Trade update going into the weekend:
AJ Long at 92.836 -8.7 pips
Considering a 20 pip spread, I feel like this was a well placed trade, timing could have been a little better, but I wanted to enter prior to the wide spread xD. Pulled the rest of the data and the long looks nice. Didn’t check EJ, but typically speaking if AJ Longs, so would EJ.
Now for some technicals…
My current system I’m going to briefly put out in laymen terms for those who like to watch my journal.
I do the following steps for each minute of the entire previous day prior to the day I trade. Well excel does xD. Thank God for Microsoft Excel!
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Determine the net money invested for the market between the Open and Closing Price (The meat of the candle) using my volume equation: (Open to Close movement in pips)*(1/Opening Price)*100,000. I am under the impressing that 1 unit of volume in forex = 1 lot = 100,000 units or $100,000. The result of the previous stated eq gives me the Net minimal money required for the market to produce the Open to Close Candle excluding the candle wicks. The candles wicks come in the following steps.
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Using the same volume equation I find the total minimal money invested in the higher extreme. Higher extreme when price goes up would be High - Closing price, if price went down it would be High - Opening Price. Next I multiply the result by 2. The reason for this is because the money that moves the market above the open or close also moves the same amount back down to the open or close thus, the money invested in these extremes must be multiplied by 2 in order to correctly measure the minimal money that moved the market to create these extremes. Wow that’s a mouthful.
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Exact same as 2, except I do this for the lower extreme. Once again if the market moves up, I would take the Low price - Open price to get the extreme. If the market moved down, I would have taken the Low price - Closing Price. The result is also multiplied by 2 for the lower extreme for the same reason as the higher extreme.
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Now that I have all the money figured out for the extremes and Open to Close… it gets kinda interesting. Basically I want to know what percent the wicks are of the entire candle. So after each minute of the day is sorted Long or Short, Microsoft Excel does some magic for me. If the market closes above open (Buy candle), I take the Higher Extreme money - Lower Extreme money and divide the result by Open to Close Money. I leave the result in integer form, however It actually represents the percentage of that particular minute was outside extreme or outside the Open and closing price. If the market closes below open (Sell candle) I take the Lower Extreme money - Higher Extreme money and divide the result by the Open to Close money.
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After steps 1 - 5 have been completed for every minute of the day, I sum up the integer results of step 4 for the entire day and get a positive or negative Integer value for every buy and sell candle of the day. It is this Sum value for the buy and sell candles that I am able to place my day long trade’s off of with the accuracy I have been over the past two weeks… (Only the past 3 days i have been posting the trades, last week was a learning period and a trial and error period).
What causes me to go long or short for the day? Depending on which integer value is greatest or least depending on the spread between the Sum values (step 5) and whether or not both values are positive, negative, or a combination of the two is what I base my Long or Short positions off of.
The principal in which I am trading off of is indeed unique and simple, However It takes Microsoft excel 30+ columns and 1400+ rows just to give me the end result i trade of of. Of course some of the columns are not used for this particular system etc, but they where built off of to get to my step 5. As You can imagine, this is a pretty big spreadsheet.
The beauty of all this is that all I have to do is copy and past Open, Low, High, Close, and Volume I download from Oanda every night into excel and it takes literally 2 seconds for me to get my result thanks to excel doing all the math for me. I don’t use the Volume given to me from Oanda (previously posted in this journal) because this volume is raw and not the net volume for that minute. Thus the need for my fancy Volume equation xD. Just kidding… its not that fancy, just inverse and basic math ;).
Thanks for reading threw and I hope this makes sense to you guys. It’s simple yet advanced. Complicated but easy. However, isn’t that how trading is for everyone?
In case you are curious… My results for the AJ weekend trade where:
Long Sum: 8.199181999
Short Sum: 5.597517565
Spread or difference between the two integers: 2.601664433 (Was a closer integer earlier when I placed the trade, widened a little after the remaining time before close occurred)
Typically from what I noticed really tight spreads means high movement in one direction, likewise for very large integer differences.
Remember that trade I took Tuesday or Wednesday with a profit of 90.1 pips in EU? It had a very tight integer difference value. Which is why I posted that as time progresses I only intend on taking trades that have a very small integer difference the previous day… They tend to be High probability win trades :). That EJ trade i took Thursday which only resulted in around 30 pips for the whole day (both trades I took)… had a high difference but not an extremely high one… So, I’m learning what not to trade which is why I have been jumping pairs lately.
Thanks again for the read! Be back around Sunday Open with an update!
Edit: My step 3 was a little messed up guys, sorry I proofed this so late. I now also use 1 hr data along side the 1m data to make my trading decision. This has resulted in an increased accuracy.
Getting it fixed tomorrow afternoon… I’m at a relative’s house posting the trade updates XD. However I will be hitting you guys up tomorrow on Skype if you guys are on?