My journey journal...from demo to live...and beyond

And now let’s look at the weekly time frame.


8-1-6 is the number. Means out of the 15 pairs, 8 are Comms trending high. 6 pairs are Majors trending high.
And one is at a crossroads. So, this tells me that on the weekly time frame the Comms slightly have an edge over the Majors. The JPY is trending high against all of the Comms. They have been the strongest lately. Then I would say the NZD would be the next strongest currency. Their high against all Majors, except the JPY.
How about a look at each of those two.

JPY----


You can see the yellow line. It’s that line in conjunction to the green, which tells me who is trending high. And of course we are looking at the state of the last candle. That yellow line is following the JPY strong (price going low).

NZD —


There truly is a battle between safe havens (JPY) and risk (NZD).
And we need to remember in what perspective it is all in.

I will continue on with the Daily next.



Daily time frame perspective.


Now it’s getting interesting. The number is 7-3-5. Meaning out of the 15 pairs there is 7 of them are Majors trending high. 5 pairs are Comms trending high. And 3 are at a cross roads. So, this is telling me that the Majors are more dominant than the Comms, on the daily perspective.
But, something really got my attention as I computed it up. Look at the CAD. Man have they been dropping out of strength. It is evident when looking at each of the days this week, with them. *Sure Mike…all we need to do is look at the candles themselves also you know. * I know Journal, Mister Obvious, but my system is more of a trend indicator. I think it is easier to distinguish the trend in place with the 3/8 EMA’s , than to see the charts naked. Plus my way filters out more of the retracements that can possibly fool you into thinking there’s really a change happening.
Well, my point here is that I need to be watching the CAD. They just might be turning. Let’s see what the 4hr charts tell us. You need to remember that on the 4 hr, there’s so much more crossing over going on. It’s so much more frequent the more you come in on the time frames. That’s why I would only use it to find a good time to get in with.
But first, let’s look at the CAD, on the Daily here.



We can see that they didn’t have a good week. Looking at the last 5 candles. And look at them to the JPY. See that huge drop on Thursday? Man, I just wonder if price is eventually gonna head down to where it touched the low that day.
I’m keeping my eye on the CAD.

Now the 4hr. And also I’m gonna compile all the 5 totals for the week. This way we can see some kind of movement.

The 4hr chart.


Interesting. The JPY, CHF, and the GBP are all trending high against the Comms.
Wait. Let’s take it from the top. The number is 10-1-4. Out of the 15 pairs, 10 of them is Major trending high.
4 of those pairs are Comm trending high… (EUR/AUD, NZD/USD, EUR/CAD, USD/CAD ). Basically it tells me that the last short term sentiment has been all JPY, CHF, GBP, dominating. Generally speaking. All I’m doing is trying to see the picture of where the money is slanted more to, risk on, or risk off. And it looks like it’s slanted to the safe havens, along with a strong GBP of late.

Now, let’s look at the week in summary. And I have some explaining to do.


I forgot to mark it, but the first row across is the monthly time frame, second row across is the weekly time frame, third row across is the daily time frame, and the last row is the 4hr time frame.
What do you see Mike? Talk to me.
Well, the top row is the monthly. And that is such a slow moving time frame. So, looking at that I have to remember that the candle didn’t close yet. So, it’s not of much importance now, other than the fact that the Comms have a slight more dominance over the Majors, in that perspective. So, it’s something to keep in mind. And coming into the weekly perspective, the Comms have an edge over the Majors also. So, I need to remember that they have been coming from strength. Now coming into the Daily perspective, at the end of the day on Monday the Comms were stronger. 11-0-4 --Meaning out of the 15 pairs, 11 of them was Comm trending high against the Majors. And 4 pairs were Major trending over the Comms. Yeah, so it was mostly about the Comms having the strength. Then move on to the end of the week, it ended so much differently. We have the number 7-3-5. And that’s Major stronger. Meaning out of the 15 pairs, 7 of them were Majors trending high over the Comms. 3 pairs were at a crossroads. And 5 Comms were trending high over the Majors. What a big difference from the beginning of the week. I can look at it this way. Comms go from trending high on 11 pairs, down to 5. Or see it this way. Majors go from trending high on only 4 pairs, up to 7 pairs, by the end of the week.
What about the 4hr perspective? Yeah, that’s such a back and forth tale, but it is pretty evident that the Majors had it in for the Comms this week. Oh yeah, Journal, look at Wednesday will ya? It’s the thing that I have noticed for such a long time. It is so typical. We have had a dominating Major week, except with the turn on Wednesday. And it usually goes that way, but, only hind sight tells me that if it will end up being only a retracement, or a bigger turn. So, the point being is, some kind of turn happens around Wednesdays, but the length can never be predicted.
And that’s why I think, since I’m more concerned about the flow of things, that it is prudent to start any kind of trading around that time.

Ok Journal. Let me wrap this up with one more post. I’ll have to put some kind of summary to it all.

Man Journal…I totally forgot about my other chart.
Man Mike! You aren’t getting carried away with more charts are you?
Well, look, this one’s a must. It’s the most basic thing I have to follow. Hey, at least I’m only keeping track of the 15 pairs, as opposed to all 28 of them. Give me a break.
I’m just kidding buddy. Let’s take a look. Talk to me.

It’s nothing but the pips.



Man…I bet this can’t be seen too well. I’ll break it up into 2 sections. Left half, then right half.



Well, the most important data here would be the bottom right square, which is the totals for each day. Blue equals Majors, Tan equals Comms. And the only other colors would be red for negative, and green for positive. But, anyway, look at the daily totals. This is how the week went. Yep, Majors everyday, except on Wednesday.
*So, Mike. You need to think about this, in regards to your trading strategy. If you were to see the Majors pretty much dominating the first 2 days of the week, then comes Wed, a turn, then would you have gone in with the Comms? Ok, I know you would be picking one pair. That would have to be diagnosed. But the point is you need a little bit more of an indication of the flow. Cause look at Thursday. The Majors came back with a vengeance. *
Yeah, I hear ya Journal. And that’s why I think it’s important to be going in when the flow is evident on the daily time frame, weekly also, and not just the 4hr one. I should go back and see which one I would have picked.
I need to do some more research on this.
It needs to make sense. And absolutely cannot be a guessing game.

That’s where I’m at Journal.
We will figure this out Mike.

Good morning Journal…:44:

Half time here now. Sorry Journal. Yeah, I know, it’s 6:30am now, and I’ve been quite busy in the last 4 hrs.
And I kind of feel bad not including you in on what’s been going on. But, now is a good time to catch you up.
Yeah Mike! Talk to big brother!

Well, actually I do want to get out to you a lot that’s been going on in my head. And that surely helps. Cause I feel it’s important to always keep things into perspective. (Just like the market) And then I will get into the details of the meat and potatoes of what I’m working on now.

I guess I’ve been checking myself lately. And I’m talking about in the grand scheme of things. This is due to the outside influence that has come my way. Ok…let’s put it bluntly. Just read a few posts back. Some awesome fellow traders there gave me much to think about. And it only makes sense to try to completely understand what they have said, take it to heart, and see if I need to be making any kind of adjustments.

But one thing I do understand is. Everyone is different. Surely you don’t see many journals out there like this one. I know I’m a unique individual. Well, for that matter, isn’t everyone? But, you will always have the status quo. That’s the main stream norm. And when it comes to me, I have absolutely never been known to be normal. Probably because if there’s one thing that I hate the most, it’s following the crowd. I don’t want to be like others. In fact, I hate people. It’s kind of funny. Because, at my work place, in the many conversations that I have had with people I work with (that would be with the ‘service advisors’, cause they are the ones who deal with the customers), I have said that hundreds of times. ‘I hate people’. Probably because of the times that I have talked to customers about their vehicle. And I always walk away saying to myself, ‘I hate people, I hate people, I hate people’. And look, I know what I really am saying.
I hate people who are not rational. Who simply do not have common sense. And are not understanding. People are stupid. But…I know that we have to deal with them. They will always be around. If it was my choice, not too many people would be walking this earth. I mean, what’s the point of such an intelligent brain given to us, and yet, no one uses it? To it’s potential. Or tries to anyway.
Ok. Let me dig myself out of this hole. And make sense to what I’m getting at really. I like intelligence. And that is the thing that I appreciate most out of the human population. Those who are smart. Who strive to be better. Who can see both sides to an argument, and is not bias based on an emotion. And then you have principles. There are facts about everything. We should be operating out of principles, and not emotions. So, now, coming back to reality, I have tried to understand what principles I need to learn here, coming from my fellow traders. The one thing I do recognize, within myself, is that I do have a problem following a plan. It did strike a cord. But, then I got to thinking. Wait a minute. I have not, up to this point, come up with a plan. In fact, throughout this entire thread, that’s the one thing I have always recognized about my trading. And my definition of a plan is this. A system put into place. And to follow it. This system must include the following. A way (whether by way of an indicator, or a set of conditions taken place) in which the [I]market[/I] will tell me [I]when[/I] to enter. And when I have entered the market, these factors will already be attached to the trade ([I]when[/I] will I take profit, [I]when[/I] will I get stopped out, [I]how much[/I] of a position size is on it, [I]how long[/I] will I be in for, the answer to the question of [I]why[/I] am I getting out ). Also the plan needs to include how many trades are possible to take. That’s risk control, and money management topics there. A plan needs to include reviewing of the trades. That will give me feedback on whether I am on the right track or not. Whether I need to adjust any elements of the strategy. A process of tracking the (big picture) must be in place.

…Hey Journal…Well, much time has transpired since that last sentence. Man…I need to get my thoughts back together now. And now I don’t have much time to finish this post up…

So, what’s my point?
Oh yeah. I remember now. My point is that I have not had a plan in place yet. I have not followed all of those things I just mentioned. So therefore, in my mind, I have not even begun. The way I have traded, up to this point, was not correct. I was trying to accomplish a goal without the proper tools, and even an adequate strategy in place.
I know I can do this.
How do you know this Mike?
-I was successful for the first 3 months of the year. With a flawed plan.
-All the answers are within me.
-I have the ability to control how I trade. I can make it happen in which I leave nothing to chance. That will all be dependent upon a real plan in place.
-Nothing can stop me.
-Time will be the only flexible element. And I’m willing to accept the fact that it might not be according to my time table now. But, you better believe, I am gonna give it my best shot.

I must run.

Happy Fathers Day!
And that’s what I’m going to enjoy, for the rest of the day, today.
My children.

Mike

:44: Mmm
Good morning Journal.
Well, I guess it’s back to work now. Nothing worse than a Monday morning.
But, as I keep reminding myself, ‘these days are going away’. So, at least I always have something to look forward to. My future!!!

Ok Journal. I don’t have much time here, with you. Well, I mean, I do, but, I have a lot of work to do. Maybe this week will be totally devoted to that. But, I do have some very important news for you (us). I don’t have to time to go into how and why things have changed, but, I guess it really doesn’t matter. What is, is what is.
Everything is Common Sense.

Journal, this is how we’re going to operate.
I don’t have a time table now. (what a hard pill to swallow)
So, that changes everything. So, no more finding a strategy for the purpose of the 200 pips. Nope. It’s all going to go this way. I’m going to go the way of following a strategy. To a tee. And this is when it’s gonna be time for me to change careers. When I have accomplished the task of the capital building stage. Which is $50k. That is gonna be the indication that I deserve my own business. And will be proof. And confirmation that I’m on the right road. It only makes sense.
So, now, I couldn’t tell you [B]when[/B] I will arrive at the goal, but I guess it will be something to be revealed. And unraveling. And whenever my account is growing more and more, then it will be clearer and clearer. It won’t be a secret. (man…do I hate not knowing when) (I just like heads up!)
See Journal, this changes everything. Cause now, it all hinges upon a strategy. A good one. A complete one. And all I need to do is follow it. And follow through with the results. Do you see why I have always thought of the importance of my outlook? I am a goal oriented individual. I guess there’s more than one way to get there. So, now, it all comes down to following a trading strategy. And how successful [B]it[/B] is. No more pacing of myself. No more pip management. Like none of that stuff I deemed important before.
Honestly. Now it’s all going to come down to whether I have followed the plan, yes or no. And if yes, which of course will be the answer, then it will be how effective is the strategy? How much do I change it?
It might start to get boring in here Journal. Cause the only question will be for me to answer is, did you follow the plan? Oh, and I guess the account balance will be the thing to look at also.
Well, the plan is in place.
50k is the goal.
Strategy in place.
Follow it. (meaning just pull the trigger and see what happens)
Record the results of it, and watch the account balance.

That would be it in a nut shell.

So, Journal, speaking of that, I must run. All my time now must be devoted to the development of the strategy. I [B]am[/B] getting close. And the plan will be to have it accomplished before July 4th. (couple weeks)
Uh…wait…that might change. Cause the reason why I wanted to get back in soon was because I only had 18 months to go (previous thinking). But now, that has all changed. I really don’t know about the [B]when[/B]. Ok, maybe I will need some demo time with it.

Yeah.

Journal, next time I come back, we will be talking technical.

Mike

Hi Journal. How are ya?
Hey Mike! I’m good. How are YOU doing? You still in it? Talk to me. What’s been going on with you?
Oh, I’m still in it alright. I’ve been working so very hard lately, Journal. I’ve been learning a whole lot. And this should help very much because I got to get everything out that I’ve been going through. I’m changing.
And I’ll tell you why. Cause I’ve been reading.
:44: Mmmmm.
Ok. Here we go.
Well, first off, I came to realize that I need to read. I mean, doesn’t that only make sense? It’s like taking a short cut. Why not read about what has worked for those already in the business? I thought I could figure this out my way. Be original. Plus, I’m not the kind of person to follow the crowd. (Boy, do I hate that). I don’t care what other people do. I want to do what [I]I[/I] want to. But…I have come to realize that I am not that smart. And I really mean that. I mean, who do I think I am? Honestly. I am no one special. It is an evil to think of yourself more highly that you ought to anyway.
It’s time to learn.
And I’ve come to appreciate all those out there who take the time to write a book about what they have learned in this business. I wish I had more time to read though. But, my entire life has been nothing but ‘finding the strategy’. So, that’s what I’ve been searching for lately.
And guess what? I found it.
I read something some time ago in a book that stuck with me. I thought I bought that book, but I didn’t. (Was at Barnes and Nobles reading it, at the time). Well, I found it now. And bought it. And now my whole strategy is based on this. ‘[I]Currency Trading for Dummies[/I]’. In the back of the book on page 335 is where it starts, under trading strategies. Here’s the quote that brought me in…
’[I]Moving averages are one of the most commonly used technical indicators across a wide range of markets. They have become a staple part of many trading strategies because they’re simple to use and apply. Although moving averages have been around for a long time, their capability to be easily measured, tested, and applied makes them an ideal foundation for modern trading strategies, which can incorporate both technical and fundamental analyses.[/I]'
And that’s where it all begins.
What I’ve come up with is gonna take some time to get all down here. So, I’m gonna get this precursor out now and begin with my strategy, on the next post.
It’s massive.
Oh wait. There’s a lot of other things that have happened also. I probably should explain.
My whole outlook has changed! (I think I articulated this already, but this is it in a nutshell).
I do not have an end goal date. My future will be dependent upon my success in trading. When I reach 50k, then it’s time to jump. I do not know when that will be. It’s gonna have to be unfolded. I just know that it [B]will[/B] happen.
If I follow the strategy and the market continues to trend, along with a correctly adjusted money management system, this should work out.
-I will follow the strategy because YOU are going to hold me to it. What I do right or wrong will be documented. You will know the details of the strategy and will be able to tell me where I went wrong.
-Hopefully the market will continue to trend, as it has done so from the beginning. Cause that’s all I see in the charts. (Long trends)
-My money management system will be closely watched and documented. Will try to find the balance between the risked dollars to growth dollars. (I have learned something on that also Journal)

Well, it’s still kind of early now. So, here it comes Journal. I’m giving you everything I got.
This is very exciting.

Mike

:44:

Ok Journal. Let me start by showing you what I will be looking at on my charts.
I have 3 moving averages. SMA’s. 4, 9, 18. 4 = yellow. 9 = green. 18 = purple.
I’m only looking at the Majors vs Comms. 15 pairs. That’s it.



That’s the USD/CAD, Daily time frame.
My whole purpose with this strategy is simply this. Ride out trends. And the way I’m going to do it is by way of these lines. This is what I see in that chart. There is 4 things on that chart. The 3 lines and price.
What I am shooting for is this. I want to be in a trade, from the beginning to the end. And to be more specific, I am looking more at the purple line. As long as price is on one side of the purple line, it’s trending.
I probably need to blow this up more. Here’s the left side of that chart.


Those lines are simply price. The average of where price has been. For yellow it’s the average price for the last 4 periods. That always rides closely to the present price.
What I’m most interested in is the purple line. If price has crossed over to the other side of it, then there’s a trend change. You can see the two times that price wanted to cross over, but eventually didn’t. That’s gonna be the tricky part. I will have to accept the fact that I’m going to lose some $'s around the purple line. It’s better than going with the green line. Price will cross over the green line more than the purple. So, as we can see, the trend will be the strongest when it looks like this. In this order. From top to bottom…PURPLE LINE, GREEN LINE, YELLOW LINE, PRICE. A trend does not get any stronger than that. I call that, being lined-up. Then price will eventually cross up back over the yellow line, meaning there’s a consolidation occurring. I don’t know to what extent yet, but it is starting. The green line would be the next support where price wants to cross over. If the trend is strong, it will fall back on down below it. BTW…these lines do act as support and resistance areas. That’s very cool. Then next comes the purple line. If the trend is strong, that will be a strong resistance area. I can look at how price reacts to that line, OR I can see how the moving average lines react to the purple line also. Look there at the 2 instances where the yellow line has reacted to the purple line. Looks like some obedience to me. Now price did bump up over the purple line, but didn’t go too far over it. The yellow line can act as price also. It is the representation of price in such a short time period. What other things am I looking at when I look at these lines? Well, I have a rule. I do not want to be in a trade being on the wrong side of the purple line. I should always ask myself…is this trade valid? And the answer should always be a yes. If I’m in a trade and I’m on the wrong side of that line, then the answer would be no, it’s not a valid trade. And that brings me to how I will enter in a trade. The only time I can enter into a trade will be when price is close to the purple line. Look, it doesn’t make sense to get in when price is away, like it looks there at the bottom of that chart. I need room for it to ride. And yet, I am even looking to get in when there comes a trend change in longer time frames. Those are long trends.
So, that’s the idea. That’s the very heart and soul of how I’m gonna trade. There’s so much more to it though. Like this. When do I plan on taking profit? I’m gonna let the market dictate that for me. I am riding out trends. So, fundamentally speaking, the answer is…at the end of a run. Sure, I can get stopped out. And that will be around the purple line. I can get back in though. As long as it’s around that line. So, I will either get in, or get stopped out at the purple line. That is going to be my entry signal, and stop loss.
It’s that simple.

I’m going to continue this on another post.

So, thanks to some smart people out there, I have a trading strategy. I think that is genius. But, here’s where I have tailored the strategy to myself. From the beginning of my history, I have always knew to keep things into perspective. Proper perspective. And this is a huge dynamic to the strategy.
Man Journal, you might remember when I first started going live, that I had a similar thinking. I think it has merit.
I’m going to be trading in different time frames.
Monthly.
Weekly.
Daily.
Even 4 hr. Time frames.
I have the system in place. All my charts will look like that, except in the different time frames. I will trade the same way, but with one slight difference. The position size. This is what I have decided. (Boy have I had to relearn money management! )
Monthly – 1% of the account.
Weekly – 2% of the account.
Daily -----3% of the account.
4 HR ------4% of the account.

I use the BP’s position size calculator. The biggest thing I need to come up with is the stop loss, to complete that calculation. I will use the purple line for that. So, when I get in, it will have to be on the correct side of that line, with a cushion of pips back to that line. Basically just far enough in, in which I will have a stop loss and also a way to calculate the position size, to get in with. Of course it’s going to be rocky at the start. Price can toggle that line for some time. Who knows how long price will stay around there. And then even to dart out in the direction I am thinking it will go. It’s not going to be easy, but I need to remember that I want to be on the correct side. And then to stay in until the run runs out.

Journal, my plan is to demo this. And I have been now, for a week. The plan is to continue to demo until I have no doubt that this is going to work. I need to experience the bad times as well as the good times. I need to work out the losses. How much am I able to lose before I can get on a lengthy ride. But most of all, I need to see this dynamic work out. And that is trading in the different time frames. Normally, when there is a major trend change occurring, it will play out, first, in the 4 HR time frame. Then proceed into the Daily. And then eventually up to the Monthly. So, I’m figuring it should be like this. I could be making money in the Monthly time frame, but it should be with such a small amount at stake. Those trades should be running for months and months at a time. Then there’s the weekly time frame trades. Those will have a little bit more on it, and to be running for weeks at a time. The reason why is because I am looking at the close of the candles more than the actual present price. I believe more in where price wants to end up, rather than where price stretches to.
So, let me show you some charts of what trades I’ve been doing so far.
Here’s EUR/AUD on the 4hr chart. So this is a 4HR trade.



If you look to the left, price was trending below the purple line. But it went above it. But, first off, I have the bias for the Comms. So, I’ve been looking for the Comms over the Majors. And this was evident on the left side. But, being on such a shorter time frame, price naturally will pop up over the line. That’s what happened there in the middle of the chart. Price shot up at an extreme high in such a short time span. That makes the yellow line move high pretty quickly. Even over the green and purple lines. But the longer trend is the purple line, which that line levels out. That gives me a good opportunity to get back in on the trend going south. That’s what I did, there at the arrows. You can see that the yellow line (short term price average) crosses over both green and purple lines. And that’s my goal, to get in as close to the purple line as possible. Man, is this working out good. So, how about the stop loss? Well, I must periodically move that because that is the purple line, and that moves a lot. I guess it’s a good thing because it seems to act like a trailing stop to some extent. So, the plan here is to ride this run on out till I get stopped out by the purple line. Now look to the left, on the chart. See how price rose up and closed above the purple line? But, the yellow line did not move up that far. It didn’t even cross over the green line. So, should I wait till price closes above the purple line? Or when the yellow line crosses over the purple line? Well, I need to remember my rule…I do not want to be on the other side of the purple line. So I choose price, and not the yellow line. I could have gotten back in on that trade. Especially when they were already lined-up.

I’ll come back with more charts.

So this is a running trade also. It’s on the Daily time frame. It’s the NZD/USD. I just bought it on the last day.


As you look left, you can see that the trend is up (Comm high). And then price comes back to support. And wants to go higher. I see that I didn’t get close to the purple line. Maybe that was a mistake. But, I am on the correct side of the purple line. And I made the stop loss at the yellow/green juncture.
Well, I’ll have to try to get it better with getting in closer to the purple line.
What else do I have going?
The EUR/NZD. 4 HR trade. But, it’s the very same thing as the EUR/AUD one.


I have the AUD/USD on the DAILY. I bought it on the last day. Top dotted line.



If you look left we can see a big trend change. Then only in the last few days price broke down below the purple line. And now it looks like it will continue on with the trend. Yeah, I did buy it not as close to the purple line as possible. Actually quite away. And my stop loss is just above it where the yellow/green met.
We’ll see how this plays out.
Well, that’s all the trades I’m in now. 4 of them, above.
But, I definitely want to through out to you what I’m looking at, at the present. Man…there are some opportunities.
And that’s what I want to do here. I want to be giving out the before trade talk. Picture. Plan. During. And after.
That should be what occupies this thread from now on.

Well Journal, I have a nice long weekend ahead. So, I’ll be back with some good stuff.

Mike

Ok Journal.
Check this out. This has my attention the most.
First off, I do keep track of the Major/Comm tilt. And lately it’s the Comms. No doubt. But, I must be aware of the Majors. I’ll show you why in a little bit.
But, here’s what I think is the most interesting thing.
CAD/CHF. In all of the time frames. I should start from out to in.
Monthly time frame. CAD/CHF.
I’m taking it out to the Crisis. Around 2007.



You can see when all 3 lines and price come together, after some consolidation, get ready for another leg. Which has been down. CHF strong. Surely we remember when the Swiss rocked the world at the beginning of last year. (Man do I remember that…watched it unravel right before my eyes)


Close up view here.
But, let’s mind what’s going on in the present time now. We have all 3 lines and price converging now. So, which way will it go? Well, look at the yellow line. It crossed up over the green line only 3 months ago. And all you have to do is look back and see that whenever all 3 plus price converge, next comes the trend. All I know is that I want to be in on it. Look…it can go either way. This could easily be at the top of a hill. …Or are we going to see the purple line turn on up??? I simply don’t know.
Let’s turn on in to the weekly time frame.


This is the weekly, from the beginning of the year. We see that the trend has been low (CHF strong) till about the middle of Feb. Then the weekly trend changed. Just look at price in conjunction with the purple line.
You know what? I think we can make the correlation to fundamentals. This is Mr. Oil against Mr. Safe Haven.
So, ok, that’s nice. What do we have here? Well, it sure looks like the purple line is acting as a major support level. But, we’re not done here, because price is not really moving out anywhere yet. All I know is that I want to be in on the move. And ride it out. Now, I’m going to have to note exactly where the end price of the purple line is, on all of the different time frames.
So, what about the DAILY time frame.


This is the daily from May 1st. This is where the purple line is leveling off, relatively speaking. Back and forth it has been going (price). But, actually, it looks like the purple line is biased to the downside. Lower highs and lower lows. Uh…well, maybe we just might be talking about a break out to the downside.
I don’t know. But, in any case, I really don’t care. Just as long as I am on with the trend (correct side of the purple). Once again, here on the Daily, we have all 3 lines and price converging also. See, I’m new in this game. I don’t know what I’m looking at here. Does this scenario happen often? Where, on all of the time frames, if they are converging, does it mean a really big, long, start of a trend? Man…I just do not know…but, I will surely find out what happens. All I’m going to be doing is remembering to be on the correct side of the trend.
I would have to say that since it makes most sense that trends happen in the short term before the long term, then this is looking to go south. If I see price breaking down below this purple line, then I must go short. Not only on the daily time frame, but the weekly, and the monthly also. Ok…so what is the price at the end of the purple line now?
Daily ----- .7505
Weekly —.7493
Monthly —.7494
And price is currently sitting at .7517 .
Ok, what is this telling me?
Price can go down…or price can go up…
Looks like UP on the daily. Because we’re almost lined-up. See. The only problem is price is in between the yellow and the green. That’s the only problem. Purple is on the bottom. Then Green. Then Yellow. Then next should be Price, for everything to be trending strongly high.
And the weekly again? DOWN. The yellow line crossed down over the green line. And the purple now. On this weekly time frame, the trend has been high, above the purple. So, in order for a down, we will have to see a change in trends, because it has been high. …Geeeeez.
Monthly again? UP. For the last 3 months price has been above the purple line. The yellow line has crossed up over the green and purple lines. Meaning in the medium term(…well, short term in the monthly time frame perspective), price has been on the rise.
Ok Journal…this is getting a little bit confusing. Bear with me. I’m trying to sort this all out.
Maybe this is all a good thing. Because remember, I just do not know where price is going to go!!!
All I need to be concerned about is getting in on the trend. And I should consider myself lucky at this point because there is a lot of converging going on. So, what do I need to remember?
See, this is what I want to do this week. Since I am at a good place (in regards to the purple line), (and it’s at the beginning of the month, and second half of the year) I want to get in on a monthly trade, weekly trade, and daily trade. Hey…what about hedging? I can get in on one going high, say the daily, and one going low on the weekly, and one going high on the monthly. !!! All with stop losses in place. Until I see what direction price wants to go.
Hmmm…
I don’t know.
Well, let’s look at the 4HR time frame. What is this telling me?

I have to switch to another post.

This is the 4 HR chart. CAD/CHF. This past entire week.



So, this is the facts. The week started out trending low. CHF strong. Then pretty shortly did the trend turn CAD strong, trending high, on the 4 HR time frame, for the entire week. Except at the end of the week, in the final hours, price has finally broken the support level. And we’re back to where we started. CHF strong.
Just look at how price ended the final 4 hrs of trading for the week. Talk about breaking out! It closed at the area where price reached out to like 5 times earlier in the week. So, now, I’m thinking that price is wanting to go low.
Wait…just wait a minute…Mike…just because it broke down, doesn’t mean it’s gonna go lower. I mean, it did end up much higher than it did at the beginning of the week. The trend was high. Maybe there was some stop huntings going on. (I don’t fully understand all that) But I have heard of price revisiting areas in which some things are happening there.
Ok. Lets take this 4HR time frame out for the last 2 weeks. Here’s the shot.


Now this is telling. How about some Price Action here huh? Talk about a support level. Where price ended up for the week is definitely sitting at a previous resistance level turned support. Now I’m thinking that we just might have a bounce up from here.

Geeeez. I’ve been talking about this a little bit much. (Plus I’m running short on time here).
What did I get out of all of this?

I don’t know yet.
I got to think about it.

Must run!!!

Mike

Hey Journal…
Well, good news and bad news.
The good news is I placed some trades about a couple hours after the market opened. And of course you should know that I was going after the one particular trade. CAD/CHF. Yep, and it’s going good. I picked the right direction alright. Plus I didn’t get to clue you in on the other ones that I had marked. I wanted to talk about those also, before I pulled the trigger, but just didn’t have enough time, was so preoccupied with that one trade. Sorry. But in any case, my account is nothing but rocketing higher and higher.
Ok…yeah…that’s nice…But this is the problem. And I seen it coming. When I placed all of the trades.
(This is why it’s good to be learning this stuff on demo) (But also kind of a bummer cause I would be pretty rich right about now)
Ok, well, I seen it coming when I set up the strategy. It’s all about money management factor of my system.
So far, what I got here (I believe) is a good method for getting in, what’s keeping me in, and what gets me out. And I believe that encompasses the old adage ‘let you winners run and cut you losers short’.
But, I need to figure out a suitable money management system to match this system. I was definitely wrong what I noted down earlier. And I noticed this when I placed these trades last night. Sure, there’s many trades I wanted to get in. So as I calculated the position sizing, I noticed that it just was way too much on each trade. Then the next thing you know I was out of margin. I couldn’t place anymore trades, which I had many lined up to do. Something is wrong. Big time. So, I guess I need to talk it out. Cause there is an idea I have in my mind about how it should go.
Let’s begin. This is what I want.
I would like to trade any and all of the set-ups that are occurring on my charts. I truly believe it’s the only way to go. I mean, the take off is going to be rough, no doubt. But once things are moving, I want to be able to say, ‘If it’s trending, I’m in it’. Look, all I want to be preoccupied with is the take off. And that means getting in on a ground level trend, in it’s infancy (the purple line). Once it starts, and I’m in profit, I do nothing else. It is going to ride on out till the market stops me out. Sure, if it happens that it was a fake out (a deep cut into the trend), and I got stopped out, then I will look for the reentry. But, other than that, all I am doing is looking for trends to be starting. In the different time frames.
But what I want is very minimal riding on the trades that are on higher time frames. And the closer the time frame the more of a size on them. Generally speaking though, I don’t want a lot of risk out there on each trade. But there should be more risk with the multiple trades running though. Man, this is gonna be such a balancing act.
Oh, and there’s another aspect that I came across also. And that has to do with the stop loss. You know…I can’t really place one when I first get in. (That’s going to do wonders to what kind of position size I need.)
But anyway, I feel it’s more important to see where price ends instead of where it stretches to. Yeah, I place a stop loss, then get stopped out, and then start over again. So looks like I need to come up with a set of rules for the stop loss. Ok, how about this? Not far away from the purple line!
Ok Journal, I just wanted to pop in here and clue you in on what I need to work on. Once again, I need to read. And that’s precisely what I was doing all morning. I am digging up as much as I can here in BabyPips.
I was reading up on leverage, margin, position sizing, etc… So, much work to do Journal. I am on it though.

But, in the meantime, check out some of my trades. I’ll start out with the one and only trade.
CAD/CHF. This is the 4HR, Daily, Weekly, and Monthly time frames.


In the first chart there (4hr), that big huge 4hr green candle is where the market opened up this week. I tried to get in as close to the purple line as possible. That’s the best I can do.
Look at the 2nd chart (D). That is the only one perfectly lined-up (most trending high…purple(sma18) on bottom, then green(sma9), then yellow(sma4), then price). The 4hr chart is close and only needs the green to get above the purple. But the weekly time frame seems kind of risky, except for the fact that the purple line is surely pointing on the rise, along with the other 2 lines also. And the monthly shows some promise. No doubt that this is premature cause the month has just begun. But starting out on a rise though. Also need to note that the yellow crossed the other 2 fairly quickly. That signifies a strong turn around. Hopefully I caught this at a good time.

Anyway, this demo account is looking really good. But, it means nothing until I can get the position sizing properly adjusted. And that’s my primary goal now.
Much reading to do.

Mike

P.S. I opened the week with the account right at about $105,000.00
Now it looks like this.


Man am I trying to get a 2k demo account balance going. Need to trade as real on this demo!!!

Hey Mike , ok I started to read your journal but hey man , you’re spending too much time talking to the journal IMO… and that business with demo@$54k , absolutely no point in playing with 54k if you cant actually control a $2k a/c in demo …(imo) demo is good to try different stratergy but … you may as well play with a million … makes you feel good but does nothing for your discipline,MM,targets etc etc etc . I recieved a margin call ONCE and that was enough to frighten me into NEVER oversizing again for the size of my a/c … ive been at it for round 5yrs now , not very sucessfull $$ wise but the discipline,mind,and PATIENCE is getting better everyday.My only advice is study 1 or 2 curriencies UNTILL you know how they react to s/r and/or any other things that work for you. I particularly like the idea of only trading the 3 days where you seem to see a pattern going on .when I have a “bad hair day” I revert to smallest size I can and “take profit” at set points UNTILL I gain confidence in system back … Hope this is of some use P/unlimited

Hi Journal.

Underground.

That’s where I’m at.

I am not live.
I am not demoing.
I don’t even look at the markets anymore.

I am (have been) reading.
Learning.
Changing.

I am being built. From the ground up.

From now on, this Journal Journey will not be for any kind of emotions. I’m tired of talking about it all.
But, it will be a place of reference. What will take place here is what I will need to remember. I’ve been learning so much lately that I need to contain it all, somewhere. This is what I’m going to be made of.

Mike

Hey Journal.
What a difficult job of trying to figure out what the most important thing that I need to remember.
So, this is it. (Only because it hit me so very hard, and hurt the most)

[B]PROCESS ORIENTED, NOT GOAL ORIENTED[/B]
‘How we make trading decisions is more critical than what we get for results.’

‘Having a process helps engage deliberative mind. Following a specific process also helps reduce emotion-based judgements and decisions. A process grounds you and guides your focus to what is important. To their distinct detriment, many traders focus solely on their trade results and pay scant attention to their trading process. This allows emotions and mental blind spots to extract their toll. In contrast, successful performers are focused on their process rather than outcomes.’

[B]OUTPUT[/B]:
I find it senseless to look at what is going on in the market, nowadays. Because my primary purpose now is reading. I still wake up at 2:30am, and will not even open up my lap top. That has been a first. What I am doing is learning how to be a real trader.

Results are not the most important thing anymore.

It’s knowledge, skills, and abilities that I will be working on.

Mike

[B]Time Compression Trading[/B] by Jason Alan Jankovsky

If there is anything I wish I would have read in the beginning, it’s this book. (Or maybe now is the time)
Finally, finally, finally I will start to look at the market in the way I should.
I’m going to take a guess and say that this writer is either hated, or loved. It has to be one way or the other.
Cause I have never heard someone bash ‘price action’ the way he does. And guess what? I agree with him.
I’ve always wanted to have the right perspective of the market. I mean, this is where it all starts anyway.

So…I don’t want to do a lot of explaining anymore. That will be all the intro I give for this book. I want to get to the points that I deem very, very important. This is how I am going to be built.

[B]The market is people.[/B]
The way I viewed it before was not this way. I seen numbers. In the form of candles. That was the absolute finest point of which I viewed the market. And boy did I try to find a way to make sense of what was going on, with the numbers, and try to predict which way the numbers were going to go.
Well, there’s a better way to see it. And that is the way it actually is.
[B]This market is a zero-sum market.[/B] ‘The market is only a machine. All the market itself will ever do is provide a place for people to come together and choose to enter an order from one side or the other. It is the nature of those orders that we have to be concerned with. We need to know their nature because once we have entered a trade, the only way we can get paid is if someone else loses; and the only way someone else can lose is if the orders after us are larger from the same side we are on; that is what creates the price change we are attempting to exploit. Orders after us create our profit or our loss. This means that other traders decide if you win or lose, not you.’

[B]OUTPUT[/B]
I do not want to see price (as an exclusive entity) anymore. I do not want to see numbers. I want to see decisions. I want to see the actions of what people have decided. I start there.

‘In the markets, this is an absolute: There are only two groups of people, winners and losers. It does not matter who those people are, what the size of their equity or trades might be, or their level of knowledge or study. At the end of the day, no matter who you are or where you choose to participate, you are in one group or the other. Period. End of story. No matter who you are or who the other market participants might be, at the end of your participation (and theirs), only one of you will be the winner and the other will be the loser. There is no way around that immutable fact.’

‘Winners’ psychology is different from that of losers. The actions taken by winners are different from those taken by losers. Winners are doing their best to think in probabilities, and they come to their conclusions from a different stream of thought than do losers. Winners are watching what is happening in an attempt to discern what is most likely to come next, based on how well they can tell what is happening now. Winners don’t want to predict prices; they want to know with as much clarity as possible what has already happened. Only then can they make a reasonable guess as to what will happen next. In short, winners are outthinking losers. Trading is a thinking man’s game, not a mathematician’s game.

[B]OUTPUT[/B]
First off, I will not be trading anytime soon. Not even demoing.
I want to be an observer. I want to view the market (the place where these transactions take place) through a different set of glasses. I will start there. I will not be concerned with trading (entry points, looking for breakouts, pips, what is high or what is low, where price wants to go, trends continuing or turning, etc…) That means anything that has to do with a trade. I will be an observer only.
So, whenever I decide to open up the charts, I will practice looking at the market as an observer only.

In the meantime, I continue to read. And re-read. And take notes.

Mike

[I][U]Not[/U][/I] a mathematician’s game? Do you have a hidden truth not yet revealed to all those huge international financial institutions with trading floors who require a minimum of a first-class honours degree in mathematics (and maybe a Master’s in maths as well) before they’ll even invite someone to an interview?

Please forgive my facetiously heckling tone (I happen to detest Jankovsky’s perspectives, though I admit to not having read this book. His other one, [I]The Art of the Trade[/I], was more than enough for me ).

And welcome back, Mike. I, for one, am following with interest and looking forward with interest to seeing how your journal progresses. :cool:

Hey Lexys!

Wow!! What an honor to see you here.
You know, to be honest, I thought of you when I wrote the statement ‘I bet he’s hated or loved’. Cause I know of you. I know that your quite the mathematician. And that is your perspective on the market.
In any case, those were his words. And I’m sorry that I like the way he thinks.
For the book reader that you are, why don’t you give that one a try? It is making me start completely over. I just cannot disagree with anything about it. It makes sense to me.

But…of all the things I have read about you here…I have complete respect for you and do look up to you. I admire you, and the work you have accomplished in this business.
And while I’m on the subject…I happen to think very, very highly of a woman’s mind. It is wired differently than a man’s. I will never take that for granted. So, just like our friend Pipme, when you talk, I listen.
It’s all about becoming successful.
I’m glad to see that in others.
And one of these days, without fail, I will also.

Thanks Lexys.

Mike

1 Like

I might - thanks, Mike. (And thanks for not taking me the wrong way! :cool: ). The problem is, I have a big stack of unread books at the moment, because I have the bad habit of maintaining my Amazon-ordering quantities even when I have less reading-time available. :8:

It wouldn’t be the first time someone’s “subsequent book” would be of much more interest to me than the first. (I found Van K. Tharp exactly the opposite: it was [I]only[/I] his first book in which I found any real value to myself!).

I have Asperger’s, which (one theory says) may actually make mine [I]less[/I] differently wired from a male one than is true for many women. I don’t know whether that’s good or bad, though (or even true) … but that’s perhaps why I’m so “mathematical”.