Positive start to New Year 2012 – Trading EURUSD

Happy New Year!

Well, it’s back to trading and I’ve spent quite a bit of time over the Xmas period looking over the blog and what I’ve been in 2011. I’ve reviewed my trades (that’s the great thing about having the blog – it also serves as my own trading journal) and asked myself what I liked about my trading and what I didn’t and how can I improve going into 2012.

A lot of us getting into trading we buy or seek other trading strategies and most of the time find that they don’t work for us… a lot of the time, it isn’t because the trading strategy is flawed but because it is incompatible with us. We all have different risk profiles and tolerances, each trader also has different levels of fear and greed – the two most powerful emotions when one is trading the markets. For trading to work, we must find a technique which works with our personalities. It’s almost like finding a partner, you look for a certain type of person that suits you.

I’ve traded a lot of different strategies and have made them work for me but always felt a bit uneasy with some of them. Some of the trading systems are more long term and you have to hold the trades through swings and experience draw-downs. The longer timeframe charts are easier to trade from if you’re a new trader but for it to be profitable, you have to give the trade room to weave it’s way to your target.

I think ultimately, my personality suits that of the shorter timeframe charts.. I like to get and out.. ride a swing and get out before the pullback. These trades are shorter term looking at the 1 hour, 15 minute and 5 minute charts. However, I don’t feel that I’m good enough to be trading from these lower timeframes as yet so my trading is still from the longer timeframes which are profitable but don’t yet feel comfortable enough for me.

Anyway, I’ve been looking at the shorter timeframes and working on the premise of the below diagram:

Basically an uptrend is a series of higher higher and higher lows and a downtrend is where prices make lower highs and lower lows.

The idea is that in an uptrend you identify where the pullbacks are and go long. In a downtrend, identify where the pullbacks are and go short.

Today, as you can see on the 15 minute chart of the EURUSD, I saw the uptrend form as the price action had pulled back from the previous longer term uptrend. Then we got a series of higher highs and higher lows. I enter long a little later than I would have liked but certainly with the movement where price was going. I experienced a another pullback before the price shot upwards. I tried to take profit for 20 but actually got 17 but happy in that the trade worked out and also that it felt more me to take trades like this.

 

 

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Category: Forex trader, Trading