Acc Risk: 0.5%
Short: 1.1868
Stop: 1.1918
Target: 1.1640 (4h100, 228 pips, 4.56x RR)
Mindset: Positive, like the set up, but feel the trade has further to run.

Spotted this set up doing my morning scans, noticed price had diverged into resistance on the 4h and 1h. The resistance was on upper trendline on the daily chart and into MA resistance on the weekly (w200) and monthly (m50).

So a lot of nice factors in my favour.

Didn’t manage to get any screenshots! Was in a bit of a rush.

Took my first profit manually! – 9 Aug

Acc Risk: -0.25% 🙂
Short: 1.1868
Stop: 1.1918
Target: 1.1600 area (268 pips, 5.36x RR)
Mindset: Still like the set up

I’ve split my trade and took my first profit manually just ahead of the 4h100. I always get annoyed when I do this – I should just set and forget and let the market decide when I exit. Shortly after I closed the trade 20 pips off the 4h100 price went down and tested it. These things eat away at your performance and you often regret the decision immediately after you’ve made it.

I’m leaving the remainder to run after a chat with Charlie, I have a feeling we’ll be able to get lower, but this is based on nothing other than speculation.

The trade is paid for now, I’ve banked £45 and I’ve got £18 plus charges at risk. So either way I’ve made some money on the trade.

CPI figures came out bearish – 11 Aug

The CPI figures were a miss, not a big miss 0.1% instead of 0.2% predicted. The Euro has rallied I’m not convinced this will run though, the trend is still down. If we do come higher we get a new divergence short set up which would be great. That would give me more certainty in a run lower. So I’d be quite happy to get stopped out now and re-enter again later.

At the moment price is chopping around the 4h50 which actually feels like a good shorting zone, but no set up so not going to trade it.

EURUSD 4H Chart – 11 Aug 17

Still in the trade waiting – 19 Aug

I’ve been sitting on this trade waiting for the 4h200 to be tested and I’m still waiting! I can see this getting touched around the recent lows at 1.1660ish. Often happens when you use moving averages as targets. I thought we might be forming a triangle but it looks like we’re in a mini down-trend which is holding for now.

More tests of the lower trendline than the upper, so I wouldn’t be surprised to get a test of the upper trendline again soon.

EURUSD 4H Chart – 19 Aug

Still here, trend channel looks to be breaking – 24 Aug

Am I bored of this trade, this trend looks to be breaking now to the upside now. I definitely prefer those quicker moves that are over in a few days. This has dragged on for ages. Something I’ve seen happen a lot with trades is an initial flush down a pause and then a move back to the prior low, usually to coincide with a moving average target. E.g. I’m holding for a lower level target that ends up being the prior low I.e. I could’ve been out of the trade a couple of weeks back.

Not sure there’s anyway to trade that, but just an observation.

EURUSD 4H Chart – 24 Aug 17

Stopped out – 25 Aug

Finally got stopped out of this trade, as I suspected, price was heading higher. Would I have done anything differently? No. I took partial profits and tried to run the rest based on my analysis which I think was still sound. I can’t close a trade on a hunch alone.

So no problem there. Made a small profit on the trade.

Blue-cross hair shows the exit point of the trade.

EURUSD 4H Chart – 25 Aug

Acc Risk: 0.5%
Short: 1.0894
Stop: 1.0961 (63 pips)
Target: 1.0686 (d50, 209 pips, 3.31 RR)
Mindset: Surprisingly positive considering my track record!

Following the french election, the mega gap up must have everyone getting short the euro. It certainly crossed my mind and I’m sure it will but I’m also sure it won’t happen when everyone expects it to. Most of the Euro markets have been rallying higher since, I took a divergence short on the GBP and surprise surprise it didn’t work out.

This set up, on the daily timeframe, looks pretty good to me. I think we’ve got a few days margin too before the divergence doesn’t work out if price moves higher. It’s not A grade though, with gaps like this I guess you are often going to get a divergence!

Here’s the set up …

Daily Chart

EURUSD Daily Chart – 28 Apr

Price is into the upper trendline, we’ve got the gap and the upper trendline has been tested a few times but failed to break. Obviously the gap is the obvious trade to take, the GBP gap following the Brexit vote is still there!

Weekly Chart

Weekly the gap has opened up into the w50. This also adds a bit of validation to my short.

EURUSD W Chart – 28 Apr

I think we could be sitting on this trade for a while.

Stopped out – 5 May

Price stopped me out. I never liked the set up of this chart; I traded the divergence but the trend has been higher. It feels like the Euro will sell off after the french election regardless of the result. There’s a 4 hour divergence setting up but there’s no confirmation on the lower timeframe for me trade – so I’m sitting tight for now.

Daily Chart

EURUSD D Chart – 5 May

4H Chart

EURUSD 4H Chart – 5 May. Divergence on the 4H but not the daily or hourly.

Acc Risk: 0.35%
Short: 1.0759
Stop: 1.0782 (23 pips)
Target: 1.0697 (1h500, 62 pips, 2.7 RR)
Mindset: optimistic and impatient

I have to confess a few faults here:

1. Trading off the hourly timeframe, not in my plan (although I think I should include it!)
2. Trading mechanically first, then analysing a trade after I’ve put it on
3. Suffering from FOMO (fear of missing out). I feel a pressure to take every set up so I don’t under trade my system.
   

I cover 20 markets and so I’ve usually got a set up forming or tradable. However over Easter I didn’t trade, and it’s been pretty quiet lately, so I haven’t put a trade on for about a week. I have been keen to get back into the market. I was looking at the EURUSD 4H chart and looking for a divergence which didn’t materialise, price was into a weekly trendline resistance, so I went down to the 1H timeframe to see if a divergence had occurred there.

It had, it looked nice, so I didn’t think twice about it.

1H Chart – the setup

EURUSD 1H Chart – 20 Apr

4H Chart

EURUSD 4H Chart – 20 Apr. Not that I would trade from it, but I did note a 61.8% retrace.

Weekly Chart

EURUSD W Chart – 20 Apr

It’s a small position – risk is only 0.35% but I wanted to get back into the market. Not a great reason but I have followed the set up rules, just on a different timeframe.

I have also been thinking recently that it might be short-sighted to stick rigidly to my two timeframes (daily & 4 hourly) when things don’t quite set up like this did, why not check the hourly timeframe for an entry?

One other habit I’ve noticed is seeing a set up, taking it and THEN really checking the charts to see what other factors might be in play. I need to kick that habit into touch! Thinking about it for a second, I would say this is partly because I don’t truly know what I am looking for, I have no other stats to base my analysis on (e.g. 70% of the time when price closes inside the 4h bands, it will touch a particular ma, or x tests of trendline usually lead to a break etc) it’s back to my opinion again, I have no real weighting I can apply to what I am seeing.

I think I need to do some more back testing, although not sure how best to backtest broad analysis like this.

Update 20 Apr – Manually closed for a 40 pip profit 😐

Well I haven’t followed my original plan here. I’ve had a lot of doubt about my target, some targets are very clear to me and don’t get changed, but some are difficult to pick. This is a great example, the set up was on the hourly chart, but I’m always thinking bigger targets – hence my 1h500 target which aligned with the 4h200. However, I only have daily and 4h backtesting stats on the 20, 34, 55 & 100 MAs and the divergence only occurred on the 1h timeframe.

So I decided I was trading on opinion and not my strategy, so I closed the position just below the 1h50 (yellow line) @ 1.0719. Not that it matters/bothers me, but price has since hit the original 1h500 target (red line).

EURUSD 1H Chart – 21 Apr

A few thoughts/questions on this trade:

1. I haven’t back tested the 1h timeframe, but I found similar results across the daily and 4h timeframes so assumed it would be the same for the hourly (but I never checked / did the work).
2. Once the trade was on I checked the chart regularly! I didn’t want another loser (had a number of losers going long against the Yen) and I wasn’t confident about my exit. This has to be a sign I’m not comfortable with the trade. In future is it best to just close the trade if I find myself in this situation again?
3. I think I did the right thing in retrospect – exiting at the 1h50 – my original target was baseless and I still earnt an okay RR

Some things here to cover with Charlie.

Acc Risk: 0.4%
Long: 1.0585
Stop: 1.0563 (22 pips)
Target: 1.0660 (4h50, 75 pips, 3.4 RR)
Mindset: Erm – not enjoying going long the Euro.

Price has been trending down for a while now on the EURUSD and might be bottoming out. I don’t feel great about this trade we look to have cleared the 4h500 nicely and I don’t really see any reason for a move higher. On the daily chart we’ve retraced to the 78.6% fib level. That’s about it. Anyway – we’ve formed a divergence so I’m going in!

EURUSD 4H Chart – 10 Apr 17

And what a nice divergence it is! Lovely and looping. Not the best price I could get, but not terrible.

Target hit – 12 Apr

The North Korea problem. Seems that Trump might be starting to spread himself a little thin. Got a lot of enemies to go after!

Trumps at it again, just happened to be on the right side of this! Apparently he did an interview with WSJ saying two things:

• The dollar is over-valued
• He’s after North Korea to stop their nuclear programme

The dollar dropped, Gold rallied, Euro rallied, etc. My target got hit. It’s all gravy. I have to say was not feeling good about this trade so feel lucky to be out of this.

I think I always say that, feel lucky, like I’m totally winging it!

EURUSD 4H Chart – 13 Apr. Nice divergence!

My order was triggered at 1.0633 for 48 pips, 2.1 RR.

Account Risk: 0.35%
Short: 1.0810
Stop: 1.0830 (20 pips! 🙂 )
Target: 1.0714, 4H 50MA (116 pips, RR 5.8x)
Mindset: Really pleased with the entry but still expecting to get stopped out again

I saw this set up on the morning scan – and whilst I didn’t really want to take it – I had a really nice spot to enter on. On the daily timeframe there was also a divergence setting up (although not yet official).

The set up – 4H Chart

EURUSD 4H Chart – 21 Mar

Daily Chart

EURUSD Daily Chart – 21 Mar. Will the divergence materialise?

One thing worth noting is the proximity of the 200MA. It’s not a million miles away so may well get a move up to that.

So I put the first position on and was just about to put the second position on when my ETX quote locked/stopped quoting and I couldn’t place my second position for about 10 seconds. When it came back again the price had moved about 10 pips so I waited for price to come back to me but it just kept falling away.

Sell quote locked. Came back 10 pips lower.

I decided to wait but price didn’t come back so I closed the window. There are other set ups forming on other Euro pairs, so for now I’ll sit tight.

Update – Not much progress, but the daily divergence has set up – 23 Mar

EURUSD Daily Chart – 23 Mar. The divergence set up.

Small update the daily chart is now diverging and I’m unsure about what to do next. The daily 50MA is a nice distance away so I feel I should switch my target to that from the 4H 50MA. However, The 4H 50MA hasn’t been tested yet (according to my charts) it had an air kiss.

At the moment I’m sticking with the 4H 50. (I think mentor Charlie would go for the daily 50). I really wish I had those two positions now so I could target both!

For now I’m going to play safe, price action hasn’t been great. I can see myself getting stopped out of this trade and having to re-enter. Price is also hand-railing the 4H 20 so maybe we’ll get a blow-out to the downside?

EURUSD 4H Chart – 23 Mar.

Update – Might be getting a double divergence! – 24 Mar

EURUSD 4H Chart – 24 Mar. Double divergence forming?

Just noted that price has moved up this morning against my position but I just wonder if we’ll get a double divergence setting up!?

Hmmm I wonder

If we do, I’ll be switching the next target to the 4h 100 which is very near the daily 50. Could be a tasty entry, we’ll see.

Update – got stopped out – 27 Mar

The Euro gapped up over the weekend and continued higher. I was stopped out of the position as the market opened on Sunday night. My first experience of getting gapped over my stop.

Wasn’t great – but I’m glad I didn’t get put off shorting again (even though I got stopped out again on my EURCAD trade!)

EURUSD 4H Chart – 26 Mar. Gapped and stopped out.

Will wait and see if I get another entry on this.

Account Risk: 0.7%
Short: 1.0709
Stop: 1.0757 (48 pips)
Target: 1.0618, 4H 50MA (90 pips, RR 1.95x)
Mindset: Keeping the faith

Saw this short set up this morning. Prices have been rallying higher since the Fed rate decision, so decided to take the short. My mind is awash with reasons to not take this trade but I’m trading the system! So it’s a short from here. Here’s the set up.

4H Chart – the set up

EURUSD 4H Chart – 16 Mar

I’m hoping for the 50MA – it’s a fair target if it works out.

Update 1 – Stopped out – 16 Mar

Just got stopped out of this trade. I don’t really think there’s much more to say on it, it’s one of those things. Another loser to add to the list. I really need to work on maxing out my winners! At the moment they are all pretty even in size so I’m net down after these losers and trading costs.

EURUSD 4H Chart – 17 Mar

Account Risk: 1%
Long: 2x 1.0515 & 2x order 1.0505
Stop: 1.0475 (40 pips & 30 pips)
Tgt 1: 1.0556, 4H 50MA (41 pips, 1x RR)
Tgt 2: 1.0655, 4H 200MA (140 pips, 3.36x RR)
Tgt 3: 1.0975, D 200MA (410 pips, 10.25x RR)
Mindset: Optimistic

I’m about to start building work on the house and so my time is seriously stretched at the moment. It’s not the ideal situation for trading – late nights, lots going on and generally feeling tired. I need to be aware of my stress levels and mindset over the next few weeks. I may have to take a break if my routine isn’t consistent enough.

Anyway, for now the situation is manageable. I saw a EURUSD trade set-up I’d been monitoring on the 4H chart. This trade has been my first opportunity to test out my new position sizing approach. The idea is to scale in to positions at a better price within, and at the edges of, the bands.

General approach is to enter the market with half the position and try and get a fill on the other half at a better price using a market order.

Here’s the set-up on the EURUSD.

4H Chart – set-up chart

EURUSD 4H Chart – 3 Mar

The price action is showing a 4H double divergence. When you add in the daily chart, things get a bit more interesting.

Daily Chart

EURUSD Daily Chart – 3 Mar

We’ve already tested the 100MA and we’re currently on the 61.8% fib retracement (2nd test). Price is also testing the weekly lower band.

Monthly Chart

I wanted to include this too, we are on an ultra-long term trendline of support today (lower blue line).

EURUSD Monthly Chart – 3 Mar

But what caught my eye on this chart was the trend channel break-away. This was a pattern a recall learning ages ago – I have no stats to prove that it works or doesn’t – but the trader I learnt it from said it was a particular favourite of theirs.

Price is in a down-trend channel (red line) but then accelerates away, steepening the trend (dark red line). Price can often retrace that move just as quickly back to the original trend line.

Hopefully the chart mark-up makes sense.

Nothing I can actionably trade, but interesting nonetheless. If my full position is triggered I might be tempted to hold on to the last position for a while.

Executing the trade

With my new approach to position sizing, my charts are very busy! But here’s the trade – I’ve manually opened the first 2 units. I’m using an order for the remaining 2 units.

EURUSD 4H Trade Chart – 3 Mar

Targets are spread across as follows.

1. 1x @ 4H 50MA. This will be the first target to hopefully limit my downside. It’s my alternative to moving my stop.
2. 2x @ 4H 200MA. I thought about the 500 but they are so close I think it is fair to shoot for the 200. The 100 has been tested a few times, so I’m aiming for more pips.
3. 1x @ D 200MA. the 100MA was recently tested on the daily chart, so I’d like to run the last position to the Daily 200MA.

With the orders, stops and limits, my ETX chart looks terrible! I’m glad I’m using two different chart packages so I can keep things clean.

EURUSD 4H ETX Chart – 3 Mar

Update 1 – First Target hit – 3 Mar

Account Risk: 0.4%
Long: 2x 1.0515
Stop: 1.0475 (40 pips)
Tgt 1: Hit @ 1.0556, 4H 50MA (41 pips, 1x RR)
Tgt 2: 1.0655, 4H 200MA (140 pips, 3.36x RR)
Mindset: Not good, not bad

The second half of my position didn’t get triggered before price has moved higher. I’ve been surprised how quickly price has moved. I hit my first target within hours of placing the trade. Feel fortunate to have caught that wave.

For now, I’ve cancelled the remaining long orders and will watch price action.

My final target is still the 200MA. I saw we hit the 500MA this morning and price dropped back sharply. Maybe I’ve been too greedy to go for the 200MA? Time will tell – it’ll probably hit the 200MA at the exact same price level !

EURUSD 4H Chart – 6 Mar

I’d say the trade is break-even, since hitting my target, but I’m paying rolling charges so it might not be when I’m threw!

Update 2 – Wait and see – 8 Mar

I can’t claim not to be a frustrated with this trade, I was quite close to getting my exit but price has drifted away now.

EURUSD 4H Chart – 8 Mar

Following the bounce and the fast move up I thought we might be into a trend change. However since hitting the 500MA price has just slowly ebbed away. I’m starting to think I’d been too greedy going for the 200 over the lower 500MA.

Hard to say, I wonder if we will move down to retest the lows and set up another divergence?! If we did that would be great for another long. Given the news events over the next two days I’m really not sure how to trade this if it does set up. The ECB meeting is today and includes rate decisions (one of the biggest factors of a price move) and forward guidance on the interest rate will move this currency.

The NFP figures are out on Friday too and the ADP figures (which forecast the NFP figures) were a big beat. So price movements could be huge.

I’ve really not decided what to do yet.

Update 3 – Final Target hit – 10 Mar

EURUSD 4H Chart – 10 Mar

My final target has been hit, feel pretty lucky about it now, after my call with Charlie last night he agreed going for the 200 over the 500 was probably too ambitious 🙂

Anyway, I feel pretty lucky about this, price got up there real quick and I my limit order closed me out of the trade. The only frustration was that it wasn’t a full position like intended, just a half size. Makes me wonder if trying to scale into a position is worth it, it would marginally reduce loses but ultimately it would reduce the winners if only half the position gets triggered (hmmmm?)

I’m starting to think that trying to get better entries is probably not worth it. Question for Charlie!

Here’s the final trade.

Account Risk: 0.4%
Long: 2x 1.0515
Stop: 1.0475 (40 pips)
T1 Hit: 1.0556, 4H 50MA (41 pips, 1x RR)
T2 Hit: 1.0635, 4H 200MA (120 pips, 3x RR)

Now this position has closed I can add to my GBPUSD without maxing out my USD exposure, so I’ve added a final position. I wonder if I’m too early on the £ trade as the Fed rate decision is due Weds evening. Hopefully we can get some breathing space on the GBPUSD to handle any shock reactions to the market.