P2 Trade Book

[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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[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).

 

[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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[peter2]

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

 

[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.