Back on the grid...back in $AUDUSD...and archery

After being mostly off the grid for the past week, it's good to be back.  But since I'll be in single parent mode for the rest of the week, my trading related activities will be significantly curtailed until next week.

Trading SIM on ES
I'm continuing to trade the ES on SIM, since I realize that I haven't yet completely bought in and committed myself to a specific trading plan that meets my personality and style.  That's probably one of the biggest factors of why I'm having discipline issues (i.e. overtrading).  Therefore, I'm back to the basics, doing homework, trying to figure out what type of timeframe, setups, style, etc., work best for me.  This may continue for quite a while.

Trading live on AUDUSD
However, I'm much more comfortable on the swing trading forex side, and I posted the observation last week of watching the .9665 to .9700 levels for AUDUSD, which continues to be respected.

The entry
After seeing a good setup on AUDUSD earlier today that took place above the .9700 level, I entered a long position at .9716 with a stop at .9690.  At this time, the trade is nearly 2R and once it approaches 3R, I will consider raising the stop to b/e or another appropriate location.

$AUDUSD 15 min

The target(s)
My target is still TBD, although I see some significant levels at the whole numbers of .9800,  .9900, and 1.0000, so I will watch the price action at those areas.  However, I realize that this is a contra-trend trade going against the bearish trend, and that any pullback higher may be very short lived.

$AUDUSD 4 hour

Archery and Trading
While on vacation, I took a short introductory class on archery.  What's very interesting about archery is how similar it is to golf as well as trading.  It's not a reactive sport, so it's up to you when you choose to engage.  But it was pretty clear to see that after you learn the basics and master the fundamentals, the biggest obstacle is then mental.

So when I asked the instructor how critical the mental game is to archery, it wasn't a surprise when he said it's the most critical component during competition.  He brought up an author named Lanny Bassham who wrote a highly rated book called With Winning in Mind: The Mental Management System.

Lanny competed in the International Rifle Shooting event in the 1972 Olympics and came up short with a silver medal.  So he spent the next few years studying Olympic gold medalists, developed his mental management system, and won the gold medal in 1976. 

I have not read the book yet, but I have seen some summary notes online.  It appears that many of the exercises and theories are very similar to what you commonly read in the trading or other sports psychology type books.

I'm getting to the point where everything I read regarding performance psychology makes me feel as if I'm walking around in a big circle -- been there, done that.  Everything is a variation of a few key themes, presented in different ways.  Nothing I read now seems to be truly new or groundbreaking.

So whether it's archery, golf, trading, or any other performance field, there are no secrets on what it takes to become an elite performer. However, just because I know a lot about what I'm supposed to do to improve my mental game, doesn't mean that I'm doing what I'm supposed to do.  There's a big gap.  So it's time to start planning and executing.

$AUDUSD - one that got away

Family duties have kept me a little busier than expected lately and away from the markets, so I realize that I will miss my fair share of good setups.  So when I do come back to see a good setup that got away, what I will do is to acknowledge that the setups are still taking place, and that there will be many more in the future.  Because the markets are not going away anytime soon.

Here's a setup that took place earlier today that I wasn't around to take.  And although it wasn't a textbook perfect setup, there were enough elements that came together that would have made it worth taking.  Since my stop would have been around 15 pips, it went over +60 pips (around 4R) at one point.

There will also be some high impact AUD news in less than 2 hours, so it'll be interesting to see how it will impact the currency.  At this point, the trend is still down on many timeframes, so I would be assume the market is expecting that the news will likely be more negative than positive.

$AUDUSD closed +175 pips

$AUDUSD daily chart

$AUDUSD retested the daily trendline at 1.0265 with oversold stochastics on the daily, and the ES looked like it hit a short term bottom.

So I exited with +175 pips.  With initial risk at 35 pips, this was a 5R trade.

This resistance area around 1.0265 is solid, but not quite good enough for me to buy.  However, it was good enough for taking profits.  I'm now looking for a solid buy setup for a short term retracement higher.

Closed $AUDUSD for +207 pips

After nearly 1 month, the AUDUSD short I entered on 3/26 was exited yesterday for a profit of +207 pips.  Based on my initial risk of 40 pips, this trade returned about 5.1R. 

The 1.0250 area provided solid support, even after relatively bad economic news released late Monday night, which indicated to me that there was a decent amount of strength supporting this pair.

While the +207 pips initial sounds like respectable outcome, this trade was held for nearly a month, so another way of looking at this is that it didn't quite average +10 pips a day.

UPDATE: $AUDUSD - possible short exit and reverse signal

Will watch $AUDUSD closely today to see if the lows of the day hold.  This might be a signal to exit the short from 1.0521, and possibly go long.

UPDATE: $AUDUSD at +150 // $ES_F pivots respected!

Update on $AUDUSD:

$AUDUSD daily

• The swing short trade on 3/26 from 1.0521 has gone around 4R (R=initial stop of about 40 pips) for a profit of over +150 pips.
• Stop loss: I'm now moving the stop loss just above the downtrend line, so that I also lock in a small profit.
• Target: Initial profit target is currently around 1.0250 (the bottom channel of the downtrend line), at which time I'll reevaluate the target, assuming I'm not stopped out.  Ultimately, the 1.0000 (and lower) still seems possible over the next month.

* * * * *
ESM2 and the pivot levels today:

ESM2 - 5 minute

It was interesting how well the regular trading hours (RTH) pivot levels were "in tune" and respected today. 

On some days, the 24hr pivot level calculations are in tune, so I actually track both. 

However, I don't usually see days like this where every level touched was respected in a meaningful and actionable way.

It's just too bad I did not take as much advantage of this.  But this is yet another example that will go into my memory bank of experiences deep within my subconscious mind.  So that next time, I'll be better prepared.

Short $AUDUSD from 1.0521

Not sure why I enter these forex trades at night, right before I go to sleep.  Maybe it's when the setups just tend to happen?  Or maybe it's a just a twisted game my subconscious plays on me to see how well I can sleep with overnight positions?  Or maybe it's just a way to get me to wake up in the morning to see how the trade went?

Short $AUDUSD from 1.0521 due to:

• Downtrend line acting as resistance on daily chart
• Fast stoch (8, 3, 3) turning down (although it didn't get as high as I would like)
• 38% retracement from high to recent swing low on daily chart 
• 20 ema acting as resistance

Stop placed at 1.0555, just above the psychological 1.0550 level, as well as the 1.0545 high of the trigger bar.  However, this might be a bit low based on any fakeout breakout stop runs above the 1.0550 level, and might be adjusted.

Target is still TBD.  But assuming I don't get stopped out over the next 2-3 days (odds are relatively high that I will get stopped out):

• Could be based on the extension of the Oct 2011 + Dec 2011 swing low trendline (currently around 1.0300 and rising), as well as a Diamond Setups based level
• Could be the lower downtrend line on daily chart (currently around 1.0265 and declining)
• Could be .9950 area, based on some DS based levels
• Could be...

$AUDUSD daily chart

$AUDUSD 2 hour chart

What's more important than risk management of your capital?

No trades today, still taking it easy.  I did have some SIM trades on Friday for about +8 ES points.  Although I treat SIM trades the same as live, there's still a difference with fills, so I'm not really counting those at this time.

EURJPY update
And from the hindsight trading perspective, the original $EURJPY long trade on 3/23 from 109.01, had I not placed the initial stop so close and brought up the stop so close, which then stopped me out the next day, the trade would be looking pretty good right now (up over +150 pips).  Lesson learned -- make sure I keep the stop below the trigger bar, and don't touch it for at least 2-3 days.

* * * * *
Managing your psychological capital is MORE IMPORTANT than managing your capital risk

Over the weekend, I happen to watch a video from Denise Shull, who has recently released a trading psychology book called "Market Mind Games."  It has received some strong reviews, so I'm looking forward to reading it soon.

Her message created one of those a-ha! moments that hit home, especially due to my mini-meltdown last week.  The information wasn't anything groundbreaking, but based on the timing of the message and how Denise presented the message, it really got through my thick skull and rang some bells.

One of the studies she references in the video is from Seo and Barrett, which in summary, says "investors who were both the most emotional, but also the most aware of their emotions were the most successful."

Here is a partial transcript from the video clip.

If you manage your psychological capital better than than you manage your cash capital, you will have a better year than last year. 

Research shows that when you are tired, you will mis-perceive risk. You think you will see one scenario, and it's not what you're looking for.  And the research is overwhelming convincing on this.

So if you get a lousy nights sleep, and you're tired...have a fight with your spouse, your best risk management tool is not to trade.  I also know it's the hardest thing to do.  But this is really a hard business.  And you gotta learn to do some hard things. 

The place to have the discipline is managing your psychological capital. 

So instead of trying to apply discipline to not having the emotions, and just doing the trade and taking every trade, apply the discipline to understanding where you are on your psychological capital scale.  And if you're tired, or if you're sick, or if you're aggravated at your wife, child, or dog...

DO NOT turn on your order entry system.  It is a very simple risk management tool. 

Now everybody wants to trade.  But there are always other things you can do.  You can review last months performance, you can read a book that you've been meaning to read related to trading, you can practice something in simulation. 

But DO NOT turn on your real account.

And just think, if you just take that one tip, at the end of the year, how many of those trades that you wished you wouldn't have taken last year, would you not have traded? 

And imagine psychological capital. If you don't take that trade, because you were tired, and so you don't have a crummy day where you lost a $1k, or $5k, or half million dollars...you don't have that crummy day, where are you going to be the next day? 

You'll going to be better off in every way! 

First of all, you're not going to be so mad at yourself for taking the crummy trade, beating yourself up, why did I do that again.  So you won't have the psychological capital deficit that  you just gotta recover from mentally and emotionally, you also won't have the cash deficit.

So the next day, you're going to be like, you know what, I actually handled that well.  I did what I was supposed to, like an athlete, or a singer who preserves their voice, or preserves their body.

It's the same thing, you're preserving your mental, psychological capital.  And when you do that for a day, you're going to come back the next day with much higher odds of making better decisions.

The point about taking trades when you're tired, angry, annoyed, etc., is so true.  Those "oh this little loss from this mediocre setup won't hurt me..." really does starts to add up, and does hurt your P&L over time.  Death by a thousand cuts.

Today, I didn't log into my live account.  Little by little, I'm learning to build up self-control and self-awareness over my actions and my emotions.  Step by step, I'll continue to make small improvements every day.

Entered $EURJPY long at 109.01

Entered EURJPY long swing trade tonight at 109.01, due to the trendline setup on the daily chart. 

• Exit is whenever the market tells me it's not going up anymore.  
• But if I'm super super lucky, 117.00 area is the hallelujah stretch goal target in 5 weeks or so.
• Stop is currently at 108.72, although since the trade has gone nearly 2 times the stop loss amount, I will raise it to near breakeven and go to sleep.

$EURJPY daily

$EURJPY 15m

$EURUSD closed +300 pips

Ended up closing the EURUSD trade today that I entered on 2/24.  When it made a new low under my original 1st target of 1.3100 before revising it, I moved the stop just below 1.3150 to lock in +300 pips, which is about a 5:1 reward/risk ratio.  The trailing stop was triggered today, closing out my position.

$EURUSD - 240m - 3/7/2011

I admit, after the fakeout breakout above the obvious 1.3150-60 level earlier today failed (1), and a new swing low below 1.3100 was printed (2), I didn't expect the 1.3150 area to get retested. 

But in this rumor driven market, 50-60 pips can take place within minutes, and my trailing stop was triggered relatively quickly (3).

In hindsight, I should have kept the trailing stop loss order well above the prior day's high, which means I would still be in the short position right now. 

But once I realized that my original target of 1.3100 was retested and failed, I probably got too aggressive with my trailing stop.

Live and learn, but at least this ended up being a respectable swing trade...NEXT!

UPDATE: $EURUSD - thoughts about 1.3150

I read the $EURUSD stream for a few minutes last night on Twitter/StockTwits, and was surprised to see how many people were saying the 1.3150 area was good support, and/or a place to buy on a retacement to go higher.

Not sure why, but it made me think the following:

• We'll never get down to 1.3150, and the EURUSD will head back up  (I was wrong)
  
• If we do get a bounce, it won't hold for very long  (So far it bounced from 1.3160)
  

The first option has already failed, so I'm thinking that the bounce from 1.3160 won't hold for very long. 

Today, the daily 20ema is starting to slope down, and also provided resistance.  The stock market also appears to be potentially slowing down.  Since the dollar and stock market are generally conjoined more often than not, if one tanks, the other will generally follow. 

Tomorrow will be an interesting day, and should help me determine whether I bring my stop loss level down closer to the current action.

$EURUSD daily 3/5/2012

UPDATE: $EURUSD swing short & the neglected indicator

Here's an update on the EURUSD short I entered on 2/24 at 1.3448:

• Original stop was 1.3510
• Original 1st target area was 1.3100, and 2nd target was 1.2800

 Updates since entry:

• On Friday, it hit nearly 4.50:1, reward/risk
• Stop was lowered to 1.3360 (above Thursday's high), locking in some profits
• Revised targets: 1st target area 1.3170-1.3150, 2nd target 1.2800-1.2775
• However, the trend still appears to be up, with a upward trendline support around 1.3150

The neglected indicator - time

I wasn't very aware of why I felt the timing was right to enter the EURUSD short, other than the resistance areas mentioned.  But after digging into my subconscious a bit more, the answer was clear: time. Most of the analysis you see is generally based on price or some derivative of price, as well as volume.  But I don't usually see as many people calling out confluences specifically in cycles and/or time.

This study of time and cycles isn't an area of study that I have pursued much, although I still recall the book I read in the early '90s called Geometry of Markets by Bryce Gilmore.  Not the easiest book to read, but one of the first books that taught me in depth on Fibonacci ratios.  Way back in those days, the 127% and 78.6% levels were still considered a big secret!

Through the years, I've noticed that there's a certain rhythm, cadence, or flow, that each market has under various conditions.  It's like someone you have known for a while, you get to know how they are when they're normal or angry, predict their next action or words, as well as be able to tell when something's bugging them.  Sometimes, you can't necessarily put your finger on it, but we humans can become quite perceptive when something's slightly out of whack with someone.

Same applies to watching the markets and getting to know its personality.  So at the time the EURUSD started to hit the recent resistance levels around 1.3450 last week, I noticed the following tendencies with regards to time for some of the recent moves:

• I went long on 1/13/2012 about 30 pips from the low, and that move lasted about 9 trading days.  I exited a day too late, but still caught 436 pips of that move.
• When I was evaluating the most recent short entry as it was hitting a confluence of resistance levels, I realized that it was about 7 trading days since the swing low -- close enough.
• By nature, I'm usually early to enter a trade and am totally fine taking some heat.  So I knew the next 3-4 trading days after entry might be a bit tough.
• And yes, Renato had his Diamond Setups overnight "Asia and London Levels" with higher resistance around the 1.3470ish area for that day.  He says his overnight levels are generally for daytrades, but if you have a longer perspective I will admit it's very valuable for entry zones.  I truly believe the overnight levels alone are worth the price of his service.
• After the fact, I went in and applied some cycles, and it looks like the EURUSD generally likes cycles based on a factor of 4 trading days.  You'll see the waves generally move over 4/8/12 trading days...at least for now.

EURUSD daily chart 3/3/2012

My current inclination is to possibly take profits if it gets down to the 1.3150 area, since that will be the 4th day of a pullback, with support from the uptrend line and support levels.  But, time will tell.  Yes, pun intended.  :)

$EURUSD swing short entered today at 1.3448

Today, I entered a swing short at 1.3448 in EURUSD, due to the following reasons:

• There were at least 4 different Fib levels based on various waves that converged on the 1.3435 to 1.3475 area.
• And something much less tangible -- it seems to have been a while since the Eurozone has really announced some really ugly news. Perhaps this weekend?

$EURUSD daily chart as of 2/24/2012

I've seen various other analysis demonstrating compelling reasons for why the EURUSD is going much higher.  And if this was an intraday chart, I'd say a reversal bottom has been sent, would look to buy on dips, and target new highs.

But I'd rather not miss a potential move, so I'm generally early to enter trades and am used to getting stopped out a few times before getting on board a big runner.  Risking about 30-50 pips in order to get a few hundred pips is my general setup for forex swing trades.

Odds favor that I get stopped out above 1.3500, which is just the cost of doing business.  But assuming this trade works, the initial target will be the 1.3100 area, with a final target around the 1.2800 level.

$EURUSD closed +436 pips

Not a trading day for me today, although one eventful news was that I was stopped out of my EURUSD trade this morning.  This was one of those perhaps a handful of trades a year where everything goes almost according to plan.

$EURUSD 15 min chart 1/29/2012

On the surface, buying earlier this month only 30 pips from the major low since last summer for the EURUSD and booking +436 pips ain't bad, and was partially luck.  But when I realize that I was less than 20 pips away from my original target of 1.3250 of nearly +600 pips, I do admit there's some sense of coulda, shoulda, woulda. 

And then my rookie stop placement just above critical support as well as just below the psychological whole number of 1.3100, was either too far away of a trailing stop from where it fell from, and/or too close to the support area below.  In other words, my stop placement was in dead man's land and was easily picked off.  Lesson learned.

But in the end, it was a good risk/reward trade -- I risked 35 pips and gained 436.  Heck, I'll gladly take one of those every month.

* * * * *
Looks like I'll continue to be out of trading commission for another couple days, in addition to this Friday due to travel.  So I'll look at working on my mental game when I do have some time during the day.  I believe that there are some subconscious elements at play which is challenging me from getting to the next level.  I am certain that with a little more attention in this area, it will significantly help my trading performance down the road.

Sometimes, I'm lucky

Wednesday, January 25, 2012

Total gross profits:  $100.00 +2.00 ES points
Total trades:  2  [0 scratch]
Accuracy:  100.0%
Execution score: 100.0%
Opportunity cost: +$0  +0 ES points

I only had 2 trades this morning, and one was a reversal signal which made me exit out of the trade early.  But since it appeared everything was at a standstill and choppin' around until the FOMC news releases were out and digested, I decided to take care of some non-trading related duties (I went to Costco, yeah!).

So I left late in the morning and thought I would be back in time post-FOMC news trading, but ended up being out much longer (darn tire center took forever, UGH!).  I returned when the regular cash session was almost closed, and was surprised to see that our friend, volatility, had returned!

THE EURO TRADE
The Euro was exceptionally volatile, which brings up the long trade I entered back on January 13th.  As longer time readers know, I've always had an affinity for the forex markets, and have dabbled in it.  But before we get to the specifics, it's always interesting to see how some trading ideas come up, and how some trades I've taken have more of a story.

THE CAST OF CHARACTERS

@treeee50
Planted the seed by showing a picture and whispered to all those that listened...the bottom in the Dollar might just be here.

@Jay_MTF
Saw the picture, heard the whisper, connected the dots, and said "Euro strength?"

@grove_under
Heard the whispers between @treeee50 and @Jay_MTF, then listened to the Boss Man, got the plans and executed the mission.

@RenaTrader
The DiamondSetups "Boss Man" with the killer overnight levels for the Euro (and ES, CAD, crude oil).  Seriously, his overnight levels alone are worth the subscription price to his trading room!

WHY WAS I LUCKY?
But going back to this particular trade, the reason why I'm so lucky is because this trade came within 3 pips of my stop loss order.  Yes, I almost got taken out on this particular mission.  I was using Renato's Euro support levels from the overnight session, and was using the conservative entry levels with relatively tight stops.  So instead of getting stopped out and missing the big move, I've been fortunate to have entered it near THE bottom, and rode it up with relatively minor bumps along the way, so far.

EURUSD 120m chart

BUT DON'T COUNT YOUR CHICKENS...
As I write this, the Euro is up about +450 pips from my original entry level, so it has approached an area of profitability where it's one of my better forex trades (assuming I closed it right now).

Speaking of good trades, let's not discuss the EURCHF trade back in September where I was up nearly +800 pips until it...ugh, heartbreaker.  Well, the lesson I learned from that experience is that in the forex market, the near impossible move can happen, so nothing is certain (including stop orders) until the trade is closed.  And that disclaimer includes this open trade.

TIME WILL TELL
My preliminary profit target for this Euro trade is near the 1.3250 area, which is simply the 38% retracement of this big leg down.  So either we'll get to that profit target area, or there will be some other signal that tells me that the move is over and that I should exit. 

But regardless of the outcome, I will consider myself very lucky that I was able to be in the right place at the right time, and overheard a conversation (thanks twitter) that lead to what has been (and could be) a great risk/reward trade.

And although I won't ever say this enough, thank you to the great cast of characters I mentioned above, as well as all the others (you know who you are!) for the great daily dialog we have regarding the markets and trading.  It has certainly made this oh-so-challenging journey to become a consistently profitable trader a really great experience.  Let's keep it going!!

Recap: $AUDUSD stopped out

When I entered the $AUDUSD short yesterday morning, I thought that I would be in this one for the long haul.  But all good things come to an end, some more quickly than others. 

Reasons for being stopped out
I was stopped out just above .9800, giving me a profit of a little over 100 bips.  The stop was brought down based on a clear indication that several key resistance levels were broken:

1. The downtrend line on the 15 minute chart
2. The resistance line at .9775 where the last key breakdown took place
3. The .9800 whole number level where another breakdown previously took place

AUDUSD 15m 09-29-2011

What did I learn?
At this point in my development as a trader, one important aspect of each trade is whether I learned something.  As I was reviewing this trade last night as it was still trending lower, I realized that .9700 was a key support level for at least 2 reasons:

1. On a 30 or 60 minute chart, it's clear to see that there were many tests of the .9700 level,  each resulting in a rejection.  The clues left behind were the lower wicks (bullish signs).
2. Looking at the 2 swings prior to my entry, the .9700 level was a near perfect Fibonacci extension

AUDUSD 60m 09-29-2011

Next time...
In the future, I'll have to consider taking profits, or at least partial profits at those key levels caused by a confluence of factors.  But overall, I felt the execution on this trade went relatively well.

Charts: $AUDUSD short

Meanwhile, as my equity day trading hits a bump in the road, I continue to be able to wait for decent setups on the 15 minute forex charts.  I was stopped out of a $AUDUSD short trade I initiated last night for about 30 bips, but a decent short setup appeared this morning which I'm still short, and has gotten as much as 180 bips in the money.

Weekly recap: Limited trading, but still gained insights

I had limited trading last week due to a family visit, and it will once again be somewhat limited due to more visits later this week.  However, I was able to get in some trades, still had minor bouts of overtrading, made about 1% gain for the week risking only about 15-20 basis per trade, and here are some other observations I made along the way.

• In some ways, the ability to have limited time to trade kept me focused.  The more time I spend in front of the screen, the more likely I am to overtrade.  The state of my mind changes, likely due to impatience, fatigue, etc., but even more so if my first couple trades are losses.  I might need to take breaks that are longer to help calm the mind.
• Even with limiting my trading time, it seems as though my usual pattern of starting with losses, then having to dig myself out of a hole still help true.  I'll need to find a way to break that pattern of starting off with losses.
• On those "rare" occasions when I start off the day with a few wins, I seem to become more complacent and passive, looking to protect my gains, and therefore limiting my upside potential.  Quite the opposite of when I'm trying to dig myself out of the hole.
• What I believe I need to do is to have a similar mindset as I do when I'm digging myself out of the loss.  However, I need to be careful -- What I don't know is whether it is the markets that are cooperating with my methods to create these big recoveries (i.e. lucky coincidence), or whether it's my mindset that truly changes and becomes more focused but yet aggressive when I'm underwater. 

During this period of limited time, I'm still continuing to read (and re-read) from Dr. Brett's books to consider how to implement new exercises and drills to enhance my strengths, and improve my self-discipline.  I'm amazed how every page seems to be packed so many great insights.  If only his books were available 20 years ago, I wonder what type of person (and trader) I would be today.

* * * * *
Here are a couple trades from last week:  One that was almost a classic Trader-X beyond the opening range low style setup, and another that is a forex swing.

FCX 5m sell below 7th bar - I wouldn't rate this setup too much more than a "B", since there were some choppy/wicky bars in the opening range, and the setup took place above the S2 pivot level.  But there was something about this trade that seemed compelling.

FCX 5m 09/21/2011

The first 3 bars created both a "fill in the tail" and descending triangle type of short setup, although it didn't look good enough to take.  But after the fakeout breakdown, it pulled back up, bounced of the vwap, and created a green shooting star bar.

I don't usually like to short on green bars, but this one looked compelling enough since it had the opening range low [btorl], a vwap line bounce [vlb], and descending 5ema all aligning together.  Perhaps the only negative was the S2 pivot level which was below the price action.

I exited the first 1/2 on the break of the 161.8% Fib extension, and then exited from remaining 1/2 when it approached the FE which was also aligned closely with the S2 support.

AUDUSD - I missed the big daily chart move down on this pair, but believe there might still be some more room to the downside.  Friday was a relatively choppy, narrow, and indecisive day.  But based on the trendline of the highs on a 15 min chart going back a couple days as noted below, I shorted this pair after it made a new low, and retraced back to the descending trendline, and broke below the prior 15 minute bar, at .9803.  My current stop is just above .9850 (yellow dashed line).

However, it didn't follow through to the downside, broke the descending trendline, and went sideways.  Last Friday, I exited my short position and regretted it.  This week, we'll see how things are looking in a few hours once the forex opens.

AUDUSD 15m 09/23/2011

Update: $AUDUSD closed on Friday

The $AUDUSD short trade that started on 9/9/2011 was closed out on Friday, 9/16.  The stop above the highs of the prior 2 daily highs was hit, and it ended up with a little over 70 pips profit.  It was well over 200 pips profitable at one point, but I wanted to give this one room to breath (unlike my daytrades where I usually close them out too soon).  And as Murphy's Law would have it, the pair opened with a nice gap down last night, and I also missed a clean short entry earlier this morning.

$AUDUSD 15min 9/19/2011

$EURUSD short was another trade I entered on Friday, based primarily on the daily charts.  It looked like a great opportunity to short based on a pullback to the point of breakdown from the prior week...

$EURUSD daily 9/19/2011

...so there looked to be a good spot on the 15 minute chart to enter.

$EURUSD 15min 9/19/2011

However, I got in a little too early, took some heat, and then the price action consolidated the rest of the day around my entry price.  It broke above the prior swing high that lead to the swing low prior to my entry, as well as the 100 ema, so I was no longer as confident of this setup.

And then my mind, I decided it was good to take a timeout this weekend, be in all cash, so I scratched the trade with a small profit.  As with the AUDUSD trade, Murphy's Law took effect, and the pair opened with a nice gap down last night.

Here's something I need to consider - I appear to be reading and executing better on a 15 minute level, using much wider stops.  I believe this method could could also work on stocks, but I've always tried to segregate the two asset classes apart.  Being able to get out easily overnight in the forex also gives me some comfort to hold on.  So perhaps I need to better integrate what works in each and work to enhance those strengths in my overall trading.

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It also turned out that I ended up having family visiting this week, so this timeout I took looks to be timely.  In terms of priority, family will always take priority over trading, so my activity will likely be quite light this week.  After having quite a mentally intensive past few months, I'm looking forward to this brief rest before I take things to the next level starting next week.

Recap: $ITMN and $AUDUSD

In a day where I got chopped silly by a thousand paper cuts and had to reference my Dr. Brett books and website for comfort and assistance to rebuild my psyche and sanity, at least there were some trades that worked.  I was able to take what I consider a "very ugly" loss and cut it in half to just an "ugly loss."

So yes, I did end up taking some nice profitable trades, so I should feel a touch positive for the accomplishment of partially cleaning up my big mess. But in the future, days with big messes caused by undisciplined trades will be a non-occurrence.

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ITMN - 5min - vlb setup.  Sold short around 11:15 due to the vwap line bounce [vlb] which also corresponded with resistance from the Retracement Zone (RZ).  Held on through a choppy ride down, missed exiting at the FE target ($0.25 opportunity cost), and got out on the first pullback after the downward trendline broke.

There was also a "vlco pinch" setup later in the day, which is when the rising (or falling) 5ema pushes up (or down) against the vwap line, and pinches it to breakout.  With the pivot point level also acting in conjunction as resistance, I was hoping that this was the start of a big reversal.  But the price action stalled right at the RZ and I got out at breakeven.

ITMN - 5min - 09/13/2011

AUDUSD - Update: Still short, although I had little scare earlier this evening when the price approached the 9/13 highs of the day.  My stop has been lowered to slightly above the highs of 9/13, so the price got about 15 pips from getting triggered.  In hindsight, that spot was a great place to add on for a low risk/reward trade.  I've locked in some profits, and now it's time to sleep.  We'll see how this turns out tomorrow morning.  Good night!

AUDUSD - 15 min - 09/13/2011