Jerome's Journal

Experience makes the child grow wise

I’ve just seen something I’ve never seen before

Its more than just noting the horizontal line of prior S/R

when price returns reaches that level it often forms
a consolidating zone

You can’t know which way it will go from there

This is one of the most dangerous traps in Forex

Having the patience to wait for price to push right
through the zone, and retest back to 20 or 60
before decisively moving down

Only then enter

not being frightened about how much money my delay
is costing me

Its not delaying thats going to cost you big time

its all about avoiding impulsiveness, keeping your
water dry ( one typo Ive got to leave :slight_smile: )

I’m on a roll here

no, not the 15 consecutive wins I had today, because
you can give that all back and much more!

but I’ve had such an eye opener

not so much about TA

I know quite a lot about S/R zones, and waiting for
the Retest

nothing new there

but I’ve learnt something invaluable about myself

I don’t wait for the bigger picture to form

I see what looks like a reversal and jump straight
in on impulse, ignoring all the rules

of course it can pay off, but this is literally how accounts
are blown

This is very likely my last major obstacle to overcome

to even occasionally giving in to impulsiveness will
guarantee disaster

total self discipline and a smooth equity curve
isn’t the best way

its the only way!

I know in my heart, that up until this point in time
I would be opening an irresponsibly big reversal
position on impulse, as in sc below

I would see the break of Support zone to
the upside and go straight in

but you have to wait for Reversal to be proven,
for the 300 to change colour and direction, and for
60 to be established in a new trend

I absolutely must get this drilled down

I can trade. 20 consecutive wins, even on M5 is
not hard anymore

but I can only go so far before the psychology
sabotages everything with a wave of impulsiveness

This is a great observation and can be challenging to fully embrace. It is a trap I can step into easily!! I’m in it right now actually!!

KC

KC

Actually, the situation may be even worse than that.

It should be a matter of ‘once saved always saved’ but
I fear it isn’t. a challenge indeed as you say.

The tendency is to recognize the problem, vow to walk
on the straight and narrow from this day forth, and then
immediately jump in on a half formed set up on impulse.

Discipline isn’t something we can merely give lip service to.

I remember one mentor, a Russian girl would you believe, with a
few very simple systems. trading news etc

From a poor background, she is able to tour the world, on the
back of her Forex winnings. Her systems are largely irrelevant.

They wouldn’t help you or me.

One guy on her forum, absolutely in awe of her, asked ,‘How
does she do it!’

Another guy gave the very telling, definitive answer

‘She’s a machine!’

More and more, I’m coming to see that all successful traders
are machines.

and it may be that a mere 5% of emotion creeping in, will cause
95% of your devastation.

It always seems like running up the cliff scree, you do well initially
but at some point you always lose your footing and come tumbling
down to the bottom again.

What I’m now doing, is focusing on why the chart is NOT a valid
setup, so that becomes the default view.

Only when a Setup is overqualified, so to speak, will I enter.

That at least is the plan

Below is an example. today NZDCHF is the most disparate pair.
but that means little in itself.

I see we are at a significant H4 level

consolidation or reversal more likely at this level.

we need to get past this first

I can’t seem to load a Link using my phone. But if you use the search tool above and type in the word “befuddled” I believe the first thread to come up will be by trendswithbenefits

Definitely worth a read!

I’m walking the same emotional road as You Are! It’s far more challenging than I ever expected.

KC

Here it is if anyone’s interested. You certainly can’t trade if you are befuddled

back to the example above, we are now past that support level

and I arrow what we are looking for. we have some WOS.
If it doesn’t happen we don’;t trade

wos

The temptation, is on seeing the break of Fractal, to jump in

but we need the retrace and a clear signal that price is
rejoining the trend, with momentum

Saved from a Loss!

By impulsively jumping in, you can expect this
kind of thing to happen

Win or lose I’m on far nore solid ground waiting to
pass S/R, wait for retrace, wait for clear return
to trend signal

A good win by obeying the rules

but we reached a new Support level and it looked like
reversing, but here it can consolidate or continue on
down. trading reversals against the trend is not this system

my success wasn’t the win so much as resisting the
temptation to trade prematurely, and then trade against
the trend

Realistically my self discipline caused me to lose
out on a mere 5 pip move up

Price will probably bounce around t his key area
of support now. time to stay away

Brexit Day and GBPAUD broken 4 yr highs. I’m hoping
it will continue up, and there is a 400 pip space to next level.
Friday afternoon wouldn’t be my first choice, but price did
finally make a move up. I’m trailing quite tightly so no
real risk involved

Happy Brexit Day!

+58 pips, very happy with that. I wish we could have a few more
such Brexit Days!

Price could shoot up hundreds of pips more, given the occasion,
but late Friday afternoon is not exactly prime trading time. price
is tightly consolidating within a triangle at the momemt.

A breakout with Momentum would be tempting

but self control is the overriding priority, not greed glands
eager for quick fix

Importance of Fractals

I had to wait and watch for 45 minutes before taking
my trade yesterday

Price was refusing to break out of the Fractal box

a break out of the box often indicates momentum

It is essential that the market is actually moving

We see future levels where you would have needed
to wait for the break out. I didn’t miss much as I was
already in

but I need to note

You need to wait!

Even when you have a set up, you still need to wait for
momentum

5% in two days

Two good wins today, and even with modest level stake lot size
I’ve made 5% in two trading days, including a few losers today

Not saying that will be typical, but I should get better, not worse

Balance is £589 but I’m not counting the first £530 as that was
obtained deliberately recklessly to mirror my previous $US account

I’m not aiming for snipes 10% per day, but we see its doable.

I will simply take what the market gives me playing safe.

no more averaging or reckless behaviour

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We’ll get back to reckless behaviour which is my stock in trade

but here is something few will be unfamiliar with

on this occasion I got it very right, previously I would have
given any gains back and then some

you can see how quickly the market can turn on you, but
as I say, just about all of us have such battle scars

Doing pretty good

Was doing ok on my previous Polish PLN account but there was a lot
of averaging involved. Averaging is gambling, counting on the
market moving your way. eventually you blow your account at some
point, it isn’t sustainable

Since opening a £UK account I have made £598 but most of that
was 50 x lot size to bring it up to £500 to resemble my PLN account

so that doesn’t give a true idea.

If you convert the three mad position sizes to conform to all the other
modest Lot sizes, I have made £96 in eight trading days

My live account is around £1,160.00

so that would have been 8.3% profit in eight trading days
which would average 23% per month at very modest Position
sizes.

How much I might make in reality is a very different thing

but making money recklessly on demo is not duplicable
on live accounts

If I trade with same caution live that I’m trading now it should
be duplicable

My account history below shows the true £96 profit at
low lot size but you see the wild efforts to quickly
add an initial £550. Those three big wins would just
be £15 at same lot size as other trades

I will add here I have closed my other Reversal system,
not because of the big DD, thats part of the system, but
out of sheer boredom that there has only been one win in
three months!

I’m just not interested.

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A loser and my life is over!

I refer to a recent post where I got out before that
180 degree Uturn

If you wait until the market moves on lower time frames
you can make some nice gains, and when it really is
moving and inertia is building up, you can trail quite
tightly, minimizing risk.

Often, the market isn’t really moving, price just had
a random spurt for any number of reasons

but if your stop is reasonably tight you shouldn’t
lose too much

I have made a Fantasy account which is actually
less than my typical results eg I win 50%,whereas these
accounts win 33%

but keeping losers small, we make £45 over 30 trades
which might resemble a 20 trading day month.

and interestingly, you can pick any random sequence of ten
consecutive trades and you always end in profit, even
losing 67% of the time!

Modest losers are effectively where you are testing the water.
At least half the time price won’t have sifficient inertia to keep
pulling away from the Stop, and you lose between £1.50 - £3.50
typically

but when the market is actually moving it will pull away from Stop and
you simply trail the Momentum bars for £10, £15, £20 or more

It doesn’t have to happen all the time!

An indicator that tells you the current surge in momentum will be
good for at least 10 - 20 pips would be extremely useful, but no such
indicator exists

it has to be trial and error. but you do come out way ahead

The secret is managing your ‘error’ trades, both financially
and emotionally.

Thats precisely what this post is about.

Every shopkeeper gets this concept

they order in various lines t hat they determine will make a profit.

Why don’t they only order stock that will sell like crazy?

That is actually what they are all trying to do, but they also
have no control over market forces and often get it wrong

so they might test the market first to minimize risk

The many times they lose, if they can’t have a sale
they simply consider it a business e xpense.

Thats all a trading loss should be, a necessary business
expense to test the market

I pay the market £1.50 to give me a signal that it
has momentum and will make me a nice profit.

The market delivers that signal in two ways

It stops me out, a clear signal it is lacking the inertia
I am seeking.

or my trade makes £10 - £20 which is the signal that
the market did have sufficient inertia to keep moving
without need to pull back to my sensibly placed Stop.

This viewpoint of paying the market a very small fee
for a win or lose signal is a very emotionally healthy
approach

Of course you only seek such a signal when you already
believe the market is moving.

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Great post @Jerome32!!

I’m going to put a link in my thread to this!!

This is a great little book! Basic stuff we should all embrace. He addresses your small loss experiment even further and says even if you don’t wait for a signal and flip a coin for short/long keeping losses small you probably make money. The idea is to become ruthless with losses I still have a hard time with this and would like to keep my losses smaller. Even seeing better entry points I am still getting in too early and I have heard if you’re in “too early” you’re still wrong! :laughing:

If you think about it it’s not about making money it’s about being rewarded for not losing money!!!

Thanks for posting this…

KC

It really is about not losing money unnecessarily

I have read about the coin flip test, its all about money management

For the next two weeks I am taking time off winning trades to deliberately
concentrate on perfecting my losing trades.

when trades have momentum I invariably call it right, in other words
when I get stopped that usually was the end of the move anyway

so I just need cast iron discipline with lot sizing and Stops and
I should really be turning the corner.

Im glad some are benefiting from this, only since transferring system
over to Snipe2020 have things really come together.

Ignore the first two years of this thread

of course that last bit of sage advice won’t help if you are
unfortunate enough to have already read the entire capricious
saga ))

The book recommended is free in audio and $4.99 on Amazon

Let’s begin with what I like about the book:

1.) It’s a really quick easy read. Contains little or no fluff (OK, a little but very little). I read the entire book on a 1.5 hour flight.
2.) The author isn’t a cheerleader/life-coach type of instructor. He actually presents a practical method.

The downside?
1.) The entire book focuses on Forex trading. If you are into common stock / commodities / futures this is not the book for you.

5.0 out of 5 stars Quick easy read.

July 15, 2016
Format: Paperback
Just read this book through kindle unlimited and it was exactly what I needed today. I thought I was alone in my mistakes but he hit everything that I have done on the head and now I know how to bounce back from it and get back on track. Quick easy read.

1 Like