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

[MikeWolski]

Good morning Journal.

Alright. The numbers are in.
I’m not gonna talk. We’re just gonna check out what this stuff looks like.

Let’s look at some commodity currencies. Back in the day, it used to be all 3 of them, AUD,NZD,CAD. But somewhere along the lines that dynamic has changed. And that’s one major reason why I grouped these together. Cause I have the question of “When did they part ways?”

We start from the beginning and move on out.
AUD = red. NZD = dark red. CAD = brown.

I think this date is important because it’s the start of the most recent bullish broad market sentiment. This starts the clean up from when the bomb fell.

• The AUD leads the way with the Comms.
• The CAD cannot be considered part of the club (even though they’re an oil export economy). They’re at break even this entire time.

Now, let’s try to keep everyone else in it.

The majors. USD = white. EUR = yellow. CHF = pink. JPY = purple.

One more grouping. We got the European currencies. Let’s see their dynamics.

The GBP = blue. EUR = yellow. CHF = pink.

• The GBP has made a clear break lately. This puts it into the proper perspective, if your focused on the short term aspect.

• So, we got the AUD, NZD, GBP are the only ones ending in positive territory from this time frame perspective. Well, risk-on currencies they are. Right?

Now let’s look at Jan 2020 up to the present.
Comms.

• CAD cannot be counted among the Comms. At a certain point, they simply trade sideways. They did not join the other 2 on that big appreciation.

I’ll tell you what I think. The CAD gets pulled down by the USD. They are torn between them and the Comm brothers.

I’ll tell you what else I think (sorry about that bit about me not talking).
The GBP marches to their own beat. It’s quite difficult to put a correlation on them. Other than being a risk-on currency, I just don’t know.
Oh yeah, that’s right, they must march to the Brexit beat. Right? So, we do have their fundamentals front and center, more than anything else.

Let’s back it up to the starting point of 2019.

• With more context, we now know that the CAD was riding high before the crash. See how these different perspectives can make a difference? Yeah, I do remember they had a great year leading up to that. I think their interest rates were like very high and their central bank was very bullish. So now, you cannot be feeling sorry for them. They’re only at break even!

• Is interesting to see that the Comms were dragging quite a bit before the fall. I mean, does the market see this stuff coming, or what?

• What to say about the GBP? I don’t know. Their either hot or cold (generally speaking). I mean, comparatively, their just volatile.

Let’s back this bus up a little more.
Let’s go to the year 2018.

The only thing I’m interested in, with these 3, is when their relationship breaks down. I’m kind of seeing it a little here, in the beginning. Compare the CAD (brown) with the AUD (red).

It is quite clear, between these last 2 charts, of the risk-on vs. risk-off. All 3 of the safe havens are riding high above in the positive (above the white numbered line). And all 3 Comms are pretty much below in the negative territory. I mean, how much more clearer can you get here?

But, on the other hand, whoever can summarize the GBP, cudos to you. I can’t. Sometimes they run with the other Europeans, sometimes they don’t. But, honestly, I do find it interesting when all 3 of these run together.

Let’s put it all together. Well, only because I only go back to 2017. Don’t worry. If I can add onto my data base 2 years worth every week, like I accomplished this past week, then I’ll be happy. It’s not a difficult task either. I’m telling you, this excel is unbelievable. The secrets it possesses, makes number compiling easy.

Now…it’s time. Let’s answer the question of when did the CAD deviate from running with the other 2 Comm currencies?".

Follow the CAD (brown) in the beginning. See how they meet up with the AUD (red)? Ok. Up to that point, I consider them part of the club. Keep following them. They break away a little bit, but then join back up with the AUD. So then, they break away and rise up while the other 2 fall away. At first, I thought this was when they divorced. But then you have to keep watching it. They meet up and converge again for a short time. All three of them. See it there? But then, they separate again. The CAD goes high and the other 2 go low again. This is where I’m gonna call it, where they diverge. This is where I believe the CAD has stopped acting (for the most part!) as a Comm. I’m sorry, but from here on out they are divided, like I said before, because of the USD. So. Let me stop here and look at my excel table and find for you this date. Maybe we can find a fundamental reason why this all happened.

Hold on.

April 18, 2019.
If you look closely and see where the AUD (red) turned down, well, that’s that date. The NZD has been falling just before that time. And the CAD just goes sideways.

So now. Since I have some detailed data on this date. Let me pull up and show you what’s been happening around this time.

What do we have here? Well, the top table is individual daily results (nothing running). And then underneath, we have the 2 weeks results (4/19, 4/26). What I see is that on the 22nd of April (a Monday) the CAD was the most bought currency that day along with the AUD, NZD, being the most sold off currencies. That’s interesting. And also confirms some stuff. Maybe there’s other things in there, but not as divisive as that. So then, let’s move on out a little more, for some context.

We have the weekly results for the month of May following. If you compare those 3, there is confirmation that they are NOT running convergently. They are diverging. And yep, I do see that the CAD is running alongside the USD. See it there? Those weekly results are confirming that.

Let’s move out one more time.
How about the quarter. Since April is the start of the second quarter of the year, let’s see what the results end up being.

We have the last month of progression for that quarter.
What do I see?
I see a very weak NZD. A weak AUD that comes on down to the NZD. But the CAD slowly but surely climbs up quite high. You can’t tell me all this is not a confirmation.

There has to be some kind of fundamental reason. I’m not too sure if it has to do with Mr. Oil, or something with the USA. Cause you can’t forget that they are trading partners to the end.

Does it really matter what the reason is? Well, I guess it could be, since this relationship, moving forward, has broken down and can’t be counted to ride with the Comms anymore. Know what I mean?

That reminds me of my very first trading strategy. In fact, it was at the beginning of this thread. Jan of 2016. It was called my Major vs. Comm strategy. I grouped the 3 Comms and traded them against the 5 Majors. See how long I’ve been trading a basket of currencies? It’s just my thing. I refuse to view the market one currency pair at a time. Nope. In my world, it’s all about relationships. Well, believe it or not, I constructed that strategy into one trade. Even though it was 15 separate pairs, I treated that as one trade. 5 currencies paired against 3 other currencies, for a total of 15 pairs. All of the Majors went in one particular direction (either long or short). And the Comms went in the other direction.

Well, that can’t happen anymore. Cause the relationship broke down.
That’s nice.

Sorry about that Journal.
Where was I?

What can I say about this macro context?

• The Comms (AUD,NZD) predominantly, end up in negative territory. Why do I say that? Cause. Someone can think that, presently, they might be overbought (look at the short term charts above). But they haven’t been very strong for some time. There’s room for them to run high and hot.
• Not the EUR has been running high and hot for this length of time. You would, could, think that they have some downside room to run in, for the future. While the USD has the room to go high in.
• The USD. As I’ve said before, did they hit their bottom? Support? If nothing else, keep this in mind.
• The CHF. Well, let’s ask the question of what would their central bank be thinking if I showed them this? Do they want to get back to around break even and maybe even negative territory? I mean, I’m sure they do, but are they capable? It’ll cost them, to do it, anyway. Plus, I’m sure they are not liking the fact that their partner, the EUR, is that high. And they are tied to them in some degree. That’s what is normal.
• The GBP. Well, they are on a pretty good appreciation streak lately. This begs the question of whether they are gonna hit a resistance level soon. You can see it there. They are at it, from sometime around '17 or so.

Well, this only tells me one thing. I need to go back more years. Especially to find the dynamics surrounding the GBP and the correlation of Brexit. Cause I think that all started in 2016.

Don’t worry. I’ll get to it Journal.

But for now, it’s a post.
I think I’ve said a little much. Sorry.

Again, thanks for listening Journal.
Mike

P.S. - It just hit me. I’m not too sure if I answered, or concluded some pertinent questions and answers.

Well, how about this.
I can make a case for just about anything. Whether long or short, I’ll throw up a chart to justify it.
Nevertheless. I find all of this nonsense very interesting.
I’ll just keep it in mind.
Stay flexible.
Always keep tabs on the different contexts that I can find.
That’s all.

Now… I’m done talking.

[apezzero]

@MikeWolski

will

What does "… " reference mean in this blog - is it a concept or strategic or preparatory method? Please someone can educate me about it - and how it is relevant for a trader to be successful in the business.

[tommor]

You’re referring back to a post that highlighted the difference between demo account trading and real account trading. Which basically is psychological, and that’s because real money is risked and lost or won in real account trading and only imaginary money in demo account trading.

[MikeWolski]

Good morning Journal.

This is the place where I do my talking. To you, Journal.

This is my journey.

Yep, we started on Jan 1st, 2016 when I first went live. That means trading on a live trading account. With real money. Remember that? And that was after my 3 years of me practicing, on demo accounts. And well, I wanted to document how it all went.

I’m not the brightest bulb on the Christmas tree, and am quite slow with things, but I am thorough though. At the time, I was ready. Ready to show the world (or whoever would be interested) how it would look, and what would happen. I was a firm believer in practicing running a business as it would be real. Like no difference between the two. I wasn’t gonna trade live until I proved it on demo first.

It is a transition though. Theoretically, there shouldn’t be a difference between your trading on a demo account as opposed to on a live account. I was aware of that before I proceeded into it. And, as it happened, that’s exactly how it went. No difference in how I traded. Cause I traded the strategy as I was doing all along.

I’m such a perfectionist, cause 3 years is such a long time to be practicing. But sometime had to come, for me to experience the live action. And it came time. No better place to document it all than right in here. And that’s what all this nonsense is all about. My journey.

Let’s see. When I look back at it, now, what do I see?
And that’s what I just got doing right now. I viewed a lot of the beginning pages of this thread. Yep. What memories.

You know what? I was not confronted with a big difference in my emotions. My trading carried on through just like it always had. Sure, emotions are always a factor you have to deal with, just like any other factor in trading. If I was emotional, it’s probably because that’s a normal cause and affect, in what happens in the market. No one’s without emotion. But as I look back from where I’m at now, I’d say this…

The more you get used to it all, the lesser degree of emotion there is. Like, when something really good happens, then you’re not as excited as you were when you were in the beginning. And also, when something bad happens, you’re not as upset as you used to be, also.

It’s the experience, and the time served that carries you through.
I would say that your emotions get calloused over time. Cause look, it makes sense. The more you get disappointed, the more you pick yourself up. The more success you experience, the more you calm yourself down. You just end up realizing what to expect. More and more, anyway.

I mean look, who doesn’t get happy when things go good for ya. That’ll always be. And the same when things don’t always go the way you wanted. Sure. That’s normal. But, those hard times that will come, won’t derail you. You just buckle down and get the work done that needs to get done. That’s all. You make the changes that are necessary. From a sober mind, not an emotional one.

My journey journal

• All of my talking in here.

…from demo to live…

• My transition documented in here.

…and beyond

• Now what?

At the time, I didn’t know what was gonna happen. Did I?

But I did know one thing. This was my future. This was the last thing I would put my hand to. It’s something you just know deep down inside. It’s not about money. It’s not about a particular lifestyle. It’s not even about having an easier career, physically on the body (working on cars for a living is much harder on the body).

Sure. Those are good perks. But this is my calling. It’s my destiny. It’s why I was born. It’s how God fashioned my brain to work. This is where I belong. This is what I can become an expert in, sometime in the future. It’s what’s right, in of itself, for me.

Well, let’s see.
What, then, happened so far? (beyond)

— I crashed, ran out of money, my trading account.

— I crashed the second trading account also.

— I got mentored (all documented in here, free for you, not for me.)

— I got to experience what a full time trading business feels like (for one complete year) — Only, then, to fail at it.

— I’m back to demo trading. I’m assimilating a trading business.

Talk about coming around full circle.

What can I say, that’s where I’m at.

Jan 2020 was when I had my last revelation. Which is :

— There should be no reason why I can’t prove success of running a trading business. On demo. Virtual.

All proof will be on paper. And in here, documented.

—Next step—

• Wait for a sufficient amount of money to be able to properly operate a live trading business. I will never start with an insufficient amount of money, again.

• Continue on gaining the experience needed, for to operate my own successful, full time trading business.

At the present time, I’m in my 8th year.
Boy, if I would have thought it would take this long, I would have been surprised. Honestly. But, it wouldn’t have mattered. I’ve always known that however long it takes, then so be it. Cause, it is my destiny.

But, I have realized, along the way, that it’s the journey that’s most important. Good times, bad times. That’s life for ya, right? But, it’s my life. It’s a fun life!

This is a very difficult trade to be in. And I said this before.
I’m glad!
I wouldn’t want anyone to come on in here and prove success over and over again, in the market, with a few lessons here and there. There’s so much to learn. About how the market works. What are all the factors. And, what it means to be a real trader. Most of all, what it takes to own a successful trading business.

I believe this is me.

I’m a trader.
I’m a business owner.
I like to journal. Explain. Type.
I’m a story teller.
Mostly, I’m a child of God. And His will will be done in my life.
We’re gonna see it all take place, right in here.

Alright Journal. I’ve spent enough time talking about that. Although it was good to give a summary about my thread. I guess it’s been awhile. A lot has transpired since I first started it. Maybe the title should change. I don’t know. But, it is funny of how I’ve come full circle back around and am demo trading again. Well, not only that, but I’m actually demoing my entire trading business, not just the trading part. There is a difference. Trading happens to be the engine that drives the business. But there’s so much more to a business than the generator. Trust me.

Well Journal, I had some other things I wanted to talk about. So, I think I’m gonna cut this and start afresh with it, on another post.

Alright Journal, thanks for listening.
Mike

[tommor]

Another thorough and honest personal post Mike, thank you.

We cannot master the psychological challenges in trading unless we understand our own psychology.

[MikeWolski]

Good morning Journal.

Alright… we got some things to talk about.
Like, some changes.
For as much as this pains me, I have to do it.
It’s my strategy. Need a new one.

The reason why I’m so bothered by this, is because I really, and I mean really, wanted to proceed through this year without having to make any changes to a strategy. Journal, I’ve told you this time and time again. You know what I’m talking about. It’s just the point of continually seeing something play out, and working. You know, for some data collecting and proof being documented. I’ve been so badly wanting that to happen, but it can’t.

Well, I guess you got to be right, or at least close, for that to happen. And I’m not right, on this strategy that I’ve been using. I have to tell you though, the things that I’ve been working on has been for a good reason. You’ll see (if you’ve been paying attention). These last 2 months have shown me something. And, I believe it’s been showing me that I need to move on. Change.

Don’t worry Journal. I’ve been on it for a little while now. I’m simply just catching you up on things now, that’s all. I got something. And I’m looking forward to this.

Well, before I move on, I was thinking that I probably should explain why my strategy wasn’t working. Trust me, I have reasons. But, I really don’t want to go through all that now. But, the bottom line was that the results have not been good. I did make it through 2 full months. I hung in there. Am ashamed and disappointed of this time that has transpired this year so far, without satisfactory results.

I guess that all comes because of the high expectations I have of myself. But…it’s ok. I’ve accepted it. And am moving on. What can I do, right? When I really think about it all, there has to be a reason. A good reason for why I thought I was onto something good, but then to be shown differently. Much differently.

Time wasted?

Maybe.

Maybe not.

“Oh…I got it this time.”

Results show…“no you don’t.”

At least I will always be able to chalk it up to experience. It’s just another one of those things that I got to go through. At least I have learned something, though.

• Complete currency trading is quite inefficient. Will only work in a volatile market environment. It has it’s place. Just not in a relatively calm market.

Don’t get me wrong, this is a tool in my tool shed. It just doesn’t produce during these times. I got proof that it does work during volatile times, like last year. Man, I got all kind of proof, documentation, evidence that it works like a charm. But you know what? I got to hang that tool up. Now. Cause I lose more than I can gain.

Specifically, I’m talking about my complete currency trading strategy. The idea of trading the 7 currency pairs, of the one common currency, as one. There’s way too much slippage. It’s inefficient. Meaning, the losses out weigh the profits. It’s too diversified. There’s not enough going in one direction for a profit. See. When it’s very volatile, the market wants, and likes to, compound itself. The currencies each have more of a distinct direction they want to travel. It gets concentrated, meaning, all 7 AUD pairs will be traveling in one direction. Or all 7 JPY pairs. Know what I mean? And plus, during this volatile time, they will travel (the pip count) much farther. Producing some good results for the whole (currency).

Well, they say that your strategy should match what the current market environment is. Right? And now, for me, it’s time to change.

Alright.
Now that I got that out of the way.
Let’s change.
I like change.

This is what I got going on Journal. Trust me, this has been coming down the pike. Like this entire month. So. I guess I should start out with my mind map on it.

Let’s see. Some of the highlights of this strategy will comprise of :

• Mastergunners portfolio methodology. The Forex Portfolio - How to Gain Consistent Profits by Staying in the Market 24/7

• Chart reading. My trend determination will come down to how well I can follow a chart.

Journal, you know me. All of these things, and then some, have always comprised of who I am, when it comes to my style of trading. There’s no secrets here. Nothing new. I’m just putting these things together in a slightly different way, that’s all.

I want to talk about these specific, important aspects of the strategy.

—Basket trading—

It’s always grabbed me, ever since I discovered it back around '13 or so (I can’t remember exactly, but we’ll say sometime between '13 - '15. But, I’m in that thread. And I do have to say, if there ever was a thread that changed my life (I mean, my trading) it’ll be that one. I’ve been apart of many, many threads in here. But that particular one has, and probably will always, stuck with me. Probably because that’s exactly who I am. I can’t deny myself. Simple as that.

I just might have taken that to extremes, though. It’s like stretching out a rubber band. I went all the way with basket trading in the sense of, what I call complete currency trading. As you know. But. I’m gonna have to ease up on that some. I want to get back to some of the original concept of that methodology. You’ll see when I completely spell this all out.

—Charting—

I’m getting back into the chart reading again. For the longest time I’ve been dealing strictly with numbers. Remember…excel stuff. Just my own plotting of numbers. It’s a particular dynamic. And it is quite different than viewing a chart. I, like everyone else, started out that way. Looking at the charts. And then to take away from that the information that makes you trade in a certain way.

Look. This is stuff that traders probably don’t even realize. It’s like the obvious. I mean, what else is there? What a trader does is look at a chart, then makes determination on what they see. Well, I got away from that. I went to the numbers. It mattered to what the numbers meant more than what I was seeing. There’s a difference. And I realized that. Cause I wasn’t having a lot of success, back in the day when all I did was look at the charts. I do think it’s a bit primitive. And probably deceiving also, in a way. You know what they say…“trade what you see, not what you think”. So. If you understand what that is all about, therein lies the deception.

The disconnect between what we see in a chart, as opposed to what is really happening in the chart. But, the thing that’s getting me lately, about charting, is in it’s hindsight. You know what I think about hindsight, right Journal? It’s evil! Meaning, I think there’s so much deception when you think, after the fact (in hindsight), that you should have known better, all before it actually happens. But, the truth of the matter is, when it’s currently happening, you end up thinking something completely different. Basically, it’s very, very difficult to be thinking the correct thing when it is at the present time.

I just call it evil, when in hindsight, you think you should have known better. That’s all. But, on the other hand, every time I look at a chart, and pull up all of the different time frame perspectives, the biggest thing I get out of it, is this:

- Trends are legitimate. Can be very long. And over time, if followed correctly, can be very profitable.

So. What I’m saying is. Hindsight shows me what’s possible. But, in order for that to happen, there’s things I got to learn. And that’s the road I want to travel on now.

Now. Trends are one thing. But I believe that a more correct trend will make more of a difference. Let me explain what I mean.

One currency pair still means nothing to me. I will always, forever, believe that. It’s a currency’s aggregate that means everything, to me. So therefore, that’s what I’m after. And this is what I will follow. A currency’s aggregate running pip count.

Let me be clear. This is what I’m hanging my hat on. And follow.
— A complete currency aggregate running pip count —
This is the chart that I will be following. Diagnosing. Depending on.

Oh, I just remember another very important point. About me and my trading (I’m trying to catch you up on what’s been going on with me Journal). It’s the difference between mechanical trading and discretionary trading. For quite some time now I’ve been trying to be as mechanical as possible. That’ll probably be why I was biased with numbers as opposed to the charts.

Discretionary trading — synonymous with following chart reading.

Mechanical trading — synonymous with following pure numbers.

So, for me, a bit of revelation, lately, has been that I need to be a bit more discretionary with my trading. It’s so very difficult to come up with a plan that you can count on. Believe in. And prove profitable no matter what the market ends up doing. But I’m starting to believe that some degree of discretion is what’s needed, for making the difference in what’s profitable than not. I think that chart reading encompasses that certain amount of discretion that is necessary.

I hope you can understand what I’m saying Journal.

Back to my point of what a more correct trend I should be following. And I believe this will make a big difference in my trades. Let’s see it with the charts.

The AUD.
Their aggregate, complete currency, running pip count chart.

Now. There’s a reason why I picked this time frame (all you have to do is read my last so many posts on all of the different time frame perspectives I explored). In my mind, it’s the most correct, accurate tell tale of what the AUD has been up to lately.

In any case, 3/18/20 is the starting point for all my charts. It’s gospel. Cause I believe that’s when the slate got cleaned. The whole entire market started out, with a consensus, on this date.

No one can argue, or even show me differently, what the (correct) trend has been.

AUD trending high

It did trade a bit sideways, there in the middle. Even slipped some. But then resumed it’s bullish bias they had since the beginning.

Now. This should be interesting. I haven’t done this, so maybe I will learn something here. Let’s look at those AUD pairs separately.

These are all the AUD pairs, since 3/18/20. Daily t.f.
All of those daily compounded pips, on each pair, all added up will result in my chart above (except AUD/CNY, bottom right). Now. You could ask me, "Mike, wouldn’t it be easier to summarize the AUD by just looking at these 7 pairs this way?

And I would say…“Absolutely not.” Each pair is showing something different. Showing their own particular story. So, let’s do this then.

• The AUD/USD (top L) and the AUD/JPY (bottom L) look almost exact. Tracks identical. Nice long high trend, then short retrace, then back up.
• The AUD/CAD (bottom, third one over) also compares to those 2.
• The EUR/AUD (top second over) and the AUD/CHF (top right) are exact. Just inverted to each other. They ranged most of that time period, in the middle.
• The GBP/AUD (top, third one over) ranged in the middle. But is quite volatile than the others.
• The AUD/NZD (bottom, second one over) shows a lot of retracement in the middle. You could even say they were trending low (not high) here.

Or…as I am preferring, we could just look at their aggregate running pip count, above, and get the accurate story from. In the middle of that chart, they falter. Yes. But it was supported. And never technically broke any kind of major support level, to be considered trending low. Chart reading, by the book, that is.

And this is where I feel that I will have my edge. In tracking a currency’s correct trend this way. It’s my starting point. It tells me whether :

• It’s technically trending.
• When I should be in the trade.
• When I should not be in the trade.

I should note also. That when there’s a trend going on, I want to be in it. Of course. But when it stops trending, then I don’t want to be in it. Not going in the other way. Cause I feel that patience will pay off. Between the ranging that currencies like to do after a trend, and also the break & retest they like to do, in case of a strong move in the opposite way. But I feel, that patience should reveal those traps that come. Know what I mean?

Let me finish my analysis on the AUD.
-Their trending high.
-They are on my list, of currencies to trade.
-This is where they are considered not trending anymore.

I have 2 more other currencies that I deem are trending high. And want to be in them.

The NZD.

-It’s important to see the correlation of both the AUD, and the NZD together. And in this case, I believe the AUD kept the NZD supported, and the reason it went higher.
-I also think it’s important to know when the New Year began. And what their trend is in relation to that time frame reference. That context, I think, is very important.
-So far this year, the pip count was rejected from going lower. But, if it breaks lower than that ‘out’ point, then I believe it’s not trending high anymore.

The only other currency I believe is trending high is this one.

The GBP.

-Their trending high status has been of late. Starting the very end of last year, and continued into this year so far. Strongly.
-It’s almost straight up since the year started. I could pick (technically speaking) the beginning of the year for a breaking point for the trend. Instead, I picked a point half way in between. I’m playing it conservative and safe. I’ll jump if it hits this point.

Now.
I have these 3 currencies that are trending low.

The USD.

-There’s no doubt the USD has been on a bear trend, since this start.
-But since this years start, it’s been supported from going any lower (lower swing lows).
-Look in the middle of that chart. The same thing was happening. It traded sideways for a good amount of time. And then what happened? Right back on down (back to trending low again).
-But I’m not going to chance any higher of an ‘out’ point that what I got there. It’s the highest point of this year so far. I can be patient and see where this wants to go.

The JPY.

-The same thing goes here. Can’t really separate the USD, & the JPY. They track very similar. Over time they seem to converge. And it’s been the JPY lately coming back on down where the USD has been.
-They are almost straight down since the year started. So, I picked a landing point close to when the year started.
-You have to give them some space to run, cause it can come all the way back up to the beginning of the year and then U-turn and still be considered trending low.

You got to be true to charting rules. Straight down…steep declines warrant that much in the reverse. That’s why swing lows/highs are important. When there are none, then drastic measures surely can show up.

That’s nice.
One more trending low currency.

The CHF.

-Another late stage, recently started, trend development.
-This year has shown nothing but swing low’s.

I need to show the correlation of the CHF with the EUR. I think this is interesting.

EUR is yellow. And their not trending at all. So forget them.
But these 2 currencies are tied together. Have always been. But lately, boy, they sure have diverged from each other. They did diverge way back last year, as shown. The EUR diverged from the CHF by going much lower. And the CHF was supported much more. But then, the EUR comes roaring back up to them. And we have a marriage once again. For at time. We’ll call it sometime shortly after the year started (the second week of the year it came apart).

Alright. That’s nice.

Moving on with more details of my strategy.

On the left is the corresponding OUT points that I need documented. You have seen all those points on their respective charts.

And now, this is where I have diverged from what I’ve been doing. No more complete currency trades. I can’t go in with every possible 7 pairs anymore. I’m gonna rationalize it in this fashion…

In order to minimize the inefficiency of that system, I’ll just pair up what I know to be true. Whatever currency is trending high will be paired against whatever currency is trending low. Makes sense, doesn’t it? You can say that I’m shaving off the fat.

This is my basket of trades, and how they have come into being.

Believe it or not, this is what I’ve been wanting, ever since I was exposed to MasterGunner’s methodology. If you read through his system, it was all about picking the trending currency pairs. Riding them out till they are not trending anymore. It’s a simple concept. And when you give it the time it needs for trending, you could end up with some real profits. Well, this is my way of deriving which exact currency pairs are best to trade.

We should look at these currency pairs individually.

Trust me…I’m not such a fan of any particular currency pairs, just yet. I prefer macro over micro. (Complete Currency over a pair.)

Give me some time to get warmed up to this (nonsense).
But, I do understand that it’s about making a profit. At least it seems like what I am doing is using my Complete Currency diagnosis for an educated determination of who exactly should I trade. Right?

Don’t get me wrong. When the day comes (and surely it will, again, someday), I will be jumping on the complete currency band wagon again. In the meantime, it’ll be hanging up in my tool shed. I didn’t do all that work for nothing.

Well, I really don’t feel like going over these pairs, just yet. Let me cut this post. I’ll come back tomorrow morning and divulge more of my new trading strategy.

A new month, and new start.
I like it.

Thanks for listening, Journal!
Mike

[mastergunner99]

Good to see my contribution to Babypips still holds value after all these years.

[MikeWolski]

Good morning Journal.

Alright. It’s a new day. New month. A new beginning for me.
This is how I’m gonna trade. More details on my new strategy.

But first, let’s take a look at what’s going on in the market.
What’s the market look like?

Chunks at a time. Here’s what happened last week.
Top table — Daily standalone results.
Bottom table — How the week rolled out. Running daily %'s.

What are the important points here?

• End of month plays took place (Thurs, Friday)
• Volatility quite high this week. Anything over say 5% a day is high. Top table let’s us see those numbers in perspective against each other.
• The mighty have fallen. Look at the NZD, & AUD. Were at the top on Wednesday. Slipped on Thurs and crashed on Friday.
• The AUD ends the week last -9.72%. Most sold currency this week.
• The NZD end about break even .65%.
• The safe haven currencies. USD,JPY,CHF. Bad day on Wed. Most sold currencies. But look at who took the MOST SOLD OFF currencies on Mon, Tues, Wed. They each took turns being that one.
• The USD most bought currency on Fri. 7.58%. And because of that, it puts them about even with the EUR for the most bought currencies for the entire week. 6.54% & 6.48%.
• The CAD acted mostly as a Comm this week. Except for Monday. They go by way of the USD then. But, it’s nice to see them ride with their long lost bro’s. This is not normal nowadays. It used to be, though. But, -.92% for the week. Not too bad.
• The EUR. Big day on Thursday, most bought along with their close partner the Swiss. 5.38%. Nothing really stands out about them, other than that they are probably being supported from the bottom up.
• The GBP. This year, they have been on a tear (going up). I would say they are counted among the risk-on currencies. Thursday they did fall apart like the others. But Friday they did not.

That’s nice.
It’s kind of hard to talk about any kind of trend flow at the end of the month. Things flow in an opposite manner. It’s the accounts getting squared away. Profit taking and the such.

Well then. Let’s step back a little more and see a bigger picture of what’s been happening in this market.

Top table is the daily monthly running %'s. Underneath that is the individual day’s. Then underneath that is the weekly results.

• The AUD was the most bought currency in the first 3 weeks. And get’s squared off in this last week. And my point is…you can’t necessarily think their trend will change because of this last week. That’s nothing but profit taking. Or a retracement move.
• For the most part, the risk-on type currencies took the month. And the safe haven currencies were more sold than anything.
• The USD is about in the middle. Ends the month being 1.01% in the positive. I think there’s a struggle going on here. No real consensus. There’s buyers along with the sellers. Which way will this break? We’ll have to see.
• The GBP is the most bought currency this month 18.26%. Once again, playing alongside the Comms this month. Let the good times roll, right GBP?
• The CHF. I tell ya, they are getting sold off. I think the SNB is doing everything possible to keep them subdued. Ends the month -18.09%.
• The JPY. They are just the favorite currency to sell, in times of risk-on. Has been the most sold currency this month -22.51%. Look at every weekly result. Down low!
• The NZD. They are the weak Comm. Just not as strong as the AUD. This month. Ends with 8.65%.
• The EUR. What can I say…nothing really stands out about them. All month, about at break even, comparatively speaking. Maybe the Swiss have gotten them stuck from being able to rise up. I don’t know. They were, though, running slightly negative for most of the month running.

Ok.
That’s 2 months down and in the books now. How’s the year been looking like so far?

• The biggest outlier has been the JPY. -42.68%. There is no other running % bigger than that, which makes this the most agreed upon play this year.
• Then the GBP is the most bought up currency this year. No one else is even close. 25.31%.
• Again, the Comms are having it this year, over the safe havens. So far.
• This is where you can see that the CAD has been more siding with the USD. As opposed to the Comm brothers.
• How about the CNY? They have been running hot, comparatively, against the USD. They eased up some this month (probably trying not to make waves, right?). They are elevated though. Having a good buying year.

Well, that should suffice, about what’s going on in the market so far, right?
We have some trends taking place. Whether you’re in them or not, they’re there. In fact, I believe there’s always trends taking place. And they like to last a while.

Let’s do something. I’m sure that I gave some kind of summary of what happened last month. Did we have any kind of mentionable changes since then?

@MikeWolski

So. How about we take a look at what happened in the month of Jan. One month down, 11 to go. This will be a loaded pic (cause I jammed it all in on one shot).

Top table is the month running. By %'s. The second big table down is each day all by itself. Daily % total. And then we have the weekly totals last. That’ll be a summary of what happened in the week. And so, I’ll tell you what I think is important to note.

• The CNY is noticeably the most bought up currency this month (17.53%). Far more than any other currency. And we want to know what will replace the USD? Maybe these guys are trying. Just keep this stuff in mind, that’s all.
• The JPY, easily, is the most sold currency. Been that way all month long. Was last in 3 of the 4 weekly standings. So…what can we say about this? Well, more than anything else, it’s been a mostly risk-on market sentiment.
• Speaking of that, the CHF corroborated that sentiment with them also. Not as much as the Yen, but in comparison, is the next most sold currency. You can see, via the weekly line ups, that the CHF was running close to the EUR only up until the last half of the month. Then they diverted. I think the SNB probably wanted that to happen.
• The GBP has a good month. Lots of buying and never really fell apart (as they are known to do). Ok. Well, they started out the month being sold off pretty good, but climbed ever since the second week. High weekly numbers on those last 3 weeks.
• The AUD and the NZD. Well, the AUD fell apart this last week of the month. And it’s noticeable how they diverged from the NZD. But you have to look closer. That divergence mostly took place on Friday (on the second big table down, it’s seen). Well, that mostly tells me that the risk-on sentiment isn’t in full blown mode. IDK…Maybe it’s starting to break apart. (?) Or simply, just one bad day of a divergence.
• The USD. What do I see concerning them? Well, this last week they diverged from the JPY (not normal). Much stronger. They took Wed as the most bought currency. But then again, just the day before they were the most sold currency. But, as the month ended, the Dollar broke even.

All you really have to do is read my summary notes.
JPY — Same old story. That trend continued so much more!
CHF — Their trend continued. Being sold off. Under pressure (as they say).
GBP — Continued on their winning streak. Trend continued.
COMMS — Comparatively, have been staying on the high side.
USD — They go from break even to an inch higher. We can say that they are not being sold off anymore, like they were coming into this year. But also, we can say that they are not bouncing higher. There’s a struggle going on here. No consensus.

My point here is that a lot of the trends that were talked about last month did continue into this month. I would have to say that the broad market sentiment trend continued. Which is more risk-on.

Now.
The reason why I am making the point about trends is because that’s a big premise of how we trade. Whether we trade with the trend or against it. We want to know whether things will continue the way it has been going, or not. And then we take the appropriate action, in our trades.

You got to know what’s going on.

I’ll tell ya what I’m gonna do. And how.

Let’s see.
This is swing trading. Run for days.
I follow daily results. Pip counts.
I follow this trend :
My aggregate complete currency running pip count chart. I’m sorry, but I don’t know what else to call that nonsense.

At the present time:
3 currencies trending high.
3 currencies trending low.

• 9 currency pairs running on one trading account
• Account balance of $10, 000 (demo)
• Position sizing = 2 x’s the account balance amount in units (20,000 units on each) This is what I call my standard positon sizing amount. MasterGunner used an equal amount of his account balance in units, for each trade. I’m double the amount.
• Tracking these trades will be crucial to me. Since I can’t back test, this is gonna become my historical data collecting base. Need to build a system of testing whether this will work or not. And to answer questions of why.

Rules:

• Stay in the trade as long as each currency is still trending
• Exit the trade if one currency has hit the OUT point, which is noted
• If there’s an exit, it will have to be at an EOD. After the daily determination
• Take profit on any pair if it reaches 10% of an increase - Then immediately re-enter with an adjusted position size (recalculated standard size)
• Any or all actions, above, will be taken at EOD

So.
When the market opens up, I will place these trades, accordingly.

Then at every end-of-day I run the numbers, which is standard operating procedure for me. Each currency’s chart will change, to some degree. I will, then, be able to see whether any changes will occur. The questions will arrive:

— Are the trending currencies still trending? If yes, then no changes to my running trades. If no, or at least one of them, I will have to exit out of the respective trade. I am expecting both currencies (trending high & trending low) to be true. If one’s not true, I’m not gonna be in it.

— Are there any new currencies that start trending? This depends upon the day of the week. I will need to be sure and convinced that a new trend has taken place. And then to open up a new trade, or two, for to be in the basket.

Journal, this is about all I got. Up to this point.
It’s a good start anyway. I think.

But, I’ll have to come on in here, as time passes by, and show you how I’m keeping track of this new strategy of mine. Like I said, I want to build a data base. I got to know why something works or not. I want proof.

Look. You should know by now. I’m all about details. It’s the only way to be.

Let’s see what happens.

Thanks for listening, Journal.
Mike

[chrisfraser05]

Hey Mikes Journal,

You sure have alot of history in you!!!

I’ve read you start to finish, and boy have you and Mike shared many ups and downs, it’s really hard not to get emotionally evolved.

I really hope things are at a turning point and Mike manages to make it as a successful trader, the trader he was born to be. I really admire his passion and nobody could question his perseverance and dedication.

Has Mike ever watched VP’s No Nonsense Forex Videos on Youtube? I think they would suit Mikes attention for detail, passion for research and would help him establish rules he can use to reduce his emotional trading.

Cheers Journal, Chris

[MikeWolski]

Good morning Journal.

Thanks Chris, for the comments.
Man…I can’t believe you read this from front to back. I didn’t think that was possible. Honestly. There’s a lot of writing in here (as opposed to how many pages). I know, cause I did that very thing about 2 or 3 years ago. And it took me 3 days straight through! Well, I’ve written way much more, since then.

Well, what can I say, I’m sorry about the emotions thing. Trust me, I hate the idea of emotions being part of me. I don’t think I’m any more emotional than the average person. What I write about, coming from the inside of me, and what’s on the outside of me are two completely different things. I just might be aware of it more than others. And it all comes out in my writing. But, in real life, those who know me, probably…wait…this reminds me of something that just happened. This past week. At work.

At the end of every day, we have a thing called child check. Our school buses have to be checked, for any possible children left behind. It’s the last thing that happens right before we park our buses for the night. Well, this woman does it for us. And I’ve been getting to know her. Even if it is only for a couple minutes every day. She’ll jump on the bus and sweep it for kids, and even spray it with a particular solution (COVID protection). Well, we’ll have small talk during that time. She’s a nice person.

Well, recently, she made this comment to me. As she proceeded to come on my bus, she said, “Mike, you know, you’re the most calmest person I’ve ever met.” I’m not lying about this. Then I said, “Wow, I wouldn’t exactly say that, about myself.” She then said, “Well then, maybe it’s how you carry yourself. Cause you sure do seem like it.”

I really got to thinking about that small conversation. It’s small talk, really. But, the point is, what and how people view you, really, is not always accurate. They can take you as being something bad, or the opposite, take you as from something being good. In both cases, I guess, people don’t have the complete picture of yourself. It’s the missing pieces that usually makes the difference. But…I definitely was wondering why this happened to me. Like, where did this come from?

Maybe it was for this point, that I am making, right now. And my point is, that I might write like an emotionally tossed and turned man, on the inside. But that’s really not the case, on the outside. I think I’m normal as any other person. Now. I might be aware of what’s going on inside of me more than the average person. Even enough so to be able to write about it. Explain it. And even explore it.

I’ve said this before. Many, many times. If you can get to the bottom of “why do you do what you do” you will accomplish much. I truly believe that. Now. If that entails exploring your emotions, then so be it. But I think it’s more of exploring your intentions, motivations, and drive.

In any case. This is who I am. Good, or not so good. It’s ok. What can I do?
Again, thanks Chris. Take whatever you can from all this nonsense, and learn from it. In your own way. And btw…I’m not a fan of watching videos. I just don’t do that. I truly believe that everybody should carve their own way. I got the help I needed, back when I started out.

Alright.
Gonna cut this and come on back.
Mike

[tommor]

Hi Mike -

Its hard to find more thoughtful and more thought-provoking posts on the site. I appreciate your efforts and openness.

As I may have posted previously, I am also a daily trend-follower focusing on currency baskets rather than the individual 28 major charts.

I’m mulling using the smaller partner in the “sibling” currencies as an indicator. The sibling currencies are EUR & CHF, AUD & NZD, and USD & CAD. The bulk of the trade for the smaller sibling passes through the larger. If the junior sibling is weakening, expect the senior sibling to weaken soon: vice versa if the junior sibling is strengthening.

Right now, I score NZD at 3-4 (3 bullish points to 4 bearish) and AUD at 5-2 - both have been weakening but NZD’s score has fallen further. I score CHF at 0-7 and EUR at 2-5, both weakening, and CAD at 6-1, USD at 4-3, both strengthening. In all three cases, the junior sibling is leading the way.

The basis of my thinking is that the international banks make the prices and they’re better at pricing currencies than I am. So if they are pulling money out of NZD, that suggests they don’t expect much from AUD…

[MikeWolski]

Good morning Journal.

Let’s talk turkey.
I mean, trading.

This was the first week for my new strategy.
And what a week it was. Very interesting!
Let me explain. (I guess that’s what I do best…sorry)

I went through a lot this week, with it. Details, details, details. Much became clearer as the days went by. I mean, I’m talking, even the title (or whatever I should call it).

This is my Basket Trend anchor trade.
Cause those are the two biggest factors in the way it trades.

But this week, for me, was gonna be all about finding out how will I keep track of this strategy. You should know me Journal, I like tracking things.

But why?
Why is that?
I’ll tell ya.

Every now and then, I’ll get some real gems, golden nuggets, from Babypips. This is one of them. I took it and ran with it. Made a mind map of it. It’s all the things that (should) go into your trading plan. Well, here is 2 very important questions that need to be asked concerning your plan. I don’t know about the answers I gave there, but it’s the questions that is what’s most important here. And this is what I’ve been diving into this week. All for to answer these questions. If you pay attention, you should see that I’m trying for that.

Boy Journal…I remember, I was quite distraught about it. Well, I don’t know if that’s exactly the right word. But, let’s say that my mind was quite preoccupied on this. I mean, I was even dreaming about it, one night. Quite vivid stuff.

But, I’ve been coming through it. It’s the process. That’s all. I’ll start showing you what I’ve come up with, so far. Trust me, I’m not done.

Well, this is how I started. This tells me the currencies that are trending. On the left. There’s 6 of them. 3 trending high, 3 trending low. Which means that I will have 9 pairs in my basket. Shown. And the big number, next to each currency, just means that’s a point on their aggregate chart. It’s the whole reason why I deem them to be trending, and why I am trading them.

Each currency has their one chart. Here’s the AUD chart. This tells me :

• Why their trending
• Where I got in at
• Where they will be not trending anymore
• Which means where I will get out at

@MikeWolski

Let me finish my analysis on the AUD.
-Their trending high.
-They are on my list, of currencies to trade.
-This is where they are considered not trending anymore.

It’s not shown on that chart, but it’s there. The very last point of that chart was last Friday (last day of March), 10,512. That’s where I got in at, cause I got in as soon as the open happened. And the point of where I will get out is there, “OUT”. That’ll be at 9,742. Anyway, that’s what those numbers above mean.

Well, since I am trading pairs, I guess I do need to know where I’m getting in at. So that’s why it’s there. Remember. I’m not a fan of individual pairs. I like aggregate. Macro. Complete currency stuff.

I need a system. I’m not gonna just look at this chart as time goes by. I definitely need a system of correlating together these basket pairs to the aggregate currency that I watch and track.

You’ll see here. I do not pay attention to these individual pairs’ charts. I don’t even look at them, for any kind of analysis. I don’t. It doesn’t matter to me what’s going on there. It will have no bearing on how I trade them. I’m so happy about this. This is the way I can trade effectively and efficiently all the while looking at the aggregate. If you pay attention, you’ll see it.

Here it is. After much…deliberating…this is what I came up with. It’s awesome.

To me, this is so much better to look at than the charts. I prefer numbers than charts (I think charts can be deceiving). This is what I will look at more than anything, concerning my trading.

This is results after the first trading day of the month. The top row is the major currencies. Bottom pretty much the Comms. And then lower right is some aggregate summaries (not quite finished with that yet).
There’s much context here for me to see.

• How a currency is doing. Their trends. Green for bull trend, red for bear.
• How the currencies relate to one another. The relational aspect between them all.
• Calendar context. Week by week, and months at a time. I think time is hugely important. And you don’t get that just by seeing a chart.

I want to focus on one currency this week. The USD. Let’s zoom in on how they did this week. And in regards to my trading them (this is gonna be interesting).

So. The USD is in a bear market. So, they’ll be sold, of the pairs, in my basket. I correlated the numbers on my table to the arrows I put on my chart. Also, there’s a method to why I placed those numbers in that order. The EOD number went more negative. That’s more away from my entry, also the ‘out’ point. Right? So, it’s lower.

What happened the next day?

It went more negative. And that’s the USD complete currency pip count, daily running. It ends up being -8879. Now. Do I need to look at my 3 USD pairs, in my basket? No way. I know as long as the USD aggregate is continuing negative, then my trades must be going negative. So. The EOD is moving away from my entry point, also the ‘out’ point. All going good.

Wednesday’s results.

The USD was bullish on Wed. Their aggregate pip count was positive. Shows both on the chart and my table (from -8879 to -8663 = +216 pips). Well, I’m still below my entry (which really doesn’t matter, what matters is the ‘out’ point). No changes to my trades. They run, that’s all.

Thursday’s results.

The EOD results is the white colored box. And well, I put it in between the ‘in at’ and the ‘out at’ points. Cause the USD gained +457 pips that day. Which is not good for my USD short trades.

So. What do I do? Anything? Nope. It didn’t pass over threshold of -8116 (out) point. Therefore no changes. Let’s see what NFP Friday gave us.

Well, count it up. The USD gained +216 pips that day. And well, you can see that the EOD figure goes up and over the threshold. It went beyond my ‘out’ point.

Like I said. I’m more of a numbers guy, than a chart guy. Sure. You can look at the chart over there. Zoom in. See that it overtakes my ‘out’ point. In fact, that point is the highest point this year.

Now it’s getting interesting. What am I gonna do?

This reminds me of what I said only a week or two ago.

@MikeWolski

So, for me, a bit of revelation, lately, has been that I need to be a bit more discretionary with my trading. It’s so very difficult to come up with a plan that you can count on. Believe in. And prove profitable no matter what the market ends up doing. But I’m starting to believe that some degree of discretion is what’s needed, for making the difference in what’s profitable than not. I think that chart reading encompasses that certain amount of discretion that is necessary.

I hope you can understand what I’m saying Journal.

What’s my standing rule, now?
I exit.
Why?
Cause it’s technically not trending anymore. Trending low anyway.
Does this necessarily mean that it’s gonna trend the other way? No.
Does this mean that it’s gonna range now? Nope.

I don’t know what it’s gonna do now.

That’s the only facts that I know now. Right now.
Well, how about if you tell me that it’s a fact that it’s not trending low anymore.
And I would say that we don’t have enough information to conclude even that.

Cause, first off, it happened on a Friday. That’s important. I think that’s a big factor. What if the market simply wanted to hit this level before the week ended. And get a lot of traders to jump on the band wagon for the return of a strong Dollar.

“Yeah…the mighty Dollar is back! We’re done making all this money going south the USD. It’s time to go north!”

Then comes the open.

Retracement.
Right back on down.

Look. I don’t know what’s gonna happen. I can give you such a good excuse to trade both to go long, or back to short. Easily.

How about we look at some charts.

This is the 1hr charts. This entire week. This is what I take away from this context. The eighth candle from the end is when NFP took place. And I see that (as which normally happens) the market sees what’s up and coming (NFP). Apparently the market thought it was gonna be a good report. And sure enough, it was. It trended in that direction. Well, whether it’s true or not, it seems logical. If you look closely, on many of those pairs, the USD started out the week going that way. USD strong, against the EUR, GBP, AUD, NZD. Even the Dollar Index. But against a very weak CHF, and JPY it’s more clear of the strength it has, against those particular ones.

Then, as I have said, the run up to NFP is for a stronger USD. And what can we say about the aftermath? Well, let’s look at this closer.

Let’s see. What are the possibilities here?
USD — continue on with a strong Dollar, after NFP.
USD — take back the gains it made on the lead up. Back to the weak USD trend.

Well, you can’t really say the first. As a consensus anyway. The USD didn’t run away with it. The closest I see, for a strong USD, is against the CHF. Price did travel on up. No doubt. If it wasn’t for that last candle, it would have been a strong USD. But…we don’t know why, in that last hour of trading, it came back down. Was this the day trading, or even weekly trading traders? Where they have to get out before the week ends. And the trend talk doesn’t matter? It’s positioning, more than anything. Well, I’m not convinced that the follow through favors a stronger USD.

What about the contrary?
Back to a weak USD?
Maybe we can call this a trading weak. It favored the contrarian trader this weak. The bulls took control, and made their money. The question is whether they will come back and try to turn this tanker of a ship around? And cause an appreciation of the USD?

Look at the AUD, NZD (bottom left 2). Those currencies were pushing for a retracement (weaker USD). That goes for GBP also. And remember who I consider is trending high. It’s the AUD, NZD, GBP. It sure does look like those 3 were trying to retrace the losses of the week. Like it wants to go back to the prevailing trend. My 3 currencies that are trending low is the USD, CHF, JPY (top right 2). I don’t know what to say about those. The Swiss is weak. Yes. The JPY? That pair went nowhere.

And what about the USD Index (bottom right)? It’s flat. There’s no trend after NFP. Simple as that.

The way I’m seeing this (given all that nonsense I just threw out to you), is that the USD had a good week. Let me throw out the %'s.

Top table is the month running. Bottom table is individual daily results. Bottom corner is the weekly result. What can we say about this?

• The CAD is the top dog this month so far. Put up some good days. Took Friday. And you can see how they have tailed the USD, mostly on Thurs and Fri.
• The USD is the next most bid currency 6.66% (yikes).
• The CHF and the JPY are the most sold currencies. Once again.

Well, let me say what I said in the beginning. Anything can happen, from here on out. The USD can go right back on down to trending low. Nothing is really convincing of a change in trend, just yet. They had a good week. Actually, they had 3 good days, mind you. Cause the first 2 days of the week were their normal selling trend days.

Man…when you put it that way. The USD just got the run up… up to NFP. That’s it. It didn’t follow through, afterwards. Like for a change in trend. Surely not convincingly, anyway. But, you know what? I still don’t know what’s going to happen. Therefore, I like what my trading plan states.

If it hits the level, I’m out.
I can wait a day or two, or the next week, to see some direction it wants to go in.

You know what? If I do anything else, I’d be speculating. Gambling. Guessing. Whatever you want to call it, it’s not smart. What’s the rush anyway? My trades run for days on end. This is where FOMO can set in. (Fear of missing out). I’m not gonna play that silly game. I prefer to follow. Not speculate.

So. The answer is. At the open, I’m out of the USD trades, in my basket.

And my next possible move, would be if they decide to go back to trending low again. Then I’ll simply get back in with them, like I was. That’s all. Now. If they start moving higher, than I’ll be watching it, on the sidelines. I mean, trends don’t change on a dime. Unless you see a monstrous, full blown domination of a move, then that’s another thing. And even then, you’ll probably get a retracement move back on down before it heads up the ladder for good. So, there’s time. No need for haste.

Ok. I’m done with the USD.
How about what my other trades did.

• GBP — Struggled the first 2 days of the week. But ended up in the positive.
• CHF — No problem here. The trend continues going down and down.
• JPY — Same thing. Trending low. Majorly.

Well, that should beg the question…Do these safe havens plan on staying down this low? And if they do, wouldn’t that correlate with a weaker USD? Their correlation usually catches up with each other. That would tell me that eventually the USD should drop on back down, with them.

On the other hand, what would make sense if the Dollar took on a bid, and some serious strength (trend high) then those 2 currencies would have to come on up, also. I mean, come on. It would have to. I would put money on that scenario.

Ok. How about my other 2 trades.

• The AUD stayed above my entry place. That bodes very well for me.
• The NZD slipped. Thurs, Fri. The EOD place comes in between my entry and the ‘out’ point. Not really close though. I don’t change anything with them either. Still trending high.

Remember…“If it’s trending, I’m in it.” And…“If it’s not trending, I’m not in it.”

Boy. I got to tell you. All my data points to a continued trend following, regarding all of the currencies that I deem trending. The USD is the odd ball, out. How can that be? Think about it. It’s the world’s reserve currency. The most important currency in today’s world. If they change course, then you better believe that all the others will change also. In their respective ways.

Who knows. Maybe this next coming week will start producing some serious changes. Like across the board. We’ll have to see. But, I got to see it first, with my own eyes. Then I’ll trade accordingly.

It’s time to grow up. Do the smart thing.
Be patient.

Well, what about the other two currencies that I believe are not technically trending? The EUR, and the CAD. What do these tell me?

Well, since we seen such a good week with the CAD. Let’s start with them.

Well, let’s talk trend. Is there one? If there is, I don’t see it. All we can say is, that they are on a major stretch presently. Highest point of the year so far. They just passed the Jan 20th swing high.

As far as I’m concerned, it’ll be a guess as to where they might be biased to. I just have no clue. If it’s a start of something, then it needs more time to play out. They’ve spent more time low this year, than anything else.

But, what about their correlation to oil? Last I checked, oil has been going through the roof. Wouldn’t you think they’d be trending on the high side? Right? But, they’re not.

On the other hand, it makes sense when they’re correlation gets tied to the USD. Trading partners. Much commonality, like interest rates, their economies, etc.

I think they’re torn. That’s why it’s not so clear as to any trend.
So. No. For me. Not clear. Would be purely a guess.

How about the EUR? Anything here?

Man. Talk about consolidation. That’s the only word I have for them. I think they’ve been dragged down by the CHF. Well then, let’s see them two together.

Yeah boy, what a divergence lately, huh?

BTW…Tommor…thanks for you post!!
I like how you think. Looks like we do think very much alike. The correlation of them are extremely interesting.

@tommor

Right now, I score NZD at 3-4 (3 bullish points to 4 bearish) and AUD at 5-2 - both have been weakening but NZD’s score has fallen further. I score CHF at 0-7 and EUR at 2-5, both weakening, and CAD at 6-1, USD at 4-3, both strengthening. In all three cases, the junior sibling is leading the way.

Well, I got up there for ya the EUR and CHF. So, the question would be (I think), will the CHF climb up to the EUR? Moreso? Or will the EUR drop on down to the CHF? Moreso? And as I see there, you think that the junior currency (the CHF) is leading the way. Well, there’s proof right there. I think you’re correct. So far.

But look back. Their divergence through the early part of 2020. And what ended up happening? The EUR came on up to the CHF. More than the CHF dropping down to the EUR. So…will the EUR follow in the same manner, nowadays? We’ll see. Right?

I’ll give you the others.
The AUD, NZD.

AUD = red (top)
NZD = dark red (bottom)

Well, this is a zoomed out view of them. Kind of hard to tell anything. Let me zoom in some.

The NZD has generally been weaker. Yep. I definitely concur. This shows it here.

How about the USD, CAD.
We’ll go this year, again.

USD = white. CAD = brown.
And you are saying that the weaker is leading…ok. I’ll buy that. Lately. Sure. Cause it’s not the other way. And I guess that if you look at their particular pair, we’ll see the whole difference right there. AUD/NZD, EUR/CHF, USD/CAD.

That is interesting stuff Tommor.
Thanks for chiming in!!

Well, I’m typed out.
I’ll have to come in here tomorrow morning, and tell the complete story of how my trades ran. The basket as a whole. It was very interesting stuff.

Alright Journal, thanks for listening.
Mike

[MikeWolski]

Good morning Journal.

Well, I want to put some kind of summary to how my basket trades did this past week. I haven’t been able to put in place a good method of tracking this, yet. Maybe I can get close here by talking about it.

Remember, I want to know if my strategy is working. And if it does, why? Well, the only way you’re gonna know any of those things is if you can look back at what happened. See what the market did, and see what you did as a result. Right? Makes sense. Well, you need some way of documenting all that cause and effect.

Let me walk through this. This is what happened this week.
I tried to document as much of it as possible.

I placed my trades at the open.

This explains what my basket of trades are. In detail. 9 trades. Why?
Cause :

• AUD, NZD, GBP are all trending high
• USD, JPY, CHF are all trending low
• I only trade trending currencies, therefore, these are the only possible pairs. High against the low.
• $10,000 starting account balance
• Position sizing = 20,000 units on each. Is considered my standard sizing. That’ll be double the amount of the account balance amount, in units.
• Costs me $278.45 to place them all. It’s a factor I got to realize (a big ship).
• Margin factor. It’s there to see. Most of my money is tied up.

Monday comes.
And this is all I have for a documentation (not all that much). I’m just starting out, remember.

What’s important to me is what’s in those squares. That basically tells me how the aggregate currency is doing, not my individual trades. As I’ve said before, I’m not one for the individual pairs. I don’t even look at their charts. Cause I don’t care. That doesn’t have any bearing on what I do with them. They run. Why? Cause my aggregate currency chart shows if it’s trending, then I’m in it. And what does that have to do with the paired up trades, that I trade? Nothing. Other than whether I need to be in it or not. That’s it. So then…why should I care about their particular chart?

I’m tired of that game. Everyone can go right ahead and read those charts. Great. Try and figure that out. Good luck. I’m not gonna go down that road again. Cause, I believe, the answers are not there. Sorry. But, they’re found in the aggregate.

Anyway.

All I can show you, of what I got, for my basket of trades is on the bottom right 2 big blocks. It’s just what I got so far. But, at the EOD, I did count up all 9 trades. What a nice turn out for the first day. 587 pips totaled. 7.20%. That’s nice.

And then, I do want to know what the complete currency total is, for that day. That’s on the last block, there. IDK…it’s hard for me to let that go. I just want to know. But why? Uhhh…I’m not quite sure, other than it’s hard for me to shake that. See. I want to know what the complete currency is doing. The aggregate. And well, concerning my trades, I just would like to know if I traded the complete currency (instead of the partial that I’m doing now) what would it look like. That’s all. It’s just some knowledge.

Moving on.
Tuesday comes.
And I remember it well, I was sitting in my bus, in the morning time. Dark. Before I proceeded on with the morning run. I got a few minutes left (10 - 15) before I start. Checked the market, my trades, and there it was. I was up a lot.

Well, I got a rule. If my account balance goes up 10%, then I take profit.
So, I take action.
But, I kind of forgot to start taking pictures of everything beforehand. Well, then I remembered as I was doing it. This is what I got.

Well, it’s the realized P/L that was my account balance just before I exited out of the trades. That’s the proof. That means that my account went above 10% (11k).

So, according to my plan, I exit out of my positions. I recalculate the position sizing. And immediately re-enter. That’s all. That’s what I consider taking profit.

So therefore, the result, will be these same exact 9 pairs, going in the same direction, but with 22k sizes on them (as opposed to the 20k they had). So I did that. It only takes a few minutes.

That’s a Tuesday.

Well, a quick glance shows me that there’s only one currency that I’m slipping on. Not all that bad, but evident. Look up there. It’s the reason why I organize the colored box’s that way. Green, red, or white box’s. The out at, the in at, and the EOD. If it’s red, meaning I’m short that currency, then that means I’m going down (low). And I would want my EOD result to be the last box. That’ll mean I’m in profit, and surely far away from the ‘out’ point, which is above the entry point. And when the currency is trending high (green) then I would want to see my EOD place be above.

Now. Surely you can see which currency is slipping a little.
The GBP.
Only slightly, when you take a look at the particular number. So this way I can get a quick bird’s eye view of what’s happening with my basket of trades. Well, in the aggregate anyway. And the one specific result block, bottom row second one over.

Wed.

Well, now you should see it. The GBP. Better now? For sure. And I can scan across everyone’s aggregate and see that I should be in the positive. Their all trending. Still. And moving in the way I want them to.

But take a look at the results of the basket of trades, for that day. Bottom row, second one over. Of all the 9 pairs that I have running, the daily results for those ended up being 15 pips, but -.56% to my account. Yep. Slipping alright.

Thurs.
I have a few hours in the middle of the day that I’m home (in between the morning run and afternoon run). Well, this is when this occurred.

I took this just before I acted. My account went above 10%, again. You can see it there in the Unrealized P&L (%) ------- 10.70. That means I take profit.

So, I’m gonna do what I do. Exit out of all those pairs. Immediately re-enter with the adjusted sizes. Which will be 24k on each (that’s double 12k, for an account balance). Look. I know it’s risky to be continually adding onto sizes. But if I made it through the last step up (from 20k - 22k) and now going higher, I have profit that I’m playing with. I understand that I’m too high up the ladder at this point.

Let’s see how this turns out.
Thurs EOD results.

Again. Who can we see that’s slipping a little.
The USD. And the NZD. This is their aggregate. And this is what tells me whether I’m to be trading them or not. See. The particular pairs don’t tell me anything like that. This is the reason why I don’t look at them. Don’t need to. But, I guess I need to find out what the basket is doing as a whole. And that’s the reason why I need to look at my account balance.

I’m really kicking myself. Cause I realized this pretty much on Friday. What am I missing here? What am I not keeping track of?

My daily, account balance.

What can I say. There’s no where I can go back and find this. But, this would show me a couple things. First of course, is the whole. The account balance. But also, I can derive what my basket of trades are doing. Right?

See. When I take profit, or adjust things like that, that makes it very difficult for me to keep track of a lot of the metrics.

But this reminds me of what happened on Friday.

What’s Friday again?
NFP.

Well, there I am. Sitting in my bus, again, after the checks that I have to do before I get going. But I give myself some time before I have to run off. Again. I look at the market. My trading account. And what do I see?

Bad news.

I was like…Yeah, that’s right. It’s almost NFP time. Probably got about 2 hours to go till that time hits. So. What am I going to do? Ride this out? I mean, my account dropped quite a bit. You can see it there. -1,669.94 Which is -14.15%. Yep. That’s a lot. And I have all this position sizing running on them. Too much. I realize that.

So. What am I gonna do?

Size them down.
Got to protect the account somehow.

And that’s what I did. I exited out of them all. And immediately re-entered with my standard sizing. 20k. I don’t know what’s going to happen. But I do realize that there’s been a trend happening this week. And that’s been a stronger USD. Right? Well, I adjusted everything. And am at about break even since the week started.

All the gains have gone. It was a ride. Nice ride. But let’s learn something from all of this. Was my thinking at this point.
Time to drive. And see the kids.

Well, I totally forgot about all this, as the day passed by. I mean, I even have about 7 minutes of a wait time all around 8:30am (which is NFP time). I could have checked how it went during that time. But, I forgot. I’m just preoccupied with the job, that’s all. Look. I’m making this point for a reason. It’s the truth. I’m not gonna be consumed by what the market is gonna do. What it does, is what it does. I’ll be checking all that stuff later on, like during lunch time when I get back home. I have those 2 - 3 hours then.

Anyway.

What happened?

Well, I made no moves. Which means I didn’t need to take any kind of pictures. But I do remember seeing account balance start to rise back up again. BTW…I never did see it drop below my starting place (10k). IDK…maybe it did at some point. But I never seen it. It started rising. And I got to thinking that I’m not in any kind of trouble. We’ll just have to see how far it can come back.

And well, my account balance came back up. Not bad. I’m just glad it didn’t go into the red. Look. This is the first week of the month. The first week of everything (my new strategy). Like I said. It was a ride.

So. What are some lessons I can learn here?

First off, I need to be keeping track of my account balance at the end of every day. Look. It’s for the purpose of tracking the basket of trades. As a whole. I mean, what other method can I do? I’m just not that crazy of always watching the account balance. For whatever reason. It doesn’t feel right. But, until I can find a way of monitoring what the basket does, I’ll have to do it this way. And that means, that I got to remember, at every 5pm, I got to take a pic of my a.b. Cause if I don’t, there’s no other way. My broker doesn’t keep track of that. And plus, my EOD numbers come from another source, not my broker (Barchart). So…it’s what I got to implement now.

Anything else I have to learn, this week?
Well, surely, someone can be saying how much am I going to add onto position sizing? Do I limit it? To like only one time in a week? I did it twice this week. Which, I’m sure, it hurt my account balance. Cause when I’m up that high, and the account is coming back down, oh…it’s coming back on down much more quickly. Right?

But then again, what if I didn’t touch it (minimized it that Friday am)? It did make sort of a come back, didn’t it? It did. Well then, does that mean I would have had a higher account balance right now? Hmmm…

See. This is stuff that’s kind of hard to figure out. How a basket behaves. When times are good. When times are bad. How much position sizing is on? Too much? Not enough?

I’m keeping track, those numbers on the bottom square, of what my account balance does in one day. And it has nothing to do with my position sizing. It’s what those 9 pairs daily results end up being. And well, that’s just one reason why I need to at least keep track of what my account balance is, at the end of every day. See. When I change my sizing, that seriously skews my ability to know exactly how the basket is doing.

Sorry about all that nonsense. These are things that I have to figure out. I’m just in the middle of it all now. I think as time goes by, I’ll figure out a good system.

As I said in the beginning. I need a good way to track whether my strategy :

• Is working, or not?
• And what are the reasons why?

Well, whether I articulated it correctly or not, I’m learning something. It’s the experience, really, that’s most important. I’ll get it.

But, I got to say. I’m very happy with how things tracked this past week. Had a nice ride up. Sure, a big fall, but not ending up under water anyway. And as I have stated on that last post, the only currency that I see doing any kind of possible change would be the USD, moving forward.

Will they start moving up?
If so, what’ll the other currencies do because of them?
Those are some questions I plan on answering. Maybe even as soon as this next week. We’ll have to see.

Changes —

• Exit out of my 3 USD pairs, at the open.

I will, therefore, be starting the week out with 6 pairs in the basket. If by chance the USD goes back to trending low, I’m going back in ( I think that’ll be the case…but I got to see it first. And convinced.). I will need a full day or so to see it. Like, all 3 sessions to have had their turn at it. You got to remember who’s all in the game.

Alright Journal.
That should about sum up my trades.
Thanks for listening, Journal. Again.
Mike

[tommor]

Good post Mike.

I don’t think its a bad idea to exit positions if your basket suddenly leaps in value. If all prices suddenly accelerate, you’ve got what you wanted, no need to be greedy, they can’t continue accelerating for ever.

From what I’ve seen in forex, most of the 28 major charts coincide. What I mean is on a given day, almost all of them will follow the slope of their respective 50EMA or almost all of them will do the opposite. Its not conventional correlation such as between e.g. AUD and NZD, its more to do with market mood. Its either a “normal” day or an “abnormal” day. On normal days most currencies are bought or sold as they were yesterday and last week. But on a day when you see prices on some starting to go against their historical tendency, they will pretty much all follow soon today.

So if NZD in an uptrend starts to fall, most of the other trends will not be continuing today.

[sharabelabd]

Thanks for sharing your journey in this thread. I have read some part of it and it amazed me that you have traded on demo account for 3 years. This is where most of the traders make mistake. They jump into live trading too early. Consequently, they lose money and confidence. I will keep an eye on this thread to read and know more of your trading journey.

[MikeWolski]

Good morning Journal.

Well, let’s see. It’s the weekend now, in which I so look forward to. Like, every single time! This never gets old. And every week I feel that I do take as much advantage as possible this time that I have. No difference this morning.

2:30 comes, with no alarm going off. I wake up like a kid excited on Christmas morning. It’s the quiet time that I cherish more than anything. And that quiet time I refer to is literal, along with figuratively. Cause there’s no other time in a day that this can happen. What can I say…I’m a morning person. And now, it’s 4:30.

See. First things come first. His Word. I’ve learned over the years what’s most important in life. Being such an avid reader, nothing gives me more joy than reading His Word’s. The more I learn about Him, life, reality, the more I find myself complete. See. It wasn’t always like this. There was a day in which you would have thought that this forex game was my god. Sure. It was the only thing that occupied my mind, day and night. And I would say definitely more than anyone else. Cause I take things to the extreme. I go all the way.

The numbers, analysis, tracking, testing, problem solving …and then more numbers. What can I say? That’s what I like. This whole game. There ain’t anything more Mike Wolski than this stuff. I know it. But…you know what?

It’s not the purpose I was made for.
He is!

And when you get to that bottom, like I did, then all things fall into place.
It’s like growing up. The older you get, the smarter you become. You start to realize what’s truly important. And put all things into it’s proper perspective. But…I can tell you this, though. I’m not gonna be enslaved to the pursuit. This pursuit. Anymore.

I choose God. That’s who I serve.
And the good thing is, He shows me my place on this journey.
“Delight yourself in the Lord, and He will give you the desires of your heart.”

That’s nice.

So. Moving forward. I want to talk about two things.
The market.
My trading.
And guess what? I’m gonna do these two things simultaneously.
Should be fun.

Well, coming into this week, what was going on?
This was last week’s post.

@MikeWolski

But, I got to say. I’m very happy with how things tracked this past week. Had a nice ride up. Sure, a big fall, but not ending up under water anyway. And as I have stated on that last post, the only currency that I see doing any kind of possible change would be the USD, moving forward.

Will they start moving up?
If so, what’ll the other currencies do because of them?
Those are some questions I plan on answering. Maybe even as soon as this next week. We’ll have to see.

Changes —

• Exit out of my 3 USD pairs, at the open.

I will, therefore, be starting the week out with 6 pairs in the basket. If by chance the USD goes back to trending low, I’m going back in ( I think that’ll be the case…but I got to see it first. And convinced.). I will need a full day or so to see it. Like, all 3 sessions to have had their turn at it. You got to remember who’s all in the game.

Alright. What was I talking about?
The USD. They were on a tear. The last 3 days of last week, they were heading
straight up. All the way up to NFP time. Then leveled off, and even dropped some afterwards.

OK. Well, of course I did what I was planning. At the open, I exited out of my USD trades. That’s 3 USD pairs that was in my basket. Now my basket consisted of 6 pairs running, only (not 9).

Monday.
Results.

Well, well, well. What do we have here?
The USD. Top dog. Most bought currency, to start off the week. Continuing on what they were doing last week. Like, straight up. Now, 3% is not all that. It’s probably below what average is (4% is avg.) But, for a Monday, not bad.

What else do we see happened?
The safe havens, like catfish on the bottom, once again. That’s interesting to me. Look. I’m all about relationships. I’m in tune to it. And those 3 normally should be running similar. But not today. This is abnormal. Even the CNY (-1.23%) is running normal with the other 2 below. It’s the USD that’s out of sync here. But, what’s normal here, is the CAD running alongside the USD. Both being bought up.

Ok. Well, what about my trading? Any changes?
Nope. Their running. And surely, at this point anyway, I was wrong in that I thought the USD was gonna go back to being sold off. The good thing is that I go by my trading rules. I’m not including them in my basket of trades. 3 sessions went by, and the Dollar goes high.

My trading results.

I’m sorry Journal, you’re gonna have to get used to this view. Cause it tells me everything I need to know about what I should do about my trades. Monday is the first trading day of the week, therefore, the first block of the week (and second row in the entire month). And well, the results of my basket of trades are on the last 2 blocks.

• 205 pips produced
• 1.87%
• 6 trades running
• $10,882.93 account balance
• Complete Currency pip count is 495 (almost meaningless at this point)

Tuesday results.

Getting interesting now. The USD. What happened?
The top table is the daily individual results. Single days. The bottom table is the week running (you add them up as the days unravels).

The USD was the most sold currency that day (-4.38%). And the CAD can’t help themselves, right along with them (-2.56%). Normal. Also normal is the JPY, just above them (-1.06%). Same with the CNY (-.95%). But the CHF takes the cake. Most bought currency that day (3.96%). Wow. What does this tell us? I really don’t know. Does it really matter? Well, I would like to know, but when I don’t, nothing I can do about it. I still just follow my trading plan & rules accordingly.

But, regarding the USD, this quite large selling that happened, does this make me change anything about my trading?

The USD ended that day with the number -8129. Let me make this a little more clearer.

Previously, and that’s what I refer back to, their trend was bearish. And my previous trades made me get out if this chart went above the -8116 point. Which it did last Friday EOD. That’s why I jumped at the open of this week. Well, not Tues EOD, present time, put’s us just under that out point. Technically, this should make me get right back into shorting the USD. Why? Cause they just went back to trending low again, according to that chart (which is the aggregate USD pip count chart).

So. I’m sitting there. At EOD Tuesday. Pondering what I’m gonna do. Remember, I’m considering the discretionary aspect of my trading now (as opposed to the mechanical way that I have been). And you know what? I decided to be a little more patient. I’m not gonna rush right into this, just yet. I’m gonna give this one more day. I need more information to tell me what the USD wants to do. Look. That’ll be 4 straight days of going up. And now, a down day? That’s normal. Huh? It needs a correction sometime. That’s completely normal, if it wants to continue going up. Ok. So. I’ll wait one more complete day. Therefore, no changes to my trades. My basket of 6 trades have been doing well. Tuesday was a break even day for my trades (it’s there on the bottom right of my table above).

Wednesday results.

Notable stuff.

• CHF goes from most bought (a day earlier) to now the most sold currency (-3.21%). Interesting.
• All ending %'s are very low. Lot’s of retracement happening.
• The USD ends -1.10%. More sold than anything. Continuing on from yesterday.

Now what? This isn’t a convincing number for me to hop on the band wagon to go back to selling the USD. But, I need to look a little closer, though.

Well, of course, it’s lower. Like I said above, this is below the previous level of -8116. Which constitutes this USD back trending low. So. What am I gonna do now?

I pondered again.

You know what? I trust my system here. I trust this aggregate currency trend determining chart. So much so that I’m in for one complete day. Money going on the line. And that’s what I did. At EOD Wed.

Well then, here comes Thursday.
Thursday morning.

You can see what time I took this pic.
Once again (mentioned this last week), I was sitting in my bus just before I depart. And with like 10 - 15 min left, I check things. What do you know…the USD is heading south still, and causing my account to go above 10% of an increase. Well, that’s triggering my take profit action. After much consideration, I’m gonna keep this. I’m just not gonna do more than one take profit a week. That’s my limit.

Anyway. I exit out of all my 9 positions, in the basket. And immediately re-enter with the new position sizing. Therefore it’ll be 23k sizes on each (instead of the 20k).

Here’s the shot of the other 3 trades (I couldn’t get all on one pic).

Ok. So things are going very well. I was very happy to see that the USD was continuing on the sell side of things. Let’s see how the day ended.

Wow. The USD did end up negative. Right? -3.28%
And look who else is dragging feet. Mostly the safe havens. Even the CNY (which that is normal to ride along with the USD, JPY.) So, it looks like the risk-on currencies are taking over the week, so far. See the running %'s (bottom table)?

Keep an eye on the CAD. Since I know what happened with them this week. Things are definitely happening with them. But anyway, today, what happened? They shoot high. Definitely opposite of what the USD did (was abnormal).

Ok. Now my trading results.

• The USD. Look up at their square. I entered them at EOD Wed. at the -8247 point. -8116 is the out point. And the present point is -8564. Now, what does that mean again? This makes it a little more clearer.
  
  

I’ll explain a little about each of the rest of them.
So. Look up at their box’s.

• The GBP. Going so well. 7428 is the latest. Which is the highest point yet, along this latest trend (high) of theirs. Getting way further away from the entry & the ‘out’ point. Entry point is at 6535. ‘Out’ point is 3992. Simply awesome.
  Fine. I’ll show their chart. Those 3 numbers correspond to what’s in their box.
  
  
  
  Now. The only thing mentionable, with this I think, is whether I should start changing my ‘out’ point, or not (Aka…stop loss point). Well, I thought about this. And you know what? I’m not changing anything. Just because it’s going straight up shouldn’t make me change the way I view what’s going on in a chart. Look. What I’m saying is this. My stop out place has nothing to do with how much it goes up. I, frankly, don’t care how high it goes. I’m not gonna change my out place as that being a factor. As long as it’s technically trending, I’m gonna be in it. Simple as that.

Looks like I need to show the table again.

Moving on.

• The CHF.
  
  
  
  It’s going good. Not in any kind of danger. Trending low.

The JPY.

You don’t need to be a genius about any questions on this trend.
It’s too easy. But…how long will this go on? I don’t know, but I’ll be on it till it ends. According to this chart.

The AUD.

It is a trend. Slow going, but is biased to the upside.

The NZD.

Quite the same. Choppy, but technically trending.

Summary for my basket. For EOD Thursday.

• 319 pips
• 1.75%
• 9 trades running in basket
• Account balance = $11,826.43

Sorry Journal. That’s a lot of explaining, for one day. I’m not gonna be putting up those charts every time. Way too much work. I don’t even look at them, honestly. I go by the numbers on my table. That’s so much easier. Plus…I believe charts are deceiving to begin with. A lot of diagnosis (analysis) goes into what I think should be the ‘out’ places. Trust me, it must be correct, in my mind.

Anyway.

Let’s just see how the week ended.
Friday.

The CAD! Top dog this week. In fact, that’ll be 2 in a row now. Look.

Yep. Looks like the CAD is dominating the month, so far. Sitting at 22.01% for the month.

Well, you’re probably gonna want to ask me whether I will jump on this bandwagon.
Will I?

I have to consult with their aggregate chart. I’ll do this with you.

• No real longer term trend
• The first month of this year, goes up and then right back on down. Flat.
• The second month — the same. Flat.
• This month — Straight up. These entire 2 weeks.

The only question here is, whether this is a start of something new for them. Surely it could be. This is something I will start to watch pretty closely. Like for a retracement, down to around the 0 mark. Or where the last dip happened. And then a turn and burn back on up. That scenario would get me interested. Cause, you have to admit, this last climb up has been something. Like… a real sentiment change. But, they haven’t demonstrated a lot of consistency for me, ever since last year. That’s why I’m a bit hesitant with them. I kind of need more proof.

Cause, remember, they are tied with the USD. It’s them I got to have a close eye on also. And the last time I checked, the Dollar is not trending high.

Well, let me start ending this stuff.
Here’s what my final numbers look like, regarding my trading.

This month of Mar has been going real good for me.
The first week produced 4.23%.
The second week produced 9.30%.
So, that’s over 13% for the month, so far. Not bad. Not bad at all.

Oh, Journal, I tell ya. This strategy of mine, is it. I’m very happy how it’s all turning out.

And I’m gonna stop right here and stop talking about it. Cause, you know how many times I’ve told you this very thing?

I know.

Well, it just feels right.
It’s simple.
Easy.
Common sense.
Smart.

Time will tell.
And I’m not going anywhere.

Let me leave you with this. It’s some thoughts about my strategy.

Well, thanks for listening to this nonsense, Journal.
Sorry that this was an all day post (many, many starts and stops all day today).
Thanks for always being there Journal!
Mike

[MikeWolski]

Good morning Journal.

Sorry it’s a bit late this morning, Journal. I’ve been quite busy with going over a lot of stuff. I am quite puzzled though. I was hoping to get to the bottom of it before coming in here, and to be able to share the answers with you. But, nope. This is gonna take some time to get to the bottom of.

It’s something I’ve been working on this week. And surely this is gonna occupy my time for a while, moving forward.

Let’s see if I can somehow put a summary to what I’m up to.
It’s chart reading.
It’s reading my chart. The correct way. The best way.

First off, I believe I have found the secret (well, one of the secrets) to my edge in trading. And that will be me finding the direction of where a currency wants to go.
We can simply call it it’s trend.
And that comes by finding the aggregate running pip count, per currency.
That’s my secret sauce. And hopefully everyone will disagree with that (why would I want anyone else to know?).

Ok. So, this gets my full attention. It’s the (best) thing that tells me, and shows me, what is going on with a particular currency. Simply put…it’s the sum of all it’s parts, put into one entity. And this is called my complete currency. So then, I just chart it.

Now, the next most logical thing for me to do is to be able to correctly read this chart. Because, that will produce the times that tell me:

• When I should be in a trade
• When I should not be in a trade

Well, I will always believe that chart reading is very subjective. There’s so many different contexts you can be looking at something. And if everyone thinks they are correct, in what they think is gonna happen next, then who’s most correct?

Yeah, it’s enough to make you mad. But, in the end, the thing that is most correct is found in hindsight. Being most correct about what trend is has been, is like the best thing we can attempt to accomplish. And that comes after the fact. Not during the fact.

Just think of it. Imagine we can actually be in whatever trend is taking place. Trending high? I’m in it high. Trending low? I’m in it low. And since the definition of a trend is something that is continuing in the same manner, then that should mean profits. Right?

Isn’t that the game we’re in? Simply stated?

Ok. Enough of that stupid talk.

What I’m after now, is, in my mind, to be able to correctly read my aggregate chart. This is what I’m working on.
And I’m hoping to come out of this with some rules of thumb. I’m writing down a lot of stuff as I progress on through.

Let’s look at the progression of the USD. We have to start with last weekend. This is the narrative coming into this week.

This year starts at about the 205 point (line going across, top).

• The USD was in a downtrend coming into the year.
• It trades sideways ever since the year started. Back and forth around flat.
• It made one swing high (a good run) at about the 229 point.
• It came back to even, and then did a swing low (a good run) around 243.
• Then swung up to even again, and immediately went for another swing high 251 point.
• And the week ends with a correction. But, that last point is actually lower than the previous swing high (229).

And well, because of that, that made me short the USD. I reverted back to the downtrend that was in place.

Let’s track it, as it went this week.

Monday.

No real change. Actually, is was +2 pips. So therefore, nothing changes with my diagnosis. And also with my trading.

Tuesday.

Actual change in pips was -21 pips. So, for the first 2 days of the week, going nowhere. Remember, the market is getting ready for the FOMC meeting. Wed.

So. At this point, can we tell which way the trend is?
Absolutely not. Look. We had a swing high, then a swing low, then (the latest) a swing high. And now it’s a bit elevated. I guess you can say, technically speaking, it’s more leaning high than low. You can’t dispute that. It’s favoring the high side. There’s been more high (or we can say demand) than the contrary.

Look. I’m talking all in the context of what the trend is. See. If the market wants to, it could want to go high, for the reason of getting more downside to come in the future. That’ll be in a different context. I’m aware of that. The market can do whatever it wants to. And have good reason for it. But, the context in what I’m talking about here is nothing but trend.

What’s gonna happen as a result of the FOMC meeting? Well, that’s next. Let’s see it.

Results are -342 pips. At EOD Wed.
Well, what can we conclude from this, then? Well, that’s bearish. No doubt.
As far as I’m concerned, I’m staying in my short USD trades (3 in my basket). That made my job easy. See. My out point is just about at that line going across (gridline). Cause that’s what I did previously. See where it crossed up and over? Well, that’s when I got out of my USD trades. And then when it came back down, I got back in, and resumed my short trading.

Let’s see what happens next.
Thurs. EOD.

Result = +328 pips.
Wow. That was unexpected. I thought. Cause, I thought if the trend was gonna be to go low, then why wouldn’t it just continue? But no. Basically, it retraced just about 100% of all the losses it did yesterday. Not 50%. Not even 68%. All of it.

Ok. Want to be exact? All but 14 pips. 96% retracement.

Now what?

What’s this telling me? That the market doesn’t necessarily want to go low anymore. I mean, right? For whatever reason. Maybe it’s because the other sessions didn’t have their turn at the news (Asian, then London again). I don’t know. Really. But, I do know that this seems to be some kind of turnaround.

Well, in regards to my trading, I’m not supposed to change anything. It hasn’t hit my out point yet. Well, one more day to go here. Let’s see what happens. How are we gonna end the week? FOMC all done, everyone is gonna have plenty of time for positioning before the week ends. Change, out of the short trade (for high)? Or, to continue on with the short trade?

Let’s look.

Result = +122 pips.
Wow. Ok. Well. That’s bullish.
Now what?

Step back and punt.
Just kidding.

Well, by the book, this is what I would say.
Did it hit my out point?
Nope.
Therefore, I should keep with my short bias.
Right?

I don’t know about that.
Now that I have more information. Let’s step back and … look at it.

In the context of my last bias. Which is a short USD. Looking at the whole, does this look like a short trending USD? Like, even since the beginning of the year?

Nope. No way.
There’s more upside happening than downside. Right?
Recently, that is.
I mean, we’re talking about trend here.

Look closely. What’s the last thing that has happened?
A swing high.
Then before that, a swing low.
Then before that, a swing high.
Then…back and forth…no trend whatsoever. That brings us back to how the year started out.

Look at where we’re presently at. Here’s my options.

Short

• Stay short, cause that’s my latest standing. I have my out place at -8116 (-120 pips away). It didn’t hit that yet. Or I could change my out place to -7737, the latest swing high (- 499 pips away). Those are how many pips I would be losing.

• Because this was the last major trend that it was on. Looking for a continuation of it. And look above, at the previous chart. Look back at how far it ranged sideways before it finally broke down lower. In fact, I just counted, it’s 57 days (119 - 176). We are at 55 days now, since the years start. Ok. Well, that’s similar, isn’t it? That’s just about 3 months long.

Long

• Exit out of my short trades. Re-enter going long. And let’s see. I would set the out point at that last swing low, -8686 (not shown). Cause, if hit that, then surely I would think it would be going back on down (- 450 pips away).

• From -9725 up to the present sure does look like an uptrend is unraveling. That’s my reasoning. Along with that, after the dust settled from the FOMC meeting this past week, it’s ending on a higher note now.

Sideline

• How about these facts. I don’t know what’s gonna happen. I think I’ve made some very compelling arguments for both scenarios (long & short). Why don’t I exit out of the market, and watch some EOD’s play out. Wait for my secret sauce of an indicator here to tell me in which direction it wants to go.

• It’s not clear to me in which trend it is in yet. Sure. It’s heading higher. But as it stands now, we ain’t all that far off from where the year started out at (+622 pips away).

• I think the USD is coiling up. And there is a good chance that in whatever direction it eventually goes, it’ll go. Like, to cover some major real estate. I just counted…That last move down, (from the break down of the consolidation to the years start), was 2,513 pips. That’s covering some good distance, huh?

• I could wait on the sidelines until I see a break above or even below those gridlines. The top line is the 8,000 line. The bottom line is the 10,000 (pip) line. And BTW…the years start would be about in the middle of those two lines (almost 9k).

Journal. I’ve told you many times in the past, that I could always give you some good arguments for any kind of direction possible. Even if I have to bend a context or two. I can do it.

In any case, this is what I’m talking about, Journal. At the onset of this post, it’s precisely about this, chart reading. I want to, need to, correctly diagnose this complete currency chart. See. I’m not talking about those itty, bitty little charts that show only one currency pair. What’s that??!!

That means nothing to me. It’s completely nonsense. It doesn’t tell me anything but 1/8th of what a currency is really up to. What about the other 7 8ths of it?

Now. When I can gain some experience :

• Correctly determining a trend
• Minimizing risk by not being in trades that I shouldn’t be in (cut losers short)
• Taking advantage of most opportune times (let winners run)

Those are the aims I desire, in my trading.
Alright Journal, that’s what I’ve been working on lately.
And it’s coming by way of my back testing. It’s the moving forward, day by day, and trying to figure out the rules I should be following, as I go along. Actually, it’s like what I just did with the USD up there. One day at a time. My thoughts and reasonings behind all of the moves that I make.

Questions always considering.

• If I’m in — where’s the out point at?
• If I’m out — when would I get in?
• Technically trending is different than higher highs & lower lows.
• Is it making higher highs or lower lows?
• What’s considered trending and what’s considered counter trending?
• Am I seeing a move in the correct direction?
• What is the (market) bias?
• What is (my) bias?
• Is my bias a trending condition or a counter trending condition?
• Is it clear or not clear, in what I should do?
• Am I guessing?
• Am I following?
• What day of the week is it?
• Realize the dynamics of what normally happens during specific days.
• Is it at months end? If it is — the trend means nothing
• Be cognizant of when NFP is. Any cause and effect from it?
• Should other currencies be a correlating factor? If so, what are they?
• Do I need more information? Meaning more time to play out?
• In hindsight, do I need to change my bias?

Well, those are some things I wrote down. Trust me, I’m only beginning here. This is gonna take some time. That’s such a rough outline. I’m hoping to be able to have a set of rules to diagnose my charts from. Whenever I solidify these, I’ll surely show 'em to you.

Alright Journal.
Got to run.
Sorry about the long post. Once again, it was a start and stop kind of day today.
We’ll have to see how tomorrow morning goes (whether I have stuff to talk about or not). But…I do know that I’ll be busy. Very busy.

Thanks for listening Journal.
Mike

[MikeWolski]

Good morning Journal.

Alright. Well. After some diagnosing, I came up with a plan. My next course of action.

I’ll tell ya what made it pretty clear. Let me show you.
We’re talking about the USD. And…something else. But first.

The USD.
The context is this year.

This is basically the same thing I showed you yesterday. But, you have to admit, it’s much clearer. How about these points :

• How many times in the beginning that it bounced up off of the 0 line (it’s almost like a ball bouncing off the floor).
• Only one time did it dip into the red. Only for about 5 days.
• And ever since, it’s heading up higher. And the bounce now is off the floor.
• It’s trending higher, not lower. Making higher highs.

Ok. That’s nice. Isn’t it? Sure. The market can do whatever it wants to do. And will.
Well, if you remember some questions I’ve thrown out there, to consider. Here’s one. How about the correlation with the other currencies. (Tommor knows what I’m talking about.)

This is interesting.
The CAD. (In brown)

You can’t tell me these 2 are not dancing together.
And I do remember Tommor noticing how the younger has been leading the older.
Well, if you pay attention, it’s there to see. No doubt.
But, what has happened lately? Surely, a divergence. Look closer. Like, very close. The last 6 days. Ok, but first, on the 7th day from the end, they both diverged. The CAD went up, the USD went down. Then next, they both went up, but the CAD went really high. That is what made the biggest difference between the two.
But the thing is…they both are on the up. Do you see how the USD (on it’s last swing high) came on up and joined the CAD? That’s called convergence.
This gives me more credence for a stronger USD, moving forward. I do agree with the notion that the younger is leading the way, and can possibly pull up the Dollar to it.

Alright. Enough of that.
How about some others?
This is gonna be new for me doing. So…don’t mind me if I get surprised here. But, let’s look at the USD & the JPY together.

Now. These two do correlate. Normally. But this year, nope, two different paths.
Let me point out some similarities though. Look at when the USD dipped down into negative territory. Yeah…they were following the JPY then. That’s where that came from. And then the USD followed the CAD on up, while the JPY just continued on down.

One more thing to look at here. Look at the last 3 days. Remember, this is surrounding the FOMC event. We had a dip, followed by a retracement, then a slight climb. I think the Yen followed the USD here concerning that.

Ok. That’s nice. Well, what does this tell me? Anything? Well, nothing for the contrary. I think there’s more scope for the JPY to come up to the USD, than for the USD to drop on down to the JPY.

Journal, do you see this? What a struggle we have here. The USD is being pulled down by the JPY. No doubt. But on the other hand, the CAD is pulling it up. You have to admit. This is very interesting stuff. I kind of think you have to just see it, for what it is. Trying not to think where it should go next. Or whatever would make all things equal out. But just note what exactly is happening here. It’s a struggle!

We have to keep an eye on what the JPY does. Right? I mean, hey, if they continue on down this path, well then, maybe it’ll bring the USD down some with it. But on the other hand, if the USD climbs. And we see the JPY start climbing also, well, that would make sense. And over time, the gap between those two should diminish. To some extent anyway. You know, the divergence between these 2 reminds me of them a couple years ago. I was just so amazed of their divergence that was happening.

Fine. I’ll pull it up.

That the whole complete year. See that great divide? I hate to say it, but it always seems like they come back together. Wait. I think this happened in '19 also.

Well, yeah. You have to admit. In the context of a year, they separate, then eventually come back together. Look. I’m not liking the idea of assuming anything will have to eventually happen in the market. The market can stay messed up longer than we would think possible. But then again, can I find (in my arsenal) a time when this hasn’t happened?

How about '17?

I guess here’s proof that they won’t necessarily converge entirely over each other.
See what I mean? Can never say never. Or always. Or should. In the market.

2016 ?

Wow. Look at that gap. Boy…if you were waiting on these two to converge, you would have waited all the way to the end of the year, for the most part.
Who has the patience for that?
No one.

Alright. That’s very good and nice.
It’s a new day. New year. And just because things have happened in the past doesn’t mean it will have to happen in the future. But, there is a point here. Between these two currencies, the gap between them will want to close. At some point. The thing is, we do not know when! That’s the tough thing about it. The closest I can get here is to show you that in a years calendar, there’s a better chance than not that they will converge together. Not necessarily, but a better chance than not.

Well, I keep looking up there at all of those years. Comparing them all. But, I didn’t put up last years chart. So, here it is.

Well, they were all over each other in the first half of the year, right? But then the second half they came apart (diverged). And well, you got to think. What’s happening this year so far? The JPY has been coming down. And the USD has been going up. Which will, in effect, bring that '20 chart up to one another.

Ok. How about this. I’ll splice in this years running data into last year ('20). This way we can see when the last time they were converged together (touching). Do you think we will be converging back together? Well I sure do! Let’s see it.

And there it is. I knew it! What’s up Journal…
Maybe I can make the case that these two will eventually come on back together. Huh? But, that’s the thing here (and I always say this). Context is everything!
And what context we have here is from touching to touching convergences. And guess what? When did the latest happen exactly? Give me a minute.
March 4th. That’s when the crossover happened.

So. What’s this telling us…now?
Uhhh…Well, back it up a little. If you go back to my very first chart, this years one. We should not be thinking this is all that much of a divergence. You have to admit, just a little while ago, when I was typing all this in here, I was thinking of how much these two are diverging from each other. But now, it’s more of a marriage. I think it’s more normal, than abnormal. See how everything has changed now?

Context, context, context.

Ok. Sorry Journal, for all that USD, JPY talk. I’m done now with that.

But, I do have to say, I’m going long the USD. And the CAD. They will be in my basket of trades. Well, speaking of that, why don’t I just spill all the beans. Here’s what my basket will entail now.

This is gonna be a big change for my basket, as you can see there. Completely changing directions with the USD. Adding the CAD, for the first time.

Well, let me go through each of these and explain why I’m in with them. What else do we have here?
The GBP.

No changes here. I’ve been in them. They’ve been continuing to trend high. I might have moved up the out place. So…all is well with my GBP trades. But look at who I’m gonna be in them with. The CHF and the JPY. No more USD. Ok then. Fine.

Remember. I only trade whoever is trending. Trending high currency against a trending low currency.

Let’s move on down the list.
The CHF. Why am I trading them, short…

Their running good. Nice down trend continuing. That’s why their being sold against whoever is being bought, in my basket.

Next up, the JPY.
Look. I don’t feel like putting them up. All you have to do is look up there above. As far as I’m concerned, they are trending low. Until I see something different, then no changes yet. Been making some money off of them, though. They’ve been good for my basket.

The AUD. Been long.

They’re still trending high. And I’m still in it. Sure. Slow goes it. And that’s why I moved up my out point. It was back at the previous swing low point. But hey, if it breaks down, then out I am. That’s all.

Kind of reminds me of the NZD.
Well, I’m out of them now. Jumped last Thurs EOD. I’ll show you my reasonings.

This is another tough one. It’s been sideways, after that long upward climb. Then a spike up high. But then, came back down into the range area. This is just way too risky. We don’t have a trend here. Sorry. They are not the AUD. But, that last dip down (second to the last day) did it for me. I’m out now. I’ll wait this out. But look. Isn’t it nice to see those gridlines keep them ranging in that space? I think it’s awesome. Therefore, if I see them go above or below those lines, then I’ll be trading them in my basket. BTW…it’s the 6,000 & 5,000 running pip count lines (1,000 pips in between all those gridlines).

Well, I showed you the CAD earlier. So, I won’t go into them. But, it will be interesting for me, cause I haven’t traded them this year yet. If you scroll all the way up to the top where I have them and the USD together, I’m gonna probably place my out point right where they both have diverged at. It’s at the 1000 gridline. If they drop below that point, then I will consider them not trending high anymore. I won’t trade them when they are below that point. That’s all. But until then, let’s go CAD!

Alright Journal. I’ve talked enough.
Thanks for letting me.
Mike

[MikeWolski]

Good morning Journal.

Well, that’s a week. And boy, what a week it was.
Let’s see. What kind of summary would I put to it? For me.
Unprofitable. But, very encouraging.

Yeah, it is discouraging when you can’t come out in the positive. For the week. No doubt.

But…you got to ask the question of …why?

Well the first thing that comes to mind is to wonder whether it’s the strategy or not. I mean, I’m talking about something inherently wrong about it. And of course, that usually takes some time to realize. You know, coming from the hindsight perspective. Like, over time, if it’s not producing, then no, it’s not working. Right? Well, that was me, all last year.

Look. It’s not like I didn’t learn anything. Realize a lot of stuff. Even to be making some progress. But, I just don’t want to continue on down a road that won’t work. That’s all. It kind of hurts. I spent all of last year thinking I was on to something. Just to realize that I wasn’t. Time has a way of catching up to me. It takes quite a bit of time for me to finally see the picture. I’m sure I’m outside of the curve of how long it takes for a normal person to finally get something.

It’s ok. I know one thing, though. No one can accuse me of waiting it out long enough to capture a sufficient amount of time for something to play out. Like, I have patience. More than the average person. I’m sure of that. Yeah…I remember saying something in here, quite a while ago, about myself on this subject. Something like, “I have an endless amount of patience.”

Put it this way. I’m not gonna jump from one thing to another. I’ll give it enough time. But, I do have this question always in the forefront of my mind now.

Is my system working?

Well, even though I ended up in negative territory this week, I still, truly believe, it wasn’t because of a flawed strategy of mine. It was due to the turn of the market, this week.

And that’s what I want to do now. Explain what happened this week.
Let’s walk through this. I’m not ashamed of what happened.

Where do we start?
How about from where we last left off at.

@MikeWolski

But, I do have to say, I’m going long the USD. And the CAD. They will be in my basket of trades. Well, speaking of that, why don’t I just spill all the beans. Here’s what my basket will entail now.

This is gonna be a big change for my basket, as you can see there. Completely changing directions with the USD. Adding the CAD, for the first time.

So yeah, I came into this week with some serious changes. This isn’t a regular occurrence. I mean, you can see there how much I change what’s in my basket. No doubt I was nervous. In fact, I never switched, directly, from one direction to the other. I’ve been simply jumping out, then re entering in at another time. So. This was a first. And it was with the USD. I explained all my reasons last week (and a little more).

@MikeWolski

We have to keep an eye on what the JPY does. Right? I mean, hey, if they continue on down this path, well then, maybe it’ll bring the USD down some with it. But on the other hand, if the USD climbs. And we see the JPY start climbing also, well, that would make sense. And over time, the gap between those two should diminish.

Well, I’m sure you remember all that correlation I showed between the USD and the JPY. It’s there. Well, what was my plan? I’m changing on the USD, but not with the JPY. I didn’t feel good about that, like to trade the USD/JPY. But, I did. The JPY was still trending low, at the time.

Ok. So. We need to see what happened this week. Concerning these two.
And the best way is to show you their individual aggregate trend. It’ll paint the best picture of what this currency did this week. But, I think I’m gonna do this in a different manner. Instead of unraveling it day by day, how about we just look at the week, in hindsight.

The USD. Before, and after (just so you can see it clearly).

Ok. No more selling of the USD. Buying it now. Why? Cause the trend, I believe, is showing indications of a turn around. Let’s see what happened.

Yep. Well, THAT was a relief. I was right. That was my bias, for them. So, everything that I said last week on this, was pretty much dead on. Therefore, my USD trades, in my basket, had to of done good. Right? Well…Look up above there. Who was I going long against? Well, according to my trading plan, I only trade a pair that is trending both high and low. That’s it. Again. Look up there. My only USD pairs are the USD/JPY, and the USD/CHF.

We have to look at what they did. What did the JPY do?

The JPY. Before and after.

Yep. Coming into the week, definitely trending low. But, with a bounce starting (possibly) into this week. And what’s my plan again? To trade the trend. And that’s what I did with these two. Well, what happened?

Look at day two there. Went pretty high, huh? Just like the USD did. Why don’t I make this a little clearer.

Even more clearer.

Those are individual daily % results. With the weeks summary underneath. I just wanted to show you how Tuesday turned out. Sure, the USD did wonderfully that day, but, not as good as the JPY. That, of course, didn’t turn out positive for my USD/JPY long trade. Right?

Ok. Let’s step back and look at this.
I’m talking about a few different things here.

1. • The condition of a currency.
2. • A currency pair. To be traded.
3. • Currency correlation to one another.

I guess I have a lesson here to learn. I’ll just put it out here right now.
# 3 is very important, and should be adhered to, regarding what I trade.

Look. This is how it all comes together.

The top table is the aggregate currencies. Their trend states.
Green = high. Red = low.
That, in turn, determines how my basket will turn out. Below.
All in columns. Per day.
Each of those greens (trending high currencies) will go against a red (trending low currencies). So therefore, Monday and Tuesday comprised of the CHF and the JPY short against those long trending currencies (USD,GBP,AUD,CAD).
And of course, their all spelled out. Being in green means that pair is long.
Then, the last rows are what my daily results were, for my basket.

• Monday = -140 pips
• Tuesday = -236 pips

Under that is the yearly running pip results (but I started this at the beginning of this month).

Well look. At Tuesday’s EOD, I had to make a change. There’s no way I’m gonna sit back and wait for the dust to settle. Just look at the results! Tuesday. In the table above. All that on top is the major safe havens (except the CHF). Then on the bottom is the risk-on Comms. Those are some big numbers, for one day. That told me something. That told me that the market was changing.

I mean, look, I knew something was up. Right? I changed my USD short sentiment to long. I also threw in some CAD. And sure enough, the CAD did follow the USD, didn’t it?

This is what Wed looked like (24th), for my trades.

What did I do? Top table.
Switched the JPY to trending high (green).
Switched the AUD to trending low (red).
Switched the NZD to trending low (red).
Which produced those 12 pairs.
Resulted in +247 pips for that day. That’s my trading basket results. Better.

And of course, I didn’t make any other changes this week (surely that’s enough).

Well, Thursday went well. Made some more pips, right? +271 pips. For me then, that’s +518 pips in two days. Awesome.
But then, comes Friday.
So much for all those pips (profit). Gone. Just like that. -526 pips.

Sure. It doesn’t feel good.
But, honestly, what I’m most concerned about, is the strategy. Remember?
Is the market doing the twisting, and turning thing? Which means there’s nothing I can really do.
Or do I have a flawed, or lacking type of strategy? In which I can do something about?

Well, this is what I do.
From the top. Look at each currency’s aggregate.
Then I’ll move on in.

The USD.

As shown above.
Trending high. They are.
I’m not changing anything with them.

The JPY.

I have to show this again. Sorry.

Yeah…what do I do now?
Ok. By the book. In the whole context of it, their still trending low. Right?
On the other hand, I got some things to consider. The relationship they have with the USD. Like I mentioned already, above. Although, technically speaking, I do have to say, that the spike up speaks loudly to me. It’s quite meaningful.

In fact, I wrote down these things, this week. I feel this is a little something new for me. It’s a realization that I’m gonna take seriously.
Word for word.

• When confronted with a trend that has been very steep & long - prepare for a turn-around. —V shape.
• Mind all correlations - especially if there are multiple agreements - Don’t be afraid to turn (on a dime).

I wrote those down on my "charting rules to abide by" paper, that I’m building.

Look. All I know, right now, is that I don’t want to be trading the USD/JPY pair. Absolutely not. Well, not when their divergence has been of great, lately. That means they probably will want to converge back again. Know what I mean?

Anyway.

I’m gonna follow them with the USD. And you know that I’m going long the USD. Therefore, that means I’m going long the JPY.

I guess I’m gonna need to build up some rules to follow, when it comes to deciding when I need to go with the correlation of the currencies, rather than their respective trends, if they are different.

Always building.

Alright. Let’s move on.

The GBP.

No changes here. Their trending high. Don’t need to be a genius to figure this out.
Therefore, they’ll stay in my basket of trades. Trending high.

The CHF.

I still consider them trending low. Technically, sure, they seem to have leveled out (sideways). Not making any lower lows, but not climbing either. Now, if they would climb up above a couple of those gridlines, well then sure, I’ll consider otherwise. But as it stands, in my mind, their depressed.

The CAD (brown).

Shown with the USD (white).
Remember me correlating these two? No doubt. The younger leading the older.
This is still the case. Therefore I’m not changing my CAD long bias. They will stay in my basket of trades being long.

The AUD (red) & the NZD (dark red).

Well, I believe the market sentiment has changed, and these guys are on the other end of it. Basically what I’m saying is, that I think the risk sentiment is off. Especially after what the NZD demonstrated. Man…that drop says it all for me. Just like the JPY. They both had a meaningful move there.

But, remember what happened on Friday? How I lost the last 2 days worth of pips? Well, when I look at this chart, I’m not inclined to think that they will go back up. That rise back up was completely normal. Small retracement, from what happened all week. And that’s why I’m not gonna change my short bias with these two. They’ll both be in my basket staying short. Now, if they reach much higher and surpass last weeks levels, well then sure, I’ll change. But not beforehand.

How about the EUR (yellow). Shown with the CHF.

Well, I got nothing with them. Nothing clear, anyway. Yes, they are diverged from the CHF. Is the younger leading the older? Well, if that’s the case, then the EUR should start to dip some. But that hasn’t really happened yet. If anything, their elevated. So…I just don’t know. It’s unclear where they want to go.

That’s all technical stuff.
What about my strategy? I touched on this a little bit earlier.
More specifically, about how I determine which currency pairs to trade.

Well, I do know one thing. All of last year told me this. That trading a complete currency is very inefficient. Meaning, I lose more than I can gain. See. This is where I start. It’s me. I move from out to in. Macro to micro. And well, I tried the macro alright. Trading all 7 pairs of one currency, as one, does not work. Only in a very volatile market background. Sure. It works wonders. And I have the data to prove it.

But, in a more normal setting, I needed to trim the fat. And how do I do that?
Well, find the trending currencies. Both long and short. And simply pair those two factors up.

I mean. It works. As far as I can tell. Although, it does seem like I’m missing out on some potential moves. But, unless you go through each and every one of the 28 currency pairs, and do a specific trend analysis of the pair you’re not really gonna know about it, right?

This reminds me of how the original Mastergunner’s methodology came about. That’s what he did. And look. Don’t get me wrong. That’s the normal. You look around. Do the research. Who’s making higher highs? Lower lows? Tailored to a specific pair. Then you just go with it. Stay in it till it doesn’t trend anymore.

But what makes my method different than that method?

Well, apparently, I’m considering what the macro truths are, irregardless of what a particular pair is demonstrating. In fact, I’m not even looking at any pairs. How I derive a pair to trade has nothing to do with it’s particular looking chart. I realize that the entire forex universe of traders do that very thing. But you know what? Ask me if I care? About what other traders are doing… I’ll be nice and just say that I don’t care.

Remember my constructing and deconstructing methodology?
I construct a complete currency for understanding and determining what their aggregate trend is. That’s taking all the sum of it’s parts and coming up with an answer. One aggregate tell, of what that currency is doing.

Then I deconstruct that to come up with what pair to trade. Since forex trading involves trading 2 currencies simultaneously, I just pick both trending high and trending low ones. Although I am seriously diminishing the possibilities that way. I don’t trade trending high currencies against other trending high currencies. I don’t trade low against other lows. I don’t even trade non-trending currencies at all.

Look again.

Sure. I could be missing out. On some opportunities. But, who knows? Maybe I’m not. I don’t know. I’ll have to be collecting some data on this, in order to really find out.

And trust me Journal. I’m doing that.
Back testing. You better believe it. I’m getting close to being done on the 2020 calendar year. And the reason, is to be able to look back see these ones that I should be in, and even to compare these pairs to some other ones, that just haphazardly happen to be trending.

Look. That’s hindsight for ya. I should be able to answer some of these questions.

• Are these pairs the choicest ones?
• Were there other pairs fairing better than these?
• Is there any kind of connection between what I have and something else? For instance, do they eventually show up on my list, or don’t they?
• Do these pairs come in on the late side? Meaning am I only catching the latter part of their trend?

I’m sure I could come up with a lot of other questions that I would want answered. But the point is, what can I learn from the back testing along with my forward testing data that I’m collecting.

Am I on the right track?

I guess time will tell.

Remember. Patience is mine. However long it takes…so be it. I’ll be here to find it out.

Alright Journal.
Gonna cut this.
I’ll come back tomorrow morning with some other stuff.
Thanks for being here.
Mike

P.S. — If you can read this, it’s some of my bottom line numbers for this month.

[MikeWolski]

Good morning Journal.

Well, I just got done with my month’s summary.
If nothing else, at least I can say that I’ve been pretty successful so far this year with that. Which is coming up with a good summary of my entire months.

You know me, Journal, how I like mind maps. Probably everything that is important to me, regarding my business, is in a mind map. It’s all about being organized. Yep. I would have to say that this is probably the best thing I learned from being mentored. Back in '17. Don’t get me wrong, There’s too much to mention about how much I learned from Exceptional Trader. Absolutely. But, in my mind, there is no substitute for being organized. I’m talking, when someone who doesn’t know you, would come onto my computer and read all of my mind maps, technically, they should come out with a complete understanding of who I am…my vison…my business…and all the way down to the way I trade. Basically, everything all laid out and explained.

Now. Do I really care about what others really think?
No. No way.
Even if I die. Would I want someone to come along and take over everything that I built?
Nope. Cause, it’s for me and myself only.

I just believe it’s beneficial for myself of being organized in such a way that I can step back and look at everything that I have built. I should be able to see all of the whats…whys…hows. Of my trading business.

That’s nice.

How about I just throw out here March’s summary. It’s a two part thing.
One mind map is a summary of what I’ve been up to, for the entire month. And the other one is strictly for the numbers.

And well, while I’m at it, here’s a shot of what my desk top looks like. A little proof of what I deem important. Like my mind maps (in red).

Oh yeah, how do you like my bus? That’s my office.
Sooooooo much better than a shop. Man, what memories (bad memories). I still can’t believe I spent 21 years working in a shop (car dealership). All I know is, God must have had His hand on me the entire time. To get me through it.

Ok. That’s nice.
Sorry.
Getting a little off track here.
Where were we?

Ok.
I had a good month.
Pretty much all that I did this month is up at the first mind map. So. Needless to say, I was busy.

There was one lesson that I recently learned though. I did touch on it, up there. But, I want to expound more on it.

It has to do with correlations. And Tommor will know exactly what I’m talking about.
But, I’ve come to a conclusion. Regarding trading decisions of the correlated currencies.

I’m not gonna consider correlations anymore.

USD, JPY.
EUR,CHF.
AUD,NZD.
USD,CAD.
RISK-ON CURRENCIES.
RISK-OFF CURRENCIES.

Look. The market converges. The market diverges. We never know when these dynamics take place. For how long. And why. We know that some currencies behave in a certain way, to be normal. Like, to follow in a like-manner, another currency. And then there are times when they go in complete opposite directions (they diverge). Not normal.

This is all interesting stuff, no doubt. Surely these convergence and divergence states (of 2 currencies) can be followed, like any other trend. But, when it comes to following something, I’m not gonna count on these dynamics anymore.

The most important trend is a currency’s individual aggregate trend.

I just can’t mix up the two, that’s all. Sure. One of these days I will explore a separate strategy regarding correlations. No doubt, fascinating stuff.

But, let me show you what made me come up with this determination.

I was back testing.

I’m looking at the year 2019 (the whole entire year). And I need to have some kind of idea of how I will trade going into the year 2020. Need the context, right? Here’s the USD (white), and the JPY (purple).

Sure. We all know they converge (normal) and diverge (not normal) to each other. I mean, that’s fine. And going into the next year, what are we seeing? A lot of convergence, with one another.

I’ll zoom in.

This chart is showing how they’re leading up to the new year, plus the first 2 days of '20. The first 2 days have both of them moving up. Bullish. I wouldn’t be trading until the following Monday (the 6th). This is what I’d be looking at on the weekend leading up to my first trades of the year (concerning the USD, JPY).

Well, what do we got? Well, for some time frame reference, Nov 22nd is when they hit their top (specifically the JPY). Since that point, they both gone downhill. Bear trend. But, '20 get’s them both a boost up. It’s a counter trend move. So. What am I thinking? Well, at this point, I need a little more info. We got to see whether they will continue on with their bear trend, or change, right? And since they are both doing the same thing (running together) I’m using the wording they. Well, let’s take this day by day.

I’m not trading yet. Need more info.
Monday EOD results.

Ok. Well, looks like they’re gonna go back to the way of their trend. Right?
I mean, that’s what I’m thinking, at this point. I can get in. Or I can wait out the week. I mean, think about it, there’s no other scenario that I would do. Either get in, or wait. Let’s say that I go in, short, with both of them. I’m following their respective trends.

Ok. Tuesday’s EOD results.

A loss. On both of them. It happens. So, we move on. I’m not gonna be jumping in and out of them. I just keep asking the question of whether it’s still trending or not. With the USD, surely the trend is continuing. And with the JPY, if it goes higher than this last swing high, then yeah, it will break it’s trend. But we’re not there yet. So, let it ride.

Wednesday’s EOD results.

Ok. The JPY comes back on down. Good, cause it was getting close huh? And what about the USD? Well, it goes quite high. And the answer to the question of whether it’s still trending low is…well sure it is. It’s got some room to run, and still turn around. But…divergence day one.
Let’s run it.

Thursday’s EOD results.

Divergence day two.
Are they respectively still trending? Technically, yes.
Well, we got one more day in the week to go. Got to run it out.
I mean, what else would I do? When all else fails, follow the trend!

Friday’s EOD results.

Divergence day three.
Now what…
It’s the weekend. I’m sitting here looking at this. Maybe even jumping in here to talk about this. What am I to do?
The USD has just hit it’s inflection point. Surely, come Monday, it could U turn and continue on with it’s trend. Right?
The JPY has just broke on down further. It’s all kinds of trending (lower).
And what do I do about their correlation dynamic? Who’s right and who’s wrong? Well, the JPY should be the correct one, right? I mean, maybe the USD will turn around and follow suit. Like, come back to the convergence scenario.

This is the actual pip count for these 2 currencies this completed week.
It’s their complete currency pip counts. Just mind their relativeness.

Just look inside the colored boxes. On Mon, they both went down. On Tues they both went up. But Wed on out, each day, diverged. This is just showing what my charts showed above, that’s all.

So. I’m sitting here, on the weekend. Wondering what I should be doing, moving forward, with these two. With the USD, taking a bit hit. Like, too much. But, with the JPY, well, getting rich. But, I need to do something. Or do I? Cause how do I know that the USD won’t come back on down?

When all else fails…what…follow the trend…right?
Ok. So. With the USD. I’m gonna give it one more day. Cause, I do have a rule that when I hit the inflection point, go one more day. Got to see it through (literally).

Monday. EOD results.

Divergence day four.
Ok. So. With the JPY I continue on with it. Right? It’s trending.
But what about the USD? Well, it broke the trend. I’m getting out now. Lost quite a bit with them. But that’s the game.

Let me remind you about how I trade. All this means is that I won’t be having any USD pairs in my basket. I’m not trading the complete currency way. That only works when the volatility runs high. But wouldn’t you think that if I were, with the JPY, boy, I would be making some money. Cause I bet you that every single JPY pair would be pipping out big time. But I’m not. Whoever else is trending high is who I would be trading the JPY against. Remember…I trade whoever is trending high against whoever is trending low. That’ll be the pairs I trade. Only.

That’s nice. Let’s move on. There’s a point in here somewhere.
Let me speed this up.
This is what happened for the rest of that week.

Divergence day 5 through 8.
And the actual pip correlations to it.

So yeah. What’s my point again?
If I were playing any kind of correlating game with these two, I would be in trouble. Like this. I could be thinking, betting, that the USD were to come back down and join little brother. Cause, after all, they both were on that down trend. Right? And, on the other hand, I could be thinking, betting, that the JPY should be turning up. Which it should be following the USD, like it normally does. Know what I mean?

The point is, I would be in a real mess if I entertained the correlation dynamic. There is none!

All of this reminds me of what’s going on in the present.
Let’s see this.

This was the 23rd, of Mar. It was on a Tues. EOD. First off, we can see that the JPY has been on a down trend. But the USD has been breaking out higher. I mean, no doubt, they have been diverging this year. But when I seen this, I’m like, yeah, the JPY definitely wants to join back up with the USD. So then, this is when I put the JPY in my basket, of course along with the USD. Both going long. Let’s see how this plays out.

Wed, the 24th.

No problem. Both in agreement. I feel good. No changes.

Thurs, the 25th.

Diverging. I’m not gonna change anything. Have hopes for the JPY to wake up, and go back NORTH!

Fri, the 26th.

Well, both kind of agreed. But, not looking good for the Yen. So then, this was last weekend at this time. I’m not seeing a break of the downtrend, really, with them. Yet. So, no changing. I’m letting these run. North.

Mon, the 29th.

Letting them run. No changes.

Tues, the 30th.

Divergence definitely noticeable. I keep things running. Still. Cause, you never know what the last day of the month, even quarter, will do. Oh…I’m hoping.

Wed, the 31st.

Ok. I’m done. I had enough wishing, hoping, praying. It’s not happening. These 2 are diverging. That’s all there’s to it. So. I’m out. Of the JPY trades. None in my basket now. Well, while we’re at it, let’s see the last 2 days of this past week.

Thurs, the 1st.

Well, I have the USD in my basket. They seemed to drop some. Yeah, along with the JPY. But it doesn’t matter, I’m not changing anything for the rest of the week. Even though NFP Friday is now upon us. Maybe something good will happen.

Fri, the 2nd.

Well, nothing big happened. That’s a good thing.
But what do we have?
Well, when I look back at it. Was I correct to think and even consider these correlating factors? No way!

In fact, when I see it now, if I would have followed my original plan of when all else fails, follow the trend. And so. When it comes to the JPY, what then? I should have been following them all along, going short.

I mean, I have the answer, here in hindsight. And the incorrect answer surely has nothing to do with correlations! Absolutely not! This reminds me of what I showed you earlier, with these 2. And here we are again.

And that’s precisely why I have that rule.
I’m learning something here.

Tommor…for me…no more correlations.
I’m done with them.
Maybe on a different strategy, sure. But, I cannot have these two dynamics in one strategy. It’s like their opposites.

I’m getting tired of burned with that dynamic.
What doesn’t fail me, is the currency’s independent aggregate trend. In the long run.

Alright Journal.
Gotta run. Sorry.
I’ll come back tomorrow morning. Got so much more other stuff going on, to tell.
Thanks for listening.
Mike