Friday 4/4/08 Daily Update

Disappointment is an understatement!!

Today was one of those days. More on an emotional level than the profit loss issue. I was tired but hoping I would catch a signal that would levy some of the weeks loss. Instead, I missed an opportunity at 1am that would have netted me 20-25 pips! That alone busted my morale. On top of that another signal came at 8 am and I could not enter because news was about to come out. That would have net almost 50 pips. So I go into the weekend with a loss, and knowing that I missed out on some very precious pips. Tired, and disappointed. I can't wait for Monday so I can shake the streak.

Well, here are the charts for the day. Take a look. I hope someone else caught these signals and enjoyed the wonderful feeling of closing out the week with a positive day!

Talk to you soon!

Thursday 4/3/08- Update

Better than a kick in the head!

Once again we had more than one trade in the day. This time the trends on the 4 hour chart was up and so we were only looking for long trades. At 1 am we had our first signal. It actually looked promising. You know that gut feeling you get. That hoping you get the signal because you are SURE that the trade is going to go your way. That which I was talking about yesterday that you just know feels right. So I got the signal smiled and pulled the trigger! BAM! 21 pip loss. Suck on that. That goodness we don't trade on emotion! Anyway, yeah, we got stopped out, and I was feeling that I never wanted to trade again. Just kidding, This is the business we chose.

Again at 7 am another signal popped it's head. I didn't look pretty. Stochastics were almost overbought, rsi was barely over 50 and MACD had already turned positive. I felt like I was getting in on the tail end of the rise. But, once again, I don't think, I do. Like a trained monkey. If A=B and B=C then A=do the trade...period. So I got in and waited to get stopped out. BAM!!! 24 pip gain! What?! Yeah, my feelings about where things are going are no good. Thank god for the strategy.

So anyway, we busted out 3 pips! We did 3 lots both times and so all in all it was 9 pips! Like I said in the heading, it's not stellar by any means, but it is better than a kick in the head!

One more thing, in the comparison with the pip surfer, we actually got in the same trades and well, he got 6 pips. We are getting closer to becoming ONE...hahaha..

Here are today's charts..take a look!

Talk to you later.

Wednesday 4/2/08

Ouch!


Today was not only a losing day but it was a test of discipline. There was One signal that happened today at 1:15am. It looked so ugly. I didn't want to pull the trigger on it because if you look at it well, you will notice that I had to go short right above the support line of 1.9851. Not only that but it had been tested 3 times before without breaking it and on top of that by the time I got the signal we were coming off a 100 pip decline with no retracement. It was just against everything I felt.

But discipline is discipline, and a strategy is a law of probabilities and in no means infallible. The hardest thing to do is follow it without thinking and letting it take it's course. You cannot pick and choose which trades you are going to do and which you are going to stay away from. At that point you might as well just start guessing without a strategy.

So today was one of those days where I pulled the trigger against my thought and well, this time, I would have benefited from listening to my instinct. But as we have seen previously, my gut has been wrong more often than not.

At 1:15 am the signals were there for the short trade and so we got executed at 1.9855. The previous swing high was 1.9885 for 30 pips and so that let me go for 3 lots. The next 50 level was only 5 pips away so I decided to put my limit at the same amount I as risking. 30 pips. So my target price was 1.98225.

I let it ride and on the very next bar I was stopped out for a 30 pip loss. I wasn't surprised but I was upset. I questioned my decision to enter. Now that I have blown off the steam (yeah..like poker you can go on tilt from trading..so check emotions at the door) I can say it was the right thing to do.

There were other crossover during the day. The signals were there except for the MACD was already negative and so that canceled out the the trade. So I did nothing more today.

One trade. 20 minutes. 30 pip loss. times 3 lots = $900. That's the way the cookie crumbles. Fortunately we are early in the month and I am confident we will make it up.

So here are the charts for the day. Tomorrow is another day.





Talk to you soon.

Tuesday 4/1/08

If you snooze you lose!

Today started late for me. I actually slept till 5 am and so I missed the 1 am trade entry. It was a good trade to have been in but I couldn't stay up for it. As you can see on the charts there was another crossover at 9:15 am. Normally since we were so close to news at 10 am i would have stayed away, but the volatility in the the pair was pretty good so I thought I may get a few pips before I had to exit. My gut told me not to exit but rules are rules, and the minute you break them and get lucky you justify doing it again, next thing you know you have no system. Anyway, I xited the trade 10 min before 10 and got a pips profit....hahahahaha...1 PIP!!!

Oh well, tomorrow is another day! I just woke up and it's 10:30 pm so I should be able to stay up!

Here are the charts of what should have happened.

Talk to you soon.

Monday 3/31/08 Update

Busy Day!!

Today was extremely busy giving us the opportunity to jump into 3 trades. Not only did we get into three trades, but also had to use cautious money management. On all three trades I had to use different lot amount because the stops were very far out on some and not so far on the others. In the end, we net +7 pips! That's it? Yep, I could have been worse I guess. I could have lost 7 pips!

So here's how things happened:

At 12:00 am we had all the signals for a short trade, and since we were in a downtrend on the 4 hr chart, we pulled the trigger. We executed at 1.9845. Before the trade I was aware of where the swing high was so I knew more or less how many lots I would sell (so as to not risk more than 2%). I ended up selling 3 lots, and set my stop at 1.9870. I could have sold 4 with small risk like that but I didn't. OK, so that was the first part of the trade. The next was putting the limit. This is where I let fear take over and I made the mistake of setting my limit at 1.9920 for 25 pips (it wasn't random, it was the same amount I was risking) instead of setting it up at the next 00 level which is what the strategy calls for. In any case, my target was hit and I made 25 pips per lot. 3 lots= 75 pips.

So I'm feeling good and come 7 am there is another crossover with all the corresponding conformation. Again I was going short...but this time I knew the swing high was a little further away..it was 50 pips away! So I could only sell 2 lots. That's what I did at 1.9857. I set my limit at 1.9807. Why? Because the next 50 level was only 7 pips away so I decided to go for the same amount I was risking. The trade got within 8 pips of my limit but turned around and I got stopped out for a 50 pips loss at 10 am. 2 lots= -100 pips.

So now I'm not feeling so good. On one I was too conservative with my lots and limits and so now I find myself negative 25 pips! Had I sold 4 in the first trade I would have been even. Had I set my target at the 00 level I would have been up...instead I am losing. But thanks to proper money management on the second trade where I only sold 2, I was only down 25 pips.

OK, now at 11:15 am I get a third signal. This time the swing high was a whopping 90 pips away! That limited my selling to one lot. I was executed once again at 1.9857. Second chance...I guess..... with the same price. I had originally thought to put the limit at 1.9807 again but decided that I would put it at the support level 1.9817. I would however have to monitor it because it was late and I knew I had to close the trade before 4 pm, as per the rules.

It was 3:11pm and the pair had traveled to 1.9827 where I was up 30 pips on that trade and 5 pips for the day. I decided to not risk a turnaround since I would have to close out the position soon. I closed it manually at 1.9825 for 32 pips. 1 lot=32 pips gain.

In recap:

Up 25 pips x 3 lots +75 pips

Down 50 pips x 2 lots -100 pips

Up 32 pips x 1 lot +32 pips

Total +7 pips

The funny thing is that had I done it all three times with one lot the result would have been the same!!

Now as far as my comparison to Pip Surfer:

We both did the same three trades. he got +43 pips on the first trade, lost 47 pips on the second trade and made 12 pips on the third. He made out with +6 pips. I made out with +7 pips. We saw the same 3 trades and executed them in completely different ways. Yet we ended up with basically the same result. That's a first!!

In any case, this was an awesome day for getting everything in order. Calculating stops...measuring risk and determining proper amount of lots, discipline in the trade and strategy, and of course proper interpretation of the signals. I would say all in all, I deserve a b+ for today. Made some weak decisions in my targets but also some very strong ones in money management.

So here are the charts for today in case you want to see all the actions of today

Talk to you soon.

Track Record 2008

Starting Date: 3/17/2008 Starting Balance: $50,000.00

Cumulative Performance Since Inception: (not including current month)
Number Of trades: 47
Positive Trades: 31
Negative Trades: 16
% Positive: 66%
Performance in pips: +928 pips
Performance in $: $9,280.00
Current Balance: $59,280.00
% gain/loss: 18.56%

(Details on every week and Month can be found in the corresponding archive for that period)


JUNE 08

Number of trades: 8
Positive Trades: 5
Negative Trades: 3
%Positive: 62.5%
Performance in pips: 201 pips
Performance in $: $2.010
% Gain/Loss: 4.02%

MAY 08

Number of trades: 17
Positive Trades: 12
Negative Trades: 5
% Positive: 70.5%
Performance in pips: 267 pips
Performance in $: $2,670
% Gain/Loss: 5.34%%

April 08

Number of trades: 18
Positive Trades: 11
Negative Trades: 7
% Positive: 61%
Performance in pips: 300
Performance in $: $3,000
% Gain/Loss: 6%


March 08 (only includes 23-30)

Number of Trades: 4
Positive Trades: 3
Negative Trades: 1
% Positive: 75%
Performance in Pips: +160
Performance in $: $1,600.00
% Gain/Loss: 3.2%

Corbanfx Week End Review 3/24-3/28/08

It was a good week for us helping us close out the month with a profit. We had a net gain of 96 pips. Here's how it all went down:

Monday : Holiday...No Trades
Tuesday : One Trade for +26 pips (3 lots= 78 pips)
Wednesday: One Trade for +47 pips (3 lots= 141 pips)
Thursday : No trades
Friday : One Trade for +23 pips (2 lots= 46 pips)

TOTAL: 3 trades, +96 pips (265 pips)

Friday 3/28/08 Daily Update

Three in a row!

Well today was another good day for us and our strategy netting us a 23 pips gain. The main trend since 8 pm EST last night had been down so I was only looking for short trades. At 9 am we got a crossover as well as down trending stochastics, RSI<50 and MACD was positive losing value. Beautiful!! We sold at the open of the next bar and got filled @ 1.9973. Stops were set at previous swing high which was 2.0018 (it was 40 pips away so I had to adjust my amount of lots so as to not go over my 2% risk) I set my initial target at the next 50 level which was 1.9950. That was 23 pips away. On the next bar our target was hit and we had our 23 pips.

I won't have charts up today because I usually get them off Pip surfer and he isn't trading in the last 2 days..so sorry but if you are reading this you probably know how to pull up your own charts...

I am not very good with the computer, copying and pasting and all that good stuff.. so anyone who wants to tell me how to transfer my charts to this blog, let me know.

Well that's the end of trading for this week..I will post results for the week and start the track record for monthly..
Talk to you soon.

Thursday 3/27/08- Update

Another day with no trades!

Today I didn't get any signals. Not because there weren't any but because the only one came at 1:15 am and I was not available. I guess again it worked out to my advantage because we would have been stopped out for a loss of about 11 pips. Pip Surfer wasn't trading today so I guess it is the first day we both get the exact same result...

Anyway we still got one more day for the week and that's it for the month as well..

Talk to you soon.

Another up day!

Well, I gotta say I was sleeping when for some unknown reason I opened my eyes and saw the chart making the crossover for a long trade at 3:00 am. That gave me about 5 minutes to read the signals, check my main trend and calculate where my stop would be. I got in at the open of the bar 2.0053 and I put my stop at the previous swing low, 2.0015, and my target at 2.0100 OK, so I actually decided to go back to sleep, but I set my alarm for 5:20 because I knew that the MPC Treasury Committee Hearings was going to come out at 5:30 am and I wanted to make sure I was out of the trade at the hour. It was a beautiful thing when I woke up to see that the target had just been hit. +47 pips. Anyway, the news was going to hit, and I knew more news was going to hit at 10 am. (and honestly, I was extremely tired since I don't have alerts set up and I am in a whole new schedule because of this trading) so I decided to go back to sleep and call it a day. In retrospect, it worked out since there were no more signals.

This time Pip Surfer only got 3 pips more than I did because he entered at 2.0050. Again, showing that trading systems and strategies differ by the human element. I sound like a Dow Chemical commercial...

Well, all in all, this week is going good so far...but trading has a way of humbling you when you get to comfortable..we'll see what tomorrow brings.



Here's today's charts for those of you who are more visual!

Talk to you soon.

Don't call it a comeback!

Welcome back from the long weekend! It was a good day today, netting our system a 26 pip gain. As per what I saw, the 4 hr. chart made it clear that we were in an uptrend. At 7:30 am we had a crossover towards the upside, stochastics were trending up, RSI>50 and MACD was negative gaining value. This means go! So I got in at the next candle open (actually I got a better price) at 1.9924. I set my stop at the previous swing low which was 1.9901 and set my target at the next 50 level 1.9950. The PT was hit and we were filled at the price 26 pips higher. That's that! Now, for my daily retrospect on the differences between two traders and the importance of interpretation of signals. In the blog of Pip Surfer, it is shown that at 1:45 am there was a valid signal. I saw it as not valid because I interpreted that there was not a crossover per Se, but rather two EMA being equal. He got in the trade because at some point the line did cross but later went back to even I guess. All in all, he was able to get in at 1.9912, which means 12 pips below me..representing a difference of 46% higher profit than I did. I made 26 pips...he showed 38 pips.

In any case..we made a profit and I am hoping to give you some more good news this week. Until then, here are the charts for today if you want to follow along. Talk to you tomorrow.

About the system

So you want to know how this all works, and you need to understand how decisions are made. Good! Here is the Cowabunga Strategy taken directly from Mr. Pips Surfer.

The Main Trend Is Your Friend
The main concept of the theory is to catch small trends during the day while avoiding fakeouts. Simple right? Wrong! It's easier said than done. I will be making my trades off of a 15 minute chart, but I will be using a 4hr. chart to give me my main trend. If my 4hr. chart is trending up, then I will only be looking to go long on the 15 minute chart. On the other hand, if my 4hr. chart is trending down, then I will only be looking to go short on the 15 minute chart. By looking at the main trend first, I will have a better chance for a winning trade by moving along with the current market direction.

4hr. Chart Settings:
5 EMA applied to the close
10 EMA applied to the close
Stochastics (10,3,3)
RSI (9)
The 15 Minute Chart
After establishing the main trend , it's time to look for trade entries on the 15 minute chart. The 15 minute chart looks similar to the 4hr. chart, except for the fact that I have added a MACD histogram. The trade entry rules are simple:
Long trades:
5 EMA must cross above the 10 EMA (Indicated on my chart by a black candle)
RSI must be greater than 50
Stochastics must be headed up and not in overbought territory
MACD histogram must go from negative to positive OR be negative and start to increase value. (We want to catch trends early so the MACD histogram must be negative)

Short trades:
5 EMA must cross below the 10 EMA (Indicated on my chart by a purple candle)
RSI must be less than 50
Stochastics must be headed down and not in oversold territory
MACD histogram must go from positive to negative OR be positive and start to decrease in value. (We want to catch trends early so the MACD histogram must be positive)

15 Minute Chart Setup:
5 EMA applied to the close
10 EMA applied to the close
RSI (9)
Stochastics (10,3,3)
MACD Histogram (12,26,9)
Stop Losses
There is not a hard number that I use for a stop loss. Instead I use either the most recent swing low (for long trades) or the most recent swing high (for short trades) as my stop loss. Using the examples above, this is where I would place my stops:

In these examples, the stop losses were not that wide. However, there will be times when the most recent swing high or low is several pips away from your entry. This is where you must be careful. If the stop is too wide for you to keep within your money management rules, simply stay out of the market! Trust me, there will always be another trade later. Even if that trade happens to win a gazillion pips, you should never compromise or doubt your decision to follow strict money management.
Exits
Here's where things get a little hairy. You'll have to use your brain for this one. What's that? A trading system that actually requires you to think?! But don't worry; it's really not that hard. Generally 50 and 00 levels will be your targets. What is a 50 or 00 level? It's simply any price that ends in 50 or 00. For example, 2550 and 2600 are examples of a 50 and 00 level respectively.
However, if you are too close to a 50 or 00 level you can also choose to set your target for the same amount of pips you are risking. For example, if your going long and your entry is at 2445 and your stop loss is at 2425 you would be risking 20 pips. You could then set your target for 20 pips away from your entry. So in this example your target would be 2445 + 20= 2465.

Conclusion
If you're sharp, you may have noticed that I use RSI and Stochastics which both measure overbought and oversold extremities. Referred to as multicollinearity, it's often frowned upon to use 2 indicators that pretty much tell you the same thing. However, in this case I am using RSI as more of a trend confirmation tool rather than an overbought/oversold tool.
I also must mention that I will only be trading the GBP/USD. If you're starting out in the Forex, it's best that you stick to one pair so that you can focus all of your concentration on it. After a while, you'll start to get a feel for its movements, and it will help build your "intuition" on future moves. This is something that will come in handy as you become a more experienced trader.
I will never trade a news candle or the candle before it. If I am in a trade and a major news event is coming up, I will exit my trade before the report is released. I will however trade a candle after the news provided all my criteria are met.
Signals that occur before 12 midnight ET should be taken with caution. While you can still take them, you should be cautious because market volume is very quiet before the Euro session.
I will close my trade whether I'm in the money or not at 4pm ET because market volume is very low at this time. Trade signals that you see before 12 am ET (midnight) should be taken with discretion because market volume is also low at this time. Optimal signals usually come after 1am ET.

Corbanfx Week End Review

Well the first week of posting was really only two days since it started on Wednesday and Friday was a holiday. But in any case these are the numbers for March 17-21:


Wednesday- No trades
Thursday - One trade for -35 Pips (3 lots -105 pips)
Friday - Holiday

Total - One Trade for -35 pips (-105 pips)

Starting with a drawdown!!

Well, the first trade I post in this and it's a loss of 35 pips! I hope it doesn't mark a trend! Anyway, today I got around to my computer at 4:30 am. What this means is that I missed a trade that was to be done in the 3:30am candle. By the way, all trades are on the GBP/USD unless other wise specified. More bad news- That trade would have been profitable! The bad news continues, the trade I did take, at 10:15 am was a loser. Now this is another reason it is important to get into as many valid trades as possible. If you miss out the good ones and jump in the bad ones, then it doesn't matter what strategy you use..results won't be good.

The system called for two trades today for a total of -16 pips. I lost 35 pips. So lets compare two traders executing the same strategy:

In his blog, Pip Surfer entered the trade short at 1.9807. I got in at 1.9805. For whatever the reason. When calculating the stop I put 1.9840. Pip Surfer had 1.9837. Maybe I look at charts on the ask price and he is looking at the bid price when he sets his stops...who knows, the fact is that we both followed the same rules, entered for the same reason and in the end I lost 5 pips more. Once again proving my point that no 2 traders will end up with the same result even if they follow the same rules. (Not to mention that he was up and got the trade I missed to make his day less of a loser than mine).



So here are the charts for the day. The main trend chart shows that we were in a downtrend all day and the 15 min chart shows what should have been the entries, stops and exits.



I will not be trading tomorrow or monday since it is easter and volume will be low, and thus erratic..so I will talk to you on tuesday!

Have a good Weekend!

Lotta looking-nothing cooking

Well, As far as the day went, lets just say I could have slept all day and the result would have been the same. But I will take the time to note that as far as the strategy goes, I should have been in a trade @ around 1:15am. As you can see in the charts, The main trend was down (240 min chart) and all signals were go on the 15 min chart. That trade actually would have been stopped out and we would have lost about 34 pips per lot. Honestly, I missed the trade, I don't have a crystal ball..had I seen the signals I would have been in. It's in my best interest to get in on as many valid trades as possible to really get a feel for how profitable it is in my case.
But this brings up a valid point also. I had mentioned that hypothetical results of a strategy vary from actual results. Today is a perfect example of why that is. Today I was lucky to miss the trade and not lose 34 pips, but monday I missed a 71 pip gain (hadn't started this blog yet)
Anyway there was another valid signal at around 5:00 am and this one I did notice, but I did not enter because I don't trade (this strategy) when a major announcement is about to come out and we had the GBP MPC minutes meeting coming out @ 5:30 am. Soooo, nothing there today with the cowabunga system.
Tomorrow is another day. Talk to you then.

Here's how it all went down...(or should have!!)

And so it begins!!

First and foremost, I want to make it clear that I did not develop this strategy. I am simply making a detailed accounting (more for personal reasons and discipline purposes than anything) of my own experience using this strategy. The idea, as far as I know, come from alias PIP SURFER on babypips.com. In his blog, he gives detailed info on how the system works and when he places trades. SOOOOOO...why then am I doing this? ahhhhh...because I have noticed that even though I follow the strategy exactly as per what it calls for, and try to execute exactly when it shows that entries should be made, my results vary. WHY? Sometimes I miss a trade because I am sleeping at 3 am! (i have not set up automatic alerts (YET!) Sometimes my entries are different because of 2 second difference in pressing a button! My exits and profit taking is different. In truth, I believe that if two traders sit next to each other, following the same strategy, in the end their results will not be exactly the same. Errors happen, timing, slippage, computer crashes and so on and so forth.
So, with that in mind, I am posting my own experience in this the "COWABUNGA" strategy.
Talk to you soon!