Look at the chart below. The market had hit the pivot point the first time and retraced. It then moved upwards and this was the time where I got back home and look at the market… it had retraced off the pivot and some strong movement up again towards it. I was a littl reluctant to put on the long as the pivot point was so close again when I was thinking of my entry.. 10090 or so with the pivot being just 10 points away from that.

When it hit the pivot the second time, I expected some push downwards again and then it just popped! It shot up almost vertically, first stop the next pivot line R1. It hung around there for a few minutes before it shot up again.. as I write, it’s just hit 10190…

WOW, that was a quick 100 points there!

Unfortunately, it’s hindsight, they say trading is easy in hindsight and it is…. to even stand a chance as a trader, you just have to be pulling the trigger!

The Dow was moving lower and you can see the resistance line I drew in. The market was bouncing to this line before heading lower. However, at the blue arrow, the market broke the resistance line and I was looking at a possible long entry at 10532. Luckily for me this did happen as the market tanked. I wasn’t flexible enough to short at this stage here so I watched it go lower, below the low of the day and then some more. I finally went short at the main pivot point and snatched 12 points.

I’m still 8 points down for the day but hey, it was better than before!! What I’ve learnt about trading is that you can’t be too hung up with losses. Yes, they are annoying when you have made a mistake or not followed the system but we are human… unfortunately, us humans are flawed and we don’t always do the right things especially when it comes to trading. A successful trader actually has to suppress his or her natural urges towards becoming a winning trader…

Well, the order triggered and went up nicely… the first port of resistance was the big round number at 10400 and I got out around there. With the spread and everything else, I actually just got 12 points. The market can easily go higher or lower from here…. I am never comfortable with the Dow, it generally robs me of money!

Still, a profit is not to be sniffed at!

The timing on my chart says 5am but that’s because I am using a US broker and it’s not clever enough to work out where I actually am.. it’s a minor detail.

Anyway, the top of the range was 14757 and the lower, 14651. The range is just over 100 pips so can be done. I have to half my usual stake to keep in line with my money management and the target is 100 pips either way of the break.

As you can see from the chart, I made my 100 odd pips in a few hours of the break towards the downside. Lovely profits!

Also, I’m taken a much larger timeframe, the range is a lot larger than that when I take it between 4 and 7am. To ensure that I don’t go too big, I have to trade smaller lots. I am not prepared to risk more than 5% of my trading pot for each trade.

Anyway, I traded this today after disowning (temporarily) the previous system. The upper band was 14490 and the lower one 14394. The upside target was 14586 which is 96 pips. However, I am also risking about 90 pips for the trade so I had to trade at half my usual size.

Guess, what, it was a winner! I made all 96 pips in a few hours! Shame it was only half the normal size but a good start to a new breakout strategy for the GBPUSD market.

Anyway, I didn’t trade the system today. You can see the two lines which is sitting at 14446 and 14396. You can see that it was a really easy day for the system.. a nice push upwards to take 30 pips if I had traded it. As per my post yesterday, I did mention that this would happen!! It’s sods law, the markets are designed to frustrate. However, I have been looking at another system today and did put in a trade, I’ll write about it in a new post. However, for now, see the chart for the day!

The trading system has suddenly taken a turn for the worst and I’m considering what to do about it. It’s been very frustrating as I keep on getting stopped out by a few pips..  however, I do not want to tweak it as I will end up with something completely different and not the original system. I think this system will start winning again but for now, the losses have been plenty and I am losing confidence with it.

My trading psychology needs me to be winning more trades than losing.. what I mean by that is not focused on the monetary winnings but the sheer number of winning to losing trades. Some people would quite happy having 9 in 10 losing trades but that big trade is big enough to cover all those 9 losers. For me, I need to have around 70% of my trades as winners with the wins to loses being about the same in value.

Anyway, lets see tomorrow.. I may watch on the sidelines before dipping again… knowing my luck however, if I decide not to trade, the market will frustrate as it’ll show that if I had traded, I would have done well!

Anyway, here is the chart of today showing the short and long trade that triggered

Anyway, if you look at the chart you will see that my trade triggered at 7am for the long which then fell to hit the stop for -40. The short trade also went and it should have hit the target for 30 pips but including the spread and all that, I think I missed the exit by less than 1 pip. As a result the market moved higher and stopped me out.

I had a 40 pip stop for both for it was a -80 pip loss today.

Today could have easily been a winning day though with a bit of luck…  had the long not triggered at 7am, it would have triggered around 11am for a profit.

The short also was so close to a profit..

It could have easily been a winning day today with both trades hitting target for +60 in total.. oh well!

It’s times like this when you consider whether your trading system is going to work for you… the back testing has shown that 3 days in a row of losses is rare but when it happens, your confidence in the system diminishes and the danger is that you start to tweak your system to such a degree that the original system doesn’t exist anymore.

Today, however, the losing streak ended… phew! In fact, I got the best scenario possible. Both trades triggered and made a profit resulting in a total of 60 pips which negates all of this weeks gains.

The long trade which was initiated first peaked at about 30 pips so that was very lucky. The downside movement however was much larger at 150 pips..  my system doesn’t yet capture long runs like this so it could be something which I build into the system as an addition rather than a change.

The first trade was a long as the market just peaks above the high line and then promptly falls both hitting the stop for the trade for -50 and then initiating the downside trade. The downside movement was quite large (almost 100 pips under the lower band) and I captured 30 of them.