Oil DST long – 16, 21 & 22 – 28 June

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Long: 44.60
Stop: 44.11 (49 pips)
Target: 48.70 (110 pips, d50, 2.24 RR)
Mindset: Like the set up, but oil is spikey and the price range has been low
Attempts: I anticipate as many as 3.

Updates

Oops my trade expired! – 16 June
Sell off! – 20 June
Going in again – 21 June
Stopped out – 21 June
Third attempt – 22 June
Sitting tight, lacklustre price action – 23 June
Would like to close this on weak price action – 28 June
Hit target PM – 28 June

I’ve been watching oil for longs for maybe a few weeks now. I’ve been seeing divergences forming on the daily, 4h and h timeframes. I’ve also been asking Charlie to take a look at the set ups in the MBT Monday sessions (although I’m not sure he fancies the trade himself).

However, I can see a weekly trend channel in play and we are close to hitting the lower part.

Within the weekly channel we’ve been in a mini trend channel down, which is showing a divergence. The higher timeframe pattern says that we’re in a bearish pennant pattern so going long might not be so wise, but it’s been a while since we tested the daily lower trend channel.

So my expected pattern is for a bounce higher before a rollover.

4H Chart set up

Oil 4H Chart – 20 June 17

Daily Chart

Oil Daily Chart – 20 June 17

Weely Chart

Oil Weekly Chart – 20 June 17

Oops my trade expired! – 16 June

Ops, I didn’t realise the market I chose expired daily! So my trade just got closed! Doh, should’ve checked more carefully before placing the order.

My plan now is to see how the market opens on Sunday night and re-enter the market.

Sell off! – 20 June

Sometimes my lack of routine helps me, I didn’t get a chance to check on the market properly on Monday so I didn’t get back into my trade. It would’ve stopped me out, so the small profit I made on the trade expiring was fortuitous.

I’ve been struggling to choose a point to get back in as price action has been so lacklustre. So I emailed Charlie about it and went to work. Here’s the chart at the time.

Oil 4H Chart – 20 June 17

My assumption was that I should just get back in – price of the time matched my previous entry level – and Charlie agreed the set up was still valid. However another fortuitous thing happened, as I was commuting into work, there was a big old sell-off underway so I didn’t get a chance to re-enter.

Oil 4H Chart – 21 June 17

Going in again – 21 June

Long: 43.46
Stop: 42.84 (60 pips – quite rich)
Target: 46.40 (294 pips, 4h100, 4.9 RR)
Mindset: OK, think I’ve got a good entry here. No daily divergence though.
Attempts: Just this one. I think this’ll stick now.

Ok the set up is here again and we’ve had a nice spike lower which got bought up so I’m going in again.

Oil 4H Chart – 21 June 17

Stopped out – 21 June

Got stopped out on another move lower, the trendline hadn’t been quite touched until now, so not too unexpected, but I never put much faith in my trendlines. Sometimes I think they should be drawn as fat bands to stop me putting too much emphasis on them.

However, the price action has now set up another divergence on the hourly chart. I’m not entering just yet, as the 4H candlestick hasn’t closed inside my bands (although I’m very tempted too).

Oil 1H Chart – 21 June 17

Third attempt – 22 June

Long: 42.56
Stop: 41.95 (61 pips)
Target: 45.00 (244 pips, 4h100 & d500, 4 RR)
Mindset: Nervous about this as the trend down is so strong. Price rises get sold off quickly.
Attempts: 1 or 2. If it goes higher, I imagine it’ll jump around a bit and retest the lows again.

Price has closed inside the bands as of this morning. Price action looks pretty bearish to me, but it would with my strategy. The shame with this trade is that the spike low has upped my stop level so my position size has had to be smaller to keep my risk the same.

Oil 4H Chart – 22 June 17

Sitting tight, lacklustre price action – 23 June

Nothing is really happening with this trade, price jumps get sold off, it’s gone back to small range bars. I feel this is a bad sign for my trade, it looks identical to the previous price action before oil made another leg lower.

Oil 1H Chart – 23 June 17

Would like to close this on weak price action – 28 June

Just keeping an eye on this and the recent price action looks to be weak. I can see another pullback and a potential stop out on this. I’ve been reasonably close to target but haven’t come close enough to close the trade. I think I will be in this for a while longer yet.

If I wasn’t trading my system – I would close this trade. I’ve been resisting the urge to intervene. If I do close it though, it’ll become a trade I can’t properly learn from (I need to experience the discomfort of watching unbooked profits fluctuate) and I’ll be reintroducing bad habits (tinkering with trades and potentially underperforming the strategy).

So I’m sitting on my hands but yeah … I’d like to get out of this and wait for a better entry.

USOIL 4H Chart – 28 June 17

Hit target PM – 28 June

Oil 4H Chart – 28 June 17

Very mixed feelings about this, glad to have hit target and have booked some profits (in fact I feel quite relieved about it – felt like it was dragging on and Oil is pretty spikey) but at the same time I can see more upside! At least to 45 (d500)!

Oil Daily Chart – 28 June 17

Pretty typical I guess – always wanting more – but not being patient enough to wait for it.

EURAUD DST Long – 16 June

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Long: 1.4685
Stop: 1.4655 (30 pips)
Target: 1.4780 (1h100, 95 pips, 3.1 RR).
Once the divergence is confirmed I’ll be moving to the 4H50 as a target.
Mindset: OK – nice set up, might need another attempt to stick.

Updates

Stopped out – 19 June
Sitting tight – 20 June
Missed the boat? – 21 June

This is a more complicated trade than usual. I have seen a divergence to get long on the EURAUD on the 1H & 4H. There’s also a similar set up on the EURCAD but it has run higher already.

I can also see price has run up on the EURUSD (no divergences but it looks like it might make a short divergence.) The AUDUSD has also run up against the USD but is now diverging (not yet locked in).

The EURAUD higher timeframes have some interesting levels being tested now (see below).

I can see at least one stop out given the price range has been low, a spike low wouldn’t surprise me. So I need to be vigilant and prepared to get back in if the opportunity presents itself.

EURAUD 15M & H Chart

Multiple divergences are present on the 15M chart there’s a double divergence (very slight) on the Hourly. The hourly histogram is positive.

EURAUD 15M Chart – 16 June

EURAUD H Chart – 16 June

EURAUD 4H Chart

The 4H bar is about to get locked in as a divergence. I may be in this trade too early. I should’ve probably waited for the bar to close.

EURAUD 4H Chart – 16 June

EURAUD Daily Chart

Testing the d50, however momentum is to the downside. So yeah, I can see myself getting stopped out.

EURAUD Daily Chart – 16 June

EURAUD Weekly Chart

Never place much emphasis on my trendlines, but price maybe re-testing this trendline before heading higher?

EURAUD Weekly Chart – 16 June

EURCAD H & 4H Chart

Other markets are showing a similar pattern. This set up is similar but the better entry level looks to be on the EURAUD.

EURCAD H Chart – 16 June

EURCAD 4H Chart – 16 June

AUDUSD H & 4H Chart

This chart shows the short divergences I am seeing on the AUDUSD. Not sure where this move will end though. If the Aussie heads higher, it’ll probably stop me out. Potentially though I’ll add to my Aussie short on a divergence.

AUDUSD H Chart – 16 June

AUDUSD 4H Chart – 16 June

Stopped out – 19 June

Been stopped out of this trade yesterday evening. The story I’m trading is still in play though, so I’m looking for another place to get long.

EURAUD – 4H Chart

Here’s the price action – it looks very weak to go long where I did – but I saw the divergence so traded it. Would’ve preferred a spike down before getting long. Divergence is still in play though.

EURAUD 4H Chart – 20 June

EURAUD – 1H Chart

Hourly price action is still pretty weak. Divergence is still in play though.

EURAUD H Chart – 20 June

EURUSD – 4H Chart

One thing I noticed on the EURUSD is how close we are to two key levels. The 4h200 and the daily trendline that’s been in play since the start of the year. I think because of this and the AUDUSD looking like it might come higher for a divergence (see below), I’ll set some price level alerts on my phone and wait a little longer to see what happens.

EURUSD 4H Chart – 20 June

AUDUSD – 4H Chart

Although the current bar doesn’t look too bullish (it still might yet), I can see price coming up to those prior highs again. I just wonder if the EURAUD is not quite ready to turn yet.

AUDUSD 4H Chart – 20 June

Sitting tight – 20 June

I may be over analysing this, but I’m still not in on this trade. The EURAUD has sold off this morning (setting up another divergence?) and the EURUSD pattern is still on my mind (4h200 test and the 2017 trendline). The AUDUSD also looks like it might retest the highs, it hasn’t sold off much so far. So my plan is to wait for the EURUSD to touch the trendline, the AUDUSD to retest the highs and then get long on the EURAUD.

EURAUD 4H Chart

EURAUD 4H Chart – 20 June. Currently selling off, maybe another divergence will form?

EURUSD 4H Chart

EURUSD 4H Chart – 20 June. Looking for price to head lower.

AUDUSD 4H Chart

AUDUSD 4H Chart – 20 June

It’s a good story – just not sure if it is too much of an ask.

Missed the boat? – 21 June

I think I’ve missed the boat on this trade. The Euro did sell off some more against the dollar but the Aussie sold off more and so far the EURAUD long set up has been slowly edging higher. We still might get a sell-off and divergence but it is looking less likely.

EURAUD 4H Chart

EURAUD 4H Chart – 21 June

EURUSD 4H Chart

EURUSD 4H Chart – 21 June

AUDUSD 4H Chart

AUDUSD 4H Chart – 21 June

AUDJPY DST Short – 16 June 2017

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Short: 84.65
Stop: 84.80 (15 pips)
Target: 84.05 (15m100, 75 pips, 5x RR)
Mindset: Annoyed with myself – shouldn’t have got involved

Updates:
Stopped out – Lunchtime 16 June
Sometime later – 25 June

I’ve been watching a few markets and getting impatient, especially with the FTSE. Each time a really juicy set up looks to be forming I’ve either not been able to get in on the move or the set up hasn’t materialised. It’s been a really frustrating week.

I’ve been interested in shorting either the AUDUSD or the AUDJPY but the patterns haven’t quite materialised so I’ve been going to lower and lower timeframes looking for a justification to get in.

I found this set up on the 15m timeframe and took it. I’m annoyed because I don’t have time to manage the trade on a timeframe like this. My target is the 15m100 and it keeps moving every 15 minutes!

There’s a lesson here – don’t trade timeframes that don’t suit my lifestyle. As soon as I put the trade on I knew it was the wrong thing to do. I’m so keen for a profitable month I was chomping at the bit for the next set up. Let’s hope I don’t give some money back.

Here’s my thoughts / justification for the trade …

15m Chart – the setup

Spotted this double divergence – it’s quite a nice looping divergence.

AUDJPY 15M Chart – 16 June

Hourly Chart

We might be forming a divergence here too. I’ve broken a rule here though, the divergence isn’t on two timeframes yet.

AUDJPY Hourly Chart – 16 June

4H Chart

4 Hourly chart shows we’ve overshoot the 4h500, price tends to that in my experience.

AUDJPY 4H Chart – 16 June

Daily Chart

We’ve run into the d100 and potentially the upper part of a trend channel.

AUDJPY Daily Chart – 16 June

Game plan from here

See if price comes down for me, target is set up the 15m100 for now (as it’s a double divergence). If the hourly divergence forms I’ll switch to the h50. I’d love to trail the stop down to the lower trendline but I don’t have a proven strategy for this.

Stopped out – Lunchtime 16 June

Ugh – I thought I’d actually survived this, I went out for lunch and got back to see this chart. Price has just nipped me out. I think the set up is pretty good but I wasn’t around to re-enter because of the timeframe, so lesson learnt. Don’t dabble in day-trader timeframes when you’re swing trading.

Had I have got a 15 min entry on a swing set up, that would’ve been fine, but this wasn’t. So feel suitably schooled about this. I’m glad I lost on this trade – otherwise I might’ve not learnt the lesson. Here’s the final chart – amazing that my stop was on the exact limit of the price action! Probably like everyone else!

AUDJPY 15M Chart – 9 June

Some time later – 25 June

Just wanted to see how price played out. The price didn’t quite get to the 1h50.

AUDJPY 1h Chart – 25 June 17

Monthly Review – May 2017

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Starting balance: £6,815.66
Target return: £241.95 (3.55%)
Actual return: -£36.61
Closing balance: £6,779.05 ( -0.54% )

Overall my assessment of the month would be one of poor discipline (not being focussed enough). With the house renovations going on and a holiday to get ready for I didn’t regularly check the markets. I was too busy buying bathroom sinks and posing trunks 😀 !

On the positive I didn’t hemorrhage money, a few losers but after my call with Charlie, I’ve started trading tighter. My DST rules are now:

Only take a trade when a divergence occurs on two adjacent timeframes
Only take the divergence if two or more markets are setting up
Take the sweetest looking divergence (kinda obvious but I do find my head gets stuck into one market)

Daily Performance

There was only 1 divergence I spotted this month, GBPJPY. I didn’t take it as I was trading the GBPAUD pair. In hindsight the GBPJPY should’ve been my focus because it set up on 4H and Daily timeframes (rather than the GBPAUD setting up on the 4H and 1H timeframes – higher timeframes are more significant).

	All Signals	Win Loss %	Win Loss %
Winners	1	100%	0%
Losers	0	0%	0%
Still live	0	0%	0%
Total Signals	1	-	-
Total Pips	511	-	-

4H Performance

Not a bad month to be away on holiday, some really strong trends in play which has hammered the win rate. Taking all DST signals would’ve resulted in a win rate of 38% – however the strategy still made over 1,000 pips.

Factoring in the new rules, the win rate would’ve been 56%. What’s interesting this month is the new rules would’ve meant I’d missed half of all losing set ups and only 2 of the winning set ups! (Be interesting to see how that plays out over subsequent months.)

	All signals	Win Loss %	Signals with Confirmation	Win Loss %	Signals Taken	Win Loss %
Winners	21	38%	19	56%	1	20%
Losers	31	56%	14	41%	4	80%
Still live	3	6%	1	3%	0	0%
Total Signals	55	-	34	-	5	-
Total Pips	1,177	-	1,685	-	59	-

May Trade Log

The early trades were taken before my call with Charlie where I switched to a tighter set of rules.

#	Date	Stgy	Mkt	Pos	Acc Rsk	Open	Stop	Stp Pips	Tgt	Tgt Pips	R:R	Close	Fnl Pips	Fnl R:R	Days	P&L (£)
1	28 Apr 17	DST	EURUSD	Short	0.5%	1.0894	1.0961	63	1.0686	209	3.31	1.0961	-63	-1	7	-33.65
2	1 May 17	DST	USDCAD	Short	0.6%	1.3678	1.3705	27	1.3519	159	5.8	1.3705	-27	-1	2	-37.80
3	3 May 17	DST	Gold	Long	0.55%	1254.5	1251.1	34	1268.0	57	1.67	1251.1	-34	-1	1	-34.00
4	4 May 17	DST	GBPAUD	Short	0.55%	1.7350	1.7396	46	1.7236	114	2.47	1.7396	-46	-1	1	-34.88
5	9 May 17	DST	GBPAUD	Short	0.55%	1.7514	1.7551	37	1.7182	332	8.97	1.7551	-37	-1	1	-29.92
6	10 May 17	DST	GBPAUD	Short	0.45%	1.7593	1.7654	61	1.7375	218	3.57	1.7327	266	4.36	14	132.26

Mistake of the month

My biggest mistake from this month’s trading is not comparing markets side-by-side.

I was following the GBPAUD divergence too closely and not picking up the opportunity in the GBPJPY. I followed both charts but didn’t switch to the GPBJPY which had a better set up. I don’t really have an explanation for why I didn’t switch, but I should’ve.

In future, before taking a trade, I will make a note to layout all the related pairs together (e.g. GBPAUD, GBPJPY, GBPUSD, etc) and compare the relative set ups to double check I’m taking the best opportunity.

Here’s the two charts in question (grey areas are when I was away):

GBPAUD

Early in the month the GBP was strong, so a few stop outs along the way; however price did retrace nicely. I had a good run on this.

GBPAUD 4H Chart – May 2017. Grey areas show when I was away

GBPJPY

But I should’ve paid more attention to this. A similar set up, price grinded higher resulting in a few stop outs, but the daily divergence formed at the top which would’ve given me a juicier target to aim for. A 4H entry (~147.40) with a Daily target (~141.85) would’ve resulted in a 550 pip trade at almost 7x RR!

GBPJPY 4H Chart – May 2017. Grey areas show when I was away

GBPJPY Daily Chart – May 2017. Grey areas show when I was away

Notes to review with Charlie

If I hit monthly target early should I tighten up on the trading? Is it best for psychology?
Wanted to cover off adding to winning trades and at what stage it’s valid to add in. Thinking about the GBPAUD short on the way down
Cover tricky price action following a divergence stop-out. Wait for price action to properly go outside and back inside the bands again? E.g.
GBPJPY 4h stop out example

Tricky price action example

EURCAD Daily Example

Gold DST Short – 7 Jun

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Acc Risk: 0.45%
Short: 1292.8
Stop: 1297.1 (43 pips)
Target: 1271.8 (4h50, 210 pips, 4.8 RR)
Mindset: OK. Expecting a couple of stop outs before this might work out.

Spotted this short set up and like it because we have the potential for divergences across multiple timeframes. My only reservation is the price action hasn’t made a big spike high, I would feel much safer if it had, but you’ve got to be in it to win it so I opened a position.

If the divergence also occurs on the daily, I will look to add.

4H Chart – set up

Gold 4H Chart – 7 June

Here’s the divergence I’m keen on. The reason I like this trade is on the higher timeframes.

Monthly Chart

Gold Monthly Chart – 7 June

We’re testing a very long term trendline. It’s been recently tested (relatively) but I would expect a reaction to it before we were to break it. I’m looking for some monthly hand-railing.

Weekly Chart

Gold weekly chart – 7 June

Similar to the chart above, I noticed a slight narrowing of the MACD and Signal lines (shown by the histogram divergence). I expect the price to come lower and react to this.

Daily Chart

Gold Daily Chart – 7 June

Although we’ve broken my trend line – I drew it so I don’t put too much emphasis on it! If price comes down into the bands, we’ll have a daily divergence adding conviction to my trade. The MAs are all getting into order so I don’t imagine we’ll get much of a pull back. Maybe to 1240.

Hourly Chart

Gold Hourly Chart – 7 June

The hourly chart shows a divergence and potentially a double divergence forming. I’m late to this divergence but I’ve got a level here that I would’ve got at the time so I’m taking the trade. Price might go a little higher, I’m prepared for it, just hope I can get back in, unlike my FTSE trade.

Woohoo another winner – 8 June

It’s great to bank another winner so close to my last one and it’s a decent size too. The trade was not perfectly managed though. I was late to update my limit order (I was trading the 4h50) and when I saw price coming down to 50 I was frantically logging in to update my order (not great).

I was actually intending to move it lower (as the daily divergence has now confirmed) but I didn’t get there in time and the order was closed @ 1273.5. Still, pleased with the trade, it’s a 4.5x RR trade 🙂

Here’s the chart. I may be very lucky to have got out where I did. Although price has moved a long way from the bands so might be good for a run?

Gold 4H Chart – 8 June

Will I get the daily short? – 9 June

Price has paused at my exit level before heading lower. I thought I might not get my daily entry (even though the chart shows the 5ma touch – I don’t think it would’ve until the candle close pulled the MA down). Not sure what’ll happen next but I’ll keep watching it.

4H Chart

Gold 4H Chart – 9 June

Daily Chart

Gold Daily Chart – 9 June

It makes me feel nervous to be trading around a breakout zone. Probably means I should be more confident?

FTSE DST Short – 1 Jun 17

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Risk: 0.55%
Short: 7547.8
Stop: 7591.3 (44 pips)
Target: 7465.5 (4h100, 82 pips, 1.87 RR)
Mindset: Nice set up. Divergences on multiple timeframes

Updates

Stopped out, but still looks good – 2 June
Missed a second entry by 3 pips! 🙁 – 2 June
Sometime later – 9 June

I’ve been watching the FTSE for a while, I’ve had a number of opportunities to get short and haven’t done very well getting my entries. There’s such a big difference between seeing a trade (especially in retrospect) and actually making money out of it. (E.g. Spikes taking you out and you not being around to get back into the trade, waiting for a better entry that doesn’t get triggered, trading the wrong market, etc etc.)

The FTSE has been looking great on a number of timeframes for a short and I’ve missed the boat on one of these trades already. So I was pleased to get another set up come along. We had a divergence (double) forming on the weekly (not in yet), another double on the daily (currently active) and a 4H & hourly divergence! Set ups don’t really come better than that, right?

I’ve been losing quite a bit lately so I’m trading tighter now (only taking a divergence when confirmed on another timeframe) and looking for correlation on other markets.

FTSE Monthly Chart

A marginal divergence might form this month?

FTSE Monthly Chart – 1 Jun 17

FTSE Weekly Chart

A double divergence may form here.

FTSE Weekly Chart – 1 Jun 17

FTSE Daily Chart

The rise in prices have a diverging trend on the MACD

FTSE Daily Chart – 1 Jun 17

FTSE 4H Chart – the setup

Price rises haven’t been coupled with a strong MACD. The MACD is very flat so it’s hard to pick an entry from this chart.

FTSE 4H Chart – 1 Jun 17

I’ve taken the most recent spike high as a place to get long. The entry is on the 8ma. I think this trade is a good set up and could run if the weekly divergence comes in. If it does, this will need stop management. Not something I have been in the position to worry about. I can also see this getting stopped out so I will need to be ready to get back in.

Stopped out, but still looks good – 2 June

Prices have continued the trend higher. Not surprising really. If the move that stopped me out immediately reverses, I will try another entry immediately.

Missed a second entry by 3 pips! 🙁 – 2 June

Doh, I set a couple of price level alerts to see how price behaved following my stop out, both alerts were hit quickly so I felt a reversal could be happening soon; it did. I’ve been keeping an eye on the price all morning, waiting for my time to get short following a retracement. I was looking for an upper band test at 7580 but it only made it to 7577 (3 pips short).

I took this screenshot in preparation for the trade log but it never got there.

FTSE 4H Chart – 2 Jun 17

NFT was this afternoon and price has fallen away since. Pretty annoying to see, but we haven’t broken the higher timeframe trend yet so I am hopefully that I might get another entry to go short again.

The hourly chart might set up a divergence and the 4 hourly, daily and weekly would still be diverging. So that would make another nice entry.

Sometime later – 9 June

Thought I should start monitoring how markets play out following my trades (win or lose). Here’s the FTSE. Would’ve been a great trade had I got in, but I didn’t and that’s trading, sometimes you get lucky.

Maybe a shouldn’t be too precious on my entries?

FTSE 4H Chart – 9 Jun

GBPAUD DST Short – 4 May & 10 May

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Risk: 0.55%
Short: 1.7350
Stop: 1.7396 (46 pips)
Target: 1.7236 (4h50, 114 pips, 2.47 RR)
Mindset: Nice set up. Feeling positive after my catch-up with Charlie.

Update – Stopped out – 4 May
Setting up, but staying out – 5 May
Having another attempt – 9 May
Stopped out again – 9 May
Set up still valid, going in again – 10 May
Booked my first profit in 9 losing trades – 23 May

Another set up I like the look of, the divergence is a double divergence now. I had a go at this one last swing high and lucked out on the second attempt to bag a winner. So I was pretty keen to take this trade. However, I got in early on this! I took the hourly chart as an entry and the 4h chart hasn’t actually set up!

I did take a look across the GBP pairs to see how the other pairs were setting up.

Here’s what I saw.

4H Chart – set up

GBP 4H Charts – 4 May

These three charts are diverging nicely – the GBPCAD and GBPUSD seem to have already started to break down. The GBPJPY (not shown above) is holding up fairly well – no divergence yet. The GBPAUD looks the best divergence of the charts to me (set up and risk to reward style).

See how it goes.

Stopped out – 5 May

Here’s the latest of those GBP charts.

GBP 4H Charts – 5 May

Price has headed higher, one thing I didn’t think too much about at the time was that the aussie was the weakest of the GBP pairs. Not sure if that is too big a deal – but I thought I should check the Aussie as well as the GBP against other currencies?

The AUDUSD is in a downtrend – just hitting a trendline. Looks ready for a (small) bounce, the EURAUD has run into resistance and looks ready for a pullback. Neither has a set up I can trade but I wonder if the Aussie’s time for a turn is soon?

AUDUSD 4H Chart – 5 May

EURAUD D Chart – 5 May

EURAUD 4H Chart – 5 May

The EURAUD is showing the start of a divergence set up.

The other Aussie pairs aren’t saying too much to me. I will keep an eye on the GBPAUD for more – proper 4H – set ups. That is, a 4H divergence with a confirming hourly divergence. I’ll be trading at minimum risk until I can hit a running streak.

Setting up, but staying out – 5 May

Macron Le Pen face-off

Today is the last day of trading ahead of the french election. Where le Pen and Macron go head to head for the presidential win. There’s a fair amount of debate about what change a president could bring – in terms of whether they could actually leave the Euro zone – but in a nutshell Le Pen = Bad for the EUR, Macron = Good for the Euro.

Polls suggest it is Macron’s for the taking but apparently the winner of the first round of voting doesn’t necessarily equate to the winner of the overall race. Of the last 9 elections, 3 previous presidents were not the leaders going into the second round.

I’ve got set ups I can trade now – on the EURAUD and GBPAUD which look like great set ups. But the shorts are out in force.

I think the analysis of price heading lower is correct but I’m sure it’ll be down to timing with this one. A win for Macron will probably pop the EUR higher before selling off. A win looks priced in to me – but as advised by Charlie – I’m keeping my powder dry for now. Staying flat over the weekend (It actually feels quite relieving!)

The first round of election results did ripple through all markets (even the AUDUSD). The GBPAUD gapped down last time (and I do want to get short) but any bad news could be punishing on a GBP short given the correlation of the EUR and GBP during the Brexit situation.

GBPAUD gap – 23 April. Not as big as the EURUSD but still a decent gap down.

Will be looking forward to checking price action on Sunday!

Going in again – 10 May

Following the results price hasn’t reacted much to the news. We’ve just had another spike up which has created a shooting star. We now have divergence on the 4H and Hourly Charts. The hourly chart is very undecided and choppy but both charts show a double divergence.

4H Chart – set up

GBPAUD 4H Chart – 10 May

1H Chart – confirmation

Shows the previous days double divergence. Just waited for the 4H to confirm the trade before going in.

GBPAUD 1H Chart – 8 May

Here’s my position now.

Risk: 0.55%
Short: 1.7593
Stop: 1.7653 (61 pips)
Target: 1.7327 (4H100 or prior highs – if I’m away, 266 pips, 4.36 RR)
Mindset: Not confident

The entry was very fortunate after the price action, I checked this trade at 8am but waited until nearer 10am to put the trade on. Early price action would’ve stopped me out! I’ve been hit a few times by placing trades in the morning only to get stopped out.

It’s been making me think that the hourly timeframe needs checking when entering a swing trade in the morning. Something to go back over and check. I’ve set my limit at the 4h100 but will move it to the prior highs if the trade is still open during my holiday. Looking at the chart I think it will meet nicely with the 4h100 whilst I am away.

Booked my first profit in 9 losing trades – 23 May

Finally! I winning trade. I’m not ecstatic – just relieved.

GBPAUD 4H Chart – 30 May

Price action has headed down to the 200MA. I’m happy with the trade as it was. Hope I get a few more 4x winners.

Gold DST Long – 3 May

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Acc Risk: 0.55%
Long: 1254.5
Stop: 1251.1 (34 pips)
Target: 1268.0 (57 pips, 4h50, 1.67 RR)
Mindset: Feeling positive. Quite like the set up on this.

Spotted this divergence into the 4h200. Decided to take it because the divergence coincided with a test around the 4h200 and a daily trendline. Price was also near a w20. The RR wasn’t great, but my mind has been on trading the set up (even if it was reluctantly!)

4H Chart – set up and stop out!

XAUUSD 4H Chart – 3 May

I got stopped out of this trade pretty quickly – by lunchtime price was moving down and stopped me out.

Catching up – 5 May

This trade didn’t work out so well for me – shame because it was technically very neat. Here’s the daily chart and the weekly chart just touched the w20.

XAUUSD D Chart – 3 May

Monthly Review – April 2017

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Starting balance: £7,005.35
Target return: £234.68 (3.35%)
Actual return: -£189.64
Closing balance: £6,815.71 ( -2.7% )

Daily Performance

There was only 1 divergence I spotted and I took it (it was a loser)

	Actual	Win Loss %	Trades taken	Win Loss %
Signals	1	-	1	-
Winners	0	0%	0	0%
Losers	1	100%	1	100%
Still live	0	0%	0	0%

4H Performance

Again didn’t perform as well as I’d hoped aiming to take 50-60% of all trade signals. But given my smaller account size I can’t afford to spread my positions around at my current risk level (0.5%). I’ve definitely been more active in the markets scanning and picking trades. I think this past month has seen a couple of strong trends (in the JPY and GBP) which have not been favourable for the strategy.

So the winners haven’t been big and the losers have been numerous.

	Actual	Win Loss %	Trades taken	Win Loss %
Signals	51	-	20	-
Winners	16	31.3%	7	35%
Losers	31	60.7%	13	65%
Still live	4	7.8%	0	0%

April Trade Log

#	Date	Mkt	Pos	Acc Rsk	Open	Stop	Stp Pips	Tgt	Tgt Pips	R:R	Close	Fnl Pips	Fnl R:R	Days	P&L (£)
1	28 Mar 17	GBPCAD	Short	0.6%	1.6829	1.6912	84	1.6636	193	2.3	1.6655	174	2.07	1	86.85
2	28 Mar 17	GBPJPY	Long	0.9%	138.00	137.40	60	147.82	982	16.3	138.60	60	1	7	58.42
3	30 Mar 17	EURJPY	Long	0.4%	119.41	118.85	56	120.86	145	2.59	118.85	-56	-1	2	-28.10
4	03 Apr 17	EURJPY	Long	0.6%	118.84	118.40	44	119.99	115	2.61	118.40	-44	-1	1	-21.83
5	03 Apr 17	AUDUSD	Long	0.6%	0.7609	0.7571	38	0.7693	84	2.2	0.7571	-38	-1	2	-39.12
6	05 Apr 17	Gold	Short	0.4%	1255.2	1263.3	81	1234.0	212	2.61	1263.3	-81	-1	3	-24.76
7	05 Apr 17	CADJPY	Long	0.35%	82.33	81.90	43	83.69	136	3.16	83.19	86	2	6	51.18
8	06 Apr 17	AUDNZD	Long	0.3%	1.0817	1.0803	14	1.0893	76	5	1.0803	-14	-1	2	-15.56
9	10 Apr 17	EURJPY	Long	0.45%	117.70	117.27	43	118.45	75	1.74	117.27	-43	-1	3	-32.90
10	10 Apr 17	AUDJPY	Long	0.5%	83.223	82.746	48	84.457	123	2.57	82.746	-48	-1	2	-33.39
11	10 Apr 17	EURUSD	Long	0.4%	1.0585	1.0563	22	1.0660	75	3.4	1.0633	48	2.1	3	59.57
12	12 Apr 17	EURCAD	Long	0.5%	1.4110	1.4084	26	1.4240	156	6	1.4084	-26	-1	1	-33.15
13	12 Apr 17	CADJPY	Long	0.5%	82.25	81.97	28	83.46	121	4.32	81.97	-28	-1	2	-33.60
14	13 Apr 17	EURCAD	Long	0.5%	1.4120	1.4084	36	1.4224	104	2.88	1.4084	-36	-1	1	-36.10
15	20 Apr 17	EURUSD	Short	0.35%	1.0759	1.0782	23	1.0697	62	2.7	1.0719	40	1.7	1	40.03
16	24 Apr 17	EURCAD	Short	0.6%	1.4634	1.4717	83	1.4313	321	3.86	1.4718	-84	-1	2	-42.13
17	26 Apr 17	USDCAD	Short	0.5%	1.3588	1.3631	43	1.3434	154	3.58	1.3631	-43	-1	2	-35.52
18	27 Apr 17	GBPCAD	Short	0.55%	1.7485	1.7548	63	1.6935	613	9.7	1.7548	-63	-1	1	-37.86
19	28 Apr 17	GBPCAD	Short	0.5%	1.7613	1.7654	41	1.7429	225	5.48	1.7655	-42	-1	1	-31.35
20	28 Apr 17	GBPAUD	Short	0.4%	1.7285	1.7337	52	1.7061	276	5.3	1.7338	-53	-1	1	-28.66
21	28 Apr 17	EURUSD	Short	0.5%	1.0894	1.0961	63	1.0686	209	3.31	1.0961	-63	-1	7	-33.65

Notes to review with Charlie

Noticed clusters of set ups form (e.g. All JPY pairs setting up).
Switching markets after being stopped out – might dilute the win rates. Need to pick the markets better first and then stick with the best set ups.
Need to get better about my trade scans – make sure I check every day rain or shine. Still missing the odd scan and therefore missing set ups.
Trading too many markets? Multiple signals across correlated markets. Difficult to decide which to take. Goes to previous point – I’ve ditched the NZD to help with my routine and scan times.
Using the higher timeframes more (been too focussed on the lower timeframes) Struggling to appreciate the significance of what I’m seeing. (e.g. daily vs weekly, trendlines vs MAs, etc)
Add to checklist – are there other divergences in play across other markets with better targets?
Using the hourly timeframe to get better entries – not necessarily a divergence – but band play?
Started to think about my account in terms of number of bets (like big blinds in poker).
Emotion free trading eBook. Finding it difficult to get into a positive state having never had a run of winners.

Holiday – talk through approach for winding down trading …

USDCAD DST Short – 1 May

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Acc Risk: 0.6%
Short: 2 x 1.3678
Stop: 1.3705 (27 pips)
Target 1: 1.3577 (4h50, 101 pips, 3.74 RR)
Target 2: 1.3461 (4h100, 217 pips, 8 RR)
Mindset: Feeling pretty smart about this one.

I was just doing my monthly review and noticed this set up. I’ve been looking into the hourly, 4 hourly and daily correlations. This set up caught my attention because there’s so many divergences in play! So again, another trade to be positive about! The trade is in two parts – because there’s two possible targets in play – the 4h50 and the 4h100. Because of the split targets my position risk is slightly higher, but I think it’s the right decision to make.

The divergences are visible on every timeframe!

1H Chart – the setup

USDCAD Hourly Chart – 1 May

4H Chart

USDCAD 4H Chart – 1 May

There’s nothing to really say on the Weekly or Monthly timeframes. As far as these charts are concerned price could easily go higher still.

Daily Chart

Doesn’t look like it will be a divergence but nonetheless close to being one.

USDCAD Daily Chart – 1 May

Weekly Chart

USDCAD W Chart – 1 May

If price does reverse, we’ll get a divergence on this timeframe, so could look to revise the targets.

Stopped out – 2 May

Price action has moved higher against me, it looked like it was going to go my way, but quickly moved against me this afternoon.

I am still watching this market closely. I think we could well get another divergence forming.

USDCAD 4H Chart – 2 May

Still watching this market – 2 May

Price has closed inside the bands (just though) so I’m tempted to take another trade. The stop size is now much bigger than before so the trade isn’t as appealing. The bar has also only just closed inside the bands (by 4 pips) and we’re going into the night now (10pm UK time), spreads have widened and the phone icon keeps appearing on my screen.

I’m not really sure what is best to do, I will leave it overnight and see whether we get a better entry.

USDCAD 4H Chart – 2 May