My journey journal...from demo to live...and beyond

[MikeWolski]

Good morning Journal.

Alright, I’m ready now. I just had to finish up some final numbers (ran out of time last night). But here we go. Got another cup of coffee now and ready to type.

Another weekend upon us. But this past week was very interesting. And I’m talking about how the market moved in conjunction with my strategy. But look, I know I told you that whenever I was gonna make a move I would come in here to explain my moves, like in real time. Well, that did occur, but I just can’t! Oh, I thought about you. Wanted to. But just couldn’t. It’s the timing of it. Let me explain.

See. At the end of the day there’s a lot going on. First off, I get home from work around 5pm. Between dinner, Trish, my daily numbers extraction, and then a trading decision is a lot at the end of the day. Plus the fact that we don’t stay up late. Cause around 8pm we like to call it a day. But…that doesn’t mean I can’t explain my thought process during this time, right now.

Well, let’s see. This week encapsulated a market turn for my JPY currency. So therefore that means I must change also, right? Cause all I’m doing is following. I’ll try to unravel it for ya.

Ok. So here’s Monday’s results.

What all this tells me is this. The JPY is currently in a bear market (red). Meaning that currency has been weak (aggregately) against all of the other currencies (red line moving higher means a stronger bear market, likewise, moving lower means a weaker bear market). You can see there by how much also. So, last Thursday (Jan 16th) they hit a high of 167 (I’m not gonna explain that, cause it’s written up previously). So then Friday comes and ends a little bit stronger (139). Again, last weekend I posted about how they ended the week looking like a turn. Well, Monday continues in that direction (120). All this means is that the bear market is weakening (the JPY is getting stronger).

So, do I make a move? Absolutely not. Nothing is telling me to move yet. That line is still red, right? Plus, the number 120 is pretty high. There is much distance it can drop while still being in the bear market condition. Basically, they can retrace very much. Anyway. Tuesday comes, and this is what it looks like.

Now that’s a big drop. The current bear market is weakening. Meaning the JPY is getting strong. Right? So, the strength of the trend drops to 64 from 120. Translated into pips would come out to be -249 (my 7 JPY running trades). And translated into my account would be a drop of 2.30 % of my account balance. That’s in one day. I know…it was a lot.

So. What am I going to do? I’m sitting there, Tuesday end of day, seeing nothing but a turn, right? Basically, my account balance is dwindling all of the profits made previously since last Thursday. That’s 3 consecutive days in a row. So. Again. What am I gonna do? Man…I remember it. Well, my plan tells me to follow. And I do have some clues to tell me when I should change. But given all that, the bottom line is that I’m supposed to stay put. And that’s what I do. All I’m thinking now is what’s most important, to follow my plan (and, of course, I’m talking very much now to Him, about it).

Let’s see what Wednesday brings.

Bottom line is the trend is still weakening. See. It goes from 64 down to 39. But, the thing is that I actually made money that day (53) pips positive. Know why? Well, that’s all thanks to the GBP. See. And this is why I like trading a complete currency. Cause you don’t necessarily have to get them all right, as long as you are on the majority. Well, on that day, the Pound just crushed the market, across the board, including the Yen. And that bodes well for me. Cause my direction is still a bear market JPY (all 7 Yen pairs long on the charts).

But, my aggregate turns out to be even lower. All this is telling me that the JPY is getting stronger. Will the trend continue this way? Or. Will the trend stop correcting and resume the bear market now? See. We just do not know what’s gonna happen next, until it unravels. I’m sitting there, on this Wednesday evening, really in a conundrum. I keep telling myself that I’m supposed to follow. But, the market hasn’t yet turned. And I won’t know until end of day Thursday.

One of my clues (because of backtesting results) is looking at the amount of consecutive pips leading up to a turn. And my magic number is -380. Well, look up there. That hasn’t happened yet this week. This week went like this… +53 pips, -249 pips, +53 pips. So, technically, I’m supposed to stay put.

Well, I’m stalling that night. I keep watching the live charts. 6 o’clock comes around. 7 o’clock comes around. And you better believe that I’m talking to Him a lot. I just want to be guided, that’s all. So, my final decision was this. "I know I don’t have a definitive, preplanned reason, but I’m changing directions."

Look. The honest truth was this, Journal. I trusted Him with the decision. That’s what I did. I exited out of all 7 JPY pairs long, and then immediately went back in with the 7 pairs short (JPY strong). And then, shut it all down. I’m not gonna have anxiety about my decision. Well, I don’t want that to be the case, you know? Honestly though…of course I’m concerned. What am I gonna wake up to? Disaster? See. I’m not basing my decision on a pre-planned rule. That’s what’s bugging me. So, I’m just gonna wait and see what happens. And learn something. That’s all.

Well, I wake up the next morning. You know, about the time London starts out. So, after a minute or so, I grab my phone. Check what my JPY daily candles look like. What am I wanting to see? Sure. All red candles, right? That’s my direction now. Even though the stated market sentiment hasn’t officially changed yet. Well, it only takes one to two seconds of a look. ALL RED!

And I close it up. And thank my Lord.

The market sentiment is still moving that way. JPY getting more and more stronger. So much so that at the end of that day the market did change directions. Look.

You can see that on the 23rd (Thurs) officially the market changed to bull. 10 into it. (That would be 10 pips aggregate of my 5/9 pip spreads)

So, I just stay the course, for Friday. And the market continues in that direction even more. You better believe I’m happy. This is the second time I’ve got the direction correct, this year. See above. There has been 3 market changes so far. Jan 2nd into the 3rd. Jan 8th into the 9th. And Jan 22nd into the 23rd. That’s nice. I know. Anyway.

Look up there. My system is to follow the trend, and in the end hope to come out positive. Sure, I made money all the way up that bear market. But I also lost a lot of money on the way down, right? Well, I’m aware of that. That’s my system. But when I think about it, I believe that’s the best I can do, with the knowledge of this fact that "I do not know what the market will do next."

Some trends are longer than others. And frankly, no one trend is the same either. All I can hope for is that they stay longer than shorter. I mean, last year there was some monstrous lasting trends. Especially approaching May and went through June.

But, another major factor with my system, if you don’t already know it, is how well I can change, when it does change.

Oh, I just now remembered another point that I thought of this week, about my system. You know, I haven’t had the experience yet, but I do believe what will propel my system will be in the adding of position sizing. More precisely, leveraging up at the right times. But I haven’t been able to do that just yet. All I’ve been doing is a lot of catching up lately. It’s ok though. At least I haven’t made any real mistakes so far. And I’m very happy about that.

How about some shots.

You can see where my latest trades have started. All shorted, of course.

Well, at least I’m approaching my break even threshold. See, I started out with 30k. And the current unrealized balance is only $232 short of that. So, that’s all good and nice. I’m still in ok shape. The system still has a lot of proving to do. I have to keep telling myself, that time is on my side.

Here’s my loaded pic.

Bottom lines. Since the year start.

• The perfect system is currently running +600 pips.
• The day late system is currently running -1092 pips.
• My actual trading is currently running +358 pips.

Look. I’m aware of the fact that this is not completely accurate. This is just a way of tracking these 3 things. That’s all. See. My trading decisions can’t be right at 5pm every night. First off, I need some time to run the numbers. And also when you have a basket of 7 trades running, even an hour can produce a pretty good swing of pips, one way or the other. But, all of this is just a way for me to have some kind of benchmark of the system. You know, proof of concept.

And speaking of proof of concept, this is what I finished up this morning. Journal, I’m sure you remember me showing you how I am tracking the other currencies in the same way I am with my JPY. And for the whole purpose of knowing whether the system will work with them (even though I’m not trading them). Proof of concept, right?

Brace yourself.

Well, I think it’s self explanatory. Each currency is either trending strong or weak. Green, or red. And in the middle, tells of how strong that trend is. Which is the 5/9 aggregate pip spread.

Look at the CAD, this week. They changed trends. From bull to bear. I think that was due to their rate decision this week. It didn’t change, but their talking about a rate cut in April, I think. So, the market is pricing that in now.

Oh, and just so you know. I haven’t explained a number up there. Cause I just implemented it this week. I think it’s important to know this. And looks like I haven’t finished CAD. Man, I missed this, this morning. The latest, with them (CAD) is that they are trending in a bear market against 5 other currencies and 2 other currencies they are trending bull. Hence what 5-2 means. Then the day before that they were trending bear market against 6 other currencies and one currency was a bull market. So therefore, whatever market (color) their in is what that first number will be.

Look up to …let’s see … oh, the CHF. Pink. Yeah, since the beginning of the year they’ve been strong. Climbed up to trending 7-0 (that’s against everyone) for a good while. But look most recently. Their faltering. And quickly. 2 things that can tell you that. First, their pip spread (bull market strength, middle number). And also by how many other currencies. This week they went from 7-0 to 6-1 to 4-3. And respectively, 81 to 49 to 25. Big change right? Well, let’s see that that looks like on the charts.

Well, 3 candles from the end, their 5/9 ema’s showed bull on every one. Then 2 candles from the end shows the GBP switching over to Swiss bear market, hence 6-1. Then the last candle shows the GBP, USD, JPY officially switched markets (4-3). That’s just the latest sentiment, but looking at the NZD and CAD (bottom center and right) those look like their turning also. But we really don’t know that just yet. You can see how weak the AUD (bottom left) is. Quite.

That’s all good and nice.

I need to back it up a little.

Proof of concept. This is in those last 3 sets of numbers. Top row is the 7 currencies totals. Then the next row is the JPY. And the last row is the complete 8 currencies total. These are all running totals. In pips.

Basically, if I ran my system, in the same way with everybody (not just with the JPY), what would the pip count be?

All I’m really concerned with is whether the pip count is increasing or decreasing. That’s it! Honestly.

You can go back and see which currency has been producing the most, and down to the least. It is interesting. But, I’m mostly concerned about whether over time there’s an increase in pips. Simple as that. And right now, the final pip count is at 3,415. That’s very good. But look. I know that is not realistic. By far. Cause I can’t change right at 5pm (daily market close). And this is the perfect system, which is impossible to achieve.

Look up there at the GBP. I am fully aware of the fact that their pip counts are very much more than everyone else’s. In fact, everyone’s pip count is slightly different, due to their average daily ranges. I’ve considered this. Believe me.

Am I comparing apples to oranges? And am coming up with an aggregate total that’s not all that accurate? Or distorted in some fashion?

All I can say is that I have factored that in. I know that the Pound will travel a lot. I do have all of them itemized. And I look at that. Like that one day this week (I just talked about that earlier) how the GBP got super strong and skewed the numbers. I factored that in. The outcome would have been in the negative numbers, which did have a bearing on my decision, to switch my direction.

Anyway. Journal…I’m getting lost here. Losing my train of thought.
Looks like I got to cut it short.
Maybe I will continue with more of my thoughts tomorrow morning.

Alright Journal. Thanks for listening.
Mike

[MikeWolski]

Good morning Journal.

Well here we are Journal, Feb 1st. This is a big weekend for me. We have a lot of work to do before the weekend ends. See. Along this journey, there aren’t any more important steps along the way than, well, like right now. The end of a month. These are the times that I will need to check in. Sure, I’ve been giving you a snap shot of what’s been happening on every weekend, but now is the first time for some new stuff.

Let me reiterate some things, from the beginning. This year, for me, is the year of simulation. What that means is that I will run and operate this business of mine like it’s the real thing. Because, in my mind, there’s absolutely no reason why I can’t prove to myself whether I can do this or not. It’s nothing but numbers. I do not need to have a large bank account of real money, to prove this to myself. I have all the tools necessary to see this through. So, why not start here, right?

Anyway. That’s what I’m doing this year. I’m working it.

Well, now is the time that I would pay myself. Whether I rack up some profit or not, I want to (need to) pay my bills. And this is the time for that, at the end of a month. So, I’m gonna track all of this. And I’ve explained this before, but, in my business I have 3 accounts.

• Trading Account
• Business Account
• Checking Account

The first one is the generator. The second one is the pot. And the third one is where I pay myself. All I’m gonna do is keep track of the money flow between all of those 3.

Well, I need 3k to live off of for a month. So, whether I have made profit or not, throughout the month, I need to draw out that much from my trading account. And I did. I’ll show you in a minute. But, the dynamics that come with that definitely need to be played out. Needless to say, I’m very glad to be walking down this path. Cause it’s the real thing!

I wanted to mention this before I forget. See. A big reason why I’ve never been able to do this before is because I haven’t been able to come up with my way of trading. You know, finding my strategy. I think that’s probably the biggest factor that needs to be hashed out. Well, for me anyway. See. I’m sure someone could wing it in a haphazard way. Simply trade away in whatever manner that is, and just keep track of the numbers at the end of the month. But for me, if I don’t have a consistent method, a plan to follow, then I won’t be able to track the effectiveness of it all. For me, it’s like this is the most important part of the whole entire operation. And as I’ve explained to you in the beginning, I believe I’ve found my way. I’m putting it all to the test.

Ok. That’s nice.
Let’s get to some numbers.

The way I read this is line by line, going across.
So, the first line reads, what the beginning of Jan looks like in each account. Look. I can plug in any amount of numbers I want, right? That’s all they are anyway. Numbers. But, I’ve decided on this. $30,000 to start. This is what I really wanted to start out with last year, in real life, when I tried full time. Look. Why don’t I put something like 100k, or 300k, right? Give myself a good cushion. Sure. But, for me, this is not realistic. Whatsoever. And I’m surely not going to trade under the illusion that all I need is something like 1% a month to pay my bills. I mean look. With this amount, all I need is to generate 10% a month. And frankly, I don’t even need to generate that amount every single month. Cause, like I just did, all I need to do is withdraw 3k from the total. And then continue. See. I think this is a big enough amount, in most realistic terms, in which I believe is possible. That’s all.

But, I think the bottom line will be in the viability of my strategy. And this what I want to do most of my talking about, this weekend. But, just let me get this nonsense stuff out of the way first, Journal.

Look up there again. My business account. Yeah, ok. So. I got nothing in it. I know. So what? I could put any number I want in there, right? Well, I’m playing reality here. And this is probably the way it would go. I’m not gonna have all kinds of money to put where I want. I’m not a rich person. What I am doing here is building a business. From the ground up. And sometime in the future, that account, just like any other business has, will inevitably need to be built up. Right? Or it just wouldn’t be a business.

The good thing with my business is that I don’t have much in the way of expenses. You know, the overhead costs that come with every business. I’m sure I could incorporate some risk management into that aspect. But not now. Anyway. The expenses that would come my way would have to be paid out of that account. Right? So therefore, I need to build that up. And there will be a time for that. But what I’m doing right now is making a priority out of paying myself, first. I just want see whether I can sustain this. Can I trade, with this amount of money, while drawing out that amount of money, every month?

Now that is the question I’m wanting to answer. Also it would answer the question whether I could do this full time. Basically…is this self sustainable?

Look. If the answer is a no, then at least I should be able to find some answers.

• How much does my system generate?
• How effective is my position sizing?
• How well does my system work under certain conditions?

The answers to these questions should enable me to make the adjustments I might need. And I’m sure I will carry out those adjustments. Right?

And over time, however long it takes, it will be clear to me when I’ve proved this to myself.

Ok Journal.
Enough nonsense already.
I need to get into this.
I have so much to talk about. So, I’m gonna cut this short and come back with how I thought the month went.
I’m just getting started.

Mike

[Gilas]

Good luck! Looking forward to your results.

[MikeWolski]

Journal.
Here we go.

• My system is profitable. So far.
• End of month dynamics.
• Need more work on when to add more sizing.

Let’s see…where do I start…
How about a play by play of how the week unraveled.

This is what last weekend, at this time, looked like.

• JPY is in a bull market (green line).
• 82 pips of an aggregate 5/9 pip spread (strength of their trend).
• Trending bull against 6 other currencies and 1 bear (6-1).
• I’m (been) in with 7 JPY trades short.

Monday comes and the result is…

Unless you’re under a rock, you would know that there was a nice gap to start the week out with. JPY strong. And that’s how the rest of the day went.

• Bull market still, with strength of 170.
• Trending bull against all 7 of them now.
• The days total pips turned out to be 409.

I was all kind of happy, I remember.
Then Tuesday comes, and ends.

• Bull market strength moves up to 189.
• Correction of a day. -128 total pips.
• Again, no changes to my 7 open running trades.

Wednesday comes and goes. Results.

• Bull market strength goes higher to 210.
• Pip count for the day comes in positive 169. Covered yesterdays losses.
• Made a change to my trades. I added another position sizing, to each (first time for this…am very nervous).

Thursday comes and ends. Results.

• Bull market strength loses some to 202.
• Pip count for the day comes in at -14.

Now, I got to stop things right here.
At this point, as I have been all week, I’ve been wondering how am I going to navigate my money?

• I want (have) to pay myself.
• My trades perpetually run.
• How will I do this?

I’m only gonna be honest with you Journal. By the way the market was behaving, I was getting scared. I was dealing with some serious emotions. And I’m sure a lot had to do with having 2 sizes on each of my 7 trades. That didn’t help matters. And what about what the market looks like? I mean look, doesn’t it look like a possible top? Plus, we’re heading into the very last day of the month. Why won’t there be some good profit taking from the market participants? Right?

And while I’m still being honest with you, I guess it doesn’t help when I’m watching the market way too much that day. Boy, I remember it. Towards the end of the day, in the last hour, it was swinging way too much for me. I think it was the Pound that was moving the entire market in sort of a risk-on kind of mood. It was that day in which they had their interest rate decision going on. So, sure, things went differently than what the underlying sentiment was. Right?

I do know one thing though. I can’t make any moves until the end of day. That is something I won’t budge on. It’s a rule. Even if it was only an hour before time is up. Plus, I need to see some numbers. Like what I just showed you up there.

That’s when it happened.

I jumped. And my reasons were:

• It’s the end of the month.
• It’s the time to pay myself. By restarting a new demo account with the correct balance, as like I would be drawing out money from a real account.
• Give the market the last day for any clues of a change.

I took a picture moments before I exited out of all my positions. Take a look.

The dotted lines are my (short) entry places. 2 on each. See them?
My second size doesn’t look so good against the GBP (top row, third over). Also against the CHF, same thing. But quite decent against the bottom 3 (Comms). Well, remember, I trade a complete currency, and this is how it is.

Look. It’s not pleasant when you’ve seen your account balance at a much higher place than where you’re presently at. But, it’s something I had to do. I was happy though to be in the positive. Cause, if you’ve been paying attention Journal, you should know that this month has been mostly negative for me. I think it was this past week that I finally got caught up. But, wouldn’t you know, after I upped the size on everyone, is when I temporarily seen a big account balance. I was well over 32k. I remember thinking that a 10% increase was just awesome. I was approaching that figure, anyway (33k).

Man…yeah…it was nice while it lasted. But, this is business. I got to do what I got to do. I’ll take profit…period. Better than being negative, right?

Anyway. Let’s move on.
I’m out of the market now, going into Friday. What was the result?

• Bull market strength goes higher, to 215.
• Pip count that day ends with +227.
• I don’t benefit from any of that, cause I’m out.

Well, I do have to tell you the latest. And this answers the question of

• How and When do I get back in, continue?

Something did trigger my decision. I was reading some news later on that Friday. And when I read that Asia will come back from their holiday (Lunar) on Monday. “And you better believe there will be some heavy selling when they do.” Honestly, when I read that, that made me think to get in the market before the end of day hits. Cause I was wondering whether to start the week off when it starts, or at the weeks end. See. I remember that gap that took place (and I benefited majorly from it) last weekend. So, those 2 things tilted my decision to get in just before the close. And that’s what I did. Now…whether it was good decision or not will be determined. I’m just stating how and why I did what I did.

Also. My trading strategy dictates that I run with the market. I’m not gonna play that silly game of trying to figure out when to get in and when to get out. I’m done with that nonsense. It’s in the long run, that determines my outcome.

• The market is bullish JPY (green line).
• No indication of a changing market (215). That’s quite high for strength.
• I’ll start off the month from the beginning.
• I don’t know what the market will do next! Therefore, I follow it.

Alright Journal. Got more coming.
Just need to block this off.

Mike

[MikeWolski]

Good morning Journal.

Feb 8th. Another weekend upon us now. And I got to tell ya, I had a great day yesterday, Friday. Check this out. We finally had a snow day. And that closed down the schools. I mean look. For being in Pgh, this used to be normal for us. Back in the day, it seemed like the schools always used up their allotted snow days every year. But, it just hasn’t been like that in recent years. I don’t know, maybe there is something to this global warming nonsense. In any case, it sure was wonderful to have off. Even though we only had like 4 inches. But being on a Friday, it was awesome! Three day weekend!

Yeah, that’s nice, I know. So therefore, since I wasn’t bus driving, I did get a lot of work done on my business. Oh, and being an NFP Friday, was all the more fun. I got to see how the market ran. And yes, it did run, the way I was hoping. What a week I had. Talk about a roller coaster ride. Unbelievable.

Well, ok. I will tell you about it. But let me get some more coffee first. I do have very much to get off my chest this weekend. I had to get out a piece of paper, yesterday, and write down all the main points. Which led to a lot of writing. So, now is the time to hit them all.

Hold on.

Alright Journal. Here we go.

- January’s summary -
I really didn’t do this yet. I did accomplished it this week. But, I need to answer the question of How did I do last month?

I’ll break it up by the weekends.
$30,000. starting balance.

Jan 11th weekend (first full week).

• Account balance $28,343.97
• -5.52%
• Up to this point, the market switched trends twice.
• I performed a perfect switch, and a day late switch.

Jan 18th weekend (second full week).

• Account balance $29,237.59
• -2.54% from the starting balance
• +2.98% for the week
• 1 trend (JPY bear market)
• 4 positive days (pips), 1 negative day
• I performed no changes (trades just ran)

Jan 25th weekend (third full week)

• Account balance $29,768.98
• -.77% from starting balance
• +1.77% for the week
• Trend switch one time (JPY bear to bull market)
• I performed a perfect switch
• 4 positive days (pips), 1 negative day

Jan 31st weekend (fourth full week)

• Account balance $30,654.16
• +2.18% from starting balance
• +2.95% for the week
• I performed no changes (trades just ran)
• JPY stayed a bull market

Well, as I stated last week, it seemed like this month was nothing but playing catch up. You can plainly see that within the first 10 trading days of the month I dropped a good bit. And, for the rest of the month, it was nothing but up. Right? But hey. This is none of my doing. All I’m doing is following the system. And as for what I can see, the system is working.

This is my job.

• I let my 7 JPY trades run perpetually
• Stay in the correct market
• Switch directions when the market signals it

That’s it.
Pretty simple.

I’m not gonna play that silly game of trying to determine when to get in and when to get out. You know what? There’s a great chance that I will catch those big moves the market often does. In fact, I will catch them, cause I’m always in. So therefore, my only concern will be whether I’m in the correct trend. And yeah, that’s probably the biggest part of my job, to be sure I am following correctly.

This is a good segway into what I want to talk about next. It’s what happened this past week.

Here’s how it rolled out.

You can see that the JPY has been on a serious bull trend. That’s all last weeks numbers and Mondays E.O.D. Remember I got back in minutes before the last week closed out? I missed last Friday (31st), due to squaring off the month.

Well, we’re pretty lofty here. Hey, you never know, the Yen can continue to go straight up, right? Oh, let me explain those numbers. Yellow (5ema) below the green (9ema) tells me it’s a JPY bull market. The middle numbers tell me the strength. The 7-0 tells me their trending high against all of the other 7 currencies. And on Monday the pip count was a +100 pips. And the running pip count for the perfect system stands at 1363 pips (for the year). We shouldn’t be concerned with that. Honestly.

Ok. Well, let’s proceed on to Tuesday.

Yeah boy, it wasn’t pretty. The JPY weakened. It was a risk-on day. So my numbers go like this. The strength of the bull trend goes down to 128. Man, that’s almost a hundred pip drop. Basically, they got sold off majorly. So, let’s continue. Their still trending bull against all of the other 7 currencies. And the pip count for that day turned out to be -632.

Yeah man. I remember that day. It hurt. For sure. I went through the whole process (psychologically).

• Stay in the trend
• I follow my system
• I trust my system
• Success is keeping with my plan, no matter what my account looks like

This is all the stuff I had to remember, going through this. Believe me, it was hard to stomach. Let me show you this table again, which sheds some light on the amount of pips gained or lost.

So, as you can see, I was losing probably over 6% of my account (-632 pips). Well, I can tell you that I started the month of Feb with an account balance of $27,654 (all explained last week). And I seen it dive all the way down to right at 26k. But…what can I do? This is just temporary. Let’s move on.

Wednesday comes and ends this way. More of a beating!!
The strength of their bull trend goes down to 60. Now their trending strong against only 5 other currencies and 2 turned bear trend. The pip count that day turned out to be only -56 pips. Now that’s much easier to stomach. Right?

So…what do I got? Well, I remember it so well. That end of day didn’t feel good. And, what’s my job again? Oh yeah, to stay in the correct trend. Look. I made it this far. I must see this to the end. I trust my system. Plus I know that NFP Friday is coming. And I’ve known that big moves usually don’t happen before that time. Sure, there’s a lead up to it, but no major moves. Anyway. My main concern is following that dog-gone colored line up there. It’s still green and I’m still hanging onto my short 7 Yen pairs (JPY strong).

Look. I’m gaining some real character during all of this. Plus. I’m getting closer to my Master. Trust me.

Here’s Thursday’s results.

The current bull trend strength goes lower to 26. And they are still trending bull against 5 other currencies, and 2 bear. No changes in that regards. Right? The pip count turns out to be +36 pips that day. My, my, my. Maybe we are turning. I don’t know yet. But, all we have left here is Friday. And that’s an NFP Friday. Things are gonna fly. So, this is my thought process.

I am very happy that I am in the correct trend. Hey, that line is still green. It’s still a JPY bull market. And I’m still in the market short on those 7 Yen pairs. So…I’m actually trading successfully. Again. It’s not what my account is looking like. It’s whether I’m following my system or not. So, all good. I just want to know what we have in store for Friday. Hey…you know what? If I see a change in trend, I’m gonna switch. Look. That 26 number is pretty low. And it won’t take a whole lot for the market to turn the other way around, at this point. Right?

Well, Friday comes. And so does the snow. It started to snow around 4am. It was forecasted. I got the call around 5am for a 2 hour delay. It’s snowing more and more. And then close to 7:30am I got another call for the closing of our school for the day. That’s along with all of the other school districts in the Pgh area. Ok. That’s nice. Let’s get some more coffee and check out some NFP.

Well, I watched it. Not gonna make any moves unless I see something major. Basically, all I’m concerned with is how my JPY pairs are doing. And when it came time, there was no real move. Which I was very happy about. I just didn’t want to see my account balance fall any more. It was steady. Actually, it started to rise up. Slowly. But then. It was an hour later. 9:30am my time. That’s when I first noticed some real movement. Yep. The JPY is coming back alive!

Oh yes. And well, that was the tale of the day. It was nothing but a rise on up. Across the board. It was a good feeling. Man…you know what? I kept thinking that this unbelievable risk-on sentiment going on this week was just abnormal. I mean, this coronovirus isn’t over yet! Why is everybody (stock markets) shaking all of this off? That just didn’t make any sense to me. I really figured the risk-off sentiment was gonna come on back. Look. These were some of my thoughts. But, I have to remember, there’s only one thing that’s most important to me. And that’s me following my system. As I have been telling you, Journal, this whole time. And guess what? I have been.

The JPY bull trend is still in tact. 63 pips of a strength. They are now trending bull trend against 6 other currencies now, and one bear (USD). And that days pip count turned out to be +435.

So, for the week. What’s it look like?

• -117 pips

And you can see who the top dog is, right? The USD (top left). My trade is not looking so good there. But guess what…I trade a complete currency. Let’s take into account what the rest of them look like.

• Against the EUR, looking pretty good. In profit now.
• Against the GBP, looking awesome. Man did I get lucky where I got in with them.
• Against the CHF, in profit now.
• Against the Comms, not in profit. Heading in that direction though.

Well, I’m happy how things turned out. What a week though, huh?

Ok Journal. I’m gonna cut this short.
Oh…I’m just getting started. I’ve only covered 2 of my 5 points.
Need a time out.
Be right back.
Mike

[MikeWolski]

Hey Journal.

• The Trend
• Proof of Concept
• Trading a complete currency

So, I want to talk about the Trend.

@Clint

The portfolio methodology, as originally detailed by Mastergunner, contains no specific rules for exiting a position. There is nothing in the methodology regarding an initial stop-loss, or an initial profit target.

In simplified terms, the methodology involves identifying and entering a valid trend, and holding your position for as long as the trend remains valid. Obviously, this requires a solid understanding of trend-trading, including successful strategies for (1) identifying a trend, (2) entering in the direction of the trend, and (3) identifying the end of the trend.

In the Mastergunner Portfolio Methodology, the end of the trend is the basic exit signal.

Mastergunner has not specified rules for identifying trends; instead, he has left it to each trader to use his/her own preferred method of trend identification. There are many ways to identify a trend, and entire books have been written on that subject. I’m not going to attempt a review of those methods. You can study trend-trading on your own time.

• My system is rooted in this methodology
• Clint puts it in most simple terms, regarding what we should do with a trend

I’ve often thought of this every since he wrote this up. This was back in Aug.'13.
So now, I just want to talk about what I consider what a trend is.

• 5 ema line
• 9 ema line

Those 2 lines on a chart will tell me what market (bull or bear) that pair is in. I’m not even considering where the current price is, believe it or not. To me, it’s exactly where those 2 prices are at, at the present time. I’m looking at, presently, where the average of the last 5 days price was at. Also what the average of the last 9 days price was at.

Look. Of course I need to know what the present price is, because that’s factored in on the last 5 time periods (it’s the last period), along with the last 9 time periods. Right? Anyway. That’s what is most important to me. What’s been the average price lately?

So. I have 2 prices. That’s nice. But, there’s more. What I’m really doing is monitoring and following what the difference is between what those 2 prices are. Now that’s my indicator.

You can’t really see that on a chart. That’s why my excel tables are important. But if you were to look at a regular chart, it would be the inside width of those 2 lines. Look.

Now those 2 pics are correlated.

USD/JPY

• Bear market (5ema above 9ema)
• 13 pips in between the lines

EUR/JPY

• Bull market (5ema below 9ema)
• 9 pips in between the lines

ETC…

If you add them all up, the result is 63 pips. That, to me, is my indicator.
Shown here.

So, let’s back it up a little.
Clint.
He says to (1) identify a trend, (2) enter in the direction of the trend, (3) identify the end of the trend.

• My line, up there, identifies my trend. The JPY trend.
• Since I’m perpetually in the market, all I do is orient my trades accordingly (long or short).

Now, look up there at that red line (JPY bear market). I just counted the pips ( all 7 JPY pairs totaled) from that Jan 9th to Jan 22nd. That equals +298 pips. It’s positive. Sure, not a whole lot. But, as I have backtested this system for all of last year, & over time it adds up. And every single trend is different. But, at least I have picked a definite place to switch directions. Look. As all this was unraveling, I simply did not know that at that red 167 point (market top) that we were going to have an eventual market change, 5 days later. If I would have known that, I could’ve changed early, right? But we just do not know what’s gonna happen next! I change when it tells me that it changed.

Now look at the most recent JPY (green) bull market. This didn’t change markets, like previously. It sure did come back on down though, right? I mean, I don’t know what’s gonna happen next week, either. It could go right back on up. Or, it could be just a minor delay and eventually switch trends. Who knows…I surely don’t. And I’m done with the guessing game.

I thought about this. What if I did change directions prematurely, as I was losing my shirt this past week? Can you image how bad, and messed up I would’ve been right now? I would have to admit that I can’t follow properly. I would have a real mess on my hands because of all the slippage that comes with getting out and in again with my 7 pairs (getting back on track). That’s a serious cost!

I have learned some things in the last 7 years, of my tenure so far. I think it’s a kind of personal integrity thing.

That’s nice.

Let’s see all of the different trends. For this we’re gonna have to look at the other currencies.
I also want to couple this with another point that I want to cover.
Proof of concept

• USD is currently in a long bull market. The pip count from the beginning of it to the present comes out to be +557, +337 (perfect system, day late system). This weeks pip count is +345, +19, +169, +151, +274. Equaling +958 pips. Nice week for them.

The perfect system (impossible, because at end-of-day is when that day’s trend is determined) is the first number. The second number is the day late system. Which is achievable because it’s a day late. Look at the USD, on the 9th. On that day it was +110 pips for the perfect system, but -110 pips for the day late system. This was the only time this year of a change in trends.

• EUR started on a bear market, went bull for 4 days, bear again and presently on a bull market. The latest strength shows being quite weak. Every day this week they went straight down. -13, -208, -239, +7, +46.

• From years start the system produces +491, -805. Perfect, day late, respectively.

• GBP back and forth also, with the trends. Recently, this week, changed from a bull market to a bear market.

• GBP produced this year +1849, -1097. Pips. Perfect, day late.

• CHF have been on one trend from the beginning. Bull market. The system produces +958 pips. Both perfect and day late are the same because there’s no changing of the trends. Right? That’ll be the 7 CHF trades simply running.

• AUD started out bull and went bear. Long bear market. But look at what happened this past week. Remember the risk-on sentiment for most of this week? What was their pip counts? -496, -508, -279, -5, +423. This is a counter trend direction they traveled in this week.

• AUD year total for my system turns out to be +1354, and +684 (perfect, day late).

• NZD is similar to them. The system turns out +1075, and +993 (perfect, day late).

• CAD switched markets one time also (bull to bear). The system turns out +866, and -186 pips. Know why the big difference? Cause look there on Jan 22nd. That day’s result was 526 pips. Meaning, the perfect system adds on 526 pips to the running total, and the day late system subtracts 526 pips from the running total.

So here’s the entire currencies all added up together (including the JPY). This is the total proof of concept numbers.

The top row is the perfect system. Bottom is the day late system.
Take a look at how the month of Jan ended. We had a huge run up to the end of the month. A climax is attained on the very last day of the month, in both systems. The perfect system produces 10,723 pips and the day late system produces 3,647 pips.

Then you get the counter trend trading at the beginning of the month. Or you can call it retracement trading. Don’t forget, all I’m doing here is following the trend.

And so, for the year in total, so far, we’re sitting at a total of 8,296 pips for the perfect system. 338 pips for the day late system. I would consider that profitable. Surely it isn’t unprofitable. Right?

What does all this mean?
All I’m saying is that trading my way of trend determination, so far, is profitable.
And trading a complete currency is profitable, also.

And this brings me to my last point. The fact of my trading a complete currency. I want to do a lot of talking about this. But I’m out of time now.

I’ll come back tomorrow for this.
Thanks for listening Journal.
Mike

[MikeWolski]

Good morning Journal.

I hope you don’t mind me talking this nonsense. You know, my system, the way I trade, etc… I don’t know. The more I talk about it, the more I realize how this is the way in which I should be trading. Cause it’s all me. It’s how I look at things, and frankly nothing makes more sense.

But lately, I have noticed how I do look at the market differently than probably most people (traders). I mean look. I can’t imagine going to the charts just to see what one particular price pattern is looking like. Sure. I do understand where that is coming from. It’s called TA (technical analysis). Or maybe you can call it the old price action …action. I mean, my beginnings did come from that orientation.

I know myself. I am a numbers guy. In fact, I know this because of how my dad was. Now HE was into numbers. He invented games to play, by himself (cause he was an only child, and was a loner). And it all came down to the numbers. He called it his thing. I remember him mentioning one time how he’s been doing his thing for over 50 years. Look. Some people like to read. Do puzzles. Or whatever hobby that brings happiness to you, on your spare time.

He did sports. He invented a way in which you can play, manage, see an entire baseball game played on paper. Well, he had developed teams, leagues, played entire seasons, the whole thing. And not only that, but other sports games also, like football, basketball etc…I don’t even know to what extent. Other than when he had any kind of time to himself, this is what he did. And we’re talking this was his life.

Of course this all started back when there was no such thing as computers. He had notebooks upon notebooks filled up. Yeah man, the good 'ol paper and pencil. There was a time where my brother (who’s very intelligent) helped him develop a computer program in which to generate a random number. He did incorporate that. I mean, he was old school, but thanks to my brother he was able to automate some aspect of it. (My dad is no longer with us)

Anyway. All of this reminded me of how I started on my journey here with the Forex market. I ended up doing the same thing. I ran the numbers. I figured if there was a way to organize, compare, relate the numbers in such a way, you should be able to learn how the market moves. In some predictable manner.

Alright. I say all of that nonsense just to make the point that I did start out with the technical analysis way. I went down the road of reading price action. It was fun to run the numbers. Actually, I still do! But, there’s more to it.

This is what I want to know.

- What are the currencies up to?
- How are they relating to one another?
- What’s happening from a certain time frame?

And guess what? You can only come to answer this, correctly, from an aggregate stand point. You will not even come close to knowing anything just by looking at one pair. One chart. Lines drawn here and there on it.

-AGGREGATE-

Formed by the conjunction or collection of particulars into a whole mass or sum; total; combined:

See. This is my premise. This is where I start from. Before I will do anything (trade) there are some things that I need to know first. It’s nothing but answering the question of What’s happening?

• What’s going on with the USD?

And how am I supposed to know what the answer is if I only look at one pair? Say the AUD/USD. Sure. That’s tell me some stuff. One is stronger than the other. In some kind of time frame. Short term, medium term, long term. So basically, that to me right there is just like this. Someone looking at the Forex world with a telescope (you know, the ones that a pirate would pick up and look through). But it’s zoomed all the way up close. You’re looking at the finest thing you can see. We can plainly see how the Dollar is (has been) relating to the Aussie. That’s nice.

But, is this an accurate depiction of what’s going on with the Dollar, Aussie? There’s more to it. We need to zoom out that telescope a little bit more. How about we throw in a little EUR. How’s the USD relating to both the EUR and the AUD? Now that will give us a little bit more of a picture, right? Are they stronger than both? Or stronger than one and not the other? Meanwhile, I’m asking the very same question of the AUD also. Who’s the weakest of those three?

And I haven’t even thrown in a particular time frame into the mix. That’s a big factor. Time is everything. In this business. That’s why someone could be correct in saying that the USD is stronger than the AUD. And the AUD is stronger than the USD. They both can actually be right. I just depends on which time frame. So…it’s really about putting all things into the correct perspective. It’s comparing apples to apples, and oranges to oranges.

So, I think the key word in there is compare.

This only makes sense. Bottom line is. If you’re not comparing each currency to one another, you’re not gonna get an accurate depiction of what’s going on. You really need to zoom out that telescope to correctly see what’s happening.

Now. Let’s back it up a little. How about that word aggregate again? Go ahead, read that definition, again. I did. It actually means coming up with ONE thing. A sum. A total. Something combined. Right?

So…how would I come up with one number, or thing, that says how a particular currency is doing? Well, it only makes sense. Compare them all. Basically, all you do is add. Cause if the USD is up a little to one, and down a little to another, and up a lot against one, and down a lot against another, if you add them all up, you’ll come up with one total number. And so, if you do this same thing with all of the other currencies, in the same way, you’ll find their aggregate number.

And look. What will we be measuring anyway? You can measure what the USD is doing in pips, cause that’s how they travel. Every currency travels against another currency in pips (measurement of movement). In fact, there isn’t any other way to judge it other than in pips.

Well, I like to see the numbers in percentages. How much % of pips. As opposed to the actual amount of pips. Because, remember, each pair travels at a different rate. Some quicker than others. cough - Pound - cough

Anyway. This is what Forex is anyway. It’s a pair of assets, all combined into one actual asset. As opposed to – one stock, one commodity, one bond.

And unless you do the work, you can’t come to know what that particular number is. The comparison number. The apples to apples number that puts all the individual currencies on the same playing field. I mean, think about it. How would you come up with anything like that just by looking at one particular currency pair? Yeah…good luck with that.

Needless to say, there’s some work to do in order to come up with a way to determine how well one currency is doing against another currency. In an aggregate way. That’s finding one number in whatever particular time frame you want to know.

Would I call all of this (nonsense) technical analysis? Well, when I think about it, it wouldn’t necessarily be fundamental analysis. That’s all about the reasons of why they move the way they do. There’s a whole lot more reasons of buying or selling a currency pair other than what a chart is looking like. Especially when you know who the players are. All you have to do is watch when the economic indicators come out. You can tell there’s eyes watching what these figures turn out to be. It is amazing. The thing is though, we don’t know what they are thinking, hoping, or wanting to see. But…they are watching. Right?

I guess this is technical analysis. In more of a relational way though.

And like I said…this is Forex. One asset is going up, at the same time the other asset is going down. And nothing makes more sense to me than to find an accurate assessment of how that individual currency asset is doing. Before jumping in with assessing what any particular pair is doing.

Ok. That’s nice. Let’s move on. What’s my point anyway?

Well, all I’m doing is explaining the roots of my thinking. Why I think the way I think. What I realize about how I view the market.

How about I give some real numbers to all of this nonsense.
(This is gonna resemble my earlier thread Complete Currency Dynamics)

I’ll just take the USD as an example.

All I’m doing here is adding each of the USD pairs and coming up with an aggregate. That number is found on the bottom gray line going across. That’s for each day.

All I’m doing is answering the question of how did the USD do today? And the answer comes out to be a %. Either a positive or a negative %. See. You’re not going to find that number anywhere on a chart. Sure. What you can see, on a chart, is how the USD did against only one other currency. For instance, on Jan. 8th. The USD/NZD. The daily chart will show a green candle, NZD stronger than the USD. Up 0.10%. But, if you add up the aggregate, you’ll find that the USD was quite strong that day, with a total of +1.87%. If you look closely on that day, it was only against them that they were weaker. The USD was stronger to all of the others.

Well then, I just do this with each of the currencies. And that enables me to do a true comparison. So…let’s see some real data.

Remember, we always need to keep the proper perspective. This is from the beginning of the year. These are running totals. And who’s the strongest currency from the years start? Who else…the USD (+20.36%).

How about from the perspective of this calendar month?

Sure. The AUD (red) busted out quite strong, aye. Someone could rightly say that they are strong…but no…they are quiet weak. They had a good few days, that’s all. For the AUD — +4.87% on Monday, + 5.69% on Tuesday for a running total of +10.56%, + 2.25% on Wednesday for a running total of 12.81%. A -0.68% on Thursday for a running total of +12.13%. And a -4.48% on Friday for a running total for the month at +7.65%. So far.

What am I looking at here? Nothing but an aggregate comparison.

I guess I am saying all of this because I can’t (don’t want to) see it any other way. Plus, I realize that my style of trading is to trade a complete currency. You know me, Journal. I have to see aggregate. And well, that’s gonna be the way I trade. Why not?

I really love the dynamics of trading a complete currency. We’re not talking about one pair here. We’re talking 7 pairs (disregard the CNY). I just want to keep track of what they are doing. Especially against the USD. You know…the Trump trade debacle. Actually…it’ll go all the way to how our country is doing in comparison to theirs. So I’m just keeping track of them. I can’t even trade them if I wanted to, anyway.

Some dynamics would include:

• Hedging
• Leverage
• Market exposure

Well, let’s compare trading one currency pair to trading a complete currency.

With one pair, it’s either going up or down. It all comes down to whether it’s going the way you want or it isn’t. Right? It’s quite simple. It’s all of what we know about.

But when you trade a complete currency, there’s more going on. You depend on the outcome of 7 different currency pairs. Of course, they all have one thing in common. That one particular currency. And what can happen? Well, it depends on the relationship against each one of them. It can go from one extreme, being the strongest currency against all of them. And if that’s the case, it’s like trading one pair 7 times. In a bull market. Which will be the most you can possibly get. That would turn out to be the best leverage you can get, in your favor.

Or, how about on the other end. That currency can be the absolute weakest currency of all of them, right? That’ll just compound the losses. In fact, that’s the key word here. Compound. It’ll be like losing 7 times the amount of one pair. But, that’s what I’m talking about when I say that leverage is a dynamic.

Look though. As everyone knows, it all comes down to your position sizes. Now that’s the biggest factor in trading…period. That just needs to be properly adjusted. You can level the playing field by putting on smaller sizes. But think about it, you have more variables this way, being able to add onto leverage, than you would if you’re trading just one pair. That aspect would definitely belong more to the experienced. I guess what I’m trying to say is that an experienced trader would be able to take great advantage of this aspect.

But, in regards to whether a currency is strong or weak, comparison wise to the others, normally it’s somewhere in the middle. It’s like a seesaw. Which way is it tilted more? Cause what we’re dealing with here is 8 total currencies. And where each of them are on the totem pole. If they are within the top 4, then there should be more of a positive outcome. Likewise being within the bottom 4, will be in a negative outcome. This aspect is what I call the hedging part.

Look. You don’t need to be completely right, or correct, with things more this way than you do against only one. With one pair, it’s a 50/50 chance at any one point of being right. With a complete currency, I don’t even know what the equivalent chances would be. I think it’s spread out more.

Anyway.
That’s nice.

There’s different dynamics at play here. And, as I can talk from experience, it seems like I get more lucky this way than just going with the one on one. Like, some currency will drop off the map (depreciate) and cause such a tilt. cough-GBP-cough. I mean, I’ve seen it and benefited from it. Both when the Pound crashed and when they sky rocketed. Of course, as with anything, it can go against me also.

Alright Journal, I think I’ve over stayed my welcome here.
I had fun typing.
Explaining.
And talking.
Thanks Journal for listening.
Mike

[MikeWolski]

Good morning Journal.

Let’s see…it’s Feb 15th. And I’m ready for a long (3 day) weekend!

But first…we got to talk.

This is not gonna be pretty, Journal. Let’s see. In a nutshell. I got some learning to do. This week turned me upside down. Trading wise. And I’m not happy about it. So, the least that I can do is learn something here, right? I mean, I’ve even used my Business Journal to document my every move, this week (I wrote a lot).

-What happened, Mike?-

Here we go.

This is what’s been going in the market since Feb. Let me explain. The month started out with such the risk-off sentiment (JPY bull market). And well, ever since, that’s been a top. Meaning, there’s been a lot of Yen selling (risk-on). All you really have to do is check out that bottom row number. That’s how many pips it turns out if you are holding all 7 JPY pairs in you hand, short (JPY bull).

Well, as we see, at the end of day Monday, not all that much of a change to the landscape. The JPY still in their bull market. The strength does move up to 75 (from 63). Their trending against 6 other currencies and 1 their trending in a bear market (USD). And the pip total comes out to be -32. That’s pretty much around a break even day, for 7 running pairs.

I’m still in it. My trades are matched accordingly. All is fine. Let’s move on.

End of day Tuesday.
The JPY still in a bull market. But the strength coming down (60). Still trending against 6 others, and one not. And the total pip count comes out to be another negative figure. -134.

I don’t know. Maybe it’s my fault. But…every since the beginning of the week I’ve been expecting different results. Uh…like some pips maybe? But it’s just not happening. At this point, I’m bent out of shape. Look. There’s only been JPY selling. No risk-off mood. Speaking of that. Check this out.

This is the AUD. Since the beginning of the month. They’ve been in a bear market since Jan 6th. But this is showing the change. On Feb 3rd, their trending bear against all 7 other currencies. With a strength of 315 pips. But, on that day, if you were holding all 7 AUD pairs short, you would have lost 496 pips that day. That’s a lot! Then the next day comes. You would’ve lost 508 pips. And, well, you can see the pattern here. It’s not pretty if you want a TREND to continue!! Well, the bottom line here is that the AUD, according to my trend determination, changes from a bear market to a bull market, on this End of Day Tuesday (green).

Let’s see. If you simply were holding on all 7 AUD pairs, last weeks pip count would turn out to be 865 pips. And then it continues. For this week so far, you would’ve chalked up another 366 pips (193 plus 173). I say all of this just to see the other side of my JPY. It’s like…the JPY is losing, but the AUD is gaining.

And Journal, this is gonna hurt, but do you remember me saying something last week, about them?

@MikeWolski

Sure. The AUD (red) busted out quite strong, aye. Someone could rightly say that they are strong…but no…they are quiet weak. They had a good few days, that’s all.

So…what’s the lesson here?
I guess I should have taken them more seriously. They’ve gotten strong enough to change their respective market now. I mean, the writing was on the wall.

Anyway. I need to move on.
But first, definitely need another cup. Hold on.

Alright.

Well, I remember what happened. See. It was Tuesday night, and the NZD had their interest rate decision at 8pm my time. I wasn’t gonna make any moves until I seen what the market reaction to that was.

It turned out to be more of a risk-on sentiment. Well, I kept my cool, and swallowed up the fact that I’m gonna lose my butt, again. i just went to bed. No changes. Well, it was on my mind. Probably too much that night. Oh…I do remember. I didn’t sleep that well. I mean, who does, when you know you’re going down? Right? So, this is what happened, as a result. I woke up earlier than usual. This is right about when London starts their session. I checked the fall out. It wasn’t pretty. I mean, the market (all my JPY pairs, daily candlesticks), showed nothing but green high candles. And there goes my account balance. Not good. Major losses.

Well, this is what I did. I quickly took a picture (for documentation purposes), and switched directions. That’s…exiting out all of my 7 short pairs, and getting back in going long. Take a look at what it looked like.

This is the pic right before I exited out of them all. I wanted a before picture.
Just look at my entry places (dotted lines on each).
Now Journal…what do you think? First off…are not every single candle green?
Is not every yellow (5ema) turning up now to go over the green (9ema)?

Yes. And yes.

No doubt the NZD is the cause of all this. I mean, come on! It’s a blood bath! What am I gonna do? Stay in all these losing positions?

Well, what’s my strategy tell me to do?

Uh…wait to the end of the day to see the result.

Well, also, my whole premise is to follow the market. So. I’m just gonna get ahead of this before end of day, that’s all. Am I bending the rules here?

Yes.

So, the best thing I can do now is document:

• My every move
• My thinking
• My motivations

So that I might learn something.
I just do not want to be doing something in secret. If I’m gonna blow it, mess up, jack things up terribly, then let’s do it in the light. I can always go back and find out exactly where I went wrong.

Hence, the reason why I am talking to you right now, Journal.

Well, let’s see what that end of day Wednesday looks like.

• JPY still technically in a bull market
• Strength goes from 60 down to 15
• Trending bull against only 4 other currencies and 3 bear

Ok. Well, maybe I got ahead of it. Right? It looks like it’ll change markets soon. Like, sometime this week. I mean, this is my thinking. But, in actuality, what happened was that everything that transpired that day already took place. The rest of the day just back around. Those daily green candles really didn’t get much bigger. In fact, that EUR/JPY pair made a complete turn around!

Anyway. This is proof of where I bought every pair. I’m going up now.

Ok. So now, all I’m hoping for is a turn of the trend. Technically speaking. Right? Cause I switched directions. Yes. It is a premature move. I will admit it. And trust me, I documented all of this, as I proceeded. And…why?

Because I’m supposed to follow the market, first, then act accordingly.
But, I just committed the opposite.
Let’s see what the end of day Thursday looks like.

• JPY STILL in a bull market
• Strength comes down a little bit more to 13
• Now trending (bull) to only 3 other currencies, and 4 to bear market

Great…Now what. I’m starting to break my cardinal rule. That’s a green line up there. And if there’s anything true to my strategy, it’s the fact that I need to follow that. But, I’m not. This reminds me of something I said last week also.

@MikeWolski

I thought about this. What if I did change directions prematurely, as I was losing my shirt this past week? Can you image how bad, and messed up I would’ve been right now? I would have to admit that I can’t follow properly. I would have a real mess on my hands because of all the slippage that comes with getting out and in again with my 7 pairs (getting back on track). That’s a serious cost!

I have learned some things in the last 7 years, of my tenure so far. I think it’s a kind of personal integrity thing.

Alright. Let’s get this over with.

• I can’t follow properly
• I do have a real mess on my hands
• I have not learned anything in the last 7 years
• Who do I think I am?

Well, I don’t change my positions. Cause I’m not gonna make matters worse by changing back and forth. It is a large cost to be doing that. What I’m thinking here is this. Make it to the end of the week and make a decision to get back on track before next week starts.

This is how it ends.

• JPY in a bull market
• Strength rose up to 24 now
• Pip count takes back most of the losses (only -104)

Monday through Wednesday the JPY loses -401 pips (counter trend).
Thursday and Friday the JPY takes back +297 pips (trended).

Well, what happened, in hindsight?

• Did I follow the market?
  Nope.
• Did I act before the signal?
  Yep.
• My account drops -7.28%. From this time last week.
• From the month start = -17.71% (This is extremely embarrassing)

This is what it looks like now.
Wait. Let’s put these 2 charts together. This first one is what I showed you earlier. It’s right before I jumped. Just look at the 5 and 9 ema lines.

Now, this is what made me do it.

And this is what it looks like at the weeks end.

All you got to do is compare. So, let’s do that, together.

• USD - leveled off. It did not continue higher.
• EUR - dropped like a knife.
• GBP - the 5 ema line did cross up and over (changed trends)
• CHF - same as the EUR. No trend change.
• AUD - could not really change trends (5 equal to 9 now)
• NZD - did not change trend at all
• CAD - technically did change the trend (5 above 9)

Look Journal.
What hurts the most to me, now, is the fact of me not being able to keep with my strategy. And all that is, is simply following what my aggregate JPY trend is. And, as you can see above, the line is green. Therefore, I should have been staying in with all 7 of my JPY pairs short (bull market).

@MikeWolski

Yeah man. I remember that day. It hurt. For sure. I went through the whole process (psychologically).

Stay in the trend
I follow my system
I trust my system
Success is keeping with my plan, no matter what my account looks like

That’s what I said last week. Did I do that this week?

No.
I did not.

What can I learn about this?
Look. I’ve been pondering this. And beating myself up pretty badly about it.

• My system proves itself again

Even if I need to eventually see it a day late, then that’s what I should do. See it first, then act.

• DO NOT GET AHEAD OF THE MARKET

Journal, I remember when this all went down (Wednesday early morning). I counted the pip spread. It came out to be Bull 7. I know that I esteem the end of day numbers above all, but this was a live, current standing. And it never really did dip down below into bear market territory. Like, at any one point in time. So therefore, this is another point to be taken, in which for me to trust my system even more.

Throughout that day, I would take a time out and count what that current number comes out to be. It never went below that “Bull 7”. Look above. Thursday ends with a Bull 13. Then Friday ends with a Bull 24.

I’m just giving more credence to the fact of why I should trust my system, more.
And what’s the harm of following a day late anyway? Right?

I don’t know. To be honest with you, I always feel that the market can make such a large move in which it could crush me. And why not get ahead of it? Well, in hindsight, I guess what wins out is the integrity of my system.

That’s what I should try to prove.

• Will following my system cause me to lose, in the end?

This is a real lesson for me, Journal.
I guess it’s all in how closely I can keep my trades on the right track. I’ve done a bad job in doing that this week. 3 days this week, I was not on track. And I’ve given myself a leeway of “no more than one”.

I failed.

I just hope to not do this again.

Well, this is how I rectified it.
Tried to, anyway.

Friday, late. I’m done with my last bus driving run at 4:45pm. So I have 15 minutes, in the parking lot, to square away my trading (on my phone). When 5pm comes, that means the end of the day. And the end of the week! Well, I texted Trish I’m coming home, and sped off. I forgot!

Let me back it up a little. It was around 4pm that day, after assessing the market, that I needed to get out of these 7 JPY long positions, and get back in going short. Right? Cause the market did not officially change. Well, that was my plan. As soon as I’m done working, I have to do this. And it’ll have to be when I get back into my car, in the parking lot. Which will be just about 4:45pm.

But, I forgot. I was talking to her on my way home. Then it hit me at about 3 minutes till 5. I told Trish I got to pull over and place some trades. Well, I did. But I guess I needed more time. Cause time ran out!! I only had time to do this.

I exited out of all my long positions. I started getting in on my short positions, but only with the USD, and the EUR. When I got to the GBP/JPY it said “market closed”. Man…I was so upset!!!

What can I do.

All I can do is wait till the market opens up on Sunday night. Then I’ll proceed to finish the action.

Well, that’s my story Journal.

It was not a good week. I messed up. I mean, am I beating myself up unnecessarily?

No.

I should have erred on the other side of things. Like, seen a printed red line first. Definite market turn. Then changed my positioning.

And well, I guess I have the opportunity to see whether I will make this mistake again, or not. I don’t plan on it. But if I do, how do you think I will react to that? It won’t be pretty. Therefore, I will not make this mistake again. Cause:

• I don’t want to talk about this again
• I know I can be a follower of the market (my system)
• It will be extremely embarrassing

Alright Journal.
I’m done talking.
Maybe I will pick myself up and we can talk about something else this weekend.
We’ll see.

Mike

[frandlost]

Morning Mike, great documentation! Great journal. Trust me, I can feel your pain.

Would it be ok to post feedback? An objective, outside observation (s).

Don’t want to jump in if you prefer members are “read only.”

KC

[MikeWolski]

Hey KC !

To answer you question…absolutely!

I’ve always wondered what people think.
Not that I NEED to know.
But would definitely welcome it KC.

Thanks for asking!
Bring it.

[MikeWolski]

Good morning Journal.

Feb 22nd. Another week in the books. And boy…what a week is was.

It was a good week.

Oh…you made some money, huh?

Nope. I’m still not there yet.
But I learned a whole lot. About my strategy. And about myself. Let me explain.

Well, you have to remember, Journal, where I came from. Remember last week? I do. I came down pretty hard on myself. And to summarize that. It’s like this. I will absolutely not ever get ahead of my strategy. Again.

• I trust my system
• I will follow it
• And NOT get ahead of it

I mean, come on Journal. You know it by now. It is very. Very. Simple. (like me)
I follow my line. Whatever color it is, that’s the direction I better be in, with my basket of 7 running trades. Right?

Cause it’s costly, when I’ve deviated from it.
But never again.

Ok. So. Let’s unravel this…drama.
What happened?

Ok. So, here’s what the JPY trend has been looking like since the beginning of the month.

• It’s technically in a bull market (green line)
• But that bull market looks like it found a top since the months start
• The JPY has been losing strength considerably

And so. Monday comes and goes. With not all that much change.

• Technically still considered in a bull trend
• Goes from 24 to a 20 (the strength of the trend)
• Against 3 other currencies in a bull market, 4 others in a bear market
• That days cumulative pip count turns out to be -54 pips

Well, all that right there tells me that not a whole lot has changed. That’s all. And so, what does that tell me to do? The same thing. I do nothing. Sit tight.

Let’s move on. Tuesday’s results.

• The trend is still bull
• Gets stronger, from 20 to 41
• Now it trends bull to 4 other currencies and 3 bear
• That daily pip count comes out to be 199 pips

Ok. Well. That’s nice. I made some pips this week, so far. Right? It made up for the loss yesterday, and then some. But this is what I’ve been thinking about what’s been happening, in the market.

The JPY has been consolidating a lot lately. Just look at it there. We’ve come off such a strong Yen. But it’s (the JPY trend) just not going anywhere. It’s like the coronovirus thing has kept them in the game. It doesn’t want to go away, and has kept the risk-off sentiment very much alive. And that’s what I’m used to equating the JPY moves to. Either risk-off (JPY strong) or risk-on (JPY weak). Right?

But anyway, that’s nice. All I know is that my mindset moving forward from last weeks spanking was this. Nothing in the world will make me deviate from my plan, any time soon anyway. My worst case scenario will be to change trends when the market says I should. And that would be, at the latest, a day late. This is my mindset now. And I have a feeling the market will make it clear for me. And guess what? That’s precisely what happened. This next very day. Wednesday. Take a look.

• Trend change from bull to bear market (red line)
• To a 71 pip strength
• The JPY trending bear to 5 other currencies, and 2 to bull
• The total pip count that day comes out to be 905 pips!

Now Journal. This was a market moving day. And believe me, I was in touch with what was going on that day. Cause I need to be. Remember. I don’t play with stop losses. I just kept seeing my account drop like you wouldn’t believe. The daily candles on all of my JPY pairs were getting greener and greener. Larger and larger.

Journal. Let me explain something here. Do you know what a piece of steel is? Well, I do. Cause that was me that day. Unmoveable. It didn’t matter what happened in the market, to me. All I kept saying to myself was that it’s looking like a trend change. Which means I will have to make a change…at the end of the day. Cause that’s my rules. And I’m not gonna deviate from them anymore.

The honest to goodness truth, was for me, to stick to the plan. I wasn’t worried. I was not shaken, whatsoever. I’m telling you Journal. After what happened last week, I was out to prove my system, no matter what. Even if my account did drop 905 pips. And guess what…I don’t think I’ve ever witnessed that much of a change. Basically, that’s well over 100 pips on each of the 7 JPY pairs that I’m in. Ok. That’s nice. So what.

Steel.
I am.

This is what it looks like at the end of day. And right before I switch directions.

Mind you…these are the daily charts. That’s zoomed out a whole lot.

So I tell myself.
Hmmm…this looks clear. Time to change with the trend.
I took this picture seconds before I switched. Meaning. I will immediately exit all of my short positions and then go long.

But Journal. I want to explain something else. This, also, has been going through my mind. Before this occurred. And that has to do with an idea I had. See. The market has been consolidating so much lately that if it becomes clear of a trend change, then I should get in with 2 positions, instead of one.

You should know Journal that I’ve had these unresolved, I should say more like incompleted, issues on my position sizing factor. Moreso having to do with when I can I add more position sizing, along with when to take some profit off the table.

Well, this seems to be the time to do it. I felt pretty strongly to go in with, not one, but two position sizing. On each pair. And that’s what I did.

There’s proof right there. If you look closely, I have .46 of a lot size on each. See. A single position sizing would be .23. But I doubled it. That’s all.

That should tell you how convinced I was of a trend change. I mean. I really felt this is what I need to do. And the more I thought about it, the more I felt good about it. It’s kind of like, this is the time for it. You know? Better to do it when a high probability situation occurs, than not. Right?

This means that I’m able to take some profit off the table, (when it’s the right time), and then to be able to still have a position running.

Actually, I remember journaling this week about this very issue. In My Business Journal. And I said in there…that I believe that this might be the key to my trading strategy.

That’s nice. Let’s move on. Thursday’s EOD results.

• JPY bear market (red line)
• Strength goes up to 161, from 71.
• The JPY is now trending bear against all 7 pairs
• The total pip count that day is +240 pips

All you have to do is look at the 5 (yellow) and 9 (green) ema lines up above. It’s that right there that tells me what the trend is. The 5 is above the 9 now, on all of them. And that’s what’s most important to me. Not even what the current price action is. Of course, the present price action IS reflected in my ema lines.

Anyway.

I would love to have a conversation about what was behind the Yen moves this week. I really don’t have the time this morning. But, in short. You would think that it would be some serious risk-on sentiment, right?

But nope. You got to see all what else is going on. Cause it surely isn’t the risk-on currencies (AUD, NZD) taking over.

Hmm…Let’s see what table I can through out here to clear this up.

Ok. So. The top table is what happened in each day, by itself. The bottom table is the weekly running totals. You can see how on Monday they were the same.

Now. What got me, that day, was how all of the news was touting What strong Dollar we have!!! Oh my God!!! It’s too strong!!!

Uh…guess what…analysts…you’re so wrong. I’m telling you Journal, they did not know what was happening that day. First off, the CAD was the strongest currency on that particular day (4.36%). Even the EUR (who would of thought) was much stronger (2.99%). The USD was only up 1.64% against every other currency. That particular day. But yeah, they were the top dog the day before (Tuesday). And even Thursday, also. But I distinctly remember that day all the news was talking about the safe haven US Dollar.

Anyway. I need to calm down. Their stupid though. I’ll just call it tunnel vision. There’s a whole lot more going on than the USD. But check out what the JPY did. A minus -10.72%. Now that’s major. Also. The Commodity currencies are not getting any kind of bid. So, it definitely isn’t a risk-on scenario. It’s more of an interest rate differential buying, than anything. And the CAD just might be having the upper hand, in that regards.

All I have to say is look at how the entire week ended. The USD was by far NOT the strongest currency. Their 4th on down the line.

Sorry Journal. I’m done now.
It just ticks me off.
Analysts.

Anyway. How did the week end, for my trading?

• JPY in a bear market
• strength of 192
• trending weak against all 7 other currencies
• pip count for Friday came in -96

Sure. I lost a good deal of money this week. It’s ok. But, I also gained back some, also. Going in with 2 sizes on each makes a big difference. You can say that I took advantage of the situation. Believe me, it felt good to see the trend continue that way Thursday and Friday. See. Now I have the opportunity to take some profit off the table, while still having a stake in the market. Cause I still believe in my system, in which states that “I will be profitable in the long run while continually being in the market with the stated trend”.

But I realize I still need to iron out the issues relating to when I should take some profit out of the market. Yesterday (Friday) I was contemplating taking some profit off, just before the market closes. Why? Well, due to the fact that I am in some profit. So why not? But…I decided not to.

Why? Well, I guess it’s because I think the answer should be more about when there’s a clear counter trend happening, than anything. Know what I mean? Like when my line, up there, starts pointing downwards. Cause I really don’t know what’s gonna happen next. I should wait for that kind of signal. That’s what I’ve been thinking. And that’s why I didn’t take any profit on Friday.

I’ll clue you in Journal, when the time comes.

Well, I got to run.
Thanks for listening.

Mike

P.S. — I almost forgot. Don’t mind me. I need to get this out there for documentation purposes. It’s what my account looks like now. I need to track it every weekend. It’s not pretty.

And my latest chart.

[Nydorenn]

All right, open statistics will allow you to orientate yourself more quickly in your strengths and weaknesses and think out a quality plan of action depending on it, it is very nice to see how people are beginning to treat trading more thoughtfully and clearly, it is a great strategy to get real earnings in the real market.

[MikeWolski]

Good morning Journal.

Let’s see…where do I begin…

What a week it has been.
What a month it has been.

And that’s precisely where we’re at right now. End of month. February in the books. And this is the moment that I’ve been dreading. Cause I need to find out where I’m going wrong. Actually, I have many questions. About my system. My strategy. Myself. Everything. But…in all of this reflection, right now, the biggest thing I keep asking myself is this…

What do I really need to learn?

As I proceed through this (and trust me I’m not looking forward to this), I will be coming up with the answers to that question.

Ok. Let’s begin. From the top.
This year is a year of “Simulation”.
Simulating how I would run and operate my very own trading business. I do have a strategy that I am following. I guess you could say that it’s pretty close to being mechanical as possible. As opposed to a discretionary type. Therefore, a lot of my efforts are pretty much revolve around following a system.

That’s nice. I’ll get to more of that in a little bit. But what’s more important than that is…how am I running my business?

Well. I would say that the most important time for me, in my business, is at the end of every month. This is the time for reflection, stats, and …oh yeah…pay myself. Cause I got bills to pay. And frankly, this is the reason for a business. To generate an income. Right?

Well, I got end of month now. And I got accounts to square up. Whatever happened up until this point, kind of doesn’t matter (well, of course it does). But I’m gonna have to withdraw some money from my trading account. This is how I want things to go. I work on a month to month time frame. Sure, it’s probably how most businesses operate. But, I like it. I think a months time period should be plenty of time to generate what I need. And even if I don’t generate a profit out of the market, I still want to get all of my expenses taken care of in one shot. Like at the beginning of the month.

As I have explained before, I primarily have 3 accounts. My trading account. My business account. My checking account. And at the present time, my business account needs built up. There’s nothing in there. See. If there was, then I would have the option of paying myself from out of that account (at the end of a month). But that’s not how I’ve decided to start the year with.

Anyway. That’s nice. Yesterday, I did reset my demo account to reflect what it should be if I withdrew out of it what I needed. I mean, that’s my priority. Cause in real life, this is precisely what I’d be doing right now.

Look. I’ve spelled out all of the details in previous posts. Plus. And I’m sorry Journal, but you’re not my most important Journal. “My Business Journal” is. Yep. Good old fashion paper, pencil, & notebook. Yeah boy, I’ve been filling that thing up a lot lately. Much documentation has been going into that. Anything business related goes in there. My strategy details. All of my trading actions. My thoughts behind any of those actions. And of course the end of month transactions. Cash flow statement. Income statement. Balance sheet.

Hold on Journal. I need more coffee.

Alright.
Well, I’m gonna need more than coffee to get through this. But, here we go anyway.

My trading.
For the month of Feb.
Bad.

But what haunts me is, what happened yesterday.

And, I’m not even going to run the numbers to find out the what if scenario. You know what they say about hindsight.

Yeah…it’s evil!

Anyway. Well, I did what I did last month. I jumped out of the market for the very last day of the month. Oh, that’s right. I came across another problem. Man…I need to figure this out. I’ll get to that later.

I took the last day off, to adjust my trading account. I talked about this last month. It’s a good time to take a breather and get ready for the next month. Right? Right. Well, I accepted the fact that I had a losing month. Lots of things happened over the course of the month. And I did talk about that stuff. But the thing is (and this is so evil to do) if I would have stayed in my 7 JPY short positions, I probably could have made up for all of my losses for the month, just in that one day!!

Unless you live under a rock, Journal, you would have known how big of a day the JPY had. And I was in with them going in the correct direction. Just hours prior. But I jumped. And my strategy dictates that my trading decisions are only made around the end of the day time (NY closing). And at no other times.

Well, when I woke up, at London’s open, I figured I’d check in to see what’s going on. You know, to see if I made a good decision or not. Well, it turns out that if I would have stayed in, all of my losses…mistakes…and turmoil that took place this month would have been erased. By the days end. And I would have looked like a genius.

But nope.

The 7 JPY pairs generated 1304 pips that day.

Talk about a sick feeling inside. And I’m talking about, all day long!

I don’t think you understand Journal. I’m in the market, cause it’s my strategy, perpetually. Basically, I’m always in it. My trades continually run. The only time that I’m not in is, well has been, at the last day of the month. I’ve talked about this last month. It seems like a good time to reset everything. In fact, I don’t know any other way to do it, frankly.

And what I’m saying is, that one reason why I like being in the market perpetually is because of the fact that we don’t know what’s gonna happen, and precisely when these big moves take place. Therefore, I can get lucky moreso than not. And I’m talking about with the trend here. All you have to do is look there. This wasn’t that much of a surprise, was it? Absolutely not. Take a look at the commodity currencies at the bottom. In fact, all of them! This week (the last 5 days) went JPY strong. It was the trend. As opposed to counter trend.

And my strategy dictates that I trade with the trend. Stay in it. And hope that it continues, more than not. Coming out as positive, in the end. That’s all.

Journal, that right there is my strategy. In a nutshell.

Yeah man, yesterday hurt. And I’m not used to this. I know it’s called FOMO (fear of missing out). Look. There’s not any other time of the month, OR EVER, that I’m not in the market. Except this one day. Of a month.

Maybe I should change this rule.

But then how would I square off my accounts?

I don’t know.
I’ll have to think about this. I need some kind of rules in place. Guidelines.

So. Getting back to my most important question.
What do I need to learn?

Trust my system.

I think this is gonna be a reoccurring theme. And I’m ok with that. Trust me. I’m aware of the fact that I’ve said this before. I’ve beaten myself up. And always have come to the conclusion that my system works. I mean, this is a good thing. I would rather be proven time and time again that my system proves profitable over time, than to find out it’s flawed. Know what I mean?

I’ll show you what I mean.
This is the month of Feb.

I’m not gonna explain all of this. Cause I did before.
Anyway. I got a point to make.
Well, I guess I have to, to some extent.
The top line graph, which goes with the table directly underneath it, is the JPY aggregate trend. Green is JPY bull market, red is JPY bear market.
Then underneath that is the 3 things I’m keeping track of.
The perfect system – impossible to follow.
The day late system – easy to follow.
My actual trading – theoretical numbers.
Now, within those 3 groups, there are 2 sets of numbers. The top number is the daily pip count, all by itself. And the bottom number is the yearly running total. These are actual pips. More precisely, the amount of pips of the 7 JPY pairs.
Cause, you would want to know how many pips, of a result, you would have at the end of the day.

And I’ll give you an example of the difference between the perfect system and the day late system. On Feb 19th, the trend changed. But, I didn’t know that it did until the end of the day. Well, on that day, there was 905 pips to be had. In a perfect world, being all knowing and switching trends before the day began (impossible), that would be positive pips. I just want to know what this number would be, that’s all. So, on that day the perfect system produced 905 pips and the yearly total turned out to be 2092 pips. And underneath that shows the day late system, which was -905 pips, and a yearly running total of -1410 pips. And underneath that is for me. I didn’t change beforehand, therefore I was a negative 905 pips. With a running total of -781 pips. But…on Feb 26th, I did change around the end of day time. Actually it was 4 hours later though (9pm).

Coming into this week (as of 2/21 EOD) the YTD’s running totals are:

• Perfect system = +2236 pips
• Day late system = -1266 pips
• My trading = -397 pips

At least I’m doing better than the day late system. Cause anybody can follow that. It’s simple. All you do is see the results at every end of day, and then position accordingly.

Then the end of the week (present) the YTD’s running totals are:

• Perfect system = +3187 pips
• Day late system = -595 pips
• My trading = -750 pips

And let me explain the trend here. In hindsight, last Friday was when the JPY only got stronger, from then on. The pip counts this week were:

• Monday +629 pips.
• Tuesday +171 pips.
• Wed +140 pips.
• Thurs +307 pips.
• Fri +1304 pips.

If you were holding all 7 JPY pairs, going south, this week. That’s your results. And frankly, on Friday, that’s a record. As far as I have kept them.

Unbelievable.

What a great time to be on the sidelines. You dummy.

Oh well. What can I do. I made some mistakes this month. And for me to think that one day should make up for them, is just not right. What I think I need to be most concerned with, is trusting my system. I hope I won’t be having to always say that to myself. I mean, you got to admit that even on the day late system going from a -2206 pips to a -595 pips running yearly total is not bad at all. That’s a total of 1,611 pips of a gain. All just by sticking to the plan. That’s the easy plan, mind you.

Look. There’s merit in following the trend. That’s what my strategy is all about. As opposed to finding out when to get in the market and when to get out of it. I’m sure every single trader out there has that in mind. My obvious here.

But you know what?
I’m not one to follow what other people do. In fact, I despise that. The game is, for me, trying to find a way to profit from the market, in a consistent manner. And I think it’s best to follow, instead of speculating.

Alright Journal.
I got a lot of work to do this weekend. Like getting a good summary of what happened this month. I’ll then throw it up here for ya. Concerning:

• My trading metrics
• What did I do right?
• What did I do wrong?
• How’s my system doing?
• How well (or not well) did I follow my system?
• What are the lessons that I’m learning?

Thanks for listening Journal.
Mike

[frandlost]

Well, it turns out that if I would have stayed in, all of my losses…mistakes…and turmoil that took place this month would have been erased. By the days end. And I would have looked like a genius.

But nope.

Emotions… The head game is the hardest part. I wrestle with it all the time.

I’m in the market, cause it’s my strategy, perpetually. Basically, I’m always in it. My trades continually run. The only time that I’m not in is, well has been, at the last day of the month.

I understand your strategy’s premise. I like it. It’s almost the simpler the better.Given that, I am often thinking how to garner the most pips, and here’s my thought(s) on this.

A pip is a pip. It’s not like the value of each pip goes up dramatically the longer I hold it with the trend. So I have adopted the mindset that 4 trades for 50 pips is just as good as 2 for 100 pips or 1 for 200 pips. (technically I guess they do go up a small amount but for this discussion I would say it’s irrelevant given the amounts we’re talking about.)

I started thinking of my positions as dump trucks. Each position can only hold a certain amount of pips before it has to be emptied - This may sound stupid but it’s been working for me - @Lang15 did a video that confirmed this process for me - My dump trucks hold 50 pips, and has to be emptied.

Once my dump truck is emptied I set it back on the roadside with a stop/limit order. @tommor has mentioned this quite often - at a sign of weakness TP and can always get back in at a better price. This practice has required me to improve my chart reading and placement of entries.

For me, I have found this takes a tremendous amount of discipline and patience but I have started to continually take pips off the table. While still being in the market.

It’s kind of like a “see a penny pick it up… now” strategy. Up until recently I was using the “see a penny come back for it later” strategy and often found the market beat me to it!

These are just some thoughts that I have had while reading your journal, which I enjoy very much!

Mike, thanks for sharing your thoughts, insights and analysis.

KC

[MikeWolski]

Hey KC!
Thanks for that.
That is awesome. You’re definitely thinking.

I remember thinking about that premise. Having a predetermined amount of pips you want to capture.

The only thing about that is you have to take into account exactly what pair you’re trading, when it comes to the 50 number. Cause 50 pips of a GBP pair does not even compare to a USD pair.

From one extreme, say GBP/CHF, could swallow that amount up in an hour or so. To say the USD/CHF, which would take about a week to attain.

But I understand where you’re coming from. It is a good premise to be coming from. You just factor in everything else around that. Like these points:

• Where the support and resistance zones are
• The prevailing trend
• The fundamentals underlying the pair
• Your position sizing on it
• Your stop loss point
• The particular pair

Then, when the time comes and you pull the trigger, all you would do then is set it and forget it. See what happens. Right?

Then learn something from each trade.

Just some of my thoughts on that.

Thanks for sharing KC!

Mike

[frandlost]

The only thing about that is you have to take into account exactly what pair you’re trading, when it comes to the 50 number. Cause 50 pips of a GBP pair does not even compare to a USD pair.

That’s an excellent point! And I embarrassingly admit I have to be more conscious of that!

KC

[MikeWolski]

Good morning Journal.

March 7th now. First full week, in the books.
Where we at?

Well, all is fine. I mean, I feel good. Like, really good about my trading system that I got going. Now…do I feel good about how I traded in Feb? Nope.

There is a huge difference between my trading strategy, and how I actually trade. Therefore, I’m not gonna throw up here my results from last month. Look. I did spend a whole lot of time on that, last weekend. That’s where my time was spent (instead of in here). But boy…do I like writing down everything in my Business Journal. But, the thing is, I got everything out there on the table. All my stats. What I did wrong. What I did right. A Cash Flow statement. An Income Statement. I’m even dissecting every JPY trend from beginning to the end. That’s a process that will continue on. Presently we’re on trend # 5. Bull trend.

Anyway. That’s nice. I just know that I’m covering every aspect of my trading. And for the month of Feb, I do have it all down. I am moving on now. Therefore, I do not want to rehash all that (nonsense) again. I’ve dealt with it all. Needless to say, I am learning a lot.

But Journal. I do have to say that I’m very intrigued about my system. Do you by chance remember how I’m tracking this systems Proof of Concept? Well yeah, that’s an ongoing process. And the results are getting very interesting. I will get around to showing you what I’m talking about shortly.

But first, more coffee.
Then, let’s see where we’re gonna go next.

Alright.

Well, let’s talk about the market a little. Unless you live under a rock, you’ve got to know that the market is moving. There’s pretty much only one thing it’s concerned about. The coronavirus. And all of this is affecting my currency, the JPY, in a major way. Let’s take a look.

I’m gonna unveil what’s going on this way. Comparatively.
I track the JPY trend.
It’s strong now. But how strong?
I’m gonna show you a shot of when the JPY got the strongest last year.

This is all you need to know.
That is the JPY bull trend (green). The line graph corresponds to the table underneath it.
The numbers signify how strong of a trend it is.
We can see that when the month of August came, well, so came a very strong JPY. Just look at the numbers. From 33, to 70, to 98, to 232, to 352, to 441. And that’s the top. It all went downhill from there. That’s a quick strengthening of the Yen. That’s 5 straight days of massive increases.

I’ll throw up the same pick, but with the actual daily pip count that corresponds to that.

That top row of numbers are simply the total amount of pips had if you added up all of the 7 JPY pairs. Daily results. For that particular day. The bottom row is what the running totals are since the beginning of the year. So, just forget that row. Let’s look at this. Technically, it was a bull trend already (green) heading into the end of the month. The Yen was getting strong. If you were holding all 7 JPY pairs, going south, on July 29th, you would have ended up that day with 70 pips. Then July 30th produces 184 pips. Then July 31 produces 128 pips. Then Aug first, end of day, produces 971 pips. That’s a lot.

You get the idea. This should shed some light on what happens during, and within, the life cycle of a trend. Well, this particular one anyway. Let me highlight the important numbers.

• 1,981 consecutive pips accumulated
• then one day of -256 pips of a correction
• followed by 800 consecutive pips
• followed by one day of -838 pips of a correction
• from beginning to end totals +2496 pips

What I’m saying here is that if you had the 7 JPY pairs running continually (short, JPY strong) for the entire month of Aug, plus the last 3 days in July, that’s your result. A lot of pips. 2496 pips.

All I’m doing here is looking at a trend. It’s output, in pips. And how it transpires. This was the biggest JPY bull trend of 2019. Now. Let’s compare that to the latest JPY trend happening right now.

For some perspective, I backed it up to the beginning of Feb. So, what do we got? Well, technically speaking, the JPY bull trend started Feb 26th. But it got a running start since Feb 24th. In hindsight, that’s the day the buying of the Yen started, right? Cause the 24th produced 629 pips in favor of the JPY. The next day produced 171 pips JPY strong. And so forth. Ok. So. Let’s look at the metrics of this JPY bull trend so far.

• 1751 consecutive pips, the first 3 days of the trend
• followed by a -377 pips of a one day correction
• followed by 551 pips one day of a continuation of the trend
• followed by -349 pips of a one day correction
• followed by 959 consecutive pips (the last 2 days)

This trend, so far, is producing 2,535 pips.
But the story is not over. But, so far, to compare this to last years strongest trend (above), I think, is interesting. Look up there, at both charts.

What was the top trend strength number, for last years one?

• 441

Where are we at presently?

• 441

I am not making this stuff up. What that number right there means is this.

All I’m doing is adding up them all up. The total is on the right.
Now. Visually speaking. This is what it looks like on the charts.

Each currency pair is matched with my table above. So like, the USD/JPY pair has 90 pips between the 5 and 9 ema lines. That’s all. And all I’m doing here is adding them all up. Including the CNY. That’s a different animal, though.

Anyway. That, right there, is how I come up with my trend indicator number. And right now, that number is 441. Which is shown on my line chart.

• This is how I measure the JPY trend
• This is how strong the trend is
• This, right now, has matched last years highest number

Let me state the obvious. Every trend will be different. Between the strength, and the duration, no one trend will be the same. Just like every single snow flake that falls to the earth. Different.

But, according to the way I measure the trend, we have matched last years strongest run. And I can’t believe it actually has matched exactly.

Look.

I’m not lying. This was last years table. Monday Aug 5th was the top, of that trend.
You can see that I measure it all the same. Although the GBP was the weakest (120) against the JPY, then.

And look. I’m not going to put this out there (like a lot of analysts do) to insinuate that the market will do the same thing next. Like go down from here.
No way. Know why? Cause in my trading all I will do is follow this trend, to the end.

I think there’s a big difference between speculating and following. Man…I’ve thought about this, this week. I kind of think that mostly everyone who trades, speculates. As opposed to follows. And I think that just might be what separates the winners from the losers. In the long run.

I don’t know. This can be a very insightful discussion. For me, I would need much more thought on this subject. And it would come down to this very question.

Do you speculate or follow?

Is there a difference?

If there is, could there be anything else?

Does our trading boil down to this?

Is there any other reason behind HOW we trade?

Speculating.

• I think it will go this way, therefore I do this.

Following.

• The market dictates what I will do next. And I act accordingly.

Yeah, the more I think about this, there’s a difference. It comes down to answering the question of what makes us do what we do? It’s a psychological matter. In fact, that’s what trading is. Our decision making abilities.

Anyway.
Enough nonsense.

I’ve run out of time.
Got to go.

Mike

P.S. - For documentation purposes.

• I started the month with a account balance of $19,188.00
• +9.30 % first week of the month (unrealized balance now is $20,973.66)
• The latest
  
  

Man Journal…I guess I didn’t get around to telling you about my take-profit action. Well, in short, do you see up there, on every pair the sell .19 lines (19,000 units)? That number comes from my account balance being $19,000. That’s one standard position size, on each. Well, I start out with 2 sizes on each, which was .38 (38,000 units) on each. But come end of day Thursday this week, I took profit. Why? Well, NFP was coming up next. And plus, I was in much profit already. So, I took .19 off of each pair. And this is the result. See. Now, I’m able to continually have a position in the market at all times. While having the opportunity to bank some profits.

• +456 total pips @ 19,000 units on each

Now, when will I go back to another size on each?

• After a major correction
• At a change in trend

Alright.
I’m done.
Mike

[MikeWolski]

Good morning Journal.

It’s Sunday morning now, and I have some time.
Well, I did mention this to you yesterday. And now I want to talk about it. Cause I’m very perplexed about this.
I’m talking about my proof of concept, regarding my system.

Ok. So. Let’s begin from the beginning.
What is my system?

Point by point explanation.

• This encapsulates the way I trade
• A basket of trades
• As opposed to the game of getting in, getting out
• EOD is the time when you stop and count the progress
• Running progress, in pips, from the years start
• Which direction the trades are going, all the same
• Day late means at EOD, if the trend has changed, then so do my trades
• Results, of an outcome in pips accumulated

This explains my system. But will also explain the charts below.
See. I’ve been trading the JPY this way since the beginning of the year. Yeah, that’s nice, I know. But, I’ve tracked this system as if I traded each of the other currencies also.

So. How about some results of this trading system with the respective other currencies. This can simply be called complete currency trading results.

-GBP-

Alright. It’s simple. If you had the 7 GBP pairs running, according to my stated trend, then all along the way this is what the results would be, in pips. It’s the results over time. I just didn’t show you what the stated trend was.

Well, I started with this currency. Which is the worst of the 8. Know why? Well, it’s because the trend changes frequently. But also when it does, there are a lot of pips lost, due to the day late way. Let me show you a little of that.

I’ll just give you one instance. On Feb 13th. The trend changed from a bear market to a bull market. Well, see, you don’t know that until the end of the day. And that day produced 843 pips. See it there? Well, in a perfect world where you knew before the day began that the trend was gonna change (we don’t) then you would’ve been up +843 pips. So therefore, that’s a result of -843 pips. Then, at end of day, do you change directions. Hence, day late.

• Changed trends 6 times so far this year.
• YTD pip results = -3,510
• Current trend = Bear market

Anyway. This system is easy peasy.
But, with the GBP, it’s not looking like a profitable way, right? Well, let’s move on to the others. Will there be a difference, between them all?

Next up, the CAD.

• Changed trends 3 times so far
• YTD pip results = +1014
• Current trend = Bear market

Not bad at all. You can see that most of the time the running daily results were in the positive (above).

Next up, the AUD.

• Changed trends 3 times
• YTD pip results = +1254
• Current trend = Bear market

Getting better. Most of Jan was in the negative territory. But on the 23rd trading day of the year, Jan 31st, the system hit a top, came back down, but really didn’t go into negative territory. So…lots of positive results since.

Next up, the USD.

• Changed trends 2 times
• YTD pip results = +1303
• Current trend = Bear market

Again, the systems expectancy started to turn around beginning of Feb. After the 23 day. Well, I guess you can see that my system didn’t produce much during the month of Jan. Kinda across the board. But then things did turn around.

Next up, the EUR.

• Changed trends 5 times
• YTD pip results = +1456
• Current trend = Bull market

That is a lot of changing of the trends, which adversely affects my system. It was only in the last 7 trading days which brought up the YTD total amount, a whole lot. So…is interesting.

Next up, the CHF.

• Changed trends 2 times
• YTD pip results = 2,177
• Current trend = Bull market

Now we’re getting somewhere. If you would have traded the CHF as a complete currency, this year, just letting their 7 pairs run continually, there’s a whole lot of potential with my system. Many pips equates to positive expectations. But then you have the position sizing factor. That’s for another discussion.

The best for last. The top currency.
NZD.

• Changed trends just one time (Jan 7th).
• YTD pip results = 2,726
• Current trend = Bear market

Well, just like most of the others, Jan was not so good of a month for my system. But things did take off heading into the end of the month Jan.

Mind you…we’re looking at the day late system results. This is easy to follow. Seriously. At the end of every day, whatever the trend turns out to be, that’s the direction your trades will be running in. And nine times out of ten your not gonna have to do anything. Just let them ride. See. For instance, the NZD. The only time you would have any action to take would have been on Jan 7th. At that end of day, you would have exited out of the long NZD positions, and then re entered going short. I’ll show you.

You can see that the only difference between those 2 systems was on Jan 7th, the perfect system produced 41 pips. But the day late system produced -41 pips. That’s nothing.

Anyway.
What am I looking at here anyway?
My system, simply is :

• Following a trend
• I change directions when my trend indicator changes direction
• Over time, there’s a positive expectancy.

So far, as you can see, it’s being proven. Now. Over how long of time? Time will tell. What would we say if I ran these numbers for the month of January only? That this system doesn’t produce much results. Right? Well, for most of them anyway. Forget the GBP. I don’t know. Maybe they will sometime throughout the year, we’ll see.

Now. Where does my JPY stand, in comparison with those?
Did I pick the best currency to trade this system with? Or not?

Here’s the line up.
From worst to best.

• GBP
• JPY
• CAD
• AUD
• USD
• EUR
• CHF
• NZD

So yeah, I almost picked the worst one. Maybe that’ll explain much of my struggling, so far this year. Let’s look at it, in the same format as the others.

• Changed trends 5 times
• YTD pip results = 189
• Current trend = Bull market

Uhhh…yeah Journal.
Now do you understand my struggles?
I have made some very good trading decisions this year. Cause if you remember, for the month of Jan I came out in the positive. My account ended +2.18%. And if you look up there, that was at the end of day 23rd trading day. -429 is the number (it’s hard to see I know). So, for that month I did better than the day late system. Now…for the month of Feb, I made some grave mistakes (which won’t happen again). And as you can see, making mistakes, along with a naturally producing negative expectancy, turns out not-so-good.

Ok. I’m about done here.
But, I got one more chart to show you.
How about this question…
What would it look like if I had combined every currency, and run this system?
Or more like, if I had 8 separate trading accounts (one for each complete currency), what would the total outcome be?

Stand back.
Here it comes.

You can forget about that top green line. That’s the perfect system.
The bottom line is the day late system.
Look at where the last day of Jan was (23rd). See. I’m telling you. There’s truth to the fact of the end of month flows. It surely escalates.
Where’s the last day of Feb? It’s the 43rd trading day of the year. So, going into Mar has been a very positive expectancy of my system. Aggregate.

Well, the bottom line number is 6,609 pips.
That’s the total amount of pips, from the beginning of the year, if you ran this system on every one of the 8 currencies. All totaled up. Day late system.

Well, my bottom line is this.

• So far, I’m calling my proof of concept positive.
• Positive, on a monthly basis.

I will continue to do what I am doing.
JPY is my currency to trade.
I will continue to keep track of the others.

Thanks for listening Journal.
Good things are happening.
Mike

[FxMaestro]

Mike, love your discussion here. Can you please help with the list of the books you read? I will love to read them too. Thank you man.

[MikeWolski]

Good morning Journal.

It’s Sat. Mar 14th.

Well Journal, I do have to say, it is getting interesting around here. And I’m not particularly talking about trading wise either. I’m talking about life. Let me explain.

This Coronavirus. It has affected my life. Now. To begin with. Let’s get one thing straight. I do not have it. And I do not know anyone who has it. But. In the most simplest terms. I am out of a job for the next 2 weeks. As you know, Journal, I’m a school bus driver. And well, yesterday, it was just minutes before we were to pick up the high school kids (at days end), that the word came out from the schools website that there is not going to be any school for the next 2 weeks.

This was precisely at the time when Trump was in the middle of declaring a national emergency (live on tv). Also it was around the same time that our mayor, of PA, announced that every school in the state will be closing. Man…I’m telling you, there was much going on ever since about 2:30 pm yesterday. Friday the 13th, mind you.

You know Journal…in my lifetime, I honestly haven’t experienced something like this before. A pandemic. A disease spreading, contagion that is globally reaching. But look. I understand what’s going on at the present time is a lot of precaution. Sure. Because who doesn’t want to get it. Right? I mean, the good thing for us is that we were not the first country to experience it. China. Then South Korea. Japan. Then on over to Europe, particularly Italy. Geez.

Sure. It has had a very big affect, on a lot of people. Worldwide. But…is it real? All I want to do is put this in it’s proper perspective. Is this being blown out of proportion? Like. Have we (as a people) ever focused on the influenza before, like this? It seems like we haven’t. Because, annually speaking, there are many, many deaths that occur because of the common flu. It’s just what happens out there. When old people get sick, well, a lot of times it just doesn’t end well. You know what I mean? And now, the whole world will all of a sudden become experts on how many people die due to the flu. In particular, this strain of the flu.

I don’t know. I would like to know what’s important about this and what’s not important. What’s the nonsense, and what do we really need to understand. Know what I mean? All I know is…because of this…I’m not able to go to work. For the next 2 straight weeks. And they even say that it might even be longer. Cause they have to assess the situation, come then.

But that is what’s real. Having to stay home. And you want to know what else is real? Check this out. See. Me and Trish do our weekly shopping every Sat. But, due to what’s going on out there, we thought that we should get this done sooner, than later. And well, yep, we went out last night. After work.

Talk about a run on the shelves. It was bad. Look. It wasn’t a complete apocalyptic scene, but surely it was close. This was something you normally don’t see. Good luck trying to find some toilet paper. There’s simply none to be found. I’m so glad she picked some up a couple days ago, or else we’d be in trouble. But yeah, a lot of empty shelves. Both at Walmart, and Aldi’s.

See. I really don’t know if it’s normal for people to go shopping on Friday nights. Cause we never do. So I don’t know for sure. But it was crowded. I guess everybody else was thinking the very same thing that we were. Kind of like, tomorrow just might not come. Get what you can now. Whatever is left, that is.

As we were shopping, I kept calling it end of days. Cause that’s exactly what it looked like. I mean, it is hysteria. No doubt. So therefore, we can play that game too. You never know, maybe people are on to something. We are dealing with an unknown here. Maybe, just maybe, we will be holed up in our house for a long time. You never know.

This was the prevailing thinking, last night. No joke. But…is this all blown out of proportion?

Well, I do know one thing. If we would have waited to do our shopping today, we wouldn’t have gotten anything! Cause we surely contributed to the emptying of the shelves. I’ve taken the last of many different items.

Anyway. I’m done talking about this. It is kind of stupid. Look. There was a run on grocery items last night. Sure. But the shelves will get restocked. Life won’t collapse. Not now, anyway. I just got to think about what I’m gonna be doing for the next 16 days. Now that’s real. I will be filing an unemployment claim, today.

Well Journal, you know what the first thing comes to my mind, don’t ya? Sure. I’ll be working on my business. I’ll have to find something to do regarding that. Maybe I’ll run some more back testing on my system. Or some kind of project. I just don’t know yet. I got to think.

Hold on Journal.
Time for some more coffee.
Then, let’s talk market.

Alright Journal. I’m back.
But I’ve decided to cut this short.
I want to talk market, and trading stuff on a clean slate.

See ya shortly.
Mike