He’s not gong to die of Hypothermia in LA Mike - He’ll come back fine. A bit hungry perhaps, but fine. Do let us know when he gets there, I do hope to read on Tues morning that he’s home.
I expect he’ll regroup and be off again in due course, but hopefully a bit better prepared, so you can get on with the trading and not worry about him. 
Just part of being a Dad mate ! 
Hey Falstaff…thanks for that!
Well, it’s Tuesday morning. He made it, I’m sure. See, I didn’t pick him up at the airport. But I was talking to him when he was about to board the plane there in L.A. He was due in at 11:19 pm last night. I’m sure he got in ok. His mom picked him up. We’re only talking about 3, 4 hours ago.
Let’s see. I don’t really have much time here now. But there was a couple interesting moments he had.
Do you remember how he said that he almost slept there in Long Beach? Yeah, I was wondering what he meant by ‘almost’. Well, it was Sat. night, around 10 something, he found a plank, or some kind of wood, right there by the ocean. He settled in for the night. Curled up. Gonna sleep. He noticed how noisy the waves are. Kept thinking how this is not going to be so easy. But he tried. Then next thing you know, someone bumped him! “What are you doing?” He responded with “I’m trying to sleep”. It was a drunken Mexican guy. He was pretty scared at that point. But, all that guy said in response was…“oh, ok”. And left. So, that got him up. He turned on his phone (cause he was trying to save his battery life). And, lo and behold, his buddy shot out to him that it’s ok to come back to the house now. So, he got over to the train and eventually made it to his house. It was late, but did make it. That helped him out so much, to be able to get through Sunday and Monday. Then yesterday, after making it to the airport, he told me he was very hungry. He went through the line, to get some food from one of the places there. When he got up to the register, he ran his card through. It was declined. Then kept running it again with more food taken off. So, after going back and forth with the girl, who tried to help him out by discounting things, the lady behind him felt really bad for him. She stepped up and said that she would take care of all of it! He thanked her up and down. For some reason, he told me that he didn’t think that this lady would do this for just anyone. But, somehow, she found favor with him. So he ate. And he said that this was the first time that he had gotten really full, in like the whole entire time that he was there. That occurred just a few minutes before I called him. So then, he was waiting there to board the plane. He will have over 5 hrs on the plane. I told him that he should take this time to think it all over. Start your (adult) life over. Make some goals. Draw up plans. Accomplish the things that you need to. A drivers license. A car. A job. Make some money. Save it, so that next time you can do this again, but better. It is all about becoming independent and making your life what you want it to be.
He definitely agrees. And said that he will.
But, he also wants to make some more beats. Music is his life. He is good at creating/producing music. That’s something he said he hasn’t been able to do while he was away, cause he was preoccupied with surviving.
So, that’s the end of the story.
Well, we shall say, the end of the first chapter of his life.
He’ll be ok now.
Thanks for listening Falstaff!
Mike
Mike, well wishes for you and your family from the Crew here at VIPER central.
The Ever Wishing The Best VIPER
Great that he’s back mate 
18 does seem a bit young to be “growing up” tho I have to wonder whether the Beatles or Elvis were grown up at 18 ? Trouble with “growing up” is you have to put a lot of dreams to one side and concentrate on becoming a “wage Slave” It’s nearly 50 years now since I did “A” Level Economics and started watching the shares in the “Economist” but I “needed a trade” (profession) according to my old man (Father) so went off to UNI to do a professional course - I bloody hate it ! and trying to escape - I’ve done roofing, Washing machine repair TV and VCR reconditioning, Had my own second hand shop, Been a director/shareholder in Light Haulage, And eventually went back to me “Trade” and have freelanced for the last 20 years so I don’t work every day - six months a year brings in plenty
My Economics teacher was a guy called Ken Howes and he said he was only teaching until he got a job trading in a merchant bank ! - I should have spoken to him more and gone that way myself perhaps - Ah well, I can look back on life, 2 marriages, 2 divorces and a 20 year “live in partner” plus 4 kids - 3 with a different woman I wasn’t married to. I can honestly say life has not been boring ! But in many ways it has been reactive not pro-active. Encourage Ian mate, Encourage him to “do his brains” chasing his dream. Look at Edison, Ford etc etc _ the one big fatcor in success is determination and perseverence - well ok that’s 2 ! lol.
wish himm well from me Mike !
atb
F
Good Morning Journal !
Man, have I been busy. I just got done with something big. Actually, multiple aspects I’ve been working on. And now I think I’ve put it all together. Let’s see if I can put some perspective into all what I’ve been up to lately. I really got to think about this.
Ok. So. Probably the most important aspect I’ve been getting to the bottom of is trying to boil my trading down to is specifics. I want to get to the point where it can possible be automated. Surely I couldn’t do that, cause I am not a programmer. But, there should be no reason why I can’t draw up what exactly makes me get into a trade, what makes me add more position sizing, what makes me exit, and even what makes me size the trade the way I do. So, I’ll show you what I got, soon.
But, the other thing that’s been on my mind (actually, I’m trying to not forget about doing this) is the diagnosing of the market. It all falls under the reasons why I would enter a trade. And it’s putting all of the currencies into their proper perspective. A monthly, weekly, daily diag. Also how they all are relating to one another. All of this data would be my peripheral vision, before I enter trades. Then once that is established, I follow the trading plan for the entries down to the exits. See, I need some kind of supplement to the way I trade, which is an ema crossover method. I realized that the more I was trading this way. Just because a crossover is about to happen, doesn’t necessarily mean that I should be getting into it. There’s a perspective that must be met first.
Oh, and there is one more thing that I want to show you. (Surely I’m not proud of it, but it is what it is) You know what I do every month. Results. Yeah, well, it’s not all that pretty, but I must. So, let’s get to that first, then on to the other stuff next. Warning…I think I’m gonna overload this journal with pics.
Ok, Journal, so, let’s get this over with quickly. Yeah, I stink. What can I say. Oh…I just remembered…what I can say…"When your at you worst, your at your best." The other half to that saying is "When your at your best, your at your worst. When I think about it, that means, you should never be at your best. Or at least think your there anyway. Ok, so, no indication here! But…what we have here is my trading account balance at the beginning of each month. And that’s what it looked like, with my open trades running, the second the month ended. The figure in parenthesis is how much away the account was from last month. And don’t worry about the $6.46 amount. That’s technically my business account. I just haven’t beefed that up any. One of these days I will be using that.
This is what my trading looks like on a monthly basis. I redid it. All I’m looking at here is the amount of pips my trades are running (A), to what my trading plan says I should be running at (I), for ideal. That’s it, no more max. That was stupid.
The first column is how they all break down, per month. The second column is them all totaled, and compared. Plus I put in how much my account moved up/down % wise. Then the third column is the running total. Basically it’s everything totaled, all of the actuals/ pars/ and %'s. Well, I, at least, am comforted by the fact that my account, since July 1st, is up 21.1%. So, for as bad as I feel about my trading, it’s not that bad. At least I’m above water.
I do need to clarify, because I did have to change every single pip up there since July. My ideal pips consists of when the 5 ema line crosses over the 9 ema line, that is the start. And the end is the opposite crossover. It doesn’t get any simpler than that. It’s exact. There is no mistaking where the start and end is at. It’s just not an easy task to get into & exit at those points. Regardless…that’s what I’m shooting for. Those amount of pips that it comes out to be. I feel that I will become most successful the more my trades match the ideal. And I’m talking about the amount of pips, only. No more, and no less. That’s perfection. But, that is only half of the complete trading plan. I haven’t gotten around to what my ideal trading sizes should be. But I know that I’m not that far off because you can’t trade any smaller than what I do now. And I do know that the number of trades running is a factor of money management also. This all is a long process to refine. I’m getting there though.
Now, let’s talk about specifics. This is my baby. This will show me exactly how the 5,9 21 ema’s relate to one another, along with the price. Also my trades will be amongst the lines. Let’s look at the USD/JPY. And I’ll explain.
Someone could say that this is just like a chart. Basically all of the same info. Well, yep, pretty much. But, it is in a different format. But I feel it gives me more specifics & details. This would be the only way I can automate my system. So, from the top. That’s the monthly line up. Nov 1st. We can see that price (red) is above all lines. This block is the trending high block. Red on top, followed by the 5 em line, then the 9 ema line, then last the 21 ema line. So, for me, this is what I don’t want to see. The USD is trending high against the Yen. So, I’m calling this a ‘solid trend’ (high). It doesn’t get any stronger than that. Then below the monthly is the weekly blocks. They are positioned on top of every Friday. The dates will be every Sunday. Those are the weekly time frame P,5,9,21 lines. It shows me how strong they are trending on that time frame. Then of course, below that, is the daily time frame blocks. So basically, this is a one-shot view of how much price is trending on all 3 time frames. But…there’s more. A lot more. I’m putting in my trades within these also. Their the green inserts. This will make me more accountable of where I should or shouldn’t be putting on trades. Ok, so, let’s talk about where I did enter in this USD/JPY trade that I have running now. On Nov 6th, end of day, price ended up in between the 5 and 9 lines. Same happened on the 7th. But…the 5 ema line did not cross down over the 9 ema line. At that time, the crossover would have been at 113.71. I put on a short entry order at that place. And sometime on the 8th, price did hit that and got me into the trade. But what happened by the end of that day? Price shot up and ended up! 113.915. That was on a Wednesday. So, I’m gonna let it ride out for the week. That’s why I stayed in it, even though the 5 did not drop down below the 9 yet. But! Let’s continue. End of day Thursday. Price dropped down and ended at 113.358. Yes! And Friday then came and ended. Now, not only do I have my 4 lines, and my trade entry, but also I have added the crossover. Cause look, the 5 crossed down over the 9. And that will leave a point of crossover. So, I added it there being a light blue/dark blue mixed colored entry. 113.67. See, I need that there because that will be my triggers. I will have entry triggers and exit triggers. Those show me the ‘ideals’. And guess what…I will be keeping track, every day, of where this pair is at in regards to how many pips it’s giving out at the time. Look up at the ‘A’, ‘I’, little table. I started on Nov 3rd, keeping track. Since the 5 did not cross over the 9 yet, there shouldn’t be any pips to be had yet. But the actual is running because I’m in the trade. It took of course. So, Monday, end of day, will start to show what the ‘ideal’ pips should be, cause the crossover took place on Friday. So, to put a wrap on this pair, I did some diagnosing of it. Will show it to you soon. But I have come to the conclusion that I need to get out of this trade. My plan is to put in a stop loss at break even, at the open. Why? This just does not look good. We have a trending high USD on the weekly time frame, and the monthly time frame. Nothing points to this trade being something to hang on to. I got lucky with the turn of the week occurring. No other reason. Well, you also have to see that all of these lines are close together. So a crossover surely would be possible at anytime. I kind of think that we’re at an inflection point. Meaning, something has to give soon. Up, to continue the long term trend flow, or down for a break down of it. This is a risky trade to be in without a stop loss. And I usually don’t play with one until conditions like this make me put one on.
So, anyway, the only other thing I wanted to show you Journal was my diagnosing. This is what took so long for me to get done this weekend. I’m not that sharp. It just takes me so long when I look at the charts to determine what’s really happening. I mean, dog-gone-it, you can make a case for just about any direction you would want. That’s why it’s important to be as unbiased as possible. Being objective is not easy. Well, let me give you some shots of what I have. This is really a monster of a mind map. I will have to show pieces of it. So, let me start with what I think is most interesting of the pairs.
So, we have the AUD/JPY. And I’ve been in the trade since Oct 27, as you can see. (EMA table) Well, I got into this trade pretty late. Sure it’s trending low, the 5 line is below the 9 line on the daily, and has been the whole entire time. But, I would like to be seeing that green entry much higher in the line up. Since I shorted it, surely I would be wanting to see price, and even some other lines below the green. It’s been a struggle. But, I’m actually a little better than what the ideal has been. This is how the ideal is being calculated for the month of Nov. Since it’s trending low already at the beginning of the month, I’m starting with the closing price of Oct. (87.04) . And all I do is compare the closing price for each day to that price right there. It’s like, it’s trending low so therefore I should be in it, until the opposite crossover happens. Since I didn’t get in at the beginning of the trend, it’s gonna be risky. Again, the ideal is getting in at the beginning and riding it out to the end. That’s what I’m keeping track of. And if you want to know how this system fares per month, just look back at my second pic up there. So far, it always generates a positive expectancy. I can’t assume that this will always hold true, of course, but it does point to the fact that there pretty much always comes a risk-off time happening. In fact, there is no negative result for any particular pair yet, in the 4 months of data taken so far. The lowest is zero. I always thought that there could be negative numbers. I guess not. So anyway, after looking at all of the data for the AUD, I do not feel good about this trade. I know I got in way too late, and need to find my way out of it. And I have to tell ya, I am watching the ideal numbers. Right now I’m above it. All you have to do is see how much that ideal number oscillates. It’s crazy. Why don’t I put in a stop loss, at BE? Uh…maybe I should. But I think that’s a little bit too risky. I know their low on the currency relationship table, but that’s precisely when they start climbing.
Well, how about one more. The NZD/JPY. They are similar to the AUD, but I have come up with a totally different outcome. Maybe I should change this.
Man…I’m looking to get out with the AUD, and the CAD. But, in fact, this is the only pair that I came up with that makes me want to stay in a trade. Look, see all that green there in the middle table? That green being at the bottom is not good. Price was pretty much riding higher, but then shot back down in the last 2 days. I definitely got in this trade at the wrong time. Soon as I got in, look, at the red (price), all it did was go high. Look also, we had a crossover last Wed, to the upside, then it crossed back down on Friday. I don’t know what to do…all perspective points to being weak. I think I will stay with that notion, and just see what happens.
Ok Journal, man, I’ve run out of time.
Will catch up with you again shortly.
Mike
Good Morning Journal !
Good morning Mike ! Come on in…talk to me. How the heck are ya?
I’m doing ok Journal, thanks. I mean, I’m feeling good, physically. You know, I just never want to take advantage of that fact. For what my body goes through at work, I’m forever thankful that nothing serious has plagued me yet, now that I’m getting much older. Whether it’s the knees, the back, or any kind of stupid injury. I mean, you just never know. I just want to make it to the day that I won’t be getting my hands dirty anymore. Oh, and the sweat also…man…it isn’t easy. 20 years working on cars is a long enough time to be doing something that isn’t quite you. But, thank God, I’m a worker. That will get me through it. Boy…and I can’t wait …till the day…that all of this, will pay off. Of all of the effort that I put into this. The experience that I need. The knowledge that I will need. The smarts that I need. Has to pay off. I mean, that day has to come.This all reminds me of what I plan on doing at the end of the year. I think I do that every years’ end anyway. That’s putting my entire trading career into perspective. You know, like where am I at. Where did I come from. Where am I going. And I should dig up the previous write-ups also. The end of the year is my anniversary, cause it all started in the week between Christmas and New Years, 2012, that I started my pursuit.
Yep, ok, that’s all nice and good Mike. We’ll get to that. But what’s going on now? How was your week? Did we learn anything?
Well sure I did. I experienced something that we always hear about, but it’s kind of like my first time. See, I’m, generally speaking, usually in the market when it’s rolling, and running Yen strong. But lately, I’ve been realizing that I’m in the market just too much. And you know that I’ve been losing money that way. I’ve had 2 losing months now. So…you know…I’m gonna cool it some. And that’s what I did last weekend. I determined, pretty much, that everyone is not looking promising, after my diagnosing the higher time frames. Everyone except the NZD. Yeah, I did say that I should be ready to put on some more sizing with them if they started to fall. Other than them, all that was on my mind, at the open, was to get out. I had a 1k size open with all 7 pairs running last weekend at this time. So, I remember being scared. Boy, I can even show you what I wrote down on all of them. Basically, get out! The higher time frames (weekly, monthly) show Yen weakness. And I’m like, why am I in these trades??? It doesn’t make sense. Well, come the open, I jumped. The USD, EUR, GBP, CHF, & CAD. I took those trades off. But, I did stay in with the NZD, and AUD. I’ll remind you of what I determined last week, at this time.
The NZD.
And so, this is the result. Daily time frame. I stayed in. Added another 1k position size. Then jumped out. Was scared. Took the profits.
How about the AUD. This is last weekends determination.
Result.
You know, it hurts, when I look back at this chart and see my previous trades. We’re in a downtrend. And boy…you just do not know it when it’s presently happening. It started back in September! But, look up at the screen above that one. The weekly time frame (in the middle). It can be said that it’s in an uptrend. Well, honestly, last weekend, it did close below the 21 line. Is that the (hard) indication that the uptrend is over? Ok, what about to the left of that, monthly look. Tell me that doesn’t look like it’s climbing out of a big downtrend? I’ve pretty much always thought it was more accurate analyzing larger to smaller, time frames. Top down analysis. But, this seems to be changing the opposite way. Or, is there really is any correlation to be had in the first place. I don’t know.
But, this one really got to me. Let me show you the CAD. Last weeks analysis.
I was definitely scared of being in this one after seeing all of that. Look. Monthly - moving up and out. Weekly - moving up. Same with the daily, after a bit of rest.
So, what happened this week, you ask?
I updated the monthly, weekly, daily charts to the present.
Different ball game now huh. Well, that does teach me a lesson with the monthly time frame. It is very important to see the closing of the candle. We’re not even close for it to be closed. But, the candle for Oct is a bear candle. That is the last true bit of information on that chart. I admit, I was fooled by last weeks shot, on that time frame.
Look, as I said last week. You can paint a picture to say anything you want it to! But, what’s really accurate? I was scared to be in this trade anymore, because I thought all of these charts said, “we’re wanting to go up”. Of course, now I know, that’s not the case. Well, I should say, for this past week anyway. Look…I know the story is not over. It could still move on up to continue it’s long term breakout course for the longer time frames. But,to be honest, right now, I am wondering how much of a correlation the time frames really do have on each other. I think it’s actually the first time I’ve ever doubted this fact. I mean, Journal, you know me, I’m all about perspective. It’s definitely top/down analysis. Not small to big analysis. But, you just got to wonder… who’s leading who?
So…
Wait. I need more coffee.
Mmmmmmmm. Oh man…this baklava is so good. And it does go good with coffee.
Ok, so I’m sitting here. Looking at the things that I wrote. Yeah, seeing myself complaining. Sorry about that. Well, let’s move on. I want to show you this chart. It’s my ‘currency relationship’ chart. You know it. But, this is the months tracking.
We have the Nov 1st monthly line-up (middle, bottom, one line). Above that is the weekly time frame standings. Then the daily time frames is the corners. I go top left, bottom left, then top right, then bottom right. Let’s pay attention to the Yen. What are some facts here? Every single weekend, so far, they have climbed up a notch. And it’s visible by what happened on the daily. Last week, they toggled between 3rd and 4th place. Then, this past week, they go from 3rd, to 4th, to 2nd, 2nd, FIRST. Ok, what does this mean again? They are trending higher than everyone else. Meaning, the JPY is trending above the 21 ema line, on the daily time frame, against everyone. It’s that line that separates who’s trending higher or lower, in my book. And the other thing that I find very interesting is the Comms. Just look at that. It has been the AUD, NZD at the bottom lately. But now, the CAD has joined them. I wonder if that correlation will stick. Man…you just never know if they are flowing together or not. Lately, no. They have tailed the USD more than the Comms. Geeeeezzz. Yeah, look at the USD. Maybe they are dropping off because the Dollar has. In any case, back to the Yen. Usually when they are on top, the Comms are at the bottom. It’s always been like that. So, another thing I want to point out. Let me show you, first, what last Aug looked like, when when had a good run.
Basically they were the top dog for most of the month, on the daily time frame. But, look at where they were on the weekly time frame, during that time. They were no better than 5th place the entire time! And on the monthly, Aug 1st, they sat 5th. So, you would think that they would’ve been placed higher on the weekly time frame. But, nope. And it is interesting that the Comms were above the Yen on the weekly time frame, during that time. That is interesting to me. Sure, it does bode correctly on the daily, where the Comms are down low compared to the Yen. And also, see, the CAD, did ride with the other 2 Comms, well, until the end of the month. Then they separated.
So, back to my point. Look at the present (previous chart). The JPY has never been this high on the weekly time frame, since I’ve been tracking these this way (June I started this). Does this give more credence to the fact of them getting stronger? Sure…I know…only time will tell. After the fact, I think, it only tells how strongly and how long will the Yen trend strong. (Man…this is making me want to go back and get the rest of this year mapped out.) And the question is…is there a direct correlation? Also…which is following which? (monthly - weekly - daily or daily - weekly - monthly) ? Top down? Or bottom up?
I know there are no answers to these questions. I just have to spell them out, that’s all. But, I do have to conclude, presently, that the Yen is getting stronger. Man…I remember keeping track of these currencies on a daily basis. Surely all you have to do is go back a couple years, and you’ll see some of my work. But, I remember seeing how strong the Yen can get. I mean, they can dominate like no other. Can’t remember exactly what year. Maybe 2016. They tore apart everyone in the beginning of the year, for months! So, I know the possibility of their strength. And of course, their weakness. Surely, anyone who’s been around knows they can be the butt end of a trade. Easy money.
Ok Journal. I’m done talking. I want to get back to work. I’ve been compiling past data to my new ‘ema relationship’ table. I’ve been working on the 3rd quarter of this year. Surely, present data is being compiled. I’m just working my way back. I should show you what it looks like so far. It is a daunting task. But, I’m enjoying it.
Btw…I’m gonna try and get back into the market. I think last Friday was the beginning of something big. Don’t worry, I’ll start off small, and if it turns out correct, gonna add some sizing.
I believe this will help me to get closer to automating my trading. It’s data, that I will be able to use. Each block is comprised of the 4 lines. Price (red), 21 ema trend line (tan), my crossover lines of the 5 ema (light blue) & 9 ema (dark blue). There is an extra square in the block for the crossover point (half light blue, dark blue). And so, the more data I can get, the better I can see what chances are best for me to pick of when I should be getting in and out of trades. And I should get a better idea of whether or not the correlation with the weekly & monthly time frames hold true or not. Should I consider that? Or not? And also whether there’s correlation laterally, between the currencies. You know, divergences that occur over time. Especially between the Comms and Majors. But, when the time comes, it’ll all be about asking the right questions. Like…what are the better chances…being in a trade that matches the weekly time frame standings, or not? How about the fact that your not necessarily making money even though it’s trending high? So therefore, is there any better places (indications) to be getting out? Ok, so what will be the best triggers? I can go on and on. But, that’s the idea. I need to find what the market will tell me, when exactly, has the best chances to be getting in and out are. (I know people go back years and years for backtesting a strategy. But, patterns happen all the time. This will just be a continual update.I track of the present time, the daily progression of it, and will keep chomping at the quarterly time periods of the past.
Will keep you up on it all Journal.
Mike
Good Morning Journal !
Good Morning Mike !
Well, Journal, I’m pretty excited to be here with you this morning. Boy, do I have good stuff going on. And I’ve been wanting to share it with you. You know that I’ve been working pretty hard these days. Well, I definitely think it’s paying off. Look, I’m not there yet, (you know, finding that holy grail) but I feel that I’m making some real headway. Let me explain.
Let’s see. Where do I start…You know Journal, I was so close to calling you up, earlier this week, and sharing with you the moment that I got. But, now is the time, for it. Ready? Ok. Look. This is it.
I need to trade the AVERAGE PRICE, not actual price. What this means to me is this. See, as you should know by now, I have my indicators. And the more I think about the perspectives of them, it only makes sense to me. Who doesn’t know by now how hard it is to trade price. Let’s talk about this. Price is just all over the place. When anyone talks about trading, that exactly what their talking about. Present time Price. You do not know where it is going. And to figure out all of the reasons why traders think it’s going a particular way, is impossible. Sure, I read the headlines everyday. My favorite is Kathy Lein. She is with Investing.Com. I follow her. At the end of everyday, she gives a run-down of all what happened in the currency market that day. She’s just like all of the other ones out there that give the reasons why the Dollar moved the way it did. “Well, no news hit the headlines today, so the reason why the Dollar moved on down is because of deflation fears, plus Yellen is starting to get worried about that also”. You know what I’m talking about. It’s whatever kind of news that comes out that day that they match it to what the currency did. And when they don’t know why it did something, then they blame it on the old ‘traders probably taking profit today’. I mean, who really knows? No one! Surely it could make sense, but it’s virtually impossible to know why the crowd feels a certain way. It could be a technical reason, (like price just moved above the 200 day moving average, so therefore it’s a bull run now) or a news related issue, like I already stated. Or a fundamental reason, like a central bank wanting their currency cheaper. It’s just impossible to know. That’s what I truly believe, no matter what good explanation they come up with, to match what price did.
Now, what else do we have? If, absolutely, no one knows what price is going to do, all we have is what price has done. Whether it’s a nano second ago, or a day ago, it’s all in the past. That’s what everyone is looking at! There is no such thing as present data! I don’t care. It happened already. Even every single choice made, that hit the market, that moved the market, technically happened in the past, before they even hit the button! I think it all comes down to the percentages of those who agree to those who disagree.
Everyone is on the same page. All we’re doing is looking at what happened to determine what will happen. Therefore, I think it would be smarter to pay more attention to the average of past price than the actual past price. And I have decided that I should be trading by the average of what price was, instead of the actual candles themselves (a.k.a price). This is gonna be my edge. I’m telling you Journal…this is going to change everything for me. If I can stick to this principle, things are going to look up for me. Now, let me delve into it.
I need to stop chasing price, and pay more attention to average price. Then align my trades accordingly. Price is all over the place. But, average price is much smoother.
Let’s look at what I’m talking about. Best example is probably the GBP/JPY pair.
First off, price is in red, because it’s easy to pick out, among the other prices (5,9,21 ema’s). On the daily row there, you can see how price was trending high as high can be (GBP high) at the start of the month (on a Wed). Then, immediately by end of day Thursday & Friday, price dropped down below all 3 ema lines. And you know that the way I trade is I’m wanting to be in a trade when the 5 ema crosses down below the 9 ema. So therefore, I need to know when that happened. And it did take place on that Friday Nov 3rd. You can see that the light blue square got below the dark blue square, for the first time. (The Thursday and Wednesday prior, the 5 ema line was higher than the 9 ema line) And to put a cap on it, the 21 ema line (tan) is there to tell me whether the pair is trending high or low. So if price is above it then the GBP is trending high and the JPY is trending low. Vise versa the other way. And of course you know that I favor the Yen, for strength. But, my trading revolves around the crossovers of the 5 & 9 lines. I would like to get in at the point when they crossover down and stay in it till the point they cross back over. But look at what price does the first week and a half. It’s all over the place! Who in the world can tell where price wants to go? Ok. So we have a transition taking place. On the weekly line-up, it’s showing GBP trending high as can be. The monthly line-up shows the GBP pretty strong. Trending high (above the 21 line), but not as strong as can be because the 5 & 9 lines below the 21 line. Anyway…should I automatically assume that price wants to go higher, because of the longer time frames? …shrug… I don’t know. But, my only point here now is that price is all over. So much that it makes the 5 cross down over the 9 on Friday. Then on Monday, the 6th, the 5 crosses back up over the 9 again. You can see that it’s at the same point. Then, by the end of day Wednesday, the 5 crosses back down below the 9 again. It stays that way up through Friday, even though actual price jumps up there. Like I said, price is everywhere. And then finally it settles on down low the very next week. Price goes low enough to start affecting the weekly line-up. But…I would like to ask the question. What’s easier to try to manage, price itself or the average of price? Come on it’s a no brainer. All I could of wished for was to get in at the 149.69 point. But it is tough at that time, to do that. Cause I don’t really know which way it wants to go then. But, by the end of the week, the 5 did stay below the 9. Plus, price did end up at just 7 pips below that level (149.615). I could have been pretty dog gone close, even afterwards! My only point here is that I believe I have an edge playing the average price than actual price. And do I really need to mention how we see that price wanted to go down as the month rolled on.
How about some USD/JPY.
Well, starting the month, trending high as can be, the USD, all on the daily, weekly, and monthly. Then comes the change on the first complete week. And by the end of the week we have the crossover, on Friday (at 113.67). I mean, all we have here is a simple change of trend. Deep enough even to change the weekly line-ups. Yeah, all I’m doing here is looking at this, in hindsight. It seems so easy. Of course it is Mike, in hindsight only. But look up at the top there. I wanted to make all of this a little easier to distinguish when it’s trending high for the JPY and when it isn’t. So, the red line means the 5 is above the 9. The green line is when the 5 is below the 9. This all kind of means that I should (or would like to anyway) be in the trade. That’s gonna be called my ‘ideal’ line. And I have inputted in there how many pips are generated. The starting point will be the crossover point, of course. But, this is where it gets interesting. I had to redo all of these numbers because I started out doing it wrong. This is the correct way now. Let me walk you through it. On Nov 10th, the starting point is 113.67. But, instead of subtracting that from the end price (in red) I should be subtracting that from the 5 ema line! To find how many pips I should expect. Remember, I am following the average price, not actual price. I do not want to care about where actual price is. I will only care about my 5 & 9 price lines. So, on 11/10 we got 113.67 minus 113.60 equals 7 pips. That’s the starting point and the ending point. Then end of day on Monday the 13th we will have the starting point minus 113.60 again. Then the next day gives 113.67 minus 113.543 which is 13 pips. And of course all of that is noted up there at the bar. Those are the pips I should expect to have. It’s all accumulated also. This is what I call the ideal trade.
Journal, listen to me. This is what I am shooting for. This is what I want. This will be my mission from now on. I mean, can I be any clearer? I want so badly to emulate that top bar. I want my trade entries to be as close as possible to the crossover points. I want to stay in the trades as long as the 5 are below the 9 (top bar to be green). And I want my exits to be around the same amount as that value ends up to be. Because of the backtesting that I have done already, I know for sure that I will always be in the positive. Some months are greater than others. But, I know for sure, that I will not lose this way. I can count on this with everything that I have. Again…what I am doing here is following the average of price. Sure, the actual price does have an effect on the average (because that’s precisely what it is, added up history of the actual), but my concentration must be on the smoother past data. I believe this is the perspective that I must keep. It should keep me out of trouble. It should help me determine the flow much better.
As you can see, just below the ‘ideal’ bar, is where I’m putting my trades. And keeping track of the pips. It’s the ‘actual’ pips accrued. So that at the end of the month, I should already have the numbers of how many pips my system has attained, to what my trades have attained. You know, keeping track as I go. As you can see now, I’m not in this trade anymore. I jumped, out of fear. And surely, that was a mistake. I did get in just a tad early, which was not all that bad, but then hopped on out. …WHAT A MISTAKE…And now I don’t know when to get back in. Maybe if there comes a good dip in the numbers, then when it climbs again. We’ll see how it goes. We have the end of the month coming up this week. Never know what will happen.
Journal…there’s so much more I want to show you. But, I feel this is a good start.
We’re only beginning.
I must get more work done on this, now.
Mike
Good Morning Journal!
Well, here we are again. Nice and early. Got some fresh coffee. And I’m ready to type.
Journal…I’ve got to tell you. I am so excited about my strategy now. I know I shared it to you last week, but I need to do some more explaining. Man…I keep on thinking about this. This is a real break-through. I definitely believe this is going to change my entire trading. And the thing is, it’s like there’s nothing really new here. I’ve been honing in on this for some time now. You know…it’s like this. Do you remember a while ago, (back some years this was more popular) there are these pictures. Whether on a frame, or in a book. And when you first look at it, it looks like a really nice design. There’s nothing there. It’s just like a big pattern of something. But, there is something there. You have to see it almost cross-eyed. In order to see it, you have to stare at it for a while, then it’s like you have to relax your eyes and try to see through to the end of it. And then next thing you know…BAM. There it is! You see it! It’ll be some 3-D image of something. Yeah…it is really cool. Well, that’s what this has been like Journal. Seriously. I’m so very excited about what my future trading has in store. I haven’t discovered anything different, from what I’ve been working on now for a length of time. I’ve just discovered more of what I got right now. Just like the 3-D picture. I think I’m just realizing that I’m on the right track. Well, I want to talk more about this, in particular but, I want to shoot out to ya some results. You know…end of the month.
Well, I’m just happy that I ended up in the positive. Man…when I think about how this month went, I don’t know…I went down a road that I haven’t yet. It was the first time that the JPY ran rampant, and I was not really on board. It was just like what happened back in July/August. But this time, I was trading scared. I guess it’s like the more I learn, the more I am getting careful. So therefore, I won’t always be trading, EVEN THOUGH I SHOULD. You know, this reminds me of what Trish mentioned to me last night. We had on t.v. some skiing. It was on the Olympic channel. And we were watching ski jumping. You know, where they do that one real big jump. They start up there really high, and jump like 80 meters off of the big ramp. They actually fly through the air and see who can make it the farthest. Well, anyway, Trish…(my partner, who was born and lived in Germany for the first 11 years of her life, so she’s knows the European lifestyle quite well)…said to me that these youngsters who do this sport must start out when they are 2 years old! And you know why? Because when they are that age they are not afraid of heights. That’s the only way you can get someone to get really good at something like that, because when you get older, the fear of heights will surely prevent you from even trying it, let alone competing in the Olympics. And the point here…is getting someone acclimated to do something BEFORE fear can even settle in. Because there won’t be that possibility of fear at that age. You know…think about that. A baby. If a baby could, it would want to pet a lion. Why not? Who wouldn’t want to touch that nice, soft, big mane. Looks cool, huh? Sure! Well, we know that there comes a time in everyone’s life, when your young like that, that when something bad happens, you will have a memory that will last for the rest of your life. It’s a trigger. It’s a realization of what could happen, not necessarily always what will happen. Ok, sure, petting a lion will probably always end with the result of getting bit, but not always with, say, trust. If you were mistreated by someone who was of a different color than you, does that mean that in the future you will always be treated that way by anyone who looks like that? Absolutely not. So, my point is…fear. Look above. Fundamentally, my plan was to ride out the trend. During the first 2 months of it, I did pretty dog-gone good. Then the next 2 months, bad. Losing way too much, account dropping. The Yen lost it’s strength during that time. I should’ve not been in many trades. And then here comes November, the Yen tracked very strong. (oh, I got the numbers to prove that) So, what am I remembering now? What can happen. Yeah, why don’t I just do the smart thing and stay out. Well…you know what…now that I’m on the other side of it…that’s a mistake also! I should be in when the JPY is tracking strongly.
Ok, so, I’m learning. And that’s what I’ve been up to lately. I feel that what I’ve come up with is the proper method. It’s a more of an automative system. I should know when I should be in, and when I should not be in. Believe me, it’s simple. Just like me. SIMPLE.
Journal, I’ve shown it to you last weekend (the last post), but, this is all I want to be doing now, is talking about it more and more. The more I think about it, the more I get excited. Plus, I need to get my thoughts down on paper. And that’s why I am here.
Well, I need more coffee.
I’m coming back.
Mike
Journal…here we go.
Here’s a record of my system and me.This is how my system did, and how I did, in the last months.
The middle column is just the total from the left one, and the right column is the total from the middle one.
Yeah, I know, that’s nice. Anyway.
At the present time, I’m not in the market. I closed out my trades like around Wed,Thurs last week. Thank God! Cause definitely, the Yen has dropped out of the sky now. Let me show you.
I don’t know if you can pick it out, but, the trades that I was in are the bold, italicized ones. This month I was mostly in with the Comms. But, look back towards the beginning of the month. Yeah, I had mostly everyone going. But, you know what happened…I just got scared. And doesn’t it figure??? That’s precisely when the JPY got real strong. Well, at least I stayed in with the Comms then. —nod, nod,nod, shrug---- Oh well.
So, this is where I’m at. I’m not in the market. I am going to trust my system 100%, from now on. Like…no more discretionary trading. I’m going to give it to you straight.
Well, that was painful. Ok, enough explaining.
I like how the month of Dec. is starting out now. All of the Majors are trending higher against the JPY. But, with the Comms, it’s so close. The gap has closed down to only a couple pips between them all. I would like to see them all crossover back to the upside. See, this would get me to start my system from scratch. Let me show you what I’m talking about.
Yeah, let’s look at the CAD/JPY pair. Boy…they shot up on Friday like crazy! So, this trend should be changing very soon. Look, at the latest numbers. There’s only 4 pips separating the 5 from the 9. Just a day ago the spread was 22! Sure, all you have to do is look at price and how much it jumped, but…I am not watching price anymore. My focus is mostly on average price. Specifically the average price of the last 5 days, and the average price of the last 9 days (light blue/ dark blue). So, we should be seeing a crossover to the upside pretty soon. And this is what my goal is. With everything in my power, what I am shooting for is to be getting in at the crossover price. Look back at Nov 15th. I just want to know for what reason why I couldn’t have gotten in at 89.198. I mean, look! Even the day before (14th) , what was the spread? Like 0 pips! I could have been prepared to get in at that price. Even a day before that, on Monday, the pips spread was 5 pips. Then it goes to 0 pips. Then the crossover happens, and before the end of the day it ends up to be 29 pips into the trend. Look at the top row (bar). Those are the cumulative pips the trend generates at every days end. And all it is, is the spread of pips between the crossover and the 5. This is what I call trading average price. Oh, let me point out to you another thing I find very interesting. Look at the bottom numbers. Guess what that is? Those are the total number of pips that all of my 7 JPY pairs have totaled. All I’m doing is adding them all up. This definitely tells me the big picture how the Yen is progressing. Are they getting stronger or weaker? Well, let me tell you something. When I first got this idea of adding them up, it was Thursday morning, (London open) for the 30th. So, I was looking at the progression. All you have to do is pay attention, and you can see that a top happened already. And you know what? That’s precisely when I jumped, out of every trade that I was in. Boy, we definitely were done with the trend, as we can see how the week ended up. So, all I know is that this figure will be a factor with my trades, or more like a confirmation piece of data. So yeah, you can see up there where I jumped out of the CAD trades, had two running. How about some other shots for me to talk about.
Let’s look at the CHF/JPY pair. The beginning of the month apparently was trending high. You can see, at the top bar, that the total trending pips (for the previous trend) went up to 107 pips. Then on the 14th we had an opposite crossover. That killed the trend. I mean, sure, you can see why. See how high price jumped on that day, which brought up the 5 to go above the 9. Ok, that’s nice. Price can do what it wants, I don’t care. But, what I do care about is what my 5 & 9 are doing. The killed crossover price was 114.073. But then, it comes back around again, only a pip away and 2 days later. So it’s like I could have just stayed in and rode it out. Actually, look up there. I was in that trade and got out that previous Friday. But I only racked up 3 pips from it. It did take a nose dive from that point on. Well, what we can say is that this next trend didn’t go as far. It switched over only 52 pips later (on Thurs 11/30). And I just checked, I am correct there with the monthly ending pips. 53, for the system. And I had 3. See, yes, there are 52 pips on that last trend, but from the beginning of the month (in which the trend was just a continuation from last months) the difference was only a positive 1 pip. Therefore 53 for the system that month. So, that’s all nice. Right now, it’s trending CHF high. So, my plan is to wait it out till the next crossover down. I must get in it. Journal, just like all of the others, whenever I print a crossover on my table, I better get in it. My only objective is to have a trade start as close as possible to the crossover price. I mean, I don’t care if I’m late. As long as it crossed over…and I printed it…I need to be in it. I will take as many losses as possible (which will be the costs of trading) in order to make this happen. Don’t worry Journal, you’re gonna be seeing my trading actions.
How about the EUR. They are tough to trade, I think. They just switch too frequently. It’s like, you just have to grab the pips and run. You know, I just looked, they ended up with the least amount of pips compared to every other pair (36 pips the system generated for the month). Next is the CHF ( with 53). So, guess who lost the most pips to the JPY?
Yep, the AUD. I actually did real good with them this month! So, I don’t know what else to say about this. It’s all cut and dry. I guess the lesson here for me is learning to stay in “till the end”. I did do good by adding additional positions. So that just means more pips.
Ok Journal. I do need to say something. I am aware of the fact that I count pips. (I did mention this before to you) But, there is another factor involved. That would be position sizing. I know there are different camps out there that make the money more efficiently. Larger sizing for a shorter distance. But, how I figure it, for me, is that once I can get comfortable with the distance, mostly just being in the positive actually, then I’ll work on the sizing later. I would like to get to the point of being somewhat consistent with my trading. And to me that means getting as close as possible to what my system will put out. Boy…I can only imagine…if I can be relatively close to what the system generates. Then, I would be good!! But, then, at that time, is when I will start messing with what my position sizing should be.
One more thing, Journal, that I need to mention. See, I read a lot on B.P.'s here. And of course it’s so beneficial to hear what more experienced traders think like. But, I do have to say, there is one thing that I will never, (at least all the way up to this point anyway) scribe to. Everybody, and I mean everybody, uses the method of risk/reward plotting. I mean, I understand completely. But I don’t want to trade that way. So basically, what their all saying is, that you should pick where you want to get in, where you want to get out, and have it all planned out (the parameters of the trade). And therefore, since you do that, you will be able to come up with, (before you actually trade it) how much risk is present to how much reward. Like 1:2. Or 1:3 ratio. You know, I just can’t do that. I think it’s smarter, and I would want, the market to tell me when it’s done trending. Or basically when I should get out. I kind of think the market loves trends. So, I would want to follow, rather than determine when I should be getting in and out. Man…I tried that before. Just look at the beginning of this thread. I wanted to make a certain amount of pips every month. And boy, did I try. It’s all documented. That’s impossible. The market cannot be tamed. I think you should not even try to put expectations on it. It’s just going to do what it wants to do. So, I have come to the conclusion that it would be better for me to follow. Period. Not predict. Not expect. Not hope. Not rationalize. Simply follow. And make that a science. Get good at following. And, as you know, I have realized that it would be easier for me to follow average price, than actual price. But to get back to the risk/reward thing. How do I know what’s a good reward anyway? I don’t. So why play that game? Who am I to think that I should be making this or that amount? Well, I don’t. I don’t want myself to be thinking I deserve anything, actually. (Everything is a gift from God anyway) So, I say, “Hey Mr. Market…can I follow you? Well, I sure am gonna try my best to.” Therefore, I will not be having a predetermined get out place, until I get the signs to do so. I think that’s what it means when traders say ‘let your winners ride’.
Ok Mike,enough babbling already.
Yeah, your right. Let’s get on with it.
Well, I got one mission. It’s simple. Get in at the crossover price. Stay in. Get out at the crossover price. How hard can that be? Well, look, it is difficult. What I’m trying to do is presently get in at a point (price) that is an average. Which means that it’s past data. So, how do I reconcile the past with the current?
Well, first off, the more I concentrate on making my trades match what my table shows the better. I will have to utilize my entry orders smartly. Use all of the different clues that I can find. And just do whatever I can that would be considered following the market, instead of predicting it.
Don’t worry Journal, you’ll see it all take place.
Mike
Good Morning Journal!
Good Morning Mike! Talk to me.
Well, you know me Journal, I’ve been working on it. Been so busy. Every morning time is been taken up completely, so no naps squeezed in. And on the weekend, I take the opportunity when we have nothing going on, to jump on and continue on with the backtesting stuff, and just refining my trading plan. But, speaking of that, looks like I got to get you up to snuff on something.
So, as I’ve been working on this, something bothers me. As you know, I’m keeping track of stuff, at the end of every day. So, at the bottom of my table, I’m keeping track of the total amount of pips that are accumulated in whatever trend we’re in. But, I was finding that I needed to differentiate between 2 different things. Let me show you, then I’ll explain.
Here’s the latest on CAD/JPY, because their the last pair on my table. But, look at the bottom. I got two rows there. Now, what I have had, at the very bottom there, is the total amount of pips of every pair added up. Let’s see if I can give a definition of those 2 bottom rows. (First off, those 2 rows will show me a birds eye view of what the JPY is doing accumulatively). The very bottom row is the total amount of pips that I would have accumulated if I were in the correct trend. Green equals the JPY strong, (long). Red equals the JPY weak (short). Since the CAD/JPY is shown, what I would be adding up here, for them, is the second row down, on the top bar. 191 / 190 / (142 is the total for the month, so I wouldn’t add that up / then, 156 / 146 / etc…And here’s the perfect place to show you exactly how I come up with those figures. Look at Dec 4th and 5th. You can see that on the 4th a crossover took place, at 87.726. It’s a crossover going up (5 going above the 9, light blue just went above the dark blue). Now, leading up to this point, all I’ve been doing is adding up the end of day pips and having a total. Let me remind you that I’m trading the average price, so I’m basically only looking at the 5 (light blue) line. On Dec 1st, my total, end of day pips, equaled 156. Then on the 4th the crossover took place which ends the bull run for the Yen, at 87.726. So, since the 5 ema was last at 87.623, I just subtract that from the crossover. Which is a minus 10 pips. So, that ends up to be a total of 146 pips (it’s the last green number up there) for that JPY strong run, for this pair. You can see how the pip count diminishes heading into the crossover. 191/190/156/146. Now. I’m going to keep track to see how strong the trend goes the other way (JPY short), (even though I don’t trade them short…only long). Now, I have the crossover, then end of day 5th comes and the 5 ema is at 88.191. The difference between those 2 points is 47 pips, going the other way. And that’s how I have up there 47 pips, in the red. Then the next day the 5 ema ends up at 88.068, which is 13 pips going the opposite way. So, I just minus 13 from the latest running total of 47, which comes out to be 34. Which is the same thing as taking the crossover point (87.726 minus 88.068). It’s all the same. 34 pips for that trend. All this does is tell me how strong of a trend is taking place by adding up the amount of pips the 5 ema (light blue) takes on —from the crossover. And eventually to the back-crossover.
I’ll show you what my table looks like on the chart. The days are matched up.
Yeah boy, forget price. That’s all over the place. I’m shooting for average price. And to be more specific, the 5 ema price, See the crossover there? That ended the bull run for the Yen. Now it’s going the other way. Which means I will not be in. But just look at what I was looking at on end of day Wednesday of this week. That real big red candle. Guess what’s going through my mind at this time? “Yep, I missed the boat. Price just blew past my 5 line.” How can I get in if it’s after-the-fact? This is what I have to deal with all the time. But, I’m learning. I held fast, because I knew it was Wed., and there’s normally always a turn before the end of the week. Sure enough…it happens. But, the real most important thing here for me to see is a crossover. That is my signal. And boy, it’s not easy. Can you imagine looking at intraday Thursday? See how price dropped down a good bit? I bet you in real-time that 5 crossed down below the 9 line, when price was at the bottom. But, thank God I hold onto my principles. “End of day price is most important”. Plus I don’t look until end of day anyway. Price wants up. Also, we don’t have any crossover happening either. But boy…at the present time…we are close now. There ain’t many pips separating 5,9.21 and price. Just look at my table for the specifics. 17 pips separates price down to the 9 line.
Anyway…I hopped on a bunny trail there. I want to finish a point. And make another one. I need to view my table again, sorry.
So…it hit me. I want (need) to know what are the spreads between the 5 & 9, all by themselves. That’s how many pips are separating those 2, to tell me the strength or weakness of that trend. And that is different than what the cumulative pips are from the beginning of the crossover is. There is a difference. And that is what I have up there above the ‘cumulative running trend pips row’. It’s the first row, in the individual look. And at the very bottom, it’s the first row below that black line. That is the total of all my 7 pairs, down there. So, on Dec 1st, the netted amount of pips for all pairs equaled 82, for the negative. Meaning they added up to be JPY trending weaker pips. Even though the CAD trended 4 pips weaker to the JPY, the other pairs apparently are trending higher to the Yen. Then on the 4th, the CAD turned (12 pips) and joined the others and the total equaled 120 pips. Well, we can see the progression of how the week turned out. Something did happen during mid week, and caused the Yen to get pretty strong. But, it didn’t last too long. All this does is show me a big picture of the flow. Right now, the Yen is on the weak side. Cause it’s red. And I probably shouldn’t be in any trades. Also, that last row there tells me that there are 499 pips accumulated, of all the pairs, to a netting JPY trending weak, from all of their crossover points. All i can say is, there’s been a big change from like a week ago. This gives me perspective.
So, I wanted to show you that Journal. I sure hope this will be the very last thing I modify on my table. I mean, I can’t imagine I need any other data accumulated. Everything here is important.
And, there was something else that bothered me, late in the week. I realized that I really need some way to boil down all of this data. It’s a diagnosis thing. Everything I do must have a good reason for it. So, this is what I came up with. Take a look at my mind map, for this weekend.
All of this is the most important stuff. These are my clues. The Total Pip Spread is what I just got done explaining to you. (5/9 pip spread only) But, I have below that the individual numbers. And we can see that the only pair that is trending in favor of the Yen is the AUD/JPY. The crossover took place and now it’s 4 pips into it. And if I add them all up, it better add up to the last number (105)… Yep, it does. And the way I look at the ‘Total Trend Spread’ is this…If I were to be trading against the JPY, and have gotten in at every crossover point, this is the amount of pips that I would have, in total, up to this point. Don’t forget, it’s based off of the 5 ema line, not price. And of course, we have the line-up. At the top is the daily, and at the bottom is the weekly time frame look, on the weekends. Yeah, it’s evident also on the daily, of how the JPY jumped mid week, but then fell again. Is interesting. Then, the ‘Crossovers’. I surely need to know if there are any, for the JPY of course. Yes, there is. AUD/JPY. Well, this tells me that I should be in this pair then, huh. Well, look below. This is the trades that I’m presently in. Now, Journal, don’t beat me up just yet. Oh, you mean why am I wondering why your in with the CHF? Of course, please explain. Cause I don’t see a crossover with them yet.
I know, I know. But, I did tell you that I’m gonna have some losing ones, in order to catch the crossover point. Let’s look at the table. I’ll show you what happened this week.
First off, this is why I got in with the AUD. As soon as I placed the trade, I took a picture. Did it crossover? Yep. This all was like short of an hour into that next day. They were moving down. Ok. Ok. I admit. I wanted in before the ship left the dock. I was thinking this would be the closest I can get to the crossover point.
So, same goes with the CHF.
It was Thursday night. Friday’s candle was just being printed. Now, Journal, look back at Wednesday’s candle. (This was just like what happened with the CAD, remember?) Sure, I’m thinking the ship left the harbor, and I missed out. But, I’m gonna wait to see what happens before the end of the week. Thursday comes. And here I am now. Price came back up pretty dog-gone close to the crossover point. Yay! I can get in now. And it doesn’t take long for price to be printing red. (We’re only talking about less than an hour into the day Friday). So, I got my signal, price came back up to me, and now I’m getting in. So…how did the end of the week print?
Dog-gone…What can I say? I guess price continued to turn on up. Well, that’s all good and nice. But, the question now is, what’s the plan? Well, since I don’t know where price wants to go, how about my clues? What are they telling me? I mean, that’s what they are there for, right? Look back at my analysis chart. There is so much red going on. Sure it can come back on down. But, you know what? I’m not going to play the ‘hope’ game. I need to get out of this trade. The CHF/JPY one. It crossed back over, and it’s that simple. I’m out.
You can see the crossovers on the 7th, and 8th. So, from the top. Technically, there are 3 pips of a spread from the 5 & 9, but since that is red, it’s trending CHF strong. Then there are 7 pips total accumulated for a CHF trending trade. That’s the crossover minus the 5 ema. Then on down you can see where my trade was taken. I’m gonna jump at the open. Then on down is the weekend lineup (weekly t.f.). That tells me it’s JPY trending the strongest can be. But, the prices are pretty close together. I’m not taking much stock in the higher time frames. I guess I skipped the monthly t.f. look. At Dec 1st, that tells me that the CHF is trending stronger to the JPY (5 above 9). Price is above the 21 line, again, the CHF stronger. I don’t know…I’ve been losing interest and faith in the longer time frames. It’s just not automatic, or a sure thing. I mean, look, I would say this…CHF stronger on monthly. JPY stronger on the weekly. And the daily…who knows. It’s been going back and forth. JPY been stronger leading up to Dec., but now has been turning. My only point here is that I’m not going to care much about the monthly, and weekly line-ups. All I really care about now, is where the crossovers are on the daily. I’m getting out, taking a loss, because it switched back. It’s that simple. No more hoping it’s gonna come back down, even though it’s only a couple pips away.
Anyway…that’s my explanation Journal to why I got in, and now, what’s my plan.
And with the AUD/JPY, well, I am staying in till I see a crossover back the other way. Simple.
It does kind of bother me that my entry point doesn’t exactly come close to the crossover point. You have to understand Journal, it’s not easy. I guess I could have waited till Friday, cause that’s the only time price came back up to the 85.18 crossover point.
It’s tough.
But, my bottom line is, I’m not going to miss out on the next JPY strong trend. And surely there will be enough pips to make up for the losses that I incur, at the beginning.
Stick around Journal…your gonna see some good stuff happen, with my trades.
Mike
huh you know baklava , its good to see you take that with your morning coffee , i love coffee and teas but i cant take them 
gives me adrenaline rush recently im off of that for some time now 
Good Morning Journal!
Wow. Are we getting close to Christmas. It’s just next week, pretty much at this time. It will be a nice long Christmas weekend, ending on Monday, which is just so awesome. And guess what Journal? I will be off of work the following week, (in between Christmas & New Years). So, needless to say, I can’t wait till next week at this time. I will be pretty dog-gone happy.
So Mike…have any kind of plans when your off?
Well, you know me Journal, I will still get up at 3. And be able to enjoy all the time I’ll have to be working on my business. Every time I take vacation-time off. I look forward to this time, for the business, so much! So…back to your question…well, yes. I will have the end of year review. Boy…I tell ya…I don’t know of anyone who takes more of the ‘before, during, after’ perspective on things, more than me. I’m sure I did that last year, so I’ll have to revisit that post. But anyway, I have that in mind to do next week Journal. I am looking forward to doing that. And so, other than that, nothing more different. Oh, that reminds me, me and Trish do this very thing. Every single year, (at a nice restaurant) heading into the New Year, we will go over where we were at last year at this time, how the year went, what do we have to look forward to. I make this a major priority for us Journal. And she likes doing that also. (She has such a good memory! Which is most beneficial for us.) But, if you want perspective, I believe, you must consider the past, present, and (project) the future. You just need to know where you came from, and where you are going. So, don’t worry Journal, you’ll get your dose. It’ll be fun.
Mike…don’t sing it…bring it! Can’t wait either!
So Journal…man…I got to show you something. I think I have gotten to the end of my numbers. This is exciting. This only makes sense. I gave you heads up on what I’ve been up to, in the last couple weeks. Well, now, the final result. No more searching. I’m done. All the data that I need, is complete. And it’s simple! Look, this is it.
You know, that I’m trading average price. So therefore, that is what I’m going to look at. The 5 & 9 ema’s. Well, I’m looking at their spreads. I believe this will tell me just how strong the JPY is. So, how about a visual. All I’m doing is adding up the total 5/9 pip spread, of all 7 JPY currencies. And put down into one chart. So, without further due, here it is. I’m gonna give you 4 charts. It’ll start from July and run to the present.
I guess I need to do the explaining as we move along. So, if you remember, I had my best trades take place between July and August of this year. This is the reason why! In the middle, where the numbers, is zero (0). Below that is negative, and above is positive pips. Remember, these are all just added up 5/9 pip spreads. This chart is the result of these numbers.
Uhh…yeah. That was a top. And all it did was move on down. All I needed to know, back then, was that I shouldn’t have been in any trades. I should have taken profits, and then waited it out till the next move on up. Well, looks like at the end of Sep. was a good time to be getting in. Let’s continue.
So, the end of Sep till the middle of Oct was a good time to be in some trades. Then we see it kind of levels out. Sure, the pip spread was in the positive, but pretty much hovers right around 0. Well, let’s take it the end. Here’s the present view.
Well, we had a top towards the end of Nov. Then moving into Dec., it was all negative pips, for the most part.
Now Journal, I need to explain something. I am not basing my trading off of this chart (although I probably could), but this is just a reference. This is my perspective. This is a flow. This will be some sort of prerequisite to my trades. Cause, you know how I trade. I mean, what makes me get into a trade? When I print a crossover, as I have shown you on my table, that means I should be in the trade. And I need to get out at the reverse crossover. It’s all in black and white, on my table. I believe in that 100%. But, concerning this chart, I’m not going to make any hard rules to follow. Like, if it’s below the 0 line not to be in a trade. I guess this will be sort of like a confirmation piece of data. But, regarding my exits, I think it’ll come more in handy. It could help me to be getting out of a trade before the back-crossover takes place. I mean, all you have to do is look back at the month of Aug. During the middle, I should have seen how it all was just too high, and should have seen the end coming.
Well, I am continuing to come up with the previous months data. I’m in last June, (almost done with that month). But, that’s what I’ve been doing with my spare time, and plan on continuing to do, which is retrieving more and more past data. Well, all I have to say is, get used to seeing this Journal. This is exactly what I’ve been working towards. So much of my plan is coming together. I feel so good about my system.
And you might remember how last weekend I was bothered by wanting a sort-of bottom line analysis. So, that’s what I’ve been doing also. I will be showing you every single weekend this sort of mind map. And here’s this weekends bottom line.
Well, the “crossovers”. This tells me all who are in a positive crossover (JPY positive). The “trades” show me what trades I am presently in. Also where I got in at. So, according to my system, the “crossovers” and “trades” should be the same. Well, as you see there, it isn’t. I’m not in with the USD. I’m gonna show you why. But, as you see, that’s my next action. So, it all kind of makes sense, when you see my pip spread chart. The end of it is moving on up. This is the first time it hit a positive pip value since 2-3 weeks now.
So Journal…it’s game on! At the present, I’m doing good. I got some pips under my belt (shown in green).
Well Journal…looks like I’m gonna cut this now. I need some more coffee. Then, I want to come back and do some explaining on how I got into those 4 trades so far. This is pretty important for me. You want details? I got them.
Mike
Journal.
Mmmm…Oh my…brownie…so good…
It’s the little things in life…
I’m so thankful.
Man! That was good! I appreciate all the things Trish makes for me. She is so good to me.
And in another perspective…All good things come from above.
Ok. So. Speaking about perspectives…how did I get into these trades this week? Well, looks like I got to pull out the table. It explains everything.
Well, I can’t remember exactly when I placed that trade. It was a sell stop limit order. And it took. So, sometime Tuesday it did. Apparently price reached on down, picked it up, and rose on up. All I was doing, at the time that I put in the order, was try to pick out where the crossover would happen. That is a difficult thing to do! Trying to know where the average of the past 5 days will crossover down over the average of the last 9 days. (light blue down over dark blue) Well, it finally did on Thursday, at 133.134. I picked 132.867. shrug . Kind of close. 27 pips of a difference. But, this is what tells me what to do. And all I got to do is obey. See that crossover on the 14th? As long as I am sort of close to that. And I’m in. I am doing what is right. I am successful. It’s that simple. So, you can see my trade up there, and now, all I do is wait it out to the other crossover. I trust my system so much that it doesn’t matter what I think, if I obey, I will absolutely be successful. And so far, so good. How about my clues? At the top, that’s the pip spread. It was coming down. And yet, turned positive! All I have to say is, this is a successful trade so far. Man…I’m even happy about what the weekly time frame standings show at the present. Price is moving down below some levels. No crossovering, but relatively close to the 21 line.
Then came the CAD. This is a good one.
Now…for the bad news. Kinda.
That dog-gone USD/JPY.
Ok Journal. I got to run.
Man…I’ve been wanting to also talk to you about another thing. Maybe next time. But, how about a teaser.
Uhhh…didn’t I say I was trading average price? Well, if that is not any closer to average price, nothing is! Needless to say, I’m exploring this.
Mike out.
Good Morning Journal! And Merry Christmas!
Well, it’s here. Christmas. Vacation. Good times.
So, yeah Journal, I’m happy. Everything is ok. Well, not really. I’m not too bothered by the hit I took this past week. What can I say? The market turned. It’s just one of those things. I got in when I was supposed to, but all we seen was risk-on taking place. The JPY lost their butts. But anyway, this revealed something in my plan that I need to work on. A PROPER EXIT!! Yeah Journal, it’s embarrassing, So therefore, we’re gonna talk about it. I’ll explain what I was thinking. But, in any case, I need to come up with a trigger that tells me to jump. Anyway…this is what it looked like.
So, as you know, this is the 5/9 pips spread all totaled up. Last Friday was the first time in a while that the sum reached in the positive (2). Well, yeah, last week at this time is sure did look like we were on the up & up, right? Well, let’s look. Monday totaled a -4. Then went to a -48 (sorry can’t see that). Wed was a -110. Thurs the spread totaled -143. Friday ended up at -128. So, yeah, it was bad.
Ok Mike. So, it didn’t go the way we wanted. That shouldn’t matter. What’s the plan on when you should be getting out? Isn’t it when it crosses back over the other way? And you see the print on your table?
Ok Journal. Gloves off.
It isn’t that easy!!! Look.
CAD/JPY
Those 2 shots match up, being the last 9 days.
Now Journal…Look…my whole entire plan is based off of the crossovers. That’s what I consider most ideal. That is what I am trying for. Look up at my table up there. See the second row down, from the top? That right there is what I am trying to do. And you know by now that I’m only looking at where the crossover took place, the 5 ema price line, and where the opposite crossover takes place. So, the only thing I’m expected to do here is make 16 pips during this whole ordeal. Let’s take this step by step. (btw…those dates are wrong at the bottom of the chart…NetDania is goofy by that…their one off)
Anyway, my entry was pretty satisfactory. I’m not worried about that. So, let’s take it from Monday. End of day comes, and we have a red doji candle. Look up at my table. The pip spread is 12 (5/9 spread). The model shows 36 pips in the green (the starting crossover up to the latest 5 ema line). Ok, so, no problem here. I’m not gonna touch anything. Tuesday comes. Prints a green candle. My table shows the pip spread drops down to 9. The model drops only 1 pip to 35. And yeah, price comes up in between the 5 & 9. That’s to be expected. Haven’t had a green candle in a while. I can’t do anything yet. Other than start to wonder. Then comes Wednesday, end of day. There goes price. Shot above every line there. On my table, I print the back crossover. So, that would make it 16 pips of a done deal. And the pip spread goes in the red. Actually…I just noticed that I’m wrong. It shouldn’t be 3. It should be 0. Because 9 minus the 5 equals out to zero. Ok, anyway. What am I supposed to do at this point? Price is long gone. How can I get out at 87.897 ? The ship left. And I’ll be honest. All I have now is hope, and my notion that there is always a change before the end of the week. And to be really honest…I determined to go to the end of the week. That’s exactly what I did. I jumped out of everything minutes before the close. Hey…I got to go one way or the other. But, to back it up a little, look at Thursday end of day. Talk about feeling the pain. I knew that I had to go to the end of the week. But thank God Friday was a bit of relief. But anyway, how should I get out? What’s the plan that I need to take?
Well, looks like I need to work out my exits like I do my entries. I need to put on some effort of where they are going to cross back over. Even if I’m somewhat late. That would be better than the alternative. And I guess that means I need to do some serious work leading up to it. Like on Tuesday, or even on Monday, I should have been mapping out my exit, if the possibility were to happen. I guess I could have picked a price around the 21 ema line even. See, my rule of playing the ‘end of day price’ comes into question here. On this occasion, price wants to go up. And even farther up. That puts me at a disadvantage when I’m only considering end of day price. The ship wants to go!! When I think about it, I guess I do lack in the area of mapping out my exits. And I have to be honest with myself…I do place some stock in hope. But look, I’m not totally wrong about a turn towards the end of the week. It happens. Often. But I need to be smarter than that. I need to pick out when I should be getting out. Don’t worry Journal, I’ll get on it. That’s gonna be one of the things I will accomplish this week coming up, now that I’m off. I will find some triggers for the exits. And I’ll put it all in a mind map.
So, I’m looking forward to this week. I will be having very much more time (in the morning) to be getting some work done. Also, I plan on coming in here a lot more this week. We have much to talk about Journal.
Mike
Good Morning Journal!
Well, I’ve just grabbed a second cup of coffee now. And I’m ready to type.
Christmas has come and gone. All the hustle and bustle…now done. Still have the Christmas tree up. Still wear my santa hat. All the lights outside still up. So, the feeling is still around. But, boy, is it great to take vacation this time of year. And let me tell you. I’ve been taking advantage of this time off, regarding my business. I’ve accomplished a lot so far already. And that’s why I wanted to come on in here and show you. This morning, I’ve finished up the task. Remember what I told you that I was going to do? Well now I get to explain. (Believe me, this will be very beneficial to me)
I’ve been thinking a lot about this lately. What I’ve been doing, really, is preparing for next year. It’s like…I am wanting to have such a good year coming up. And the better I prepare for it, in these last days, the better. Cause all I want to do is follow the plan. You know, no more small changes to it. And it is all about following the plan. Which, in turn, means that I will be following the market. I, whole heartedly, believe in this plan. So…ok…that’s nice…here we go.
So, I’m not going to go through and explain everything there. (Oh, I thought about it though) But, what I want to do is put all of this in simple terms. Because my system is very, very simple.
As opposed to what I used to do. And probably what most traders currently do. My goal, now, is not to: make as much money as I can, follow a predetermined path (results oriented), get the most out of a trend…or any mindset like that. When I trade, this is the only thing that I will be concentrating on, shooting for, hoping for, striving towards. (It’s all been spelled out before) (but it’s what I need to always, always remember)
Match my crossover Model This is what that means.
Rule #1 - If I print a crossover, I need to be in, by then.
Rule #2 - Get in as close to the printed price as possible.
In this case it’s 109.691. You can see the 5 was above the 9 in those first 2 days shown. Then by the end of the 5th of Sep, it occurred. If you look closely, on that printed crossover, the light blue (5) is below the dark blue (9). This is all I’m concerned about, regarding the entry. I don’t care about money. I don’t care about support / resistances. I don’t care about anything else other than that number. I just need to be in. And close to it. If I miss it, I need to get in anyway. I don’t care where. As long as I’m in within a day around it. Needless to say, there’s a lot of work needed around that print. It’s the preparation time before hand. And it’s the urgency afterwards. I will be taking losses in trying. But, as long as I can say that I’m in, whenever it’s printed, then I’m good. Now, for the managing part.
I guess the only part of managing that I haven’t really addressed, is the adding position sizing. I’m not gonna be too concerned about that now. That will be more necessary much later on down the road, when I get more proficient with getting in and out of trades properly. I’ll show you what I have so far. But, I need way more specifics on it.
Now, the exits. I feel good about what I have decided on now, about my exits. This is what I got.
I want to talk about principles for a bit.
I realized, as I worked on all of this, that there is one principle that I won’t change. It’s the principle of letting price run it’s course, in the span of a day. I’m sorry, but no matter what my plan turns out to be, I cannot abandon how I feel about that. I believe it to be true, so much so, that if I have to take a loss at the end of the day, then so be it. It is tough, knowing that if I’m wrong about the direction, that I have to wait till the end of the day to find that out. It’s a hard pill to swallow. Actually, if you haven’t noticed, I do not believe in stops. My stops, inadvertently, happen to be at end of day price. That’s because I don’t trust myself, more than I trust the market. Who do I think I am, thinking I know when is best to get out of a trade? Also, all of the games the big dogs play, pushing price so far one way, (stop hunting, I believe it’s called) just to come on back? I’m not going to think that I can outsmart them. Nope, nope, nope, nope, nope. I believe the best way, for trading the daily, weekly time frames, is counting on where the end of day price ends up. That’s why, on my mind maps up there, mostly all of my decisions will take place at the end of the day. I believe that’s the truer tell of where price wants to go. So, if I’m going to lose, concerning direction, then so be it. I will only let things go for one day. And that’s it. Needless to say, I have control over my position sizing. And that’s actually more important anyway.
That’s all good and nice Mike. Any other principles you had in mind?
Well, you know, the old turn at the middle of the week. It does happen. Sooooo often. But, I’ve decided not to make that a factor in my trading. Man, I’ve thought about it, a lot. What I really am doing is assuming, predicting that that is what the market will do. Sure it happens. I’ve been right about that many times. But it is too dangerous to have that as a principle, for my trades. That’s all. I don’t need that incorporated into any plan to have.
I believe in trends. I kind of think that it’s the same thing as saying humans are creatures of habit. In the financial world, those who make their living pushing money around, will want to do that one way, for a time. Capitalize on that while they can. And that leads me to my crossover system. I believe in that big time. That is what’s telling me: when it’s trending & how long it trends for. And there can be some major trends happen. But anyway, it’s nice to finally have something to tell me that there is a trend taking place. And boy, am I taking stock in it. It’s almost like cheating. When I see, and print, a crossover on my table, it’s like …giving me the answers. All I got to do is act on it. There is no assuming of mine. There is no predicting of mine. All I’m doing is watching, and following it. Oh, and no hoping either. I am just tired of the hoping business. Let me see it happen, then act on it. This is what I am striving for.
Journal…thanks for listening.
We’re at mid week, of my vacation. And I hope to be getting a lot more work accomplished.
Let me rephrase that. I will be coming back with more accomplished work done.
We’re gonna talk about what this past year looked like.
Where I’m at now.
What’s in store for next year.
Mike
Good Morning Journal!
Yeah Journal, I’ve gone back in time. I’ve been reading what it was like a year ago here. Well, I got to tell you, it is interesting, in reading about how you were. Look…a year ago is really not that long ago. But, there’s always something to learn from hindsight.
So, during this time last year, I was being mentored. I was in between the 2 major parts of the program, at this time. We would start back up after the new year sometime. Look…it’s all documented back there. I should just cut to the main points.
Yeah right, Mike. So, was the whole mentoring program worth it? What was the most important things that you got out of it?
Well, when I think about it, I surely didn’t realize what real benefits came from it.
Man…I got to tell you Journal. Writing all of this stuff now, makes me think that I’m much smarter now than I used to be. Kind of like, that I have arrived. There’s definitely a dynamic, in my thinking right now, that I am sooooo much more smarter than I used to be. It’s kind of like I will want to talk down about myself. So, I just want to say, that I am much more smarter than I used to be. More experienced. More mature, in the business. But…come next year at this time…I guess I expect that I should be even more advanced than I am right now. I will review this post, and only hope that I have made much more progress than where I’m presently at. So therefore, yeah, I learned so very much, but will always need to know and experience so much more.
Ok, that’s nice. Now, back to the mentoring. I have to admit, the biggest thing that it did to me, was slowed me down. It is all about looking at the really important issues. Embracing principles, I would have to say meant the most to me. Look, in all of the work that needs done, (finding your strategy, developing excellent habits & routines) needs rooted in good principles. And I need to be aware of that.
I remember when it was all over, how I felt. I had so many tools & resources made known to me. I called them blocks. I had so many blocks that I needed to put together. My way. And that was gonna take some time to do. In fact, that process is still going on today. Probably will for a very long time. See, he gave me so much information in so little time. Even though I felt as if my head was spinning, with all of the material given, I did feel equipped. I know it will take a long time to sort through all of those gems. Bottom line…the process is long, but I’m enjoying it. The good thing is, I did give out all of the material right here in my journal. So, I guess I can always refer back and review it!
Well, that pretty much was the beginning of the year. Then, the rest of the year had to do with coming up with my strategy. Slowly, and I mean slowly, but surely, I found it. I have to give the credit to Terry. He helped me immensely, in finding out how I should trade. You know…all he did was ask the right questions. He made me think. Mentoring is all about getting out what’s inside of you. That’s what he did. And I’m a better person, trader, because of him.
Well, I eventually went back into the market again. This time was different. Smaller amount of money. Smaller position sizing also. I would have never thought that I would be trading .01 lot sizes. But, you know what? I got used to it. It isn’t about how much money to win. It’s all about whether the trading plan is working or not. That reminds me…this past year, trading wise, was really all about finding the plan to follow. I honed in on it, slowly but surely. Lots of tweeks took place, but at least I was in the same ball park the whole time.
I told you how me and Trish go over our year, at the end. And I remember telling her my thoughts about my business. I was calling 2017 the year for progress. I do like to come up with a word or two for things like that. It’s easier for me to remember that way. Progress, was the word. I have to tell ya…it sure was! I made all kinds of progress. I feel really good about how far I’ve come. And I’m not talking about results either. This is more of a deep…confidence. It’s internal. I guess it’s like, the more I experience, the more assured I am. I want this. It is coming true.
I went through some changes this year. One thing that hit me, as I was reading last years posts. I don’t wake up at 2:30 anymore. (that was my schedule for a couple years) That took too much of a toll on me. I backed it up to 3am, along with taking naps. Let me tell you, that makes a big difference, in the long run. You know…it is all about the long haul. Man…that is a good principle! And can surely be applied to trading.
Journal, I need some more coffee. Break time.
Ok. All better now.
Yeah, I’ve been reading my posts from last year. You know, when I think about it, pretty much every move I make regarding my business has already been posted. So, on the one hand, I kind of think this is a waste of time. But, over time, I guess some things get forgotten. What I need to keep remembering, on this post, is to stick with the biggest things. So, let me regroup and reiterate.
LAST YEAR was the year for equipping of instruction. And then a search for the strategy.
PRESENTLY where am I at?
I found the strategy. It’s been such a gradual process that I cannot pinpoint when I actually started trading it. But, I have been trading it and, to some degree, have been getting acquainted with it.
2018. This is going to be the year of cement. Let me explain.
“Cement : To become cemented; join together or unite; cohere.” I want an underlying theme of cementing going on. I guess it hit me, as I wrote above, how I had many ‘blocks’ given to me as I was mentored. Well, I need to get back to that and start cementing some of those things together.
In regards to the business, I need to build. Just like a mason does. When he builds a building, what is he doing? He cements all the bricks together. Now that I can stop concentrating on the dog-gone strategy, I will be freed up to build my business. Look, I was taught that in the material I was given. I want to get back to that. I want routines in place. I want proper practices also. I just want to put into place the foundation of my business. (Looks like I’m going to have to review all of that material, spelled out right here in my journal)
In regards to my trading plan, I want cementing of my entries and exits. I want to get used to doing the same things over and over. You know, getting in the market that same way. Getting out of the market, the same way. The whole ‘rinse and repeat’ process.
I just believe it’s time to start laying down some foundation. Trading is not all about the strategy only. It’s about the business. How am I going to operate it? Even part time. What are the essential things that need to be adhered to – daily, weekly, monthly? Since I am a swing trader, I should definitely have the time to be working on all of this other stuff.
Look, I’ve spent most of the entire year on the strategy. It’s not all for nothing. I don’t regret any of it. But, I want my own successful, thriving, trading business. And it’s about time to start putting the blocks together. With cement.
Journal, this is just my theme this year. I surely don’t plan on coming back in here, next year, and thinking I have to have it all set in stone by then. Well Mike, what would you like to see next year at this time then?
As long as I’m much closer to my goals, I will be very happy. Remember my vision? (yep, that’s what we established this past year) Well, I just want to know, for sure, that I’m getting closer, that’s all.
Needless to say, I will be working very, very hard for that, every single day. Just has I have been.
Every.
Single.
Day.
Ok Journal. I’ve got to cut this. But, boy, do I have much more I want to talk about! So many exciting things I’ve been up to lately.
We’ll talk about it. (Gonna try to fit it all in, this weekend)
Mike
Happy New Year Journal!
2018
Well, we’re only 4 hours into it now. And yeah…I brought in the New Year…But, boy…I’m gonna be needing some naps today. But, it’s ok. I got all day to relax. This is my last day off. Then tomorrow, it’s all back to work.
Well Happy New Year to you too Mike! And, as far as I’m concerned, I can’t wait to see all what you will have for me this year. I believe in you. And I know your gonna get there. It’s only a matter of time. Don’t worry, we have plenty more of it to come!
Well, thanks Journal.
Ok. So. This is what I’m bringing. I finally got my ducks in a row now. See, I placed an open trade at end of day Thursday. (Don’t worry, I’ll get to that more in detail later) So, dummy me, when the end of day Friday came, I kind of forgot that it was running. I’ve been reading a lot. (I’ll be getting to that also later) So, my broker ends and closes it all down, like usual. So therefore, I couldn’t go back in to see what my ending balance was for the month. Let alone, end of year! That’s why I’m kinda late on how the month ended up like, in particular. But, luckily, Sunday night it came open. And I finished up with all of the numbers. Look…it ain’t all that good. But, I’m not worried at all. I have such positive expectations for this coming year, it ain’t even funny (and I’m gonna get to that also). So, let’s see some bottom line stuff.
Well, that’s what my account balance looks like at the present moment. Surely nothing to brag about. It was a losing month. But, it’s ok. You can see my open trade also, which is in the positive, which makes the total equity balance a little higher. And we know by now, that doesn’t count, cause it’s not my money yet. Here’s what the last few months looks like on record.
Journal…I’m not even worried. You know…I see all of this like this. Visualize a race car. The back wheels are chocked up off the ground. The engine is running hard. Those back wheels have come up to speed, and are spinning ferociously. And guess what. It’s time for those back wheels to drop to the ground. We know what’s gonna happen next.
Look, I’m sorry. But, I can’t help having this much anticipation and excitement for what’s in store for me. I just feel really good about the process that I’m on. I am excited.
Ok. That’s nice. Let’s take a look at my other table. This is the one that compares my system’s output, to mine.
I showed you this before. It’s self explanatory. The left is what happened in the month, the system (ideal) & my trades. Now, the ‘ideal’ happens to be the pip output of the 5/9 crossover system. You can see, for instance, that the USD produced only 12 pips positive of when the 5ema crossed down below the 9ema. And my USD trade(s) produced -62 pips, that month. So, anyway, the purpose of this is to know what my system produces. I did tell you that the system doesn’t produce a negative amount. It is true. In the case of the AUD, (actually all of the Comms) the reason why it’s showing a negative number is because their respective runs ran through both Nov & Dec. If you will add up both months total pips, you will see that it’s positive, for all of them. That’s why it would be dangerous to get into a trend simply at the beginning of a month, cause it can all be downhill from there, to the end (in which that was the case with all of them). Anyway, the middle column is nothing but the totals. And the right column is the running totals. By the way…I started the tally from July, so the ending total amount of pips my system generated happened to be 3945, for the last half of the year. And look, I know this is pip counting. Like I said before, it’s only half the battle. But, it’s how I have to start it. This is just a good way for me to judge how far off I end up being, from my trades, in comparing to what gets printed from my system. So, all I’m going to be doing is shooting for this standard. I want these numbers. Heck…I just want to be getting closer and closer to them, that’s all. That’s more important to me, than anything. This is what I am modeling after. And guess what. I’m going to start all these numbers over. There’s not a better time than to start fresh, from the beginning of the year. We are even now. I’m gonna try my hardest to keep up. And all I have to do is follow the plan. Believe me, I understand that it’s almost impossible to catch every crossover when it happens. And get out at every back crossover. I fully comprehend that. But, I don’t see any reason why I can’t get close. Relatively close. Believe me also Journal…it is not in my mind, to even think, that I can beat it. That’s just suicide.
Ok, that’s all nice and good. What else do I got?
Oh, I wanted to show you what happened on my first trade. It’s kind of messed up that it took place last year. By only a day. But, oh well, what can I do. I have to obey my plan. Let’s take a look.
The top row, is the 5/9 pip spread. We can see how it was diminishing. Well, on the 28th, Thursday, end of day, as I was printing those numbers, look at where price dropped down to. Uh, yeah, pretty down there. Past where my 5 & 9 prices were at. So, again, this happens all the time. (Sorry your gonna have to hear all of this again, but, we’re gonna have to get used to it, cause it’s the nature of the crossover game) I missed the boat. I’m sitting there…thinking…well, the crossover hasn’t taken place yet. I didn’t print it yet. But, it does look like it will be somewhere around 113.05(?), I was thinking. And price is below that now. Great. Well, this happens to be my first pair that I start with. Let me finish all the other ones, and I’ll come back and do something. And that’s what I did. But, guess what…price was rising up more by the time I was done. Awesome! Thanks Asia! So, I’m like…I must get in no matter what. My rationale was…I’m close enough. So, I got in. Market order placed, at 112.953 (3rd row from the top is my trades row). I put it there because it was at the start of Friday. Then comes Friday. Well, well, well. Thank God. Price dropped down more and ended that way. Sure enough, the crossover took place also. But where? Look…113.041. That puts me only 9 pips away from the crossover. Heck, I’m more than happy with that, are you kidding? And this is what I do. I don’t care (well sure I do, but you know) what price wants to do, I got in when I’m supposed to. I obeyed. I got a crossover print, and am in a trade relatively close to it. That’s step one. We’ll see what happens hereafter. Anyway, from the top, the second row down is my model. Like I said, this is what I’m after. Nothing more, nothing less. So it’s showing now that if I got in exactly at the crossover, I would have 12 pips accrued into the trend. Ok. Well, I’m only 9 pips off of it, so, I’m in good shape. Also, (in explaining that chart) we can see what the total output of my system was for the month. 12. You can guess that for the remainder of Dec the JPY didn’t trend at all, except that very last day. And as I said before, I count only the crossover point to the 5 ema price, not current price. 113.041 minus 112.924 equals 12. That means for the month of Dec the system only produced that amount. And right underneath that is what my trades equaled out to be (both in bold, bigger numbers). And then directly underneath that is the monthly time frame line up. What can we make of that? Well, that’s the most extreme trending high, USD to the JPY, line up. Then down and left to that is the weekly time frame line up. That is always over a Friday, of course. What’s to make of that? Well, price and the 5 & 9 are above the 21 line. So, technically the USD is trending higher. But it’s noteworthy to know that price dropped below both 5 & 9 ema’s. And then below that is the daily time frame line up. Man…price has dropped below the 21, by 30 pips. But, again, need to remember that for a trend to be somewhat strong, you need both the 5 and 9 lines to below the 21. And their not, yet. Surely there can be a bounce. So…it is interesting though. This is how trends start. But, not always. All I’m concerned with (for my trading) is the daily crossovers.
Here’s the chart look, matched with my table.
Ok Journal…Let me guess Mike, more coffee?
You got it. I’ll be right back.
The good thing is, everyone should be sleeping in this morning, cause of the very late night. I’m happy about that. More time to get some work done.
I’m only beginning here.
Mike
Journal…
Ok. So. Remember me giving you that teaser a few days ago? Well, yeah, we need to talk about it. I was a little bit more excited about it, in the beginning, when I first discovered it. But then, the more and more I pondered what differences it would have on my trading, if any, I’m starting to doubt myself. I just don’t know. Maybe at the end of this, I will have realized something. I just don’t know. So, let’s begin. I’m gonna show you the comparison.
Normal Japanese candlestick charts.
Heikin Ashi Japanese candlestick charts.
I’ll tell you what I know, in layman’s terms.
It is all about finding/seeing average price. It’s constructed so, with the average price being most important.
It still has the 4 crucial end points of price: open, close, the high, the low.
The high and the lows, of the candlesticks, are the same. No difference there, within their time frame.
The open of a candle will be at the middle of the previous candle’s open and close. See, we’re not used to that. We’re used to seeing where price was last at, and then continues on from that point. But, this new starting point will begin at the midway point of the last candle (of it’s open and close). It’s easy to see that on the chart when you look at it, with that in mind.
The close of a candle…kind of fuzzy on this…but I think it’s the average of all of them – open, high, low, close.
And doesn’t it figure, when we look at a live chart, we see what the price is. And it’s such the average price. Needless to say, it’s not what the current actual price is. So, therefore, the question would be, how important to me is what actual price is? …I’ll come back to that in a minute.
Before I forget, I want to mention this. Just look at the difference of those 2 looks. Talk about seeing a trend easier. It’s no contest. Heikin Asi has it. It’s smooth. Look at the colors. They pretty much stay grouped together, more than the other. So, that’s a big plus. Also, how many times have I said to you Journal, that price is all over the place. And to me, that’s fooling! That’s precisely why I want to trade average price, than current price.
Another cool thing to know, is when you look at this chart, when you see a high trend, there are not wicks on the bottom of the candles. Likewise, a trend going down, no wicks on the tops of the candles. Basically, that means strength. Conversely speaking then, where there are wicks, that’s what price is feeling out. And probably where it wants to go. Just look at the charts, with that in mind. It is amazing. And I need to tell you, I did do a lot of comparisons, between the 2, in regards to what the differences of the crossovers are. Guess what? There is none! Maybe a pip, but not any more. And that does only make sense. Because that’s exactly what we’re talking about, with the 5 & 9. Average price. So, they do match.
I just have one, little, itty, bitty, problem. When I place a trade, ok, say a market order. I am going to want to know what the actual price is. Right? Cause that’s where I’m getting in at, at the present time. And on this platform, it doesn’t show me what the actual price is, unless I switch it over. Look…I guess I’m just making the point that what I need to do in the present, I can’t have the average, at that time. I need present price. That’s all. This is my only hang up.
But, I just remembered something, as I was typing this. See, I keep forgetting that I have an account with Tradingview. Yeah, I buck up like $40 every month. For some time now. But, I just don’t use it. So, recently I jumped back on there and made up some charts, this particular way. And guess what? They do show you both present and the average price at the same time, as what the final closing price is at. So, I’m real happy about that.
So Journal…I do think that I’m going to make the switch. I’m going to convert. Bottom line…it all aligns more closely to my principles. I want to trade average price.
Even at the end of every day, when I make my table, the only real difference is gonna be that the red figure will be the average, not the actual. All of the other lines will be pretty much the same.
Here’s my TradingView shot.
Well Journal, I’ve got to run.
Sorry. What can I do…getting busy around here now.
Mike
Good Morning Journal!
“Rise and shine…sunshine!” Man…I remember my mother used to tell me that, when I was little. What good memories.
So Journal, we have some things to talk about. I want to talk market, and then, finally, maybe I can get to telling you about this book I have been reading. It’s a real gem. I’ve been getting a lot out of it. I think it’s one of those books that pretty much every trader has read, and if not, will eventually. Well, in any case, I think I want to go through it here. Remember Journal, when I mind mapped another book, in here? Well, I want to do something similar to that with this one, because it’s definitely worthy of that.
But first, I’ve been wanting to talk market. I haven’t done that lately. And also, don’t forget about my open trade. I want to check in with that. I don’t know, maybe it’s not open anymore. We’ll take a look.
So…yesterday, I prepared for our talk about what’s going on in the market. I took some pictures. And I always feel the best way to approach the present, is to catch you up on what has already happened. Ready for some perspective?
Well, this is what’s most important to me, the JPY. And that should answer the question. This is my 5/9 aggregate pip spread for the Yen pairs. As you can see, it’s not looking so good. As a whole, the Yen has been selling. Right now, the total pip spread is -174. To look at how this past week went, which was the first week of the new year, just count back 5 blocks from the end. Monday’s count didn’t move any more or any less, from the previous Friday. But, we need to remember that that was the holiday and it was very light trading that day. Tuesday got a little bit better. Even Wednesday was looking up. But then, here comes the mid-week turn around. Going through the rest of the week, the Yen pairs were being sold off pretty good. We can’t forget that Friday was NFP day. So, aggregately speaking, it was risk-on sentiment. Needless to say, given the depth of the negative number, there’s pretty much no JPY buying. Well Journal, that’s what I’m most interested in. Does that mean that I have a bad trade running? We’re gonna have to take a look and see. But, I want to see the field first.
This is what the month of Dec looked like. At the top, is the daily time frames. Under every Friday is the weekly time frame line-ups. And the monthly Dec 1st line-up is at the beginning. The color purple is me. Yeah, that’s nice. But what I think is interesting here is the reddish colors. That’s the Comms. You don’t need to be a genius to see that all 3 of them have been dominating the scene lately. So much so that it reflects in the weekly time frame standings. They’ve moved on up. So now that we know what’s been happening, let’s look at the first week of the new year.
After a bit of a drop by mid week, the Comms stick together to end the week on top. That’s on the daily. But look at the weekly standings. Slowly but surely, they are closing in. You know…more and more now, the way I view the weekly time frames is this. It just tells me how long they have been strong. Meaning, it’s the length of time that’s important to note there. For such a long time now, both the EUR and the GBP have dominated. They have been bought way much more than any other currency. It surely has been the trend. But the changes I see, are now coming from the Comms. And what sticks in my mind, because of reading the news, is it’s the metals (in the commodities market) that’s making some kind of comeback lately. I mean, I do see many other things happening here. Like China, which is the big player when it comes to these currencies. Oil, in regards to the CAD. And, of course, it’s just the whole risk-on buying taking place. In a sense, the whole commodity market. So, that’s kind of what I see as a reason. But, in any case, does it really matter? Well, it is interesting. I do like to see the group dynamics play out. The 'ol risk-on vs. risk-off.
Well, how about a chart. I don’t throw much of these out there anymore. But, I do have to say, I like my new Heikin-Ashi charts. There’s no excuse not knowing any kind of trend here.
Oh boy Mike, I think you better start telling me about your trade running, with the USD. Cause that don’t look too good up there.
Journal, you need to relax. I’m not worried one bit. I trust my system. I’m following it to the tee so far. I got in when I was supposed to. And when it’s time to get out, then I will.
Nice Mike.
Now, don’t forget Journal, I’ve switched over to average prices. So therefore, the red blocks is not what the current actual price is anymore. Instead of it used to being the actual closing price, now it’s the average of the open, close, high, & low… closing price. Anyway, you can see that I bought it (sold it) at 112.953 (third row down, from the top). And yeah, price has now come on back up to it. I know, I know. Thanks a lot NFP. Well, looks like it’s time to jump. But, what’s my plan dictate? Well, we have to look closely at this.
Is there a crossover yet? Meaning, did the 5 ema crossover above the 9 ema? Not yet it didn’t. Ok, so , that’s a fact. Another fact is, that the current price is above where the crossover will take place, if it continues to go in that direction. So, the plan is, to be getting out around where the crossover will happen. So, I feel like I have a choice right now, between 2 scenario’s. Wait one more complete day to see if price will continue on up. Or get out at the open.
See Journal, so far on this trade, I have executed it like I’m supposed to. And I feel good about that. I really don’t care about what happens here, as long as I follow the plan. I know trades will go like this. You know, the trend just might not materialize yet. I’m not going to take a guess. But, I do need to prepare myself for the exit, right now. Because, another fact is, presently, that the 5 & 9 ema’s are pointing up. That right there should tell me to get out. See, I could be thinking like, oh, well, price went all the way up to around 113.30, which hits the top of the resistance, but now is on it’s way back down. So, maybe I should wait one more day and hope it continues on down. Just one more day. Look…I guess it could end that way, but honestly, I think that’s what you call ‘hoping too much’.
So, I have decided, right now, that I’m going to cut my losses short. At the open, I’m out. Look, it just didn’t take. And come Monday, end of day, if there’s a turn on down, then guess what? I get in again. That’s all. Plus, I’m not losing a whole lot here. I did take a picture of my account before it closed down for the weekend. Let’s look at it.
Ok, so, that’s all good and nice. I got the plan. Will execute it as soon as the market opens, in like around 12 hours from now.
Well, Journal, that’s all the market I wanted to talk about.
Now, time for some more coffee.
And I’m gonna come back and we’re gonna finally talk about this book I’m reading.
Yep, getting a little bit more educated.
Mike
Journal…let’s go.
First off, this is the first book that I bought, on my phone, only. I don’t have it as a hard back or anything. So, anytime I want to read, all I need is my phone (which, by the way, is with me everywhere I go). It’s on my ‘ibooks’ app. on my Iphone. Pretty neat! I mean, when I stumbled upon it, and thought it was worth getting, I bought it through my phone, and the next thing you know, bam! It’s there, now. Like, in an instant. No more waiting for it to come in the mail! I don’t know, maybe I’m just too old, and this has been a thing, but…who cares…I love technology!
So, not only have I been excited about reading a book anywhere I can go, but this particular book, is so awesome also!!! I just love getting educated.
Well, let’s talk about it. First off, what I’ve found very interesting is this. See, in much of the beginning chapters he goes on and on about how this approach, of trading the markets, hasn’t always been. In fact, he states that Wall Street, even presently, does not scribe to trend following. They do like a, reversion to the mean, type of way of making money. And I don’t fully understand that way. I mean, I guess I understand, in theory, that if price has gone away from what it’s value is, then price should come on back to it. They place bets that price will come back to fair value. Also, there’s a lot of fundamental analysis going on with the big money players. Which is contrary to the technical analysis method. Anyway, I’m reading all of this stuff not even knowing that there was any other way to approach the markets. Look at all what we learn right here in BabyPips. Sure, there’s different aspects to exploit about the trend, like breakouts, ranging strategies, buying the dips, selling the rallies, support/resistance exploiting…etc. But, in pretty much all of those types of approaches you kind of have to know what the trend is. Trend is central, in which all new traders are taught. But, this book makes it well known, that this is not how it used to be. And especially how the big money traders on Wall Street simply do not trade this way. So, he has made known, how this new idea of approaching the market has caught on. Also how it differentiates from what the conventional method has always been. So basically, it was confirming what I have always thought was the best way to approach the markets. Man Journal, I even just got done telling you that I believe humans are creatures of habit. And that it will be evident, in the market, as a trend. Ok…so…a lot of confirmation for me in this area.
I’ve heard of the Turtles before. That’s a pretty big following. But, I’m not exactly sure who was the founder of that. But, I kind of have a feeling that this guy might be him. Or if not, maybe one of his buddies was. I’m just not quite so sure about that yet. I just haven’t studied the Turtle method, in depth. I do know that BabyPips has a thread on it. And I have heard about the famous story of a guy who did an experiment, by taking some people (so called off the street) and turned them into trend traders. Some of those people moved on to become some incredible successful traders. In any case, I’m a little fuzzy about it all, but I think that this book has it’s roots in the Turtle’s method. Maybe by the end of the book, it’ll all be clear.
So, let’s see. This is a pretty big book. And I’m just wondering how I should explain it here. Surely, I would like to go through it chapter by chapter, but, I think that will take such a long time. I do have to say, that I do know, and am familiar with a lot of the material. So much rings true and is undeniable, in my mind. Lots of confirmation. But, I guess I will touch on what is most meaningful to me. And exactly what I am learning.
Well, I want to explain what happened already to me. See, everyday, I’m always wondering what am I accomplishing, in regards to my business. And of course, this book has been my attention getting lately. So, exactly what kind of work am I getting done by reading this book (I ask myself)? Well, is learning about some really great trend traders contributing directly to my business development? Uh, no, not really. So, this has been going through my mind pretty much every morning. But…as I’ve been moving through the book, kind of rapidly through those sort of things, I’ve finally come across some good stuff. Boy, it hit me. Now…I’ve got something. There’s a chapter…well, let me just show you.
Decision Making!
Yes! Well, guess how that directly applies to my business? I’m sure you remember Journal, that’s one of my core trader skills. And I even have a mind map on it. So, that’s what I’ve been working on, as of late. Hey, look up there, at the top right. See the ‘notes’? I’ve been highlighting notes in my book. All that I deem important to me. Like I used to, with real books, with a yellow marker. Really cool. Well, I’ve come up with another mind map on decision making. But, to be honest, it’s not quite done yet. So, rather me try to explain all what I got down on it, I’ll try to show you my mind map of it. It’s quite big.
Well, there you have all of my highlighted stuff from that chapter. And why I’m not done with it yet, is because I want to simplify everything into principles. I got the top right one done, and also the second one (sorry you can’t see it), but that’s it. And then, when that’s done, I want to redo my decision making mind map for how it should directly apply to my trading business. You know, with the idea of using the decision making skill in…well…making the decisions that I have to make. That’s what I have in mind. Now, that’s working on the business.
So Journal, I am excited about this book, and all that I can get out of it. Let’s take a look at some of the other chapters in it.
Ok Journal…got to run.
Mike
