Nuts and Bolts review of today’s sub-optimal trading & lessons learned

Initially, this was going to be private post – but then I thought I publish it instead to make myself accountable for some of the poor trading that i did today.  Regardless I am obviously still taking the time to painstakingly review what I did (still inspired by Tiger Woods) so that I can learn and trade better next week, next month, next year and (maybe) in the next life!  Additionally publicly highlighting my poor performance should make these things stick even more so.

There is a fair amount of detailed technical analysis in this post – it’s not easy reading, but could be considered good exercises for people already versed with some trading techniques.  Feel free to comment below and also to ask questions.

DAX

Today I took 3 long trades on the DAX.  Each of the trades was a partial loser.  That said, the DAX more or less traded flat for the day.

  • Yest Close (at 9pm): 11,645
  • Today’s high: 11,721
  • Today’s low: 11,645 (same as yest close)
  • Today’s close: TBD
  • Current Price: 11,672

At the start of the session, using Voigt’s marketstructure and basic EMA analysis, I classified the DAX to be in a slight bullish state.

dax-feb10

I was waiting for a pullback to the EMAs before taking a long trade.  In order to take three long trades in the more I used first the 15M, then the 30M and finally the 1H timeframe to ‘justify’ long trades.

The first trade looked like this:

448

After being closed on tightened stop, continued to monitor the instrument.  I had to switch to the 30M timeframe (one higher up), in order to ‘find’ a setup.  I had my bullish bias and wanted to trade it – I didn’t want to miss out on a potential move up in equities.

449

After the 30M trade also didn’t work, I then went up to the 1H timeframe.  Here we go:

450

Here’s what all these trades looked like on the 5M timeframe for the session:

dax-feb10-5m

What else could I learn from these DAX trades?

  • That it’s not a good idea to look for a single candle to act as a trigger candle for getting into the trade?  For my continuation/trend-following trades, it tends to work much better where a pattern or picture is painted over several candles, rather than just one.  That’s a good insight – that’s something to take note of.
  • Wait for more clarity – compare how nicely the US30 trended once it got underway.  There were quite a few attractive/beautiful setups in the New York session (see US30 and AUDUSD for example).

US30

Given that I was not able to parlay on my bullish-equities belief into profits in the DAX, I had another go with the US30 (the Wall Street index) once the US cash market had opened at 2.30pm London time.  Here the setup was reasonable ok, and price looked to be respecting the EMAs on the 15M timeframe.  Hence I chose the 15M as XTF and a good bullish pinbar completed at 14:45pm (15 minutes after the Wall St open).

The following chart shows what the trade looked like – the trade initally went 17 points against me (on a 30 point stop) before finally rallying and going as high as 31 points in profit.  From there it pulled back a fair amount.  Looking at this now, I need to ask the following:

452

AUDUSD

The final trade on the day was a reversal trade on AUDUSD – the lesson to pick up here is that I completely missed the 1H picture.  Earlier in the day I had marked out a symmetrical triangle formation on Aussie Dollar.  But I had failed to pay attention to that when I took the short trade – even though I had looked at the 1H chart to identify a potential S/R zone around the zone where the pattern took place – that in itself is a sign that I was looking for evidence to support what I wanted to do.  Naturally, a lot of this becomes a lot easier after the fact – and naturally I like to be incredibly hard on myself here.

Here’s the 1H chart that provides the context (remembering that I didn’t spot it at the time).

453-1h-analysis

Here’s what things looked like on the 1M and 5M charts – the setup was taken from the 5M chart:

453

USDJPY

Took a trade on that too.  Not a huge amount to learn from that one – in comparison to what I can pick up from the trades on DAX, US30 and AUDUSD.

The only point would have been that the setup was not overly clear – it was okay, but not amazing.   And probably also influence by my strong bias on USDJPY.

Thus, maybe I need to watch not assigning to much weight to my directional biases from the start of the session.

What else re these USD pairs?

  • I had forgotten about the US 3pm news – shame on me! That shouldn’t happen – that’s unacceptable.
  • I should have also remembered about the Trump-Abe press conference at 5-6pm London time – dude, WTF!!

REVIEW OF TRADES

Are you starting to see how important it is to review trades, so that you can improve, and become a better trader?

 

This entry was posted in Reversals Strategy, Trend-Following Strategy. Bookmark the permalink.

12 Responses to Nuts and Bolts review of today’s sub-optimal trading & lessons learned

  1. Read Van Tharp and maybe get a trading coach- you are torturing yourself,and it hurts me to see this. Paper trade for the time being-do not be in a hurry- I have found nothing to trade since December in all honesty. The markets just ‘feel’ horrible, so I am taking tiny little options trades that only cost a couple of hundred on the basis that the markets are so massively skewed there has to be a 5-10% pullback. After 17 years of trading and many downs and ups I have found what I am comfortable with-do not think you will find your niche any time soon, so please do not beat yourself up.

    Like

    • Thanks for your comment David. It seems the post came across in a tone different than I had intended. I was actually thoroughly enjoying this review, finding some insights and was smiling whilst I was writing the post. All in all, I was happy with the week. Thus it wasn’t torture in any way or form, just part of a typical working day.

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      • In terms of the markets right now – yes the Trump factor, and particular his tweeting, are something new. However I have found the dax, us30, cable and usdjpy to be behaving in a good manner lately. Also, I do currently have two experienced mentors/coaches that I ask for advice and direction on a regular basis.

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      • I didn’t feel any negative vibes from this blog post, i think David is projecting his own current frustration with the markets.

        Btw, perhaps refer to the US30/Wall street index as the ‘Dow’?

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  2. Comments sent to me by a trader friend on WhatsApp in regard to above blog post (he was happy for me to repost them here):

    “Stops were too tight. If I were analyzing you under CFA Level 3, you would have a loss aversion bias. It is difficult to judge though – no matter what, it’s tough to let those winners run. But you should devote a significant amount of time to resolving that part. I am not sure how, maybe speak to your trading buddies. And spend a week on ideas for that.
    Also, AUDUSD is always pretty well correlated with stocks, so if your stock charts and trading is bullish, it might be a flag not to look for reversals in AUDUSD”.

    Liked by 1 person

  3. I think there are times when the market is just horrible and right now it’s horrible. FTSE is in a stupid range,and S&P is the tightest range for 35 years- does that ring any alarm bells? When volatility gets low we like to prepare for big volatility. I am mildly frustrated but I won’t let that turn into the boredom trade. One thought – Van Tharp says when you lose you pay up 100% of your stop,so moving to break even is a bad idea-borne out by the maths. A trade is either win or lose. Good trading.

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  4. S&P tightest range for 35 years?
    A quick look at the charts shows the S&P breaking out to new all time highs ever day!

    Like

  5. Fuat says:

    Hi George,
    I advise you to follow waltervannelli on twitter for correct trader mindset.Many things to learn from a really successfull fx trader .
    Cheers!

    Liked by 1 person

  6. Pingback: This week’s “nuts & bolts” trading review | Trick or Trade

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