MONDEOMAN FAST TRACK TRADING JOURNAL - not what you may think.
Some of you may recall that I have been hanging around here for the last few months, but was also a member nearly a decade ago. After loss making efforts in FTSE100 share trading and Forex trading in 2010 and 2011, followed after a gap by another foray into Sports Betting, I decided to approach Forex again in the latter half of last year prompted by three events in my life.
The first in 2018 was the passing away of my father, who was one of those Dad’s to die for. I never grieved his passing. I just thought of all the beautiful times we had spent together despite a long time being physically separated since I left school. In his last couple of years he retired to a single flat about 1/2 mile from our home. I would proudly walk him to the bookies, and the bookmaker would say “Oh hell, here comes Bill. He’s brought his bodyguard with him”. I drive a Merc but still think Mondeos are the best car ever manufactured - you know - fit for purpose without breaking the bank, and fine for an inverted snob from “Up North”). “If it’s more than a grand you’ve won I don’t have that much cash”. You see, my Dad lived and breathed horses, but did not suffer fools gladly. So he took his Racing Post form secrets to the grave.
I may share anecdotes if encouraged to do so, but I am mindful you are here to learn, so I will not force them upon you.
Anther event in 2019 was that I had occasion at work (contract management IT consultant) to initiate a programme of robotic process automation of business processes using a proprietary tool from one of the large global consultancies, after a transition of services to their East European offshore location. My mind swiftly returned to 2011 when I had convinced myself that I had “an incompatible psychology with that of a successful trader”, and vowed to cease interest in the subject unless I could find a methodology that excluded my interference once I had “pushed the button” on the trade entry. Preferably, I would have a robot do that for me but I was already knowledgeable about the good and bad practices and results from HFT (high frequency trading) and was amazed as a telecoms consultant that this was all about latency, and getting a few nanoseconds closer to the Exchanges in which the financial transactions occur meant the difference between an edge and no edge. By the way, I do not condone HFT since it is exactly the "big business raising the barriers to entry that I so despise in global business. I plan to automate, but the jury is still out whether I will maintain a watchful human eye over any other than binary decisions (in our out of market) and leave all that other stuff to a machine time frame.
The third event was that I read the book Super-forecasting, which reminded me so much in its content of that work done by Tharp in helping professional traders with their Psychology, but also with a deeper understanding of what is involved in the mindset and consequent actions of a budding successful trader.
So that was my decision to re-enter Forex as a passion, but also as a potential future stream of income. And recently, it was the final placement of my father’s headstone on his wife’s family grave (don’t ask why it took two years to get this done) that made me realize that my pride in the life of my father could only be bettered by saying a silent thank you to him for being such a wonderful influence on my life, and something I could discuss with him when you have those inevitable conversations with yourself - whether it is your alter-ego or your actual father, it doesn’t matter.
Two weeks ago, I was writing my Terms of Reference (an unfortunate habit formed by being a Project Manager for a living), for Forex Trading as an adjunct to a recently and similarly written document that spelled out a 2020 to 2025 long term investment plan in Crypto-currencies. Part of the reason to revisit Forex was a fascination in the short side of Crypto, but in my mind shorting an underlying asset is alien to “investment” but sure could be handy for the new Crypto, and also for the not-so-new precious metal long term and very boring holding (kidding really).
So as part of a lessons learned review from 2011/2012 and from 2014/2015 for Sports Betting, I looked into the decisions taken at the time and realized that those decisions did not make sense in the cold light of day. Though in both instances we were not achieving our goals (we had less money, not more money), we had nowhere near broken the bank, and with the benefit of hindsight, I realized that I really should have persevered and sought a slowing down of expectations and a continuous improvement cycle to identify WHY we could not demonstrate an “edge”. For sure, the results were negative, but for the last 150 out of around 400 trades, the system expectancy had become pretty close to zero. At the time I saw this as a failure, but now I see it as an opportunity. So realizing that it was now going to take me at least 3 to 6 months to get into serious back testing of algorithm ideas (I am following the NoNonesenseForex method), after completing (this time) all the School of Pipsology including quizzes and all the 130 or so remaining NNFX videos, I took a decision (it’s called Agile framework) to run a Sports Betting back test on some historical data I have, and a forward demo account (Excel simulation) of around 100 historical cases on what is remarkably similar to the “Algorithm” that VP talks about in his NNFX approach. It is a baseline, two confirmatory indicators, an entry that satisfies rules, a management and an exit plan, mostly preset depending on written rules.
It is this system that I am going to provide a “Journal Journey” for. I will post my first 40 trades (in 10 days) next