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

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.

Ok Journal.
This is my final touch ups. Now that I’m in with a trade, and something I’ve been wanting to do for so long, I will be documenting all of the details of every trade. So, 3 MM’s here.
This will be the beginning place where I will find all my trades.


Each trade will have 3 entries. ‘Entry’, ‘Manage’, ‘Exit’.

And every trade will be detailed.


Mike

Hey Journal!
Well, what a week. It’s been awhile since I had this much action. So much going on. And guess what? I’m gonna tell you all about it.
So. Journal. Unless you have been hiding under a rock this week, you must know the market sentiment.
Yes Sir. We have risk-off happening. So, just imagine what I’m thinking. Yeah man, all kinds of emotions. But, I did stick with the plan, I did make one mistake, and a lot of emotions kept in check. I’ll explain.
See, I remember, it was last Friday (a complete week ago), when I was off of work and that’s when I placed my first trade. And I think that’s when risk-off really started to kick in. I’m gonna put up a chart later to see it.
Then, Monday comes. It’s taking off even more, in which a lot of the other pairs I watch have crossed my signal line. So after work, at the end of the US session, I’m like, wanting to get in. Sure, there’s excitement! See, I have always have had a watch on what general sentiment is, and it’s been awhile since it was like this. And guess what? I kept thinking and saying to myself…“You have to be patient and wait till the close of the candle.” If it’s the real deal, then it should keep continuing, at least for more than a short period of time anyway.
After work, I’m scrambling. I’m pulling up my plan. I need to know what position sizing I’m doing. It’s all laid out on my ‘position sizing’ mind map. I mean, I do have the one pair going already, CAD/JPY. Definitely in the positive. So, the only real decision I need to make is how much am I willing to risk? I do have a cushion with the one pair, and now I’m gonna have multiple ones running. (I knew I was gonna be faced with this scenario). Ok. I’m making it only $5.00 of a risk. On each one. So, I’m looking at NZD/JPY. Their below the line. I simply run the numbers to make that happen. See, my stop loss line is already determined, cause that’s my signal line also. And in it goes. That was with 3k size, or put another way .30 a pip. Then I go to the USD/JPY. They are below the line. And again, I run it (BabyPips position size calculator) with $5.00 risk with the already laid out stop loss line. That ended up being 2k size. And one more pair I did was the AUD/JPY. That turned out to be only 1k size. And that’s it. Their all in. 4 pairs running.
One thing I noticed, which I probably would be spanked for, was the total margin level started out at around 50%-60%. Now, I’m not too versed on that factor. I haven’t studied much in the way of what’s too high, what/if that should be considered a factor anyway. I don’t know. It’s something I’m just going to remember and try to learn as I go.
Ok. So. That’s nice. Things are moving along very well as the week progressed. My account is moving up. I get excited. Then the account balance goes back down some. Sure. The emotions are there. I’m thinking things like…‘why wouldn’t I just take the profit and run?’…‘you mean I’m just gonna let the profits come my way and do nothing about it?’. But I keep telling myself that the most important thing is to keep with the plan. And the next step that my plan says that I would do (action #1) would be to move the stop loss to break even. When am I gonna do that? Yep. Good question. And see, these are the things that I just cannot think about in the planning stages. But, now, this is the time to be smart about it. And look, I’m not all that new to the game. I’ve been here before. Actually played with so much more money than this measly $100.
So…I kept telling myself this. And it helped a lot. THIS IS NOT MY MONEY YET! Sure, the account balance is moving higher and higher as the days go by. But, simply, it’s not mine. I should be more concerned about managing risk. That’s the purpose of my first action. Moving the stop loss to break even. This way my account is not in any danger. That is what is more important than anything. Ok then. Well, the market is moving like a freight train my way. I move everything up to break even a day later, I think it was Tuesday end of day. ‘Hey, if the market is moving fast, then let’s protect the account’. Meanwhile, the first trade that I got in with was wayyyyy in the positive, CAD/JPY. And this is where I made a mistake. Let me explain.
First off, as mentioned before, I haven’t used a trailing stop before. Well, now is the time to learn, I guess.
Wednesday. It figures I would do it then, because I can remember way back when, when I used to run the numbers and always see a turn at around that time of the week. Geeez. Ok, anyway. Well, that’s when I decided to put in a 50 pip trailing stop. Seems like a lot of cushion, huh? I thought. Nnnnnnope. That sucker got hit pretty quickly. I’m like, man…What do I do now? Look. It did end of being 123.1 pips / $21.78 banked money. I was at work when I noticed this happening. And I thought that I should be getting back in. So, that’s what I did. Basically on the fly. Man…what a dummy. Here I go again chasing the market. I got back in with a $5.00 risk to a stop loss. And guess what??? That got hit also!! I’m definitely chasing the market now. So, come Thursday, I got back in again. Things finally turned back around and the risk-off sentiment continued. This all transpired during Wed.'s high candlestick wick. Cause price just came back down and continued on. Well, at least I did not touch the other 3 pairs that I got running. Their stops are all at break even. AUD/JPY 100 pips, USD/JPY 50 pips, NZD/JPY 75 pips. Away out. And CAD/JPY about 40 pips.
So, what do I learn here? Uhhh…maybe don’t use trailing stops…??? Well, I don’t know about that exactly just yet. But, I do know that I have some decisions to be making here on the weekends. I do believe in a weeks time frame run. And that’s what I’ll do tomorrow (Sun morning). I’ll prepare for this up coming week, by looking at where I want my stops to be at, cause that’s where I will be taking the profit at.
Running short on time here, cause I have to work this Sat. Which means that next Friday…I’m off!!! Yay!!!

Ok Journal. Here’s some shots. The first is the field. Daily. All of the deep red lines are my signal/stop loss lines. The green lines are where I got in at. My broker is not open on the weekends, so this is all I can show you about where I’m at in the market. But, the last that I seen of my numbers on Friday was pretty much around $160.00 of a balance. So…I know…pretty scary right? I’m sitting good, for now.
BUT…THIS IS NOT MY MONEY YET!!!
It’s when the trade is over…then it’s my money.
Oh, and a shot of seeing risk-off sentiment. This started last Friday, that red line going up and down. These are one hour lines (time frame) since then.




Mike

Hey Journal.

Ok. Well, here’s my analysis, and the plan for this upcoming week.
Really, all I’m concentrating on is where my stops are going to be. But before I could do that, I had to do some research on trailing stops. Yeah, some good stuff out there. A lot of different opinions. Some like it, some don’t, you know. And as I read them all, I internalize the info whether it sits right with me or not. But, I have to say, I agree with one principle more than the others.
So, it comes down to this. I’m not going to use trailing stops. (And I remember where that whole idea came from. Terry. He suggested it. And I blindly thought it should be a good idea. But, I need to remember that this is my system.) Anyway, I would rather want to play the price action game than just any certain amount of pips. And I do remember having this as an idea already. This is what I want. I’m going to use previous days high as my continued stop losses. I can’t particularly say it to be the previous days high as a rule, cause of some exceptions. Like if you look at the USD/JPY. The last 2 days highs are pretty close, so I will use the 2nd days highs. But basically, it will be a recent days high. Also, I do believe in a days price action to be pretty important, you know the open, high, low, close. So, that’s my reasons. And I can’t say for sure when I will be doing the adjusting either. Another one of my principles has to do with what happens in a weeks time frame. I think it’s important to see where price wants to go at the end of the week also.
So, I got a good MM of my trades, and the plan to go by.
Also I think it’s important to keep track of the monthly/weekly/daily trend. I’ll shoot those shots out too. Very interesting to me what it looks like now.


Here’s the monthly charts. Starting from beginning of last year.


Here’s the weekly charts. Starting when the trend was risk-on. Yellow above Green.


Here’s the daily charts. Starting at about the beginning of March.


So, this is what we have. Monthly time frame equals risk-off. Weekly equals risk-on still. Daily equals risk-off.
Basically we had a pretty good retracement off of the risk-off, and the daily now seems to be turning it back that way again.
If I would try to think of any other scenario, maybe would be that the weekly is trying to change the trend, eventually for the monthly time frame. But we would need to see the daily come back around first. Until that happens, I think it’s a going back to the longer time frame risk-off sentiment.
I’m trying to be objective about it. I guess what will be the tell is what eventually happens on the weekly t.f.

Ok.
Thanks Journal.
Mike out.

Hey Mike!

I know for a fact that there some regular contributors to the forum that really want you to do well.

Now that you are back in the market at a reduced capitalisation level; what you are effectively doing is forward testing. Any type of testing should have an aim and a procedure. At the end of it you should have data which allows you to trade your strategy in the most efficient and profitable manner whilst staying withing your overall risk parameters shouldn’t it?

What sort of data are you hoping to get from taking trades “on the fly”, or what does a $21 win tell you?
Should forward testing give you the same thrill and excitement as playing in the Superbowl?

If you don’t learn from the mistakes you made the last time out you are in for more of the same, I don’t think that anyone wants to see that.

Win

Win…

I thought about what you have wrote. For a few days now. Very carefully. So, let’s take this point by point.

What I am doing is forward testing. Sure. At my first instance of seeing that, it seems like it’s a bad thing. To be honest, my first feelings are to get defensive. Cause everyone knows that you should have done the backtesting trials first, to get proof, data, etc…then, because of that, therefore trade that way. That’s taking the statistical edge (of history) and applying it (to the future) .
Well, I’m not going to do that. Why? Because, first and foremost, I don’t know how. I don’t like using the MT4 platform. I’m not a computer geek or anything close to that. And I’m not going to spend hours and hours learning something that gets me to knowing what has happened in the past. And that leads me to another point.
I am not going to put a lot of stock (weight) on the past. And to clarify myself (which I guess I must continually be doing here), ‘put a lot of stock’ means to some degree. That doesn’t mean I don’t believe it’s true that the past doesn’t occur again in the future. Sure it can. We just don’t know when it’s gonna happen in the future. I do believe things happen over and over again, like price action. We can see very large candle stick wicks with hardly any bodies to them. Yeah, normally we know what is going to happen. One way or the other, it’s gonna move. So, my point is…I do believe things that have happened in the past will happen in the future. And it is possible to find that statistical edge, by back testing a whole data set the number of times of it occurring again in the future. Sure. It is possible. And people do it all the time. But, principally, I don’t want to bank on what happened in the past to happen in the future. I think there’s too many other variables, factors, in play that cause an outcome. That whole concept of coming up with a strategy based on doing it that way just does not fit right with me. I don’t like it. I would be doing something that is not me. I would be doing it your way. Not mine. The best that we can agree upon is principles. That is something that can be black and white. What works in the market and what doesn’t work in the market. Principally speaking.

Therefore, I do realize that I am forward testing. Thanks to you for letting it be known. And I accept it. I have many reasons. For one, I want this ship to get moving. I want to see progress. If I allow myself to perfect everything before I jump in, then I probably will never get off the ground. I believe in learning from experience, moreso than history lessons, (forward testing than back testing). That’s a principle. And I hope you see the word moreso. Cause it doesn’t mean that I don’t believe in history lessons. Take for example risk-on/risk-off. It happened in the past, and I know it probably will happen in the future. And that’s predominantly the way I look at the market. Whenever I see risk-off occurring, then I should think about getting in. When it’s risk-on sentiment, then I should not be getting in the market.

Any type of testing should have an aim and a procedure. At the end of it you should have data which allows you to trade your strategy in the most efficient and profitable manner whilst staying withing your overall risk parameters shouldn’t it?

What your talking about there seems to be back testing. Cause you say ‘at the end of it’…‘which allows you’ …So this is something that should happen before you trade. It’s a prerequisite to trading.
Well, I don’t agree. This is your take. This is your way. And I don’t believe it’s the only way. Sure, your probably successful. And you always have good advise to give. But, what I want is principles. Like I was taught, “there’s many methodologies but few principles…”

And you think I’m taking trades on the fly? I guess I have to explain myself again.
This is how I trade.
Risk-off happening in the market, I can be in a trade. Risk-on I’m not in the market.
The levels are set on each of the 7 pairs that is possible for me to trade. These levels are support levels. They also will be my stop losses. I get in the market when price goes below this level, using that level for the stop loss and for calculating the position size. I will get out of the trade when I’m stopped out. If price keeps moving in the right direction, I move my stop loss to break even first. Then, if continually moving, I move it on down more. What I am doing is reacting to the market movement. It’s a defensive type of trading, because I am not planning on taking profit anywhere. If the market is going to move, I will make more money, if not, then I’m protected. I have given up on trying to determine how much can I make. I think that my strategy is based upon the principle of ‘let your winners run while cutting your losses short’.
I want to trade in the present. I’m trying to follow what the market wants to do.
Now…how can we even have a conversation together when we have two completely different ideologies?
I can’t back test what the market is going to do. I want to trade according to principles. Show me a principle of where I am wrong. What I am doing is following a plan.
Sure, this is gonna take a long time to perfect, well for better and better anyway. But, I’m more concerned with progress than anything.
Oh, and if you think that I won’t get any data from this, your mistaken. It’s called live and learn. I will learn something from each and every trade that takes place. It’s even possible for me to collect past, present, and future data if I wanted to (if I was a data freak), as opposed to simply just back testing.
It’s simple.
I’m in when a certain market condition is happening.
While protecting myself.
Learning how to navigate my stop losses for profit.

This is all a process. Including this thread. This is the way I trade. BY PRINCIPLE.
And the only thing I ever got out of you, that was constructive, was the principle of following a plan. Sure, that is good stuff. And I’ve always have known that. But now I finally have a plan. And it does not require back testing. I’m a forward tester.
So be it.

Mike

Journal…Me and You…ONLY.

Well, boy, do I have some work to do. Live and learn. And this is the place where I need to hash it out.
What a week it has been! Man, where do I start. Trying to think how to organize this.
I’ll tell the story, then I need to go over the trades. And that’s what I’m looking forward to, cause there’s a lot of adjustment I will to be doing.
So, basically, in the beginning of the week, things were going so well. My account kept going higher and higher. At the same time, (like I have mentioned earlier) all I was doing was telling myself over and over…and over and over again, no lie, ‘this is not my money, until the trades are over’. And you know what? I believe it to be true. I follow the plan. It’s funny…cause at my work place I have a good buddy who follows what I’m doing. He keeps asking me, ‘So Mike, how’s the account doing?’ And this happens multiple times in a day. I remember him saying, ‘Man, Mike, you need to jump out and take the profit’. That started when the account was at $40 higher. Then I remember him saying it again at around $60 higher. And then I said that if I had listened to you back at 40, then what? But I have always had told him, ‘nope Jay, I must stick to the plan…I’m riding out the trend’. ‘But I am moving up my stop losses’. So, time is passing by, and I show him the balances…$80…then my account doubled. I was up to an account balance of $200. He couldn’t believe it. And trust me Journal, honestly, I kept saying to myself over and over again that it’s just not my money yet. But, again, honestly, the mind remembers what’s going on. Surely I don’t want to see it all go away. Am I prepared for the drop??? I did tell myself that it’s probably gonna happen.
And it did.
Reality took over.
Approaching mid week, things were changing. And what made matters worse was I kept telling myself that it’s the end of the month happening. Not only that, I realized that it’s the end of the quarter also! I know there will be a lot of squaring up of accounts going on and it’s more of a skew of price action than where price wants to go. Now, of course, I can be wrong about that. But that’s what was going through my mind.
My account is dropping.
Man…I am mesmerized. I realize it also. It is an evil. There ain’t a couple hours passing by that I’m not checking my phone. I’M A SLAVE TO THIS!! And I hate it. This is all what’s going through my mind while this is going on. My account is dropping. I still keep telling myself that it’s not my money! For as much as I am battling this mind game, there’s a deeper, stronger part of myself that just cannot relax. It’s like there’s 3 Mike’s here. The outer Mike, which is the physical one. This is what I end up doing in this real world. Then there’s the smart(er) one that is telling me to be patient, stick to the plan, just giving me as much advise as I possibly can. And then, there’s the one deep inside that is only seeing the bottom line $ amount. He don’t care what happens afterwards, whether I keep to the plan or not, or even what will be the next course of action. It’s the here and now only. It’s what the account looks like…that’s it.
I am remembering what the plan is. And that’s my take profit. What I am doing is trading defensively. But, I guess I forgot that part. Things have been going so very well, that my mind kind of dropped the focus off of losing to how much am I going to win.
It’s a struggle. I realized it while I went through it. And now, I am going to do something about it. Believe me Journal, I have already started a mind map on how to rectify this problem. In fact, I started a major mind map folder. I will be keeping a ‘PROBLEM’ folder. Those things that I absolutely need to get under control, with solutions/course of actions, will be filed there. I’ll share that with you later.
So anyway…yep…there goes my account. Down.
Shaved off, bit by bit.
I’m [I]watching[/I] it, just too much. I have noticed how my brain remembers where the account went up to. That’s kind of funny. Sure, rub it in why don’t ya brain.
$200 was the top. $180 …ok, still not bad. Actually not bad at all. $160 …uh oh. Not good. Getting worried. $140 …yep, starting to panic now. (‘end of month, end of month’) … Geeez. Is this gonna continue?
$130… OK …I had enough. I watched it bounce back up a little bit. And sure enough, I’m out. Jumped completely.
I can’t believe I did it. I did the unthinkable. I honestly didn’t think that I would end up doing that. And my excuse was the end of the month. Well, then I promised myself that I would not get in any more until at least after April starts. I must have jumped around Wednesday morning, cause I remember at work for 2 days not looking at my phone anymore. There was no reason to. And I did keep my promise. I was done for the month, trading wise. Although I would take a peek at the market as I was working. I remember seeing it at a point where I thought it was gonna come on back down (my way). I had a sinking feeling in my stomach. I thought I made a mistake. But a couple hours later I checked and it was a real fake out. The market did end up going back up. Man…I tell ya…this intraday movements are really evil. For me. I cannot handle it. I know and keep reminding myself that I trade in the longer term. Well, it’s actually medium to longer. And yet I realize that I [I]watch[/I] the market way too much. I [I]watch[/I] it as a day trader, but trade it as a swing trader. Well, my strategy dictates it as swing trading. I do remember my principle. And I have questioned it to myself many, many times. How much do I believe in the daily time frame? I’m telling you Journal, I have asked myself that over and over again. I DO BELIEVE IT. I WANT TO BELIEVE IT. But why then cannot I act accordingly??? Meaning that it’s important to find where price wants to end up at the end of the day.
Well, things are gonna change. I’m putting in a rule. I’ve contemplated this so much before hand, because I know myself. I know how to obey. In fact, I will even say that nobody knows how to obey more than me.
Growing up with a step dad who knew how to punish me. Who didn’t hesitate to bend us kids over the bed many times. I have heard those words just too many times!!! [I]Bend Over[/I]
No one obeys directives more than me.
And then even to get shipped off to the Army, (my Mom highly suggested) shortly after high school. Like I hadn’t had enough beatings, the Army basic training would finish it off. That was not fun for me. And then for the next 6 yrs of taking orders. Just not free.
No one knows how to be obedient more than me.
I know how to obey, and I will obey myself. Now that’s who I want to obey, anyway.
See, I want this more than anything. This is my business. I can be true to myself. I can get to the bottom of myself. I will fight. And I will take care of these problems with the utmost of fervor. So, therefore, I know what my biggest problem is right now.
Take a guess Journal.
[B][I]Watching the Market[/I][/B]
I will not watch the market anymore. My privileges are gone. I don’t deserve to satisfy my curiosity about what’s going on, anymore. This has to be a rule of mine. Sure, I have a lot of other issues to hash out, but this being in place will alleviate many trading problems. If it’s true that I believe in end of day price, I need to see it before I make any kind of decisions. I guess what I really need to concentrate on is truly operating within the confines of my time frame trading. It’s longer term Mike.

Ok. That’s nice.
So, I have to take apart my trades.
That’s up next.

Mike

1 Like

Ok Journal.
Here we go. Trade by trade.
USD/JPY


First off, the top red line has always been my signal line. And that means that it’s the line that when price goes below it, will be when I get in a trade and that being my stop loss. I remember that Tuesday the 21st. I waited to the end of day to get in (after work). So, the bright green line is where I got in at. And the red line above being the stop loss. So, my first action was moving my stop loss to break even (bright green line). That was done. Then my next action taken was moving the stop loss into profit, which is the next green line down. That was the high price on the 23rd. Price kept moving down. Then I moved the stop loss even further (a little bit more) to the next high, on the 24th. Then comes Monday the 27th. Price opens quite low, and drops even lower. I’m so into profit at this time. Well, we can see (hindsight of course) what happened this week. Big bounce on up. Pretty much everyday. The blue line is where I jumped on out of all my trades. I forget whether it was the 28th or 29th when I jumped.
So, now that I’m on the other side of it. I want to talk about it, and learn something. What should I have done? Well, what was the plan to begin with? Mind you that I know that this is where I need to learn something for the future. Cause I know I need to have a better exit plan. Well, as I remember it, my plan is to ride out the trend. So, what would’ve happened if I had followed the plan to the T. I would’ve gotten stopped out at my latest stop loss. And the profit would’ve been 25 pips and somewhere around $4. or $5. But…I did mess it all up and luckily ended up with 66 pips and $11.
But what I really want to do is look at what’s happened/ happening. If I would’ve just stayed in period, I would’ve gotten stopped out at every level that ever was. All the way up to my original stop loss, signal line.
And now price has come back on down and seems like it wants to continue on with the trend.
Boy, I’m kinda stuck. Cause look. My principle does hold true. Daily ending of price. On the last day, Friday, price did climb up to great heights, but did end up down. Ok, so it’s nice knowing that that holds true. I can hold off, and when I don’t look at the market anymore other than at the end of the day. But what about my principle of having a stop loss established? Surely I cannot make it that I don’t have one anymore. It seems like those guys are doing a good job of taking out everyone’s stops. And it would’ve been me, if I didn’t do the stupid stunt that I did. nod,nod,nod…not good I realize that the worst thing that I can do is to not follow the plan, more than losing money. But, ok, so how do I rectify this? That top line means this to me. It’s my signal line. I simply do not want to be in the market above it. And if it gets broken, then I guess I get stopped out. Or…how about this…why don’t I just make it a rule to have that as a silent stop out place, and not marked. Since I will be only looking at end of day price, it won’t have an effect on me. Well, then again, what if price goes above it strongly and doesn’t turn back around. Yep. Then I’m screwed. I cannot assume this is going to happen the same way in the future.
So, looks like it’s a good plan to stick with: FIRST protecting the account by moving the stop to break even. This way I’m not going to lose. Then it’s to lock in some profit. And sure, I would’ve chalked up a little bit. Ok. Not as much as I could have, but I guess that’s just the name of the game. What happens afterwards I’m just going to have to deal with it. And it looks like I will basically have 2 options. Price will either continue back on down with the trend, or it’s not. In this case, it shot way on up, cleared out many stops, but came on down. I wonder if the end of the month play contributed to this spike?
So, I need to incorporate another entry plan. And I knew this. I remember wanting to come back in with the small lot sizing like starting back over. And that’s what I will do. Rinse and repeat. But, what’s gonna be my initial stop loss? Gonna figure this out now.

Ok. I’m back. Took a good look at, monthly trend, weekly, daily, and the level. This is what I determine.
I seriously don’t think price is gonna close above 111.73 , also I think the 112.00 level is good for the stop loss. So, I’m going to use that 112 level again, and calculate my loss to be $5.00. I can lose that much, but I don’t want to lose any more than that. Yeah, I do have more in the account, but I figure that with trading these other pairs will weigh on the risk also. So, that’s gonna be the plan for this pair.

Geeeez. One down, 8 to go.
I’ll try to shorten these.

Mike

Journal.

NZD/JPY This one was pretty cut and dry. Man, we are talking about weak/strong here.


Again, the top line is my signal/initial stop loss line. The bright green line is where I got in at. I first moved my stop loss to break even. Then on down (darker colors). I used previous days highs for the stop losses into profit. And the lowest blue line is where I jumped out of all the trades. Again…not good, but that’s what happened. As we will see on all of the JPY pairs, this past week was a weaker one for the Yen. But, in this case, the NZD, is quite weak itself. Just look at how high they can only get up to. Not all that much. And the last day there, well, that’s telling.
So, what would’ve happened if I went strickly with the plan? I would’ve gotten stopped out at about +40 pips or $7,8 . Instead it was $17. Look, I know this is gonna be like an art-form trying to learn how to navigate my stops/take profit lines. If you see, it’s possible that if I was lazy enough to keep it away a little bit more, I could’ve prevented getting stopped out and another entry. Cause now it sure looks like it wants to continue.
Just like with the USD. Btw…they all look pretty much the same, as we will see.
So, what’s the plan?
Well, I see the high from last week as being major. I seriously don’t think that will be broken. And if it does, then I don’t want to be in. This is 78. 40 .I will make that my initial stop loss, with not losing more than $5.00.

That’s the plan.
I got to thinking. When am I going to get in? Should I wait to see what happens at the open? Should I wait a day? Well, nope. If I can afford to lose $5.00, I would rather lose that than to miss out on the opportunities that may lie ahead. Plus the fact that I think that last strong red candle is meaningful. If price just nothing but climbs up and hits it, it deserves to take my fin.

And as always, what I need to remember is I’m playing defensively. My first actions are to move the stop loss to break even.

Come to think about it…all of my problems that happened this week…ARE GOOD PROBLEMS!!! At least I’m still in the green. I haven’t been talking about how much I have lost, because I surely have not lost anything. That’s still an evil to think that all that profit showing in my account was mine.
Nnnnnnnnnope.

Mike

Journal.

Well, I guess we have to talk ugly. It ended up that way anyway.
AUD/JPY.
I ended up taking 3 trades with this pair. The first one was good. But the subsequent ones were not. Actually I remember when I took the 2nd trade. I thought I might see it differently, but my broker shows other trades all by themselves. Ok, now I know. Live and learn.
Here’s the first one.


Again, the bright green is where I got in at, with my stop loss above. I kept moving it down. And the last one (at 85.08) just simply got stopped out. I can live with that. Hindsight tells me that all of the stops were broken and I would’ve gotten stopped out, except for the original signal/stop line. Ok. That’s nice to know. I guess.
What can this tell me? Anything? Well, maybe I did a better job at coming up with that original line better than I did with the USD/JPY. Cause remember that one got shot out of the sky. But not this one. Anyways…I understand that this sort of thing is always gonna happen. I’ll never be always right. And I’ll never be always wrong.

Now, this is where I went wrong.


When price went down this far. I put in another 1k trade, there, at the green line. OK. I admit it. That was stupid. Did I think that price will just continue on down forever? I mean, this is what a brand new trader does. I wasn’t thinking. I guess I was caught up in how much it was diving. Ok, maybe I got greedy. What else would explain my putting on more size to a runaway train? I did think that 1k wasn’t a whole lot of size to begin with. So that did contribute to the reason. Anyway, what I want to remember is this. Kind of like a principle.
Man…I keep thinking of planning on making another mind map folder, called PRINCIPLES. I want to collect and keep abreast of all my principles. Those I should not break. And are like cardinal sins.
Anyway, I should make one saying that price is gonna want to retreat back up. Or at least prepare myself for that action. Look, I do know that it happens. That’s the reason for the whole Fibonacci retracement stuff. People wait for those. I know that stuff. But, even that is always never guaranteed to happen. Anyway, my point is I just was not thinking about that when I placed that trade.

And what possessed me to take this trade? Another AUD/JPY.


I jumped in when price was climbing, thinking it had enough. Put in a stop loss, which is the top most red line. But, then the lower red line is where I jumped out of everything. Even this trade.
This is another result of the problem of watching the market and making moves because of that evil.
So, this problem will be rectified.

Well, my plan?
I’m gonna move my signal line down from 86.00 to 85.76 (the high from last week). I’ll use that, and get in with losing no more than $5.00. Same as the NZD/JPY.
Another thing I’m realizing, is that I do prefer to trade the Comms against the Yen, than a Major to the Yen.

Mike

1 Like

Journal.
How about my CAD/JPY.


Remember this one. At the top left corner, when I fell asleep that Friday? I woke up, first time experiencing a break of my signal line strategy. Then jumped in at the green line. Then Monday, Tuesday came. I hung in there. I even remember when price just about wanted to catch my stop loss. For some reason I was cool as a cucumber at that point. So, price just dove after that. Then dummy me tried to put in a 50 pip trailing stop. That was at the 4th candle from the left. Well, learned a lesson from that. No more t.s’s. That red line ended up being wherever 50 pips was since I entered it. And then I was out.

Well, I got to run.
I’ll catch up with you later Journal.

Oh, how about one more pic.
Well, my broker is not open at the moment, so I’ll show the results of my 9 trades. In total.


Mike

Hey Journal.

Well it was a good week. And you want to know why? Cause I am finally getting to the bottom of my strategy.
I think I know why also. Remember my newly established rule? Yep, I am not watching the market anymore. I can tell it makes a difference in my thinking and actions. I’m staying within my time frame trading.
So it was last Sun night, when the market opens, and I had plans on getting in on some trades. There’s a good reason too! Because the sentiment has definitely been risk-off and no one can deny it. Well you know what that means…I should be in the market. I had plans. But. My new rule is to only look at the end of day. Was Sun night open the end of day? Nope. Well, that was going through my head at the time. But now when I think about it, it is actually the end of day Friday. Same thing. So anyway. I was struggling with wanting to get in and this emotional desire. I realized it. And that is precisely not what I want to become, an emotional trader. Well, at least, not to be trading because of my emotions. Regardless, I chose not to trade, and also I chose not to look at the market either. This is called being in touch with one’s self. It was a good lesson.
I know I’m going to learn more about my trading as I get these principles down. So therefore, that freed me up this week for some other realizing. Cause when I’m not watching the market, I’m able to solidify my trading system more and more. (What else am I going to do right?) So, I’m going to get into that in a bit.
But, interestingly, what happened was come Monday night…guess what. I take a look at the end of day prices. Sure enough. Down, down, down, everything goes. Risk off is on the move again. I looked at what I wanted to do. Yep. Man. I would’ve been golden. But… I know the drill. Hindsight, hindsight, hindsight. Woulda…Coulda…Shoulda. That’s getting old. So what. I stuck to wanting to prove a point to myself. And that’s what I did. There will be other opportunities. Plus the month is young. So, let’s just move on. And I did.
More importantly, I solidified my strategy this week. I had a revelation. And it hit me pretty hard. I’m very excited about this. This is something that has been with me (in my mind) for such a long time. And now I’m ready to implement it.
Here we go. Big picture. Principles.
-I want to be in on a trend from beginning to end. (closest point in hindsight for the beginning anyway)
-If it’s trending, I’m in it.
-If it’s not trending, I’m not in it.
-I trade defensively. Meaning my take profits will be at the point where it’s not trending anymore.

So, this is what I want to come true. And in order for that to happen, I had to dissect a trend. (BTW…I have done this so many times in the past, but this was gonna be the last time) I found that there are only a couple of very important components to a trend. I thought about researching a trend, but no. It can be subjective, but some things are undeniable about it. This is what I got.
-Every trend has a beginning.
-You have swing highs and swing lows.
-Every trend has an end.
That is it.
Now, I trade the JPY. So I will be dealing with trends going down. Therefore all I will be concerned with is the swing highs. That will be my stop losses. Because if it breaks the latest swing high, then it will be considered not trending anymore.
The only hard part is going to be how to get in. It’s possible to get in on a trend and lose quite a bit. Like the worst possible scenario is getting in at the support line (bottom) and it goes all the way up to the resistance line and then continues up, which breaks the trend, and won’t be anymore. That’s losing a lot of money. Now, the best possible scenario is getting in at the top of a retracement, because that would be the closest point to where it breaks the trend, if it went bad. And if it’s a good trade, then it will go down all the way to the support line, and to then break through it, would be so ideal.
Ok, so my first point is this. Getting in at a good point in the trend is the hardest part.
My second point is this. The rest of the trade is easy. If it continues to trend I will make money. The steeper the trend, the more money. And if more legs in the trend, then more money.
All I will have to do is change my stop losses to the latest swing highs. And that, of course, will be after the fact.
I believe long trends happen on the higher time frames. From the daily on up. Also, I wondered about how to compound. This, I believe, happens by the fact of trading the other JPY pairs. But, I’m gonna take this aspect slow for now. I have to experience being in trends that have multiple legs to them first. Cause it seems plausible that if a trend is moving into another leg, then I could just start over with the smallest size again. And all I would lose is that particular trade if it went bad. It would be separate than the first one.
But I’m not going to think about that yet, honestly. I need to get comfortable with being in trades that are trending first.
This is what I want to see happen now. If I’m in a trade, it will be trending. And I will only be getting out of it if it goes to not trending anymore. I want to take all the bumps and bruises that go along with being in a trend. And the market will be what bumps me out. NOT ME!!!
See, I have never traded this way. I have always been the the reason why I got out of a trade. But what I want is the market to be the deciding factor. I think the market is smarter than me. And I need to rely on that fact. The market does trend. I don’t know about you, but all I see on the daily and higher time frames are some really big trends. That tells me that the market does and will trend. That means money. Not a loss. Sure there are the times after a long trend that it goes back and forth for a time, only then to begin on another trend. So, in the end, I believe, the probabilities favor a trend. That’s the edge I’m playing. And I’m not talking about every pair out there. I’m talking about the 7 JPY pairs. Daily, Weekly, Monthly time frames.
The 3 Comms out weigh the other 4, in my book also.
I am getting really excited about this. Because I’m going to prove that these principles are true.
I have to mention this. If there’s one quote that was ever said here on BabyPips that stuck in my mind, that made such an impression to how I want to trade, it was this. From Mastergunner. Been a long time ago, but he said this in his thread. “If it’s trending, I’m in it”. Ok, so that really isn’t earth shattering. But, it actually shook my world. And now, I’m gonna make that a reality in my trading. All I want to do is prove that I can be successful with this strategy. And eventually this is what I want to be true. Whatever JPY pair is trending, I am in it. Meaning, all of them that is trending I’m in with. But, that’s gonna take some time to achieve. I need more money in the bank, even to have the smallest position size on each one. 1K is the smallest I can go right now. And that’s too big for me to go even 3 or 4 pairs now.
But guess what? I’m going to buck up some more to my account. I’m planning on adding another $200.
That will give me a little bit more to play with.

Ok Journal. I got to run.
I’m gonna come back. With the plan that I will embark on this week.

Mike

1 Like

Hey Journal!

Yep, your buddy Mike here.
So, it’s looking good for me to finally get some typing done this weekend. You know I love to type. And not only that, I love to put all things into perspective. And that’s the plan this weekend. I should have plenty of time for it. I just feel like talking about many different things, that I’ve been wanting to lately.
Well, I guess I’m gonna have to talk about my trades later. My broker has the system maintenance update going on now. I want to show you the running totals when I talk about the trades. So, I’ll save that for later.
Not to spoil anything, but things are looking very good for me!
And I need to tell you Journal…boy…I have made huge strides by implementing my newly found rule. Checking what’s going on in the market at the end of day. Only. That, in itself, has changed me. It has slowed me down, big time. And doesn’t it only make sense? I’m trading swing style. Meaning, what price does in between what happens in a day just does not concern me. That would be concerning to a day trader. Also, I can feel the emotional struggle, hopes/wishing/rooting , have all vanished. I don’t have to deal with that anymore. Cause I just took that possibility off the table. Easy as that. See, and all of that was just something I’ve been doing since the beginning. I mean, I love the market! It’s interesting! It all became a habit for me to know what’s going on. I surely didn’t think that was a bad thing. Who would have thought? Well, ok, it’s not a bad thing in itself. No. It’s just like anything. Like when we come home from work. What’s the first thing we do? Turn on the t.v. and watch the news, during dinner. It’s interesting stuff! But…when the possibility is there for me to take action due to those swings of price, therefore I shouldn’t even be expose to it anymore. It kind of reminds me of someone who goes to AA. After they get sober, do you think it’s a good idea to offer them a drink, say if you went out to dinner together? No way. That was a big problem for them at one time. Big problems require big measures to be taken afterwards. So, for me, as an addict to the market, …I guess this rule is the only solution. But, you know, I have to back this up a little. Cause this rule originates from a principle. And that principle is this. I believe in the meaning of the daily time frame. It’s beginning price and end price being the most important information. Along with that principle, is the principle of trading within your time frame. Mine is swing trading, days to weeks. Therefore nothing shorter than a day is of any relevance to me.
Needless to say, those are some good points. But another point to be made is, that I haven’t established a concrete, formidable trading plan yet. Well, one that I’m completely satisfied with anyway. And this rule established and obeyed has opened my eyes to how I should be trading. And what got me there in the first place is believing in trading by principles. Not by a specific methodology. I think there’s a difference.
I don’t know, maybe it could be true that principles should precede a methodology. Or even that a true methodology derives from principles.
Yeah…ok…that’s nice…anyway.
What else did I want to talk about?
I remember now. This has been bugging me more and more as I have been progressing along nicely.
My system is really simple. If it’s (JPY pairs) trending, I’m in it. If it’s not trending, I’m not in it. And since it’s so simple, I figured I could find an easy way to keep track of when it’s trending or not. At first, I was trying to mind map it. Uhhhhh…no…That didn’t work out. But I did come up with something. This brought me back to my Excel days. Man…I had so many tables and charts, it was unbelievable. But now, I got the table. This is going to track my seven pairs. It will be an on going thing. I will be able to see when a trend starts and ends. And also this will help me with keeping the strategy. As I have said, I am going to prove that being in a trend from beginning to end will be profitable, and that’s my edge. I’m sure I have a lot of work ahead of me in refining the entries and exits.
So, this is the table I will be using.


Let me explain. It’s all obvious. I’m keeping track of all 7 JPY pairs. The top 4 are the major pairs, and the last 3 are the commodity pairs. I’m keeping track of the monthly, weekly, and daily trends. If it’s green, the JPY is trending high. If it’s red, the JPY is not trending high. So, in each day, I can see in which time frame if the JPY is trending or not. The only other colored rectangle is yellow. That means I got in the trade at that time. And am staying in it, until it’s not green anymore. It will be red. That’s when I will get out. Probably will make it another yellow rectangle. So, you can see that I am in the CHF/JPY trade. Also the 3 commodity pairs. And they are all on the daily time frame. One of these days I will get in on the longer time frames. Like for instance, look at the CHF/JPY pair. I happened to get in on that trade the very day that they turned trending high on the weekly time frame. I thought about it. Should I automatically make it trending on the weekly time frame, now in hindsight? Well, that wasn’t the original plan. So, I’m gonna keep it on the daily time frame.
At the top left, we have USD/JPY. So, I started the time table to begin on March 15th. That’s the first time the JPY started to trend high against the USD, on the daily time frame. Look down the GBP/JPY. The JPY started to trend high against the Pound on Feb 24th. So, there’s perspective to see against all of the other currencies. And how about the time frames. On the monthly, the JPY has been trending high for such a long time, across the board. But, on the weekly, the Yen has only gotten back into trending high recently. Mind you that will change after every 5 days. This past week was the first week that they are trending high against everyone on all time frames. So, needless to say, the Yen has been very strong lately. But why haven’t I gotten in on the other 3 pairs? Well, first off, I’m still at the beginning of the entire strategy. And it requires an easing into it. Another reason is because I’m not playing with a whole lot of money. I did explain that even if I went in with only 1k on everyone, that would be too high a margin taken up. Maybe not enough even.
Also the timing has to be right. I don’t want to get in on a trade when it’s going to retrace immediately. It’s tough right now because they are trending so strongly and I haven’t seen a good retracement. Yeah…like I did a few weeks ago, and got so scared, moved up my stop losses, got stopped out, jumped out of everything. That all was such a stupid mistake. But, I made rules since then, and solidified my exits. Live and Learn. Now is the time to have such a table as this, because I can (1) keep track of when it’s trending and (2) compare my trades to the trends. Sure, it’s easy now when there’s a strong trend happening, but I know that there will come a time when it’s time for ranging, and fake outs happen. That’s when I have to learn how to stay out of the market.
You know…it was only a few weeks ago that I was in on mostly every pair. If I would’ve only stayed in… But, from now on, this is how I trade. I am convicted, that no matter what, in the end, the trend will be profitable, on these time frames.

So, all this stuff brought me back to some really interesting stuff here on BabyPips. I touched on it last time. Well, I’m going to come back with it. This is (was) the source of my entire trending knowledge.

Mike

1 Like

Hey Journal.
So, I have all my ducks in a row now. This is, when I think about it, my roots. These things that are gonna be mentioned is what hit me so hard. It is my truth. You know, there’s really nothing new out there. Everyone has their own individual style. And it’s all nothing but a little bit of here and there. But now, I’m going to show you where I’ve picked up my truths from. I’ll start from the beginning and move chronologically.
This is all from Mastergunners ‘Forex Portfolio’ thread.

As a result, I’m able to capture all of the trends. If you ever see a lengthy trend in the markets, I was in it. That’s what I hold out for. Large pip movements. I’m not trying to get 10 or 20 pips. That requires too much work for too much risk and it takes too much time. As Sweet Brown would say, “Ain’t nobody got time for that!”

Price movement has to be respected. It is extremely volatile, and when you try to contain it, you’ll find the angst of unnecessarily triggering losses. You’ll never hear me complain that I’m being stop hunted. Ever. Furthermore, I trade price action. I don’t use instruments to guess which direction price is going to move. I simply move in the direction of price. While that sounds so simple, it really isn’t. I as well am no fortune teller, and though I enter into the overall direction of price, price still does what it does and trades do turn against me.

That’s right, I never ever set a take profit target. There would be no way I would be able to let a trend run it’s course if I were to sit there and pull out of a trade after an arbitrary amount of pips. When a trend comes to an end, it shows in price action. And that’s when I will enter a stop loss, locking in some pips and giving price an opportunity to continue on the path I want it to go.

I got news for you. The market doesn’t care what your trading plan is. You can add up all the math you want and it won’t make a lick of difference. You don’t control the market and you never will.

Whether you aim for 20 pips a day, or limit yourself to five trades a week, you are only creating an atmosphere where you are limiting your potential.

Your goal should be one thing, and one thing only. And that is to maintain an edge in the market. For if you have an edge, the results will be self evident.

I don’t, and certainly the market, doesn’t care what your goal is. I care about what you did. For what you say you can do, what you add up in your excel sheet, what your calculator computes doesn’t mean a thing until the deal is done.

Your trading methodology will dictate what you get out of the market. You don’t have a say in it. So get over it.

My methodology on average reaps me a little over 60 pips a trade. So knowing that wouldn’t I want to swing the bat as many times as possible? I’m not going to say, okay, I’m just going to swing twice and that’s it. Makes no sense. I want to trade as often as I can given what my methodology will output.

So quit dreaming. Forget adding up the dollars that aren’t there. Focus on developing your edge. And when you have it, use it to exploit the market as often and as profitably as you can.

Ok Journal. Now, isn’t that just priceless? I mean, I can just see what Mastergunner is really saying. He has taken a step back from the in and out, day trading scenario and focused on one thing only. That’s riding out the trends. Any of them, and, in fact, all of them. This is a methodology. It has been said over and over again. Meaning it’s not a specific trading strategy. And what I see here is principles. He’s riding out longer term trends. It is really that simple. He feels so strongly about his method that he feels it’s necessary to not contain it to just one pair. It’s an edge. And he will use it on any pair that is trending.
That is another confirmation to me that on the daily time frame and above that there are long lasting trends that do occur. So…you get the idea.
Another huge factor within that thread that affected me was only one other person. Without a doubt, the smartest guy ever to step foot in BabyPips, the genius of all genius’s. Intelligence upon intelligence. The most respected person who I have never met personally, but regard as the Einstein of Forex.Clint Eastwood. Only because of my age am I able to discern how intelligent, thorough, knowledgeable, and …old. (Look, I don’t know for sure, but he has to be very old, because I fully believe in the older you are the smarter you are). In my mind, when Clint talks, you need to listen. And guess what? Yep, he was involved in the thread. And it was the things that he said that really grabbed me. It’s because he talked about what was the heart and soul of the methodology. [B]THE TREND[/B]
And here’s some of his wisdom.

The following comments aren’t necessarily directed at Raj, as he seems to have things under control. Rather, these comments are directed to any newcomers to this thread who might be attempting to use the MG99 methodology, but — instead of achieving dramatic profits — are experiencing unacceptably large losses.

This thread presents a powerful methodology, the MG99 Portfolio Methodology, which can supercharge the trading results of almost any swing trader who is already consistently profitable.

And therein lies an important caveat —

If you are not already successful placing individual swing trades, one at a time — do not count on this methodology to somehow magically transform you into a successful swing trader. In other words, you can’t blindly toss a bunch of bad swing trades into a portfolio, and expect a few winners to compensate for all the losers.

This is not a shotgun approach to trade selection.
Instead, this methodology will simply amplify what you are already doing.

If you are already swing trading successfully, this methodology will accelerate your winnings. If you can achieve overall profitability making five, or ten, or twenty consecutive swing trades, then this portfolio methodology offers you a way to trade all five, or ten, or twenty positions simultaneously — multiplying your profitability — without creating intolerable overall risk.

On the other hand, if you are an unsuccessful swing trader — heading for an ultimate crash and burn — this methodology will simply ensure that you crash and burn sooner, and more dramatically.

So, before adding the MG99 Portfolio Methodology to your trading strategy, make sure your trading strategy is profitable over the long term.

If your swing trading is not yet consistently profitable, week after week, and month after month — without this methodology — then, before you consider adding this methodology to your current trading strategy, your first task is to develop your swing trading skills.

I recommend that you spend some serious study time examining the swing trading strategies detailed here in the Show me the money! [Swing Trading] forum, and in the Free Forex Trading Systems forum. There are some good strategies outlined in those two forums, and you should be able to find one that fits your preferred way of trading.

The very first step in any successful swing trading strategy — and in the MG99 methodology — is to identify trends (price swings) which you can trade. If you’re having trouble with this basic first step, check out The 3 Duck’s Trading System. That system offers you a simple, easy, highly-effective method for identifying trade-able trends. The Three Ducks method can be applied to any style of trading, but it is presented specifically for swing traders.

The MG99 Portfolio Methodology is a powerful tool, which can do good things in the right hands. But, it can do a lot of harm in a short period of time in the wrong hands. So,make sure you are a competent swing trader, before you try to apply it.

Actually everything he says should be highlighted.

In simplified terms, the methodology involves identifying and entering a valid trend, and holding your position for as long as the trend remains valid. Obviously, this requires a solid understanding of trend-trading, including successful strategies for (1) identifying a trend, (2) entering in the direction of the trend, and (3) identifying the end of the trend.

In the Mastergunner Portfolio Methodology, the end of the trend is the basic exit signal.

Mastergunner has not specified rules for identifying trends; instead, he has left it to each trader to use his/her own preferred method of trend identification. There are many ways to identify a trend, and entire books have been written on that subject. I’m not going to attempt a review of those methods. You can study trend-trading on your own time.

I will tell you that my preferred method involves simple trend-lines and trend-channels, and that I define a breakdown of the trend as a retracement (of a certain size) out of the trend-channel. The retracement which triggers an exit (for me) is the close of a daily candle below an up-channel, or above a down-channel, by more than 38.2% of the channel range. For example, if an up-channel has a range of 200 pips between channel boundaries, then the close of a daily candle more than 76.4 pips below the lower channel boundary signals an exit of the position. Why 38.2%? Because it’s an easy percentage to drop onto a chart using a Fibonacci tool, and it seems to work.

None of the above is meant as a recommendation for you; it’s merely an example. Develop your own ways of identifying trends, and identifying when they collapse.

A number of traders on this thread have introduced the idea of adding stop-losses and profit-targets to this methodology. And that can definitely be done successfully. But, it represents a different trading concept from the one outlined by Mastergunner; and, if you go that route, you need to understand that you are trading a variation of the original methodology.

Well, there it is Journal. Hopefully you can understand why I subscribe to this methodology. In my mind, it’s all about the trend. These 2 monsters have made that point. And now, my job for me, is that I want to prove it to myself. You know, sometimes in life, there are real golden nuggets that drop into your lap. You just have to be aware of them. And capitalize on them as best as you can.

Mike

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Hey Journal.
So, where am I at? I guess I will just throw out some bottom lines.
My account is riding in the positive.


Yeah, I have 4 trades running. And you can see there the unrealized profit account balance (equity balance). Sure, it’s up there. But that really doesn’t mean much, cause I surely am not going to cash on out of everything now. Honestly, what is going through my mind is that things are going pretty good. In fact, you know what? I haven’t even moved up my stop losses to break even yet. *(See, I am changed from before, because I remember that was all I was consumed with, 'where’s my stop loss…hurry up…protect the account,… and even how about locking in some kind of profits '. But, technically speaking, my next move is to wait for the next swing high. Look, I understand that there’s not necessarily always a swing high. I mean, we could be seeing a complete turn around and head north from here. Then that would mean that it’s not trending anymore. And that would mean the end of the trend. And inevitability my trades. I’m sure the very next day that I see price shooting close to my break evens, then I will adjust. But, what I really am doing here with my trading is this in a nut shell. I will prove that being in a trend from beginning (as best as can) to the end will end up profitable. In the long run. This is my edge, and I will stick to it. You have to remember that I did not start these trades from the beginning. I have been searching for my conviction. Yeah, I came close to the realization that I have now, but it was just a bit late from what was going on in the market. The JPY was, has been, on a roll since March. But…it’s ok…I have the rest of my life to prove this.


You don’t need to be a genius to figure out that the JPY has been trending high for a good while now. See, as the years go by, I’m sure I’ll get to the point where I will eventually be getting in pretty close to the beginning.
Oh, and you know, when I see all what’s going on in the world geopolitically, boy do I get happy. Yeah, I know, it’s messed up. But, hey, this is business. Bad news is good news for me. *Come on N. Korea…let’s make it look good! *

Oh…don’t make me …Ok…I’m going to. Let’s talk about what’s been going on on the monthly charts.


Who’s been trending for a couple years now? Yeah, I know, the last half of last year till the beginning of this year was a good bit of risk-on happening. Which is not good for the Yen. But, looking like we’re back on the long trend again. Well, I did mention it before that it could’ve been a relatively short retracement in order to get a boost for breaking up the long Yen trend. Well, I guess it could still happen, but, it seems like a continuation of the long term trend. Which if turns out to be true, guess what, we could be at just the beginning. You know what they say…sell on the rises (for going south).

Ok. That’s nice.
Well, I’m running out of time.

We’ll be in touch Journal.
Mike

Hey Journal.
Well, it’s Monday morning. This was not such a good weekend for me. Well, not much time, because (you know how this comes around every month) I had to work on Sat. And next thing you know, it’s off to work again. But, like I always do, need to look at the bright side of things, come oooooooooooooooon Friday!!
Yep, 3 day weekend coming up for me. I can’t wait.
So, what’s been going on? Well, I really didn’t have a whole lot. Until last night. At the open. Well, let’s back it up a little. See, my broker just does not open until a couple hours before the open. Only then can I see what my account looks like. I can’t on Friday, cause by the time I get home from work and check, it’s down, for system maintenance. So, all weekend I’m in the dark about my account. All I have is Netdania. That’s where I have all my charts. At least I can see where things ended up at. And I can do some strategizing for the coming week.
So. Here we are. Sunday night. I’m checking my account. It’s about 4 something. And I’m not sure exactly when the market opens. Between daylight savings time and my new broker, I haven’t found out. But, I am getting close, because of what I’m about to tell you. Yeah, ok, that’s nice, so, it’s like 4. I can see what everything looks like on the account, but the market is not rolling yet. It’s like an unraveling. It surely is not business as usual. Like the only thing I can trade is copper. And the charts seem to be changing from time to time. All this was going on between 4 and 5. Then very shortly after 5oclock. I got pretty shocked. Yep. Looks like it’s time to learn something here. We had a gap this weekend. And it wasn’t good for me. In fact, as I was looking at things coming to life, my trades were being closed out. Man, I was like, what’s going on here? I knew there had to be a reason. But, I had a plan in place and all I was about to do was move some stops. Oh, and add on a position to CHF/JPY. But…nnnnnnnope. All plans out the door. Like I said, this needs to be a learning lesson. Oh, I remember opening another trade, back on Wednesday night. The EUR/JPY. And then I checked it Thursday night. It was looking real good for me, cause it just turned the bend on down. Thursday’s candle was red. It was a good call I thought, afterwards even. Anyway, I took a pic of my account balance before the market officially opened.


See, I’m thinking about you Journal. I wanted to get all my ducks in a row. I even took a pic of my trades.


There you can see. The Lot P/l column. Against the CHF I was up 116 pips. CAD up 109 pips. AUD up 93.
I was looking pretty good. Well, it didn’t end up so good. So, I was looking around. What can I do? According to the plan, all I can do was go with the USD/JPY. Cause they were still below my support level by only 16 pips. Hey, it fit. If this was the end of a big move, retracement, then it was my only shot. I calculated out that I wouldn’t mind losing $7. So I went with it.
Well, it didn’t take long to see that that was a loser. Take a look. And look at the time. Only 4 minutes it was open for.


You can also see my other 3 trades that got stopped out. The NZD, CHF, and the EUR. Those GBP’s was such a mistake. Man…I wanted to talk about them also. But never got around to it. What a mistake. I even took pic’s to explain them. Ok. Anyway. Wow. What happened to the EUR? Well, anyone who trades live knows about slippage. And that has to be what happened! Man…what a lesson. There’s nothing worse than being stuck at the open when price went wayyyy past my stop loss. I mean, I can understand. The broker opens up, sees price gapped way far, and then closes out my trade. What can he do? That’s the game. I understand. Actually, that’s business.
Well, all I can do is learn from this. I’m all not that too upset. Believe me, I understand the market can go wild. Oh…I remember…I had to check the news. And yep, it was because of the French elections. This was round one. It was all about the EUR. They moved the market. See, they are considered a risk-on currency. And that’s the opposite of what I want. The JPY is a risk-off currency. And things went risky. So after reading up and learning the importance of their elections, (man, I’m such a dummy for not doing so earlier) I understand ‘why’ the market moved the way it did. Live and Learn. Now I think I will start paying more attention to what’s abroad. And guess what I have learned, Journal? Well, without looking, what I remember is that this election is similar to our US election. So, what I want is to see is this woman LePen to win. She’s like a carbon copy of Trump. So, I hope she takes it. Hey…I voted for Trump. If I was over there, I would be voting for her also. And that would bode well for my JPY, cause all money would be flowing to risk-off, safe havens. Well, all of this is not over until I think May 6th or 7th.
The good news is, well at the time last night, was I still had 2 trades still in. The AUD/JPY, and the CAD/JPY.
I have a feeling I’m gonna lose to the AUD. My CAD one had quite a bit of room to go till that was taken out. And since I don’t look at the market until end of day, I couldn’t tell you Journal what’s been happening all through Asia. And now London opened up recently. I doesn’t matter anyway, for my trading. I have to see what things end up as. That is what’s important to my trading. I have rules for a reason. All I would be doing is getting in the way because of being impatient.
Another thing I have been wanting to tell you Journal. I did start out my account with only a $100. But I did add another $200. See, I’ve been making some good money at my full time job. Quite a bit extra. And hey, why not? Any chance I get, I’m pouring more in. Like for instance, I had to go away for a class a week ago. It’s training we have to keep up on. But, I had to buck up for some of the expenses. Then afterwards, I get reimbursed. So, I have a $123.00 check I’m wanting to put in. I couldn’t put it in the bank on Sat. since I had to work. Oh well, I’ll put it in on Fri. Ok, that’s nice. My point is that what I’m doing is building up my accounts. I have the trading account, and my business account. One way or the other, I’m gonna build them up. And hopefully my trading will be the side that puts in more, on that particular account. We’ll see what my accounts look like at the end of the month, which is only after this week.

Ok Journal. I got to run.
I think I have another pic to shoot out.


Yeah, that’s the blood bath.
Oh, well.
Those white lines is where I bought the trades. The 3 pairs on the bottom I was in. The top right. And the EUR, second one from the top left.

Hey, you know what? All I really care about, is, my motto. IF IT’S TRENDING, I’M IN IT. IF IT’S NOT, I’M NOT IN IT. (following the plan)

I just hope it will end up back to trending by the end of the week.
We’ll see.
Mike