EUR/JPY Evening Trader

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Didn’t do that well today. Eight trades in 2 hours, 10 minutes, with a loss of 41 pips (had to close with 40 drawdown limit). Didn’t have a good grasp of market direction most of the time either.

Trades: -9.5, -6, -9, +18.9, -12.5, -8.5, -8.9, -5.5.

Had several things go my way, however. I had one out of eight trades be profitable, which shows good commitment in taking small losses, I went long within about half a pip of the session’s high, and I went short within a pip and a half of the bottom. I also lost sight of the longer term trend (half of trades were longs), and overtraded again. I’ve really come a long way.

Think I’m going to keep the actual trades to myself today. Won’t do anything else likely until Saturday.
 
Wanted to reflect briefly on my trading last night. I was not being very adaptive to the market, as the trend and market organization was lining up with the 15-30 min time frames. Although in hindsight, I should have seen this very easily, especially as the bearish lines didn't exactly line themselves up correctly on the 5 min and 1 min.

Instead of viewing this as a possible deviation (been studying lately in patterns of market organization), like I did, I should have adapted to the market. A good lesson to learn now, but it will take plenty practice to get it right.

Good trading.
 
I'm trading with IB - I just love them, and it's also very flexible to trade anything under the sun.

Obviously the behaviour of the order book can be faked, but it does provide some sort of indication on what's going on when the banks update their prices - or when a retail order is sitting in a heavily arbed pair like EURJPY and not being picked off. Or crazy movements of bids and asks without the price moving that much. With a broker just offering a spread, you're missing out some information.

Whilst I can relate to the argument that the spread is fixed, what is good in a pair like EURJPY is that you can put your order in between, and also trade against other retail orders - I definitely do that from time to time.

Today there's been a bank (I guess) which has really been working this pair - so the ECN-spread has very often been 0.5-1 pips only. With prices rising they would offer 0.5 pip above the bid all the time, and then there would be 3 pips up to the next offer - clearly someone working a large order. This kind of stuff you can get a feel for. Of course if you have Reuters, EBS or BloombergFX then you'll get even more information about the current order flow.
 
Quote from 4XQs:

I'm trading with IB - I just love them, and it's also very flexible to trade anything under the sun.

Obviously the behaviour of the order book can be faked, but it does provide some sort of indication on what's going on when the banks update their prices - or when a retail order is sitting in a heavily arbed pair like EURJPY and not being picked off. Or crazy movements of bids and asks without the price moving that much. With a broker just offering a spread, you're missing out some information.

Whilst I can relate to the argument that the spread is fixed, what is good in a pair like EURJPY is that you can put your order in between, and also trade against other retail orders - I definitely do that from time to time.

Today there's been a bank (I guess) which has really been working this pair - so the ECN-spread has very often been 0.5-1 pips only. With prices rising they would offer 0.5 pip above the bid all the time, and then there would be 3 pips up to the next offer - clearly someone working a large order. This kind of stuff you can get a feel for. Of course if you have Reuters, EBS or BloombergFX then you'll get even more information about the current order flow.
More...

Thanks for the tip, 4XQs. I have been aware that the spreads at IB are excellent, and would very much like to open an account there. Unfortunately, the minimum is three grand, and I personally only have two (if I decide to use all my spare cash).

As a result, I will likely have to wait until Easter Break (minimum) before I try out the platform, and if I remember correctly also has a $5 commission per trade, which is very expensive in comparison to what I can get with Oanda right now with just the spread. Did put ECN reading on my long term to do list, however.

Good trading.
 
I'd agree that Oanda might be more suitable for you. Very flexible position sizing etc.

I think the minimum commission for IB's forex trades are 2 usd. Minimum orders are 25k usd I think.

The spread in EURJPY is usually 2-5 pips. However, IB gives their customers price improvement - if you can believe it. It's just fantastic really. If a bank trades through your order, you are given the benefit of the bank's price: Say you're offering at 1.27525 - then a bank bids 1.27535 - you get an instant extra pip. Doesn't happen every time of course, but often enough to add up.

Also, it seems that whilst you're trading with half pips per tick - the banks are quoting in tenths of a pip - which is then rounded away from the midpoint. This is also passed onto me when I trade - if I hit a bid at 1.2752 I might actually be filled at 1.27524.
 
It really does seem like a great deal. I didn't yet look into the trade minimums, just since I didn't qualify for the account minimums in the first place, but it seems like I will have to wait even longer before I try it then. I haven't found another place with nearly as good spreads. Oanda is pretty good, and hotspotfx is about the same (although iffy platform and I'm pretty sure they had a minimum size or something I didn't like).

I started with TOS, but for some reason they like to quote the bid price, which I don't understand, they chart rounded pips, and their spreads just got really high recently (standard 3 pip EUR/USD).

Oanda has pipettes, has better TL drawing, and better spreads. It suits my purposes for now.

Thanks for the insight into IB.
 
Brief trading day today. Total 50.6 pip loss with trades of -21.2 (2 min), -18 (4 min), and -11.4 (47 min). The charts are attached. My drawdown limit was 40, but after being down 39.2 after the first two trades I decided that I should have a max of 50 with no new trades after closing with a 40 drawdown.

My first two entries were not good. I was looking for a long near the longer-term trendlines back up to the top of the pennant, and the existence of two trendlines made it a large gray area of continuation. I took both beginnings of price strength, including a doji star on the 5 min (failed), and then a continuation closer to the more solid trendline (also failed). For my last trade, I was waiting for a pullback, and noticed that the rate was stalling at the bottom of a channel line that was developing over the past 18 hours and had three hits. I took the long again, although it was a bit iffy. I knew that a recoil from the breakout could spring for a huge gain, and PA was indicating a stall. My entry was a bit early, but even though it was a loser I believe I would have still entered at the double bottom.

I don’t really think I all-out failed today on everything, just maybe four things I should have done better:

1. Safer entries – I was playing a longer term downtrend, and was trying to hop on the reversal only a few minutes late. I should have waited for it longer.

2. My profit target on the last trade was initially too low to take, with corrections anticipated at both the previous low and trendline, which was only about 20 pips away.

3. The acceleration of the down move was something I would have noticed extremely easily using my old strategy – a very consistent curving, drifting, accelerating down move at the top of a channel. I very much like this strategy, I just missed it. Unfortunately I did not recognized the channel, and I was looking at the R:R of hopping on the trend rather than the meandering reversal that nearly put me to sleep.

4. Be more open to the short. After about 10 minutes I decided that PA was likely going to the TL and I would take the continuation. I was not looking for short signals, and I should always be looking for signals in both directions.

By the way, I did change up my schedule. I am going to try trading Monday, watching Tuesday, and trading again Wednesday. I think the break will help me soak things in a bit more. On a good note, my mistakes are much smaller and more advanced, even though they are just as crippling and expose my weaknesses. I wish I had an easy button.
 

Attachments

Today was just an observing today, and I got in about 2.5 hours. Including some time late last night and early in the week, I am up to about 6.5 hours for the week. I will be back to trade tomorrow.

One thing I would like to comment on is how certain patterns that have failed me are reappearing. For example, I would take a trade any time price strength showed up before, and that is really the only reason I can see for the long that occurred today (opposite strength after piercing a trendline – a pattern I noticed a while back). After that, I’ve never seen a better fib fan continuation before in real time, and it was perfect for 35 more pips.

I believe I may have stopped these trades because it is easy for them to go either way. During my times of overtrading, I would see these patterns and begin reversing trades, which is great, but I would do it too often anyway just as I was trading immaturely. Reversing that many trades allowed the market to get in my head and cause a lot of bad trading problems. It does seem, however, that I should likely re-incorporate some of them back in my trading. We will see.
 
Mixed day today. Traded from 6:45 (time began looking for first trade) to about 10:20. Trades are attached.

Totals: 9 trades; +8, +6.6, -9.3, +10.5, -5.3, -3.8, -9.2, -5.3, -9.5 netting -17.3 pips.
These numbers do not show my progress, however. Although I did show some amateurishness at certain points in the day (and especially the guesswork for when the dead channel was going to break), I feel I did rather well. I had at least a decent market presence the entire time, and resisted most of the emotions I would normally have.

A few things I would like to say about what seems to be my biggest problem areas. After the double top, I did take the breakout. It was a beginner-type move, but I did believe there was a good risk:reward in place, and I did have the presence to make a net profit of 1.2 pips. I wish I was a bit sharper here, and exited and entered a bit earlier, but it was all good for now. Also, I am a bit unsure of my exit after the decline to the weekly pivot. There was a sharp increase, which hit my hard stop, although it did not trigger the signal other signal that was keeping me in the trade (which would have had me exit a few minutes later, but still). I perceived a good R:R to hold on a bit and let it work, but I am not sure if I should have exited when prices stalled at the pivot or not. Lastly, my trading at the channel became very weak. I was entering and reversing while I knew I did not have a very good understanding of the price action. Although I eventually identified this, I was caught in the bear trap. When I saw that prices were gaining strength, I was then about to reverse and expect the final breakout, but remembered that I was just very bearish and was thinking that the market was fooling with my mind, even though I would have finally been correct (traps followed by opposite strength are one of my favorite plays).

Anyway, I am very satisfied, and believe I have made a lot of progress again today. I also went to the library and got a few more on chart patterns to help extend my knowledge.

I may be back for some maintenance things this week, although I am likely done dealing with the market.
 
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