4/5 – May the Fourth Be with You – Trading W(C)rap

Today the London market was closed due to UK public holiday, so markets were quieter than usual.  Movement across the pairs were limited.  (I am still trading from the United States all of this week).

324 and 325 EURJPY May4

The thinking on this short EURJPY trade was ok. It was against the bullish 1H trend but there seemed to be a nice descending triangle (bearish) setup right on the 1.34 handle, and it was plausible to expect price to take out S1 again to the downside (about 20 pips away).  Unfortunately I missed the trade initially and then waited to enter as price retraced back to 1.34 and the 5M EMA’s.   Given that price had already reached the target at S1, I should have possibly passed on this one?  What about the re-entry a bit later on? And what about not entering on the anticipated break when the push down finally did occur?  Hmmm – tricky! So a “*” for the initial setup, and a “?” for the second trade – though the execution on the first one was not ideal.  Coincidentally, the second trade would have worked out if I had stuck my head in the sand and stuck with the initial stop and target, but I exited when price started going against me.

323 Cable May4

Great setup and thinking here.  Going with bearish 1H trend and bearish 15M momentum on this short Cable trade and exited the first half manually just above the 1.51 handle – good.  I then fumbled it the second half and also tried to re-enter after price had retraced.  This ended up in me scratching the first half, and making an execution error on the re-entry (shorting 1.4 lots instead of 0.4 lots).  Price topped out 3 pips above where I closed the 1.4 lots only to then drop down.  Fantastic right?

322 EURGBP May4

Good setup on this one too.  The trade was in line with the bullish 1H trend, and after falling in the morning, price had also turned bullish on the 15M.  I longed just a bit above the EMA’s and expected the Pivot line to provide support.  Whilst this was happening I kept a close eye on EURUSD since EURJPY tends to correlate with this pair significantly.  Price got 2/3rds to T1 (set a bit below the session highs).  The final result for the trade was a scratch.  In hindsight it turned out well that I closed when I did since the pair continued falling after I closed this long position.

So all in all I seemed to have traded ok today.  Though the net result for the day is a loss of 1.3R.  I have managed to trade such that after 167 trades of the K7 strategy, my loss is now equal to the transaction costs.  I am down 10R after 167 trades, an average of 0.06R per trade.   So roughly the same amount as if simply placing trades at random – in other words, right on par with the monkey throwing darts at the pinned-up Wall Street Journal.

I will just keep going and try to trade well every day.  But it is pretty darn hard sometimes. I have been doing this for so long, yet I still can’t produce profitable results.  How hard can this thing be????

DAX Comments: Didn’t do any DAX trades.  The index was up approx 200 points from the previous close and was consolidating at 10,600 – it didn’t move away from that range for the remainder of the session.  The daily ATR(14) on the DAX is now at a whopping 260 – though I have noticed that the bid-ask spread now varies from one to four points.

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