Free_to_Trade's Journal -- The Adventure

[Free_to_Trade]

By way of introduction, I am a well versed floor trader stocked with many years of making options markets. But I am new to this game and I am dabbling in spot forex.

I spent many years slugging it out in the pits. I was a runner at the CBOT in 1979 in the old grain room for Merrill. Got my "badge" (membership) in the Index and Options Market division at the CME a few years later.
I was an options market maker in S&P options, then later in currency and I settled in the Euro options pit.

I profitably traded the crash of 1987. Maybe someday I will recount it here, but it is history.
But like my post grad degrees, this is all water under the bridge.

I am going to add detail as I go along, but I want to be as disciplined as possible.
I have a small amount of capital I am playing with and actually "trading" a fake account.
When I find things that work, I will start trading a small $500 account for real.

I have waiting an account with a different firm capitalized to $20k.
will trade that as I see my own discipline and consistency. i won't risk that until I prove myself, to myself.

I know much of this already from observation, but without the audio and visual tools of market flow of the floor, I have to learn how to do this on my beloved "devil box".

 

[Free_to_Trade]

Short NZDUSD 8/4/08

8/4/08 Short NZDUSD at .72390
Stop .73430
Profit Objective: .70827
P/L Ratio 4.2:1

I saw a failure of highs on hourly plus a hammer on the daily. I got my stop level and profit objectives from trend lines, one going back to 7/08/08.

8/5 Moved stop to .72880 as market broke, again on trend lines.
8/6 Stop to .72210
8/7 Stop to .71639
8/7 Stop to .71608
8/7 Took Profit at .70827 for 205 pips.

8/8/08 My birthday, spent at the beach with my three kids. Did some surfing the next morning.

8/11 My kids gave me the flu. I can't trade when I can't think straight.

 

[Trading2k]

Based on your credentials you sound like you have the experience. Best of luck trading and keep up the posts.

 

[Free_to_Trade]

Based on your credentials you sound like you have the experience. Best of luck trading and keep up the posts.

Thank you very much, Trading2k. You know, understanding a LOT about computers does not mean that one can necessarily successfully trade on them. I have to tell you, I feel completely "blind" and "deaf" without the roar of the crowd and not being able to detect
panic in peoples' eyes. And you can't see order flow. I can't see the swaps.

In other words, I guess I am an aged "newbie" !

 

[Free_to_Trade]

Short EURUSD 1.48501

I have entered an order to sell short Euros just at yesterday's low.
Stop: 1.48801
Profit Objective: 1.47601

Risk/Reward Ratio: 1:3
Capital Usage: 1.3% if filled

Here is my rationale: First, whilst the dollar has risen dramatically of late, I think today might be respite.

Technically we find a "waterfall" and on the daily we are sightly above the mean opf the regression line (linear) that stretches back to 7/30.

The presence of doji indicates some lack of direction on the part of participants, but the fundamentals look strongly like we are going to have an even stronger dollar in the near future.

First, European continental industrial production is substantially weaker than last year, and whilst the states have been falling off as well, relatively we look to have some growth.
European industrial production is off right now by 1.6% from 2007, but tyher GDP forecast for the US is supposed to be sightly higher from 1.4% to 1.5%. Even the Bank of Australia, with rates at 7.25%, is expected to cut rates.
Aug. 7, 2008 Economist
Markets &amp Data | Weekly Indicators | Economist.com

 

[Free_to_Trade]

Short AUDUSD .88945 8/13/08 GMT

Rationale: There is a gap needing to be filled on the candlestick chart, and then it may be a continuation pattern to continue the major trend lower. I am still riding the EURUSD order
and currently I am about 60 pips away.

P/L Ratio: 3.6 :1
Short fill: .889450
Stop: .8770
Take Profit: .8450

 

[Free_to_Trade]

August 13, 2008... Is is Friday yet?

I know all too well that trading is not always rosy. I guess I misread these patterns I'd seen on the candlestick charts. These apparently were reversal patterns and not continuation.

AUDUSD Stopped out at -79 pips. (.8770)
EURUSD Stopped out at -30 pips. (1.48500)


I am going to resassess these and this evening is a new trading session.

 

[Free_to_Trade]

I am not sure that posting about a trade before it's covered is very smart for me. At least in the pit, I was able tio hide what I was doing by the complexity, using brokers sometimes, etc. Of course nobody cares about what I am doing. But I am referring to how I feel about it psychologically. After I cover this trade, win or lose, I will log it.
(We all must conquer our inner-demons...)

 

[Free_to_Trade]

August 14, 2008 Short EURUSD 1.48143 1:32 GMT

Using some of the same rationale as I did during my previous trade in EURUSD, I saw a failure of the previous retracement of the Euro. The market was hovering about the 1.481
level. So I entered a limit order to sell at 1.48143. I was filled almost immediately. I used a P/L ratio of 3:1. My risk was 30 pips for a stop. I kept my profit objective at 90 pips.

August 14, 2008 Short EURUSD 1.48143 1:32 GMT
Stop at 1.48443
Profit Objective: 1.47243

The market continued to break. In the meantime I was obsessed with replacing the back inner-tube on my junker bicycle. It is an old 10-speed and has bolts on the rear wheel.
I kept trying to remove these, but I am afraid of stripping them. so I will haul this bike on the subway and get it fixed by pros. Gave up on the bike.

1:49 GMT
Adjusted stop to 1.48323

Left to get some calamari, closed up shop.

2:38PM GMT Bought back at 1.47243

Hindsight: Should maybe not have been so conservative and had I been present, I would have extended my profit objective lower. I should have at least extended the profit objective for part of the trade, but was gun-shy after losing on the previous two trades.

http://www.better-trading.com/images/EURUSDB.jpg


We have an Air and Water show on our beach today (and the entire lakefront). It is so cool to see the Stealth bombers and the F14 fighter jets. But my enthusiasm is tempered
today. My 10 year old boy was adopted from Southern Ossetia when he was 7 months.
His town, Vladakavkas, has been bombed. I pray for the safety of the wonderful Babushkas at the orphanage and all of the wonderful people we met there.

 

[Free_to_Trade]

8/18/2008 Short GBPJPY, profit 90 pips

In the afternoon I saw a large candlestick from 8/13 with a bottom at 202.509. There had been a considerable break in the market from 8/06 through 8/13.

With the abbreviated candlestick body on 8/14 with long wicks, it seemed to me that a "Falling Three" might be developing. I drew a trend line from the lows on the daily for three days and extended it heigher. On the fourth day this trendline was violared. I expected the market to continue on the downside.

I entered a short order at 205.118, whcih I calculated to be the bottom of the candlestick bottom of the session on 8/18. As it turns out, this is approximately the high of the day so far on 8/19. I was filled at my price a short time later.

8/18/08 Short GBPJPY 22:45 GMT 205.118

Stop Loss: 205.468

Profit Objective: 204.21

Profit Loss Ratio: 3.03:1

Profit Objective met: 8:04 GMT 8/19/2008

Profit: 90 Pips (~1 pip interest spent)
-------------------

I have all three kids today so no way can I do any concentrating on the market! The wife has to work today.

I will resume trading tomorrow.
--------------------------------------------

 

[Free_to_Trade]

Sell NZDUSD 8/20/08 23:07GMT, Profit 151 pips

I saw some narrow range trading in the NZDUSD on 8/20/08.
The shape and tenor of the market on the daily made me suspect that
the NZDUSD was going to revert to its much longer term downtrend
dating back to 2/27/08.

I entered a stop order to sell sust below the low of the day on the
20th, at .70764. My rationale was tghat as the market rallied and
failed, it would break down below that level and resume its longer
term trend on the daily. That price was also the top of the bar
of 8/15/08. I had to wait two days for the rally to fail.

On the 24th 12:09GMT, I was filled.

Sell NZDUSD at .70764
Stop: .71064
Profit Objective: .68738

As the trade progressed, I adjusted the stop level 15 times
to follow the market lower, a trailing stop (My broker does
not support trailing stops).

On August 26th at 12:09 GMT, the market retraced to my stop level,
which I had narrowed to 30 pips.

My profit was 151 pips.

Yes I have had a lucky streak, of late. It is not that I have
not been posting my losing trades, it is that I haven't had any since my
double loss of 8/13/08. I know all about odds....

 

[Free_to_Trade]

Short AUDNZD 1.22134 Stopped out 1.23231 -0.01097

Well, I knew it wouldn't last. Oil prices started rallying and the short trend in
AUDNZD rallied overnight. Also, I am trying to mimic my trades in a real account versus
one that is fictitious. I made a clerical error in how I entered the stop and profit objective. But I will record the "real account" results here.

Short AUDNZD 4:$$AM GNT
Stop: 1,23231
Profit Objective: 1.19281

Profit/Loss Ratio: 2.6:1

Stopped out at the stop price at 16:49 GMT.

I will need to be more careful abnd think more clearly when entering trades.

I am assembling some analytics right now for tracking the cumulative results.