ForexSpirit

Today was all about steadying the boat. I spent a good bit of time over the weekend pondering on my trading approach and reviewing my journal for the past few months. I was trying to determine if any radical changes were needed or if I was generally on the right track but just sabotaging myself.

The key question probably revolved around whether my averaging down style was helping or hindering in the long run. After reviewing my usage of averaging down over the past three months I determined that it’s not the prime reason for my failures last week. That still seemed to revolve around being impatient and not handling spikes very well.

I also looked at whether it might be more beneficial to implement a sort of doubling down approach where I would exit a trade with a traditional close SL and look to increase the lot size of the next trade to hopefully make back those pips on the next winner. I’m not totally won over by doing something like this. To me it seems to be a wolf in sheep’s clothing: the same as my current approach just done slightly differently. The one advantage would be that I could trade in the opposite direction to the original trade if desired. I would generally be doing this if my bias has changed. But if my bias has changed what can’t I just flip my averaged down sequence anyway?

The conclusion of all this introspection was that I wasn’t going to change anything this week. Business as usual with the plan to regain the consistency and discipline I had been fostering.

After dipping a bit from the weekly open the London session seemed to be consolidating between 1.4200 and 1.4240. This meant I was going to be trading in a range market starting off in the top half of the range.

Bias: range
Conviction: medium

For the last 15 minutes of the 5:00 EDT hour 1.4230 had been acting as resistance which led to taking a short for the first entry of the day. This entry is fine, but not great. In hindsight I found a reason that I should have waited or even gone long here instead: there was a triple bottom at 1.4220 during the last half hour with the minor low created at 6:05 EDT forming a higher low. This pointed towards a break higher to test the range top at 1.4240.

After adding an additional two legs I held to see if I would be able to extract any profit from this sequence. After giving price 4 minutes to break below 1.4234 I exited at BE. That was more than long enough and the longer I waited the greater the chances of a move back up.

A small range between 1.4234-38 then seemed to form and I played it short, counting on 1.4240 still acting as decent resistance. Time was ebbing away and I didn’t want to have to deal with another average down sequence so my SL was moved to BE when price was bouncing along the low of the range at 1.4234. There was no breakout this time and I was taken out at BE.

This minor support was taken out three minutes later and I could have entered a short right at the start of the 7:00 EDT hour as the S/R level was tested from underneath but was holding but my time was up.