I’ve decided to start a journal to document my every trade, I have always been pretty slack in the past at documenting my trades but have found over time records to be invaluable in that they allow you to learn from mistakes made or identify areas in which you can improve on.
How do I trade?
I’m a Price Action trader and look to take positions at obvious levels of support / resistance where I expect large order flow to be. My trades are generally short term (couple of hours to a day) but will occasionally take longer term trades if I have good fundamental reasons to do so.
My trades will mainly be based on technical analysis, but I will keep a close eye on risk sentiment, current news and events which may have an impact on my trade. Generally I will not take a trade based solely on news but if the fundamentals line up with my technical analysis for my trade I may look to increase the risk on my trade. Adverse fundamentals to my technical analysis and I may look to cut my risk or close my trade short.
Time Frames
Generally the support / resistance levels I trade off are based on the Higher Time Frames (daily, weekly, monthly) but I will trade off a well defined lower time frame occasionally provided the level is well respected and obvious. Although I mainly trade off the Higher Time Frame (HTF) levels, I will enter and manage my trades using the Lower Time Frames (LTF), usually 1 hour. This obviously includes fine tuning the entry, Stop Loss (SL) placement and Take Profits (TP).
Lastly, I must give credit where credit is due, the way I trade today is based mainly on what I have learnt from the J16 thread as well as Lovejoy80’s threads and the_wizard’s thread. I started off trading candle stick patterns in the traditional way taught in the J16 thread but it was not until I turned my attention away from the different bar formations and focused on the source of the move, the support / resistance levels, did my trading really start to come together. In fact I believe the way in which most traders are introduced to trading Price Action is incorrect, true Price Action is knowing how to read price and having an understanding of market dynamics and the order flow at levels of support and resistance, rather than relying on candlestick patterns to tell us when to get into a trade. At the end of the day candlestick patterns and bar formations are the result of Price Action and lagging in nature. Still I do think they have their place and I may use daily or weekly bars for a bias on which to base my entries on lower time frames.
Update 23/09/2012
It's been 6 months since I started this journal and I'm pretty happy with my progress to date. I still trade more or less in the same way as to when I started the journal, although now I also tend to dabble in the lower time frames occasionally using the same principles. Who said lower time frames were just noise ;-).
Thanks to the teachings of Lovejoy80 I have also managed to fine tune my entries and reduce the size of my Stop Losses. This has allowed me to get more %R out of my trades. Too many traders use unnecessarily wide Stop Losses in my opinion. If you haven't already I would check out his thread where setups are discussed daily:
http://www.forexfactory.com/showthread.php?t=288707
How do I trade?
I’m a Price Action trader and look to take positions at obvious levels of support / resistance where I expect large order flow to be. My trades are generally short term (couple of hours to a day) but will occasionally take longer term trades if I have good fundamental reasons to do so.
My trades will mainly be based on technical analysis, but I will keep a close eye on risk sentiment, current news and events which may have an impact on my trade. Generally I will not take a trade based solely on news but if the fundamentals line up with my technical analysis for my trade I may look to increase the risk on my trade. Adverse fundamentals to my technical analysis and I may look to cut my risk or close my trade short.
Time Frames
Generally the support / resistance levels I trade off are based on the Higher Time Frames (daily, weekly, monthly) but I will trade off a well defined lower time frame occasionally provided the level is well respected and obvious. Although I mainly trade off the Higher Time Frame (HTF) levels, I will enter and manage my trades using the Lower Time Frames (LTF), usually 1 hour. This obviously includes fine tuning the entry, Stop Loss (SL) placement and Take Profits (TP).
Lastly, I must give credit where credit is due, the way I trade today is based mainly on what I have learnt from the J16 thread as well as Lovejoy80’s threads and the_wizard’s thread. I started off trading candle stick patterns in the traditional way taught in the J16 thread but it was not until I turned my attention away from the different bar formations and focused on the source of the move, the support / resistance levels, did my trading really start to come together. In fact I believe the way in which most traders are introduced to trading Price Action is incorrect, true Price Action is knowing how to read price and having an understanding of market dynamics and the order flow at levels of support and resistance, rather than relying on candlestick patterns to tell us when to get into a trade. At the end of the day candlestick patterns and bar formations are the result of Price Action and lagging in nature. Still I do think they have their place and I may use daily or weekly bars for a bias on which to base my entries on lower time frames.
Update 23/09/2012
It's been 6 months since I started this journal and I'm pretty happy with my progress to date. I still trade more or less in the same way as to when I started the journal, although now I also tend to dabble in the lower time frames occasionally using the same principles. Who said lower time frames were just noise ;-).
Thanks to the teachings of Lovejoy80 I have also managed to fine tune my entries and reduce the size of my Stop Losses. This has allowed me to get more %R out of my trades. Too many traders use unnecessarily wide Stop Losses in my opinion. If you haven't already I would check out his thread where setups are discussed daily:
http://www.forexfactory.com/showthread.php?t=288707