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?
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.
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).
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