Yellowlion's EURUSD Trading Journal

[yellowlion]

04/07/08 05:45 Gmt

Good Morning All,

Hope everyone had a splendid weekend.

Marginally, I had a system buy signal in daily Crude on Friday and a conflicting system sell signal in daily EURUSD on today's opening weakness. Because the system is an on-close signal, the EURUSD signal is interesting but not completed. I say marginally because the system does not perform well in chop, so if markets continue to remain cautious, the signals will get whipsawed. Indeed that may be the culprit for the conflict.

I mentioned the theme of "failure" last Friday and for sure the weak US data failed to spark any enduring interest in selling dollars. So this theme also remains present.

I'm going into the week with a cautious dollar short bias.

I present the 8 hour and daily chart to help with any ideas.

Trade Well,
Yellowlion

8 Hour

Daily

 

[yellowlion]

04/07/08 07:45 Missed opportunity

Missed the first 8 hour trendline opportunity. Trying to prepare a quiz for an Excel student at the same time. Had to get it done.

Here the student takes priority.

YL

 

[yellowlion]

04/07/08 09:44 Early close

Third missed opportunity due to distractions. To razzed to trade now. Calling it an early night. Will spend rest of session clearing distractions.

Trade Well,
Yellowlion

 

[yellowlion]

04/08/08 Session Open

Good Morning All,

85 pips in 30 minutes at the Pacific open. Not really normal behavior for this pair. EURJPY went higher too. Pacific Financial stocks are soft. Whether this was a completion of a little corrective pattern in the chop, or a heads up, remains to be seen. It is unusual.

I'm maintaining a cautious soft dollar bias.

Here's a possible wave count on the daily, and a potential completion target. The rally into wave iii is well proportioned. Normally a triangle is expected here in the wave iv position, but looking one degree higher we see that wave 4 completed as a flat. I'm considering another flat here as a play in symmetry.

Daily​

The 8 hour shows the action into wave iii and provides a few levels of interest. Missing that trendline play last night really razzed me. That Excel student better pass or else!

8 Hour​

Looking at the hourly EURUSD, the chop up is evident and Asian strength was capped at expansion equality, currently creating a corrective ZigZag pattern. Nothing unusual there, just another set of three in the chop. The time of day it happened in is what's unusual.

1 Hour​

All the Best,
Yellowlion

 

[yellowlion]

04/08/08 07:45 GMT Convergence Fade

Watching the accumulation at 5723 - 40, really skittish but looked higher. Thought about a long entry, volume bars and action was more than positive. I've seen this type of action enough to know that it's a good probability trade but I still have such a difficult time entering into this. Tonight it was too skittish for me. So I continue to miss this type of floor and will until I can accept the risk. It's not like there's any more risk than any other setup I have but these accumulation entries...I see them, I just don't feel them. Maybe that's why i should take them.

Anyway, a trade I can take is a completion/convergence zone. This one has several Fib levels in a zone at 69 - 73. 1 lot standard exit +10 pips. I know the chart looks overweighted with stuff but everything disappears except the important levels once you get used to it.

1 Minute​

 

[yellowlion]

04/08/08 10:15 GMT End of Session

That's it for me folks,

One single lot entry + 10 pips.

Trade Well,
Yellowlion

 

[yellowlion]

04/09/08 Session Open

Good Morning All,

The unusual strength in early Asia yesterday has been absorbed and can be considered as a completion of just another three in the chop higher. Hugging the 8 hour trendline now. A break could see 1.5600.

Opening Support comes in at the 8 hour trendline .5627-19 .5600-.5590.

Opening Resistance at .5722 .5750 and a bit stronger at .5771

And your favorite s/r levels.

Trade Well,
Yellowlion

Daily​

8 hour​

 

[yellowlion]

04/09/08 08:46 Gmt

Gonna write exactly what I diaried during this trade.

04/09 08:00 GMT

*Long at .5716 on 5 chop down into sma's. Wanted entry at 14 but manual entry got 16 ask. Trade could see .5705 and possible 2nd entry.
*Underwater quickly -6 pips. 3, 13, 55 minute indicators negative.
*Working out of Douglas book trying to become more risk acceptant for these discretionary trades. Must take trade ideas. Accept risk!
*Sold hard took loss at .5700 - 16 pips. Didn't see .786 at .5698.

(Whenever I stop out I always look for a level I missed because I'm known for stopping out at bottoms / tops.)

*Took another quick long at .5705. Went to 15. Held for trade B/E. Now I'm thinking of the t2w board and now I'm wanting only wins. Oh yeah we're in the fool play line now. (Must Stop This!!)
*Ok breathe. In at 05, went to 15. Held on to ego and broke 1 lot +10 pip rule. Sold hard to 05. Found support.
*Resisted at 12. Heavy. Bank operations to 15 / 3 min 21 sma. Held Again! sold to 10. trade still positive but doesn't look that way. Hanging on but not much confidence. *Resisted again at 12.
Sold at 15 + 10 pips. Per Rule!

Total for both entries - 6 pips. My goodness. What a mess.

1 minute​

 

[yellowlion]

04/09/08 End of session

Took a long Euro off .5709 at .5712 ask. Heavy, end of day, not really interested in a lot of bother. Skittish behavior...looked heavy. Not interested. Closed at 13 +1 pip. Went to + 10 target. Some nights are better than others.

For the night. 3 single lot trades 2 wins (1 marginal), 1 loss - 5 pips.

All the Best,
Yellowlion

 

[yellowlion]

04/10/08 Session Open

Good morning all,

It could be easy for me to get irritated about closing that trade at the end of last night right as it was going +150 pips. By having a plan and a set of rules in place however, I know that I would only have participated in 10 pips worth anyway and I save myself the emotional pain of missing out. I also save myself emotional pain when I stick to my plan.

Plans save emotional, psychological, and financial capital.

What I'm working on here is managing my entry strategy and studying the behavior of the entries for a couple different completion setups. I have a couple methods that appear to call ceilings and floors fairly well. It appears these methods can identify a pause if not an actual reversal.

The issues at entry are:
1) The entries are usually into capitulative volume and are not easy to execute. My confidence at entry has significantly improved and entries are becoming much less difficult to execute.

2)After entry, even though the trend may be reversing, price continues to exhibit a bias toward the established trend and normally chops around for a period of time before breaking lower. This is where I am currently running into problems. I watch as the trend continually tries to reassert itself. This can go on for a period of time and puts my emotions through the wringer. By the time the reversal break comes, I'm exhausted and just want out. This is easily managed by automatic stop loss levels and profit targets. And that is where my focus will be.

The established trend rarely yields more than a 1 lot target before the trend tries to resume. Sometimes it resumes, but it fails often enough to consider these entries for a multiple lot entry /exit strategy. That will be my focus after I am comfortable with the entry dynamics.

For now it's all about the studing the entries and finding a workable strategy to manage them. 1 lot +10 pips for a target.

Discretionary entries also need confidence work.

Anyway, The flat correction idea has been jeapordized by the past 12 hours. I'll leave the tags in for another session but for all intents and purposes, it looks like EURUSD is gonna try for the highs again. Another failure increases the probability of a trendline break.

Resistance at the highs, and 1.5950 - 1.6000

Support at .5812, .5780, .5728, .5676

The 1 hour expansion that ended that unusual early Asian session rally at equality a couple days ago has also helped cap the latest strength at the 1.618 level. The expansion thus serves as a lower bound for the completion target at 1.5950.

1 hour​

The .272 retracement extension on the 8 hour serves as the upper bound.

8 hour​

Trade Well,
Yellowlion

 

[yellowlion]

04/14/2008 Session Open

Good Morning All,

Hope everyone had a terrific weekend.

I pulled back from posting on the board late last week because I saw a deterioration in my focus and more fear in my trading.

After winning all trades the previous week, I was on the lookout for the possibility of a deterioration to my innergame and sure enough it manifested itself by not wanting to post any losing trades in this public journal. By Thursday, I was like a "deer in the headlights" and could not execute any entries at all. Whether being on the lookout for a self-sabotaging event actually caused the event to occur I do not know. I do know however, that I was in a position to handle the event should it occur and act in my own best self-interest to limit it's effects. This was huge for me. Posting to this board and keeping an honest journal has helped me to achieve this ability.

Now I'm not interested in using this journal as a vehicle for self promotion. I post every trade I execute. By journaling publicly that my fear of losing is manifesting itself by not wanting to look bad posting losing trades here, I believe that I diminish the power of that fear to have an effect on me. Also, I seek to post the actions I took to counteract the issue at hand. This method has a twofold aim: 1) to deny myself the chance to justify or rationalize the issues that hamper my trading and 2) to help other traders who may be battling the same demons. By making both my successes and failures public, I hope to give less power to my demons and to help others along the way.

The action I took last week was to pull back from any and all activities except the trade screen and my written trade diary, and try to regain my focus and discipline. As a result I entered 6 trades during Friday's session with a result of - 14 pips. My balance for the week was -9 pips. The previous week saw +47 pips in 6 trades. Last week was a huge achievement for me. I saw the potential for my demons to appear and when they did, I took proactive measures to counteract thier effects and as a result did no damage to the prior week's results.

The session ahead,

I came home from work just as Sydney was about to open and lit up the screens to look at where EURUSD opened.

At first I thought "ok gap down about 25 pips". Then I looked again and realized that "no...that's 120 pips." Anyone who wants to try to convince me that I should be position trading these markets will have a hard time selling me. With all the chicanery and closed door dealings going on lately I am much more comfortable closing out when my screens go dark.

Support now resistance? Maybe. Sometimes the threat of intervention gives speculators a chance to be the rebels they are. Don't rule out fresh highs just yet.

8 hour​

Daily​

Trade Well,
Yellowlion

 

[yellowlion]

04/14/08 07:45 GMT Expansion Zone Fades

Fading a couple expansion zones and the hourly 21 sma. All single lot entries.

First entry into zone went 9 pips before reversing. (single lot entry target is 10 pips)
Working on proper stop placement the logical exit for this trade was .5763 ask.

I held it into the sma at 73 with a second entry at 70. Must stop this. My biggest losing trades have always started this way. Holding into the next fade level.

Second exit was miscalculated and I took +8 pips instead of 10. Trade went+10 and quickly reversed. Covered 1st lot at 68 ask

Third entry a little hesitant because fades just ahead of this zone went 20 pips. Did not participate in this best trade of the zones. Entered on apparent fatigue of move and took 9 pips on a fear based exit. 10 pip target hit went 18 before reversing.

Total for 3 trades + 1 pip.

Have some work to do with these fades. Most important is correct stop loss placement.

YL

1 minute​

 

[yellowlion]

04/14/08 GMT Missed One

Working out, waiting patiently for this zone. Plan was a fade entry at .5801. Took a few more levels while waiting which caused me to rethink this entry. Slamming into zone on weak volume. Hesitated. Needed quick entry. Very difficult but terrific zone. Fast reversal to 96. Didn't want it there, missed trade. Overanalyzed my way out of this one. Limit order was an option here as they are at every level. Want a little discretion at entry but maybe I would do better without any.

1 Minute​

 

[yellowlion]

04/14/08 12:00 GMT More Zone Fades - End of Session

Convergence zone fades into the 100+ pip rally off .5671.

All single lot entries. Exploring price action at these zones and looking to determine correct stop loss levels for these entries. Targets +10 pips

1st entry zone .5811 - 23. Daily pivot, 1.618 extension of wave 1, .786 retracement, and the top of the opening gap. Very strong move into zone. Some pause at pivot and then a long white candle pushed through the top of the zone. Took an an entry at .5822. No real pause, got an exit at .5835 - 13 pips. Looking back the candle spanning the zone may have been the tell but this kind of action leading into these entry zones is not uncommon. I have found it best just to take every one and get out quickly if price breaks decisively through. It's usually very difficult to tell if price is going to find resistance as it enters the zone. A good tell was the ability of price to barrel right through this multiple convergence without any pause.

1 Minute​

2nd entry level is unclear. I took another short off 5840, but hesitated and got a late entry at .5834. I didn't document the reason for the entry and didn't take a screenshot either. This entry was just above the previous trade and most likely involves expansion levels. Looking back, the entry was a pip below the previous exit.
It went +7 pips before reversing. Closed +2 pips into the reversal.

1 Minute​

3rd and 4th entries were completion target enties at .5867. These are high probability zones and if price exhibits exhaustive action these are terrific fades. This zone was indeed the top of the move and included the daily and weekly R1 pivots at 70 - 73.

First entry was at 67 - the lower bound of the zone and the pivots. Because this is a completion entry, My stops are a little wider and I'm willing to risk a little more if price tests levels within the zone. Took heat into the center of the zone and entered another lot at 78 on exhaustive price action and the last key Fib level. The top was 85.

It's been a tough night and profits were hard to come by in both series of trades. The most positive aspect of the evening was that I took every entry although some were a bit hesitant. Session was nearing an end for me and I needed a couple hours sleep before I had to be at my day job. 1st exit was the upper entry and I miscalculated the exit and took +9 pips. Second exit looked to bounce and it was 12:00 straight up so closed at +7 pips.

1 Minute​

For the night 6 trades: 4 wins 2 losses. All partial wins, no 10 pip targets hit. Some fear, miscalculations, and some just not available. Losses were 16 and 13 pips and within acceptable limits. Pip balance for the night +6

Hard won they were.

All the best
Yellowlion

 

[yellowlion]

04/15/08 06:00 GMT Session Open

Good Morning All,

Last night's second half trades are in the previous post if anyone is interested.

Quoting a post from 04/09:

Here's a possible wave count on the daily, and a potential completion target. The rally into wave iii is well proportioned. Normally a triangle is expected here in the wave iv position, but looking one degree higher we see that wave 4 completed as a flat. I'm considering another flat here as a play in symmetry.

Well we are getting an ascending triangle which is much more characteristic than a flat in this position. The labels on the daily represent the old flat analysis. I'll update them at tomorrow's open. The idea is clear enough.

And last night's opening post:

Sometimes the threat of intervention gives speculators a chance to be the rebels they are. Don't rule out fresh highs just yet.

I think if EURUSD gets up to the highs again it's gonna go through to completion of the cycle advance.

Resistance at .5860 .5886 and the highs
Support at .5800 .5750 .5700 .5680


The usual 8 Hour and Daily for your consideration:

8 Hour​

Daily​

Trade Well,
Yellowlion

 

[yellowlion]

04/15/08 10:18 GMT Trades and End Of Session

Three entries tonight.

Had to play this ZigZag into the .786 retracement at exhaustive price action and a completed but somewhat disproportional Elliott Impulse. The completion Zone was a little higher here but the entire impulse was a bit ambiguous. Anyway, had to play this. Stopped out right at 68, - 12 pips before it went to trade target. This one smarted a little. Ouch!

1 Minute

The next trade was a setup in a classic expanding triangle pattern. Took a late entry on the setup off the .618 retracement at .5843. Put a stop loss in and had a target in mind. This was not a scalp play so the target was a bit wider but not completely defined. Price then stalled right there and volume dropped off. Sideways action ensued for the next hour and 15 minutes. Watched it. Action looked accumulative. Very accumulative. Was still confident in trade but decided to play a 2 lot long into strength to take a quick scalp. Bought it at the top and exited for - 10 pips which amounts to -20 single lot pips. Now that really smarts. What I wrote in my diary was "Stupid! Stupid! Can't do anything right tonight. Two trades bought at the top tick. Grrrrr" In reality it was just a long entry that didn't work. What it did though was cut my profit potential by 20 pips in five minutes. Two buys at the top tick tonight, I was just beside myself and thoroughly disgusted. Here's the setup on the 3 minute and the two entries and one exit on the 1 minute. (Short trade completes after setup charts, don't miss this one.)

My Lesson: If the trade parameters are set. Stay away from the screen!

3 Minute

1 Minute

But at Yellowlion's desk, things can go from interesting to bizarre in the blink of an eye.
So here I am regrouping and remembering why I was in the short trade. I cut my profit margin by 20 pips by that scalp attempt but now I am going to do what should have been done from the start. I'm going to let the short trade work. I didn't have a take profit set but I had one in mind so I was just going to nap and monitor it intermittently. If the trade was really going to work the stop loss would not be hit so I just let it ride. My thoughts for a target was 40 pips. I shut down my primary screens and lit up the laptop next to my bed. I fell asleep and (this is true people) I had a dream and in the dream a voice said, "It's at .5800 Take your profit...Take your profit." I woke up, price was at .5797 and I closed the trade. + 46 pips.

Here's the complete fiasco on a compressed 1 minute.

1 Minute

For the night: 3 trades 1 Win 2 Losses +12 pips. Working hard for the money this week.

All The Best,
Yellowlion

 

[yellowlion]

04/16/08 05:30 GMT Session Open

Good Morning All,

Working hard for pips this week. Ended the night + 12 on three trades. Rare Expanding Triangle trade. If anyone's interested in the details they are in the previous End of Session post below.

As I write this we are right where I closed my last trade last night at 13:11 GMT. The 1 hour 200 SMA came in for support at the lows along with the Weekly pivot.

EURUSD looked soft throughout the morning yesterday, and the Expanding Triangle completion on the ZEW report was the culmination. Just neutral right now. Going to watch and try to get a feel for direction. Lots of data coming again tonight.

Take a look at the symmetry between wave i and the height of the current triangle with breakout target on the daily. The vertical salmon colored lines with boxes are identical and drawn from the height of wave i. If we get an expected wave e throwunder of the triangle, I'm more inclined to set the wave 5 target as wave i equality from the low of the throwunder. Just a little sidebar.

1 Hour

Daily

Trade Well,
Yellowlion

 

[yellowlion]

04/17/08 06:39 GMT Session Open

Ok here's the gorey details of the past 24 hours.

We got the breakout of the triangle without the expected underthrow and the rebels pushed decisively into uncharted territory.

Played Fib fades all the way up. All I had was Fib levels and pivots to play off of. But this is the strategy that I'm exploring so that is what I'm trading right now. In all market conditions. Discovered a few things and made some new rules.

Faded one at . 5911, 20, 30, and 56 Not a pretty picture.

Closed the 11 at -27 pips. Way too big.
New rule. Initial stop loss with no logical level --> 15 pips

Closed the 56 + 9 pips. Pulled at +10 as per 1 lot rule got 9. Only one that worked.

I know the current Risk/Reward is 1.5 to 1. The reason for this madness is if this method produces results consistent with using multiple lot entries, the defined risk will stay the same but the reward will increase. Also, using this method since April 1st going into last night, the Win/Loss is 3 to 1. Right now it's all about discovering the mechanics of the entries and I'm in positive territory with these two rules.

OK. So now I've got a short at 20 and a short at 30 , a trade balance of -18 pips, price at 40, and higer prices looking inevitable. I'm confident in the trade working out so what I decide to do is manage it.
My last and final Fib level is exactly at Daily R3 at .5978. I set a stop loss at .5988.

I take a long at .5947 and set a take profit at .5972.

This is now the trade. 2 shorts at 25 - no target. and 1 long at 47 - target 72 no stop. Current booked trade balance - 18 pips.

Pretty crappy huh?

So I started my mantra: "Let the trade work, let the trade work..."

Well the long closed at 72 and the top put in at 78 and the low was 11 so you would think all is well right?

Oh no. In the interim I took 9 more fear based longs and managed to work myself into a current open position of 2 longs and the original 2 shorts with a spread of - 69 pips and a booked balance of +63 pips. So here I sit - 6 pips with this thing.

It absolutely amazes me how many times I get in the fool play line.

I got 1 hour sleep last night manufacturing this...whatever, so I'm not trading the session. Gonna close out, take the small loss, and book the tons of experience I got.

Trade Well,
Yellowlion

 

[yellowlion]

04/18/08 05:00 GMT Session Open

Happy Friday All,

All recent trading activity is in the previous post. For those who like comedy it's not one to be missed. I didn't trade last night but the activity of the 16th is posted. You'll see why I took the night off.

It's been a hard fought week and I'm heading into the closing session up a mere 12 pips.

Trendlines in play and the retrenchment below the triangle breakout level shows an underlying weakness to that breakout. The push to .5983 was met with some pretty heavy pressure.

1 hour, 8 hour, and Daily:

1 Hour

8 Hour

Daily

Trade Well,
Yellowlion

 

[yellowlion]

04/18/08 08:30 GMT Two for b/e

First one at 37B at completion and 13 minute .618 rex. Stopped out at high but trade only went 9 pips. Classic throwover of completion channel never entered my mind. - 8 pips.

Second one at 52B at completion and 55 minute .786 retracement. Strong bar after entry but high held. Target 40B. battling at 41-42. Took +9 at 41B on a fear based exit. Target hit.

Good entries, placed stops and targets on entry , lousy discipline on second exit.

13 and 55 Minute

Trade Screen

YL