Jerome's Journal

[Jerome32]

Two winners today and I think I’m getting nearer to nailing it.

average RR is 1:1

this is scalping pure and simple

on this trade like the last, price barely went passed TP

Looking at H4 can be misleading. you can see that TP and
SL were both hit by the same candle.

so supposing SL was hit first?

I checked what actually happened on M1 below

price easily hit TP but only went 6 pips beyond. on
the earlier trade same thing - price only went 10
pips beyond. so just a quick scalp.

on this trade price reversed beyond SL level
but to see the chart pattern on M1 is encouraging.

price went quite a while after hitting TP before
forming a double top and reversing to SL

at some point after any TP is hit, price will
always eventually hit SL level

of course I must ensure that SL isn’t usually
hit first - I think Big E already checked that.

Ideal trade/ as today’s two winners but nice
candle count with candle bodies diminishing
in size as bullish/bearish power on the wane

and hitting S/R zone as green crosses red

if candle changes colour and there is
substance to it’s body as green travels
from right outside decisively up through
red -

there should be 15 pips at least, and possibly
more if no near S/R zone nearby, but don’t get
greedy-

if present at computer. when price hits 15 pips
switch to M5 and get out at first sign of reversal
even if it proves to be a false alarm.

try to save the 15 pips but hang on for more if
price action dictates.

[Jerome32]

the most profitable system I ever traded was a
strange divergence system that waits for divergence
to occur then you trade in the direction of missed
weekly pivots after a break of trendline.

it wins around 75% of the time providing you don’t
have a stop. so you can go 300 pips the wrong way!

to compensate for this you wait for divergence to
occur the next time and increase lot size x 10
but set a much more achievable TP

I never liked the sound of that

apparently the trick is to trade ultra small so a
-300 pip loss wouldn’t be a problem and your
x 10 rescue trade still only risks 1%

I never did a rescue trade.

Today was first time

Miraculously, the rescue trade almost never loses!

I still find this hard to believe.

Presumably if it ever did lose you wouldn’t rescue the
rescue trade with lot size x10 x10!!!

I guess you just take the 1% loss, although next time
there is divergence I’m assured it absolutely will
not lose, so you could go in again risking 1%

I still see no real reason to go so mad with the x 10
lot size

I would prefer a stepper plan whereby first trade
might be risking 0.5%

rescue trade risks 1%

and with 0.5 increments the third stepper would
be 1.5% risk

a total risk of 3% but with several assurances
one of the three trades will always win.

well today saw the first rescue trade win

the first trade lost for just -85 pips

rescue trade seeking only 40 pips but equivalent
of 400 pips at x 10 lot size

I might well go for the x10 rescue strategy if I
gain confidence with the system on demo.

[Jerome32]

Back to TDI system, I didn’t want to deviate from
my plan but I saw a great looking Bounce set up.

Not a cross but a bounce off red.

it seems to work well

Big E didn’t usually bother with Stop if he was around.

I didn’t with this one. Price only retraced 6 pips before
hitting my 15 pip TP just as Big E says

I was mainly attracted to the PA, it looked like it was moving
up after a brief consolidation.

not a new trend, but some move up at least

I only need 15 pips

[Jerome32]

another divergence trade. very small micro lot size

no stop. I hope it loses so I can test the rescue trade again

[Jerome32]

Two nice winners on TDI EURNZD for 44 pips and 23 pips

I currently still have a trend following PO opened
as there is strength in Euro weakness in NZD
but that is just testing out a currency strength
indicator

so far Big E’s TDI system is proving to be
extremely robust which may account for the
80.000+ posts on his thread

[Jerome32]

and on TDI EJ 15 pips banked and hoping for a further
50 pips under resistance. I’m doing so well I had better
watch that overconfidence and greed don’t kill the
golden goose. update: closed second trade for 23 pips

1

[Jerome32]

Several trades today over three systems.

Two engulfing trades supported by currency strength analysis

One TDI trade only today, a bounce off red on AUDNZD and
aiming for just 15 pips as although NZD is well down across
the board, AUD, whilst up om the chart is not so great on
currency map over last few days

Three Divergence trades on very small lot size, enabling rescue trades
if they fail.

Here is the TDI trade - There is also a sell trade which is a pre existing Divergence trade on very small lot size. Good record keeping is
the issue now - I am keeping my Contrarian Divergence trades on
another PC to avoid too much clutter.

[Jerome32]

Total mess today due overconfidence and cluttering the place up.
I still want to follow Divergence but on seperate PC and broker

[Jerome32]

I learnt from my mess yesterday, I was confusing systems,
confusing rules, forgetting rules, for example the engulfing
system you pace PO ahead, not just go straight in at
market when EC forms! This is what happens when you
become scattered - trading is hard enough when you’re
focused so why invite losers.

So rethink. I’m still following the divergence system
because it is one of the few I know to be profitable
although not to everyone’s taste.

it’s on a separate PC and separate broker so it
shouldn’t cause confusion.

Also it is a slow system, so it adds no extra hassle,
I’ve seen guys trading this system with most initial
trades winning and all rescue trades winning!

in fact on their results page they record no losers
at all as the system doesn’t recognize losers just
because they don’t go your way initially, the position
may be closed if it goes 300 pips against you but the
trade is still considered open awaiting the next divergence
with a bigger Lot size. ( absolutely not Martingale ) In
fact these guys never took out a third position as it was
always hit by the second!

You need to start with very small Lot size indeed so that
even if both trades fail you would only lose a maximum of 3%
and that would be a rare occurence.

but its a waiting game which wouldn’t suit most traders and
the no Stop suggestion is understandably highly unpopular
but it’s really not a big deal if you really trade small - micro
lots even

The system is longterm, if you think about it, if virtually all
your trades win you cannot really lose longterm. You have
to start small but its amazing how it builds up.

This has been the only system to be consistently profitable
on a real account until I went stupid - ( which is exactly what
others have reported )

But Big E’s system is awesome, - I’ve never been a scalper
or considered myself to be inclined that way but it really
does seem to work with a bit of practice. I’ve had a string
of winners this week and only one loser yesterday on this
system.

But the system didn’t lose

I think it was AUDNZD which was forming a double top
which straightaway tells you its probably going down.

Big E’s system (TDI) was showing green crossing up!
and currency strength chart was showing NZD plummeting!

So I used my ‘initiative’ and ignored Big E’s rule about
trading right into S/R zones. Duh, I have actually been
around long enough to know that anyway

Nevertheless I was sure this trade would plough through
resistance preventing a Double Top from forming

but price didn’t plough through anything, it formed a Double
Top and reversed. So I lost due to overconfidence and
presumptuously thinking I know better than Big E. So I
won’t make that mistake again.

Today, maybe being Friday there was only one set up
but a very nice one, in fact I would say one of the best looking
one’s so far as it ticks all the boxes - most importantly you do
need to get in on the second candle at the latest - these trades
are just quick scalps on the retrace usually - at least that’s
the bread and butter of the system

There was plenty more available on this trade and I wasn’t
surprised it went on much further beyond the basic 15 pips
but I’m not inclined to try anything smart today - just stick
to basics - 15 pips with 8 pip stop for Lot sizing so that gives
a 1:2 RR. Most trades do win if you are strict about the rules.

I know there is much more that can be made, and I can often
see when that would likely be, but this is a scalping system
and I just want to get the basic 15 pips down first, I can try
adding a second smaller position later if it seems viable
but I’m keeping things very simple for the moment.

I still want to track the EC system but not on the same
broker as TDI system as it messes the broker accounts
and its not obvious which system is making the money…

I could open another Demo account but I don’t know if
I really want to get involved with checking for three system
setups at the same time.

I think initially it would be far more sensible to trade the
EC system on the Daily charts where there will never be
any panic.

I don’t normally like Daily charts as they take too long
to mature and you can easily become over exposed.

I like a trade to be closed as soon as possible.

The Divergence system in particular can get like that
on the Daily charts with too many positions opened
so I think I would only ever trade that on H4.

Personally I see a big difference between H4 and H1.
Certainly there is a very big difference between H1
and the lower time frames, but I feel an also big
difference between H1 and H4.

I would probably prefer Daily TF except for the reason
given above.

Here is today’s TDI trade GBPCAD, big candles, got
in on second candle, nice cross of Green over Red,
plenty of room to Resistance, trading during London
Session for 15 pips

[Jerome32]

Nothing yesterday on TDI but this week I am
busy and distracted. it shows!

I took the trade below because of several
consecutive candles and green over red

it reversed immediately and I was stopped

• for more than usual because I wasn’t at PC

I was trading straight into consolidation that
I thought might be over

it wasn’t over enough. what do I mean?
simply it wasn’t a nice looking chart

Later it had moved away from consolidation
and green had recrossed red so I went
in and won my 15 but it was another bad trade
Mainly because I forgot the MAIN RULE - the
candle has to change colour and be clearly
reversing!

and still not a nice looking chart and TDI around 68
when we should ideally be under 32 pointing up!

Consequently I only just hit my target before green
went flat

two bad trades - I’m too distracted today

I opened six Divergence trades. two won straightaway,
one is in profit and three POs not hit yet. I won’t bother
with screenshots because it is so mechanical there
is nothing to analyse - yes you can go 300 pips wrong
direction but that isn’t helped by analysis.

It is helped by a second rescue trade

Encouraging so far

Here is woeful TDI trades for today

[Jerome32]

Three TDI trades today, two won, one lost
because I thought it was coming out of consolidation,
not my strong point!

This system works after a string of candles in one direction
and a sharp reversal/retracement. The reversing candles need
to be big and get in early to snatch my 15 pips

not sure how I keep seem to forget such simple rules

REMINDER:- keep right away from consolidation, choppyness
spikyness etc etc etc

Divergence doing well, quite a slow system, hard to report on
but two good winners, two open trades, one winning, one losing

[Jerome32]

I want to test my Divergence system to destruction

It’s the sort of system that can easily blow your account

but it’s the only system I’ve found consistently profitable
so I’m really giving it my best shot this time on demo

I’m keeping my results online as I don’t want to
confuse this journal too much

The strategy is simply Divergence and trade in direction
of missed weekly pivots which do seem to attract
price toward them, at least part way.

I will show a sample trade that won

At least 70% win, unfortunately losers can go
300 pips in wrong direction and a much bigger trade
is then needed on next divergence to make it all
back.

Without Stop you need to trade very small, if you
don’t you will probably blow your account.

For psychological reasons I’m imitating the results page
of a guy who traded something similar and every two
part trade won over several years

so his results were impressive and I’m hoping mine
will look the same

I’m not giving any trade ideas with this, as I know
how dangerous this strategy can be.

But I really want to persevere with this strategy
separately from my stuff in this journal so
I probably won’t upload screenshots

where you see T1 a loss of -$300, the idea is that at next
divergence the T2 rescue trade will recoup that

Obviously I don’t have a ‘Live Trading Room’ - I’m
just modelling this other guy and will hope to
model his success

Divergence Results

[Jerome32]

Just looking at my results page on link above, five initial
trades have won and one lost -300 pips!!

This does not look good and is not encouraging as it
stands

I need to leave it however to remind me which currency
needs a rescue trade

When the rescue trade wins eg it wins 50 pips but at
10 x Lot size. that might be around a $500 win

So I will leave the -$300 loss as a memory prompt until
the T2 win of $500 and then I will delete the -$300
under T1 and just put L to indicate the initial trade
lost and under T2 I will put $200 which is the final
profit from the two trade sequence

If the other trades don’t need a rescue trade the
final profit will be placed under T2 indicating
the final profit.

The idea is that everything ends in profit ultimately.

The best part of this system is that there is no stress
when the initial trade starts to go against you. It will
probably turn round again and win but even if it loses
by hundreds of pips, the rescue trade will recoup that.

The major objection I have always had is what happens
if the rescue trade loses, there are no guarantees in trading.

I gather this is extremely rare but I think the precaution
must be to ensure that losses never exceed 5%.

Another frustration is that you really do need to trade
with absolute minimal Lot sizes so that even
a 300 pip loser hardly notices

Of course this will mean that the winners will hardly
notice!

But if every sequence wins you will be able to
compound your winnings so that 50 cent wins
will soon build up to $5 wins, which in the same
time frame will build up to $50 wins - and although
it sounds very audacious, it will take no longer
to build up to $500 wins - in theory at least

It is a slow system that needs a lot of time and
patience to build up but you are spared the
everyday stress of individual trades losing
as it doesn’t matter as the rescue trade will
be even more profitable

I have put up a quick Weebly web site for a
very good reason!

and it is not to promote a service or anything
ridiculous like that. I have already given the
rules and shown a screen shot. I am absolutely
not giving trade ideas or signals that will quite
possibly lose 300 pips!

Seriously, on the H4 or Daily check for Divergence
and Missed weekly pivots and enter at break of
trendline as in screenshot. If the trade loses wait
for next Divergence on that pair and trade a much
larger Position size with a very realistic Target,
50 pips or less, ensuring TP is above/below nearby
support/resistance

It is a very simple mechanical system, why would
anyone need signals or trade ideas for it?

I am simply intending to create an impressive
Results page for my psychological benefit.

Imagine a web page with one year’s verified
results and every pair traded giving a final
profit - that would really boost confidence
would it not.

In the process, if there are hidden flaws,
like too many rescue trades need rescuing,
then that too will become obvious too.

|I’ve been playing around with this system
for ages but now I want to finally test it to
destruction

This will prove to be either the ultimate
system or the ultimate disaster

If anyone is interested in this approach I would
urge them to test it on demo for a year! and keep
Lot sizes to an absolute minimum.

[Jerome32]

Back to more normal TDI strategy

Excellent trade on AUDUSD for 15 pips. Textbook

[Jerome32]

I’m really starting to take note of my Divergence system

• seven winners now and one initial loser on GU.

However, new Divergence has appeared on GU so
I have placed PO at 10x the initial trade Lot size.

It will probably win but this strategy is ALL about
trade management - the only reason anyone ever
failed is quite predictable - its so profitable it
brings out the greed in us. and we start to
place trades with way too big position sizes.

Most of the time you will get away with it.

Occasionally you will get away with it by the
skin of your teeth.

Eventually the day has to come when you
blow your account only through over confidence
and greed.

That is why you might see on my results page
profits are suddenly far lower. That is because
I am deadly serious about this!

This system ONLY works if you start with ultra
low position sizes. I have a micro account for
that purpose.

I will sometimes lose 300 pips

so the rescue trade may need to be 10 x bigger.

That shouldn’t lose but I must be prepared for
every eventuality.

Should the rescue trade lose the third will not,
at least it never has in several years, in fact
a third trade is almost unheard of!

But you cannot up the position size again
by x 10 - thats is even crazier than Martingale
trading!

But let us say the initial trade loses 300 pips at
0.2% risk - which is now my current level of risk

( and you see why this strategy is not for everyone!
0.2% is a little conservative! )

But when it loses you wait for rescue trade with
2% risk. This will invariably win and bring the
two part trade sequence into a very healthy profit.

If it loses you can just accept the 2% loss or wait for
a third Divergence and go in at either 2% or 3% risk.

This third trade has never been known to fail yet if
all set ups have been valid

If it does fail you have lost a maximum of 4% or 5%
loss.

If this only happened rarely it would render the system
something of a snakes and ladders situation where
at the end of the year you might come out a little
ahead or break even.

It is not likely you would lose very much because
of the very high win rate.

So the system can lose around 30% of initial
trades, that is not a problem at all at 0.2% risk.

But it really does need to win just about all
the second rescue trades.

It actually really does seem to - over many years

but I think it could be very easy to be duped by
a few weeks of profits - it needs extensive
testing.

Also I’m not sure about the rescue trade SL

I’m assuming allow up to 300 pips again but I’m
not sure

[Jerome32]

Pretty excited now! eight winners from eight
Divergence trades

At this rate it will be my one only strategy and
I won’t be distracted by the other two systems.

There are two good things about this Divergence
strategy. It seems to win most the time, and it really
is the most mechanical system I’ve ever used.

That takes all the stress out of it and just added
Big E’s Synergy averaging candles to give even
more confidence although even if candles do
change colour it’s not a big deal.

The original two systems I was trialing are great
and I would say highly recommended but there
is definitely some discretion required - and thats
really where the stress is.

Although I played around with the Divergence
strategy in the past I never attempted the
rescue trade. I lost this week on GU but
today won back $523.00, making a profit on
the sequence of $223.00

The system seems flawless, the flaw is always
pilot error, and usually greed kills
the golden goose.

So I am reducing Lot size to mimimum so as
not to get caught out.

I made about $440 last ten days in total which
at current Lot size would probably have been around $44.

I would rather win $90 per month in safety than $900
and risk blowing the account.

It will build up.

Already my results page is looking just like that other
guy’s page I mentioned.

My results page is on the link above, there is
no other information, just results

it really doesn’t seem to matter which of us is
the best trader

The best trader here is the one with the cool head,
sound money management and meticulous record
keeper.

[Jerome32]

Several Divergence winners today bringing the
total to 14 wins out of last 15 trades

Also I am starting to really tweak and personalize
it.

I don’t think missed pivots are relevant but I
will keep the rule as it has served others well.

I have a new template ( see below) - a bit colourful!

My amended rules are this: Divergence must touch
the very top or bottom of the Autofib template ( it
usually does)

So far I have targeted a modest 50 pips to try to
build up a record of winners which I have done.

But now I plan to use the Market Profile indicator
of which I am clueless

But it also has a red and blue zone. so if price hits the
top of Autofib I will enter immediately at market and
target where blue zone starts. I will need to draw a line
to know where to exit manually as zones are dynamic
and will move with price

I would expect average winnings to rise from 50 pips
to 100 - 200 pips if this exit strategy holds

From past experience with Autofib, there is serious
correlation with several pairs hitting the top and plummeting
for massive profits. There the good days. but when one
decides to reverse back up they all do!

In the template below is a variation:

when Divergence doesn’t reach extreme of Autofib but price
keeps on and hits it anyway, check Market Profile to confirm
price is out of it’s ‘preferred zone’, it should be drawn back
into the more active price zone. wait for reversal candlestick
pattern. In this case on USDCAD 140 pips to red zone.

Note the exhaustion candle followed by Engulfing candle
with a shaved head ( must have closed in top 25% so
perfect )

It really looks like its out on a limb and wants to get back to
where the action typically is.

It should be clear I have no technical understanding of
Market Profile charts.

but something seems to be working - just need to see
how long for

[Jerome32]

Here’s me happily system hopping and mumbling away to
myself like a bumbling idiot and I’ve only just noticed
1.1k views in six weeks since start! thats a lot!

There is nothing original in my strategies, I got a few
ideas on Market Profile from Urban Forex, various
candlestick patterns Steve Primo, different ideas on
Divergence from the irrepressible Rob Booker plus
the Autofib indicator I picked up years ago on a
Nigerian Forex forum. I remember the guys were
debating whether red zone meant sell and blue buy
or vice verse. Actually you could get that upside
down and still make a profit as there are times when
price just isn’t going to reverse!

Assuming this strategy continues to deliver I’m not
sure how that will affect my journal. There really
is no point uploading screenshots as all set ups look
much the same.

It’s important to keep a journal and trading success is 80%+
psychology so I might just keep a track of what I’m thinking
and feeling as I take the trades, and keep a track of results.
Link to my results page was posted on 19th I think. So its there
if anyone wants an update, but I’m not going to keep posting
links to a page that seems to be promoting myself. That
isn’t my intention, I have no service to offer and the system
has blown accounts so I would only ever recommend demo
trading.

If anyone does want to play around with it be my guest -
but all rules have been stated, you can do it yourself easily
enough - there is no need to pay anyone for anything.

there is this myth in Forex that iits worth paying money
to guarantee financial security.

It won’t!

You can’t buy success!

Wherever you go, all the top 5 star systems and courses
on FPA all pale compared to the free training Big E
provided free of charge! - and there are many very
savvy traders like that on forums such as this.

You can do it yourself - ultimately you have to anyway

[TradeViper]

As long as you don’t mention ICT, you are golden. Now the Nigerian FX traders, IIIII don’t know bout that.

The All Seeing VIPER

[Jerome32]

Don’t know ICT. But James Edward is interesting,
he charges $50,000 for personal coaching and is
the highest rated on FPA. 98% of reviewers can’t
all be wrong can they?

He is a no nonsense multi million Hedge Fund manager
who maintains no one makes real money trading, you
only make money when others invest in you. and if you
want investment the less you make the better, around
10%pa is attractive, investors don’t like high flyers.

As 82% of trades are purely utilitarian with no
interest in profit this means everything you believe
about Forex trading is wrong

all indicators are bogus except currency strength.

Stanford university has conducted studies proving
conclusively that all indicators, support and resistance,
Moving averages etc are not in any way predictive of
future price movement

Chimpanzees throwing darts at Stock sheets far out
performed most Hedge Fund managers

Not only Retail newbies, but most professional traders
and even the institutions themselves buy into all
this myth and folklore

Its all codswallop!

He’s actually right

Candlestick patterns do vary from broker to broker
so what you think is a set up probably isn’t.

He also maintains its all total nonsense despite
all the ‘evidence’ that supports your precious
system ( like consistent profits )

All your indicators and systems have nothing to
do with the real market forces that move the market.

I actually can’t argue with him

Think what a pivot is, the averaging of various levels

so what exactly has a pivot line got to do with future
market direction?

and how is it that price is always drawn toward missed
weekly pivots as in my Divergence strategy above?

so price looks down and says, ’ we missed that pivot,
lets go get him!’

It is all fatuous

but my parting words to him, which I still stand by, -

’ If I keep getting presents in my stocking every Christmas,
why should I want to listen to you telling me there is no
obese guy climbing down my chimney every year?