Continuing…
Lots of good stuff. There were hundreds of good screen quotes like that throughout. It only takes a serious look within to make any real change.
This is how I operate.
Mike
Hi Journal!
Well, I guess I have to back things up a little. And actually it all started from the last post I did, you know, me & Terry’s last meeting. See, I’m searching for answers. It does help when I reread my experiences. And lately, I’ve been pretty bothered. It’s the same old thing…like it’ll be my last endeavor…finding my strategy. I remember going through this last year, and now, after going around a huge mountain, here I am again. But anyway, I kept reading what I wrote last time. And I noticed something. It was his story, then his advise! The biggest thing with him (in his early years) was trying out other peoples methods. Nothing really sits right for you unless you find your own way. That precisely was his point. But here I am trying to adopt his ways. Yeah, he showed me some techniques and I’m wanting to follow them. I started realizing this. Then I read his words of wisdom. Find your way, and just do it.
Ok, that’s nice.
This is how it happened, for me.
You know, many things roll around in your head, for such a long while. And you never know when your brain shows you some really good stuff. Whether your driving a car, going to the bathroom, or eating lunch, when it throws it at you, you just have to remember it. So, this is what hit me.
After all of the teaching I went through. Since the beginning of Nov. Where did it get me? Right now. I’m right where I was at from last June - Oct. Racking my brain about the way I want to trade. But it hit me. I did learn something. It goes back to my ‘core trading values’. Ok. Well, maybe I need them now. Yeah, what a novel idea. I’ll throw out there what they are again. Learning. Practicing. Thinking. Decision Making. Information Processing. The Kaizen Process. Time/Energy/Money Management. Well, you know, what are these here for? I absolutely need a few here, like Decision Making, & Thinking. So, I went back and utilized those MM’s I have of them. Did some research. You know, got to working, with those tools. And guess what? (You probably thinking that I’m gonna throw out there something really good, right about now)
Nope. Dead end. The only thing I realize is that I need to re do my mind maps on those things, because their not really effective. No help. Then, something else kept nagging me in my mind. I think this has been nagging me for a long time now. Ever since the beginning, there was one quote that I remember. And this quote Terry said is his absolute favorite. I’m going to have to find it.
Rudyard Kipling…“I had six honest serving men. They taught me all I knew. Their names were : Where, What, When, Why, How, and Who.”
I did spend a lot of time mulling that over in my head. But now, I’m going to put it to the test. I mean, if this is true, then I’m going to find it out. All I need to do is ask these questions. Over and over again.
My idea is this. I’m going to have mind maps with this simple formula. A central idea in the middle, and the six serving men around it. Then, for each of those 6 legs belongs their own mind map with the same format.
And so on.
I realize that what’s most important is asking the right questions. What a big help, in uncovering stuff.
Another thing helping me lately, is that I do realize also that I do know how I want to trade. I mean, you would figure, after so long of internalizing how I approach the market, what I see in the market, my likes and dislikes, just everything…the answers are already there! I just needed the organization and format to get it all down in.
Boy, I wish I could put in here all my mind maps that I did on the subject. I just can’t. But, I’ll just throw out my first one, the most important one.
I started from the top right and moved my way around clockwise. There’s a total of 10 mind maps I have so far. Believe me, everything is questioned, and answered. It’s truly amazing what you uncover when all you do is keep asking those 6 things. The first thing pretty much always has to be asked is ‘What’. That’s the subject matter. Then it seems to lead to ‘How’, the content and the steps. ‘When’ has to do with time. ‘Where’, the physical place. ‘Why’ always gives you your reasons behind your answers. It could get backwards with that one because if you don’t come up with a satisfying answer, then your gonna have to start over with the ‘What’ again. The ‘Who’ not always gets answered. Either you have to get creative or it will be a ‘me’.
But anyway, another important thing I always need to remember is what’s in the middle. That is what everything is centered around. So, on that MM, it is looking at my strategy as a whole. Big picture. That’s why I was forced to answer the question of ‘Where’. Well, it has to be my broker, of course. That is where I am presently at right now. I’m trying to find one. I can’t use the one I did before, they merged with another broker. So, I’m kind of at a stopping point now. Well, actually where I’m at now is, trying to demo the strategy under the same conditions that I will be doing when I go live again.
Ok…yep…
Anyway.
My view of the market has always, always, always been --“Risk on, Risk off”. I’m not going to deny myself.
But, what I have realized is that I want to trade risk off. That’s a fear sentiment. That’s under the conditions where money is fleeing to safe haven assets. And in the currency market, that would be with the JPY. It’s funny that every one of those pairs, on the charts, will be going short. I established that already. Short is what I want to trade. But… (I’m sorry Terry, I’m gonna spread my wings somewhat from the mold you have shown me). Anchor trade. Sure. I do believe in it. That means one trade. Ok. That’s nice. Well, what I want to do is trade the JPY. I refuse to wait on the sidelines, if I only am looking at one particular pair (AUD/JPY), for say weeks on end till it hits. Then get in with very minimal position sizing. This is my plan in a nutshell.
I have the possibility of getting in on one of the 7 JPY pairs. Only getting in on one.
The market will have to be in a risk-off mode.
I will pick which is the best pair to get in with.
I am using the 40, 60 retracement levels drawn on the monthly chart to give me the ‘zone’.
I will place a trade at the bottom line. In fact, that will be my stop loss, the entry will be just below it, after a confirmation of going lower (a retest).
My first action will be moving the stop loss to break even. Risk management.
Second action will be locking in a profit, by putting in a trailing stop.
Third action will be compounding profits. I will be doing two things. Moving trailing stop closer to price and adding more position sizing at the same time.
So, my take profit point will always be where my trailing stop hits.
I believe that’s my way of riding out a run while cutting short losses. Only tampering with the stop loss level.
So.
It’s all spelled out in detail.
I’m going to practice this on demo.
Man…I got to run.
Mike
1 Like
Journal.
I’m gonna try to get these MM’s on.
This one is the ‘What’ from the original MM. (JPY)
You can see that there are MM’s within this one also. But all with the same format.
Only have time for this one right now.
Mike
This is my ‘exit’.
I pretty much had this one already. But as I now have seen, I didn’t go back and redo it according to the plan. Which is having the ‘exit’ in the middle, the subject. Then have my 6 friends all around, and ask these questions.
Man…
I’m gonna do this tonight/tomorrow.
Mike
Well, this is my last one. Time Frame.
It seems like it’s incomplete. Cause that’s all I could do with it. But, I now just realize something.
This is the ‘When’ of the whole strategy. My first thought of when is about time. So…time frame right?
Well, not really!
This is what I need to address. On the when.
When do I trade?
What do I do when I trade?
What do I do when I don’t trade?
It’s looking at time in regards to my trading strategy.
Yep.
Ok.
Mike
Hi Journal!
I got some time here. So, I’m gonna throw out what I’ve been up to. Been working on my mind maps. So, here’s my new ‘time’ one. It’s actually the ‘when’ back at my main trading strategy MM.
And then here’s my ‘exit’ one. For as important that the exit is, this should be more dove into. But, I feel that will come when I practice.
Mike
Hi Journal.
Now I’m getting somewhere. Not only do I need a strategy, but a plan to follow. I remember the things I was taught, so I’m implementing them. Here’s the logic.
From the top, the strategy. Mind Map.
Then the ‘why’ in that. Mind Map. (Goals)
Then the objectives. Mind Map.
So then, looks like at the end of each month I should have a report. And the way I set it up, as a no fail success, is if I do not so good, then I just put in more money to make the objective true.
I think this is a good way to start out. I need to start building and I don’t know any other way than from the bottom. This should be how to lift off.
Mike
Hey Journal!
Hey Mike! There you are. Where have you been? What’s going on? You still in the game or what? Talk to me goose.
I know, I know, I know…Man Journal, I don’t know what’s been going on with me lately. Frankly, I don’t want to talk too much about it. I mean, it’s upsetting to myself, more than anything. I get so upset because I’m just sleeping too much. Sure, I still wake up early, on the weekdays, but then I find myself falling asleep sometime afterwards. Then on the weekends I have a very hard time waking up period.
Believe me Journal, nobody spanks me harder than I do. I have a standard. And I want to keep it going. But…sometimes it’s very, very difficult. I don’t know, maybe because I’m getting older. Or something. Yeah, how about just old.
Anyway, I do realize that some of the problem has to do with the content that I’m working on. If I’m not grabbed by it, I eventually lose it. Like I think I’ve been mentioning lately, I’m back to square one. Finding that dog-gone perfect strategy. Ok…maybe that’s a little far fetched. But I have been struggling with coming up with how I’m going to trade. It seems like the threshold that I will never cross. (BTW…this is all the follow up that I’ve been going through)
I remember…there was about 3 times that I came on here and was going to spit out my plan. I started typing away. Then. Road blocked. I realize the holes in it. Then I run out of time and eventually hit the cancel button.
It has been frustrating. Cause I just want to get going with it. So, every morning, I will go over all my mind maps. All what I have down about it already. Oh yeah, all that stuff up there in the previous posts. Well, that’s nonsense. I don’t feel good about a lot of that. So, I keep going over it and over it. It’s all about the ‘when’ and ‘where’. But I have noticed, that over time, some things stick. It’s kind of like osmosis. The good stuff sinks to the bottom, and that’s what I don’t have to change. I just move on to the other stuff. See, there’s so many factors and variables in play. I guess it just takes time to sort it all out. With being such a perfectionist, it’s hard to be satisfied with the whole, when I only have bits and pieces that is good. One one hand, I need to get the ship moving. On the other hand, I want to make sure that my trading is backed by principles. And that requires asking a lot of questions.
For example, I was caught up with one thing for a while. See, I wanted an indicator to tell me when a pair is trending. It hit me pretty hard one day when I was reading someone’s blog, who I esteem as someone who is a very smart trader (N.F.), and he mentioned that he uses this indicator. It was close to something I used before. I surely am not going to pay the fee to be his pupil and take his classes to find out exactly why & how he uses it. But he did mention it. He uses the 8 & 21 EMA crossover, probably to find the trend somehow.
So, to be true to myself and my mind mapping, how do I answer the question of ‘why’ do I use that indicator? The truth would be for me to say that this guy uses it and that’s why. And it sits right with me.
What kind of answer is that???!!! It is no answer. It’s upsetting to me. So, I had to do some research for myself. Well, that took some time. I never really found that answer, cause it’s probably in his class, only.
I did learn some good stuff about cross over applications. And sure enough BabyPips has some rich teachings on that also. I would like to answer it like this. I pick the 8 EMA for this reason…and the 21 EMA for this reason… And these 2 compliment each other better than any other pair. It fits my time frame trading.
Back testing these two prove to work better than any other two.
Now that’s an answer to the question of ‘why’. Not because this guys uses it, or even B.P’s says to.
Anyway…that’s nice.
This is what I know.
EMA is exponential moving average. In my opinion it is better than the ‘simple’ moving average because it factors in the latest moves, as the simple does not. Simple is better for longer term trading. Exponential is better for shorter term (the curves are quicker). These are the smoothed averaged price. The 8 is taking the last 8 days of price and averaging it. Same with the 21, the last 21 days. So you have a shorter averaged price line against a longer averaged price line. And you have the current price, which is the candle sticks. Their relationship to one another is important. You can see where the current price is at in regards to the last 8 averaged days, and 21 averaged days. The rule of thumb is if price is below the 8, and the 8 is below the 21, it’s in a downtrend. If price is above the 8 line and that line above the 21 line, it’s in an uptrend.
Yep, that is nice. And all this tells me is if it’s trending high, or trending low. That’s the only reason why I use it.
Anyway, where was I?
Well, I guess I was explaining where I was at some days ago. Stuck on stuff. But, guess what Journal? I believe I have come out of it. I pretty much have settled on a plan. Oh…don’t worry. Your gonna see it, whether you like it or not. All of that up there? That’s nonsense. I got some revised mind maps coming.
And I got some more good news.
I found a broker. And.
Hold on…wait for it…
I got in on my first live trade, today!
Yep. Man…I was pretty upset of how it happened. But, I pulled the trigger.
See, it’s Friday, and I’m off today. Got up early. Good. But, I did fall asleep a couple hours later. Bummer!
So, everyone is off to work. It’s 8 am. Got back to working. But fell asleep! So I woke up, with the computer on my lap (on the lazy boy) and checked the market. Bammm!!! The market was flying! My way. This is what I’ve been waiting for. So, yeah, a bit late, but I’m in as the plan dictates. See, I guess there’s a lot I didn’t explain, like exactly how I’m getting in. That will all be laid out as I put up my MM’s.
Well, bottom line is, I’m in with $100 of an account balance. In a trade, with a stop loss of $5.00, if I lose.
(Man, I wish I wasn’t sleeping! Even if I was at work, I would’ve been able to see the action. And then to take action.) See, I was struggling with whether to keep my rule of waiting for the daily candles to close. I would wait for the pullback up to the line. Then get in. But…what if that never happens? That’s the other side to the argument. And so I think that rule is no longer. Surely I will learn more as the trading goes along. I think my positioning of these levels that I am waiting for are for major breaks that will happen. Which was the case now, in my trade.
So. I will put up the trade pic now. Then I’m coming back with shot after shot of my trading plan.
The first one is the daily chart. The green line is where I sold it at. I’m going south. Red line is stop loss, my much awaited line in the sand, support line. CAD/JPY . Short. At 84.386 . Stop loss at 84.840 . No take profit yet.
This is the one hour time frame shot. Along with the account at the bottom. See that…I was sleeping when it was moving on down!!!
Mike
P.S. Sorry can’t see much.
Journal.
Here it comes.
From the top.
This is pretty much cut and dry. Everything is put into perspective. Each of those red squares is a link. That’s where the explanations happen. I even have links within those also. This is as organized as I can get it. So, these first 3 are self explainable. The trading system, the goal, and how that goal will be achieved. (#1, #2, #3)
Mike
Journal.
This will be the ‘What am I trading’ from the original MM.
This is how I pick which pair.
This is basically under what conditions I want to be trading in.
Mike
P.S. This is a link in ‘How do I know it’s occuring’. I want to see all these lines moving down. JPY strong. Daily time frame.
Journal.
This is the entry.
Trust me, there’s not much to the 8,21 EMA mind map.
So, here’s my watchlist.
Basically, whichever one of those goes below the line, I want to get in with. The NZD/JPY was already below it, but I was on the late side. So, I never got in. I drew another line lower. Today, on the CAD/JPY line was crossed. That’s why I got in. And that line is the stop loss. I want to get in lower than that. Man…I was late today so it was a 50 pip stop loss. Pretty much for me, but, hey, I stuck with the plan.
Mike
More tomorrow morning.
Journal.
Well, can’t see that too well. And that’s probably my most important MM. Here’s a close up. I split it up into the Comms, Majors (first 3, and last 4).
Mike
Hey Journal.
Ok. So I’ve been trying to solidify the rest of the MM’s. The one thing that keeps coming into my head is that all of these rules to have just might not be gospel. Yet. Look…I have to start out with something. But, I have a feeling that when the trading is happening, then I will be able to solidify the rules more. It’s kind of like (my favorite moto) ‘living and learning’. There will be mistakes, and things for me to learn. It’s impossible for me to know all what can happen at this point. I guess I just need to jump in the pool, start swimming, learn what to do when the waves come, adjust to the conditions, stay above water, tread the water, and get stronger. Oh yeah, and not to drown.
See, I don’t have any experience with trailing stops. That’s gonna be something I need to learn. So my plan basically revolves around managing the trailing stops, because that’s where my take profits will happen. I figure I would be more safe guarding the stops than (as opposed to what I did before) to wonder how much I can get. That should definitely keep me in the game longer. And I suppose also that it’s gonna take so much longer to get to my end goal as well. See…I think I have learned something. I don’t have any take profit targets, just stops. But, what I do need to master is where to place the trailing stops, and also the sizing. I am starting out with such a small size. Like the one that I’m in now. I said that I would accept losing $5.00. My position sizing hinged on that figure. And I’m not going to go the route of how much of a %. Sure it’s there, if I figured it out, but it means more to me of exactly how much of my $100 am I willing to lose.
Oh, and another thing I know is going to be an issue for me. I said that I will trade only one of those JPY pairs.
Well, what will I do if by chance more and more of those pairs cross down over their respective lines? That would mean more of a risk-off condition happening. Will I trade them?
Well, I’m thinking I would want to. But then I guess I would need to weigh out how much risk is being totaled.
See, these are the things that I just do not know at this time. I guess the principle of knowing exactly how much is at risk, will be my answer.
Ok. That’s nice.
Here’s my ‘manage’ MM.
My ‘exit’ MM.
And how my time is spent.
Oh, I just remembered. I’m gonna come back with a mind map that means something to me. I’ll explain it in detail why I came up with it.
Mike
Ok Journal.
I remember getting to the point of losing perspective. All I have been consumed with was this dog-gone strategy. Sure, you cannot deny it. This is the way, means, the heart and soul of my business. This is the primary reason for the business. Cause without a good way of generating income, there’s no point to the business at all.
But.
I believe that’s not the correct perspective to have. Having that as the only all-consuming time spent on, is being short sighted. I believe it should be the business as a whole. And that got me to thinking.
So far, up to this point in my trading career, I have had this notion that my business will not start until I go full time. Meaning, what I am doing now is trying to develop a full time trading business part time. Utilizing what time I do have (which is not entirely too much) to building something to start on.
You know what? I got to thinking. Why cannot I have a business now? Does it necessarily have to be run full time? There’s a difference between having a business run full time and having a business run part time.
And that’s what I want. My own trading business. It just has to be run part time now. Which will be different than when it’s run full time. And that leads me to be making distinguishing differences in how the strategies are developed. How I trade now should be different than how I will be later.
Well, things are about to change.
And I started out with the mind map. Here it is.
All I know is, I need to keep this perspective. There’s more to running a business than trading a strategy.
The important things I’m going to be doing is this.
Monthly income statement --Moreso, my 1st objective of the 1st goal, which is the account increasing every month. I don’t care by how much, as long as it’s more.
Weekly Learning MM’s—I need to be consistently learning. The nature of this business requires more & more knowledge, and psychological development. Everything rests in what’s in my head.
And I don’t know if you have noticed, Journal, but that middle line going down means something. At the bottom is the most important aspect of a business, the bottom line ($). But, what it takes to make that more is the process that is above it. I’m gonna add onto the ‘knowledge’ square. I need knowledge of the market & myself.
So, this MM is what I’m going to be concentrating on. I want to be answering those questions above.
This is my business. I want to run it. Now. If it’s starting out small, so be it. This is what should be more important to me. So, I’m trying to keep this as my perspective.
Ok Journal.
How about one more pic. Daily charts. This is how I monitor these 7 pairs. Here you can see where all of the lines are drawn. And where the 8 & 21 indicators are at. 8 equals the yellow line. 21 equals the green line. I will only get in when the yellow line is below the green. And price must be below the big red line. Take a look. Looks like the NZD/JPY I maybe getting in, making the red line the stop. The USD/JPY is moving down pretty good. Yellow is crossing down below the green also. The AUD/JPY moving good also.
Don’t worry Journal. You’ll know my every move. Everything will be documented. This way I can learn from my mistakes.
Mike out.