Tuesday, November 18, 2008

Todays 6am open is 14991
Looks like we may have the first trade of the week.
The 7am bar was 14990 - 15091
The 8am bar was 15021 - 15091
So we will place a buy stop at 15095
stoploss at 15017
We are willing to risk 3% of our account balance of $13542.15 which is $406.26 we will buy 5.2 contracts ( 406.26/78 = 5.2)
If the trade is not entered by 10am i will cancel the order.
I doubt whether this trade will turn out to be our most profitable as i can't see a massive break to the upside from 150 but you never know, that's why we'll put the trade on with our stops in place and see what happens.
Trade cancelled, cable has traded through the open and is now in negative territory....

Thursday, November 13, 2008

Lock it in

6am open 14885
There was an inside bar from the 5am and 6am bars but i didn't catch this
We're still in our trade and the market made a new low with the 7am bar so moving stop
New stop 15082 (15254-14910 = 344 /2 = 172)
WE now have a buy signal
9am bar 14893 - 14993
10am bar 14905 - 14951
So stop buy order placed to buy 5.4 contracts at 14955 (293/54 = 5.426) Stop loss at 14901
I have used the previous balance as our profits from the short trade have not been booked yet.
I have now moved the stop on the short to 14955 as this is a reversal signal.
We are now out of our short GBPUSD for a hefty 817 pips and have gone long at 14955
This trade has returned 14.85 times Risk:reward and a handsome profit of $4330.1
so our account balance is now $14099.25 so we're up over 40% after 3 trades, what a shame it's a demo.
NO trades 3
Losers 2 -$496.35
winners 1 +$4330.1
Total +$4099.25
Average +$1366.41
I'm sure this will average will come down over time, but at the moment it's nice!
and lo and behold...it did
Quick in and out, stopped out of long GBPUSD at 14901 for $300 loss
NO trades 4
Losers 2 -$796.35
winners 1 +$4330.1
Total +$3533.75
Average +$883.43

Riding the waves over the atlantic

6am open 15430
Loks like we could potentially be out of our trade today, Cable is above the open at the moment.
Exit will be if stop is hit or if an inside bar forms for a long our stop will move to 4 pips above the IB, eg the trigger for a long trade.
Just goes to show what i know, The 7am bar made new lows at the close, so we can move our stop down.
New stop 15524 (15565 - 15483 = 82 / 2 =41)
New lows again 8am bar
Stop to 15487 (15524 - 15451 = 73 /2 =36.5 so round to 37)
Another new low so we can move our stop again
New stop 15441 (15487-15396= 91 /2 =46.5 (47))
Another low, how long can this keep going? who knows but we'll just keep riding i down as best we can.
New stop 15413(15441 -15386 = 55/2 = 27.5 (28))
Another low
New stop 15367 (15413 - 15321 = 92 /2 = 46)
More lows on the 1400 bar
New stop 15295 (15367-15223 = 144/2 = 72)
Cable plunging to new lows again, so much for me expecting a bounce! Just show you should trade what you see not what you think!
New stop 15254 ( 15295 - 15213 = 82/2 = 41)
Stop will now stay at this level until tomorrow when well either have been hit or look for more lows.
so far if the stop gets hit we'll have taken 514 pips for a 55 pip risk, that's over 9:1 not a bad return.
That's the advantage of having rules, i woul've been tempted to lock in my profits a few times today, but my rules kept this trade open and we've kept on making money. True sometimes we will egt stopped out and have left 100 pips profit in a trade if we'd have exited sooner but i believe with a method like this it's worth these few niggles for the larger gains.

Tuesday, November 11, 2008

Another day another dollar....or two move!

Todays open at 6am is 15656
We're still i our trade and showing a profit. The 7am bar is making a lower low than the 6am so we will move our stop accordingly. The high is 15660 so 15802-15660 = 142 /2 = 71
New stop is 15731
We've now locked in a profit (in theory) and hope for the trade to run lower.
Exit will be on a reversal signal or when stop is hit.
THe 8am bar made a lower low (just 15566 vs 15569) so we can lower our stop again.
The high of the bar was 15643 (15731-15643=88 /2 =44) so our new stop is 15687
We have now locked in a profit of 90 pips which gives us a R:R of 1.63 so for (90/55)
No lower low for the 9am bar but we do have another IB
8am range 15566 - 15643
9am range 15575 - 15631
Sell stop placed at 15571
stoploss at 15635
4.5 lots (293 / 64 =4.57)
I have just taken the previous balance as no profit or loss has been banked yet.
Trade triggered almost immediately, lets see what happens....
The 10am candle made new lows so we can move our stops accordingly.
The high was 15625 so our original trade we move the stop to 15656 (15687 -15625 = 62/2 =31)
and our second trade to 15630 (15635-15625 = 10 / 2 =5)
I would not have been too keen to take the second trade seeing how far cable's already fallen without any pull back but we just have to follow the rules and see what happens
No lower lows but another inside bar
10am range 15625 -15507
11am range 15596 - 15527
So a sell stop at 15523
stoploss at 15600
3.8 lots (293/77=3.8)
Order cancelled at 1pm if no trade
All other stops stay the same.
I don't have much hope for this trade succeeding if triggered but we can but try.
Our trade was not triggered and cable has gone above our stop so the order is cancelled.
The other two stops will stay where they are as no lower lows.
Stopped out of our 2nd trade (short @ 15571) at 15630 for a 59 pip loss per lot, 4.5 lots = - $265.5 or 2.72% of our account
we were almost stopped out of the original short as well, coming within 2 pips! Just made a lower low at the close of candle so we'll move the stop accordingly:
Candle high 15589 so new stop (15656 -15589 = 67 / 2 =33.5 so round to 34) 15622
New lows again so we can move our stop down further
Candle high 15508 so stop to 15565 (15622-15508 = 114 /2 = 57)
We've now locked in 203 pips so thats 3.69% R:R if we get stopped out.
A shame that we got stopped out on the other trade but thats what happens sometimes.
So far we've taken 3 trades
- $230.85
- $265.50
+$1075.9 (If stopped out)
so our running total is
+ $579.55

Monday, November 10, 2008

Will this be the first?

6am open 15792 above this long, below short

Potential setup for 8am
6am bar 15671 15804
7am bar 15682 15735
Sell stop at 15678
Stoploss at 15739
4.8 lots (9679.15/3 = 293.07 / 61 = 4.804)
The market rallied up so no trade was taken and order cancelled at 9am.

Inside bar at 1300
12 range 15770 15819
13 range 15772 15819
As this bar was through the open both buy and sell orders were placed.
Buy stop at 15823 stoploss 15768
Sell stop at 15768 stoloss 15823
5.3 lots (9679.15/3 = 293.07 / 55 = 5.32)

The sale triggered at 15768 and the other order was cancelled
Cable traded much lower, previous candle high was 15780 so stop was moved to 15802 (15823-15780/2=42/2 =21.5)
Maybe i should have had included a rule where the stop is moved to break even when Risk:Reward is greater than 2:1 to lock in a good move as Cable has traded as low as 15633 but for now we'll just have to stick to the 50% rule and hopefully it'll continue trading lower.

Unable to move my stop any further as the previous bar did not make a lower low so our stop remains at 15802 for the night, hopefully markets will drift lower. For now i'll run with the 50% rule but if i find too many profits being given back then i will look to change this somehow.

There was an inside bar on the 1500 canle but i said i wouldn't trade after 1500 so we'll let that one go.

Lets see if we are still in the trade tomorrow............

Saturday, November 8, 2008

Waiting game

Day 3 and still no trades, this was turning into a lesson on patience and discipline not actual trades but i've chosen a setup that should over time produce good Risk:Reward when the correct trades are taken, this means only the right trades, not ones that are sort of Ib's but i've got a hunch etc

We did finally get a trade after the midday candle:

11am range 15702 -15815
12 range 15718 - 15815 (97 pips)

We have taken 15647 as the open so we will only look to go long.

Buy stop placed at 15819 , stop at 15714 for 2.85 contracts ( $300 / 105)

Our order was triggered at 1320 and we went long 2.85 gbpusd at 15819, the market then chopped about before the figures came upon which it gapped down, then up then down again. Since our opening candle made new highs i moved the original stop to 50% of the difference between the original stop 15714 and the low of the 1300 candle 15762 (714 -762 = 48 /2 =24) so the new stop was 15738. This is to reduce risk becasue the market may go back to near the low of this candle so we don't want to get stopped out by a quick flick down, but if it goes much beyond this low then the rally's probably over and we want to be out and wait for the next IB.

Stopped out at 15738 time 1445 for 81 pips loss or $230.85 so we've had a 2.3% loss and the account stands at $9769.15

If i had left the stop at the original point then we would still have been stopped out in the end.

I believe the best profits will come from the trades that go on with little pull back, our job is to manage the ones where it chops around and try to minimise loss.

There's a lot of maybe's with stops, only time will tell if my 50% method is right so thankfully we're demoing this.

Have a good weekend and hopefully we'll all 'ave it off next week.


I am trying to follow this method properly so we need to only trade real Inside Bars. On Thursday morning my charts with Ig showed that the 6am bar had only traded 2 pips above the 5am bar, so although it was not strictly an Inside Bar i would've been tempted to take a break of it as this is usually when the market comes to life so there could have been a decent trade.

So i let this trade go and although it did go up to start with it would have only produced only a break even trade at best using the 50% stop.

Wednesday, November 5, 2008

So near and yet so far

Day one of this adventure and we had a potential setup on the 1200 (midday) bar, the 11am range 15850 - 16049, 12 range 15945 - 16045.

As the open at 6am was 15854 and price was above this we were looking for longs so i placed my buy stop at 16049. 4 pips above the IB high with an "if done" stop at 15941. 4 pips below.

IThe size was $2.75 this was calculated by dividing my risk capital (3% of $10000 = $300) by the number of pips risked 108

so 300 / 108 = 2.777777777 so rounded to 2.75

On this note i'm not sure if IGmarkets accept odd shapes but we will see......

In the next hour the price fell below our stop and never rallied up to our target price so i cancelled the order.

Inevitably in the following hour the price rocketed through our level and onto the high 161's but such is life. We are looking for low risk entries so would ideally like the price to break above our IB in the first hour without going anywhere near our stop.

Still there will be other days and i'm sure the market will reward our patience.


This system is discuss on Forex Factory (www.forexfactory.com) as the DIBS system (Daily Inside Bars)

What we will do is look for Inside Bars forming on the 1Hour chart of the GBPUSD.

I will only trade in the direction of the day, which shall be decide by the open of the 6am (UK time) candle. If the price is above this we will go long on the break of an Inside Bar, if price is below we will go short.

If an inside bar forms i will place a Buy/Sell stop loss order 4 pips from the High/Low of this bar and my stop loss will be 4 pips above/below the other end.

When an hourly bar makes a new high/low i will move my stop loss to 50% difference between the high/low of this bar and my previous stop.

I will only trade london hours 7am to 3pm, after this the stop will be left until the next morning.

I will only exit if my stop is hit or i get a reversal signal.

I may miss some signals as i have other trades to make, but will attempt to trade all the signals i see.

I will only need to check the trade once every hour, just before the hour.


Everyone says trading must be complicated and lots of people advocate using Moving averages adn many other indicators. The purpose of this blog is to show a simple method using only price action will make money over time.

Not all trades will make a profit but the winners should make more than the losers so we should profit overall.

At the moment i will just be trading a demo account with IGMARKETS.

If you attempt this please follow tight money mangement rules, this is what will make us money.

I will pretend i have a balnce of $10000 and i will risk 3% of this at most, on each trade.