Trade setup: 62

Target: 1.6870

Filed under: EUR/AUD

Trade Setup: 61 Update

I took out 2/3^rd of my position at +40 pips yesterday and let it run. I woke up this morning with a -132 pips position. It did cross my stop loss price but the EA I use don’t close trades until the Four Hourly candle closes below/above the stop loss. So the trade is still open with -60 pips right now.

I did some miscalculation on the volatility measurement so I’m reassessing the trade.

Based on the retracement I’m projecting 208.20 as first target and 206.60 as second target. Stop loss is moved back to 212.95

Update: Still no H4 close above stop nor this beast has decided to go down. Ranging market.

Update 2: Stop loss was not far enough. SL Taken out and re-entry was at 212.42 which reached First target at (76.4%) 210.45 and Setup:61 is still valid only concern I’ve is that the four hourly volatility is really down compared to the 300 pips move we just had.

Update 3: Target Hit!

My first setup was still valid though eventually after making over 300 pips from those range last week I didn’t trade the Nonfarm payroll movement, it actually reached and bunched from my first exit target.

Filed under: GBP/JPY

Power of Fibonacci

I must be joking. The power of Fibonacci projection shouldn’t be considered as holy grail. No one knows where it will retrace to and where it will stop following the magic numbers. But when you add price action… Fibonacci can be very powerful tool to project stop loss and target projection.

When this trade was on the way I was sitting in a Arabic style Shisha house and watching the price going up on my mobile. And I wrote a memo on my cell phone that the price will reach at least 213.90 before it can go up or down.

With a volatility indicator in place I would have got out of the trade within 10 pips of my projection of a almost 1000 pips move.

Fibo alone is worthless, but if used with a proven strategy it can give really great R:R trades. Like the next last trade I posted which is still underway.

Filed under: GBP/JPY

Trade Setup: 61

 
 

Fibonacci alone is not enough of course, I’ve been using basic standard deviation to calculate the waves (Not EW)

Filed under: GBP/JPY

What is your monthly income?

Do you ever think why professional traders hardly talk about their trading outside their peers?

I’m reaching there slowly, to the answer. Its all about mental perception. When you will talk to a friend who is making substantial amount per year (lets say in six figures) and he knows you are a trader, he asked you how much you are making?

Or lets stay safe, he did not ask but as a trader you want to compare your own income with another successful peer.

You have a $50,000 US trading fund and making only 3% return per month. That’s only $600 per month and $18000 per year at 36% annual ROI. You must be thinking this is very bad! You are wasting your time and you need to get a “proper job” or you need to make 200% return per year to compete with your peer!

The problem is, you are thinking same way of a wage earner. A trader needs to think in the way an investor does.

Time for some math. Your peer will make $1 Million at the rate of a six figure annual income in next 10 years.

How much you will make as an investor in next 10 years with your 3% per month strategy and proper money management?

The minimum rational number for me at 3% per month is at least, $4.6 Million

So how much your peer is making per month? He is making $8333 per month for next 10 years. How much you are making? You are making $38,333 per month for next 10 years.

This is the reason professional traders don’t talk about their trading outside their peers. It is worthless to compare your monthly income to a guy who is making $8k per month. But his retainer/wage is a straight equity curve where as a trader your equity curve is bended.

If I started my trading with ONLY $350 and made $15 USD last week, I’d say for next two years I paid myself $4166 US per month (at least)

Thus, as an investor you have to stop thinking in straight line like white trash $30k per year annual budget people who would work 5 days a week to spend most of it drinking on Friday night due to burn outs and 2 vacations per 5 year if they can afford.

Think in percentile, think like rich. Your $60 per month has more value than a guy who made $2k this month today, because at this rate after 2 years your monthly income will be $4k (including current month,). and he will still be making that same amount as long as he is stuck there.

Did I tell you why do I love trading? Wink ;-)

Filed under: Random Thoughts