Good morning Journal.
Well, it’s Sunday morning now. Yeah, yesterday morning I was quite busy. Oh…you know, just trying to figure out stuff. I’m still bothered about a lot of particulars, that have to do with my strategy (what else is new, right?).
But, I’ll have to share with what it led me to do yesterday, during the day time. This was fun. I spent a lot of time doing this research. I broke out the pencil and paper and got to writing a whole lot of stuff down. And guess what was the source of my research?
Yep. Right in here. Babypips.
Probably (no…absolutely is the most correct word for it) the most influential B.P.'s thread that has ever affected my trading. I went back through it. From the beginning to the end. I wrote down the most important things about it. Yeah boy, I filled up some sheets of paper alright. I needed to compare exactly what I do against this fundamental methodological way of trading. Kind of like getting back to the roots of something.
Note…If I were you, I wouldn’t go through it now, cause I’m about to give a highlighted summary of the main points. Now…afterwards…yeah, I believe everyone should read it, and see how it grabs you. It’ll be for some, but surely not for all.
And that’s the thing here, this is not a particular way of trading. It doesn’t tell you when to get in a trade, or when to get out of a trade. The best word for it is methodology. It’s a different type of style of trading. It’s consists of how one should view the market. It is a different way of navigating the market. But anyway, I needed to go back and get the full gist of it, again. And then compare that to what I’ve been doing. Well, comparing it to how I view and navigate the market.
And btw…all this is being compared to my basket trend strategy that I have.
I know I’m missing some things. It’s the tweaks and adjustments I feel I need to fine tune how I go about my trading style. That’s all. I wanted to go back and try to completely understand why this methodology worked for him. Actually I kept thinking, all while reading it, I should compare what the market was doing during this time. It started in Jan 2013. It was in full bloom during the first half of that year. And I have a feeling that the market was probably going through some serious trending stages. Well, without knowing for sure, wasn’t that the time when Japan went through the beginning stages of devaluing their currency? Hmmmm…I kind of think so. And what a time it would have been to be on board with a methodology like this. In fact, any kind of trend strategy would have worked out nicely.
Anyway.
It is a factor and something to keep in mind, for sure. But, there is things to be learned here. Especially when Clint enters the scene. Man…he made me write some serious stuff down. It’s like, when he talks, you better listen. He’s smart. But the thing was, he got quite excited about this way of trading. He got all kind of into it. So it was nice to see how he progressed through it. His thoughts. His suggestions. Boy…it’s almost like gospel to me, of what he thinks. But the thing was, he kept to MG’s script. That’s one thing he didn’t do, alter any part of how to trade this way. He mentioned that several times. He said he would start out trading it in the exact way. And then maybe later on would or could change some stuff about it. Cause remember, this is not telling you when you should get in…when you should get out. There’s no signals to follow. It’s all about guidelines.
Anyway.
I need to get to some points.
What did I get out of this?
This is gonna take some time. To digest.
To find out exactly what I should do about my trading, in response.
Well, how about I start here. I’m gonna throw out to you, Journal, some of the things I wrote down. This is the stuff that I am pondering. This is what grabs me. But I’m not too sure what to do about it. We’ll see how this progresses.
The thread is long. Kind of. So, what I did was consolidate all the important page numbers. This will be like a cheat sheet. Quick table of reference. And what jumped out to me.
Page # 24 — Almost always have a portion of each currency. — If one is performing better, I’m generally adding to it. — If one is not doing so hot, I generally pull back a bit on it.
Page # 84 — Risking 1 unit for each dollar in available equity (not account balance) — No initial setting a profit target — No initial setting a stop loss — “As a result, I’m able to capture all of the trends.” — “If you ever see a lengthy trend in the market, I was in it.” — “That’s what I hold out for. Large pip movements.”
Page # 120 — (Something good)
Page # 219 — I never add to the position or subtract from it. I do base my pip size off my equity and not my A.B. So in a way I’m benefitting when my open trades are doing well.
Page # 222 — I never add to my position. As my pip size is based on my equity, when my existing trades rise, it allows me to enter into new trades with a larger pip size.
Page # 278 — I’m not an Oracle or is my way the only way, But I’m more interested in the overall mindset and thought process. For I feel above all it’s how you view the market that will be the differentiating difference between success and failure.
Page # 907 — In reference to suggestions of adding or subtracting to positions, I’m not against the idea, But I think that would require more work for those that want to head down that road. — I don’t like the idea of starting with half positions with the intention of adding to them. — Now here’s where to me lies the importance of all this. Treat losers the same. If you are willing to add when things are good, then subtract when things are bad.
Page # 874 — Clint enters. From here on out, it’s all his advise.
Page # 928 — I now think that a long position should be closed after the bias on that pair turns to NEUTRAL. — My rules — When a bias is judged to be long, and I’m not in any long position, then go long entry. If I’m in a long position, then HOLD. When a bias is judged to be short, and I’m not in any short position, then go short entry. If I’m in a short position, then HOLD. When bias is judged to be neutral, close any open pair. Stay on sidelines until a long or short bias is judged.
Page # 998 — (Something good)
Page # 1188 — Recap of the rules.
Page # 1197 — Calculating the exact risk involved in this portfolio methodology.
Page # 1203 — "I’m quite sure of one thing: the best way to make your trading more robust — is to improve your win-ratio.
Page # 1210 — "As I see the task for all of us who trade this methodology, there are 3 main parts to each trade, & we have to do a good job (at least, overall, on avg) with each one of them…
- IDENTIFY A SUITABLE TREND EARLY
- IDENTIFY AND GRAB A WORKABLE ENTRY PRICE
- IDENTIFY A BREAKDOWN IN THE TREND EARLY - AND EXIT AT THAT POINT
Page # 1213 — In simplified terms, the methodology involves identifying & entering a valid trend and holding your position for as long as the trend remains valid. Obviously, this requires a solid understanding of trend trading, including successful strategies for — (1) IDENTIFYING A TREND — (2) ENTERING IN THE DIRECTION OF THE TREND — (3) IDENTIFYING THE END OF THE TREND. In which that #3 is the basic exit signal.
Page # 1270 — This thread presents a powerful methodology…which can supercharge the trading results of almost any swing trader who is ALREADY CONSISTENTLY PROFITABLE.
Page # 1321 — Prerequisite for successfully trading the MG99 Portfolio Methodology. — Summary : In order to be successful trading a portfolio of swing trades, I believe you must first become successful trading individual swing trades, one at a time. — So the take-away message is this : FIRST, develop your skill as a swing trader; then take your swing trading to the next level, by employing the portfolio methodology.
(And, in anyone is interested, I come on the scene at post # 1229. In Dec. 2013)
That’s nice, I know.
And here we are Journal. Me…you…my Lord & Savior…and that last take-away message.
Am I worthy?
To move on?
Honestly.
Yeah, I’ll be honest with you, alright. The first thing that comes to my mind is that I am in no way successful. Consistent. If I were, then why can’t I brag about an ever increasing account balance? Sure, I’m a perfectionist. I’ll never relax the reins. But the question is whether I have honestly satisfied the criteria laid out by Clint (page 1270).
Well, the only thing I have going for me is that I post just about anything and everything that I do, trading wise, in here. I got records. I’m not just a talker. Whatever I do in trading, I can (have) produced the proof. But have I? Have I produced the proof that I am a consistently profitable swing trader? Well, Journal, I guess you’re the one to answer that. You can go back and see that I have good months, and bad months. Well, and I guess that begs the question of what is actually considered consistent. It is a subjective question.
Ok. Well, that’s what I first think. I am not worthy. But then I have to really think about it. Reality. What is the real reality of my trading? I’ve been trading for some time now. I have experience. Probably more than most people, who have spent at least 8 years on the subject (cause you really need to add up all the hours actually spent).
All things considered, I’m gonna have to say that I am worthy. To move on, anyway.
Let me get to the real problem of my trading.
I need new rules for TAKING PROFIT.
Journal, this is what I’m presently working on.
Check this out. This was occupying my time yesterday morning. I took some pics.
This is the latest standings of my basket of trades running. Currently.
You can see my 9 trades that are currently running. At the top is the 3 USD trades. Middle is the 3 AUD trades. Bottom is the 3 NZD trades. Also you can see exactly when I got in them (little arrow on them all is when). On the daily charts.
And why did I pick these pairs? Cause I believe :
- USD is trending low
- AUD is trending low
- NZD is trending low
- EUR is trending high
- GBP is trending high
- CAD is trending high
Remember, TAKE PROFIT is the issue I need changing.
I trade a basket of trades. Initially, I’ve treated these as one trade. All for one, and one for all. I look at these as one basket. How much increase or decrease to the a.b. that they all are doing, as one entity. Not as individuals.
This needs to change.
It’s a shame to see those 3 CAD trades (right side 3) just continue on without taking any kind of profit. That’s all I’m saying.
Here’s a different view of those 9 trades. Look at the right side, pips.
There you have it, Journal. That’s what I’m working on. I have nothing else to say about it. Cause I’m not quite sure what the answers are yet. I’m even questioning if the process of how I come up with determining these pairs to trade, to begin with, is right.
Then I go to MG’s methodology. Can I compare what I do to what he does?
— His method—
- Scan across all 28 pairs
- Looking for trends - on each of those pairs
- Objective - to be a part of a long trend - and on as many as possible
- Treating each pair separately - entering and exiting per specific situation
- Adding additional sizes as the trend continues (simply by opening new positions)
- Eliminating any pairs that turn non-trending
— My method —
- Determine if a complete currency is trending via aggregate calculation
- List the trending high currencies & the trending low currencies
- Tradable pairs are matched up - high trending against low trending
- As long as both currencies are respectively trending, their running in the market, in a basket, treated as a whole, not separately.
- Mostly interested in what the account balance is producing, as opposed to what the individual trades are doing.
- Entry & exit of trades are directly correlated to EOD aggregate trend determination only. Therefore, the pairs are not individually analyzed.
Again. Can I compare these?
It’s almost like comparing me to the rest of the world. Right?
What he’s doing is simply looking around at any possible trends. Actually, is all based off of price action. I’m not coming from that viewpoint. My premise is making a determination off of the aggregate, and then going by that. It’s the one chart that tells what that one currency is doing. Trending high. Trending low. Or not really trending.
Look. I can accept this. It’s not mainstream. I don’t even know if anyone has even done this. But…this is who I am. This is how I see the market. And I happen to think it’s an edge.
Now. How I come up with exactly who to trade…this is a different story. It’s just one way. Sure, I picked this way. I kind of thought it was the simplest. But I’m definitely rethinking this now. I might be realizing that I might be putting on too much conditions on which pair is in, and which is out. I know the market doesn’t care about that. In fact, I know the market probably doesn’t even care about who’s trending and who’s not. Well, at times, anyway.
What would another way be for me to this by? How about the criteria being as long as one currency being technically trending, as opposed to both being trending. That would open up a little more possibilities. I don’t know…I’ll have to explore this.
But my main problem, which I have to settle, is the taking profit part. Actually, I had a thought of solving this by using MG’s method. What if I just start using his precise numbers of sizing units (which is different than what I’ve been doing…which is double that amount). And then if trends continue I can add more positions, as opposed to more sizing. Just completely another position. With the one to one unit to a.b. amount. Know what I mean?
So. I can make it that as long as it’s trending, I have at least a stake in it. The longer it trends, the more positions I should have in it. And the more diminished it goes in a trend, the less positions I should have in it. Maybe that will take care of the take profit part. See? It’ll force me to either scale in or scale out. Seems better than the all or nothing scenario that I’m doing now. Actually, I don’t really have a predetermined take profit action in place. I’m just hoping that down the road something will trend long enough to generate increased profits to the account balance. See?
I’m gonna need some defined times for me to take profit. Simple as that.
Alright Journal, I think I talked enough.
This does give me some things to go on. Well, follow up with the ideas presented. Know what I mean?
Thanks for listening.
Mike
P.S. — Concerning my NZD/JPY trade.
It’s still running. Presently, in the negative. It’s ok though. I’m not fazed about it. I’m not gonna touch it until, at least, I’m in profit (don’t you worry about that). Remember my goal with that particular strategy?
You know it.
But I’ll keep you posted on any moves with it. In the meantime, it’s gonna run. Looks like it needs the time for it to.
And if there’s anything for me to learn about it, also, I’ll share as well.