# P2 Trade Book



## peter2

*P2 Trade Book* (futures, forex, cfds)

It's time to diversify our trading business that started in Pavilion103's LIVE ASX Momentum Setup Trading thread and continued in the ASX Momentum Trade Book - Part 2 thread. Diversification will provide more trading opportunities and reduce our dependance on a bullish ASX market. 

Our starting capital ($50K) has grown to approx $65K (not including open profits). We are going to transfer $15K to an account that has access to leveraged financial products (futures, forex, cfds). 

This thread will be different in that there will be less educational info presented. I apologise for this, but there is too much educational material related to these financial products for me to repeat it here.  If you want further explanation about anything, then the onus is on you to ask specific questions.  I encourage you to ask and participate. I don't wish to tell anyone how to trade these markets or endorse trading in leveraged financial products. 

*Aim*: To earn a few % each month in addition to what we earn from the ASX trading activity. 

*Trading Strategy*: Short term swing (momentum) trading using daily and intra-day charts.

It's illegal for me to post specific buy/sell recommendations. I'll post details soon after the entry and before the trade is closed like I have in the ASX thread. Every trade has an iSL and they will be in the market at all times. I will also state the initial risk of the trade (points, ticks, pips and the $AUD risked) and post a chart after the trade is closed to show the complete trade. 

I'll continue the use of the fixed fractional position sizing model in this thread. The individual trade risk will be based on the combined realised equity of both accounts (ASX + P2).  Currently the realised equity of both accounts is 50K + 15K = 65K. Open profits are not included.  A new trade risking 1% will therefore be risking $650AUD. All wins and losses will be converted and displayed in AUD as other markets around the world operate in different currencies. Trades based on the daily charts will risk 1% and the intraday setups will start at 0.5%. 

All of the trades posted in this thread will be based on live trades done in one of my accounts.  The results (R multiples) I get in my own account will be used as the results in this thread.  For example if we risk $300 on a trade in this thread and I realise a +1.6R result in my account (incl all costs and currency conversions). The result in this thread will be $300 x 1.6 = +$480.


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## peter2

My trading is a rules based discretionary style derived from my beliefs of market behaviour.  I must mention that the methodology to be used in this thread has NOT been proven or validated to be profitable in the long term (years). Trading in this thread will stop if the draw down exceeds 10% combined equity of both accounts (currently -$6500).

Most of my trades are trend trades. I do trade counter trend when there is an acceptable RR.
I do not scalp these markets. I want to get at least twice what I've risked in every trade, however with counter trend trades there are many times when I'll take +1R. 

*DAILY PROCESS* (brief outline): Find a market that has started to move and join in.

1.  Review daily currency strength. I want to buy a strong currency and sell a weak one (forex).

2.  Review a list of daily charts looking for short term trends that have started recently. Those are indicated by specific price bar patterns (candlestick patterns) that indicate probable future movement. I also use a pair of short term ema's on the daily and 4H charts to indicate trend direction. 

3. Look for setups in the trading time frame (1H) in the direction of the trend indicated by the daily charts. There are two common setups that are defined by the depth of the corrective pullback; 
shallow (<40%) => break-out entry into the trend
deep (50-61.8%) => ambush or reversal setup for entry into the trend

Once that work is done and the orders placed. I monitor a few markets during the day for one of two intraday patterns (15M charts). 

Most trades last for 0 - 2 days. I will be trying to hold some trades for longer.


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## peter2

"_Why do this _?"  
I've been considering this question for many months.  

The main reason is selfish and I've had to decide whether it's "ego" or self improvement.  My trading has improved and become much more consistent since I started blogging my ASX portfolio years ago (elsewhere). I hope this journal will help me improve many aspects related to trading in these markets. Of course, it could be my ego telling me it's for self improvement. 

Without going into detail, these aspects are;
1. Trade frequency (I should trade these markets more often than I do)
2. Trade in a smaller universe of markets (improve focus, specialise)
3. Research optimum hold times.
4. Increase overall productivity.

I'll be monitoring my progress in all these aspects as well as the usual stats, looking for signs of improvement.

"_Why do this on this forum_?"  

Overall our community here is supportive and I think I can help others improve aspects of their trading by showing some of mine.

I hope you'll enjoy it as much as the ASX momentum portfolio thread but remember this is more of a journal rather than an educational thread.


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## peter2

This is how I think it's going to work. After I've got set in the market I'll post something like this. 

New Trade: T00 EURUSD long




and when it's finished I'll post the chart showing the complete trade along with my results.
eg. Closed T00 at T2 target. Results +2R,  +$650AUD




Edit: I'm going to start this slowly as I don't know how much extra work this will require. 
I'm anticipating 1 or 2 trades per week from the daily charts and I'll try not to post too many intraday trades.


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## cynic

peter2 said:


> "_Why do this _?"
> I've been considering this question for many months.
> 
> The main reason is selfish and I've had to decide whether it's "ego" or self improvement.  My trading has improved and become much more consistent since I started blogging my ASX portfolio years ago (elsewhere). I hope this journal will help me improve many aspects related to trading in these markets. Of course, it could be my ego telling me it's for self improvement.
> 
> Without going into detail, these aspects are;
> 1. Trade frequency (I should trade these markets more often than I do)
> 2. Trade in a smaller universe of markets (improve focus, specialise)
> 3. Research optimum hold times.
> 4. Increase overall productivity.
> 
> I'll be monitoring my progress in all these aspects as well as the usual stats, looking for signs of improvement.
> 
> "_Why do this on this forum_?"
> 
> Overall our community here is supportive and I think I can help others improve aspects of their trading by showing some of mine.
> 
> I hope you'll enjoy it as much as the ASX momentum portfolio thread but remember this is more of a journal rather than an educational thread.




Great stuff peter. 

It will be interesting to observe the differences and similarities (in trading highly leveraged instruments in both directions as opposed to relatively unleveraged, long only, securities) as this thread progresses.


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## tech/a

I understand the time and effort this takes.
If you can show me how you make the time
I'd be forever grateful!

A very generous and selfless task.
Hopefully the endless posts on how can I 
make a profit
Will have a permanent reference.

Thanks Peter.


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## captain black

Watching along with great interest Peter. Back in 2011 I had a reasonable slice of my capital tied up in the MF Global bankruptcy and faced the choice of going back to doing a real job (gack!) or finding a way to make an income from a lower capital base. Thankfully I'd been doing some research and testing on day trading index futures and found a way to make it profitable so I'm always interested in seeing how others approach trading with a small capital base ($15K in your case).

Apologies if you've answered this before; what charting software are you using?



tech/a said:


> I understand the time and effort this takes.
> If you can show me how you make the time
> I'd be forever grateful!




Lol, same here! 

Great to see you posting again tech, I picked up some great tips from the futures trading thread(s) you and Pav had a few years ago.

I have thought about a similar type of educational "follow my trades" thread but know I'd have trouble keeping it going so find it much easier to hijack other people's


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## tech/a

Disappointing.

I thought there would be a lot more interest
and encouragement.

At least 3 of us will be watching on!

Rare indeed to see the combination 
of the two---derivatives and equities
being traded at the one time.


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## cynic

tech/a said:


> Disappointing.
> 
> I thought there would be a lot more interest
> and encouragement.
> 
> At least 3 of us will be watching on!
> 
> Rare indeed to see the combination
> of the two---derivatives and equities
> being traded at the one time.




Fret not! 

The day is young! Near 200 views portend a vaster audience than thee and thine!


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## Porper

tech/a said:


> Disappointing.
> 
> I thought there would be a lot more interest
> and encouragement.
> 
> At least 3 of us will be watching on!
> 
> Rare indeed to see the combination
> of the two---derivatives and equities
> being traded at the one time.




Hopefully there will be a lot of people silently watching this thread and learning.

You don't often get somebody with the time and inclination to teach you how to trade profitably - the opportunity should be grabbed with both hands.

If you are a newbie and scared to post - don't be. I am sure Peter will be glad of your participation.


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## debtfree

I've left a post on *ASX Momentum Trade Book - Part 2* to Peter that I would be following his thread here so add another person that appreciates his time and efforts. Absolutely fantastic, thanks once again Peter.

Cheers ... debtfree


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## VSntchr

tech/a said:


> Disappointing.
> 
> I thought there would be a lot more interest
> and encouragement.
> 
> At least 3 of us will be watching on!
> 
> Rare indeed to see the combination
> of the two---derivatives and equities
> being traded at the one time.




Lol the thread was started at 230am, less than 12 hours ago - give it a chance!
I'll be here


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## tech/a

VSntchr said:


> Lol the thread was started at 230am, less than 12 hours ago - give it a chance!
> I'll be here




Ahhh
The secret to his endless time allotment.
The man doesn't sleep!


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## barney

Porper said:


> Hopefully there will be a lot of people silently watching this thread and learning.
> 
> You don't often get somebody with the time and inclination to teach you how to trade profitably - the opportunity should be grabbed with both hands.
> 
> If you are a newbie and scared to post - don't be. I am sure Peter will be glad of your participation.





Echo the above 100% ..... There will be a squillion watchers in no time flat

Well done Peter.  You have given me excellent advice on many occasions which has always been appreciated.  Hope it goes well.


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## Roller_1

Watching with interest too... Looks good!


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## peter2

tech/a et al.  Thanks for your support. I don't mind a low key start. 

captain black:  The capital base is currently 65K with 15K being used for margin purposes. 

Most of the charts will be from an MT4 account. I've got the charts looking nice for my purposes. I should mention that even though the charts are from an MT4 account I may take the trade in a futures account as my trade sizes are different to those in this thread. 

----

The first important difference between trading equities and leveraged products is the handling of the iSL. The initial SL is always placed in the market whereas my exit triggers in the ASX trades are not in the market. The main purpose of the iSL's are to act as disaster exits. They're there to protect capital. If a trade doesn't work out quickly, I'll exit it at break-even much more than I have in the equity thread. 

I also use profit targets (T1, T2 etc ) a lot more in these markets. That means I exit early many times, but the profit is in my account and I'll be compounding the trade risk a little more aggressively in this thread. I'll discuss the methods and reasons at a later date. 

You'll notice that I use similar methods for setups and entry. That's not a coincidence as my trading strategies are all based on my beliefs about market behaviour. 

Another important difference about trading world markets is the impact major news has on certain markets. While I can ignore most FA info from the ASX companies, regular scheduled news is very important for a short term trader in these markets. There are scheduled news events almost everyday. There is no excuse for being unprepared for the impact of these on our trades. [Note: BOJ news right now, check out the price spikes.]


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## Modest

I'm all over this like a rash!


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## captain black

peter2 said:


> Most of the charts will be from an MT4 account.




Thanks Peter, is that darvas boxes in the chart above?




Modest said:


> I'm all over this like a rash!




You can get some cream that'll take care of that :


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## tech/a

** I'll exit it at break-even much more than I have in the equity thread. 

** That means I exit early many times, but the profit is in my account and I'll be compounding the trade risk a little more aggressively in this thread.

** regular scheduled news is very important for a short term trader in these markets. There are scheduled news events almost everyday. There is no excuse for being unprepared for the impact of these on our trades. 


*GEMS*


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## captain black

tech/a said:


> ** I'll exit it at break-even much more than I have in the equity thread.
> 
> *GEM*




+1

I posted a couple of scatter charts of trades in Modest's futures thread and they were good examples of keeping tight initial stops and getting stops to breakeven as soon as practicable. I mentioned earlier about having to become profitable trading futures after the MF Global collapse and this was one of the key things to achieving that. 

A trade setup should have an entry where you know very quickly whether it's going to move your way or not. Being able to take entries inside accumulation and distribution patterns gives high R multiples when done well. The trade I took on the FESX last night I posted in CanOz's DAX thread ended up as a 7R trade. Don't need to make many of those a day to be profitable.


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## CanOz

Ditto all the above, looking forward to this as Peter presents this in his ever disciplined and consistent manner. Something i really admire him for.


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## peter2

captain black: The boxes outline the main trading sessions throughout the day. The light blue is the Asian session that covers the ASX open hours plus one hour earlier. The green is the UK session starting 1hr before the LSE opens. This session runs into the US session that starts 1hr before the US markets open. 

It's important to know these sessions exist and what markets are likely to move in which session. I won't take or fade a BO in the EUR or GBP during the Asian session but I'll be all over them in the UK/US sessions. Having the sessions outlined like in these charts helps me see what's happening in each session over the past few days.

This chart of WTI shows why there's no point trading oil during the Asian session (no movement), but afterwards, hell yeah.


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## captain black

peter2 said:


> This chart of WTI shows why there's no point trading oil during the Asian session (no movement), but afterwards, hell yeah.




Thanks Peter. Knowing when not to trade is just as important as knowing when to trade. I use some code in my entry signals in Amibroker for the Kospi to keep me out of "choppy" price action (FESX, ES and SPI are still works in progress). I only trade index futures when the cash market is open but can see the benefits of having time zones outlined on your charts for commodities and forex.


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## History Repeats

Can't wait to see you trade futures. 

Forex a good training for new comers better than stocks i reckon, you can start as low as possible with mini and micro lots. Especially good place to learn trend or swing trading. Also you can see money flow.

Ps: you will see some familiar stuff in this thread and older threads from guys like ta, pav, peter, th ect. You can take it and build a trading plan of your own.


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## Wysiwyg

peter2 said:


> 3. Look for setups in the trading time frame (1H) in the direction of the trend indicated by the daily charts. There are two common setups that are defined by the depth of the corrective pullback;
> shallow (<40%) => break-out entry into the trend
> deep (50-61.8%) => ambush or reversal setup for entry into the trend



Hi. This will be interesting to me because I don't see other traders decision making from entry to exit in the shorter time frames. I see you get satisfaction from the interest shown like a teacher would from a class of keen students. Thank you.


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## skc

Good on you P2


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## Lone Wolf

peter2 said:


> Trading in this thread will stop if the draw down exceeds 10% combined equity of both accounts (currently -$6500).




Thank you Peter. I’m very interested to see how you approach other markets.

So the maximum drawdown tolerance of the total portfolio is 10%. If the ASX thread loses 6% then this thread will only tolerate a 4% drawdown before being halted?

That means trading in this thread could terminate even though the system itself is performing within expected boundaries. I take it you mean that you have more confidence in your ASX strategy, therefore if things turn sour (> 10% drawdown), you'll only take trades in the system you know best until you've recovered?

I can understand the idea of going back to basics if things get rough. But part of me is struggling with the fact that the ASX thread and this one are two different systems, each with their own expected win/loss ratio, max expected drawdown etc. yet this system is somewhat at the mercy of the ASX performance. On one hand, each system should be judged based on it's own performance. On the other hand, you can't allow them both to hit their max expected drawdown limit at the same time or it will blow the portfolio drawdown limit.

I almost didn't write that last paragraph, it's getting hung up on detail before you've even had a chance to start. And with enough thought I'll come to my own conclusion. But I thought I'd include it to show that your posts give people much to consider, most of which you will never see written here. A lack of posting doesn't always mean a lack of interest.


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## peter2

Sorry for the confusion. I'll be trying to limit the max DD to 10% of the total in each thread. Theoretically the max DD for the combined account could be 20% (10% each). However that would be unlikely as there would be some minor hedging happening so that the losses from the ASX thread would be offset by shorts on the SPI or another index. I anticipate that the max DD in this account will be smaller than the ASX thread. Trades in this thread will be shorter, less correlated and fewer open at the same time than the ASX portfolio. 

Yes, they're two different systems, each with their own trade distributions and 10% DD limits. 

I'm glad you reigned yourself back in there. You seemed to be getting stressed. 

---------------

wysiwyg: I don't want to tell people how to trade these markets. I'm not going to provide a TP with objective setups and trade management rules like in the ASX thread. I thought about it, but these markets are more dynamic and sentiment changes quickly and I like to take advantage of that when it happens. I don't want any restrictions in this thread. 

I'm comfortable showing a few of my trades as they happen. I don't really want to spend time discussing the setups. They may even seem random initially. Today was one of those random days. After the BOJ news one could see bullish signs in all equity markets. There was a high probability that the UK indices (FTSE, DAX FESX) would open up and continue higher for a little while. That's all a trader needs, a higher probability of the market moving in one direction. What happens after entry is trade management to create our edge. 

Most days all I start with is the trend. If it's obviously down then all I'm looking for is a place to short it that looks like it'll provide an acceptable RR (like those two strategies you highlighted in the quote).


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## peter2

All trades will have an ID# to help discussion.

*T01*: Crude oil (long), Daily trend is UP, buying the BO of the Asian session range.

I have used the futures contract (CLX6) in this trade as the risk was within our limit for an intraday trade (<0.5%, <$325).
I have raised the sell stop from the iSL (49.10) to 49.17. 




When I become used to the posting, my comments may include opinions the possible exit prices (targets).
eg. Oil has had 5 up days and I might be pushing it for another one. In this case I might accept a +1.5R result at 49.55. As I write this I see a little push up in price. 

There will be no updates on these trades. The next notice will be at the end of the trade, whenever I end it.


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## peter2

*T01*: Crude Oil long:  exit at 49.52
_Result_: Profit 0.22/0.20 = +1.1R  Profit $276 AUD

_Review_: Standard BO of small range in a daily up trend. This trade was monitored using a tighter TS than normal due to the enormous pressure of posting the trade on ASF or due to the prior 5 consecutive up days or both. 

TS raised to 49.17, then 49.25, then 49.32 (BE), then the stress got to me as price hit the 49.50 level (also the +1R).

_Summary_: A profitable although shaky start. I took much too long with the entry post and succumbed to the stress of the initial win. If CL goes to 50.00 this evening/night. It won't worry me at all. It was always going to be a very quick trade as I didn't want to hold this into the US open and definitely not hold during the CL inventory report later.  The first trade is done, ninety nine to go.


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## PeterJ

*
You don't often get somebody with the time and inclination to teach you how to trade profitably - the opportunity should be grabbed with both hands.*


:iagree:

an extremely rare occurrence in one's lifetime !
Your efforts are gratefully appreciated Peter
thank you

Peter


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## lindsayf

Nice P2!
I have been trading forex on the daily and weekly timeframes this year.
Will be following your progress and looking to glean some insights to improve my edge...assuming I have one.


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## peter2

Updates: I'll be providing updates in a similar format to the other thread. 

The P&L from this thread will be converted to % and added to the returns from the ASX Mom Portfolio. The weekly ASX Mom Portfolio graph will continue to show the performance of the ASX Mom Port. as well as the combined performance (ASX + P2). 

The aim of the P2 trade book is to earn a few % each month.


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## peter2

Review of Oct 16:  

Failed to earn a few % [+0.6%].
Failed to post a minimum of 10 trades during the month [1].

_Comment_: Sorry about that. I have found the markets a little bit volatile on the larger time frames and I didn't want to post too many trades done on 5M charts. I traded during the 24hrs of the election but didn't want to waste time posting as things could move quickly.  My favourite UK session now starts much later with the end of DST and this means I can only trade three evenings/week instead of five.


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## minwa

peter2 said:


> Review of Oct 16:
> 
> Failed to earn a few % [+0.6%].
> Failed to post a minimum of 10 trades during the month [1].
> 
> _Comment_: Sorry about that. I have found the markets a little bit volatile on the larger time frames




Don't be sorry - you have demonstrated when not to swing trade. Anything more than intraday trades recently would've been a crazy ride.


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## Lone Wolf

peter2 said:


> Review of Oct 16:
> 
> Failed to earn a few % [+0.6%].
> Failed to post a minimum of 10 trades during the month [1].
> 
> _Comment_: Sorry about that. I have found the markets a little bit volatile on the larger time frames and I didn't want to post too many trades done on 5M charts. I traded during the 24hrs of the election but didn't want to waste time posting as things could move quickly.  My favourite UK session now starts much later with the end of DST and this means I can only trade three evenings/week instead of five.




Thanks for the update. Now we know that you decided not to trade higher timeframe swing trading this month because the conditions were unfavorable. That in itself is an important point.

As Minwa says, don't be sorry. This is your trade book, you set yourself the challenge, you decide the best way to trade it. We only hope to learn what we can along the way.


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## grah33

i must have missed this thread when i went looking for it some time ago.  i'm also interested and grateful for anything i can learn.   if you can succeed short term Peter, than you're obviously really good.


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## peter2

*T02* : GBPUSD short. Daily trend is down. Selling the BO of the UK session is a low sized risk setup.





Targets: T1: 1.2251,  T2: 1.2224  Limit buy order in at T2.
Trailing stop will be moved to BE when price is below T1.


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## tech/a

Like the setup


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## peter2

*T02* exit: GBPUSD short.  Closed at 1.2237.  Result +41 pips, +1.5R

Price movement was slow (corrective), took the reasonable profit and going to bed.


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## debtfree

*T02* GBPUSD Trade:

Nice trade Peter , I had a look at the chart not long after you closed it and decided to mark it up and keep it for my viewing later.
Please excuse my error in the box with blue writing, it should read 15 minute chart and not 1 minute chart. 

A few questions if I could in regards to your stop management and thoughts during this trade, only when you have some time.

_*Trailing stop will be moved to BE when price is below T1.*_
*Q1:* I assumed that meant the *Close* of the bar (15 minute) had to be under T1 and not just a spike as what happened on the first run down to T1. Is this correct?
       I've pointed out the bar that closed later under T1 with the blue arrow which I thought  would be the time you would move your Stop to BE.
*Q2:* Do you actually place your BE/SL into the actual physical platform like you did when you placed your iSL?
       I know you stayed up all night watching this trade and wondered if you kept the BE/SL out of the actual market.
*Q3: *What was your trade management thoughts when the price headed back up to BE (red rectangle box)?
       Was it: If it keeps going up and past the top of the entry bar, reduce loss and get out or,  just wear the full loss because it didn't close under T1.
       Interested in your thoughts at that time, even if you had no thoughts.

Cheers ... Debtfree
PS: Just realized you might be trading and watching hourly bars for this trade.


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## peter2

Nice chart. The iSL is always in the market. That goes in immediately after the entry. Yes I was monitoring the hourly charts of eight markets. I've noticed that if I watch the 15m or 5m chart I'm more likely to sabotage the trade (exit early, move TS too close, stop and reverse, trade the 5M chart and ignore the 1H chart). 
Q1: Moving the TS to BE at T1 is more of a guideline than a rule. T1 is not enough profit to consider taking unless your W% is >55%. I've mentioned in the momentum thread that we must allow for the possibility that price may retest the BO level and therefore not move our TS too early. This happens more often in the forex markets. 
Q2: Yes whenever I move a TS it's in the market. I moved this TS to -0.5R as the price neared the entry level. 
Q3: "OMG why didn't I take that +1R profit when I had it? Oh well, a -0.5R loss is better than a full loss." 

Thoughts like these are universal, hell we're human. Thoughts like these made me take the +1.5R instead of leaving the trade open overnight. Price continued lower the next day and hit T3. There was a similar setup the next day but I was out at the time.


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## peter2

*T03*: *GBPUSD* short.  Sell 1.2195, iSL 1.2220 Risk 25pips
Third consecutive daily formation of this setup. We'll take it on again, but we'll be very protective of our initial risk, reducing it almost immediately. We won't risk as much also.
This is a trade that I'll be happy with +1R, as I'm wary of the third time up scenario.


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## peter2

*T03*: GBPUSD short:  Closed as the low of the previous day is reached (1.2169, +26p, +1R)
Target reached and trade closed. There was just enough room between the entry and PDL for a +1R result.
If there wan't enough room the trade would not have been attempted.


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## peter2

There was a similar setup on the AUD as well tonight. I won't include any results from this trade as I didn't post it soon after entry. 




My point is to present one setup that happens many times during the week in all markets. A person might like to research to see if it's a profitable setup for them. 

_Note_: Obviously these two trades in AUD and GBP profited from USD strength. These trades are highly correlated so don't forget to take that into account with your risk management.


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## debtfree

Well done Peter. A quick trade indeed and maybe an early night for you tonight or, another quick trade. Yes I know we never know if they'll be quick or not.

Thanks for the replies to my earlier questions, exactly what I was after.


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## peter2

I expected that trade (T03) to be quick as there was an obvious target (market like to test PDH's and PDLs). Price would hit the target or just as quickly reverse and take me out. It wasn't a random gamble as I'm aware that markets like to test prior highs and lows. The trade was a 70% chance of +25p or 30% of a loss which was reduced immediately to -5p soon after entry.

The AUD setup was similar but as the distance to the low was much larger it was always going to need more time and I'm still in that one. I treat the quick trade and profit in the GBP trade as a partial profit take in the current minor USD rally.


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## peter2

Trading setups shouldn't be complex. Here's a chart of the XAUUSD cfd market showing the three market sessions, Asian, UK and US (overlapping). 

Could you create a set of rules/guidelines (trading plan) to profit from a break-out of the Asian session (light blue)? If you can consistently create a profit from a batch of 20 trades, that's an edge. 




The UK session starts 1hr before the LSE open. Currently that's 6pm AEDST. If you want to be a trader but you're working during the day. Trading the UK session is something worth considering. When DST reverts in both hemispheres the UK open becomes 4pm. That's awkward if you're working but if your TP is established before then, it would take minimal time to place a few stop orders. 

I'm just presenting an idea. If there are a few people who want to discuss this further we'll take it into the Members Only part of the forum. This thread will stay public until the first ten trades are completed and there is a reasonable profit produced (Exp >0.25).


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## debtfree

_*Trading setups shouldn't be complex. Here's a chart of the XAUUSD cfd market showing the three market sessions, Asian, UK and US (overlapping).*_

The chart in the above post doesn't seem to be the XAUUSD, it looks more like the GBPUSD or am I wrong?
I know it's not the point and I'd certainly like to discuss it further for sure.


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## debtfree

My apologies ... I know you didn't reply for a reason ... you thought how long will it take for this bloke to realize his mistake 
You can see I haven't been hanging around this area too much  I just seen XAU and straightaway thought Aussie Dollar.
Gold debtfree, Gold!  Now the chart make sense. 
Sorry about that Peter.


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## peter2

P2TB update:  

After some time, I've added a couple of FX trades to this trade book. I'll add a few more when it's convenient. The results so far have added 2.3% to our combined capital. You may notice the combined equity curve (ASX + P2) in the Momentum thread EOW charts as it starts to peak out from beneath the other.


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## peter2

*T04*: Crude oil, long  Buying 48.25, iSL at 47.00 

_Setup_: Buying the BO of the high of the two bars with long tails. These tails indicate some demand at the lower price of $47. 

_Note_: I've used the mini contract QMK7 (500 bbl) for this trade as risk size fits our TP. The CL contract is double the size (1000 bbl) and the initial risk would be above our limit.


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## peter2

*T04*: US Crude oil long trade. Follow up.

This trade has started well and the temptation is to consider raising the TS to reduce our initial risk. 
There are three general options;
1. Don't.
2. Raise it very close so that any loss is minimal or nil.
3. Raise it to below yesterday's low of the day (setup based on daily bars)

Our TP will state the correct thing to do. Those without a back-tested TP will now be confused. Confused traders are losers. 

I started this trade anticipating we've seen the low and price most probably will go to $50. However I know price won't go in a straight line to my target (if it gets there at all). The trade management must allow price to fall and make a higher low on smaller timeframes. CL can be quite volatile. 

Let's discuss option 3, which I think would be the most popular if I'd asked for a poll. Placing the exit stop below the low of the previous day (PDL) would be putting our exit right in the 50% - 62% pullback zone (shown by the fib ruler on this chart). My beliefs of market movement include that 50% pull-backs are very common so moving the exit stop there is not wise. 

Vigourous back-testing would provide the best trade management method to use. In my experience, keep your stops tight or very loose. Those moving their TS's half way (and into danger) haven't really accepting the initial risk of the trade and move their TS higher due to FEAR. 

I'm going to remind you of some FA data concerning CL. US CL inventory is released weekly about 1 hr after the US open  every Wed (early Thurs am AEDST). This news can spook the market quite easily. If you're considering trading the commodity markets then you must know and prepare for these regular scheduled news events. 

Summary: 
1. Don't react to fear and move your TS's into danger zones.
2. Use back-testing properly to research the best strategy for your exit stops.
3. Know the important news events that impacts your market.


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## peter2

*T04*: US Crude Oil long survived the inventory news and in fact spiked to 49.
Limit sell placed at 49.50 (T1) in case of O/N price spike (it's been known to happen). This order will be removed in the morning and we'll just allow the trade to unfold.

Note: I won't be posting detail like this in future trades. The info posted so far was for educational/interest only. 
If info like this is of benefit then you need to respond.


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## peter2

*T04*: US Crude Oil long. Closed as price spiked to our limit sell (49.50) over night (o/n).
Result: +1.25/1.25 = +1R (+$806 AUD not quite +1R due to brokerage and o/n AUD rise.)

I'll be looking to re-enter this swing up using an intra day reversal pattern.


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## kid hustlr

Pete I really like the point about managing the stop loss. Plan the trade, define the risk initially and also plan how you will manage the trade.

In my experience moving the stop to halfway or something to 'limit risk' is the worst option as it often gets tagged. In fact usually I'm just better off exiting right then and there if I'm thinking like that.


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## peter2

*T05*: US Crude Oil long.  Bought 49.50, iSL 49.25.  Risk $135USD ~ $176AUD

We're buying back into the up trend. I was planning to use the bigger CL contract but not before the US GDP and unemployment numbers. A price spike before the news got us into the smaller oil contract (QMK7) with a small trade risk. I hadn't placed the order in the CL contract yet. 

This smaller contract will still provide a good return if price gets to $50. As I post this and get myself sorted, price is already 49.95.


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## peter2

*T05*: update, price moved quickly and has paused just below $50. This little trade already has $250AUD profit and I'm going to move the TS to BE (49.525) and let it go. Price might go back to $53. We've got three weeks left in this contract. (I'd better check).

The news got me into an ES long, which is going nowhere and a 6E (Euro) short which has started well. Pardon my tardiness with the T05 entry post.


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## peter2

This is what I'm looking at in case you're interested. The price bars are volume candles.


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## peter2

Whoops, just realised, that I placed that QM (oil) trade with my day trade only broker who will close me out at the EOD unless I phone and ask to keep it open. I'll watch it for a few hours (while I'm reading ) and place a tighter TS (49.70 and a target near 50.25). The US open,right now, might stir things up or down.


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## peter2

*T05*: US Crude Oil long was closed at 49.80 soon after the US open tested the $50 level and rejected it. 
Result: +0.30/0.25, +1R or $182AUD.


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## peter2

EOM update: Four trades completed during March17 adding ~3.7% to our combined trading account. 

It's a start and I plan to provide about 10 trades /month and to earn a few % each month. I've been looking at the 4H charts over the past two weeks and they could be a good source of opportunities. I don't want to fill this thread with very short term trades. The T05 trade last night showed me that I take too long to annote a chart and post comments. The trade was almost over as I posted it and it's not a good look. 

The aim of this trade book is to provide some diversification to the trading business and boost the performance. You may have noticed that there's a combined equity curve included in the ASX Momentum Portfolio chart (ASX+P2).

Review of T04 and T05. I've marked the exits of both T04 and T05 as mistakes. T04 was a trade based on the daily chart with an initial target of 50. This target was hit. 

_Aggressive compounding strategy used in this thread_. 
Trades based on daily charts will risk 1% plus 10% of P2TB profits (limit 1.5%). 
Currently $745+214 = $960 AUD
Trades based on 4H or 1H charts will risk 0.5% + 5% of P2TB profits (limit 1%). Currently $480 AUD
I can employ this aggressive style as the winning sequences are larger than the losing ones. The addition of profits stops after a DD of -2R (very effective brake) and resumes once the DD is overcome.


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## grah33

How about this one?

it's a 1h consolidation breakout aligned with a 4h trend. the red / green is the entry and stop loss.  they occur often enough, and on the 15min timeframes, as do the mini reversals you targeted.  i guess if the stops get hit too often it could be placed just outside the mini range's bottom, or halfway through the range ( it was meant to be at 20% ie just outside the breakout level)

https://app.box.com/s/agzn9vs5x7x4pnv7njrdk6xehoy2d0ve
usd-cad


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## peter2

Nice break-out. I didn't see your post in time. Hope you got something out of it.


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## peter2

I've decided to offset our ASX long only positions (momentum portfolio) with a short on the SP500.
If price falls below the pink chart line then there's plenty of room to fall. 

*T06*: ESM7 short sold at 2382, iSl at 2390. Trade risk 50*8+C = $410USD ~ $550 AUD


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## grah33

also a contrarian range trade (seems to me).  range trades would seem like an excellent way to go - lots of opportunities and probably easier to master than trend/swing trading...


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## peter2

*T06*: ESM7 short was closed overnight for a BE result. 
Price did fall after the US open, but rebounded quickly. The Fed news produced a little volatility (esp gold) but was shrugged off by the SP500. This trade was closed as the Aussie selling didn't transfer to the US. 





The original setup hasn't been violated yet and I'll be watching what happens in the US overnight. The daily momentum portfolio has gone from 135% invested to 80% and the "heat" has reduced.


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## debtfree

While the XAO is pulling back is there any action in this area of the Trading Plan Peter?

Cheers ... Debtfree


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## grah33

wouldn't mind also asking Peter, what kind of results do you expect after how many trades? you mentioned greater than 0.25R/Trade.    say you had a batch of 20trades, do you ever get say neutral or a small negative in that?

i should also say Debtfree that this kind of trading IMO might be quite advanced.  if you want to do this you may really need to take time off work.  just my thought though ( i assume you're not yet profitable like me in anything).


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## CanOz

peter2 said:


> *T06*: ESM7 short was closed overnight for a BE result.
> Price did fall after the US open, but rebounded quickly. The Fed news produced a little volatility (esp gold) but was shrugged off by the SP500. This trade was closed as the Aussie selling didn't transfer to the US.
> View attachment 70958
> 
> 
> The original setup hasn't been violated yet and I'll be watching what happens in the US overnight. The daily momentum portfolio has gone from 135% invested to 80% and the "heat" has reduced.




Hi Peter,

First of all, love your work. 

Secondly, i'm curious as to why you would hedge your portfolio with ES futures and not SPI futures or a SPI CFD? Thanks in advance.


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## peter2

@CanOz  On this occasion the SPI had already fallen hard, so I'd missed the low risk opportunity in our market. In contrast, the ES had not fallen at all. If our index had sold off in response to a change in global sentiment then the US would follow through and our market would fall even further when it opened next day. I was anticipating a fall in the US markets and that is why I traded the ES. As it turned out the US didn't fall, showing our insto traders are wimps. 

Looking back at the charts (three weeks later) that was the start of the rout in the banks which was purely a local issue. I hadn't recognised then that the weakness in the index was entirely due to the selloff in the one sector (and that it was a good time to short any of the banks). 

I apologise for not providing more content in this thread. It takes me too much time posting timely charts with explanations for intraday trades. In any trade the critical time is right after the entry. If price reverses soon after entry, then it's time to defend the initial risk. It's not time to be annotating a chart pic for a thread. If price goes in the right direction then it's possible to relax and let things work out. By then the post could be deemed to be too late and that I'm only posting the winners. 

Content may increase as I'm considering posting trades based on 4hr charts in this thread. These would be mainly forex markets as they trade 24/5 (near enough).

@debtfree  Sorry I hadn't seen your question until today. There probably was a great opportunity there some where. 

@grah33  I've purposely not provided any expectancy numbers or W% estimates in this thread. I'm glad I haven't as the content has been very low. I will say that it's worth your time learning to trade these markets.  

Let's just wait and see how this first batch of 20 works out.


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## CanOz

Thanks Peter.


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## grah33

thanks Peter. and yeah , 4h trades are a great idea too.


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## debtfree

grah33 said:


> i should also say Debtfree that this kind of trading IMO might be quite advanced.  if you want to do this you may really need to take time off work.  just my thought though ( i assume you're not yet profitable like me in anything).




Thanks grah33 for the advice and I'll take it onboard , meanwhile I'll continue to ask questions and see what I can learn.

Cheers ... Debtfree


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## peter2

I had to dig for this thread. This is the setup for the oil trade to profit from any potential overnight drop and to offset losses for our BPT equity trade. It doesn't look like it will trigger but oil can drop pretty quickly. This is not a recommendation, but preparation.

Sell 1x QMZ7 if 51.825 trades (limit 51.80), iSL at 52.45. Exposure 0.65
Dollar risk = 0.65 x 500 +10 = $335 USD ~ $435 AUD  (0.5% acct)


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## peter2

The oil short didn't trigger, instead price spiked higher. 
This should be good for our ASX momentum trade in BPT.


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## VSntchr

peter2 said:


> The oil short didn't trigger, instead price spiked higher.
> This should be good for our ASX momentum trade in BPT.
> View attachment 73203



But nonetheless proves that keeping an eye on one of the key drivers of price for BPT will have you better prepared to understand why/how it moves on Monday.


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## peter2

I didn't commit to this thread as the ASX Momentum thread was progressing smoothly. However it's time for a change. The ASX Momentum thread (Part 2) is ending and I've set myself a bold new challenge and this involves the trading I should have been doing in this thread.

I'm planning to expand the trading activities in a new thread (Part 3). For three years we've been improving our trading skills by trading ASX equities and a few equity cfds. Now it's time we applied those skills into new markets.

The current concept is to include three additional trading activities into our trading business.

1. Trading short term daily swings in ASX equities both long and short (equities, cfds)
2. Trading the 4H trend in forex currencies (fx pairs)
3. Trading daily swings in commodities and indices (futs, cfds)

Having all this in one thread will be interesting. It could be a mad-house but it will be fun.
I'm still thinking of a title for this new thread. It will include (Part 3).


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