TDs Journal

For some time now I've been wondering how I could actually help people with all the experience I have been accumulating in trading the markets over the last eight years. I don't mean how I could help people in terms of showing them how to make money but rather how I could make a difference, however small, to the quality of someones life.

When I was in Venice in August, I spent a lot of time with my relatives. My father died when I just three years old and his sister, my Aunt, was one of the relatives I saw. She suffers from Parkinsons, a debilitating disease that affects the way the brain co-ordinates body movements, including, walking, talking and writing. I was struck by how much she had changed from the happy and lively lady I remembered from my childhood.

At one point during my visit she called me into her room and with a tear in her eye, pressed 200 Euros into my hand.

My Aunt speaks no English and I speak almost no Italian but my sister told me that she wanted me to buy something for myself with it. I had the distinct feeling that she believed she wasn't going to ever see me again.

I left the money in my wallet for weeks until last week I decided what I was going to do with it.

I honestly couldn't think of anything I really wanted, so I decided I was going to use some of it to trade with and donate the profit I make to a charity that specialises in helping people with Parkinsons.

I took £40 of it and paid it into a spreadbetting account that I have not used in a long while and decided to see what I could do with it.

I will use this journal to record the trades I make in it.

I took my first trade yesterday afternoon. I sold the FTSE short at £1 a point on the break of the shooting star with a stop above it. I covered it at the first hourly support for a profit of £45.20.

I decided to go long Euro/Usd yesterday morning.

I took an initial position of £2 a tick (see euro_hourly chart - point 1) and cut half at the first potential resistance area on the hourly chart (point 2) which gave me a small profit should I be stopped out on the trade.

Resistance was only met temporarily and the price contined up, so I added £1 again, 39 ticks higher, late in the evening (point 3) putting the stops on both my positions at the same level (point 4).

Price moved in an approximate 60 tick range throughout the night but the second target, based on resistance overhead, was hit this morning so I closed £1 once again (point 5) leaving the other half of the trade to run.

I put the stop on this half just beneath the support and 1.4500 round number (point 6) and was stopped out for a scratch.

Total profit on the trade was £155.10.

Balance of the account is £240.90

I felt ill this morning so I didn't go into the office.

I watched several markets from the comfort of bed and saw several potential opportunities present themselves but none of them fully materialised into something concrete I wanted to risk money on and, as a result, I didn't trade.

So, all in all, a fairly inactive week. A couple of trades and a profit of £200.30. I am pleased with it though.

Late last night I decided to take this gap play in the Euro/Yen.

I calculated the gap by substracting the Friday close from the Sunday night open to get the size of the gap.

155.34 - 153.64 = 170.

Then I divided 170 by four so I could find out what price equated to half and three quarters of the gap once an attempt was made to fill it.

170 / 4 = 42.5 (Rounded to 43)

43 x 2 = 86.

155.34 - 86 = 154.48 as half the gap.

43 x 3 = 129.

155.34 - 129 = 154.05 as three quarters of the gap.

I went short £1 per point on the break of the inside bar at 1am. (point 1)

I put my stop at point 2 which was just above the hourly S/R pivot where price stalled forming the BEOB.

As soon as I was filled the price found support and turned against me. It went up, faked out the BEOB but found resistance as expected and after consolidating for three hours, turned downwards again.

After the sharp move down which took out some previous lows, I anticipated a bounce, waited for it and then put an order into sell another £1 at the same price as my original entry. ( point 3).

Price went straight down and hit my first target which was at three quarters of the gap fill. (point 4)

As soon as this was hit I pulled the stop on my remaining half to just above the half way mark which was also above the highs of a consolidation on the 5m TF.

Shortly after, the gap was filled and I closed the remaining half which happened to be near the lows of the move. (point 5)

Total profit on the trade was £303

Tried the same play on Dollar/Yen as I did on Eur/Jpy in the last post.

Hourly chart shows, from top down, entry point, the three quarter and full gap levels.

Managed to get 27 ticks up on the first attempt (entry was point 1 on the 5m chart) and 1 tick away from my target before seeing it retrace all the way back and coming out for a scratch.

Tried again at point 2 after I thought the squeeze was over, got 24 ticks up this time and then that came back too.

A little disappointing.

It does strike me that I have, over the sake of a tick, given back 27 in the first example and over the sake of 4 ticks given back 24 in the second. Sometimes it pays to be a little flexible on your targets although having said that I try not to get shaken out by the noise.

Something to think about.

Bladerunner said:

Hi Tom

good thread

bit tired ..............errrrrrr BEOB ?? not good with abreviations and read it twice and can"t see for looking

Click to expand...

Hey Andy, thanks for reading. Sorry for not clarifying it: BEOB stands for Bearish Outside Bar. Outside bars are those that have a range fully encompassing that of the previous bar.

Bladerunner said:

nice trades no need for any disapointment

Click to expand...

Thanks again. There is far too much risk in my trades at the moment. I'm sure most readers have picked up on that from the position size relative to the stop placement.

This is just a function of, in part, the small account size and in also the fact that I want to do £2 where possible so that I can have some flexibility over my exits and choose to scale out.

As the account grows, so will the risk taken on each trade come down. But I don't want new traders to read this and think that this increase from just £40 is a given if you follow these setups. For almost all of the trades taken so far the risk of ruin has been extreme.

Tom

A good level of support on the Euro/Yen pair and an inside bar with a long tail rejecting lower prices, made me think we are going to push higher.

Took a position at point 1 on the hourly chart. Not much flexibility to exit as I did £1 so I chose to cut at point 2 which I figured would contain prices and perhaps cause a temporary pullback.

After yesterdays unfortunate experience in the Dollar/Yen, today I decided to use a stop based on the 5m when price came less than 10 ticks from my target.

I've included a 5m chart here also with entries and exits marked.

Profit on the trade was £83.

I have realised I have been adopting some horrible techniques from my time as a prop trader which are proving detrimental to my performance and I am going to have to work on. This latest trade was a good example.

This was a beautiful setup at a triple bottom. I took it at £2 a tick (see point 1).

Initially it went onside 20 ticks, then offside 28 ticks and then when it turned back up and made a new high I moved the stop on one half of my position to breakeven.

I think I just got a little caught up in watching the volatility and this turned out to be a horrible mistake as I got shaken out when the market retraced briefly and actually covered that half a couple of ticks above the low.

I did have the foresight to realise that the market was likely to go straight through the first resistance and held it to the second S/R pivot which is where I closed the other half at point 2.

I made £70 on the trade but not happy with the way I handled myself.

So, it's the end of my first week trading this account.

Seven trades: five wins and two scratches. (Every trade is documented above and the Account Summaries I've posted follow on in succession, showing from left to right, the amount made and the total equity in the account after each trade.)

The intial £40.60 is now at £696.90.

First target is £1,000 which would represent a 2,463% return on my initial investment!

I'd like to be able to hit that by the end of my second week.

Time will tell.

What is your overall target for withdrawal / What is your percentage withdrawal.

Ie, withdraw 25% every 2months to give to charity?

trader_dante said:

So, it's the end of my first week trading this account.

Seven trades: five wins and two scratches. (Every trade is documented above and the Account Summaries I've posted follow on in succession, showing from left to right, the amount made and the total equity in the account after each trade.)

The intial £40.60 is now at £696.90.

First target is £1,000 which would represent a 2,463% return on my initial investment!

I'd like to be able to hit that by the end of my second week.

Time will tell.

Click to expand...

:clap::clap::clap:

That's all I have to say!

outstanding well played.

KillPhil08 said:

What is your overall target for withdrawal / What is your percentage withdrawal.

Ie, withdraw 25% every 2months to give to charity?

Click to expand...

I will withdraw 25% of the total equity (not including the original investment) and donate it to a Parkinsons Charity every quarter. Which will mean my first donation will go out on 2nd December - just in time for Christmas!

Sometimes, I check my potential setups thread for posts that alert me to price action in markets that I have not noticed. It's hard to keep an eye on everything! If I follow a setup that another member of T2W has alerted me to and it makes me money, I will make a note of how much I made on the trade and which member I got the idea from. At the end of the quarter I will give 50% of the money made on those individual trades to a charity that the member themself designates.

Finally, I have a rule that if the account ever experiences a drawdown of 50% from the peak (not of course including the money extracted) I will close the account and donate the remainder.

Tom

amazing stuff :clap:

Nice going TD

trader_dante said:

I took £40 of it

Click to expand...

Tight Bast@rd!

MrGecko said:

Tight Bast@rd!

Click to expand...

lol. I couldn't have used it all. I would have felt awful if I had lost it doing what my family considers to be "gambling".

Thankfully, no more was necessary.

Tom,
The rep' system won't allow me to shower you with any more points! Great stuff - you and your trading are an inspiration to one and all. If the account grows to something really substantial, you could write a Nicolas Darvas style book 'How I Turned £40 into . . . ' It'd be a best seller, guaranteed.

Tim.