Jerome's Journal

[Jerome32]

The beauty of the trade above, is that it was all over
in an hour, not dragging on for weeks

to my mind now, whether D1 or H1, it’s all about WOS

Price will invariably gravitate through WOS, as the guy in
the video says, they have to hit the next significant level
‘it’s what they do!’

He went on to mention ‘they’ ( the Banks) must hit that level
but he didn’t expand on why they must

In any event I believe him, and will focus more research on
WOS and Big Bank activity because I believe it is key

at the very least, price definitely moves through open space
and I’m looking for as much certainty as possible, even though
absolute certainty doesn’t exist.

I have a real problem with my trades dragging on, but I have
to be clear, am I just impatient per see, and need some
childlike instant gratification of fast wins?

or is it simply that there is a risk my account could be blown
and it’s the extended stress that’s the problem?

I think mainly the latter, although I would prefer trades
to hit targets within a few days, rather than weeks.

One ammendment I have made is using PSAR for
pending hedge orders rather than ATR

It is a similar principle.

I’m finding PSAR to be surprisingly useful. it’s easy
to undervalue a bog standard indicator.

[Jerome32]

Ban the Bands

Well not literally, but the longer trades drag on the less
relevant they become

At the beginning of last month five set ups were well
above/below bands

now, 6 or 7 weeks later, the entry level on a long position
is no longer way below bands but a little above them!

but to the unkowing, it still looks like price moved way
below bands and crossed eventually way above them

what isn’t obvious is that you didn’t enter at the top
or bottom, even though you thought you did at the time

So bands are of limited use, but they are of some use

price is drawn to Bands, but it can be seriously impeded
unless there is WOS

On one screenshot below, the WOS long trade is actually
a little above bands. I entered way too early.

but if price moves through bands it will almost certainly
move through the relatively short WOS

along with bands you really need a top down approach
on weekly, drawing trendline on weekly.

then ideally, you need to be above/below Bands confluent
with weekly.

then there should be divergence and missed weekly pivots
as these have a proven track record.

Traditionally, you enter at break of trendline

that is very profitable but it can be improved upon

Beyond trendline break you must identify WOS

this is probably more important than all the foregoing

When all the above is in place, price will invariably move
through WOS

so profit will be reduced and so will trade time

you need to get in and out quickly, time is not on
your side

so, for example, the five trades I took 6 or 7 weeks ago,
with possibly a few more weeks to run…

if I had focused on WOS would typically only take 1 or 2
days duration. simply put,

Price does not take 7 - 12+ weeks to cross through WOS!

Have you ever eaten a really tough steak with a blunt knife?

that’s what I’ve been doing last seven weeks

by contrast, waiting for the WOS, when everything else
is in place, is like a knife through butter

so for the new year, this will definitely be my focus

I will be looking at potential set ups and asking the all
important question

Will I cut through this like soft butter, or struggle for
weeks trying to cut through shoe leather steak?

Trading Forex can be as easy as taking candy from a baby
or as problematic as trying to defraud the mafia

that is really the way I see it now.

bashing my head against a brick wall

forcing a square peg in a round hole

all these truisms find their counterpart in Forex

I don’t know what will be left of my account in January,
but I do see some big improvement for the new year

![2018-12-14_high_probability|690x419]

(upload://9jvfB6O3FovnS05GNfItA0eBApQ.png)

and finally, here is a set up where you could enter Long ABOVE the Bands,
instead of several weeks nonsense trying to cross the Bands, like trying to
cross the mafia, stressful at best, fatal at worst,

but waiting for WOS is by contrast like taking candy from a baby

[Jerome32]

Of my current DD, 50% is all on one trade!

It isn’t a bad trade, the problem was risk management

but now, looking at the trade, I see that instead of one
big, eternal trade, there could have been two seperate,
much smaller opportunities

These are the two WOS zones where price will quickly move
through, we are approaching one now

we will cut through these zones like a knife through butter,

but between these zones we may likely have to endure several
more weeks of wading through treacle

3 or 4 months total duration for this trade would not surprise me

I now see two smaller trades, duration 1 - 2 days per trade

at least I now have clarity

[Jerome32]

The Hedge is Approaching

After all the advice, and preparations to hedge my trades
it looks like the time of test has come

The NZD has gone a bit contrary today and that affects
most my trades

at the moment GBP, EUR and JPY seem more stable
against NZD, but CAD and AUD have seriously reversed
against me

and both these trades are now approaching their pending
hedge orders

If NZDCAD continues against me, I would not expect it to
move beyond the 10 yr high 600 pips away before returning.
This will mean the DD on the trade will be fixed during that
600 pip zone, and beyond if it chooses to keep moving away.

This will be a very interesting exercise, to experience my
trade going horribly against me with impunity

This could run on, not just 2 to three months, which is
terrible enough, but throughout the new year potentially.

it could be, at the finale of it all, I might still come
out with around 200 pips profit

a good years work! I don’t think so!

As discussed recently, if I had laser focus on WOS
(WIDE OPEN SPACES ) , I would not be fussing over the
trade for several months, or a year

but there would have just been two short trades passing
through WOS in about one day each, yielding 130 pips
for two days duration

Quite an unbelievable contrast

so three months = 200 pips
two days = 130 pips

I don’t think anyone would argue in favour of option 1, purely from
a human standpoint, it is not pleasant

Getting in and out of winning trades quickly is pleasant

That said, I think the extended Hedge experience may be
valuable, you lose no more, and eventually your TP should be
hit

Actually, it it does get more interesting than that, providing
the original trade had Divergence and missed weekly pivots,

while you are hedging and moving in wrong direction, you can take
a second trade if a new Divergence appears

at cross of new trendline, set a very close TP and a Lot size that
will cover the DD on the original position plus some extra profit
and you come out of the two part trade ahead

The guy who trades this system gets around 75% on the first
part of the trade ie the opening position, and 100% on the second
position

He doesn’t make that claim, I personally know it’s true, and others
have confirmed that.

but I’m not promoting him, and I’m not trading his system, although
it makes sense to have divergence and missed pivots in place,
knowing you should come out ahead whatever happens

and here’s an interesting thing…

on my renegade NZDCAD trade below, you can see the trendline
where price broke through, and should have been the correct
entry…

Price has now seriously reversed, even approaching the pending
hedge order, but it looks like price might just be retesting the
trendline, rather than scheming to reverse 600 pips to the
600 pip ten year high, in which case ‘false alam’

[Jerome32]

I was wondering how to identify WOS?

the screenshot below should answer that

dark brown is congestion, consolidation
grey is the WOS zone

how can we know? because the last seven times
price has attempted to cross that zone it met
with no contesting

in other words a WOS zone might be defined
as a recent section of the price chart
where sellers don’t contest an up move,
and buyers don’t contest a down move

the contrasting dark brown zone is where
bears and bulls are fighting it out and you
find yourself either trapped or stopped out

viewed like this Forex does seem remarkably easy.

just trade WOS, the whole WOS and nothing but
the WOS

If anyone is starting to find WOS references a bit
repetitious and boring, now might be the time
to stop reading this thread

it’s likely to get a lot worse, until I can see WOS
zones in my sleep

Once you get this drilled down you have cracked the
Forex market

If you don’t get this drilled down, you will likely be like me,
going nowhere with two month old trades that you enter
blindly

I’m surprised there isn’t a WOS indicator although supdem
may be as close as you can get

[Jerome32]

Light at end of tunnel
The first of my five early November trades has just
hit TP for 310 pips

One down, four to go

This has been the biggest lesson ever in Forex trading

I hope I never get in such a mess again

As you see, six weeks of aggravation, but price cut through
WOS in just one day, exactly as predicted

[frandlost]

The first of my five early November trades has just

hit TP for 310 pips

Nice! It did take a while but patience paid off!

WOS… It was a great video wasn’t it?

KC

[Jerome32]

WOS… It was a great video wasn’t it?

Yes, I will be going over his material again over
the holiday

I have four positions on NZDJPY with profits locked
in and trailing stop. JPY news coming up so
obviously anything can happen

Of the remaining three, One looks like it might hit
TP anytime now so I have replaced Hedge with a Stop.

Most of my remaining DD involve just two trades
NZDCAD and AUDCAD

I’m leaving pending Hedge, anything could happen with
these two!

[Jerome32]

Happily my NZDJPY closed in profit for 47 pips

I have now opened a reverse trade on H1 as there is bounce off
D1 TF, and WOS

I’m not comfortable trading H1, but if it wins it will likely win 30 pips
within the next two hours

contrast with winning 47 pips over last six weeks!

EURNZD also looks like it should be winding up now, there is
only WOS to TP. it could quite likely be hit this week

That leaves only the two problem trades that are still not
moving. It looks like they could drag on well into the new
year. They are both moving away from Weekly trendlines
so should eventually hit targets but not anytime soon.

Hedges are in place so they are now under control.

and my available margin which had all gone at one point
is now around 230%

It now seems the account is once again secure, but I see
the account at end of January, back to break even, exactly
where I was at the end of September

so four stressful months but no harm done

yes, but I could have achieved no harm done much more easily
by simply not trading

However, I am very optimistic for the new year, priceless lessons
have been learnt

[Jerome32]

I was given a free system by some marketeer. it involved
price moving out of, and back into BB with confluence of
MACD and Williams% which I’ve never used before.

I added a couple more essential rules, one was only
enter WOS zone

and the second, must have been inspired by something
I watched, but can’t remember what, I’ll check

but it’s basically, only enter off bounce off higher TF trendline.

I’ve really seen ‘the trend is your friend’ adage at play here

It seems to work well on H4, and if WOS I don’t insist on
BB rule

With Bollingers opening into the bargain… picture perfect!

[Jerome32]

this is a good compliment to the WOS guy, except he says
price will always fill ‘empty gaps’

sounds remarkably similar

I also got inspired to incorporate trendlines

I don’t know if he offers a paid service, but as with so many of
these guys, they seem to tell you all you need to know free

so needless to say I am not recommending any paid service,
but by comparing free videos and webinars these guys
produce, you can get a very well rounded out understanding

sometimes, one of these guys will clarify something you
missed with a previous guy’s video and vice versa

Something I have noticed is that I’m getting quite good
at recognizing real quality material.

Its often revealing to check likes/dislikes

this guy has a very well deserved 52/1

of course some excellent teachers get a few dislikes
just because of their accent etc, but you can usually
tell if they have any value within the first minute or two.

[justshell]

Yeaa trendlines are important, at least to me they are. It helps identify potential entry and exit areas

[Jerome32]

Well my first H1 trade couldn’t have been much more disastrous!
it immediately turned tail and reversed on me.

but undeterred, I simply moved out to H4, opened another 5 lot position,
now 10 Lots, and placed a corresponding 10 Lot pending Hedge

that’s 20 Lots total position sizing. not bad for someone who has
just taken a vow of modesty and caution from now on

in fact its the biggest position size I’ve ever taken.

but there are differences this time

original H1 TP was a very attainable 30 pips, and now on H4,
TP is only 75 pips away.

This is not likely to be a six week deal

If it really takes off in wrong direction, I may incur 200.00 DD
before the full Hedge kicks in

I would expect target to be hit within a reasonable timespan,
but if not, I’ve certainly had worse, and it is a very good set up
with a genuine 75 pip WOS

if there is any cautionary note, it may be that I should leave off
the H1, at least until I have definitely cracked H4

I just don’t seem to get on with anything under H4.

[Jerome32]

Well that last trade, the ‘money in the bank’ trade
went the same way, plus I had my 10 Lot Hedge
triggered by a spike which cost me over 100.00
before I quickly closed it.

It was fortunate I was at my computer.

My mistake was thinking you can have unlimited Lot
size if you have a Hedge. no, it doesn’t quite work
like that

I thought Hedge was the third alternative if you disdain
stop losses and tiny position sizes.

Again, wrong.

I can see the sense in Pending Hedge orders, but balance
is needed. Lot size still needs to be moderately small, because
the market can be quite capricious, and because a Hedge has
been triggered it can immediately become a liability rather
than a protection.

So lost a bit on the hedge, replaced the Hedge with a Stop
and got stopped out. Total mess.

So I now have a lot of DD and three longstanding pairs
remaining. but DD and longstanding doesn’t mean
unprofitable, nor destined to lose.

In fact, take a look at the three screenshots below
they actually look pretty good, they just need to move!

Two all important things to note

the grey box depicts recent high and low

In all three trades, on the weekly, they all
are bouncing off either top or bottom, and off
trendline

Given this information was always available, I now
view all the premature entries as somewhat imbecilic,
but I was focused on distance from bands on D1

This is what happens, the mind somehow blots out
essential information that’s staring you in the face

[Jerome32]

Here is the biggest mystery in Forex

so many times I have found the Holy Grail
but always the Midas touch

Here is my latest, and wait for it…

it never loses!!! (yawn)

I actually acquired the system that has one or two
useful features, but the basic idea is hardly original

You need 21 EMA

when trending well, wait for the pullback to the EMA,
and if a Pin bar forms place PO a little above/below
the high/low of candle.

Providing it’s a good trend, there is no real subjectivity,
it always seems to win, at least with a 1:1 RR, although
I think with a strong enough trend, you could be a bit more
adventurous

It’s certainly simple enough, and much to my amazement
works perfectly well even on M5!

So will I still be trading it 12 months from now, or even 7 days
from now?

As I said at the start, it’s all very deja vu

I’ve been here many, many times

Probably most of you have to.

Still, unperturbed, I’m looking forward to going live with
it next week

The key is picking the very best trends, at risk of stating
the obvious

[Jerome32]

EMA 21 Pinbar Pullback Self Tutorial
( Moderator Note: This strategy contains nothing that isn’t
available as standard in any charting platform, it involves
nothing more than candlesticks and one moving average )

I stated this system seems easy enough, but I’ve never found
anything about Forex to be easy, especially with regard to
consistent winning.

It is easy however to become jaded and blasé about any new
approach, resigning yourself to failure before you even begin,
or worse still, not even beginning.

so I decided to really take this system apart and find out exactly
why it is doomed to fail, and why can it not be consistently
profitable?

Maybe it can.

I remember one of my biggest Forex inspirations was an old thread
by Greg Jones, Strategy 10 -20, and over a period of several months
Greg demonstrated this simple system just kept winning on a daily
basis, although I believe Greg traded the 5M TF.

There is no obvious reason why that strategy shouldn’t still
be profitable, it was very well founded.

so back to this simple Pullback system

I want to first lay down some basic principles

Firstly, the system prints around 90% false positives, and although
the coding could be improved, this isn’t a problem

Next, trade only really good trends

yes, you can look back on some excellent trends three weeks
after the event! identifying you are in a trend in real time
can sometimes not be so obvious, so we need to be
confident that price is trending above/below a trending EMA

Next, and most importantly, is honesty and objectivity

I look back in hindsight at all the qualifying set ups and I
would have won them all!!!

Does anyone really believe that?

real time bears little relation to hindsight where you can see
the trade would have won, so you jump on the bandwagon
and pronounce yourself a winner, and you probably really believe it

The set up looks 10 x more qualifying when you can see retrospectively
that it resulted in a good win

so to stand any chance of success you need to strip away all
the BS

FOREX TRADING IS NOT THAT EASY

Next point, in back testing, the system only goes back 50 bars
and can’t be extended

So, I am going to use the H1 TF, and check all the pairs I trade

No cherry picking! We need to see the stark reality ‘warts and all’
even if it turns out to be a highly warts based system, we need
to face up to that. so no pretending

Firstly I will show some of the pairs that printed nothing but false
positives

It’s pretty obvious there are no valid set ups there

[Jerome32]

so now, instead of looking at trades retrospectively, as would
every Forex marketeer and his dog, we will attempt to look
at the potential set up in real time, in other words I will black out
everything after the Signal bar

I will try to be as candid as possible about whether or not I
would have traded the following set ups, and give my reasons

Lovely set up. nice trend, and just as importantly, a very decisive pullback
from the EMA , then a sharp decisive return to EMA where the Pinbar
is formed,

Set ups like this are quite frequent, and really there is no need to
look for much else. I particularly like the zigzag pattern of the
Pullback. If the Pullback is in any way murky, or indistinct
there is more chance of a problem.

so how did this Set up pan out?

probably no big surprises

It won quite easily with a 1:1 RR

next

Again, much like the last set up. a very decisive move away from MA
plus decisive move back, forming V shape, or zigzag, hand on heart I would
have taken this trade

did it win? let’s see

yes, it won easily

next

Again, I seriously love this set up. beautiful trend, price diverges from
MA, and snaps back to MA with a fantastic Pinbar - what’s not to like?
What possible reason could I have for not taking this Set up?

Was this as successful as the last two? let’s see

an absolute beauty! once again

we seem to be on a roll here

next contender please

Ok, now the honeymoon is over, this one isn’t so straightforward.
maybe you can see the difference?

technically it qualifies. As I type I honestly can’t remember if it won or not.
previously I would likely have traded it. but now, as a result of my
analyses of many set ups, I have some reservations. I’m on the
fence with this one. as you see, I’ve noted price moving horizontally,
also obe of those horizontal candles was a pin bar, but it didn’t result
in a downward move, so why should the Signal bar? because it’s
nearer the EMA? I think that’s my problem. Like my Bands system,
it hasn’t moved nearer, rather it’s the MA that is moving toward
price. In other words, price isn’t forming the classic V shape
pullback, and I would much prefer it did. it is in fact L shape
rather than V shape.

so in the event what happened next?

well, well, that was a revelation! I really couldn’t remember if it
won or not. it was stopped out. now, in all likelihood, that was
probably why I had the feelbad factor. I unconsciously knew
it lost.

I think it was probably after noting this loss earlier that I formed
my opinion about L shape and V shape Pullbacks. nothing
conclusive, but I would be wary of pullbacks that don’t
actually pullback

[Jerome32]

example 5

Again, I can’t remember what happened to this one. it qualifies, but
it’s just not as impressive as our first three winners. I would think
I would take it as it does qualify

I think technically it lost, but only just. there is some subjectivity here,
In total transparency I believe I would have taken the trade and lost,
but I can honestly say it wasn’t a compelling set up, it seems like
more or less a one bar pullback? there is definitely some intuition
here, and something doesn’t seem quite right

already, it seems I know when I’m going to win, but I’m unsure
when I’m going to lose

so when in doubt leave it out?

I think that’s enough before and afters

but we can comment on my remaining pairs

No trend, wouldn’t have touched anything here

next

I named this SC Subjectivity and I remember why

price does pull away from MA but in returning forms the railway track
pattern. That has got to be viewed as a complication.

The more insidious aspect is it looks like the trend may be ending,
especially in view of the RT pattern.

but a nice Pin bar and you see MA just starts to resume the trend
upward

Actually no, I don’t believe you would have seen that,

that little MA lift wouldn’t have happened until the price moved up.

Obviously at the time of signal bar that hadn’t happened yet!

so I think I would have sat this one out in real, realtime
although it looks ok in the screenshot because we are given
a little clue of future direction

I think it won

yes it did win, but in realtime price had crossed over MA
with Bearish momentum, and MA looked like it was starting
to curl over to the downside

so I would say very subjective and ambiguous

Even though it won, I think there was enough doubt to pass it by

[Jerome32]

Two set ups, the second one we saw earlier, but the first
I really don’t like

There is no divergence from MA. not sure if it won with
spread etc, but it was very close. I wouldn’t have taken it

On the next pair we see three winning set ups in an up trend

On the next pair there are five false positivesm, and only the last signal
was a valid set up, especially by virtue of the strong trend

[Jerome32]

The next pair show five potential set ups

the first is invalid because it seems trend has changed the second
is better, a nice engulfing candle which won, but that’s not
the system. you can go on forever including half gartleys,
you name it. its better to keep things as simple as possible

number three isn’t a pin bar, and I don’t like number four
as price diverged from MA by just one candle

I like to see clear divergence and a sharp pullback to MA

like number 5 - perfect! just like the first three we looked at