Heyo friends! As you know, I recently got into the world of Forex swing trading, and I have decided to log all my trades on the blog in order to share my journey with you all. Last week I posted my first log, which chronicled my first week in the exciting currency-exchange market.
Today I bring you my second forex trading log, which covers my trading activity from 11/1/2015 to 11/6/2015 (today). Hope you enjoy it!
|ENTRY TIME||6:59 AM|
|EXIT TIME||6:21 AM|
This trade was still open from last week. Even though I felt pretty bullish about the pair, I decided to close the trade at break-even this week after the price had retraced, because I was over-leveraged and didn’t want to play with fire in case the price were to keep falling. I entered this trade with too much money on the line (almost 10% of my account), which is a big no-no. Moving forward I will diligently stick to my money management plan, which has me risk a maximum of 2%-3% on any single trade.
You’ll notice I still made a bit of money from the trade. That’s because whenever I set my stop loss to break-even, I actually always set it just a few pips above, just to snag a tiny profit. Because I’m cheeky like that. 😎
|RISK/REWARD||1 : 1.6|
|ENTRY TIME||4:07 PM|
|EXIT TIME||2:25 PM|
I entered this trade on a bounce from a trend line. Nothing fancy or complicated here. The Euro had been weakening relative to the Aussie dollar for while, with a nice down trend on the chart. So when the price hit the resistance line, I simply set a sell stop order below it.
My initial target profit level was 1.5100, but when I saw that the price had started consolidating right above that area, with a strong bullish pin bar at the end, I decided to take my cake and exit the trade instead of potentially having the trend reverse on me.
I ended up with 160 pips in profit, which came out to $11.28 and a risk/reward ratio of roughly 1:1.6.
|RISK/REWARD||1 : 1.55|
|ENTRY TIME||6:02 PM|
|EXIT TIME||6:32 AM|
This was an obvious, high-probability trend-line trade. I noticed the price had been in a strong down trend on the 8-hour chart, so I simply waited for a retracement to the trend line, then put a sell stop order a few pips below the low of the candle that touched the line and a stop loss a few pips above its high.
I always shoot for a risk/reward ratio of at least 1:1, otherwise I don’t take the trade. In this case, there weren’t any major support levels anywhere in the near area to shoot for; however there was the nice psychological “round” number of 1.4250 at a distance that came out just north of 1.5 times the risk, and since the risk/reward ratio of 1:1.5 is my personal favorite, I thought it would be a perfect exit point.
Unsurprisingly, the price fell down over the course of the next 2 days and successfully hit my target, leaving me with a 1.55R profit of $10.92.
|RISK/REWARD||1 : 1.05|
|ENTRY TIME||12:21 AM|
|EXIT TIME||6:45 AM|
I entered this trade a on trend-line breakout. The AUD/NZD has been tumbling in a clear down trend, so when I saw a big, bullish candle close above of the trend line, I set a buy stop order a little above its high, just north of the psychological “round” number, 1.0700.
Since the breakout candle was so tall, I had to use a fairly large stop loss, and thus consequently, a smaller risk/reward. I wasn’t aiming for much more than 1:1 here. I exited the trade after the price failed to create a second higher high, which seemed to indicate that the breakout had potentially reached its peak and that the down trend was about to resume.
This was a great trade, netting me 140 pips and a nice profit north of $10.
|RISK/REWARD||1 : 1.6|
|ENTRY TIME||12:26 AM|
|EXIT TIME||5:50 PM|
I noticed a descending-triangle pattern while looking at the EUR/NZD 4-hour chart. Such a pattern is usually a continuation pattern, and since the pair had been on a strong down trend coming into the triangle, I was on the lookout for a break toward the bottom.
The opposite ended up happening. When one of the candlesticks closed above the sloping resistance line, I knew this meant the pattern had failed and a reversal was most likely going to happen. I set my entry point a few pips above the high of said candle, and my stop loss below its low. My target profit was right below the previous swing high, at which point I expected the price to lose momentum and start retracing back down in order to test the validity of the newly established up trend.
My prediction ended up being correct, and I came out with a 1.58R profit of $7.49.
|RISK/REWARD||1 : 1.4|
|ENTRY TIME||3:47 AM|
|EXIT TIME||6:41 AM|
This trade was a combination of a bullish pattern and news. I knew that Friday morning, at 6:30 AM, the US Bureau of Labor Statistics would come out with the critical NFP (non-farm payrolls), which basically track net changes in employment as jobs are created or subtracted in an economy in any given month. The NFP tend to cause huge, instantaneous spikes in the market since everyone around the world is waiting for the announcement, which can lead to extremely profitable, quick trades.
The buzz around the web was that the NFP were anticipated to be better than the expected 185k figure. Since the price had already just broken through a major ascending triangle pattern and was clearly moving on bullish momentum, I simply went long the previous day at the break of the triangle, while banking on the rumors being true to give the price an extra kick in the morning.
I woke up at 6:00 AM for this trade and eagerly sat in front of my computer, counting down the last 30 minutes until the announcement.
Suffice to say that the NFP completely blew the expected numbers out of the water, clocking in at 271k. Consequently, this then caused the massive spike in price that I was expecting. I didn’t have a target profit for this trade; instead, I simply set a trailing stop and let the market decide when to take me out.
The price soared all the way past 123 within seconds, it was absolutely crazy. My trailing stop ended up triggering around 122.6 as the market furiously moved up and down in an absolutely erratic manner.
So I unfortunately didn’t get the full profit potential of the spike, though I certainly can’t complain. I still exited the trade with nearly 70 pips in profit and 11 bucks in the bank, with a risk/reward ratio that came out to roughly 1:1.38.
|RISK/REWARD||1 : 1|
|ENTRY TIME||6:30 AM|
|EXIT TIME||6:35 AM|
This trade was entirely news-based, like the previous one. In the same way that I was expecting the USD/JPY to soar up, I was expecting the GBP/USD to tank if the NFP came out stronger than expected.
The Sterling Pound had already been butt-sexed hard for the past 2 days after the Bank of England came out with a very dovish inflation report. The price fell down vertically, literally, and completely broke the uptrend it had been cruising on since late September. Unfortunately I totally missed the boat on that drop, which makes me want to cry. I wish I had gone short earlier in the week right before the BoE made the announcement!
Anyway, the price had been stalling right around 1.5110 this morning, as traders around the world were all waiting for the NFP to come out. As I said before, the numbers came out way better than expected, thus giving the poor Sterling one more painful thrust in the rear, sending the price crashing down below 1.5050.
As with the Gopher, I didn’t really have a target profit for this trade. This was my first time trading news, I had no clue wtf I was really doing, so I just set a trailing stop and let the market do its thing. I got closed out at 1.5060, pretty close to the low that the price reached during the few minutes of batshit craziness that followed the NFP announcement. The price then started rallying and retracing upward, so I was very pleased to come out of this trade near the peak of the downfall, almost 5-dollars richer.
So there you have it. I didn’t have a single losing trade this week, and only broke even once. I closed out Friday with an excellent return of over 10% on my account balance! To say that I’m pleased with my results would be an understatement.
Now, obviously, I am certainly not expecting this kind of success every week, haha. This is where trading can become dangerous when you are just starting out. You get a few big wins, become overconfident and start thinking you are the shit, and before you know it, you completely abandon your money management plan and start risking way too much money, thinking you’ll become a millionaire overnight.
That won’t be me. I’m going to diligently stick to my plan of never risking more than 2%-3% of my account balance on any single trade, and I won’t let short-term successes get to my head. I know that a 100% long-term win rate is impossible, and that it is slow and steady that wins the race.
I’m just going to stay humble, keep doing my thing, stick to my strategy until I know it inside and out, and enjoy the process.