From Newbie to Veteran: Journey of a Trader

This month has been up and down. I was sick for a couple of weeks causing me to miss many days of trading. Unfortunately many of those days were days of high volatility and opportunities for great trades.

Today I stuck to my new resolution of just a few trades per day.

I started with a Long of $EURUSD. I saw the euro break out of support around 1.3737, I decided to go long on the pull back thinking it would break though at least the 1.3745s. Unfortunately the movement has no momentum and I was stopped out.

I than shifted my attention to $GBPUSD. after the false breakout in the EURUSD the GBPUSD also went down. A bottom was forming around 1.6215. My reasoning was if the GBPUSD breaks the 1.6227 than it would go straight higher.

The Euro finally broke the 1.3741 after the Existing Home Sale numbers were released. My last trade was just a momentum continuation for about 8 pips.

In contrast to yesterday, today saw a bit more action. I suspect the bad snow storm affecting the North-East slowed down some trading in the New York session.

My one major trade was on the $GBPUSD. I shorted @ 1.6187 when the chart broke down the previous support. I covered my risk on the first half @ 1.6181 for a + 6 pips and got out of the rest @ 1.6174 for a + 13

Last month I think that I over traded causing most of my profits to be eaten by commission. This month I will try the limited ammo analogy and look for only high probability trades. We’ll see how it pans out.

Getting back into the market after a few days off is not easy.

Today is the perfect example of what happens when you trade against the trend and try to profit on the reversal. It is as dangerous as catching falling knifes. 

I realized that my trading style is more along the lines of breakouts and trend following instead of trend reversing. 

My first trade was in the $GBPUSD. It has been selling off all night on the London market. I saw some support forming around 1.5946. I tried to get long on the breakout but it turns out it was just a correction and I got stopped out of trade#1

My second trade was focused on the $USDJPY. Like the $GBPUSD a big moved happened over night. My thinking was that the move in the $USDJPY was over extended and a pull back was a strong possibility. I shorted the $USDJPY but again I got stopped out.

Finally on the $EURUSD. I tried to follow the trend and shorted it, but I think my entry was not optimal I got stopped out. My second trend was to trade the reversal. The EURUSD made a nice support around 1.3433. My long entry was good but I was stopped out because of the choppy movement in the $EURUSD.

“You got to know when to hold ‘em, know when to fold ‘em,
Know when to walk away and know when to run.
You never count your money when you’re sittin’ at the table.
There’ll be time enough for countin’ when the dealin’s done.”

- Kenny Rogers, The Gambler

The Key to survive in trading is to have enough capital to trade another day.

Not an easy market to trade this morning. 

By the time I turned on my monitors i realized that I missed a big move in the $EURUSD and $GBPUSD. Trying to force a trade would be like hopping onto a moving train. If successful than the reward is great, but most likely the odds are that you’ll fail. Since trading is not about gambling but taking calculated risk I was a little frustrated this morning about the fact I missed the big move.

I was able to take a couple of trades in the $USDJPY

I was not as profitable in the $EURUSD. On my first trade, although correct in assuming it would be better to go long, I moved my stop-loss too soon causing me to scratch that trade and miss a great long opportunity.

Finally the $GBPUSD showed the same pattern I missed on the $EURUSD long. I took the trade. Here is the chart.

Today’s trading day started like most. Woke up, checked the news, looked at the economic calendar and how the different currencies traded overnight. 

It seemed like it would be a typical trading day where I see what the market has to offer me that day and get a few good trades out of a day’s work.

Some good trades in USDPJY, EURUSD but I struggled a bit on GBPUSD.

Here are my charts for today

• USDJPY
• EURUSD
• GBPUSD

Today started out pretty quiet. 

The $EURUSD, $GBPUSD and $USDJPY were stuck in a range until the New York open.

I saw some weakness in the YEN and was looking for a long in $USDJPY. Unfortunately due to human error, I was long $GBPUSD. I had to get out of that trade quickly because although possibly profitable it was not the trade I wanted to be in. As it turns out I was right. The trade became a losing trade almost right away. I was stopped out 6 pips below.

My opportunity to be long the $USDJPY had gone. Seeing the weakness in the $GBPUSD, I was looking for a short in the $EURUSD because the $USDX gained some strength since the opening. 

My second trade was a short $EURUSD for +10 pips on my first half and + 13 pips for my second half.

My last trade was a pure momentum trade on the $USDJPY. I went long the $USDJPY after it broke the highs putting my stop 5 pips below. Out + 5 pips on first half, and +6 pips on the second half. 

I finally decided to end my trading day after these three trades because in the last 30 mins most of the pairs were stuck in a 15 pips range with no volume to move anything. 

This morning I woke up a bit late. I was experimenting with a new iPhone alarm app and needless to say that waking up to classical music isn’t as effective as waking up to an annoying buzzing sound.

Looking at the charts it looked like I missed a big move in the GBP/USD. The EUR/USD chart looked choppy and USD/JPY seemed to be stuck in a range.

I was looking at shorting the pound because of the relative strength of the US dollar. 

I was early on my first trade and my stop was triggered. However after a few minutes, a Pound drifted a little lower testing the support previously established.

Secondly, with the momentum on the US dollar, I saw an opportunity in being long the USD/JPY because a new resistance was broken.

So far I’m 2 and 1. Maybe I can push the momentum and Voila! The US dollar made new highs. I short it quickly. I was a very fast trade. I think it lasted less than one minute.

I know looking at the chart, one might ask why I did not stay in the trade longer and let the winners run? I guess an answer to that is that I am a momentum trader and do better in catching momentum plays. Once my risk is covered, the rest is gravy.

Today was my first day back trading after a 2-week vacation for the holidays.

The day started pretty quietly. The Pound did not have much movement. I saw a gap lower on the chart and no follow through. That indicated to me that very low volume was present. I focused my attention on the Euro. 

I made three trades.

Long @ 1.33236 - Stopped out @ 1.3315

• Was trending down in the channel, I thought it would bounce off the lower band of the channel but the trade was invalidated. Lesson : Do not fight the trend

Short @ 1.33139 - Stopped out @ 1.33163

• Attempted a small scalp but was invalidated pretty quickly

Long @ 1.33224

• Exit 1 - 1.33338
• Exit 2 - 1.33312

This morning when I woke up to trade I looked at the charts and everything looked clam. Had a couple of good trades in a relatively quiet morning. I made a few scalps trade in the EUR/USD and the GBPUSD. 

The range on these two pairs was very tight. That was until the EUR/USD jumped 100+ pips in the span of 6 minutes on the news that the US will “bailout” via the IMF the Euro Zone countries that are in need to rescue.

You can see clearly when the news was released. The Euro skyrocketed. The lesson of the day, ALWAYS put a stop on your trades, even when the market is calm.