Fri Oct 31 - Whipsawed in the range

AUDUSD has consolidated for 4 weeks on D. Wednesday's FOMC caused the USD to strengthen in its group. AUDUSD crashed, but not as much as EURUSD or GBPUSD making it a better pair to try a range short nearer the top of its range. I kept an eye on its partner but was hesitant to short AUDCAD since its D was in an uptrend.

4H shows a 50% retrace that rolled over. I awaited a move to the trap above but it rolled over on 60m. I entered via a Limit Order on a quick pullback. The trade went 20 pips in favor and then formed a DB on 60m and slammed 25 pips against me. I cut it at 18.

AUDCAD looked more bullish and I no longer saw correlation to head down. It is rare that I flip my position, but it was a play to test the highs of the range on D. I entered AUDUSD long deciding that CAD was risky with the GDP figures release in a few hours.

AUDUSD worked it way to +24 pips but was reversed on the USD strength from its Orange reports.

Not shown is AUDCAD which has continued to rally. This is frustrating since I knew AUDCAD was the better buy, but chose not to take the trade on that pair. In the end USD maintained strength and CAD maintained weakness regardless of the report results, better to stick with their fundamental biases.

Despite both trades going beyond 20 pips in favor I took losses on both - not even break-even on either. Reason being I am trying to hold through reports, but wouldn't be so bad if I occasionally survived them. However, with the stops being closer than targets I am dealt losses as the markets jiggle within the range.

I will have to analyze the report expectations and consider exiting ahead of reports.

Summary: 2L for -1.3R overall.

Tue Oct 28 - In Search of a Homerun

Long GBPAUD yesterday. D made a 2LPB which tailed on the trap test. I missed the previous day's entry at 77, but took an alternate entry when it tested the trap again and tailed. Entry was higher than I prefer due to entering on the 4H's close. Plus my broker's spread is 5 pips on this pair so I entered on 50% size.

Overnight the mkt went 33 in favor and rolled over on me. By the time I was at the charts I wasn't able to scratch. It was stopped at -0.9R.

The weakness that followed looks like this pair isn't trying to resume the overall uptrend, but is transitioning to a range or downwards. EURAUD is even weaker suggesting this may be the case.

Summary: -0.9R

Forex Tester

I recently learned of Forex Tester (FT) http://www.forextester.com . Gonna buy it to solidify my method. Of most interest are trades that have lots of favorable elements, but are missed due to waiting for the test. When 3 legs have occurred it doesn't make sense to wait for a test considering the rarity of 4 legged moves. I am interested to see how an entry on a closed 4H bar will perform.

Waiting for a test has some pros:

• If L4 happens I avoid a stopout
• It reduces time in a trade
• I can often gain a better entry which reduces the required stop and allows for a higher R:R trade
• I can spot a leader pair take off to precisely time my entry in a follower

But of course there are cons:

• I can miss large moves that blast away once L3 completes which.....
• wastes the time I planned/stalked                                                                

GBPNZD was in an overall uptrend on D. It pb in 2L and then based sideways for a week. 4H formed a trap and was tested in 3L (as marked). The reversal occurred with a bullish bar closing at 2.0228 signalling a buy and needing a stop at 2.0074 of 154 pips. Some of the biggest moves begin with large reversal bars. I've often seen those as signal bars but I've opted to not enter and wait for a test of the signal bar. Normally I enter with stops 1/5 that size, but if I waited for the test there would not have been an entry here. So far the pair has rallied 328 pips from the signal.

Position sizing makes each trade of equal risk regardless of the initial stop sizes.  I expect the Win % to drop, but since the method makes money thru R:R it shouldn't matter too much. Plus I will participate in more of these runaway moves. What attracts me to entering on closed 4H bars is the simplicity. Knowing I only need to look at the 12pm, 4pm, 8pm and 12am bars helps save time. Pre-mkt Prep will be mainly to update my trap boxes and group views and then my job will be to tune in at bar close time. Using FT should put me a step towards automation.  Although I have yet to be convinced everything can be fully automated I am open to anything that frees up my time.

Wed Oct 22 - In Before the Rocket Launch

AUDNZD D in overall uptrend - seems to have become a range. Playing long expecting buyers to step in. 4H retraced in 2 hard legs and basing above trap lows for a week. I entered on a 2nd tail bar for the current swing. First tail bar was a bear mid range bar, but I entered 5 bars later on a more bullish tail bar.

4H shows the test of the tail bar took 7hrs until it started to move higher. 3 bars later it closed the day strongly above the DTL. Tgt was to the trap above. 60m exit blasted into trap without flinching. Exit at 109 pips for 3.6R.

USDJPY D had a steep downmove. I planned on catching a retracement to ride down whatever else was left of it. 4H shows I entered on a test of the 107.38 high. 60m entry was taken after 2 attempts up failed.

About 2hrs later there was no attempt to work. I exited when 15m returned to entry and put in a HL with a pin bar. Out at -4 pips or -0.09R

Summary: 1W, 1L for +3.5R