F-Forex, Diary of a quant forex trader

The recovery trade

The market, in a clear downtrend had traded up to fibonacci 38.2% levels.
Up there, the market started to reverse and it is now sitting in the 23.8% levels,  forming what it can be a left shoulder or more simple a lower high for a forming downtrend. this is early US at 10 am EST, using 15 minutes charts to take a short position.

Market moving on direction of my trade:

Starting to see some bullish action … small for now.

some more bullish action, trade starting to look a little uglier.

market starting to look like bullish W pattern …

better now, still having some hope to the downside.

Not enough strenght to get down, i have to exit the trade soon as i i see a good trade exactly from the bullish side, i know i am trapped now and the smarter thing to do is just get out.

This is more easy to say than to do, i always see a reason to stay in the trade, have to correct that.

finally got out, 47 minutes after i noticed the problem and of course some more pips to convince me i was in the wrong side.

-32.80 pips were lost in the trade however i still have the recovery trade as i clearly see the trade to the opposite direction.

The recovery consist on make another trade to recover part or all the losses of a prior bad trade done before, the psychological impact is high as a new position a haves to be open after a bad trade.
A bad trade always hurt and cloud the good analysis, emotional decisions had been done but i have to avoid.

This time i really see a trade in the opposite side so getting in the recovery journey:

Confirming my theory here, at this stage on advanced trades, a new lot can be added at this levels for more than recovery but for also to earn money, but no this time.

and let the winners run

starting to fear as the US session is near to close, stock market is already closed, 4:50 pm EST right now.
i am getting out the trade with +32.50 , 100% recover but no money done today.

leaved some money in the table as the market went after those peaks seeking and destroying stop losses:

money could be earned there without to much risk but i just wanted to recover, i still also have the japan session tonight so i will try to make my 20 daily pips there.

Downtrend correction in the euro

Euro trading lower during tokyo and london sessions( Greece deficit worst than feared affecting the euro zone),  now in early US a i am expecting for some pips of correction.

I found what it can be a reversal, i am targeting 30 pips only on this trade as its against the trend.

Using the 15 min charts:

2 minutes after the big players see this as a reversal point too and push the market higher.

2 minutes only inside the market, 30 pips of profits.

Tags: correction, eur-usd, greece

38.2% Fibonacci retracement

During a little downtrend, the market start to show some retracement so i added fibs to the 1h charts.

Market is now sited in the 23.6 levels, i am waiting for some more climb to the 38.2 during overnight, this picture shows what was happening on late US yesterday.

In Tokyo and early London market climbed to my alert target of 38.2 and started to reverse, i was sleeping so i don’t have an exact entry, however i am still on time as i expect the market to get down close to the 0% fibs.

I am now in the New York – London overlap, the time of the day where the most volume is on the trade. Starting positions to the downside(1 lot), using the 15 min charts now, if this little consolidation is broken to the downside i will scale my position with another lot.

Market getting lower, added another lot:

I have now around 25 pips on each lot, i  can leave one lot to see if  i can earn some more pips but this time i prefer to close the entire position with a 55 pips of profits.

The less time i am inside the trade , the less stress i feel trading, trading is very stressing to me so i always prefer short trades, however sometimes i have positions open for days.

Tags: eur-usd, fibonacci, retracement

Pattern Reversal

Immediately after the W pattern i just traded the market is ready for a correction, remember, most intraday market in euro-usd is bound range, short term moves are generally corrected sooner or later, this time the correction is happening right now and i am going to trade it.

I will be trading to ride this little downtrend until the W bottom from last trade.

This levels are ok to take profits, i checked smaller timeframes and i am loosing some strenght, 20 pips of profits, good enough.

The market is an endless phenomenon, if i can trade it from one side and to the other all the time that will be great

Tags: continuation, corrections, eur-usd, euro, market correction, w bottom

W Bottom pattern

This is a pattern i like to trade for a reversal, on this trade i waited until i have a secure entry.

To me, a secure entry to the W pattern trade is when the market is passing up the center point ( last high ),  where the black line is draw, avove this levels i can get in, the black line also acts as a stop loss area.

I am expecting here that the market complete the W pattern reaching to something around the area of inside the blue lines.

Here is the clean entry image, using 15 min charts but the pattern can be applied to any time frame.

Market got into the target levels before starting to reverse and the trade is complete

Quick Pullback

This is the perfect pullback with a really confirmed entry signal given with stochastics and with candles hanging the reversal levels, i am targeting 30 pips on this trade, check the entry:

i used the 15 min charts, stochastics were coming back from the oversold levels and i was in the middle of a forex correction from a lower level.

immediately after my entry the market reached the 30 pips i was targeting, the limit position was hitted and i found myself out of the market:

Tags: eur-usd, euro, Forex Trading, pullback, quick pullback

The trend is my friend

As all trader now, the trend is your friend, so lets use this downtrend formed i nthe 15 min charts to get inside a trade.

Forex intraday haves corrections but in general, if the trend have some strength odds are for the trend to continue, not for a reversal move.

I am trying to get a 30 pips movement here

Limit hitted, 30 pips earned:

Tags: downtrend, eur-usd, euro-dollar, forex, the trend is your friend, trend

Correction Rally

Market reversing from last lows, i call this pattern “Correction Rally”. This corrections are done by market participants to catch all the shorts around, market will pull higher until all stops and all newbie short traders are out.

I am taking adv of this behavior to make myself available entering the market with a long position, i also add a profit taker limit trade of 30 pips.

Some consolidation,  this is happening because i didn’t waited for pullback, i just got in as soon as i recognize the pattern:

As the market don’t goes down, it haves to go up with a large candle, profits are reached and i am out.

Tags: correction, correction rally, eur-usd, rally, uptrend

An Euro Dollar Pullback

Short term uptrend given, using 15 min charts, taking position when i see candlesticks + stochastics reversal from the 200 EMA.

The market seems to don’t have the strength to get out of the hole and a black candle is shown, i still positive and inside the trade:

A few candles later shows me that the level still healthy as we are not going lower, if we don’t get lower i am positive we will finally trade higher.

If the market trade lower the 200 ema i will have to leave the trade, i am in a critic stage now, the battle between bulls and bears is happening right now.

A break happens to the upside at the same time stochastics start to climb, definitely we are in the presence of a pullback.

A little consolidation here after the break

some reversal action here to the downside, this was not expected at all, the market is unpredictable and every situation is unique.

let’s hang a little bit to see how it goes, remember that my trade credit ends if the 200 yellow ema don’t hang anymore.

the lower levels are absorbed quickly, showing me that the sentiment still quite bullish:

the market now start to head up again after liquidating some traders.

market is trading in the upper levels again and it looks like if it is going to continue with its pullback:

a new break to the upside is given and i am getting close to the profit levels, remember on a pullback i am not expecting to make a new high, i am just expecting to trade close the last high.

market traded higher so i got out the trade with 25.8 of pips of profits.