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

[MikeWolski]

Hey Journal.

Well, we’re at the open now. And I just got done rearranging all my trades.
I needed to come in here and set the record straight. Some changes, from what I put up there previously. Which, predominantly, pertains to the JPY.

I’m going north the Yen.
I think I explained my thoughts about them, on that last post. But for some reason that’s not what it looked like on that pic I gave you. Anyway.

All my trades are placed. Here’s proof.

And this is what it technically looks like. On the last column on the right.

So. Fresh, brand new sized, trades now.
So, we’ll see how the week turns out.
Yeah, I’m a little nervous about the JPY. I really hope they continue getting strong, along with the USD. We’ll just have to see.
But, I tell you what. I will not change these trades this week. I’m committed for a week at a time.

Alright Journal.
Let the games begin.
See ya on the other side.
Mike

[MikeWolski]

Good morning Journal.

Well, this won’t be fun.
Bad week in the market.

But why?

Bottom line…it was a counter trending moving market.
Got to take the good with the bad. Learn something. And move on.
Ok well, type (talk) about it first, then move on.

Remember me saying this?

@MikeWolski

So, we’ll see how the week turns out.
Yeah, I’m a little nervous about the JPY. I really hope they continue getting strong, along with the USD. We’ll just have to see.
But, I tell you what. I will not change these trades this week. I’m committed for a week at a time.

Well, as usual, I follow the plan. And as the week unveils itself, all I can do is shake my head. Let the cards fall as they may. Nothing I can do about it.

This is what happened.

This is the last 2 weeks. Daily results, all sized up against one another. And then underneath, the weekly results, from strong down to the weak.

And while you’re there, you can get a sense of the volatility. See what the avg. weekly numbers come out to be? These results are much higher. So it was a market moving week. And needless to say, that line up, pretty much is the opposite of what last weeks was. Right?

I was hoping for a continuation from what happened last week.

Nope.

Here’s exactly how each pair resulted.

Just don’t be concerned about that right column. That’s my trades results. Look at the first and second columns.

That’s all good and nice, I know. But how can this help us? So many numbers.

Well, I’m used to looking at the market aggregately. Just like above. We can see that the NZD ended the week being +11.50% against all the other currencies. The highest. But this chart has all of what goes into that, in detail. It’s the break down. The difference being this is the actual pips, and the former in %'s. In that case, I’ll give you the actual aggregate daily results.

Ok now. If you would add up all of the NZD’s individual pairs, this is what you’ll come up with. See? Now that’s what I call the aggregate.

I read an article yesterday (on Forex Live) that gave a summary of what happened in our market this week. And he correctly said that the best pair to have traded was the NZD/JPY. I can confirm this easily by just looking at that top table and see that the NZD was the most bought currency and the JPY was the most sold currency. And well, put them together and I’m sure the pip count will be the highest. You’ll get that exact pip count on that second table shown. Like this…

• +82
• +68
• +48
• +17
• -16
• Total = +199

Actually, this is not true. I just ran some numbers. Check this out.

• GBP/JPY = +207 pips.

That’s the only other pair that has netted more pips. Is interesting.
Well, what explains that, is that every currency pair doesn’t travel the same amount. We’ll just call it their average daily range. If you look up what each pairs ADR is, they’re all different. The GBP/JPY does have a higher ADR than the NZD/JPY.

Look.
That’s nice.
But it’s all hindsight.
It’s all said and done with.
How can we learn something from the past, in which has no direct bearing on what’s gonna happen next, in the market?

Well, all I can do is tell you how I think about it.

What really happened?

• A bomb went off in the last 3 days of the previous week. Called risk-off.
• The market retraced that. For the most part, every single day this week.

Well, we need to know how much of a retracement. Right? Cause that answer could point to what’s coming next. Hypothetically speaking, if it retraces 100% then we know it has a very good possibility of continuing the risk-on scenario. Actually, we don’t know if the run is over or not. See, this is how I see it.

What happened that previous Wed was big. It was the USD getting strong. Along with the JPY. But look, any currency can have a good day (just like I would say about any professional football team…whether you’re in first or last, you can have a good game at any time). But what we’re talking about here (and why I think it’s big) is that it went on for 3 days (not one or two, but three).

And then, we have a retracement. Which is completely normal. Things always retrace. Even in a trend. Right? And in that trend it could go up half way, or 3/4’s of the way, or even 100% of the way and then turn back around to continue on with the trend. And still be called a trend. But, if it goes back up and over 100% well then, that’s when the trend can change, and no sooner.

So. How can we see what kind of retracement the market did this week (and don’t forget, it could be continuing on still)?
Well, the easiest way would be to see the aggregates again.

The top table is the month running. Bottom is the individual daily results.

You can see what was happening just before that big day (16th). The USD was leading the pack before the day began (EOD 15th at +6.40%). And the NZD was dead last at -12.96%. That’s much farther than anything else, by a lot.

Now. Let’s run some numbers together. Shall we?
Wed thru Fri (16th - 18th).

• USD = +15.50%
• JPY = +13.55%
• NZD = -9.01%
• AUD = -8.80%

This entire week.

• USD = -6.55%
• JPY = -12.78%
• NZD = +11.50%
• AUD = +8.18%

What do we got?
— The USD retraced 42% of Wed - Fri’s move.
— The JPY retraced 94.3% of Wed - Fri’s move.
— The NZD retraced 127% of Wed - Fri’s move.
— The AUD retraced 92.9% of Wed - Fri’s move.

Summary:

• The USD lost only about half of what they made in those 3 big days. Therefore, it’s possible, very possible, their strength is still alive.
• The JPY lost just about all of what they made in those big days. We’ll call it break even. But not any more. Therefore, technically, they could still get strong and continue on with this (strong) trend.
• The NZD got back all of their losses, and then some. Came out net positive. Therefore, they are on track for that strong trend to continue.
• The AUD got back just about everything they lost. But no more. Their at the break even point. Like nothing happened in the last 2 weeks. Therefore, they can go either way.

But remember. This isn’t over. We need more days to go by and see how the market wants to continue this. Will it remember those monster USD and JPY days? Or will it not care about any of that and just go with the risk-on scenario, regardless of what the numbers are doing?

Look. That’s all just one perspective. It’s just one way to look at what’s going on in the market. There’s other ways.
This is the way I prefer to look at it.

Each currency trend at a time.

The USD.

No one can argue what the current trend is here. Their bullish! As it stands, the bias is for an uptrend. They were on a down trend, consolidated and made a floor, then boosted on upward. Now, until they come back down to the earth, they are bullish.
There’s more of a chance the USD will be strong, than weak. At this point in time.

Therefore, I cannot and will not, trade the USD short. It has to be for long. This is what tells me that. If I do anything else, then I’m not a trend trader. Simple as that.

The EUR.

The bias is for up. Yeah, they leveled out a good bit lately. Not making any higher highs. No doubt. But on the other hand, they’ve been on an uptrend for a while now. And this chart is not indicating a change in their trend. Not yet anyway. Therefore, I must trade this currency for long. Simple as that.

The GBP.

Same thing here. It’s been an uptrend. And has not indicated a change in their trend. The bias is for up, and I will have to trade them long. No changes (like since the entire year).

The CHF.

Now we have something different. This is what we call a change in trend. I believe this is more than a simple retracement. That move on down was quite large in comparison to their normal moves. Right? Just like that last change in trend, from low to high. See that big move up? And look, it did turn out to be a change in trend. For a good length of time. Well, I believe the same thing is happening here. But look. I could be wrong, of course. We’ll just have to see how it plays out. But the chances are more in my favor of calling a change in trend, than just a big retracement. Therefore, my bias for the CHF is for short. That’s how I must trade them.

The JPY.

Well, last week my analysis was that we needed more info, to get more of an accurate trend. And now we have a little bit more. What’s this telling me? Well, just like above, you can see that the retracement was about 100%. But the thing is, is that it didn’t fall any lower. It didn’t continue on with the down trend.

I know I shouldn’t say this…but I need another week to tell me more. I won’t lie, this is quite dangerous. If the market does want some more risk-on, then this will continue falling. Simple as that. But, I’m making this hinge on the USD. And because my bias is up for the USD, then that makes me believe the JPY will go higher also.

I’m just gonna go week by week with this one. For that reason (USD). Now when, and if, the market forgets about what happened a couple weeks ago, and goes risk-on, then I’ll change. But until that point, I need another week to go by to show me more.

The AUD.

Their trend is a down trend. Until I see this chart rise up and above that gridline there (-500), it’s a bias for low. Plain and simple. In fact, it’s even looking like it wants to turn and burn back on down from here, huh?

The NZD.

Same thing here. Down trend. And my line in the sand is the -1500 gridline. It’s acted as support. And I think it’ll hold as resistance also. We’ll have to see. But the NZD really does demonstrate some big moves. It could possibly even go up to the -1000 line and turn right back on down. And still be considered a down trend. Therefore, my bias is short, and I must trade these guys short.

The CAD.

I believe they are still on this down trend. Yes. Their up trend got broken, after a sideways travel. And this hasn’t shown me, yet, that it has legs. We just need more time, but as it stands, my bias is for low. The chances are more for this down trend to continue than for the trend to change back to high, know what I mean? We have lower swing lows. Not any higher swing highs (it’s been quite some time since that).

Alright Journal. I got to get running.
But one more thing I did want to mention.
We are entering into the final days of the month. Not only that, but the end of the quarter also. And once again, you know what that means.

This trend stuff goes out the door.
I guess we won’t get a real taste of where the market wants to go until, probably, after NFP Friday. That’s next Friday. Ok well, that’s not too far distant. Right?

Alright Journal.
Thanks for listening.
Mike

[MikeWolski]

Good morning Journal.

What a week…what a week.
Got to talk about it.

Let’s see, where do I begin.
How about where I last left off.

@MikeWolski

But one more thing I did want to mention.
We are entering into the final days of the month. Not only that, but the end of the quarter also. And once again, you know what that means.

This trend stuff goes out the door .
I guess we won’t get a real taste of where the market wants to go until, probably, after NFP Friday. That’s next Friday. Ok well, that’s not too far distant. Right?

So. Like, what am I doing anyway?
Well, I’m just following the market.

And so, how did the market behave, in the last days of the month. Quarter?

3 days this week. This is what happened.

We got the daily line up, for each day.
What can we say about this data?

• Very small numbers. Meaning, the volatility was very low ending the month. The currencies were not traveling much against each other.

• The JPY came out strong, in the first 2 days of the week. Was about the most bought up currency since the open.

• It took a dive on that last day. Most sold currency. It sold off most of all those gains.

• The USD was being bought up in all 3 days. It continued their bull trend that they’ve been on. A big divergence happened between them and the JPY on Wed. That’s uncommon.

• The Comms (AUD,NZD,CAD) were being sold off.

• The CAD followed the USD on Wed. Bidding up.

• The GBP being mostly bought up and not sold. Followed their bull trend.

Again. These are not really moving numbers. The market was awaiting the turn of the month. And NFP Friday.

But do you remember what was happening just before this?

@MikeWolski

The top table is the month running. Bottom is the individual daily results.

If you remember, the headline news was all about risk-on. The Comms took over that week. See. This is the story we got to get straight. It’s all of what’s been happening in the market. Got to put it all into perspective.

• The safe haven (USD,JPY) bomb went off the 16th - 18th. Much buying of the USD, JPY. And the risk currencies were being sold off.
• Then the weekend came. Everyone gathered up their thoughts. Analyzed the crap out of it.
• The entire week goes risk-on. Big counter trend play. Like every day.
• The weekend comes. Another breather. More analyzing. Ready for the last 3 days of the month.
• We go back to 2 strong days of safe haven buying. It’s what happened in that previous week. The market hasn’t forgotten about that. Money still wanted to go there. And it did.

Well, the turn of the month occurred. Thursday was the 1st. Then Friday, NFP, was the 2nd. Let’s see which way the market went.

Bottom table is the individual daily results. Top table is the month running (the second day added onto the first day).

• Thursday was a nothing day. Low, very low, numbers. Barely moved.
• The USD was the most bought currency.

And so. Going into NFP time, we got to know that it’s all about the USD. What happens to them affects all of the others. So what happened?

• The 3 COMMS (CAD,NZD,AUD) was being bought up. Like the only currencies going long.
• The USD most sold off currency (-4.20%) that day.

So. This is what I want to know.
— Is this the classic buy the rumor, sell the news? Was a mixed report. But the headline number was above expectations. We’ll just call it a positive report.

If that’s the case, then moving forward, we should see a bounce back from the USD. They should get back on their bull trend. The consensus would be more buying of the USD like they have been. Here’s what their aggregate trend chart looks like.

I subdivided the months. April 1st started their down trend. And that continued into May. But in the last half of May they were carving out a bottom. Then June started their bull run. See that first spike up, in June? That was on the Thursday before NFP Friday. Then on NFP Friday, EOD, it dropped. The report was below expectations. But economically speaking, things were getting better (cause the report in the month prior was really bad). So then, the market digests that for a couple days. Then onto the bull market. As you can see, it went quite high. The USD took on a healthy retracement, and went back for some more. Double top.

And now what…

Look. It’s either gonna go up or down Right? Mr. Obvious here.
But more specifically, I think the narrative will be either one or the other.
Look back at that previous swing high. This could be another swing high, but lower. I’m sure the market hasn’t forgotten about the break-down of the USD. Remember all that talk? Like, who’s gonna replace the USD? And is the credibility of USA still an issue? I’m sure China has something to say about that.

That long period of selling shouldn’t go unnoticed. That’s 2 months of continuous selling. And now 1 month of buying? Is that it? If it is, then you can’t rule out another leg down. I’m just saying this scenario is probable (and trust me…I will come back in here and copy and paste this write up, if it happens).

On the other hand, maybe we’re just at the half way point. A consolidation, and a re gathering before some more buying. And make a higher high, in the context of the year. It would probably be on the back of it’s safe haven status. And maybe the JPY would grow some legs and join them on that.

I just don’t know. But I don’t know any other possible narratives it could take.
I kind of think the former. A double top, of a lower swing high, then back down. And you have to ask…who get’s the other side of it? The COMMS! The risk-on currencies, that’s who. Look. No one wants a strong Dollar. Surely the EM countries don’t want to see that. They’ll get killed with the interest on their USD debt they have to pay back. Not good.

Anyway. It’s been quite a long time since the Comm currencies have been on a bull trend. Sure, they’ll always have a good day or two, but I’m talking about their respective trends. So, let’s take a look at them.

The AUD.

The months subdivided. And see, they’ve been on a down trend since the end of Feb. That huge drop got the ball rolling. The bias has been a sell. You can’t argue that. One day or two of buying simply doesn’t constitute a bull market.

But look at the beginning of June. I really thought they were carving out a bottom. But no. Something happened at the mid point of that month. I’m sure the USD had something to do with that. Just look above. Do you see how these guys are on the opposite side of the USD?

The NZD.

Quite the same thing here. Although these guys like to travel much more than the AUD. But I’m thinking they hit bottom in June, and now wants to climb.

You can’t argue the point that they’ve been bearish for most of this year. I’m just thinking it’s time for some kind of high trend. Surely wouldn’t know for how long. But maybe the second half of this year could be mostly bullish these risk-on type currencies.

The CAD.

These guys are tough. You never know whether they will follow the USD, or the Comm brothers. But after seeing how they reacted to Friday’s shenanigans, I’m thinking they’ll join in on the risk-on scenario. Mr. Oil has been continuing on higher. You would even think that that CAD would be so much higher because of that. But that relationship has broken down. There’s no direct correlation anymore. I don’t know. Maybe it’ll come back. Who knows.

Again. I don’t know what’s gonna happen. But I can tell you that I will be following as closely as possible. That’s what I do best. Document. Follow. If you don’t know where things came from, where things are at, you’ll never know where things are gonna go.

Alright Journal.
That’s just some of the things I’m thinking on.
I’ll come back this weekend. So much happening.
Thanks for listening.
Mike

[MikeWolski]

Good morning Journal.

What a week.

Well, looks like I’m gonna take this humble pill now.
This is not gonna come easy. But, I think I’ve already digested it.

I’ve been sitting here this morning trying to figure out what happened, in the market. Like, where’s this market going? You’d think even afterwards, in hindsight, that you can come up with the answer. I mean, usually, yeah, I can get it. But I’m having a very difficult time.

But more on that later.

In any case, I’ll come clean.
I messed up this week. Like big time.

I haven’t fell trap to this in a while. So I guess it was time. Another lesson I need to digest. And the lesson is…

Follow the market, don’t guess where it’s gonna go.

Let’s see. What made me derail?

It’s how the market has been behaving lately. I think it’s been throwing some crazy signals. I guess you can boil it all down to the risk-on verses the risk-off dynamic. And the bottom line, for me, was that I thought, surely, we were gonna have some risk-on flying this week. And believe it or not, that’s contrary to what the prevailing trend has been. So, I went contrary to all my strategy. I changed everything. And here I thought I was preempting a change in trend.

I was wrong.

All I had to do is follow.
But I didn’t.

This is the prevailing trend.

The top table is exactly how the week went. Daily results. And then the big table underneath shows how the trend of each currency is positioned. And in between those two is the net results of whether the trend was followed or not. Green is positive, with a % of how much. Red is negative. And you can see that Friday was the only negative netting daily result. Slightly. But then I have the weekly total result (under Fri). That comes out quite positive (15.85%). And just take a look and compare that total to last Friday’s daily result was. It’s just about the opposite! Therefore, what happened in that one day, was all made up on this entire week.

Basically, what I’m talking about here is how the Comm currencies had a huge day on last Friday. And then this entire week they go ahead and lose it all. Something like that. Don’t forget I’m taking all things into consideration. All the currencies added up.

Anyway. That last row is what my trading results should have been, if I was trading my normal strategy. The week would have ended in the positive. +1355 pips. That means my entire basket of trades would have netted that much. Well, that’s a good week, if you ask me.

But guess what…
That’s not what happened.
Here’s what happened.

For as ashamed as I am, that’s how I positioned my trading basket. I totally rearranged all the currencies trends. You should be able to see that the Comms are trending high, plus the JPY. And all of the Majors I had trending low.

What a mistake.

Here’s exactly how many pips my basket of trades lost. This week, and month.

What a mistake.

I mean, all I had to do was follow.
But my only consolation is that my trading strategy should be followed.
That does comfort me.
But, I stopped the bleeding. I knew it was only gonna be for one week. I risked it. And lost.
So now I’m gonna get back to following the trend.
And if the market does make a turn, I’ll lose again, due to the nature of trend following. But at least I will be able to say that I followed. And it will take some time to get caught back up.

So. Let me go through and prove what each and every currency’s trend is.
These cannot be argued.

The USD.

Uptrend. And still.

It DID NOT make a double top, in which I thought last weekend at this time.
Wrong.
Ok. How about a triple top, now?

Nope. Wrong answer.
The right answer is that it’s trending high. And it will continue being stated trending high until the market shows me first otherwise. Meaning, it’s gonna have to come back down a good bit. Surely down lower than that last swing low. Maybe even to drop below the 0 line. In any case, ever since they carved out a bottom, they’ve been trending high. That is the bias, the truth, and until it changes, is gospel.

This is how you follow, and not speculate.

The EUR.

Uptrend.
Never deviated. No trend change cause.

This is how you follow, and not speculate.

The GBP.

Uptrend.
Never deviated. No trend change cause.

This is how you follow, and not speculate.

The CHF.

This is interesting. What do we got?
Well, the latest narrative was it changed from an uptrend to a downtrend. See back there at around day 118? That drop? See. That told me the trend changed.

And believe it or not, it still holds true. Yeah, we had a monster move from the Swiss this past week (I don’t know about you, but it shook me up). We had a risk aversion day take place on Thursday. Just look up above. No one goes as high as the CHF that day (+10.27%). Are you kidding me? That’s 2 full days worth of a gain, all in one. And all the Comms took a beating.

But, you know what? I don’t care. I’m not buying it. We’re gonna need another one of those days for me to change their stated trend. Cause you got to see the big picture. That’s all I’m doing here, anyway.

Stated trend is down.

This is how you follow, and not speculate.

The JPY.

Trend is down.
I don’t know how many times I must learn this lesson. Well, I guess one more time. I mean, I don’t know, maybe their in the process of carving out a bottom. But in the meantime, it’s still considered a short bias. It is nice of them to show us a swing high. For a minimum, we would need to see another swing higher up, at least to that height, before I could call any kind of change in trend.
Until then, it’s a down trend.

I guess sometimes trend changes take much longer than I would like.
Surely these guys are taking their time.

This is how you follow, and not speculate.

Alright Journal. I’m gonna do something a little different.
All this is concerning the AUD.

I just got done going back in time and looking at all my previous charts concerning the AUD. Lot’s of them. I even found the one where I said about the cliff. Anyway. I want to put these up in chronological order. I think this stuff is interesting.
Hindsight always is.

This is gonna be a real big chronological look back on how the AUD has been progressing. When I look back at it, I wasn’t wrong at all with these guys.
That’s one of the great things about a journal. If I said it, there’s proof. And this is gonna be one of the times that I want to feel good about myself (cause I need a lot of that today).

@MikeWolski

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.

@MikeWolski

The AUD.

Well, this year, their high came at the end of Feb, like 2 days before Mar started. What a drop, huh? Then retraced up about half way of that. But do you see where I put that dot? Boy, I remember, when that happened, my bias definitely changed. Since then, the AUD has been short in my basket. And so far it’s been true. I’m not gonna change anything concerning them.

The NZD.

It’s the same thing here. Where that dot is, I’m telling you, something changed. And their trend is nothing but down. Again, their in my basket of trades, going south.

@MikeWolski

The AUD.

Yep. According to what I consider breaking above and out of this downtrend, would be there at the 56 point (that’s the 56th trading day of the year). That drop right there. I believe above that point is back trending high. But no, it didn’t quite make it past it. Then Friday brings it all back on down.

How about the NZD?

Same thing here. At the 56th trading day. Ok. Sure. It went above that. But then what? Went back down on Friday.

All I know is, the more I’m typing here about these two, the more I’m convinced they’re not turning the trend. All things considered.

@MikeWolski

Let’s look at the AUD. Any similarities with the NZD?

This is a little different. Seems like we have a cliff here. Boy would I like to see it’s aggregate EOD count drop below the floor it’s pretty much sitting on now. Right? That surely would spell a lower AUD. Cause we do have lower swing highs. And a fall off this cliff would make me risk my money. So…I guess this is quite simple. I’m gonna let that be my trigger, or I should say my confirmation factor. A green light.
And that would be for a short trade. I would have to pick the long trade currency, in order for a pair.

@MikeWolski

The AUD.

Trending low .
Ever since day 39 - 40. That drop turned it, cause it broke below the support area (between the 500 - 1000 gridlines). No more higher highs since. The floor has been sinking lower and lower. And btw…do you remember me telling you, recently, that I think the AUD is gonna fall off the cliff? Well, I think the beginning’s of it started to happen this past week. See it there? (day 93)

And now fast forward to the present time.
This is the latest.

The AUD.

Downtrend.
And it has not changed ever since it started, way back at the end of Feb. Like on day 40. The bias is down.
There was a time there, between day 100 - 115. All at the -500 gridline. That was considered a support level. They had a chance to bounce there. Many days it kept coming back to that level. But nope. It broke on down lower. It didn’t even come back up as far as that level, either. That was an indication of a much lower move, as you can see.

This is the narrative for the AUD.
No one can argue this.
It’s a down trend.
And it will continue on until some real kick backs occur. And I’m not talking about normal swing highs either (like at day 124). We got to be setting newer highs if the trend will change.

I’ll be watching.
And as I’ve already proven, I can always look back and learn something from all of my documentation.

All I need to do is follow.
Oh…that’s right.

This is how you follow, and not speculate.

Maybe one of these days I will remember that (cause that’s why I have to continually repeat it). To myself.

Let’s move on.
The NZD.

Downtrend.
And that -1500 gridline has been holding as a resistance level. I’ve mentioned that before (recently).
Just like the AUD, no proof of a trend change occurring.
I don’t know, maybe it’s all gearing up for one, but I can’t go there. I must see it first. Dummy!

The CAD.

This just makes me sick.
All kinds of signs of a downtrend. Been slipping. Lower lows.
And this past week, it broke down (I was definitely hoping for higher…actually for all of the Comms).
Nope.
The chart tells you it’s coming.
It’s telling you, be careful!

And I’m an idiot to think otherwise.

I’m just an idiot.
Period.

Well, the Comms seem to be following each other. Like all 3 of them.
AUD,NZD,CAD.

We’ll have to see whether they want to change trends, again this week.
If they do, it’s gonna have to take more than one day of a move.

It’s gonna have to take more than one week. Cause we seen that one complete week (this is what threw me).

Let me explain.
Here’s the story.

• Week of Jun 18th. Risk-off. USD & JPY dominated the last 3 days.
• Week of Jun 25th. Risk-on. AUD,NZD,CAD dominated the entire week.
• Week of Jul 2nd. Mixed. NFP Friday caused a big difference.
• Week of Jul 9th. It was all about what happened on Thurs. Risk-off bomb.
• Then on Friday, that was a normal retracement move, from the previous day.

And so. Where do we go from here?

Oh…that’s right. I almost forgot.

"This is how you follow, and not speculate."

I’m just gonna rearrange all my trades accordingly. I got to get back to the correct trend. And then watch the fall out. That’s all.

That’s what I’m to do.

Alright Journal, thanks for listening, to all that nonsense.
Mike

[MikeWolski]

Good morning Journal.

Well, I do have lots to talk about.
But I’m not so sure I want to talk about it.

See, this is my safe haven. This is the place I can always come in to and simply talk. It’s my venting place. It’s just where I can throw out my thoughts, opinions, even talk about the market stuff before it happens and see what happens afterwards. Things like that. It’s fun. This place is like that ear that I need, cause sometimes there’s nothing better than someone just to be there to listen to. That’s all.

On the other hand, I do like very much to interact with intelligent people. Now that can be extremely fun. But of course, we’re talking about intelligence here. I think there’s nothing better than those who have the experience, who have put in the effort, and have learned a great deal about our industry. Our craft. Trading.

Even further. What’s most stimulating, in this field I think, is the fundamentals behind how we perceive how the market is moving. But, the macroeconomics subject in itself, is nothing but music to my ears. It’s nothing but relational dynamics at play, on a grand scale. That’s all.

That’s nice. I know.
Well, there is a reason why I wrote that. You’ll see in a little bit.

But, this week I got into something a little different. I explored the old market indicator the COT report. It’s something I’m familiar with. I have a history down that road. Because I was a part of a thread that explored the subject.

What good memories I was apart of. I joined up with a bunch of guys on the thread. Actually, we all were brought together because of it. Man…talk about the enjoyment I had being apart of such comraderyship. It was called COT Report Analysis - a thread on market sentiment - Trading Discussion / Economics - BabyPips.com Forex Trading Forum.

Well, needless to say, I went back and read through a lot of that. Honestly, I can’t ever remember having such a good time as that. The interaction with these guys that were on fire for the knowledge of…well…the market. Specifically, market sentiment. I mean, the effort of all the research that went on there was something. Look. I’m not saying that we were all genius’s. Or even experienced enough to be considered market smart. But, the passion, excitement, and effort that was expended on that thread was unbelievable. It truly was a special time for me.

Everyone of those guys that contributed in there gave it all they got. Sure, we weren’t always on the same page. One was good with numbers. One was good with the fundamentals. One had all the organizational skills. We even had a grandfather on the scene (experienced old trader). Computer savvy person. But the point here is that even though everyone came from a different perspective, we all tried to learn as much as we could in regards to the market sentiment.

You could even tell that we all had a different asset to trade. No one really traded the same thing. Whether gold, oil, the Russian Ruble, or one of the normal currencies. I mean, I don’t even know if we realized that, at the time. Cause I picked up on all of this as I was reading it.

But what we did have was a bunch of guys with a passion for learning, researching, and giving it all you got, on trying to find out what the market was gonna do. What good memories. I will forever cherish them.

Getting back to the COT report. I did wrap my head around it again. Researched the CFTC site. And even came up with my own excel data. I accomplished from '19 up to the present time worth of data.

But I went about it in a slightly different light. I didn’t go all into it. I went by way of a very, very simplified version of it. Just enough data to be able to tell me in which direction a currency wants to travel in. And then to be able to use that as an indicator and then compare it to what I have established already.

It would be like another factor, or confirmation indicator for direction. And that’s it. Not a full fledged use of the COT report, like we use to do.

Well, I did reach out to our leader, of that thread. ForExchange (FE). And he responded! Boy, it was nice to hear from him again. But I wanted to know if I should, could, continue on using that thread or not. He of course said yes.

And this is where I’m at now.
I just don’t know if that’s what I want to do.
Yet.

I know that if I open that thread back up again, I’m not gonna be able to do the whole entire COT report any justice. Well, to the fullest scope of what FE attained it to. No way. And if young traders come by and want as much information as possible out of the report, I’m not gonna be able to give it to them. Basically, I won’t be able to take the lead on the subject.

Or I could open up a new thread and confine it to the scope that I would like. Which is the COT report, but the most important parts of it. Which is one or two things. That’s all. But see, our old thread encompasses soooo much information on the subject. I mean, if a young, motivated, curious trader comes along and wants the full info about it, there won’t be a better place than our old thread.

Look. I know one thing. I’m not gonna be able to bring back the good old days (although I would give my right arm for that). For as much as I cherished those guys, it’s not gonna happen.

But I am a more experienced trader now. It has been 7 years, since.
Well, that 7 year number means nothing. If I could add up the actual hours spent on my business, now that’ll be a more accurate length of time.

Alright Journal.
I’m done talking.
I got some thinking to do.
We all came from somewhere (and thanks for listening to the nonsense).
But it is a new day.

We’ll see what happens.
Mike

[MikeWolski]

Good morning Journal.

Well, looks like this is the place where I get some work done. If it wasn’t for the new rule of not being able to post more than 3 posts in a row, I could have continued on with what the latest COT data turned out to be. Since I’m blocked out of that thread now, I’m not able to continue on with it.

The good news is, you Journal, allow me to ramble on and on (above and beyond 3 posts in a row without having someone else needing to enter in between). Therefore, I think I will just post what I’ve been wanting to, in here. At least I can get you to listen. Plus you don’t talk back and disagree with me. I prefer it that way anyway.

Now that that’s settled, you’re going to listen and learn what’s going on in the market. Cause I have this new indicator that enlightens me, and confirms a lot of my analysis of the current sentiments of the currencies. But that’s precisely what I want to do now. I’m going to lay out my normal methodology of determining how the currencies are trending and compare that to what the COT report tracking of them has been depicting. I think this stuff is interesting.

I mean, if you ask me, you don’t even need to be an expert in trading, to benefit greatly by this material. Think about it. The very least that someone could possibly reap some profits by my analysis would be like this. You look for one currency that is trending high. Then you look for another currency that is trending low. Ok. So, that’s your one pair. The long trending currency against the short trending currency. Place that trade. With these simply parameters. Even on demo (to prove to yourself that you can be profitable).

No stop losses. No take profits. You have in your mind that this will run for days. More specifically, for one complete week. From the open to the close. Now, by all technical accounts, if the trend has continued (for both currencies), that one pair will have to end positively. And so, that’s it. You close it up, and you’re done. Note how the pair moved throughout the week, and compare that to what their stated trends are.

Then find out (just by reading what I write, or do your own analysis) whether the currencies are continuing their respective trends or maybe have changed. In any case, there should be some kind of bias for each individual currency. And so then, just do the same thing for the following week. Take the long biased currency against the short biased currency. Open it up at the open, and close it up at the end. It’s a very simple matter. In fact, you can’t get any simpler.

Think about it. There is one, and only one, thing you got to get right. The direction. You’re not worried about how many pips to be gotten. You’re not worried about being stopped out. Not worried about when to enter. Or about when to exit. In fact, all of the worries that traders seem to get up all in a pinch about, are not there.

You’re simply playing the most simplest strategy, which is whether the trend has continued or not. Plus, it’s in the most manageable time period. One week.

And guess what? If it ends in the negative, you can let it go for another week. That’s with the stipulation that the respective trends haven’t changed. Now you have a really good chance for it to end positively. This year, do you know how many times the JPY has changed trends? NONE Do you know how many times the GBP has changed trends? NONE. Therefore, if you would have played the GBP/JPY pair, on a weekly basis, every week this year so far, how many trades would have ended in profit?

I guess we can easily look at those results. Weekly time frame. Green candles are positive resulting trades. Red negative.

And then, if you stick with the negative resulting trades for one more week afterwards, you would’ve made up some losses. And I’m not even saying if you let it go for a third week.

My only point is this. These longer time period trends, that I monitor and note, do not change back and forth all the time. The just don’t. If the trends don’t change then there’s a very good chance for profit. You just have to let the thing play out. Don’t restrict it with parameters that kick you out of the game prematurely.

There is a difference between protecting your account and giving it the room to run and play out. You know what that difference is?

Let the week play out.
Cause within the week, things always come back around. And then, if an anomaly would take place in that week, you let it go another week. You can see up there that the trend is what stays true, in the end.

Given that example, I do have to say that the JPY just might be changing their trend. They are getting less short lately. You can see the evidence there on the most recent candlesticks. Even the GBP has been wavering lately. And look, that’s what I’m going to be doing here. That’s showing you how the GBP is losing it, and how the JPY is gaining it.

Alright, I’m done talking. I’m just gonna do what I do best. That’s stating what the trends are. And if there are any changes taking place.

I’m gonna do a complete analysis on each currency.
But first, we got to look at the market as a whole. We’re nothing but a helicopter coming on in. Actually, I’m gonna start out being Jeff Bezos and see what this world looks like 62 miles high. Then I’ll make the descent.

That top table is how the month is playing out (monthly running %). The bottom table is the daily results all by themselves. And at the bottom is how the week ended.

• The CHF is the most bought currency this month, sitting at +7.04%. Been that way for most of the month.

• The CAD is the most sold currency this month, sitting at -11.37%. The first 2 weeks were huge selling weeks. Then this past week retraced those losses. Most bought.

• One of the most notable incident to happen this month occurred last Monday. Was a huge risk averse day. The JPY took the top being +7.16% in one day (that’s big). And the Comms were the most sold. All 3 of them.

• Let’s look at what’s normal. What is a normal % for one daily result? Cause 7.16% means nothing if we don’t know what’s considered normal. For this year, here’s the numbers. Average daily placements.

—1st place = 3.82%
— 2nd place = 2.49%
— 3rd place = 1.49%
— 4th place = 0.62%
— 5th place = -0.01%
— 6th place = -0.69%
— 7th place = -1.51%
— 8th place = -2.42%
— 9th place = -3.78%

• The other most notable incident to happen this month occurred on July 14th. That was the NZD having their interest rate decision meeting. Remember they hinted on a rate hike later this year? Well, on that day they were most bought coming in at +7.57%. Ended the week most bought also, but look at the other 2 Comms for that week. Most sold currencies. Interesting!

• The JPY having a decent month. With the climax coming in last Monday. But then retraced a lot of those gains since.

• The USD having a positive month.

I would surmise that what’s been happening lately is more risk averse play than risk on. Caution and safe haven buying has been happening way more than the contrary. Cause why would not the NZD be able to gain any traction? That’s the currency of favorite when the world is tranquil. And especially when they want to hike rates! But it’s not happening.

Let’s look at the particular trends.

The USD.

The trending high state is still intact. Maybe a little choppy lately, but it continues to bounce back every other day on it’s trajectory. So, no change, as has been the case for some time now. See, a weeks worth of movement will tell you the way.

That chart is the only chart needed for which to tell you where the USD is heading. I should just stop and go home now. It’s simply… buy the Dollar.

But I’m gonna pull out the COT report now and compare that to what we see there.

The most important data there for me is the right column (white line). Net Positioning. That’s the difference between the longs (green line) and the shorts (red line).
The chart does go back the entire year. I just showed the way I compile the numbers. The chart = the numbers. I just didn’t show the open interest numbers on the chart. The second column is the green line. The third column is the red line. The last column on the right is the white line, which is the most telling of the trend. And don’t forget that this goes by weekly. Apparently we had 29 weeks this year so far.

• Net Positioning is in positive territory. That means the background we’re in is more long (as opposed to being negative).

• Within this back drop it’s increasing. The USD is bullish.

• The shorts have been decreasing much more than the longs increasing. Meaning, the bears have let off the gas more than the bulls have been dominating.

The EUR.

Uptrend still technically in tact. It ranged a bit, a few weeks ago. But took on some more upward movement this past week. The bias is high, not low.

Very interesting here.

• The net positioning figure is in the positive. The back drop is in positive territory.

• In the past 5 weeks, the net positioning has decreased. Meaning the short open interest contracts that are open have been more than the long open interest contracts (hence the red line moving higher more sharply than the green line).

• The longs (green line) is higher than the shorts (red line). Meaning a more bullish bias than short.

Well, we just might be seeing a faltering of the EUR. This is the second leg this year of the net positioning amount decreasing. This is very interesting and something to keep in mind. You can’t really see this dynamic in the above chart.

The GBP.

Technically, the GBP is in an uptrend. Been that way all year, and no signaling of changes yet. Although at a slower pace, the bias is still high. Not low.

• Net positioning has, for the first time this year, dropped into negative territory. Meaning, the shorts have outweighed the longs.

• In the last 2 weeks, it’s dropped drastically. After long time sideways action.

• The shorts have rose up and over the longs (red line over green).

• Seems like change might be on it’s way. If this continues lower, the top chart should start changing. We’ll have to monitor this closely.

The CHF.

Technically it’s still on a down trend. You have to see that last major drop (day 118). It started to retrace some of that, but never yet got back up there. Big rise up occurred a couple weeks ago, but not enough to attain the previous swing high. Yet. This is a tough one. I can’t say that it’s on a bull trend until it get’s back to that highest swing high area. Until then, it is following a bearish bias ever since that massive drop. And even then it continued on down further.

• Net positioning is in positive territory.

• The longs are greater than the shorts. Signifying a bullish bias.

This is tough. All I can say is that the SNB is probably the red line (bears). And they are fighting to rise back up. But the safe haven players have the upper hand. It’s a battle. Especially given there’s so much caution in the market lately. And you just cannot dismiss the CHF during this time. Just keep these things in mind.

The JPY.

The Yen has not been able to break up and above the latest swing high. Technically, this is still in a down trend. Sure, no more swing lows. But it can’t break up and out of this longer running side ways action. I’ve been quite safe in my trading keeping with the short bias. Even last Monday, when it dominated every other currency. I kept with their short trades (of course that’s because my trading plan doesn’t make me change during the week). And by the end of the week, I’m in some good profit.

It’s sideways action. But I don’t go by that. Either long or short.
And the JPY is still trending short.

• The net positioning is in negative territory. Trying to climb out, by can’t.

• The shorts are quite many. Way much more than the longs. Meaning the bears are not gonna give up that easily. The bears are in control. And they like it that way.

The AUD.

Downtrend. Ain’t anything else to talk about.
No sign of changing either.

• The net positioning is in negative territory. Bearish back drop environment.

• The shorts have taking off lately. Separating away from the longs. This is a stark change from what’s been happening this year.

Well, this has seemed to get more intense. Bears in control.

The NZD.

The trend is down. It cannot break up and out of any swing highs. It’s more of sideways action, but definitely a bearish bias. Surely not bullish. They’ll have a good day now and then but can’t for an entire week.

• The net positioning is in positive territory. But getting close to not.

• The shorts are climbing on higher. Getting closer to the longs. Although the longs are outweighing the shorts. This is bullish.

Remember, it’s these guys that the market wants to go long with. When things are sunny and bright. But there’s just too many storm clouds out and about. That’s the reason for the downward pressure.

The CAD.

Well, they had such a fall lately, that this recent climb (this past week) is natural and probably over due. But technically, their in a trending low state. This is their bias. It’s been trending low for a good while now. But what a sharp fall as of late though. Geeez.

• The net positioning is in positive territory.

• The bears have been increasing way much more than the bulls have been letting up. Although the longs have been elevated lately. Coming off an extreme for the year. Falling pretty consistently lately.

I think the question is when will the bleeding stop? Cause this has been going on for some time now. I think the CAD has been following the other Comm currencies. As opposed to the USD. I think that’s more of the fundamental reasoning behind it all.

We’ll just have to see if this continues on, or what.

Alright Journal, I got to run.
Thanks for listening.
Mike

[maby1]

I have been going through this post and I must say I was impressed at how much time you spent on a demo account. it is nice to show others how valuable it can be as you did quite well over time from what I can see here. Thanks for sharing.

[MikeWolski]

Good morning Journal.

Well, that’s a month. Another one down.

So. What I should be doing now is filling out my Month Summary. I guess I’m gonna be a little late with that, but I will get it done though. That is one of my goals I set up for this year. I think it’s important. And hard to do. For some reason I didn’t follow through with it last year. Last year I only went up to like June. And I remember why too. Cause when you are not doing so good in the market the chances of you following through with a nice general report diminishes greatly.

This year I’ve been on it. And I’ve not had such good months too. Although this month of June hasn’t been so good. Probably the worst one. And it’s all because of one week. That second week, boy. I screwed up. Big time. In fact, all we have to do here is go back a few weeks worth. I mentioned what I did. I went totally opposite of what my trading plan dictated. I didn’t follow the trend. I deviated from it. And I thought if I was going to be wrong about it, well, it’s only one weeks worth. I’ll get back on track.

Well, that is what happened. But I took a hit like terrible. And the thing is, is that if I would have followed my plan, stayed the course, things would have turned out completely different. Like being much in the positive. Boy…I remember it. I’ll tell you what happened. I was deceived. I was overwhelmed with a delusion. I’m telling you…I think back to that and wonder where I went wrong. And it’s true. It’s like your mind gets taken over with thoughts of how the market should change it’s course.

More specifically, I thought we were going to the moon with the commodity currencies. Like some serious risk-on play. And when you look back, that was not the case. At all. It was a fake out. And my trading plan, I should say, the methodology in how I come up with what the trends are, really did not change these currencies’ paths.

Well, because of that, I had to keep 2 different models. One, how the market really should be, and two, how my trading actually takes (in which it could deviate). Look.

As my basket of trades are running, perpetually in the market, I keep a daily track of what my account looks like and how many pips it generated. Well, the latter is right there. What I did is on the left, and the model of how my trading plan should be followed is on the right. All you have to do is look on the right side going down. It’s the weekly total of the amount of pips. And then in blue is the monthly total.

Well, you can see how much of a difference I really messed up with on that second week. But, I did learn my lesson, and stayed the course for the rest of the month. See how the rest of the weeks totals match? But, I’m telling you, that was costly.

And it hurts.
I mean, all I have to do is follow the dog-gone plan.
But, I think I really did learn something from this. Let’s see if I can make a summary out of this lesson.

Recognize and be aware of a delusional thinking coming over me.

I remember something coming over me. I was tasting the emotion of it all. I really, really wanted to get ahead of this risk-on scenario that I hoped would have taken place. It never did. Boy, it went completely the other way. And you should be able to see how much other way it went. In the first 7 trading days my trading plan produced +714 pips. But because of my deviation, I produced -2607 pips. The difference is 3,321 pips. That’s the bottom line.

I’m pretty sure, well I hope, that I will remember this feeling. Just so I will stay on track. And the lesson should be, that if I’m going to lose or at least dip into negative territory then I should want to go down with the entire model. Not alone. Cause that, in fact, was what I was thinking at the time. This model is going to lose, and I don’t want to go down with it.

I don’t know. My consolation is that I have a good plan. And for as boring as it is, I need to keep matched up with it. Simple as that.

Well, speaking of that. I guess this would be a good time to segway into a change that my strategy is signifying.

My plan is quite simple. Follow the trend. When it changes, then change.

So. The current market conditions are stating a change of a trend. That’s what we’re going to look at now (and btw…this is not delusional…you tell me).

The CHF. It’s as simple as this. One itty-bitty chart.

The narrative goes like this. Follow me on the rational.
It started out the year on a down trend. It slips below 0. Indicating a downward bias. It even uses the 0 line as a resistance level. Then it breaks down even more. The downtrend continues. It encounters a 50% retracement at day 28. That’s not uncommon. That is not a fake out. Then it turns and burns on much lower. This time it’s steep. Very steep. Smooth sailing here boy. But then we encounter a pretty sharp retracement. Well, since the trend extended quite far down this little sharp snap back is nothing in comparison. In fact, I don’t even know if it retraced 50% back up. In any case, that only took 2 days, then back on down it goes. Continuing the down trend.

It found some support. Back and forth carving out some kind of floor. But it starts to make some higher highs, not lower. Well, it’s not making up a whole lot of real estate, until it breaks back on down. So we see then that the down trend has continued. It even makes a lower low. But not for long. We got a boost high like you won’t believe. That only takes a few days, not long at all. Well, when I seen that, I called that a change in trend.

We could go back here in this journal and see when I did. And I did change my trading model to the Swiss trending high. Well, this very well could have just been a retracement, only to come back down. But when I seen it not go down anymore, that’s when I called it. Going up.

Did it stay that way? Yes it did. My trades CHF trades were more in profit cause their bias did change for to go up. And all I’m doing now is watching this inch higher and higher. Confirming the trend. Plus it’s not moving downward, like at all. All this just continues. No surprises. Easy peasy all the way up.

But then we have a drop. Yeah boy, that hurt my trades, I’m sure. Well, because of how much far down it goes in such a short amount of time I call it a change in trend. You can see a days worth of pip losses. Every straight line is one day. And well, it goes lower. I mean, I’m not gonna think this is still on an up trend right? No way. The bias is for down. It’s taking out many, many days of the previous climb. How many days do you think it took for it to climb all that much? Then compare that to how many days it took for this dive? That’s a factor. Time. I feel that is very important to consider.

Ok then. What happens next? A very sharp move up. Almost straight up. Well (and we’re not talking about too long ago here), I seen it, felt the losses, but contained it. I kept with the down trend. Cause you just can’t be changing trends so quickly. You got to be patient about moves. That retracement didn’t go up to the 100% point yet. I felt, and was thinking, that for the previous uptrend to continue it would have to attain up and over that high point that it went to already. So I just kept with the downtrend this whole time.

Well, it finally happened. You should be able to see that this past week made the climb up and over that top. Now, there’s no doubt about what the trend is. It’s time to change. With the change.

Just don’t tell the SNB what’s going on here. They’re not gonna like it.

But…this is the game.
Trends change.
I’m a firm believer in knowing what the trend is. And following it. But of course that only comes when you document and track it. I don’t do these EOD numbers for nothing. In fact, everything I track is for a reason. I just need to know, that’s all.

This is a summary of their trends.
And my exact trades that will be running, because of that determination.

And for a refresher, my trades are determined simply by trading the trending high against the trending low. 4 high times 4 low equals 16 total trades.

See. I believe my trading is as simple as it can get.

The hardest part is following it.

It will continue.

Mike

[MikeWolski]

Good morning Journal.

Let’s see.
What am I going to talk about today.

Whatever you want.
I’m here to listen to all the nonsense you can get out.
Just type away and you’ll feel better.

Alright Journal. Thanks. Here goes.

I got this idea. But it’s unfinished. Quite.
I really don’t know if I’m on to something or not.
This could be such nonsense. But I have to follow this and see if it’ll lead to something.

At first, when it hit me, I thought I uncovered some kind of secret weapon. Something maybe that no one has every thought to try. It’s something under everyone’s noses.
It’s a tactic. A methodology. A way of caring out a trading strategy.

Remember, this is incomplete.
I’m just gonna get it onto print and see how it looks. Well, honestly, I did break out my journal (binder full of paper that I write in) and drew up some things about it. I’ve been sitting on the idea for a few days now.

I’ll tell ya where it all comes from.
Someone (a reader of my stuff) recently mentioned how much I demo.
Ok. Let’s go there.

Yeah I demo. That’s all I’ve been doing is demoing. In fact, I’m not so sure that I could be more fulfilled otherwise. It’s the journey. I’ve been on it, for some time now. It’s been years. At the end of this year, I will have completed 9 years on my journey. Most of it has been demoing, as opposed to a live account. Actually, this journal started when I first went live (Jan '16). And so, the first 6 months of my live trading journey has been documented. It’s not pretty. But, the whole point of it is, that I’ve felt, experienced, and operated in that setting long enough to learn the emotional control needed for that environment. Honestly, for me, there was not much difference between the two methods. It’s all serious business for me.

It just doesn’t make sense to me, when you don’t have enough capital, to be trading in a live account. Especially when everything you need to see, experience, and prove to yourself, with all the documentation of course, is enabled in the demo arena. Honestly, if you can’t prove it to yourself in demo, you’re not going to live. I don’t care who you are, pretend all you want, it’s not gonna happen.

With me, I’m not successful in demo yet. This reminds me of a very thoughtful conversation I had with my (very intelligent) brother one time, not too long ago. On the subject of my journey and goals. Coming from someone who is learned on a number of diversified subjects, like monastery monks’ visions and whatever they seek to attain, he asked whether I would be completely satisfied and fulfilled if I proved, with all the documentation, of a perpetually increasing account balance operated as a virtual business, rather than having a real life business entity that operates off of a live account and generates enough income to self sustain the business and also continually grows from there.

What is most important to me? The actual self sustaining trading business I desire? Or the self fulfillment attained from successful trading operations that is continually being proved over and over again, in the market? Virtually.

I don’t know, that’s a tough one. Cause I think I can die very peacefully knowing that I can do it, over the long term, proven over and over again. Able to build and grow a generator of funds from the market.

But then again, I do think that the absolute top in life, for me, would be a simple self sustaining trading business that ensures I don’t have to depend on anything else for my finances.

Well, when I get deep into this discussion, I always have to remind myself …"unless the Lord builds the house, they build it in vain who build it."

Now that’s what’s most important to me.

But, I guess it’s a two fold thing for me. Finances, sure. Self accomplishment, definitely. I can’t separate those. So. The answer is, “I just don’t know, Bob.” (bro)

So.
I will continue indefinitely with my demoing. Until I attain.
Bottom line.

Now. To continue on with my train of thought.

What if someone gave me a lot of money, enough capital for the business venture. How would I really use it?

I’ve always, always said. I would trade the way I trade in demo. Cause that’s the entire reason, premise of why I trade demo in the first place.

Seriously. If I ran into $300,000. I would have to determine how much % a month I should expect to generate. Look at my trading plan and strategy and just do what I’ve been doing but with the adjusted position sizes. I would expect to withdraw on that every end of month.

That’s just common sense stuff. But I took it a bit further. I asked myself whether I would still trade in demo. See. My first thought would be a no. I go ahead and just do what I do being live, that’s all.

But.

Why stop the demo?
(Now we’re getting somewhere)

Why would I want to discontinue doing what I’ve been doing for such a long period of time? No one’s making me stop demo. There’s no rule saying that it’s either / or.

Then this thinking leads me to my whole entire point.

Is there a way in which I can utilize my demo trading at the same time I trade live?

Can this assist my live trading?
An aid. A tool. A methodology. A developed system for minimizing trading risk.

Look. I’m not in the habit of reading how other traders are doing it. In fact, I’m such adversed as to how others are trading. Even if they are successful. I’ll just summarize my thought here. One of my favorite words is proprietary. It comes from within. And so, what I’m saying here is that I think this is original thinking.

And if by some chance this has been discovered, or experimented with by others, then so be it. But in my mind, this comes my own originality of thought. I mean, think about it. No one on the planet has demoed more than I have (surely I could be wrong, but somehow I don’t think so).

And now all I want to do is further this methodology. I’m not too sure that’s correct English. Or proper grammar. But the point here is that I would like to develop this into a tactic.

Again, this is by far anywhere near complete.
I’m just gonna start throwing out there a lot of thoughts on this. Maybe something will start to make sense.

What’s the difference between demo and live? Nothing but the pure and unadulterated topic of destructive emotional trading. Ok. Is that it?

I surely would love to know the answer to this. Is it true we trade way much more successfully the demo way than the live way. Well, experience tells me that’s not true at all. If it were, I should be way much more advanced than where I’m at right now. I mean, I can’t even go a complete year without stumbling in a major way. Even ending a complete year in the positive!! I can’t even do that yet. Demo wise.

There has to be other benefits to demo trading. Not just the emotional subject.

How about something like this. A way to have something run in the market and to be able to follow it. A precursor. A tell. An indication.

Look. I’m all about following the market. In my mind, a few years ago, I boiled it all down and to this day I believe in this mantra.
It is best to follow than speculate.

What if I followed a demo strategy instead of the live market?
Somehow.

The difference is in the time factor.

If I have a demo trading strategy running in the market. Trying everything to follow the market. Which is always the case for me. But then riding alongside I could have the live account determined in a way dependent on that, and not specifically the market. Like for instance, answering the question of whether I should be in the market to begin with would be determined by the results of what the demo strategy is doing.

I guess a lot has to do with what specific strategy we are talking about.
I have 3 strategies.

— #1 Anchor Trade = “Complete Currency Trade”. That’s a basket of 7 pairs running (all with a common denominator currency). High volatility type trading environment.

— # 2 Anchor Trade = “MWPortfolio”. It’s my basket of trades in which 15 or 16 pairs are running perpetually. Trending high against trending low pairs. Preferred method.

— # 3 Anchor Trade = “One shot.” I don’t really have a name. But it’s the trade that I use for unique opportunities only. I’ll pick one pair only. I should be sitting on the sidelines more than it being active.

I guess I should be looking at the most important questions regarding a trade, to begin with.

• When should I get in?
• When should I be in?
• When should I be out?
• When should I get out?

And in some fashion, instead of the market normally being the case, have my demo running trades answer those questions for me. For my live account trades.

I’m just wondering if I can somehow see whether the demo running trades are successful and mimic that with the live account trades. And when the demo is not going according to plan then I should be out. Or maybe just to do the opposite.

Can I avoid some pitfalls by following the demo?

Can I learn when to leverage up?

Can I learn when to leverage down?

— Both accounts would have to be the exact same strategies.
— Both accounts would have to be on different time frames.

Seems most logical.

Man, I don’t know.

Maybe the only way I will find out these answers is if I practiced it (like I do with everything else).

I guess you can’t go wrong with trial and error.

I need rules. A structure in place.
That’s my first thoughts.

But then again, why don’t I just develop a “live account”. Set it all up in my excel sheets (like I do with the demo tracking account).
Trade that somehow alongside the demo account and see the results at every end-of-month.
Will it be too much and ineffective. Detrimental?
Or can I really mitigate a lot of risk because of it?

Journal, I think I went off the deep end.
But I have to say, it feels good to get this off my chest.

I did a lot of talking, huh.
Maybe I am a talker.
Well, if I kept this to myself, then maybe I’m not.

Let’s see if I can summarize, compartmentalize these things and maybe come up with some correct names.

What am I doing?
------ I want to know if I can utilize a demo account to enhance a live account.
------ Is trading both accounts alongside one another more profitable?
------ Is it beneficial or detrimental to follow a demo account?
------ What specific strategies would work and which wouldn’t? Why?

As I am thinking about this, it really seems like I’m wondering if there’s a way to follow a demo account. Like, that’s the bottom line.

Normally, I follow the market. How? Well, every EOD I note the prices. Track the trend. And position my trades according to the corresponding currency trends. That’s following the market. My trades are following the the trends of the market.

Is that an easy thing? No.
Am I successful in that? Not as much as I would like to be.
If the market does not follow the trend (or I should say what’s normal…Tommor’s territory) then my trades do not fair good. Negative resulting pips. And that’s not my fault. But over time I am counting on the market to end more positively than negatively. It’s banking on the principle that the end result will always turn out more trending than counter trending. Ok. That’s all about following the market.

What about following demo?

Let’s see.
My trading results in both positive and negative days. Positive days correlate with the trending days. Same goes for the opposite. But is there a way in which I can be in just the positive, trending days? Only? And not in the negative?

See. That’s what I’m talking about in following demo. Doing the positive and staying away from the negative. Mitigating the risk. Well, somehow, anyway.

Seems like I would need some kind of rules to follow. And those would be indicators of when to be in, and when to not be in. Or…when to leverage up and when to leverage down, all by the position sizing. Hmmm. Which one would be easier? Be in or out? Or go heavy or light?

Yeah man, it seems like I always come back to needing to try it out. Experience it first hand. Trial and error. Well, demo it! That’s what I do best anyway.

I’m also thinking that the principle of discretional trading has it’s place. As opposed to strictly mechanical. In this way, I’d definitely be using discretion when following what’s been happening in the demo results.

Alright Journal. I think I’ve talked enough.
I’m gonna explore this demo/live side by side trading methodology.
Looks like all I have to do is open up a “live account” tab in my excel. I simply trade the way I trade on demo. But somehow follow that when I place my “live” trades. And of course keep track of the account balance.

Hopefully at the end of each month I can make a determination of whether this is pure nonsense or something effective.

Thanks for listening Journal.
Let you know how this plays out.
Mike

[Mondeoman]

@MikeWolski

Why stop the demo?
(Now we’re getting somewhere)

Hi Mike,
As usual I have enjoyed reading your journey journal. I hope this contribution will help you cement that idea a little.

What you are describing, from a business flow perspective, is what programme writers (I think they call them developers today) have used since the beginning of programming. This goes way back to punch cards used in the Jacquard loom for weaving patterns in cloth. See link:

Programming patterns: the story of the Jacquard loom | Science and Industry...

Nowadays, software engineers have a tool called sandbox. It is a computer play area that is isolated from the production system that is in use by the real business. It’s an area they can test their next version of software in. As software companies release their new versions on the public, there is a series of events that precedes version release (or there should be). The developers move from the sandbox (or development environment) to another box of tricks called the test environment. This is built as closely as possible to the current production environment. When all tests are completed on the new software version in the test environment, management approval is sought to release the new version into production (for the masses to use). Get the testing programme wrong, and you can bankrupt a company.

I consider your idea to be directly aligned with this practice. Let’s say you have a live account that has resulted from completion in your demo account of a strategy and plan that has been proven to achieve your Forex objectives in backtesting. Why would you want to stop there. You would want to continue applying the same to your demo account to make sure your assumptions as you move to the future are still valid.

You would also be curious to continue to experiment with the indicators and entry / exit parameters you had chosen in the first version of your “production plan”. What if a change of entry/exit criteria resulted in halving your trades, but improved your edge from 60% to 65%. Would you not want to complete the testing programme (backtesting your next version) and decide to release it to your production system (live account?).

Best of luck, please continue the journal.

[MikeWolski]

Thanks for that Mondeoman!!
Very insightful.
Most of all, I appreciate the encouragement!

Many, many thanks!!!

[Bertzaaaa]

good description, I really like such stories, when a trader can spend his time on such a description, well done

[MikeWolski]

Good morning Journal.

Let’s see…what’s going on.

Well, this should be fun. A little continuation from all that nonsense I wrote up last weekend. Here’s what I was thinking, and here’s what I’ve done so far.

So.
No joke.
(In my mind)

I got $300,000 handed to me.
I’m all set. The biggest hurdle in the way of my goals and dreams is taken care of. Now it’s time to set on the journey that I’ve been waiting for. It is time. This is the business that I’ve been waiting for. Waiting on. Practicing. Struggling with. Writing about. But mostly, praying for.

The time has come. And now I have the means to get this started. Surely, that should be enough to begin with. It’s the capital they talk about. Seed money. Start up capital, to be more precise. I remember that from the course I took a couple years ago. Boots to Business program. It was a veterans course for learning how to start your own business. I learned a lot of things going through all that. It’s one thing to have dreams and visions of what you want to do. But you get a little closer to it when you are actually talking to other business owners about the venture. It seems to get more real when you are in a class learning the material.

Maybe this can come true.
It all starts out with an idea.
Draw up a good business plan on it.
Get the funding approved from somewhere.
Carry out the plan. Or in another words, start the business.

Like I said, I did learn a lot. In fact, I still have my business plan on a word document somewhere. I spent so much time on that, I remember. But going through the whole process was not all that pretty. Kind of bothersome. Cause all I was doing was trying to convince someone else that I could do this. I did get a chance to talk to many different business people about it. That was sort of fun. But, in the end, it was like I was a salesman. And I had something to sell you. Yeah, me. However I could prove it to you, on a piece of paper, that I could do this and that it will work was the goal. But of course, they would have to believe you and then give you that large sum of money. With strings attached, no doubt.

Yeah, going through that whole process bothered me. It was like begging. Pleading my case. You’re at the mercy of someone (or some entity) who just has a lot of money. Deep down inside, that just doesn’t feel right. But whatever I learned, I’m sure it helped for something. It was an experience. Pathetic might be a good word for that time. You know how hard it is to get funding approved for a trading business? Very. It’s not like trying to establish a coffee shop or something. Some dreams are just impossible to make come true. But I tried.

Anyway. Sorry about that.
I just got stuck in time there for a moment.
Where was I?

Ok. Well, what am I going to do with 300k?
Trust me, my mind has gone down this particular thought process many times before. But this time I’m not playing.

I know one thing. I’m not going to put all that in one trading account. Something just don’t feel right about having that much money at risk. I just don’t like the idea of all of it exposed in the market. Man…you never know what can happen. I just have to be a little smarter than that. So this is how I’m doing it.

That’s the total amount of equity I have. Ok. Great. It’s down. On paper (and on an excel sheet). But I will open up one trading account with 100k. Even though it all won’t be exposed in the market at one time, I tend to think that it will, just by the fact that a broker has it all. Know what I mean?

The next most important thing I noted was that I plan on withdrawing from my total line of equity at the end of every month. How much? Well, all I need is 3k. That’s like for real, also. That’s more than plenty for me to pay all my bills. Anything more would just go into savings.

So therefore, that’s my goal. Well, I should say, that is what’s gonna happen at the end of every month. And I think that’s important because it gives me some kind of reference point regarding how much I need to generate out of the market.

Well, 3k out of 100k is 3%. That’s all I’m shooting for. Regarding my trades. That’s it. I’ve done that before. Many, many times. Even though we’re not at the beginning of the month I think I have plenty of time to get the job done.

I have 3 trading strategies. Surely I’m not going to use the basket of trades that I like running in the market. But it does help me understand what’s happening when it is running. That will run, and continue to run, on my demo account.

I’m gonna have to revert back to some primitive style trading. Actually, that falls under what my trading strategy # 3 is (A.T. III). One shot. It’s where I’m like a lion. Waiting in the wings for the opportunity to present itself. Then I just pull the trigger on that one pair to trade. Quite boring. But I got to pay the bills.

I want to show my thought process on this. Cause it went down this past week. My very first live trade. It happened. And I have results.

I break out the pencil and paper and write down what I would want to see happen in the market. It’s the scenario that I’m looking for. It would be like the lion wanting to see a gazelle walk right on by in front of you, grazing on some grass like there’s no problems in the world. To be close enough to strike, with minimal risk and a most probable chance.

These are some of my notes.

I’m waiting for some risk-off scenario. I have cause to believe that it’s around. It’s in the air. I just don’t know when it’ll strike. But when it does come around, then what?
That leads me to be looking at either the JPY, CHF, USD. For strong.
But then for the weak currency I will be looking at those who are trending low. Which are: JPY, AUD, NZD, CAD.
Of course I can’t pick the JPY cause that’s one of the safe haven currencies above, regardless if they are trending low (which they are). Therefore, my field narrows down to one of the Comm currencies.

So, there are a few currency pairs to look at given all that criteria. But this is the one that jumps out to me.

CAD/JPY
For low.
On the weekly time frame, the price action looks promising. The trend is down. But the most recent price action retracement is moving higher. You know what they say…Sell the Rallies.

So. I got to wait for the opportunity to present itself on this pair.

The week unravels.
Monday comes and goes. EOD data shows nothing but the USD the strongest currency.

Can’t really tell about risk on or risk off that day. Was mixed. The day comes and goes and nothing tells me that I should do anything regarding trading. Even the EOD results.
Tuesday.

You don’t need to be a genius to see that it was a risk-on type day. Also, what do you think that CAD/JPY pair was doing that day? When you got the CAD moving the strongest and the JPY just about moving the weakest. This is a no brainer. I’m sitting out and still waiting.

Wednesday.

These are EOD results, but the point is, that during the day it was risk-on still happening. That was being carried over from the previous day.

Still. I’m not even thinking of a possible trade. To risky of an environment for me.

Thursday.
Now it’s getting interesting.
Let’s look at what the pair is up to. From the start of the week up through Thurs.

I’m not glued to the market during my days. Even though I’m on vacation still (as the kids are still off from school). I’ll check in with the broad market and currency’s from time to time. But this Thursday I started to notice a change in the air. Risk-off is coming.

Then I look at this chart, honestly for the first time this week. When I seen that very large hourly candle, I’m like, that’s a tell. Yeah, I might have been a couple hours late, but we’re not too far off away from that though. That one candle pretty much told me that I need to get into this trade. This is the opportunity I’ve been waiting for.

That triangle tell you exactly when and where I got in at. South of course.
This was 2:40 pm ET.

Ok. That’s nice. What’s the plan now?
Well, I wrote that stuff down. This is exactly what I wrote.

• Only settle for a profit
• Leave open to end of week (1 more day)
• Desire risk off to come back before the week closes

— If it does —

• Take some profit
• Ride it through till next week — If I’m in much profit

— If it doesn’t —

• Jump — Take the loss

Well, the EOD data for Thursday comes in (only like 2 hours later).

Well, to my surprise these results did show me that we had some risk-off this day. These numbers are quite low for how much a currency will travel in a day. Very low. Like 4% is normal for the strongest and for the weakest.

Ok. So. Some details of my trade.
Of course I broke out the Babypips
Position Size Calculator - BabyPips.com
Pip Value Calculator - BabyPips.com

Since I don’t play with stop losses, I guess I have to put something in. So I put in a 100 pip stop loss. Cause I wouldn’t want a trade to go much further than that much. And I use the figure 5% of how much I want to risk.
So, between those input numbers, I end up with 552,050 units of a position size.
That’ll be a $50 amount for every 1 pip movement of travel.
So that means if it moves 60 pips then that’ll equal $3,000. That’s what I’ll be looking for at the end of the month. That amount would be great to make as profit.

This just gives me some kind of idea of what to expect if I went with this unit size amount, that’s all. Surely I’m not gonna put on a stop loss. Or even a take profit. No way. I’m not going to box any trade in. Are you kidding me? I’ve learned some things over the years. That’s nonsense. That’s when you get trouble coming.
Cause the trade just won’t go the way you want it to.

All I know is that I’m going in with that amount of position size, and that’s it!
That’s all I need to know.
So. It’s placed. And let’s see what happens.
I have all month if I get into trouble.
But, as my plan is stated, I’m hoping for some profit before the week ends. Which will be very soon mind you.

This is what lunch time Friday looks like.

You better believe I’m happy. No worries here. So, I’m noticing that every hourly candle here in red is not retracing up much at all. That is telling me that there is some serious selling going on. And it doesn’t make sense for me to jump any time real soon. But surely before the day ends, oh, I’m out alright. Should be enough dough.

Then I jump a couple hours later.

See the triangle? I’m out at that point. And that is where the week ended at also. Guess what? Looks like I hit the bottom of that one. Now that’s lucky.

I probably need to remember about this, cause the way this was moving, there just might be much more to come next week. I got to remember to keep my eye on this pair. Though, I do not like watching individual pairs. nod,nod,nod

Well, how much did this produce?

Oh yeah. That’s close enough for me. You know how much I will be deducting from my account at the end of the month. But all I know is, that I am about there already!

No pressure.
I’m gonna take a nap.
Hopefully some gazelles will come on by before the month ends. But if they don’t want to, I’m not gonna sweat it. A couple dollars out of my 300k is not gonna hurt me.

But I got to tell ya.
I feel that I get great opportunities when I wait patiently as the week rolls out. I’m seeing what’s going on. And when things want to turn a certain way, well, it does seem to end up going that way. This is deja vue. I know I posted a very similar set up and situation some time ago. Like a couple months ago or something like that.

Man…I should probably make a complete strategy out of this.
Honestly.
In fact, I don’t think I ever had a losing scenario this way yet.

I just works.

Anyway. I wanted to tell the story.
And my live account trading is off to a wonderful start!
I guess this is the way I have to play this primitive trading style.
It’s not me. But, if I have to make the profits, well then, so be it. I’ll bite.
I’ll just keep my other demo accounts running and monitoring.

Alright Journal, thanks for listening.
Mike

[peterma]

@MikeWolski

Well, to my surprise these results did show me that we had some risk-off this day

Journal it’s good to see in live time how a trader can get a sense of risk by analysing price behaviour.

Maybe a lesson for us all how the market reacts to risk - specifically Japanese risk - Thursday/Friday sadly Japan reported a ‘natural disaster’ with ’ explosive growth’ in covid infection numbers.

Many learner FA traders figured that as Jpy negative - but the rule of the market has always been that in times of distress Japanese investors take money home thus Jpy buying.

Tell Mike good start and thnks for sharing.

[MikeWolski]

Good morning Journal.

Sorry Journal, just sitting here wondering what I want to talk about. And I think I got an idea. How about I kill two birds with one stone. Cause I want to do a thorough look at what the market has been up to lately. But also I want to do a normal walk-through of all my data collecting. I’m sure I probably have shown bits and pieces at various times, but I don’t think I ever went into depth into what I do.

Ok. Here we go.

I’m in the business of trading. Therefore I want to know my market. And since my market mostly has to do with relationships, I need to know how all things are relating to one another. Well, there are many different perspectives you can approach the market from, I happen to want to know what are the various time stamp versions.

Nothing means more to me than the daily result. Anything shorter than that means nothing to me. First off, the duration of my trades can run for days at a time. So why would I need to know how the intraday movement tracks? Well, there was a time when I collected the sessions results. That was in the beginning. In fact, there’s a thread in here showing how I kept track of that…like…every day. That was too much. Look. I was curious to know how things bent and turned inside of a day, but it’s a lot of work keeping track of that stuff. I think the thread was called something like Currency Dynamics.

Complete Currency Dynamics - Trading Discussion / Currencies - BabyPips.com Forex Trading Forum

There it is. I guess this is when most of my excel spreadsheet compiling methods started. Trust me, keeping track of the market via paper and pencil method took a very long time. But that’s how I started out. You wouldn’t believe how much time and effort I spent compiling all of the 8 currencies’ movements on paper. It was a lot. Hours and hours I spent every weekend, I remember. Even for me it gets exhausting. Thank goodness for excel. Whoever came up with the idea of excel is a genius. Honestly. I mean, I came from knowing nothing at all about excel, to now, needing that tool more than anything. In fact, I wouldn’t have a business if it wasn’t for excel. I guess it’s not all that smart to have such dependence on something. But it is what it is.

Ok. It’s time to get into what I do every EOD. And like I started out with, the daily time frame is my most important piece of data. But to the extent of where you can go with that is quite amazing. I’m about to show you.

This is a pic from my desktop.

For every EOD I’ll use 6 of those. I will compile all my daily numbers into that 2021 EOD numbers. A lot of stuff goes in there. I’m gonna show you. But then, after I get everything set into that, then I go right next door to the trading spreadsheet. This is where my trading metrics reside. All indicators, and documentation that I do regarding my trades will come from here. And then finally, next door to that is the historical data base. Well, it’ll be quite similar to all of what I store in the first one where all the EOD data resides, but this is the place I can go to for analysis purposes. Even for back testing. This is where a lot of work gets done. I just can’t be messing around with so many numbers at the place where I collect them all. There’s a time and a place for everything. Here’s where I can crunch, twist, play, formulate in different fashions all the historical data that I collect.

But then the 3 books directly underneath those 3 is my templets. I use these for efficiency purposes. Basically, it speeds up my time compiling the data. There are formulas set up in which all I have to do is copy and paste the new daily data. I’ve gotten smarter and lessened the amount of time that it takes to do it all, via these formulas.

Let’s move on. This is the first thing I compile. All of my %'s derive from this.

This is a birds eye view of probably the most important data I collect. Trust me, it doesn’t take long for me to get one day all filled in. Probably about 5 minutes. Max. I’m telling you, the power of excel is amazing. But all that up there is the core stuff. It’s broken down into the daily, weekly, monthly, quarterly, and yearly. I do want to go through and see what the latest is. And by that way, I’m gonna move on down the page and show it to you. Cause all of that data up there is just consolidated in a format below.

We got the %'s of how each currency has related against all of the other ones. So, when I look at this chart, this is what I’m thinking.

• European currency’s are having a good year. The GBP stronger than the EUR. And both of them are outdoing the USD. Actually by quite a bit. Therefore, I peg in my mind, that these 2 currencies are, and have been all year long, strong. This’ll probably continue on for the rest of the year, since this chart hasn’t changed much. I looked back, and the GBP has been on top since Feb. The EUR has been second since June. Before that the CAD was second. Yep, there was a time that the CAD was strong. Really strong. But not now.

I’m sorry I can’t show you the entire progression of the yearly perspective. Too long. But I got to tell you, it’s awesome to look back and see how they all changed against one another. But this is why I do this data compiling. Cause I just want to know. I always want to be able to go back and see what happened. I’m gonna take advantage of the fact that the market leaves behind footprints. Trust me.

• The USD. To date, they are positive. Sure, lately they’ve been on a bull streak. It wasn’t always like that this year. Remember the doom and gloom talk that every analyst jumped on? Well, they’re not now are they? Nope. That subject has subsided to none existence. Actually, the USD came out of the negative values around the middle of June. So, I’m gonna say that the USD has been having a good summer.

• Quick note about the CNY. Not that I trade them or anything, but I just got to know the sentiment. Comparison to the USD. They’re having a very good year against the Dollar. Just something to note, that’s all.

• The CAD was having a good year, but back at about break even now. They were second and being up in the mid 30%'s back in May. For most of that month they were dominating just below the GBP.

• The AUD, NZD are sitting negative on the year. Yeah, it’s not been going so well with them this year. I mean, you would think that after last year this would have been their year. Nope. Thanks to COVID lingering around, I think, they’re in check. Can’t get into positive territory. We very well might be in a new era. All the stock markets of the world shows a different story. New record highs. Like almost everyday! But this is strange. It has always been that when the risk on sentiment is thriving, these guys are strong also. Not this year. It’s different. And I need to know these things. This is the only way. By keeping track of 'em!

• The CHF and the JPY. Both safe havens. And this year they both have been the favorite to sell. You would think it was a risk-on type year, with these guys on the bottom. But not really. It kind of has been a risk-on year, but the European currencies being the most preferred to buy. And these 2 being the preferred ones to sell. Also to note how the CHF has not been following the EUR. What a divergence! This is just what I sock away in my mind about this year. That’s not so normal of a relationship.
  And the other thing I’m keeping in mind is regarding the JPY. All I’m doing is awaiting their lift off. I mean, they can’t stay this low forever, can they? I’m watching though. This is a real anomaly. A real extreme. But hey, if it’s a new world (cough COVID cough) then it’s a new world. I can accept that. But all I know is that if the JPY ever wants to get strong again, I want to be apart of it. I’m watching and waiting to catch that ride (if it’ll ever happen). And I’m not talking about a good couple days either. I’m talking like when everybody hops on board and rides it strong for a good length of time. I’ve seen it. I even have those days, weeks, months, documented. I can go back to the year '18. For anything daily. But hey, maybe this time is different. It’s a possibility. We’ll have to see. In the meantime, when, if, they want to turn -80%'s and higher, I’ll be in. Strong.

Ok. That’s enough year talk.
How about the latest quarter.

We’re in the middle of the 3rd quarter. And the biggest thing that catches my eye is the CHF. They’ve started out the quarter being the strongest. I even remember changing their stated trend from bear to bull. In July they were in a bear trend. In Aug I switched them to bull trend. That quarterly chart should explain why. But then look at what happens as the month of Aug unravels. They (in pink) dip down quite a bit. Good thing I am not too hasty on changing my trend determinations too quickly. Cause look what’s been happening lately. It was only in this past week that they took on strength. Like…they remembered…their strong this quarter. And that’s what happened. Went back to their bull trend. Now their the top dog. It only takes one week. This last week belonged to them.

Also, I am paying attention to the other safe haven currencies this quarter. USD, JPY. They are not the currencies that are being sold off. It’s the Comms that are. You should be able to see that 2 of the Comms (AUD,CAD) are the weakest by a lot. No comparison. But it’s a shame the NZD couldn’t come up with a rate hike. Thanks to one person who got COVID? Are you kidding me? Well, they could have changed the course of the Comms, I think, if they would have hiked their rates. But no. We have a new era, new world. The Comms are gonna be sold more than bought.

Monthly perspective.

See. And this is my point exactly. The market seen it coming. The NZD had a rate hike coming. That was due on the 18th of this month. It would have been at the very beginning of that EOD data. See how the market was buying them up? That’s the lead up. Not only them but the AUD was getting bought up also. And then what happened? Well, one person (thanks a lot) got COVID on that Tuesday the 17th. That’s when the word got out. Took the wind out of their sails, huh? And who was on the other end of that trade? The mighty USD. Actually, all the safe havens benefitted from that this past week. Those 3 took turns getting bought up.

But concerning the European currencies, they seem to skate right on by, not too much affected. Their not being sold off because of this turn of events. Remember, they’re strong this year. I don’t have that data, up above, for nothing! The market knows. And so do I.

Well, this is definitely a turn of events. The market wanted to go by way of the risk on currencies. I bet you a lot of money got stuck with their pants down. And the Comm currencies was not trending high, prior to this month. What was, then, the prevailing trend in the market before the NZD getting strong in this month of Aug?

Well, we can look at the quarterly perspective. July, Aug, Sep. What was I just explaining up above? The European currencies (EUR,GBP,CHF) all are very strong. Them mixed in with a touch of safe haven flow. We could say the majors are dominating. The USD has been having good days. The JPY has been trying to come up off the floor with some good days, not consistently though. But I would say the most telling thing is that the market went back to the CHF buying. I talked about that already. I think that’s the most correct answer to the question of where the market was heading, now that the Comms can’t convince everybody of buying them (thanks a lot NZD).

So. We know that some traders got caught with their pants down. Lost some money. But now what? I think it’s possible that they just might wait another week, after things have settled down, and try again. I don’t know…do they have money apportioned and all ready to go for the Comms? Like…will they think those currency’s are at a discount now? Cause, boy, that NZD took a real hit. Hundreds of pips lost. Honestly. Maybe they will get in on the discounted prices and ride up a long haul. I don’t know, but I think it could be possible. I’m watching for that scenario.

Well, that’s the latest narrative that I have for what’s going on in the market. Those are a lot of my thoughts. I will only trade if I see a scenario play out (on my live acct). And the one scenario I just told you I’m looking out for. The NZD to grow some legs. If they do this coming week, towards the end of the week, I’m gonna get in. See, I accept the fact that I don’t know what’s gonna happen. I’m not going to think I know something. But what I can do is envision a scenario to take place. Hey, if the NZD is a lost cause, then so be it. Won’t bother me any. I won’t touch them unless I see something big. I got to see some multiple days of buying. Also the AUD to follow. Until then, I’m content to sit on the sidelines and see market move. And do what I do best. Collect the daily data.

So yeah, let’s get back to that. I guess I got to go quite quickly. Cause we haven’t even scratched the surface on what I do on a daily basis.

This is a break down of each pairs daily pip totals.

Basically, I compile each of the pairs results (above) into the complete currency daily results (below). That’ll be in that middle table. The bottom table is just the way how I can keep a running total for the month. The total running amount of pips is in black. That’s for the month.

So. For one example. The USD (in white). On Friday their net amount of pips added up against each currency came out to be +1. That puts their monthly running total at 1272. You can compare each currency’s aggregate total amount to each other. The USD has netted the most pips. Meanwhile the CAD has netted the least amount of pips, -1496. I mean, if I wanted to, I could look up above and diagnose any single currency pair if I wanted to. I can go back to any data (through 2018) and see any particular day’s results. And the thing is, I’ll forever have this data available for anything I would want to do. Back testing. Or any kind of diagnosis I can possibly want.

But I prefer knowing what each currency’s aggregate amounts are. Not any single pair. But, in order for me to know what the aggregate amount is, I need to go through all of the pairs. That’s all.

I am able to chart the running pips. This is for the year running. This is the USD.
And this is how I determine what each currency trend is. It’s this one chart. You can’t tell me the USD is in nothing other than in a bull market trend. I guess I put it into the yearly perspective, but what’s going on in the near term. And actually, take a look at the USD. Latest. They hit the yearly running high point. And it all started when they broke out of that longer running bear run. They carved out a good floor, then blasted their way on up. And ever since, it’s been bullish.

That’s nice.

Here’s my latest set of data that I collect. It’s the individual pairs. Pip amounts.

I need to start with that table.

Then I formulate that into this nice daily line up.

You only need to be concerned with the first and second (middle) columns. That’s forever etched into history. With the amount of pips that pair ended up with. My trading results (for my basket of trades) resides there on the right column. Oh, and the totals are on the bottom. Boy, did my basket trades did awesome this week. Since my basket of trades (16 pairs) trade alongside what the trend is, this is a good proxy of how much the market trended. Huge numbers this week! Each day my trades resulted in higher and higher amounts. Look. Monday = 463 pips. And then culminating on Thursday with +951 pips. Friday was such a small amount of retracement. That kind of tells me we just might continue on with this trend. We’ll see.

But more to the point. Here, I am collecting the hierarchy of each and every currency pair, in order of strength down to weakness. It’s their order. Can you imagine how this can facilitate any kind of back testing I would want to do? I mean, I have the answers of how each currency faired against one another. The best fairing currency pair this week went to the USD/CAD. That result was +180 pips. Big day. And guess what…I had that in my basket of trades. Therefore, it was a 180 pip win for me (right column).

But I get a volatility picture here also. The bigger the numbers the more volatility occurred that day. The middle column, on the bottom, it’s totaled. And just compare Thursday to Friday. 1919 pips were totally available on Thurs compared to only 517 pips totally available on Fri. The market moved on Thurs, but not Fri. That’s all.

Well, that’s the extent of what I do every EOD. Trust me, to get all those numbers in place, doesn’t take long. Probably 15 min max. I just spend more time on the other 2 groups of excel books, shown above. The trading one is important. I do most of my thinking when I’m in there.

But, all in all, I could spend about 30 minutes for a minimum if I had other real life stuff to attend to. But that mostly doesn’t happen. I like to spend an hour on my numbers. 45 minutes is probably the average amount of time each day that I compile, look at, think about, wrap my head around, and strategize. All of that comes from that data that I collect.

It’s fun!
It’s my life.
I’ve been doing this, strongly, ever since 2018. That’s this excel, daily, compiling. It took different forms and have changed over the years, but what I showed you is the latest. Hopefully I won’t be changing anything. Cause I really, really like what I currently got.

Well, there’s some insight for ya.
Maybe one of these days I’ll show you the other two excel books that I do daily.

Or maybe I won’t. Cause it’s probably no one’s else’s cup of tea.

It’s definitely my cup of tea.
Keeps my mind going.
Plus…if anyone wants to know what’s going on in the market, I have the answers.

Alright Journal.
Thanks for listening.
Been fun. Thank you.
Mike

[MikeWolski]

Good morning Journal.

Well, once again, I’m sitting here for awhile, wondering what I’m gonna type about. Look. You know how I like to type away. It is fun. Very releasing. But I do need something to talk about. Well. I usually have to remember the whole point of this, which is, what’s going on with me? And I guess there’s always something going on.

Yeah man, it’s the old “Back to work, back to school” scenario, for me. That was a catch phrase I used to say to my kids growing up. I said it a million times to them. It meant that it was time for me to go back to work and them to go back to school. But it all was work the same. When the weekend is over, it’s what we have to get ready to do. And yet I never knew, back then, that I would end up saying this to myself, and myself only, on a regular basis.

They all might be out of school and on their own, but I never knew that I would end up being a school bus driver. But, it’s that time again. I’ve been driving lately. Even though school hasn’t officially started yet (which it’s starting this week on Tues) I’ve had to do some trips. Last weekend and this weekend (last night). It’s the high school band trips. They go with the football team on away games and do their thing on the field, the half time show. Boy, do I like being apart of all that. It brings back fond memories, from when I was their age all through school. I was a musician.

So yeah, I’ve dusted off my bus and been putting on a little bit of miles lately. Last week was the start of my private school kids run also. That is a short run for me in the morning time. Actually, it’s the run squeezed in between my high school kids and my elementary kids’ runs. So technically I have 3 separate runs for the morning time. But only 2 in the afternoon (no private school kids in the p.m.).

Anyway, this week, everybody will be onboard. It is back to work, back to school. Vacation time over. Time to get back into the normal routine of things. Early morning runs up to lunch time. Then a 2 - 3 hour afternoon break time. Then I got the afternoon runs, which will then bring me home right at about 5 o’clock. Then it’s time for my 5pm numbers. There’s nothing I enjoy more than to see what happened in the market. See how they all relate to one another. Oh yeah, I showed you all that stuff last weekend. Well, most of all that I do. I couldn’t finish. But you got the idea.

Don’t get me wrong, I do look over my numbers, and the market during that lull in time that I have during the middle of the day. I can’t help it. I’m just attracted to the business. Whether it’s something going on in the market, or on my excel spreadsheets, it’s just enjoyable.

That’s all good and nice.
But the question I want to pose to myself is this.
What did I accomplish during the summer? Regarding my business?

Well, let’s see. I got to think about this. Cause I want to remember what I was thinking going into this time. Did I have any plans or goals as such?

(much time lapsing)

I went into the summer without having a big agenda. I mean, that’s kind of unusual for me, cause I really like it when I have a big project or something to accomplish. But no. I do remember, as always, that I want to be productive and make some progress for the business. However I can take advantage of the time that I have, I usually do. But, I think for a minimum, I did take advantage of the morning time. Many, many times have I woken up around the 3 o’clock hour. My alarm clock is still set for 4. If I go that late, then it’s sleeping in. But that’s my quiet time. It’s when I read. Really, that’s the only time when it’s completely silent. And I guess I can actually say, that I do get a lot of work done then. It’s called praying. Honestly, there’s nothing more productive that I can do than that.

But, I have looked back on the journal here and seen what I’ve been up to. I really tripped up during the beginning of July. What a lesson. Oh well, I guess I did learn something.

And then I produced some new indicators. The COT report was one of them. It was fun wrapping my head all around that. Sure. Was fun rereading our old thread. Good memories. But I guess it was for that time, only. Things just move on, that’s all.

I did embark on another indicator. I collected this years data on it. I’m sorry I didn’t come on in here and expound on it. Cause I don’t know if I’m gonna go much further on it. What got in the way was the normality indicator. Now I like that very much. I’ll get to that in a moment. But the one indicator that I started to explore was volume. I kind of think, somehow, that there’s a benefit of knowing what volume is happening. I got some books on the subject. I haven’t yet, but maybe I will dust them off and see if I should go somewhere with this. I do think paying attention to volume might be of some help. But I’m not sure yet.

Check this out.

In short, got every pairs daily volume results. Then on the right their daily avg’s.
On the bottom, the daily total. Then under that is what’s the daily total avg.
I guess I want to know what the volume was for the day compared to what’s average. I don’t know. Do I like this stuff just because it’s numbers? I don’t know, maybe. But then again, that’s why I’m in this business to begin with. Cause it’s all about numbers, I think. You just got to know which ones are the important ones. Right? Maybe I just need to couple these numbers with something else. I’m not all that sure yet. But, I am keeping track of them, as you can see. Well, I got all of the YTD. That most bottom RUN AVG is from this entire year.

Anyway. This summer, thanks to some good guy out there, normality is the subject I find extremely important. Bottom line, it’s a tool. It’s information. An insight into knowing what the market is up to. It’s one of the dynamics that I’m gonna continually be aware of. It’s not really a trading indicator, but I’m finding that I’m able to see more of the particular pairs this way. Cause I’m used to, and prefer, to see the market more aggregately than anything else. But, I am a trader though. And this just might help me find that one pair that I should trade. We’ll see how it all fits into the grand scheme of things. Know what I mean?

This is fun stuff.
I think that would be a good summary of how my summer went. I’m enjoying the process of learning what I need to learn. Discovering more and more things. Experiencing all of what I need to experience. As long as He’s with me and I’m with Him, I’m sure all will work out fine.

Yeah, I might not have the amount of time anymore, for such exploration. But I think I have enough to keep me busy.

This week I will be having my end of month summary to do. For Aug. It should be a lot better than last months. Boy. I don’t want to go through that again. Now that was a bad month (July). Hard lesson I had to learn then. This month was so much more pleasant. I just find it very important to do these months summary’s. That’s all.

And yeah, I do remember that, going into September every year, is when things are gonna start flying, in the market. I mean, that is when all of the big dogs come back to work. Vacation time is over, even with them. And we’re gonna start seeing some money fly. I just hope I can follow along, with my trading.

Alright Journal, thanks for listening.
Mike

[MikeWolski]

Good morning Journal.

Wow. I just got done finishing up my Aug summary’s.

I have 2 for each month. A trading results one (strickly for all trading results), and a broad summary (write up on what I’ve been up to that month).

I’m very happy how things are progressing. There’s no way I can show you the details. Too many. But lot’s going on. There is one thing that I got to get better at though. I need to be better prepared for when the end of the month comes. Cause this is taking way too long to get through. Looking back on the entire month can get exhausting. I have taken notes along the way. It’s just that I have to take better notes. It shouldn’t take like 2 hours to do this. I’m gonna have to work on this.

I am proud of myself for doing all this in the first place. This just might be the first year that I will have an entire year of detailed month by month records. I am happy about this. I think I will celebrate all of this at the years end. I should be able to give a quick and precise summary of each month. That should be fun. I think I do that every end of year anyway, but at least this time I will be able to see all of what happened relatively quickly.

Let’s see. What do I want to bring to light about this months summary?

I made a lot of money. More than normal. Probably made up for the very bad month of July. Well, ok then. Let me give a dollar amount. Let’s compare.

• Aug totals - from my demo accounts
• 4 closed trades
• $ 2,057.09 from 4 separate 10k trading accounts
• +5.92%, +7.25%, 0.0%, +7.04%
• Live account - One trade = +2.78%
• Total of 5 trades closed in this month

— July totals - from my demo

• -$1,836 from closed trades - one demo account
• 2 unclosed trades still running (demo)

Well, I’ll tell you the most interesting thing out of all this.
I’ve been thinking about this. And I really think I’m on to something.
This is the principle.

If you stay in a trade long enough, it’ll eventually end in the positive.

Boy do I want to talk about this.
But let me first explain what happened with this one particular trade.

First off, I need to explain my Anchor Trade III strategy.
One pair traded.
With only one rule.
It must result in a positive.

NZD/CHF — Long
Opened on July 6th.
Why?
The RBNZ was supposed to hike interest rates, remember? So, I was getting in on the run up to that interest rate decision. It was early on in the week. I thought it was a fore gone conclusion.

But, do you remember what happened? It was the next day, one day before the rate hike day, that one person got COVID and they locked down. Well, that threw the whole interest rate hike thing. Instead of hiking, they kept things the same.

Don’t forget my one, and only, rule.

The result.
Wasn’t good.

And now, there’s only one thing to do. Sit and wait this out.
This is a big reason why I had not such a good month of July. Let’s see what the end of the month looks like.

Yep. Not good.
Even lower.

Well, the good side of things is this.
IT’S NOT CLOSED OUT YET.

I have not lost anything. Technically speaking.
Realize this.
It’s only when you close out a trade that accounts get squared off. Not beforehand.
This is in my favor.
Am I down over 200 pips?
Well, yeah.
I stick to my rules. I mean, rule. Cause there’s only one rule.

Well, another month goes by.
What is happening in the meantime?
Well, I can’t trade any other trades until this finished it’s course.
I do nothing. That’s all.

Let’s fast forward to the end of Aug.

Had some hope going into Aug. Look. It went up pretty much up to where I bought it at. That was the bought up, leading up to Aug’s NFP Friday. But then look what happened. It went all the way back down. EVEN FURTHER.

You know what I’m doing, this whole time.
Nothing.
Praying.
Actually, just not paying attention to it anymore. There’s nothing I can do anyway.
But I did get a lot of hope coming into the end of this month, as you see there.

Remember my one and only rule.
Well, into this month of Sep, it looks better and better.

And there it is. Yeah, I started paying attention to it, closely, on that last day. Cause that’s the first time it went up to my break even point. As soon as I seen it being up 2 pips from where I bought it at, I took profit. Sure, I should’ve waited till end of day, I would’ve been up way much more. But for as long as this ride took…I’m not playing this game anymore.

I successfully exited out of this trade.

And for the record, this was my 8th successful trade. In a row.
This was the longest awaited trade. 41 days. Man.

Any lessons here?
Yes. And this is what I want to talk about.

It’s a principle that I think no one thinks about. But is the biggest reason why trades fail.

When you put time constraints on a trade, chances are you’re probably gonna lose. We all know that new traders don’t have the patience and strength to wait out trades. It’s the psychological battle that inevitably will take you out.

Time.

What a factor.

When we get out of a trade, it can only be boiled down to 2 things.

• Where?
  or
• When?

You have a lot more options when you consider the When factor.

The Where will only result in 2 options. Either positive or negative. It can’t be anything else. That’s all you got.

So, in effect, what am I doing?
I’m making the rule that I will only get out when it’s in the positive.
It’s just a matter of time before it eventually gets there.

Should I care how many trades I take?
No. I don’t care at all. I think that’s a stumbling block in the market.

Actually, the more constraints and conditions you put on a trade, the harder and harder it’s gonna be to come on out in the positive. That’s what I think.

If you think you can expect the market to act, and do something, in a certain amount of time, you’re gonna be wrong. Guaranteed.

I don’t know how else to say this.
This is a principle.
It’s something extremely important to realize. And understand.
Our market is all about time. When we do something is of utmost importance. And if we think we can operate on our time frame, as opposed to the markets time frame, then we’re gonna be in trouble.

This is a lesson.
A lesson that every trader will eventually come to realize. Whether they know it or not.
Who thinks of this stuff? Who brings all this to the forefront of his brain?
And yet, it’s so simple. Be patient.
That’ll cut down on the learning curve.

I’ve proved that I can do this (being patient).
I just hope that I can continually operate in this way, that’s all.

Well Journal, I got to run.
Sorry for all that.
Where did the time go?
Well, thanks for listening.
Mike

[MikeWolski]

Good morning Journal.

Let’s see. What am I gonna talk about?

Well, what I really want to do is make my way around the market. I haven’t done this in a while. This is my playground area where I can do this. Not only is this fun, but I kind of need to put things into the proper perspective in my brain. I honestly think the market is changing and I need talk about it. Look. I could be wrong. Very wrong. But I’m wanting to know. The future will come upon us and this is the place that I can always go back to and see in hindsight where I was wrong, in my thinking. And then again, if I’m correct about the future of things, I will be able to come back in here and see the whole before and after unraveling.

How else will I learn things, anyway?

Let’s go down the line. I’ll start with the most important and work my way down.

The USD.
This is where we were last weekend at this time.

The USD aggregate tell. What I see here is an uptrend changing to a downtrend. I think a top was formed, and down it’s coming. The 1000 line I’m calling support broken. This was what I said. And believe. That most recent fall, I believe says it all.

What happened this week?

This was up through Wednesday. The USD got strong. It retraced the losses. Ok. That makes all kind of sense. I’m not gonna change my mind just because of a little strength. That’s how the market works. But what I’m looking at is that 1000 line again. I believe that’s now a resistance level (previously support). And now we’ve come back up to it. Just look back at that 1000 line. How many times does it bounce on here? Too many, which tells me that it’s support or resistance. It’s all the same laws that are used on any other chart. I mean hey, if it goes higher, then I know I’m wrong. If it bounces, then my theory will be correct. Which is a change from an uptrend to a downtrend. Well, I believe it so much so that I’m gonna trade this. As I stated somewhere else, this was another indicator that shouted at me for an opportunity. Let’s see how the rest of the week went (2 days).

Thursday went down (second to last straight line). Then Friday went back up half of that. But this resistance level sure did hold the line. So my theory is still intact.
Which is, the USD on a change of trend.

I could be wrong. Always. And will always have that going through my mind. But I have to keep with the theory until it changes. For instance, that support level at the 500 line could very well hold and continue the USD for a continuation of the uptrend. Absolutely. But we haven’t gotten there yet. Until then though, I’m calling a downtrend for the USD. Because of that drop. That’s nasty! I don’t know, you got to read everything else on the chart, not just support and resistance levels. How about these dynamics of how price moves. Sure does look like moving down with a purpose, to me.

We’ll see though. I just think that this bull run that the USD had going ever since Jun 1st has run it’s course. That’s all. Plus, given the fundamentals surrounding the USA, that only makes sense to me. Who in their right mind throws money around like that? I mean, come on. That’ll be the day the UK does something like that. I mean, yeah, I know that the world is watching. And even doing the same thing, helicopter money flying. But this is ridiculous. We’re gonna pay for it. The laws of physics, finance, and everything else will eventually come to roost. We just don’t know when.

Sorry.

This is my macro sentiment concerning the USD. I’m calling the present time the USD in a downtrend. And when, or if, this changes, then so be it. I’ll be wrong. Won’t be the first time. I’ll admit it. I’ll look back on this and find out where I went wrong. And I’ll learn something by it. But this is my indicator. And I believe in it.

Well, I want to put to use this other indicator I’m starting to use. Here’s a shot of the volume that took place this week.

USD pairs. Daily results. With each pairs daily avg (on the left side). And the USD as a whole on the bottom. That daily avg is on the bottom left corner. And all I’m gonna do is compare what happened to it’s average. I just care about being more than it’s avg.

• Monday — Aggregate = below avg day. And every pair below it’s avg.
• Tuesday — Aggregate = below avg day.
  2 pairs above their average. USD/CHF, and the USD/CAD.
• Wednesday — Aggregate = above avg day.
  4 pairs above avg (USD/CHF, AUD/USD, NZD/USD, USD/CAD). 3 pairs below avg (EUR/USD, GBP/USD, USD/JPY).
• Thursday — Aggregate = above avg day.
  6 pairs above avg (EUR/USD,GBP/USD, USD/CHF, AUD/USD, NZD/USD, USD/CAD). 1 pair below avg (USD/JPY).
• Friday — Aggregate = below avg.
  2 pairs above avg (NZD/USD, USD/CAD). 5 pairs below avg (EUR/USD,GBP/USD,USD/CHF,USD/JPY,AUD/USD).

I’ll tell you what I think is most interesting.
— The USD/CAD pair.

• 4 days above avg. The most of every pair. Monday was a holiday, or else it probably would be 5.

Let’s remember what happened with the USD this week. Aggregately speaking.
It rose up the entire first half of the week, through Wed. It was more of less avg volume. Then mid week the volume became greater. Well then, that was when the change, or turn, occurred. Then the volume decreased towards the end. Maybe I should write down these possible volume principles.

More volatility occurs during trend turns.
Less volatility occurs during trend flowing.

I don’t know. We’ll have to see if those should stand, as principles. I just don’t want to forget about this possibility, that’s all.

But the rest of the week, I feel, went to the Comms. Most of the above volume went to those pairs. And my theory of more risk on, in the market, just might be true.

I wonder whether this is true or not.

Risk-on results in more volatility.
Risk-off results in less volatility.

I have no idea. But I want to keep this in mind. I guess it could go either way.
Greed = more volatility?
Fear = more volatility?
Trend = more volatility?
Changing trends = more volatility?

This is what I’m out to answer.
Alright, let’s move on.
I’m done talking.

The EUR.

The trend is up. Long bias. Can’t be anything else. Cause they are not depreciating. It’s been that way all year long. And frankly, I’m getting tired of saying this. Cause the whole point of this is, to buy the EUR, not sell. Simple as that.

No changes are being signaled.

The GBP.

Technically speaking, their a bull bias. Uptrend in tact. But I got to say. It just might be wavering lately. Not making any higher highs. Leveling out. Took a dip this past week. But bounced right back in it. Modestly that is. So, the trend is up, but not as strong as it used to be, as it has been all year long.

The CHF.

Well, along with the USD, I called this a change in trend last weekend at this time. And the way it went this week, confirms the theory. It bounced at some support, and we need to see where it goes from here. I knew this was premature to call a change in trend, but I had to go with it. So far, so good. A double top formed.

Maybe I didn’t officially make the call last week, in here anyway. But I made these trend changes. Look.

I go a week at a time. I won’t change trends mid week.

Moving on.
The JPY.

The trend is low. Sure, they tried to fool you with looking like making a floor for a good many months there. But nope. The market is keeping with the prevailing down trend that’s been in place the entire year. Simple as that. And for the record, I never called a change in trend, until it would reach that -8000 level line. It never did. Got to see it first, right?

Now it’s gonna get interesting.

The AUD.

I did change their trend from low to high last weekend. But they took quite a dive this week. And I am calling that -3000 line the resistance / support level. And that’s where they’re at right now. Sure, a bit under it at the present moment. But I’m calling where we are at the inflection point. Surely this coming week will be the tell. Will we have the resistance level turn support (-3000 line)?

That’s what I think.
But the market will tell me the truth.
If I have to change back their bull trend to bear, then so be it. But I got to see it first.

The NZD is some kind of factor, also. Little brother just might have something to say.

Uptrend. They broke up and over the -1500 line. I was calling that resistance.
But what divergence to the AUD, huh? But this is the reason why I think the Comms will take over the bias, broadly speaking. It is this chart. The NZD is strong. Their trend has finally changed. Up to this point anyway. It’s been a long time coming. Their down trend has been ever since the end of Feb. So. Now’s a good time for it. Maybe it’ll go all the way to the end of the year. We’ll have to see.

Look. It’s just what I’m seeing right now. Can they go to where they started the year from? That would be from the 0 line. It only takes about 2 weeks for them to consume 1000 pips. Got plenty of time before the end of the year for that to be accomplished. No problem buddy. Let’s just see what happens.

The CAD.

The down trend continues. And I won’t call anything different till this chart reaches above the 0 line, minimum. Man…I just don’t know what happened to the CAD. It’s not because of the oil, is it? That’s been a mostly bullish market. And being the favored trading partner to the US, that shouldn’t have given them reason to fall apart like that. So therefore, the only reason I see is from their own internal fundamentals. They rely so much on their export business that maybe it’s the supply chain issues. I just don’t know. But something’s got to be behind all that. Maybe even their own central bank, who knows. All I know is, it’s a trend. And that’s what we like the most…a trend to continue. Maybe that’s what they want, a devalued CAD. Cause we all know that that is not always a bad thing! In fact, that’ll help with their trade competition.

Anyway.

That’s all of them.

I’m not going to change any of these trends. The only one in question is the AUD. That’s gonna be settled this coming week.

And if I see a rising AUD, then that’ll be my cue for a trade. Long AUD.
But then short who?
Well, who’s trending low?
I showed you all their stated trends above.

There’s 4 of them.

• USD
• CHF
• JPY
• CAD

Ok fine then. I’ll go through these with you.
Let’s see. From the top.

AUD/USD.
I first look at the weekly chart.

Nicely looking. Those 2 weeks of gains tell me the buyers have been in town. And a nice retracement last week brings it back to a cheaper place. Actually, is it sitting on some kind of level now. If it’s a resistance level (downtrend in place), then it should go back on down. But if it turned into a support level, then a change in trend would occur. Well, that’s what I’m thinking is going to happen.

My trading plan consists of waiting till a minimum of Wed to see the direction. So, I’m not gonna chance anything until around then. But how about the daily chart.

There’s, easily, a hundred pips up to that most recent swing high. Anything is tradable in between now and that point. No doubt. But I got to see how the week goes first.

Next.
AUD/CHF.

Kind of looks the same as the previous. Weekly. But then again, this might be sitting up higher than where the support level is at. I think it’s at .6650 area. And my o my are they 2 pretty big green candles. Telling me some good buying been going on there. No wicks. Right?

Daily chart.

Well, this latest swing high reaches higher than the previous swing high. Encouraging. Telling me that it can go higher. Maybe the next real resistance level is at the .6910 area. So basically, I think it has room to go, if it wants. So again, promising. I kind of like this better than against the USD.

Next.
AUD/JPY.
Weekly.

Same thing. Came back down to the level (one of them). That retracement surely makes for a good place to get in, if it starts to move up. But look at the Daily chart.

I think anything between 81.00 & 82.00 looks good. But that daily wick spike up looks good. Sure, someone would say that it’s a hammer (or something like that). Which signifies a move down. I don’t necessarily agree. At all. I think price tested the waters up there. And could possibly go back up there. If I was a day trader, this would be on my radar, for sure. But again, I have to see how the week is playing out first.

Time.
It’s the biggest factor in trading.

Not where.
But that happens to be what I’m talking about right now. Is where.
Time is more important to me though.

One more.
AUD/CAD.

This definitely is at a major level. It might stay around here for a time, who knows. If, somehow, it takes off from around here, then I’d say the trend would be strong. Either way. North…a definite change in trend. South…a continuation. But I think it’ll hang out around here for a while. Someone likes it here. We’ll have to see.

Daily.

I don’t see a whole lot. Other than the fact of the 20 about to cross over the 50 soon. As an indicator, that should mean something. But in regards to price action, I got nothing.

Zoomed out.

I don’t know. I’m not a fan. Price action doesn’t show me anything. Ok. .9540 area is where it’ll shoot for next, if it wants to go high. 200 pips away.

Honestly, I’m afraid to trade the CAD. Let’s just say that there’s better chances with many other pairs out there than these guys. I mean, are they one of the Comms currencies? Sometimes they are, sometimes they aren’t. Their just not that cut and dry anymore (like they used to be).

Ok. So. That’ll be 3 pairs on my radar then.
See. This is my preparation for the week.
Couple things.

• Risk on to make a real come back.
• Need to see the market flow in the first 3 days of the week.
• Have my 3 pairs that I’m particularly watching.

This about sums up my trading for the week.
If all hell breaks loose, and we have the safe havens take over, then so be it.
I don’t mind being wrong whatsoever. It’s just that I need a certain scenario to play out. If I don’t see it, then I won’t trade. Simple as that.

And hey, if I have to change all my trends back to where they were 2 weeks ago, then I will. I’ve been wrong before, I will be wrong again. But if I am, I will get to the bottom of why. Maybe the market doesn’t know the breadth of how dire the world’s situation really is. And then go back to some big time USD buying, JPY buying, and CHF. Could happen, but I got to see it first, though.

I follow.
Not speculate.

Alright Journal, I’m done babbling.
Sorry for all that nonsense.
Thanks for listening though.
Mike

[Glastonburyk]

Very cool content mate following!

[MikeWolski]

Good morning Journal.

Let’s do some diagnosing.

Speaking of that. I have to tell ya Journal, I’m excited about this book I just got yesterday. Man o man, do I like this book. It’s been quite awhile since I read a good one on the markets.

Geopolitical Alpha.
Marko Papic

It was just written last year. These are best kind of books I like. Up to date and current with the events. But, it’s coming from the mind of a chief strategist. How he thinks and his framework of a model. He laid this out early. So, by the end of chapter 2 you got this foundation of a way of thinking about how to view what’s going on in the world.

It kind of reminds me of George Soros and his thinking that made him famous in his battle with the Bank of England, back in the 90’s. It’s that forward thinking that he was convicted about. It’s kind of like that. It’s how a great mind thinks.

Basically, he has a framework laid out. It’s like a guideline to follow when it comes to realizing what’s really important in the arena of geopolitics, and what’s not so important also. I would say their like principles. I guess that every chief analyst would have some kind of principles in which they follow. Cause they have to make decisions on where their money is gonna go. And you don’t want to be wrong on assumptions regarding world leaders. Right?

It definitely has to do with macro thinking on what’s going on in the world today. There’s pitfalls you don’t want to fall trap to. If your thinking isn’t right, then the money that follows could be at serious risk.

I’m thoroughly enjoying this book. Getting insights on an intelligent mind is priceless. And it’s stuff I hope to remember when I make up my own mind on important world happenings. That’s all.

Ok.
Sorry about that.
Where was I?

Oh yeah, I want to wrap my mind around what’s going on in the world of currency’s.

I’m gonna try to get more of a complete picture this time. It’s the before, during, and after perspective. I’m gonna go down the line, as usual, but incorporate these these points.

The USD.

@MikeWolski

Thursday went down (second to last straight line). Then Friday went back up half of that. But this resistance level sure did hold the line. So my theory is still intact.
Which is, the USD on a change of trend.

I’m starting where we last left off. Last weekend at this time. I’m calling for a continuation of this down trend. Cause I’m seeing the 1000 line holding as resistance. Well then, what happened this week?

In the first 3 days of the week, not much. The USD (white) only is showing more negative numbers. Actually, Wed’s EOD they are the most sold currency. Ok, so then. Looking like the down trend is gonna keep.

Moving on.
Thursday, EOD.

Bam, there it is. The USD comes in strong. The most bought up currency (Isn’t that just like the market? Going from one extreme to the next, the very next day). And look at the amount. Quite purposeful. The only other moving currency that day was the CHF. But that’s another story.

Well, let’s go to the chart and see how this looks on my big board.

Well, of course. It comes all the way up to this resistance level. Again. Sure. Why not? Well then, we got one more day to go in the week. Remember, we play the week as a whole. Nothing more important than that, in my mind.

I definitely am thinking that this is gonna come on back down. Know why? Cause it has happened so many times before. I’m not worried. Although I am trading something other than the USD. I had my sites on the AUD/CHF pair (broke even on that).

Let’s see what happened on Friday.

Ok. It happened. The USD came in as the most bought currency that day. Again!
And as I have there underneath, the weeks cumulative totals, the USD was the most bought up currency for the week. All that happened in those last 2 days. And while we’re at it, the JPY ended the week second most bought currency. Which points to a more safe haven buying bias for the week. Except the CHF. Something happened to them. I think the SNB didn’t want to be apart of it. They diverged away from the safe havens and the EUR. I’m telling you, they don’t want to be strong.

Anyway. Back to the USD.
Where does this leave us now?
Well, let’s go back to the big board again.

I remember seeing this on Friday late. I can’t believe it. Of course, I’m sitting here in denial. I surely thought that the USD was on a down trend. Good thing I didn’t bet on it. But, it’s time to reassess.

The question is…what’s the bias for the USD now?

This is one day into it. Very possibly Monday can come along and correct all this and come back under the resistance level. And then it can continue on with the down trend. Sure. It’s possible. A one off.

Or. We have a continuation from the up trend that the USD has been on ever since the beginning of June. I could have been wrong and should have called the 500 gridline the support level that needed broken. Cause surely it’s plausible that the big climb up just went back down 100%. That can happen in a trend.

Technically speaking, above the 1000 line is bullish and below that line is bearish. Simple as that. And as we sit, the USD is bullish. We’ll just have to see whether what happened on Friday was a one-off or whether that’s really the direction in which it wants to go in. Up. Strong. See? The market is not always cut and dry. Looks like we need a little more time. Probably through to the end of the month.

Go ahead ask me.
Will I change my trend determination, for them?

I have to.
Remember, I follow.
This would be the difference between speculating and following. It doesn’t make sense for me to switch their trend determination just yet. But I have to. I don’t want to. Look. If the market didn’t want the USD to be getting this strong, then I don’t think it would have made these last 2 days in a row to be the most bought up currency. There would have been some profit taking on Friday. But nope. It kept going straight up. No stopping.

This is called following.
Now, if all this changes next week, then so be it.
I will follow and change things back again. Oh well.

Let’s move on.
The EUR.
This is what we were looking at coming into this week.

@MikeWolski

The EUR.

The trend is up. Long bias. Can’t be anything else. Cause they are not depreciating. It’s been that way all year long. And frankly, I’m getting tired of saying this. Cause the whole point of this is, to buy the EUR, not sell. Simple as that.

And now the latest.

Still on the up climb. Surely not falling.
It’s the same old story. No changes to the bullishness story they’ve been on since March 17th. I wish all of them were this easy, of a trend tract.

What am I doing with all this?
Do you know what I’m doing?
Simply, determining the direction.

Getting the direction correct is one of the important matters in trading.
It’s not the most important factor though.

Time is the most important factor.
When to get in, and when to get out, is most important.

If you were trading the EUR for short you would have had a much tougher time than if you were trading them long. The bias is for long.

Moving on.
The GBP.

@MikeWolski

Technically speaking, their a bull bias. Uptrend in tact. But I got to say. It just might be wavering lately. Not making any higher highs. Leveling out. Took a dip this past week. But bounced right back in it. Modestly that is. So, the trend is up, but not as strong as it used to be, as it has been all year long.

Are they wavering?
Let’s see what happened this week.

Nope. Their not wavering. Their bullish trend is continuing. This week pulled them up even a little farther. And it’s the same as the EUR. All year, heading in one direction, up.

Let’s get into something more interesting.
The CHF.
Where were we?

@MikeWolski

The CHF.

Well, along with the USD, I called this a change in trend last weekend at this time. And the way it went this week, confirms the theory. It bounced at some support, and we need to see where it goes from here. I knew this was premature to call a change in trend, but I had to go with it. So far, so good. A double top formed.

You should know that they didn’t have a good week. How’s the big board look now?

The newly formed down trend is definitely more confirmed this week. I wish the USD was this easy to see. But these guys are not having anything to do with the safe haven buying that’s been going on lately. Right? Nope. Can’t lump them in with that. But they’ve been contributing to how mixed the market has been lately. It just doesn’t make sense. What can we do though? This is how it is.

How about the other safe haven.
JPY.

@MikeWolski

The trend is low. Sure, they tried to fool you with looking like making a floor for a good many months there. But nope. The market is keeping with the prevailing down trend that’s been in place the entire year. Simple as that.

This weeks results.

Yes, it is a safe haven currency. And has climbed back up some. But surely not enough to change it’s bias. It’s low. What a long way to go to make a change in this direction. This just tells me that the JPY is not the currency to go with for a safe haven buy. Not this year anyway. I would have to start seeing some straight up lines from here to start going long the Yen. But not until that time though. No way.

How about the AUD.
Last week.

@MikeWolski

The AUD.

I did change their trend from low to high last weekend. But they took quite a dive this week. And I am calling that -3000 line the resistance / support level. And that’s where they’re at right now. Sure, a bit under it at the present moment. But I’m calling where we are at the inflection point. Surely this coming week will be the tell. Will we have the resistance level turn support (-3000 line)?

Ok. So. I got the AUD on a high bias now. I changed their trend from low to high. That’s my reasoning. And this week will tell me whether I’m wrong, or not.
Let’s look.

Ok. Well. Here’s another one I have to change. This is not trending high anymore. It’s not. What can I do. This broke down under the -3000 gridline level. This has continued on with their previously long down trend. The risk on sentiment that I thought would be coming just didn’t. Here’s proof. But it does coincide with what the USD is doing. The opposite. The USD is going back up and the AUD is going back down.

This is currently what’s going on. And until it changes, it is what it is.

The NZD.

@MikeWolski

Uptrend. They broke up and over the -1500 line. I was calling that resistance.
But what divergence to the AUD, huh? But this is the reason why I think the Comms will take over the bias, broadly speaking. It is this chart. The NZD is strong. Their trend has finally changed. Up to this point anyway. It’s been a long time coming. Their down trend has been ever since the end of Feb. So. Now’s a good time for it. Maybe it’ll go all the way to the end of the year. We’ll have to see.

This should be interesting. Did they follow in the steps of the AUD this week?
Let’s see.

No. They didn’t. The NZD is still on their up trend. This is not falling.
It’s all relative. Look up above. They did come in at -3.56% for the week (3rd from last). That does look pretty bad. In that context. But, in this context, it’s a different story. Their not retracing all those gains made previously. Right? I mean, their elevated. I’m not altering this stuff.

And I guess I will continue with my previous statement. It’s this chart that is still telling me that risk on is still in the air. Somewhere. Just don’t know when it’ll happen. And if not, then these guys got to start falling much more. It’s just what I see. That’s all.

Last but not least.
The CAD.

@MikeWolski

The CAD.

The down trend continues. And I won’t call anything different till this chart reaches above the 0 line, minimum.

Where did they go this week?

Their trend continues.
Again. Some of these currency’s trend direction is easier to see. Nothing should have told you to buy the CAD ever since their trend turned south back at the start of June. That’s if you’re a trend follower.

Ok. Looks like I got all of them.
Now what?
Well, I got some changes to make.

Got the stated trends above. There’s 2 I have to change.
And that’ll change the basket of trades that I want running in the market. It’s the demo dynamic that I need to see carry out in the market. High trend against low trend. Those are listed below. 16 pairs running perpetually in the market.

That’s nice. I know.

Anyway.
Boy Journal, I got to tell ya. I’m finding very good stuff regarding my volume indicator. I can’t go into it now, but soon enough, I think it’ll be a very helpful indicator for me.

Ok. I’ll bite.
Just a sample of what I got so far.
But first off, this is what I’m dealing with.

I get this from Barchart.
Basically, looks like my numbers are the amount of contracts traded in a day. And it looks like it’s coming from the futures market. All of these pairs.

But check this out. The current month of Sep.

These are all the pairs. But arranged in the manner to see what the currency as a whole is doing. The sum of all it’s parts. Well, that is what’s boxed in. Going across.
Let’s look at these. The USD. Everyday this month, their 7 USD pairs’ volume amount has resulted in below average. Cause it’s in red.

The daily average volume amount is counted from Jan 2020 to the present.
I’m averaging these volume’s by the days of the week.
There’s 89 Mondays since Jan '20 to the present. So all of my Monday volume results will be specific to Monday’s only. Same goes for every other day of the week.

Like I said, and believe, time is a crucial factor. So what happens in a specific day of the week should be counted as such. Apples to apples and oranges to oranges.

Getting back to the table above.
All of the currency’s except one has resulted in below average days this month so far. Can you see which currency is above average?
The NZD. In green.
They’ve had 7 above average days and 6 below average days.
I think this is telling. I think it’s telling me there’s above activity happening with them.
And what do we know about what’s going on with the NZD?
Well, they changed their trend recently. It’s all up above.
This is another reason why I think that the risk on sentiment hasn’t really disappeared. It’s hidden. But there. What else explains a higher than normal volume amount?

I’m just scratching the surface. Cause I want to start getting into which specific pairs are trading higher than normal volume. And maybe that can possibly lead me to some trading decisions. We’ll have to see.

This is fun stuff.

Thanks for listening Journal.
Mike