My FX Journal - 80% Fundamental 20% Technical

[FXX]

Last trade of the week - it has been a good week

Today there wasn't any real news that could drive price. Sentiment started off in the EU session with dollar strength but this was in my opinion driven by position squaring for the G7 and weekend. The $ in my view has run it's course for now and there really isn't anything new to drive it further. It has had a good run for several weeks now. There has been a lot of hawkish talk from ECB members and analyst chit chat about changes to policy leaning towards tightening. I believe the risk is skewed to the upside for the EURO at this time.

Given there isn't any news driving sentiment today, EURUSD presented an opportunity to get in on a technical level and leverage the ECB sentiment and upcoming conference next week. I don't plan on holding this trade i made a short while ago over the weekend but i do believe price will give back some of this mornings move. Currently up over 20 pips with a break even stop (not keen on risking anything more on this as it is a pure sentiment play

 

[FXX]

Last trade of the week - it has been a good week

Today there wasn't any real news that could drive price. Sentiment started off in the EU session with dollar strength but this was in my opinion driven by position squaring for the G7 and weekend. The $ in my view has run it's course for now and there really isn't anything new to drive it further. It has had a good run for several weeks now. There has been a lot of hawkish talk from ECB members and analyst chit chat about changes to policy leaning towards tightening. I believe the risk is skewed to the upside for the EURO at this time.

Given there isn't any news driving sentiment today, EURUSD presented an opportunity to get in on a technical level and leverage the ECB sentiment and upcoming conference next week. I don't plan on holding this trade i made a short while ago over the weekend but i do believe price will give back some of this mornings move. Currently up over 20 pips with a break even stop (not keen on risking anything more on this as it is a pure sentiment play

Closed for 25 pips. Have a great weekend everyone.

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[FXX]

Self review

Trading is going better than I thought would be possible given the failure rate in retail and also professional. Let's face it, trading isn't for everyone. I seem to have switched off looking at charts a lot more in my daily trade decision making process. My rule set is also keeping me out of many wrong trading decisions which is nice given I was being slapped around when I started this journey. One thing I have noticed is an improving ability to filter news and economic data by classifying its importance towards central bank policy and concerns. It is also classified according to how it is likely going to affect sentiment.

Areas I need to work on


Planning better around economic release. I find if I am in a trade I tend to focus on the market sentiment constantly and sometimes don't react to an opportunity.

Some work needed around trading different types and strengths in sentiment.

Find a tool I can run on my own to differentiate 2 statements. The idea here is the wording changes are key to understanding what's changed in their communication. I know ransquawk does this in their feed but I wanted something I could pull up for the last several months and build a fundamental trend. I think it will be useful and willing to see if it adds any value.

Look into automating my process based on rules. If I can automate myself then I could improve my quality.



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[FXX]

Heads up for the week - 2 major central banks and other economic data. Will spend some time reviewing their previous statements and reviewing the data since. The key to trading these most of the time is having a good service like ransquawk that disseminates wording differences. You can also read them but need to do so in context to the last statement. Also don't forget its rate decisions along with it and reaction can be wild if its unexpected. I don't trade the rate announcements because they are mostly an expected outcome. The statements however apply forward guidance and that's where the real opportunity lies.

Tuesday US CPI
Wednesday Fed statement + conference
Thursday AUS employment, ECB statement and conference , US core retail sales
Friday BOJ statement + conference

 

[FXX]

Currently in a trade piggy backing the parliament votes pertaining to house of lords and Brexit bill. Sold EURGBP at 0.88172 and in the green about 20 pips. Stop at break even and target is 0.87745 to hopefully take just over 40 pips.

 

[FXX]

Currently in a trade piggy backing the parliament votes pertaining to house of lords and Brexit bill. Sold EURGBP at 0.88172 and in the green about 20 pips. Stop at break even and target is 0.87745 to hopefully take just over 40 pips.

Target hit

 

[FXX]

Quick update on todays trade

It has been all over the news for the last week and talked about almost daily on radio. Alarm went off 10 mins before on my phone (i set these in the morning for the day because I used to miss so many opportunities that I planned on catching}. Pulled up parliament tv and lbc just in case of a feed delay. The commentary leading up to the vote was pointing to the outcome. As soon as it was announced I climbed on board having the EURGBP chart and quotes ready with the mouse on the button ~just needed a click. Target on the 5 minute chart was the last major zone. Trade worked out well.

Tomorrow is going to hopefully be interesting. Ransquawk will be up and ready to view the wording changes alerts. Will spend the morning reviewing again the last statement and the same for data points leading up to today. This knowledge preparea me to digest wording changes and still have time to hope on an opportunity.

Plenty else on this week if it doesn't turn out as planned

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[FXX]

Another successful FOMC trade

Ransquawk does it again in their rapid analysis of the data and broadcasting an upgrade to 4 hikes this year from 3 and a change in wording on economic growth from moderate to solid. In simple terms its a beat on expectations although market chit chat has been discussing overheating so it was sort of on the cards but just rumour.

Trade still in play, up 30 pips so far

 

[FXX]

so I took 50 pips out of that trade and wow it reversed. Been looking around for news and nothing so took at look at the treasury market and look at this:

Considering another entry

10 year (might be some large players working that 3% level)

 

[FXX]

I can't help but think the trade war drama and an already sluggish cat bounce recovery, is going to play a role in the ecb decision tomorrow.

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[FXX]

uk retail sales massive beat. I missed it but will look to buy on any pullback

 

[FXX]

long GBPUSD from 1.34260 , stop 1.34169, target 1.34558

 

[FXX]

long GBPUSD from 1.34260 , stop 1.34169, target 1.34558

stopped on this one. I need to work more on these after the fact trades as they tend to be touch and go which may be down to pending news or dissipating sentiment. Will continue to take them but will stop they work out to do more harm to the account than good.

It might be a case of better technical levels to trade off?

 

[FXX]

ECB to keep rates unchanged at least until summer of 2019 + Asset purchases expected to be tapered to €15 billion from Oct to Dec

Markets were expecting more and also lets not forget it will all continue to be data dependent which has been soft lately

Quick trade for 20 pips in the bag

 

[FXX]

ECB to keep rates unchanged at least until summer of 2019 + Asset purchases expected to be tapered to €15 billion from Oct to Dec

Markets were expecting more and also lets not forget it will all continue to be data dependent which has been soft lately

Quick trade for 20 pips in the bag

looks like I exited too soon. I am reluctant to change to being more greedy on profit as when I started it was one of the biggest issues chewing away at my account. Wish I had a solution to this.

 

[barjon]

looks like I exited too soon. I am reluctant to change to being more greedy on profit as when I started it was one of the biggest issues chewing away at my account. Wish I had a solution to this.

No, I think you’re quite right to operate as you do. If you think of your trading as a business where you take what you need from each good trade to keep your account moving along nicely (in business terms taking the profit margin you need to meet your bottom line requirements) then that’s fine - you can always take another bite if it really catches fire.

Maybe move up a tight stop rather than straight exit. Nine times out of ten you’ll be stopped out for a little less than you could have had, but occasionally it’ll zoom off with you on board.

 

[FXX]

No, I think you’re quite right to operate as you do. If you think of your trading as a business where you take what you need from each good trade to keep your account moving along nicely (in business terms taking the profit margin you need to meet your bottom line requirements) then that’s fine - you can always take another bite if it really catches fire.

Maybe move up a tight stop rather than straight exit. Nine times out of ten you’ll be stopped out for a little less than you could have had, but occasionally it’ll zoom off with you on board.

Thanks barjon

I was very close to letting yesterday's fomc trade run and if I did would have lost all that profit. I used to shoot myself in the foot like this which is why I do as you say and get out as soon as possible. I never had and never will have the skills to get those runners more often. I don't think anyone does.

I am not even sure what to call this bit the magnitude of expectations around major central bank events is what I believe I missed in my analysis.

I am growing closer to being convinced I can program an algo to do all this better than I can. I have done a lot of programming over the years on different data languages. My profession is data architect so getting the data from source to a processing engine won't be a problem. As for the algo. I am still thinking how I can implement the rules so its work in progress.


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[Atilla]

Thanks barjon

I was very close to letting yesterday's fomc trade run and if I did would have lost all that profit. I used to shoot myself in the foot like this which is why I do as you say and get out as soon as possible. I never had and never will have the skills to get those runners more often. I don't think anyone does.

I am not even sure what to call this bit the magnitude of expectations around major central bank events is what I believe I missed in my analysis.

I am growing closer to being convinced I can program an algo to do all this better than I can. I have done a lot of programming over the years on different data languages. My profession is data architect so getting the data from source to a processing engine won't be a problem. As for the algo. I am still thinking how I can implement the rules so its work in progress.


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What are the questions you need help with?

If you give a couple of examples I'll put my thinking cap on!

 

[FXX]

What are the questions you need help with?

If you give a couple of examples I'll put my thinking cap on!

Hi Atilla

I think it is down to slight adjustments in my process to account for strength of sentiment. This isn't a major issue at the moment as I make profit on specific news events like this week but should really have known there was scope for greater profit off the back of strong sentiment.

The other area I need work on is when I take a trade well after news on a pullback. I find these trades are my worst area of trading but luckily they are only a small part of it. I think the issue is defining the technical level to get in. Having thought about this over the last couple of days I think I need to switch the strategy here from looking to get in at a specific level to looking for a lower risk entry where price gives a swing area for a stop and in process of establishing another test of the high\low and possibly beyond.

I should probably also include in that switch sufficient analysis of the sentiment\news that drove price in the first place. Has the reaction justified the event or not - would be a good filter to add.

 

[FXX]

Speaking of which "The other area I need work on is when I take a trade well after news on a pullback."

I am looking to get back in EURUSD on a pullback. I have marked 1.6232 as the level where this retrace might find sellers. 1.6547 is another (stronger level) - in fact I am setting a pending sell order at 1.6547