Very cool content mate following!
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.
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.
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.
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?
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.
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.
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.
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.
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
1 Like
Good morning Journal.
Let’s see, what’s going on?
Well, honestly, a lot of the same thing.
Everyday comes and goes. I compile the EOD numbers. See where things stand. And nine times out of ten I’m sitting out on the sidelines, concerning trading that is.
Seems kind of boring.
But it’s not.
What I should be asking is “What’s God doing?”
Yeah, I do ask myself that all the time. Let me see, when it comes to life, a whole lot. I mean, I see what he’s doing everywhere I go and whatever I’m doing. No doubt. Man…don’t get me started. I got story after story, lesson after lesson, on what He’s showing me. I could be typing here for a very long time if I went with this topic. And I would enjoy it very much.
But.
He is with me on this stuff also. I’m not alone here. Absolutely not. I mean, sometimes I do wonder where this passion has come from. Every since my inception into this business, it’s been full on for me. You just feel it down into the core of yourself. You just know it’s you. It’s like I found myself. After 45 years of being on this planet, when you get to the revelation of this, it’s a very exciting thing. Finding yourself is very fulfilling. Of course, that was 9 years ago. But every step of the way has been inexpressibly wonderful.
Good times. Bad times.
Challenging.
Puzzling.
Interesting.
Humbling.
But God is God. He made me this way. And if I don’t see that it’s His work being done within me, then it’s all for nothing. In fact, nothing in life means anything if you can’t see Him in it. Cause when it’s all said and done with, all (real) purpose in life comes from Him. And there’s nothing better. I know it. And believe it.
“Delight yourself also in the Lord, and He shall give you the desires of your heart”.
That’s nice.
So.
Let me ask the question again.
What’s God doing? With me.
Well, let’s see.
I guess I have to think about this.
It’s not about the trades. Cause that’s where my mind goes first. Am I winning more? Or losing more? Is it about my trading?
No.
Sure, those are aspects of the business. There’s a ton of things that are important in running a trading business. But I think He’s doing more important things…
I’m learning how to walk with Him.
That’s putting it broadly.
But, just like in everything in life, it’s knowing how to live by faith.
Even concerning the market.
What attitude should I have concerning what’s going on in the world today?
How should I be looking at the data, that I collect?
What kind of mindset does He want me to have concerning my business?
What’s important and what’s not so important?
What does He think?
Well, I believe those are all answerable questions. I mean, that’s what it means to walk with Him. It’s the journey. And if it isn’t with Him, then it means nothing. I know I can’t go wrong with following Him. Absolutely not. God’s not so shallow as to think it’s all about winning or losing trades. As long as I’m on His wavelength, I know I’m gonna be successful. But, I have to say, this is the journey I’m on. It’s called His will be done. Simple as that. Nothing is more exciting!
I’m sorry Journal. But I have no other outlet to talk about this stuff. But…I got to tell you. You know what keeps me going? He gave me a personal word. It was a couple years ago. It was so profound that I wrote it on my wall in the office. It’s still up, today. But, He told me this. “I am closer to you than you think”.
Do you know what that does to a person?
Now that is inexpressible. There are no words that come close.
Now.
Back on down to the earth.
And the market.
I do have to say that I’m very intrigued about this newly found indicator that I’ve been following. Journal, I’ve been telling you about this. This is extremely interesting to me. And it’s continuing.
Volume.
I’m compiling the back data on this, but it’s taking some time. I have the month of Sep and Aug all done. Let me show you what I think is interesting.
Here’s the month of Aug.
On each column going down is a day that shows all of the pairs. The numbers are the volume of shares or contracts traded that day. All of the boxed up numbers are the aggregate for each currency. It’s simply all of their 7 pairs added up. And then each volume number is colored. Red for under the avg. Green for above the avg. The average is for each particular day. That’s opposed to adding them all up and totaling them. I believe that each day of the week should be counted under it’s own. Monday through Friday is the only possible groupings. So, if it’s a Monday, then it’ll be counted and averaged to all of the Monday’s, only, since 2020. I think we’re at around 91 of every day of the week, to date. The same goes with the other particular days of the week. But, I’m using this era. The new era that we now live in. So you should realize that the average shot up really high last year during the spring time. And therefore, what’s considered average would be a bit higher than previous years and days.
Well, you got a shot of every pair during Aug. The totals are on the bottom. Those totals are everybody (28 pairs). And then they are compared to what the avg is. Again, the average is by their particular days. But you should be able to see that Aug 19th was the only day that the market summed higher than the average. And then just look above and you can see the break down of which pairs were higher than their particular averages. Also you can see and compare each currency’s aggregate. During this day it was only the Comms that ended up above their average (AUD,NZD,CAD).
Look. I understand that we need to look at the months by themselves. Aug is during the summer time. Not a whole lot going on when money is away on vacation. Like I said, I’m just starting on the data collecting. This is gonna take some time. It’s just what I have so far.
Let’s look at what happened this month.
It’s quite different.
Much more green around huh. Well, split this into two separate times. 1st part up through the 17th. During this time the market, as a whole, did not produce anything above average. But, there was one currency that did, aggregately. See which one?
The NZD. Well, do you remember me telling you a couple weeks ago how the NZD was rising up to the top? They were. Their longer term normality numbers did spike up during this time. I think there’s a correlation with this. This is all I got up to this point.
But look at the rest of the month. We got volatility. Above average volume. Both for a lot of currency’s as a whole (aggregate) and with the individual pairs. But, to look at the market as a whole, there was only 2 days that the market volume ended below what it’s average is (for that particular day). That’ll be the 23rd and the 24th.
Well, there’s a lot of information to be had. I’ll tell you what I think.
- The market really moved. Is this because of the end of month, and quarter?
- No currency has higher aggregate volume than the NZD.
- The CHF pairs against the Comms are the biggest volume pairs.
- The very last day resulted in every single pair above their average. Actually, this was Oct 1st.
As I stated before, I’m looking to answer the questions of:
— Does it mean anything whether they have an above average day or not?
— Are there correlations between something trending and higher than avg volume?
— Are there correlations between normal trending days and volume?
— Is higher volume a good thing or not?
— Is there another way to measure volume other than above or below avg?
Look. If I can get only one question answered it would be this…
- Are there any correlations between what’s trending and volume?
And I’m talking about after the fact here. Yes. I said it. I see this as a lagging indicator. It would be nice to understand why a certain amount of volume occurs. I don’t know…maybe less volume means something also. Does this indicate the path of least resistance and that’s the direction the market really wants to go in? I don’t know, something like that.
I will be looking for these answers. So. Between the back testing, and the forward testing numbers that I will run will, hopefully, shed some light on the subject. Maybe there is no difference in the amounts of volume that come out. If this stuff is no better than random results, then I would like to know that also.
But I think knowing the direction the market wants to go in is very beneficial. If this will help me with that, then I’ll keep it. If not, then so be it. I don’t want to be weighed down with nonsense stuff.
Alright Journal.
That’s all I got on the subject, so far.
Keep you posted on anything enlightening.
Thanks for listening.
Mike
2 Likes
Good morning Journal.
Let’s see. I got to wrap my head around what’s going on in the market.
I know it’s been a few weeks, but I think it’s a good time now. Hopefully the dust has settled after that last quarter, and a running start to this one.
I need to walk my way through this.
The USD.
I divided up the year by the quarters. Since we’re starting the last one, I wanted to see what it all looked like. Not that things go by that time table, but was curious. And I see that we ended this last quarter on a high. Actually, the highest point of this year. So. I’ll just put out what I think are the important facts.
- The USD is presently in a bull market. The bias is long.
- The 1000 line is the dividing point. Above = bull. Below = bear. Lower than the 500 line is definitely a bear trend.
I stole this idea from the BabyPips data. It is another perspective to keep in mind.
Well, this is a closer view of their run up to the end of the quarter. They have been correcting their recent gains (pips). Totally normal. But. Is this their last hurrah? Or just a rest before more of a continuation of their bull trend?
Let’s throw in some recent comparison.
Top table is the monthly running. Bottom is single day results.
Well, NFP Friday just occurred. Oh, that’s right. It wasn’t a good report. Below expectations. And well, you can see the run up to it. Looks like the market was seeing it coming. Cause their dragging bottom, along with the Yen.
Those are some small numbers. I mean, only Friday was anywhere close to normal (for the top and bottom anyway). How about a look at the volume. Maybe I can get some kind of clues to what’s going on.
The volume has been higher than normal, for most days. On the very bottom shows the market as a whole. It’s total is compared to what is the average for that particular day. Green is above it’s avg. Red is below. And those red days are ending up quite close. It’s all relative. But you can’t argue that the market is moving. We’ve definitely moved into a higher volume environment than what we were in.
Back to the USD. It looks like if their aggregate volume (boxed up row) is above average, then the market as a whole ends up above also. Makes sense. But that wasn’t the case on Friday. They ended up above, but the market ended below. Kind of close though. Maybe that means nothing.
I’m still puzzled how the NZD ends up being above average, like, everyday. I’ll have to save this till later.
What else do I need to know about the USD?
Here’s my normality perspective. At the present time all 7 USD pairs are trending strong, on their 20/50 EMA indicator. You can see that on Thursday of this week it changed to every pair (7). It was 6 pairs for some time. Guess who was the only other currency stronger at that time? The NZD. Not anymore. Let’s look at that pair.
The NZD/USD.
Well, I was gonna post a pic of their chart that matches these numbers. You know, the ones with the lines and such. But I just can’t do it. I’m not gonna do what everyone else does. I don’t even like to look at them. The answers are not there. I’m sorry. If they were, I think I would have discovered them by now. Cause, for every which way someone could point out the direction it should go in, I can point out the opposite direction it could go just as well, technically speaking. It’s pointless in my mind. I’m not buying it. I guess I’m changing. I honestly don’t like looking at charts anymore (I haven’t for quite awhile now). Again. The answers are not there. That’s my belief.
The whole point up there is just that the USD has gotten stronger than the NZD. That’s it. And I can see by how much. And when. This is the only pair out of the seven that comes the closest, therefore you would think it would be this one that would change back if the USD got weaker again. That’s all. This is the only important information I will get out of that perspective.
How about this.
The big difference between what’s counted is that on the running %'s, the CNY is counted among the participants. They are not counted when I add up the pip count. I’m not gonna count the CNY pips. Those are different. Even different from the JPY way. Now the % count is a great common denominator. But that’ll make 9 players for the %, and 8 players for the pips. Their charts are not gonna match up.
And it’s not looking too much different in regards to what the trend should be. Like one saying bullish and the other saying bearish. No. But they are different. See the bottom one? This last spike higher hit the years top for the third time now. Ok. I’ll note that. But the top one shows making higher swing highs. Is different. I know.
Journal…don’t tell me to go back and make it all equal (8 currency pip results against each other & 8 currency % results against each other). That would answer the question of which method should be relied upon more. Sounds like a lot of work. I did start out in '18 with the %'s of the 8 currency’s against each other. But in '19 I wanted to include China. That took a lot of work to undo. I don’t want to do that again. Plus, I need to keep my eye on what the CNY is up to. Therefore it’s worth it.
Alright. I’m done with the USD.
Who’s next on my radar?
Well, after what happened this week, I think I need to look more closely at the CAD.
They got strong. How strong?
Boy, when they turn the bend, they sure turn the bend alright.
Well, I was counting them bull if they went above the 0 line, on the pip count. Yep. That happened this week. Therefore, at the open, I will count them as trending high. I got to switch my basket of trades that I let run, on demo. This is how you follow. I didn’t know this was gonna take place cause you can see that they can have some monster up days. Just don’t know how long it’ll last though. Well, they broke up and out of that down trend they’ve been in since, we’ll call it, the beginning of June.
Ok. Change in trend. You don’t get any bigger changes than that.
Here’s a shorter term look at when it all happened.
- 20th - 24th = +760 net pips
- 27th - 1st = +462 net pips
- 4th - 8th = +993 net pips
This is how I see it. No one could have called the bottom there around the 20th, 21st. The week of the 20th - 24th was the very first time we seen the light of day. Cause remember, their still on their bear trend at this time. All they did was retrace a lot of losses then. Then the next week, 27th to the 1st was nothing but profit taking for end of month and quarter. We didn’t even know at this time that their bear market would have changed. It’s only what happened this past week that told us, technically, their on a change in trend. And their employment report surely agreed with that sentiment. The market always seems to know what’s going to happen shortly. I call it the run-up.
Now, you got to know that the market participants, probably right now, are looking at this and thinking that there needs to be a retracement from all those pips. Like those counter trend traders. It’s an opportunity here, right? Cause believe me, not everyone is looking at this and thinking of jumping in on the change in trend. You got those who wait for break and retest action. Right? They want confirmation before they put their money on the line.
We just don’t know how strong of a trend this is gonna be for them. Believe me, these days, anything can happen. But it’s always best to follow along. And also I think the fundamentals line up with that. Just look at Mr. Oil. Their employment numbers. And what’s going on with the US also. The clue is, is nothing but higher at this time.
Will they be the new top dog?
Well, let’s see what’s been going on this year so far.
Yeah, you definitely can’t count them out.
Check out what their highest looked like earlier in the year.
They do have it in them. The rest of the year could be very interesting. And as I look at that table, look at the divergence between them and the USD back then. The CAD was way stronger than them and even the Comm brothers.
They have it in them.
Speaking of the GBP, let’s look at them. I think they might be falling apart. I don’t know.
Well, the lower % chart shows a bleaker picture. Even the top is not making higher highs, that’s for sure.
Yeah, I got to say, it’s not looking good for them. Look at that last real steep dip they did at the end of last month. Looks quite nasty. That might be a sign of things to come. Let’s see exactly what kind of drop that took.
Well, it was pretty bad. But they sure do know how to bounce back fairly quickly.
I don’t know…seems like their struggling. Let’s see. Where would I count them falling into bear market territory?
On my chart here, if I see them (their aggregate pip count) fall below that Sep 3rd low point, then I will consider them in a bear market.
Hey…it’s been a long year. They’ve been bullish every since the year started. I kind of think their exhausted. All I’m doing is watching, that’s all. Watching and following. What I do is in response to what the market does. But in the meantime, they still are in a bull trend. When that changes, if it does, then I’ll be the first to tell you.
What else.
Can’t go without looking at what the Comm brothers are doing. Right?
Let’s see. The AUD was supposed to be getting stronger. Well they had a good week, anyway.
Now this is tough. It goes like this. Big bear trend for most of the year. Hit bottom around the middle of Aug. Then makes a break out. This occurred for the rest of Aug and into Sep. But then it drops back into the previous bear trend area. As it falls during this time, during September, you’re not thinking it turned bull yet. It’s more of a continuation and a remembrance of where they were. Bear. But now we got a climb going on. So…technically speaking…they would still be in their previous bear trend until it would attain that previous swing high level. Well, on the % chart, we would pretty much be at that level now. Got a ways to go on the pip chart.
Of course. It’s always the case. We need more time to play out, for this one.
Are they trying to carve out a big bottom here? Seems like it. It just takes time for it to be revealed.
And now the NZD.
This isn’t gonna be pretty.
Yeah, they took a drop also. I guess not as bad as it could be. Cause they didn’t fully retrace their previous gains. Well, it is similar to the AUD. We need more time to play out. It could go either way.
Not even the interest rate hike can boost this up. That’s bearish if you ask me. I just don’t understand that, at all. Unless it’s a delayed sort of thing, it doesn’t make sense to me. But, time is the biggest factor. We’ll have to see if the money will eventually find that trade. The interest rate differential trade, that is.
Let’s take a closer look.
They raised their interest rate on Oct 6th.
Ok. That’s nice.
I guess that’s what the market said also.
I didn’t put up the AUD close up. Here they are.
Wow. Well, they were similar up until Sep 3rd. Then begins the divergence. See it there? You have to compare those 2 charts.
Why don’t I just put them on one.
That’s what we got, concerning the Comm brothers.
Specifically —
- AUD — Bear trend. Until the pip count over takes the previous swing high.
- NZD — Bear trend. Until the pip count climbs above the previous swing high.
Which, for both of them, is where they were at on Sep 3rd.
That’s all I got.
All I know is the CAD is moving. We’ll have to see what kind of affect that has on the USD. We should be seeing this soon.
Remember that the volume is on the high side.
That means something should happen.
Alright Journal, thanks for listening.
Mike
2 Likes
Good morning Journal.
Let’s see. Where we gonna go today?
Well, since I have the opportunity to, we can talk about my trading. There’s a lot of good and bad about it. Trust me, I have a lot of work to do on this, but I just might be on to something.
Look. This is nothing new, to you Journal. It’s just that, I can’t come on in here every weekend and talk about my trade. Cause most of the time it’s nothing but bad news.
Let me start from the beginning, again.
This is how I trade.
Specifically, this is called my Anchor Trade III trade.
It’s simple.
First off…the whole entire point of me trading in this particular way is to prove whether I can trade. See. I keep a record of every trade that I’ve placed. And that is what’s gonna be the proof. If someone comes up to me and asks, “Are you a good trader? Or are you a good talker?” I need to be able to prove it. I need evidence.
In actuality, I really don’t care what people think. In fact, if I can get away with it, I wouldn’t want to be talking to people, period. I mean, in a sense. Sure, we all need some kind of interaction. No doubt. But I’m talking about the need to confide in people. Have them to think a certain way about me. Proving whatever kind of skills I can have. It’s the human way. That’s all. It’s how we all relate to one another. We’re always trying to make ourselves look a certain way.
I don’t care one bit about that. What I do care about, more so, is whether I’m a true trader. There’s a lot that goes into what being a true trader really means. Trust me, a lot. But here I’m talking about whether I can come up with a strategy in which a trade will end up in the positive. Most of the time. Actually, all of the time (you’ll see why I am saying that shortly). And to be able to prove it over and over again. Basically, I just want to know for myself. In all honesty. Deep down inside. I want to see how I did it all on paper.
All that nonsense is what brings me to this particular strategy.
And here it is.
— Trading one pair.
— One rule only. The trade must result in the positive.
— No constraints on the trade. No stop losses. No take profits. No time table.
How easy and simple is that?
I’ve been on this journey for a little while now. I’ve documented many of these trades in this journal. And it’s continues.
— I started this Proof of Concept on April 29th
— I have 13 documented successful trades (no negative resulting trades)
— That’s one trade at a time (never had 2 trades open at one time)
— 2 trades resulted in break even
— I’m currently on the 14th trade - is running still
There’s good and bad to it. But before I get to those points I’ll show you what the present situation is for me on this current running trade.
Journal, I’m sure you remember the last trade I had. I gave you the scoop on that one. It was quite a story. Well, let’s just say that this is a carbon copy of that.
From the beginning.
NZD/USD long.
Opened this up on Sep 23rd.
This is the second time I had in mind to trade the RBNZ rate decision. And this is the second time I failed. Miserably. I’m thinking I’m gonna remember this now, moving forward. In any case, it seems like I’m missing something. I’m going after a currency that the market is not!
This is what I was looking at when I started on it.
Daily time frame. Basically, looking back on this price action, we had a break up and over some pretty good resistance level. And it has come back down now to retest it. Ok. That’s your standard run-of-the-mill scenario. Don’t forget. Previously they had another interest rate decision that was supposed to be hiked. But at the last minute, someone contracted COVID, and the deal was off. I told you all about that story before. And here we go again. This time all the analysts are agreeing that their gonna hike rates. The date is Oct 6th. Ok. We got some time. So look up there. What makes more sense than to see this fractal story move higher and higher? That’s all I see. I mean, even that last candle that I just got in at was a nice big green candle. See the triangle of where I got in at?
Well, you know the market. It doesn’t go the way you think it’s going to.
Let’s just see what the end of the month looks like.
Oh, I’m losing alright. But what can I do…
Nothing.
But, I’m not all that worried. We still have some time before the interest rate decision day. It’s the 6th. Like a week away. We’ll just have to see how it plays out.
And here it is. The day of.
This is that EOD. The 6th.
It doesn’t make sense. Whatsoever.
Since when does hiking rates end up lower? Especially with the NZD. I’ve never seen them go low during a time like this. They actually raised rates! And I don’t think anyone got COVID this time.
This doesn’t make sense.
Well, according to my plan, I got to wait this out. It’s the strategy.
I don’t trade any other trades. I don’t touch this in any way. Position sizing, or anything. All I’m doing is playing the time game.
Let’s fast forward this to the present time.
Well, I feel better (of course I do…I’m typing about it).
But look how long it took to get back up there. Like, only 3 candles. That didn’t take long, huh?
Well, at the present time, I’m still in it. Haven’t jumped yet.
I’m getting tired of getting back up to break even. But there’s other things going on though. Basically, I think we got more to go here.
Look. I’m not a fan of charts. Seriously. But to play the silly game, it would go like this. I’m not gonna be drawing any kind of lines. But if you look back, it’s evident that in the middle of the whole chart is a consolidation zone (as mentioned earlier). Well, I kind of think we’re gonna get back to continuing on with higher swing highs from this area. We just took a bit of a detour. It took longer, that’s all. I mean, during the time that the decision day was, this looks like a swing low. A higher swing low that is. So this looks like it’s on it’s way up from here. That’s all.
Ok. I’ll give you an example of why I think chart reading is complete nonsense.
Just look back to the beginning of this chart. It’s much higher isn’t it? Well, all we got here (just right of middle) is just another lower swing high. Right? And we can easily have a turn around about where we presently are now. And it would coincide with longer term swing highs.
My whole point is, for whatever argument you give for one way, I’ll give you the opposite argument for the other way. Just as plausible.
Chart reading is for the birds. I’m not buying it. I’m not gonna be held hostage to this nonsense. This is probably one of the biggest deceiving things about trading. Therefore, I don’t rely, depend, think about, or trust charts.
Sure, it’s a tool. Along with many other tools, of course. I’ve just put that quite low on my list of things that I think are important. That’s all.
Sorry about that rant. It’s just upsetting to me.
It’s just what happens after you get burned time and time again. Got to learn.
That’s precisely what I’m doing.
Anyway.
Back to some important things I want to mention about my trading strategy.
This has been what’s been going through mind about it.
— PROS —
- Ending positively every time is a wonderful thing.
- When I’m in a trade, my account is frozen. I only trade one trade at a time.
- No time constraints on a trade pays off. It always has, up to this point.
- I can get away with trading bigger position sizing this way.
- I have not lost until the trade is over.
— CONS —
- Inability to seize any other opportunities that might be occurring, due to being on the sidelines.
- Drawdowns can get quite sizeable, before a trade is closed out.
- Some end of months (bottom line) don’t look so good, on the account.
Well, there it is. The good and the bad.
I don’t know…at this point…can I say that I can trade?
Do I have enough time with this strategy to be able to say that it works?
If not, how many trades will I need to tell me that it works?
Will there be a point in which something will tell me that it doesn’t work?
What would that be? A trade in which will never come back to my break even point?
Anything’s possible.
I’ve conveyed this before. Probably too many times. I’m sorry.
But I do believe in this.
The more constraints you put on a trade, the more detrimental it’ll be.
Especially when it comes to TIME.
I think trading is all about time. That’s probably why they say that you need patience as a trader. What’s patience anyway?
— Having the ability to wait things out.
I just love things like this. Seriously.
Somethings in life are so simple, and yet humans find it so hard. (Reminds me about the subject of faith).
You want money. You want it now. You’re not gonna get that.
You want to be right. You want to be now. You’re not gonna get that.
You want a trade to work out in a certain way. You’re not gonna get that.
A real trader comes to realize this.
I’m still trying to get it myself.
Alright Journal, I’m done with all that nonsense.
Thanks for listening.
Mike
3 Likes
Hi Mike,
I am posting a link to a guy who does stuff in an Excel spreadsheet. This is unrelated to your thread, but you came into my mind many times whilst I was watching this 1 hr 15 minute video.
I have just read your latest post to your journal. I care about you and I care about your tenacity to get to the truth. So if this is of no use to you please just let me know and I will not comment any further.
I feel in some respects we are very similar, but maybe from different starting points. I also want to be able to tell myself that I can master trading, and like you I don’t really care what anyone thinks of me (except my wife and family who sometimes say I work far too hard for my own good).
Anyway, the Excel stuff is something I am very passionate about but have not used much in the past with respect to Forex. I intend to do a lot more of that shortly. Meantime it was great to see the author casually explain how he took .csv data feeds into his spreadsheet, made some simple formulas expressing averages (six period averages on 15 minute data for all 8 currencies in scope of majors and crosses), and then went on to explain how he wrote formulas to represent a simple oscillator (short average period of 6 and long average period of 20 - I think).
Please browse through to see if any of these ideas give you any light bulbs in your quest.
I am concerned about your most recent concentration on one pair, one trade at a time, and most particularly no stop loss. There are a couple of reasons.
The first and main reason is that although it is unlikely that a currency pair can ever go to zero, it could happen that a currency becomes worth a tenth or a hundredth of its value. In that case, if your trade is leveraged, you could end up with a margin call (or your demo account reducing to zero in a black swan event).
The second reason, and this relates to a piece of work I am doing at this link where I have agreed to test a backtesting software, is that of the rollover or swap cost. In real trading, this is a daily cost that is added or subtracted from the trader account depending on the differential interest rates of both currencies in the pair. These days, those interest rates are very small compared with in the past ,but they do count, and if the demo account does not allow for putting in a swap cost element, your results over a large number of trading days may be very far out of line with reality.
I hope you accept these comments as constructive. And you may wish to read the thread I have created about testing the backtesting package. Swap cost is covered in lesson L21 (which I have yet to add, but intend to do so within the next hour).
Keep at it my friend. I do believe you will find the right path having committed so much time, effort and tenacity to this task. The right path may end up being something else than Forex trading, but the skills you have collected in this endeavour are priceless.
Till next time… be good, and be careful out there.
2 Likes
Interesting @Mondeoman - I found around 18/20 years ago that it was essential to download CSVs of teh DoW if you wanted accurate daily and longer charts (Got the CSVs from Dukascopy) - because of the way the charts calculated the daily High and Lows - The Highs recorded were never reached and often not even close - ditto the lows ! so you had to start from 1 minute CSVs and form the longer scale bars for yourself.
[I actually stayed up for an entire 24 hours and checked the H/L s every few minutes for teh entire period to prove this] - but the effect on trading plans based on S/R on the longer timescales would clearlt be massive if the peaks and troughs were fictional - which they were - even though “Official” ! and thus TPs were never triggered although apparently exceeded by values of multiple “Spreads” 
]
And of course if teh data is wrong - any indicators you can devise are also going to be wrong - if you are using pending orders as triggers.
@MikeWolski - I don’t know if you have this thread backed up on your own machine - but it is now a huge resource and if it were mine - I would have it copy and pasted into word or similar - just in case I ever did want to “Write that book” - or in case the Website may just “Not be there” one morning !
I’ve lost a huge thread I did many yeasr ago on “Global Warming” - as I worked my way through the “Science” and the arguments Pro and Con - I deeply regret not having that one backed up - because I kNOW that all the work I did in Forming my opinion - and nowadays with the massive censorship of various sources the information is just now not available !
Anyhow just saying - do think about backing it up mate - these sites do not give any warning - just one morning they are no longer there ! 
2 Likes
Hi @Falstaff thank you for bringing this to my attention. As I am sure you know yourself, data cleansing is a really important step in analysis. BS in, BS out. I had not thought to check the validity of the input data (OHLC) but since you mention it, I have noticed from time to time some really big excursions on short timeframe crypto values that do not occur on every exchange platform’s charting package. I will add this to my list of things to do, besides validating server side, network side and client side gremlins (like Win10 updates turned off). A big undertaking here, but I just have to get started with automated backtesting. The manual stuff gives me headaches. As for going back for 20 years as some members suggest, I really don’t see the point in that. And I don’t expect to find an algo that covers all pairs either, not for any timeframe.
Good morning.
To my big brothers…thank you!
Mondeoman — all the advise and counsel you’ve given is taken and digested. As always. Thank you very much! Oh…and for the video. Yeah, the guy is a little dry, but I got through it. Thanks for thinking of me!
Falstaff — I still remember our conversation a few years back on the subject of me writing a book (it’s back there many, many pages ago). But, yes, that would be a dream come true. Hopefully it’ll come to be one of these days. And I will not forget about what I told you I wanted to do, between me and you. To be able to give you a big thanks, monetarily speaking. Cause, after all, I think it was your idea in the first place. You believed in me, and if it ever comes true, I would be that thankful.
In any case, I will heed you advise on the back up. Thanks!
Gonna come right back with my post.
Mike
Good morning Journal.
Well, let’s see. Where we gonna go today?
I guess I need to wrap my head around what the market is up to lately.
You know, put it all into perspective. Cause I do believe, if you know where the market has come from, and where it presently sits, that’s the best thing anybody can do.
Putting the pieces of the puzzle together is fun! I mean, concerning what has happened already in the market, I think those are the pieces we have already. Although we do need to put them together correctly. But then when we start seeing the picture more clearly can we hopefully see where we will be going. That’s what I mean when I say it’s the best thing anyone can do. Do the best with what you got and see how the future turns out.
Man…I just remembered something. Journal, remember back in the day, they came out with these pictures that made you look deep inside them. I mean, on the surface it just looked like a pretty design. But if you kept looking inside it (and your eyes crossed a little bit), all of a sudden you would see a 3D image of something cool. Like a bird flying or something. It was like, WOW! Now I see it. It’s like a secret picture. And the thing of it is, not everyone can simply look at it and see it. It took some kind of skill. With the eyes.
In any case, that’s like the market.
What is really going on inside the market. Huh?
Well, the footprints are being laid. And wherever it wants to go it’s gonna go. I’m sorry, but there’s gonna be some evidence tracked behind. Secrets are no more. Sure, the consensus is not always agreed upon, but in the end there’s always a winner. And a loser. But we know that the market will always be the winner. Every time. So therefore, I say it’s best to follow. Instead of speculate.
That’s nice.
What’s going on?
How about we look at what the USD has been doing.
Oh, by the way, I’ve been wanting to convey this. And now’s my chance.
Speaking of the USD index.
A lot of traders (Babypips) agree of how useful the USDX is. It’s the index tracked of the USD against a lot of other currency’s. Sure. I agree. Big time. In fact, that’s precisely what I’m all about, in a nutshell.
I have developed an index for every currency. Not just for the USD. I’m not biased.
Think about it. Why have they come up with the idea of boiling the USD down to one trade weighted value? That’s what an index is, right? You’re totaling the sum of all it’s parts. Coming up with one consensus value, an average, and that speaks and gives a summary of what the USD is doing. It’s simplifying, really.
Well, why are they the only currency to have that?
Oh, I know, their special. They are the world’s reserve currency. It’s the most important one. And, at one point in time, it was the anchor and benchmark with which everything else was tied to. Basically, it’s the most important currency.
Well, along those lines, I’ve always thought that if you truly want an accurate account of what a currency is doing, then you just do that very thing to all of them.
Give EVERY currency their own index.
Then compare them all in that way.
That’s the best way to compare apples to apples and oranges to oranges.
There’s no better way. You’re getting the real consensus of a currency that way.
And I believe all of these major currency’s are just as important as the USD. Cause I believe every trader thinks that also. Where money goes, period, is important.
Moving on.
The USD index.
This bigger picture view shows the Dollar on a down trend. I draw the line at the 1000 gridline area. I believe that was the support area. Yeah, last weekend I did switch (prematurely) their stated trend from long to short. They were sitting just a bit above that 1000 line. Thankfully it broke below that (cause I didn’t want to have to change things back). But now their sitting at another support area (just look back and see the bounces here). If they drop below here, then I know for sure their short bias is confirmed.
But, this is my tell, right here. It’s so simple. This is like a secret to me. It’s the quickest, most reliable method of showing me direction. Sure, there’s chart reading skills that’s needed. But experience is helping with that.
How about a shorter time frame perspective.
Now if that doesn’t give you some good details, nothing does. We can see that ever since the last couple days of Sep and going into Oct they’ve been heading lower. That’s the consensus.
I have in mind that we are in the last quarter of the year. And I’m wondering if the USD will continue heading down the whole time. We’ll just have to see.
Well, humor me. Let me show you some volume. I’ll confine this just to the USD.
Got each of the USD pairs. Volume for the day. And then all added up for a USD total (boxed line going across). And then underneath that is the grand total of all 8 currencies volume. That’ll tell you what the market did as a whole. Red is under it’s avg. Green is above it’s avg. And here we can see that, all except one day, that anytime the USD ends above average that the market as a whole ends that same way. Oct 8th the USD ended above avg and the market didn’t.
Well, I’ll tell you what I’ve been seeing, on this subject of volume. During the end of Sep and through the beginning of Oct have been much higher volume. But then as we’ve been moving through this month it’s died down a lot. Although Friday came in above avg. I’m not too sure why, but it is interesting to me.
Humor me one more time, Journal.
Check out this latest chart I came up with. I really like this.
In black, total market volume. In reddish, what the average for that particular day is. All this does is compare what amount of volume came out that day to it’s average. And when I see that it’s above, then I know that the market really moved that day.
There’s some good info there. I think.
But one thing I wanted to mention. Do you see how the average daily volume numbers have been coming down? Over the course of this year it’s been decreasing. See, this is dynamic data. Every day that goes by the average amount changes. My starting point is Jan 2020, and every day since then the average number will change and reflect anew. I’m in the middle of working on getting this chart updated to reflect everything from 1/'20 to the present time. Soon I will have completed this entire era. Cause I think we, the market, are living in a new time. What was volume before this time, I believe, we can’t compare to. It’s a new day. A new era. And I’m anchoring these days to how we’ve move along from that point in time. That’s all.
Alright.
What else do I need to know about the USD?
A look at the %'s. In the yearly perspective, back at the beginning of the month/quarter, they sat at about a running + 10%. But this month changed that to, now, in the negative territory. -1.33% presently.
In the lower table we got the monthly, quarterly (same thing), line up. We got the USD and the JPY upholding the bottom. That’s for sure. And if you look closely, we can note how the USD resulted for the 3rd quarter. It was in the positive territory. +7.79%. See? I’ve always mentioned how a turn of a month or even a quarter makes the most change. Surely that has happened this time.
The market is moving one way. For the most part. The big cats on bottom (safe havens) and the Comms on the top. That’s for this last quarter of the year, so far.
Well, let’s move on down the line.
The EUR. What have they been up to?
That’s right. I never did tell you Journal that I’ve moved the EUR from trending high to low now. I did that last weekend at this time. I made many changes last weekend. Well, I guess that’s why I’m going over it all now. But yeah, this past week confirmed my determination that they have changed from trending high to trending low now. I mean, you can see it there. Their coming down. They broke below that V shape area there at Sep 3rd. That’s where I called support area. So far it’s proving correct. Surely we have support around this next level at 5000 area also. Have to keep tabs on this. And I do. Every weekend.
How about their shorter term look.
Yep. They’ve done pretty much just like what the USD has done. Every since the end of Sep they’ve gone low.
Look. That’s just what this EUR index is showing.
Who knows how the real USD index shows all this. I mean, can you even accurately determine what the USD and the EUR are really doing, when that USDX is weighted more to the EUR than anything else?
All I know is that my charts are not biased one way or the other. My currency’s get most equal and even treatment.
But this is what’s happening. Both the EUR and the USD are trending low. What can I say? That’s the market for ya. It don’t care.
Moving on.
The GBP index.
Their trend bias is long. I do have to admit, I thought the Pound was on it’s way down, back there on that last pretty good dip. But nope. They’ve been supported. I think it’s the risk-on sentiment bringing them higher. And of course that only makes sense. When money wants to move to risk, these guys seem to be among the favorites.
How about shorter term.
Yeah, you can see here also what happens around the turn of the month. Sure, they took a pretty good dive heading into Oct. But come the 1st of the month they go pretty much straight up. We have to compare this to what the Comms have been doing. I think they might be similar.
I know. I thought about it. I could combine all the currency’s on one of these charts. And we could see them side by side and see that dynamic. But I don’t think that is very important, anymore. I mentioned this a while back. And I still think this way. What’s most important is seeing, determining, contriving their own path. Correlations are good only to a point. Everyone carves out their own path. I think that’s a principle. I learned that lesson some time back.
Moving on.
The CHF index.
At the present time, as last weekend at this time, I have their bias trend as being low. Short. Cause that’s the last thing they’ve been on. I never changed anything with them for a while. Ever since they couldn’t reach up and over that double top area I’ve counted them on a down trend. Although it is interesting to see this break up higher lately (past couple days). Surely they would have to climb way much higher for me to change this bias of theirs. We’ll cross that bridge when we get there. Until then I believe their direction bias is for low.
Shorter term details.
All I know is the SNB better be on their toes. Hopefully this is not going to go anywhere and they step in like they did back there around the 21st, 22nd.
Look. It’s always fun for me to blame and talk about the SNB the way I do. I really don’t know what their doing. Plus their site deposits data have not been showing that their intervening lately. But we do know one thing, they always have the excuse that they don’t want a strong currency. In fact, I think they always think it’s too overvalued.
Anyway.
Rounding out the safe havens.
The JPY.
Just when you think it can’t get any worse. It can.
Well, maybe it’s how you look at it. If this is what they want, then I guess it’s a good thing. I don’t know. But I do remember reading an article this past week (Forexlive) about how they (the Bank of Japan) are watching the market closely. I mean, the writing is on the wall. Their currency is devalued like big time. Is this what they really want? Are things getting out of hand? They are definitely watching and would possibly intervene to get some mean revision back. I forget the exact reasons, but fundamentally speaking, this just might be hurting their economy in certain ways (maybe in the banking industry or in the retail industry).
I have to say though, this is extremely interesting to me. I mean, anything that goes straight one way for such a long time catches my attention. More specifically, will there be opportunity for some mean revision? Like some really big moves up ahead, for north? I just don’t know. I’ll be watching for that though.
Same story as the USD and the EUR. Down it goes into this last quarter of the year.
How about some Comms.
The AUD.
This is so much clearer now, right? It had to get up and over that last swing high, cause this most recent climb hasn’t been totally obvious. Easily, we could have gone right back to the long down trend that’s been in place for most of this year. The bias is for long now. Looks like their trying to get back up to break even for the year. We’ll have to see how that plays out.
I want to show the NZD now.
Remember the divergence we had between the AUD and these guys? Well, that had been smoothed out a lot lately. Cause it sure did seem like the NZD was gonna continue on with their down trend, unlike what the AUD was doing. It practically went straight up, ever since the previous Thurs & Fri. A week and a couple days fixed all that (divergence) nonsense.
Check out this chart. It’s the short term version showing how the divergent gap has been closing.
Look closely. We all were scratching our heads up until Oct 13th (I know I was). But then here comes the NZD. Boy…they surely closed the gap a lot.
Look. I know there’s probably a good strategy regarding this dynamic. And I think I have explored it. But got burned. Cause you don’t know how long something will continue. There’s a saying that goes something like this, “The market can be more irrational than you can be solvent.” I will always remember that, cause it’s so true. We got lucky here. The market doesn’t come back to normal so quickly as this. Trust me, I know. That’s why I gave up on that idea of a strategy.
My advise. Don’t do it.
I wrote so much about that. In fact, I think it was between the USD and the JPY correlation dynamic. Just imagine if you think the JPY should be getting strong by now! Boy…I would hate to be in your shoes if you had a trade running and waiting for that gap to close.
That’s nice.
One more.
The CAD index.
Their bias trend is for high. Long. I’m kind of surprised they haven’t dropped much in relation to their gains. That kind of tells me that it’s more of a stronger long trend.
Short term view.
It’s been strong. No doubt. This last quarter really has separated the men from the boys. You know who’s moving where.
And I would say, moving forward, that until these trends change, I kind of think they will continue. I mean, after all, isn’t that the definition of a trend? It continues on a directional path. Plus, I haven’t seen any indication of changes to those particular paths. Real changes anyway.
Well, maybe my volume indicator might be indicating more volume and possibly changes come with that. Of course we only had an above volume day on Friday. Boy…I’m wondering why?
Interesting stuff to me.
Anyway.
Thanks for listening Journal.
Been fun wrapping my head around it all.
We’re coming into the last week of the month. I’m definitely sitting out on the sidelines. Cause I made some money last week.
Remember that NZD/USD trade I had running?
Well, coming out of negative territory, I ended up with +120 pips on that.
It was my 14th consecutive successful trade. And I’m happy.
So now, I’ll just wait for a good opportunity to present itself. I’m not in any hurry.
Mike
1 Like
Good morning Journal.
Don’t mind me Journal…I’m just sitting here wondering where we are gonna go.
Thinking.
Well, let’s step back a little.
And that’s kind of what I’ve been doing this week.
Kind of.
This past week I took action on the advise, mentioned earlier. That’s backing up this thread. And well, it wasn’t too easy. After searching around for any kind of easy way to do it, I found only one way. The hard way. Copy and paste.
And that’s what I did. I copied and pasted this entire thread onto the Word document application. Boy…that took a long time. I think it ended up being like over 1300 pages. Quite long. Exhausting. But done. And then I started to get some ideas about what to do with it. Sure. I was getting excited about this.
During the whole process of copying and pasting, by the way which took about 4 - 5 hours, I did take some time to read some portions of it. Sure, some stuff, especially in the beginning, was quite stupid. I mean what can I say…it’s how it came out, at the time. And I feel embarrassed about it. But it is what it is.
And then, on the other hand, there was some very interesting stuff that I wanted to spend much more time reading. For instance last year when the pandemic was approaching. I mean, you got to admit, what everyone was thinking and wondering about was like new territory, for us humans. And yes, I did express my thoughts during that time. So, of course, that’s some good reading. And I do have plans one of these days to go through the entirety of that time. Cause remember, I was idle then. I do remember, personally, that I was starting to lose my mind. Like, no kidding. It definitely was a time that I haven’t experienced before. And I do wonder how much of that did I write about.
But that’s for another time.
Well then, when I completed it, I had plans on editing it. Like, going through and making it more readable. Which I kind of did. Only to a point though. The problem is that I have to learn how that application works. It reminds me of the learning curve I went through learning Excel. You know how many years that took me? Many. And this is like the same thing. Instead of learning the myriad of things you can do with numbers, learning the myriad of things related to words, paragraphs, entire stories is a separate task. Sure, on the one hand it is a wonderful thing. But on the other, it’s like learning a whole new language. It’s not easy. And it takes time.
Given that, inability, I only got so far. I mean, I can’t even come up with a table of contents. It’s hard! The preprogrammed things it has is not exactly what I want to do. And so I kind of have to do it manually. Which is even harder to figure out.
I don’t know. It’s where I’m at now.
I have it all down though. In a place where I can go and look at it. It might not be in a format where it’s all grouped nicely or anything resembling readable. Like, I wanted the table of contents to reflect a chronological walk through my journey. For instance by the years. And then within those years to see exactly what happened. Somehow to be able to summarize what I went through then. Know what I mean?
I don’t know. That’s editing for ya, I guess.
But also.
On another note.
I got to thinking about the whole thing, period.
What’s the point, anyway?
What is it?
It’s my walk. My experiences. How it all happened. In print. As I went through it.
So.
I mean, isn’t that everybody’s life though?
The only difference between me and every other human on this planet is that I’m putting it down in print, where I can read it at a later time. That’s all. What’s the big deal? It’s how us humans are. Everyone has a history. Everyone learns along the way. We all progress along a particular way. And we are all different. Therefore, we’re all gonna have a different story.
Look. I’m not any more special than anyone else. Absolutely not. God made us all special in our own ways (and that should show us how awesome He is, to begin with). But, that’s all good and nice. Honestly. Yes.
So…why am I doing this again?
Well, in the beginning, I knew this was gonna be a good story. When you just know where you want to go. When you figured out, without a doubt deep down inside your bones, that one day you’re gonna become this thing (trader), then the only thing that makes sense is to write about it, document the journey of how it’s gonna turn out. Right? I mean, the only thing that’s gonna derail that end goal would be death. Honestly. When I go, then goes the dream. The story. The journey.
All that nonsense is to say that it’s God’s plan for me.
I know it.
And well, that’s what I was thinking back in the beginning. I’m just wondering why my story should be esteemed any greater than any other aspiring traders story.
It shouldn’t! Just because my story is going down in print shouldn’t mean it’s any more special. Like seriously. I believe everybody should have a book written about themselves.
I digress…
You know…
That’s why I love to talk to older people (ok…old). Cause you know why? Their stories are awesome! Man…do you know the things we can learn from old people? Are you kidding me? The experiences people have had a long time ago just cannot compare to anything I’ve experienced. It’s true. But I just love stories from people who lived in a different time than me.
This reminds me of our (mine and Trish) conversation yesterday. We had a nice lunch somewhere. And this is what was brought up. If you could invite 5 people over for a visit, who would it be? Like, anyone who ever lived.
Well, I picked my hero from my youth. Who else? Michael Jackson. I mean, come on, he was the most talented human who ever lived. Right? Boy…the questions I would ask him. The gift bestowed upon him…his experiences…his fame…his struggles…and probably most of all exactly how he came up with the music he did. Cause that’s hits home to me. I love music. I loved his music.
Also in our conversation, it’s funny how mine and Trish’s parents had that same feeling towards Elvis. Boy…they loved him. Sure, there’s the generational difference in the realm of music. But you know what? It’s the same adoration towards talented people who lived. It’s awesome. God truly blesses some people. But it’s fun to hear stories of them all. Huh? I mean, I would give my right arm to have my mom around to hear all how she experienced that again. Her (Trish) dad also. Boy…he was a talker alright. I remember listening to his stories at his kitchen table. Sure, maybe they all weren’t true, but I didn’t care. He was a history buff. And boy did that make for some good thought escapes. He was awesome. I miss that.
Sorry 'bout that.
Where was I?
I don’t know…I just like stories.
Ok. Maybe that is another thing I like to do. Write. Type. Explain. Come up with stories. Oh yeah, that’s fun stuff. I guess maybe that’s why I am doing this. Cause in the beginning I did realize what a tough field this is. Think about it. We’re talking about trying to figure out what’s going to happen in the future. Speculation. And humans somehow think they can come to figure it out. Sure, that’s interesting stuff. But what really got me, I remember, was learning from someone online (an old investor giving advice). He said that trading is 90% psychological. That hit home for me. Somehow I realize within myself that that’s an area in which I can excel in. Whatever I would have to learn, I would learn. I’m definitely capable, to the nth degree, I believe.
But…I know that there will only be a small percentage of new traders that will ever climb their way all the way up to the top. And which of those who do will ever document the entire way?
That’s probably where I think I might be different than most.
Again.
I’m just a guy who likes to type.
And trade.
Everyone has a special gift.
And I’m no different!!!
Ok.
So.
Where we at?
My journal.
I guess I’ll keep trying to figure out Word. And then hopefully one day be able to have all this nonsense available in a readable, context.
Also along those lines, I’m still on my journey. I mean, I haven’t died yet. And until that day comes I’ll still be striving, grasping, trying to reach my utmost potential in trading.
Let’s see. I should break out my vision statement again.
Cause this is exactly where I want to go.
“I am fulfilling my God given destiny of owning and operating my own successful full-time trading business.”
Well then, that should mean that there should come a day in which I will be able to sit down here, and type away in this journal of mine, when my formidable trading business is up and running. Sure, I might not be throwing out there my exact $ amounts in my trading accounts, but why couldn’t it be possible to arrive at the point in which I sustain myself, financially, independently through my real live trading business?
I mean, what’s it gonna be like when that day comes?
Well, whatever form it’s gonna take, I’ll be writing about it.
For sure.
Well, all I can say is stay tuned Journal.
As long as I am living on this earth, the journey will continue.
Mike
P.S. — Thanks big brother (Falstaff), for the push.
1 Like
Hi @MikeWolski,
Thanks for your journey journal this week. Sometimes I get a weird feeling. When @Falstaff suggested you save the entire journal, I tried to save my own (much smaller) journal on here by printing it to a .pdf file. I had done the same to my printer when it was only about 8 pages long, and noted, annoyingly, that many of the images printed as blurs not as images. Sort of defeated the purpose of printing it out really.
And I thought of you, struggling to find a way. On the other hand, I started something similar last Friday. I have 90 pages of notes (in MS Word) accumulated over a few months this year during listening to about 80 podcasts from VP of NNFX fame, and watching about 100 of his videos.
So after some months delay being diverted to concentrate on Crypto and crypto mining for a while, I got back on track to progressing my “trading plan to end all trading plans”, and coincident with me agreeing to test a backtesting software (FT5) I realized that I needed a test strategy and test plan that was both realistic for the audience, and could potentially at the same time progress my own trading plan (2021 plan, a bit late by now).
So I looked at my 90 page “Terms of Reference” document for the 2021 trading plan and did a word search on “test”… Hmm … 183 entries in the entire document. It has taken me two long sessions and I decided to hand write the page references to that “test” content. I now have about six pages of “test related” content that I can now confidently write a test strategy and a test plan for continuing the FT5 test schedule. But how does that fit into my overall Plan? This is, after all, a test strategy and plan only for TESTING the FT5 application. I also need to incorporate that into a Trading Strategy and Plan document, which is the output of my work to date on a 2021 trading plan.
So I am not finished, but like you it has caused me to think “what is the overall effective Index or Table of Contents” that will guide me in knowing what to do first, then what to do next?
Below is the (draft) table of contents for my 2021 Forex Trading Plan - Stage 2. It is stage 2 because stage 1 was my previous aborted 2014/2015 plan that I curtailed having lost 13% of bank, with 445 trades, and no sign of an edge having been developed.
No doubt this is going to change somewhat over the next week or two, but it may give you some food for thought about indexing your own marathon effort to date.
Table of Contents
- INTRODUCTION 4
1.1 Purpose 4
1.2 Intended Audience 4
1.3 Document Approval Process 4 - BACKGROUND 4
2.1 Vision 4
2.2 Goals 4
2.3 Initial Objectives 4
2.4 Strategy 5
2.5 Plan 5
2.5.1 Detailed Plan 5
2.5.2 Schedule and Work Breakdown Structure 6
2.5.3 Estimated Effort 6
2.5.4 Success Criteria 6 - PROJECT DEFINITION 7
3.1 Method 7
3.2 Approach 7 - SCOPE 7
4.1 In-Scope 7
4.1.1 Actions Required 7
4.1.2 Milestones 7
4.1.3 Deliverables 7
4.2 Out of Scope 8 - ASSUMPTIONS 8
- DEPENDENCIES 8
- Risks and Opportunities 8
7.1 Risks 8
7.2 Opportunities 9 - Appendix 1 – Statement of Requirements 10
8.1 Money Management 10
8.2 Psychology 10
8.3 Technical Analysis 10 - Appendix 2 – Golden Rules 10
9.1 Money Management 10
9.2 Psychology 10
9.3 Technical Analysis 10 - Appendix 3 – Traits (habits) 10
10.1 Money Management 10
10.2 Psychology 10
10.3 Technical Analysis 10 - Appendix 4 – Elimination 10
- Appendix 5 – The Algorithm 10
- Appendix 6 – Requirements Traceability Matrix 11
- Appendix 7 – The Test Strategy 11
14.1 Money Management 11
14.2 Trade Psychology 11
14.3 Technical Indicators 11
14.4 Elimination 11
14.5 Trade Setup 11
14.6 Trade Entry 11
14.7 Trade Management 11
14.8 Trade Exit 11 - Appendix 8 – The Test Plan 11
15.1 Money Management 11
15.2 Trade Psychology 11
15.3 Technical Indicators 11
15.4 Elimination 11
15.5 Trade Setup 11
15.6 Trade Entry 11
15.7 Trade Management 11
15.8 Trade Exit 11 - Appendix 9 – The Test Results and Journals 11
16.1 Demonstration Account 11
16.2 Live Account 11
16.3 Lifecycle Management 11
1 Like
Absolutely brilliant Mike 
I have to say - if I was anywhere near that consistent - I’d be looking to re-evaluate my “money management” rules !
Excel can do magic with words and paragraphs too mate ! You can type an awful lot into a cell - I used to do that when writing reports and claims or intricate letters - perhaps just type each thought as it arose into a new cell in the same column for days or weeks - then the next cell to the right I’d type more detail and examples and use more cells to the right as needed .
When I was ready to review the situation, highlight the master column and tell it “Filter” (In the DATA tab) - then you can tell it to look for cells with the word you want in it - like “Xmas” for example and it will hide all the rows where the cell does not contain the word “Xmas” - You can then copy all the relevant cells, together with their expansion notes to the right and !“Paste special” it onto another sheet , which you then title “Xmas” and you can then hyperlink that tab onto your index tab so clicking “Xmas” on your index tab takes you straight to the Xmas" tab and you can manipulate and refine there without ever disturbing your master copy.
Other useful functions to play with in this respect are “Sort” and “Group” - but when playing with words - the use of “” “” is often necessary in filter for example.
Try it out with just a few sentences or numbers or both on a new spreadsheet and see how magic it is - any specific probs drop me a pm 
AND By the Way - You can write perfectly good letters and reports etc in EXcel without the need ever to go to Word - if you;re more comfortable in Excel (As I am)
I sure wish I could type anywhere near as well as you two !
But I digress What’s with the numbers at the End of each line mate ?
he he, that is just the table of contents page number of the created template. I am hoping the plan will be less than the 90 pages of notes … but if it includes all the test plan results, perhaps not. 
I really like the idea of looking at given currency strength based on multi pair performance.
I’ve prepared very draft indicator for similar strength comparison.
Below is the result of being always in the market based on strength relation for EURUSD.
If EUR is “stronger” against other major pairs than USD then long otherwise short.
Green areas are the profitable trades, reds are losses.
Worth noting, that every loss was for some time in green zone, so further tinkering with trailing stops or partial exits may be interesting.
Good morning Journal.
Ok. Thanks guys for all that.
Very interesting stuff!
Well let’s see, where am I gonna go today?
I kind of feel like looking at the market. It’s been a couple weeks since.
This is a good time for that, cause we’re climbing out of the turn of the month. Just passed up the NFP Friday, had some major central bank meetings last week. Let’s see if we can make some sense of where the direction of these currency’s want to go in. And I think the best way to do that is to know in which trend they are currently in, and see what kind of changes have been taking place.
Alright, let’s start from the beginning.
The USD index.
Ok. So, we know that this chart tells me the trend their currently in.
On the weekends is the time that I determine their stated trend. And I don’t change this during the week, cause I believe the market operates on a weekly basis. Why? Because, we move from the open to the close. Then everyone regroups and we do it all over again. Every day has their own particular dynamic in which things like to go in. This is the best context in which things repeat themselves, I believe.
So, what’s the USD trend?
I’m not changing their most recent stated trend, just yet. Which is short.
Look back a little. I switched their long trend to a short trend ever since they dropped down below the 1000 gridline level. Sure, someone could come back and say it should be at the 500 level area. Well, this is all subjective. And I called this 1000 level way back in Oct. So I’m just keeping with it. There’s been so much bouncing around at this level.
But look at where we’re at now. Came back up to it. That last day of the week (NFP) didn’t really extend much above it. Now, the lead up to the day sure did make it all the way back up to the top. But faltered on that last day. Therefore, I’m not convinced of a change in trend yet. I stay with the USD on a short bias. We’ll just have to see what happens this coming week. I’m sure it’ll make things more clearer (cause that’s how it works).
How about some other context.
A closer view of their movements. Well, I’ve mentioned this a couple weeks ago. How ever since Oct they’ve been moving low. Like, the consensus is very clear. But now, look at what’s happening going into Nov.
Look. I’ve always, always mentioned this. Change really likes to take place around a turn of the month (I know this because if there’s anything I am good at, it’s documenting how these currencies move). Well, here again we can see this. Look back going into Oct. It changed going into that month. Going low. And what happened? It went low the entire month! But now what? We’ve bounced up some. Look closely. There was a lull from about Oct 21st to the 26th. Then a quick drop then a quick bounce back up to that very same area. Then eventually moves higher above that area. Sure does seem like a change in trend is about to happen. I mean, you have to be able ask the question…Will this month go back up?
It could. Of course. Anything can happen. But the thing is, we just don’t know what’s gonna happen. We don’t (don’t fool yourself). Now. When I start seeing some confirmation , say to rise up and above the 0 line, then that’ll start telling me change just really might be happening. But not until then. No one can tell me we’re not in a down trend here. I’m sorry. Top left of the chart is high. Bottom right is low. That’s a down trend. Therefore, their bias is short.
How about another context.
Got a quick overview of everybody. Plus we can see what happened this past week. And then we just started the month (which is the same thing). And we’re in the second month of the last quarter of the year. And…we have how the year has been playing out. All these are running %'s. Meaning, every day was added onto the last day. I’ll tell you what I see.
— 4TH QUARTER CONTEXT—
- Risk on sentiment stronger than risk off sentiment.
- The CHF has come in between the Comms. This is a bit of an anomaly. Cause they are separated from the EUR, and also the other safe havens. This is not normal. Be aware. Remember this.
- The USD is very negative compared to every other currency (one exception). Note the actual numbers.
— THE FIRST WEEK OF THE MONTH —
- The outlier is the AUD (-11.03%). Has moved in the opposite direction of their trend. They diverged (more than normal) from the NZD.
- The EUR & the CHF are running normal, in tandem together, both strong (strongest).
- The JPY had a good end of the week. And being matched up with the CHF tells me of some safe haven movement.
- The GBP fell pretty badly at end of week. Central Bank reasons.
- The USD not going anywhere. Middle of the pack.
— THE YEARLY CONTEXT —
- The biggest outlier the JPY. Tell me someone sold them all year long…Please…What a lesson here. -151.47% against everyone.
- The Europeans been strongest. GBP, EUR.
- All the Comms very positive territory. With the AUD as the weakest between them 3.
- The USD about at break even on the year. But all 3 safe haven currency’s sitting in the last 3 spots. Comparatively speaking.
That’s nice.
Moving on.
Let’s look at the EUR index. What’s their trend?
Well, it’s been a couple weeks since I changed their uptrend to a downtrend. Just like the USD. I’m not gonna change this yet. Where’s my line in the sand? Well, I’ve called that 6000 gridline the line. If it would go above that, then I would say their trend would change back to that longstanding high trend. But I believe this chart shows a change from that. It’s been moving down.
Sure. We’ve had some serious activity here lately. But we also need some more time to go by. I say the bias is for low. Let’s get a closer look.
Just like the USD. Ever since Oct they’ve been moving down (almost straight down). And well, just like them again, heading into Nov we are seeing a bounce, right? Well, we’ll call it a bit of a correction from where they’ve been moving to. You can’t say this is a change in trend yet. Sorry.
How about some GBP index.
Unlike the last 2, I never changed their long standing bull trend yet. They’ve been trending high. That’s been their stated trend all along. But this past week shows some down movement, huh? Well, do you think it’s enough to cause a change in trend?
This is what I say.
No.
I’ll tell you where my line in the sand is.
Look back at the previous swing lows. Not the first one back, but the second one. At around the 3rd of Sep. I say that’s my line in the sand. If it drops below that point, then I say their trend has changed from bull to bear. But technically, it hasn’t yet. We’re only 44 pips away. Basically, we’re at an inflection point now. Therefore, we need this coming week to tell us, show us, whether it wants to continue on with it’s bull trend, or whether it’s gonna change to a bear trend. Just look back and you can see the same scenario over and over again. They just know how to bounce back.
Closer look at this.
Well, once again, here we go with the turn of the month thing. Look at what’s happened going into Nov. The 29th really started it. Boy, it sure does look like they want to turn this tide, huh? But look. We simply don’t know what’s gonna happen. Cause I could tell you the contrary.
The Pound is a very volatile currency. These big moves mean nothing. It can go back up just as quick as it came down. Plus this is a risk on leaning currency. And if the other guys decide the consensus to be risk on, well then guess what? The GBP could easily take that cue and move higher. Absolutely.
We’ll have to see what happens this week. But I stay with a long bias.
The CHF index.
I got to get some work done here.
Let’s see. What’s been their latest stated trend?
— It’s been a bear trend.
They’ve come down off the double tops. Couldn’t make any higher highs.
— They’ve consolidated around a support level for some time now. Looks like they made a floor to me. Right there at the -2000 level.
— Broke up and out of that. But enough to change their trend?
— Where’s the line in the sand to switch to a bull trend? As I just looked back at my notes, I see I called that -1000 level.
What happened this past week? Well, it went all the way straight up to it and touched it. Dropped down a tad, and went up over it now. I mean look, we’re all around it now. We’re at the inflection point. Here we go with the scenarios.
Will we have a break and retest of this level? Well, we won’t know until this coming week (geeez…how many things do we have waiting to see what happens this coming week…MANY).
Or who’s to say this won’t come right back on down. Just like it did back at the 2 mountain tops. Cause we’re right back at this area again.
I have no idea.
On the one hand, it broke up and over the level. So technically, I should change their trend to high.
On the other hand, I play the week. It’s time that’s the biggest factor. Meaning, WHEN. That’s most important. Therefore, I have incomplete data at this point in time. I NEED MORE TIME TO TELL ME. I need next week to come to reveal where the trend really wants to go in.
I’m forced to decide to keep with their low trend. I’m not gonna change this just yet. The prevailing trend is for short. I have to keep that for one more week.
Well, can I get any more good info from the close up chart?
Consolidated…consolidated…consolidated…then a shot higher, then one more time at the consolidation area (19th - 25th). Then after the 25th we’re going high. All this was at the end of the month. Which, if you look back at the other major currency’s, matched the risk off scenario.
They seem to have the momentum going for them.
So…it could happen…meaning a change in trend for the CHF. This would most likely mean a risk off sentiment change. But, again, I need proof. I need next week to show itself. I’ll make a judgement next weekend.
Let’s move on.
JPY index.
There’s no way I’m changing this down trend for a while. Let’s see. I did make that -10,000 line the line in the sand, to change their trend. But as I look at it now, I’ll even settle for the -12,000 line. I mean, you got to think of their sentiment. Nobody, and I mean nobody, is putting their money long the JPY. I’m talking for the longer term context. I’m not talking about the day traders. Or even those who trade within a week. I’m talking about longer time frame trading. Days to weeks. No one’s banking on a strong JPY yet. There’s no indication of that whatsoever. Maybe they tried back in the summer time when a floor was trying to be carved out. But that went right back on down lower. So no. No one is thinking a long JPY.
There’s no real strength being shown here. Only those who have money to blow will trade them strong, short term that is. But that won’t be me.
Let’s see what the Comms are showing.
The AUD index.
Well, I’m not changing my long bias yet. Yep. This past week it came crumbling down. But not enough to change it. Cause I’m calling that -2000 line the support level. And guess what? Once again, we’re at an inflection point, presently. And we know what that means. Another one more week to see period. What can I say? I did think, at one point this past week, that I would be changing some trends. But I’m not seeing it. Surely not with these guys. What would turn the tide? Below -2000. It didn’t even drop below it yet. So no. It could easily bounce from here.
Let’s see that drop closer.
Man…what’s that? That’s nothing. If that isn’t a nice easy retracement, then nothing is. Completely normal. Looks like a good time to buy the dip as they say. I’m just saying…nothing is telling me we have a change in trend here, that’s for sure. And they’re the weakest of the Comms, no less. Speaking of that, let’s move on.
The NZD index.
I’m sticking with their up trend. The bias is definitely still for long. Yeah, I put the support level at -1000. If you look back, it makes all kind of sense.
Being this much above the line in the sand tells me of more strength. Surely not weakness.
All this tells me is that the NZD is being supported. Seems like more strength waiting to happen, to me.
One more.
The CAD index.
I’m not changing their stated bull trend. Nothing tells me to. Let’s see. Where’s my area…I put the 0 line. And we’re above it.
Let’s see what kind of losses they’ve been having lately.
Well, just looks like been retracing down around 50% or so, right? Went all the way up to 1800 pips. Then came back down to around the 900 area. So yeah, about 50% retracement. That’s completely normal. Not signifying any kind of change. Especially given how much they boosted up since, look up there, around the middle of Sep. That’s a long time for a climb.
Well, there it all is.
What do I think?
I’m thinking I’m gonna keep my eye on the CHF. I mean, you got to wonder where all their strength came from. It seems like a safe haven play to me. It’s like the markets’ favorite one to go to.
Do I think this currency will make all the difference?
That is a good question.
Cause if the market starts selling the Swiss, then that would mean it would be a risk on type sentiment. Right? And that means the Comms would benefit from that sentiment. AUD, NZD, CAD, even the GBP. This would mean that the trends that are in place already would keep. Would get stronger.
What if the CHF keeps up the buying (that has just happened)?
Then we would continue on with the safe haven buying. The Comms would be on the other end of that. Therefore, we would be encountering a market change, then.
Next weekend at this time I could be changing a lot of the currency’s stated trend (as I’ve said above about a lot of them).
I believe we are at an inflection time. The market should show us in which way it wants to continue on going. Now, I’m not saying it’s gonna happen right away. Cause you got to look at the days of the week.
Monday’s. — They seem to go in a screwy way. Not necessarily with the trend. Actually, more against the prevailing trend. Liquidity is the lowest that day of the week.
Tuesday’s. ---- Sometimes called turn-around-Tuesday. Whatever happens on Mondays this turns it all around. Whichever way that would be. But things are definitely trying to get moving by this time.
Wednesday’s. — Characterized by some big moves. By this time, all the big players are in it. Sure, you got to know what’s already happened by this time in the week. Momentum can very easily take place this time. But volatility is highest so far in the week.
Thursday’s. — Since I keep track of volume, I know that this is the day with the greatest amount of volume taking place (for a complete day). Imagine a staircase drawing. That’s how the week progresses. But this is the top of the steps. Friday’s come down from here. But again, it all depends on what’s happening in the market. You can possibly have momentum going on. Or you can have another turn, from Tuesday’s turn. And also it depends on what kind of fundamental events that are going on. Like the Bank of England had this past week. Just know that the volume is the most here.
Friday’s. — Characterized, mostly, by profit taking. Rarely does things move in a straight line. So whatever the trends happen to be by this time, it usually goes by retracements on this day. I think of this day as an equaling out day. It’s more rare for this day to continue on with whatever trend is. Unless it’s a very strong one (which of course does happen in the market).
Look. The market is not that predictable. I’ve seen many different scenarios.
- The market goes one way for the first half of the week. Then on the last 2 days of the week it retraces that strong move.
- The market moves strongly in the beginning, then takes a breather mid week, then goes right back to that strong trend by the end of the week. Classic, on paper, higher highs.
- Then you can have such a non moving market until Wednesday. Then bam! Off to the races we go, all the way to the end.
I mean, we just don’t know in which way it’ll go. So much depends on when the fundamental events occur also. But as it stands now, we just had NFP Friday. The market usually lets us know what it thought of the results of that day.
Alright Journal, I’m done talking.
Sorry to talk you ear off.
Been fun and now I feel better. Thanks!
Mike
1 Like
Good morning Journal.
Let’s see. There’s only one thing I should talk about this morning (well, let’s hope it’ll be only one thing). It’s a follow up on what I talked about last weekend. I, absolutely, need to continue on with the story. The market narrative.
See. I believe a lot of analysts, traders, and all those in between, conveniently forget some recent history. And I think this is a real short coming. Look. I know we all are forward looking, speculating type people. There’s nothing more we like to do than to project what we think is gonna happen in the future. I mean, it’s the nature of what we do, right?
But what I think is just a little more important, and something we shouldn’t forget about, is looking at both the history and the present time with more fervor than trying to speculate what should happen.
That’s nice.
Well, this is precisely what I’m gonna not do, and gonna do, this morning. Cause, boy, did I write some stuff last weekend that hinges on whatever is supposed to take place this coming week. It would be so short sighted to not tie up these loose ends. That’s all. So, here it goes.
Where was I?
Well then, let’s look at what the CHF did.
Top table is the individual daily results. Bottom is the weeks running.
We’re looking at the pink (CHF).
Well, on Monday they started out with being the most sold off currency of them all. Very interesting. Along with the USD. Ok. So. What can we say then?
Looks like some risk off started the week off. The Comms were up above, so that confirms that notion. Then Tuesday (remember…turn around Tue) came in with the opposite. Yep. Looks like the 2 safe haven currencies (CHF,JPY) took the cake. Most bought up currencies. The USD was in the positive also. And the Comms came in dead last. Definitely confirming the sentiment.
Well, I want to keep with this one point. The CHF. They didn’t really do much at all in the rest of the week. Just dead. And I’m thinking the SNB had everything to do with that. Cause you have to see that, I believe, Tue - Thurs was nothing but safe haven buying. The other 2 stepped up to the plate. And also the Comms dragged bottom.
So. Bottom line, with the CHF.
Strength shown. It was on Tuesday. That’s fact. And I’m gonna call the rest of the week the SNB intervening to keep them off the top. But it was more of a safe haven buying week, than anything else. Well, this was continuing on from last week.
Ok. Now I need to remember this, before I’m done. The question will be, will I be changing these currency’s stated trend?
I’ll come back to this.
But moving on now.
I go on to mention how the days of the week typically go. Of course every week goes differently. Well, how did this week go?
I just mentioned this.
Monday came busting out with risk on. That happens to be what the broader market trend is. Then Tues - Thurs went in the complete opposite manner, risk off. Then Friday went back and retraced those losses. Which was back to the risk on sentiment.
Now.
What about this inflection point?
Did this past week tilt one way or the other? Cause that’s essentially what I was saying.
Ok. 2 days going with the trend. 3 days going against the trend.
That means we should have had more of a tilting, or a change in market environment now. Well, looks like we got to measure this. How we gonna do it?
Why don’t we just go down the list and pick 'em off one by one and determine their trends. Remember. When we talk about the market, what are we really talking about? Well, the sum of all the parts. And each of the 8 currency’s are the parts.
From the top.
The USD.
I was calling the 1000 line the dividing line. Even the 500 line a secondary S/R line.
Well, this week blew all that away. I mean, look at what just happened at the 1000 line. Bouncy bounce it goes. Therefore, I call this a change in trend.
The USD was on a down trend. Bias was for short. Ever since that latest steep decline. But it changed now. It’s surely not short anymore (in my mind, it’s one way or the other. I don’t go believe in ranging or consolidation notions). I believe the market wants long now. Plus, it follows any kind of chart reading rules. It didn’t make a lower swing low. It’s on it’s way for a higher high now. Plus…I got to say…this weeks long, straight up leg, is quite large. That tells me a lot. It’s what the market wants.
Ok. That’s enough rationalization. Those are my reasons. It’s what I got to do.
I got to change the USD to a long bias.
This is how I follow. It’s not what I want (trust me, I wish otherwise).
And if this proves to be a false break out, then so be it. I’ll change it when it shows me. And where will this end up to be?
I would say their aggregate pip movement will have to go down back below that 1000 level. And then eventually it will have to go below the 500 line.
Also. I only change these trends on the weekends. Cause I believe the market plays it a week at a time. 5 individual dynamic days of the week, rinse and repeat.
It’s how the market works.
Oh…one more thing.
What are we talking about here, again?
One thing, and one thing only.
DIRECTION
It’s the bias we got to give each currency. I think that’s one of the biggest factors to overcome, when it comes to trading an asset.
Sure there’s other factors.
- What asset to trade?
- Where to get in?
- Where to get out at?
- When to get in?
- When to get out?
- How much to put on?
- Risk management rules in place.
- All rules outlined, and followed.
One thing that I have learned this year, for myself, is that the when to get in and out is to be substituted for the where to get in and out. But when I think about it, I guess you got to be going with one or the other. In any case, these are all factors to be considered. Are all very important, absolutely. But if you get the direction correct, then the rest should make it easier to manage. Cause even if you get the direction correct, that doesn’t necessarily mean you will be in the positive. It’s the oscillations that we always have to deal with.
But that’s why I feel that TIME is the biggest factor.
Sorry 'bout that nonsense.
Let’s move on.
The EUR.
I have them on a short bias.
Their trend is for low.
Well, did it go up and above that line, this week?
Nope.
It touched it and then dropped back on down. So no changing their low bias.
This was last weeks shorter term look.
Let’s see what this week did.
Yeah boy, it wanted to break up and over the top of that V part, huh? But in the last day it came back down to it. So, I’m still not seeing a change in trend yet. Actually, it can’t end up in positive territory for the last 30 days. Interesting, I think.
The GBP.
So what happened?
Well, we are at their inflection point alright.
And we’re all around it still.
How about some exact numbers. The line in the sand is at 9746. This past week dropped to a low of 9750. 4 pips away! And now ends up sitting on the 10119 line.
So the answer to the question of whether this changes trends is a no. Not yet.
I guess we can have more than one inflection times. Cause we’re at it again. Right? Next week can be the tell of whether it wants to continue on with it’s trend, or if it wants to change stated trends. But until then, I have to keep the Pound with their long standing long bias. It never changed over to low yet. Actually that’s for the entire year.
It’s not making higher highs, yes, I know. But it’s not making lower lows either. Therefore, I stick with the prevailing stated trend.
That’s nice.
The CHF.
As the SpongeBob show would say,
“One week later.”
Well, they had their chance. And couldn’t do it. See it? They actually ended lower than where they were last weekend at this time (cause they were above the line…but not now). But, man…just like with the GBP. All around it this week. Therefore, I still can’t call the CHF changing to an uptrend. Boy…I’m sure the SNB has everything to do with that. They got to be spending the money to keep this from moving up. We’ll see who wins out. The market, or big brother.
Before I move on. Let’s take the closer look. It’s worth it with these guys. Cause remember this?
"One week later…"
Look. No doubt. It’s elevated. I think the battles ensuing as we speak. Who knows…it really could go anywhere from here. Higher, of course. Or back down. Don’t know. Again, we need a little more time. The market will show itself. Is lower though than last week. That is one thing we know for sure.
Moving on.
The JPY.
I’m skipping to the shorter term look. Here’s last weeks view.
And this is the latest.
What? A little strength are we seeing here?
Well, I’m not fazed at all about it. You got to take all things into consideration.
Like all the history.
Needless to say, it’s not enough to change their stated low bias. Is interesting though. It confirms the safe haven bid we had in the middle of this past week, right?
How about the AUD. Where were we?
And here we are.
Ok. Here we go.
I got to change their stated trend.
- It went below the line in the sand (-2000).
- Making lower swing lows
- Matches the opposite of the USD (cause I changed them from low to high).
I got to go with what is. Again, I don’t want to do this, but this is being true to what is, and what was. The future never comes (cause when it does, it’s the present).
That’s nice.
I think we need to see check what I said last week on this shorter term look.
You can tell I am hoping they don’t end up changing their long trend. Right?
I’m sorry, but I was biased.
Need to go with facts.
Let’s look at what happened.
Now this is the more that we need. Can’t be in denial forever, right? This isn’t showing any signs of wanting to continue on up. And yep, that last straight down, steep move is being confirmed more and more now. Down it’s going.
Again. Anything can happen in the coming days, but with what we have up to this point, tells me to change their trend. Low it is.
How about the NZD. Following suit?
Well, where were we to begin with?
More of the story.
Wow. Well, Mon (you should remember) they were the most bought currency that day. It’s how the week started out. It shows right there. Hit a pretty good high point. But then fell quite far, since.
Did it fall below the line in the sand?
Nope. It didn’t.
Now. I don’t want to be someone who is so particular and rigid, cause you can’t really be like that in regards to the market. Got to be flexible. And understand anomaly’s happen. And especially when it comes to these guys. They like to overshoot things. But when I step back and see what’s going on here, I still don’t see a good reason to call a change in trend. You can’t deny that the -1000 line is a good S/R level. And well, it didn’t drop below it. Therefore, I can’t change their trend. The bias is for high.
I’m sorry. What we have is a divergence happening again, between the AUD and the NZD. That’s all. What can I do? I’m not gonna get burned again thinking I know what’s gonna happen with these guys. I just don’t know. If they want to be high, then it could stay this way. This is the info that I have now. I go by that. Nothing else (like speculation nonsense).
Must look at the shorter term. This is what I said last weekend.
Anything different this weekend?
Well, I got to say it. Seems like the same thing here. Their being supported.
There’s no bias in that. It’s what the data shows. Looking back at that huge move upward, is not being retraced much. Until then, we got a long biased NZD.
Finally, the last one.
Fast forward a week.
Up and down, of course. But it didn’t move below the 0 line. I keep them with the long bias. Nothing tells me to change this. I mean, and plus, it really hasn’t even retraced half of that humongous move higher, yet. To me, that kind of means that it’s still fresh in the minds of those in charge. In fact, I do believe all moves mean something.
Ok. I digress. I got to go there.
Yes. All moves mean something. Think about it. The only thing anyone has is what happened in the past. I mean, it’s the thing that levels the playing field. For everyone. And I’m glad. Maybe the new traders that come into the market don’t realize that. But it’s what we got to learn.
The old, well experienced, veteran traders know very well they don’t know what’s going to happen. They’re smart enough, and have the experience under their belt about what’s going to happen. You play the odds. It’s the best thing to do. And then you get to the point of knowing that surprises happen all the time. Honestly. They do. Older traders know this very intimately. Time and time again they get surprised and know that it’s what happens in the market. Their not gonna lose their butts like they used to. That’s all. It’s the difference between a grown up trader and a new trader. Experience makes you into a better trader. Actually, a real trader. And when it comes to putting your money where your mouth is, you just do it more smartly the older you get.
But getting back to the narrative, I think an experienced trader reads the market in a more correct way. All the movements have moved for a reason. The market remembers! In fact, that’s how trends are defined. It’s a continuation of a certain direction. Over time, though. Maybe not in the immediate sense, but in a drawn out longer sense, definitely.
Alright. I’m done babbling.
It’s how I think.
All this stuff is what goes through my feeble little mind. That’s all.
Well, that’s how I think they lay.
A recap of this inflection point type of week, goes like this.
- The USD changes from a low bias to a long bias. Trend high now.
- The EUR keeps their low bias. Trend is for low.
- The GBP keeps their high bias. Trend is for high.
- The CHF keep their low bias. Trend is for low.
- The JPY keeps their low bias. Trend is for low.
- The AUD changes from their high bias to a short bias. Trend is low now.
- The NZD keeps their high bias. Trend is for high.
- The CAD keeps their high bias. Trend is for high.
4 high trends against 4 low trends.
Alright Journal, I’m done with all that …(you know what I’m gonna say).
So, when the open takes place, I’ll change this on my perpetual running basket of trades. It’s only so that I know how the market is trading, trending. It’s my way of keeping track of things.
Alright Journal.
Thanks for listening.
Mike
2 Likes
Good morning Journal.
Well, I’m just sitting here wondering where I’m gonna go today (as is usual).
See. Sometimes I’m not struggling with the topic of discussion. Like last week.
Yeah man, that was fun. Some weeks I just got it. It’s waiting to jump out here on the page. And other weeks…well, it’s just not there.
Don’t get me wrong. I do love talking about the market. I guess sometimes it’s more fun than at other times. I’m not too sure exactly why. Maybe it’s me. Cause there’s always something interesting happening in the market. To some extent anyway.
But then sometimes (like now) I’ll remember the purpose of this journal, to begin with. And that would be about, what’s going on with me? Not so much as what’s going on in the market. There is a difference. And so, that leaves me with the thinking of what’s been going through my head this week. Cause there’s always something rolling around up there in regards to the business. My business.
I mean look. I pray for a lot of things in life. Not just for specific people. Surely, this business of mine, is a topic I visit quite often when it comes to the things I bring up to Him. And guess what? There have been some things I’ve been searching and striving out for concerning my business. Therefore, I want to go there now.
Before I forget, there’s a couple things that I’ve been pondering lately. I do want to expound on these before they slip away.
- My future, in regards to a vision. Maybe changing.
- A thought about how my strategies should be. This has been a subject that I’ve been wanting to get to the bottom of. But always forget about.
Let’s see. Where should I go first?
Well, I’ll save this strategy thought for last. Cause I think I really need to start on it. See. I know we’re getting close to the end of the year. And I have a little on my mind about what I should be doing next year. But, it would be nice to have something set up already and to be carried out in '22. We’ll have to see though.
But first. I want to talk about what’s been rolling around in my head this week. It’s the bigger picture. For me. Like…I’m talking…the big picture. So. Let me give it to you straight and then I’ll start explaining.
Vision related.
My retirement aim.
I think this would be something to shoot for.
I think this would be my promised land.
I guess this thought of mine was brought up from a conversation me and Trish had recently. And it had to do with what our retirement would look like. This is what I told her.
I honestly do not have it in mind for me to retire. I cannot see myself as retired from work. I’ll always work.
First off, I should give a definition of what I think retirement actually is.
It’s when you are done working.
Meaning, no deadlines. No responsibilities. No striving after money, in which you need to live on.
But, reaping all the benefits of a life savings. It’s the time where you are not putting in anymore. It’s the time where you are taking it out.
Ok. That looks like a good definition of what retirement should look like. Right?
Well then, that’s not gonna be me. I mean, it can’t be. I haven’t been able to store up, plan, stock pile any kind of finances for this time to come. Plain and simple.
I’m 54 right now. And what am I talking about?
We’ll call it 11 years from now. When I’m 65.
That should be the time when I, theoretically, should be retiring.
Ok then. I got 11 years to go. Can I save up enough money in this amount of time?
Are you kidding me? No way. I won’t even go there. Cause first off, I don’t make any money nowadays to begin with. All my savings go to my Christmas club that I do on a yearly basis. At least I can enjoy that dynamic, regularly.
But then I got to thinking. My promised land is not retirement (as most folks seem to have it). It’s my business!
That’s my retirement!
This is not work. This is not laborious. This is not stressful (well, for the most part). This is not hard. This is not a taxing effort on my body, soul or spirit.
This is what I want more than anything else on this planet.
It’s the dream I’ve been wanting for most of my life.
My own business.
It’s this thing I’ve been trying to build. From the ground up. All by myself.
And one of these days I want it to be completed.
So why not make this my retirement goal?
I can continue to work and retire all at the same time.
What I’m saying is that this is killing two birds with one stone. Like why not?
If I can support our way of life, while having much more time on our hands, all at the same time, then why not? I even wrote it down somewhere that I want to support Trish in where she won’t have to work anymore. Now that’s retirement!
Well, this is what I want. And I’m thinking of drawing up another vision statement on it. I guess it’ll coincide with what I have already. I guess this would be a specific thing to shoot for. Like time wise.
So then, what do I got?
I got 11 years to go. Now…if that ain’t enough time to accomplish something, then nothing is. Let’s put this into perspective.
At the end of this year, between Christmas and New Years, I will have completed exactly 9 years on this journey. My business journey. I think I’ve learned quite a bit during this time, so far. And probably have a lot more to learn, no doubt.
When I think of what I’ve learned, this is what comes to mind. And it’s something I’ve been working on this year. You should Journal, cause it’s all in here. In fact, it’s been a yearly theme for me.
This was at the end of 2019 going into 2020.
And then this was at the end of 2020 going into 2021. A year ago now.
My only point here is that this has been on my mind every year for a while now. And when I think of how I have been navigating this pursuit, have I actually been getting somewhere by now?
I think so.
I’ve narrowed down about how much I would need to start out with. It’s much more than what I was thinking a couple years ago.
And the strategies are coming together. Sure, I’ve been changing things up. Some things stick and some things don’t stick.
I know, and have read, that I’ve always been wanting to continue with one kind of strategy and to prove it over and over again. Like to be able to trade with no changing of the strategy. Yeah, I definitely see that’s something I’ve been wanting.
Sure. I mean, there’s a reason why you need to keep changing things. Probably because it’s not working. And when you can get to the point where you don’t need to change things, then it’s probably working. You would move on to other type of strategies though. So yeah, I’ve been going though changes after changes, year after year.
So then. Looks like I got 11 years to get this under control. Think about it. Should be enough time to accomplish it, don’t you think?
Wouldn’t I like to see this before I really and truly embark on my business in real time. Really.
At least one complete year of simulation trading.
Having 12 months of verifiable proof of;
— how I traded.
— profits and losses
— cash flow statement
— how all my expenses got paid for (paid myself)
All without having to continually change things.
Well, there’s only one other thing that I would need.
Money.
Enough money, to be exact.
And I’ve been down this road also. I kind of learned the hard way.
This was back at the end of 2019. What a year that was for me.
I thought about this factor.
Should I embark on an 11 yr journey to come up with the amount of financing I would need?
And well, it’s still a thought, at this point.
I just don’t know.
See. I’m not in control here.
But I do know who is.
And if He wanted to plop down the amount that I need, then I’m sure He could in an instant. Just like that. I believe it. It reminds me of His chosen people Israel. He was giving them the promised land. It was all for them. Did they have to work for it? No.
All they were to do was go in an possess the land. It was all ready to go. It was the land of milk and honey. And built up and livable. It was their inheritance.
But what happened?
The were scared. Some of the recon people came back and told everybody that there were giants in the land. Basically, the people wouldn’t come to trust in their God. God told them that He would go before them and would rid of all the inhabitants for them. They wouldn’t have to do anything! He could use a swarm of insects to drive them all out, if He wanted to. But they just wouldn’t believe.
And so, what happened?
That generation would die out and the next generation would be the ones to go in and take possession of the land (40 yrs later). They had to battle their way through it though. But even then, He was with them battle after battle. All they had to do is obey all along. And it happened. They eventually got it. It’s the history of Israel.
Well, my promised land is going to be a retirement time of my life in which I will be able to run this trading business full time. Fully self sustaining. In which Trish won’t have to work anymore. And I won’t have to work anymore either! Cause this is not work to me. Are you kidding me?
And one which will be fully funded with the right amount.
Don’t quite know how yet. That’s His job. He’ll show me.
In the meantime. All I’m doing is continuing the simulation theme. Practicing how I’m gonna pay myself every month. Prove and show how it will happen. Continue to build the process.
Sorry about that Journal. That’s a lot of nonsense.
But it’s what I’ve been thinking a lot about.
I’m gonna continue on with this line of thinking when we get closer to the end of the year.
But there was another point I wanted to make.
How about I just start the discussion. I need, though, to embark on this.
Concerning strategy.
In the last few years, I’ve been working on my Anchor Trade.
But for the longest time I’ve been wanting to develop a strategy (strategies) that have this component to them. It has to do with TIME.
I want:
- A long term strategy
- A medium term strategy
- A shorter term strategy
See. I don’t want to have to depend on only one particular strategy. Cause we should all know by now that one strategy is not going to always work out, as planned. Right? Well, what about multiple ones?
What makes more sense than to have some back up ones running?
This past week I thought maybe I should go with this.
Since I keep track of these time frames that I should develop the same.
- Yearly
- Quarterly
- Monthly
- Weekly
Well, I got the data that I can go back on and analyze with. Some back testing analysis. Right?
To be more specific, I’m talking about a strategy in which I’ll have a trade (well, I think it’ll be one pair, not all that sure yet) that runs for the entire year. Perpetually. And some how able to work the position sizing all along that time. Maybe even like taking some profits along the way. I don’t know yet. But something like that. A one year trade.
Then one for a quarter. That’s a 3 month long trade. Now I don’t know about taking profits along the way, cause that’s not all that long amount of time.
Then one for a month. Just looking for some profit. That’s all.
Then the shortest would be for a week. That’s absolutely the shortest I would go. And I’m not talking about even for the whole week. Cause I do have a strategy parameter that uses the week as a whole. I’ve talked about this before. And I like it very much. You wait out the first 3 days of the week. Then get in on some kind of flow (Wed or Thurs) and take profit before the week ends. That’s the shortest time in the market I would want to do.
Anyway. I was thinking about this. In fact, I believe I had this idea way back in the beginning of my trading career. And looks like I never followed through with it.
It’s like diversifying your strategies. Sounds like a smart idea to me.
I don’t see anything wrong with coming up with an anchor trade for each time period. But I think I have some work to do first. The back testing I talked about.
Remember. I’m not keeping track of these daily stats for nothing. It’s what I do. It’s what I like to do. But I should use them for this purpose.
I’m not too sure if I can come up with something before the new year starts. We’ll have to see, though. I do have some time coming to me around the holidays. That’s some of the perks of working for a school district. They always seem to have days off (compared to a real job out in the work force).
Speaking of that, it’s starting this week. We only work through Wed. Then off till next Tuesday. I will be having some time on my hands. And I think I’m gonna get on this. Like really. I can see a mind map coming. I can see some pencil and paper writing, in my business journal. Many early dark hours of the morning time, when it’s real quiet to think about all this.
Ok Journal.
Well, that’s what’s been going on with me.
Thank you very much for listening. Cause remember, it has to be you. There ain’t anyone else to talk to about this stuff.
And now I feel better!
Thanks!
Mike
3 Likes
Good morning Journal.
So. This is what I’ve been up to.
I’ve been wanting to answer the question of whether this particular strategy would be the way in which I should trade (my long term trade, next year). Here’s the details.
— A year long trade.
— One pair running the entire year.
— Does not have to be the same asset the whole time.
— The determination of the pair will be whoever is the strongest and weakest on my yearly running table.
Well, I have some results.
Interesting.
But seems like I have more questions than answers now.
And that’s why I’m talking to you about this, Journal.
To start things off here, it should be understood that I only back test off of my own historical data. So all I’m doing is working off of my excel spreadsheets. Therefore, at the present time I’m a little lacking on how much time I can go back to. But even that can be debated. Cause I’m not so sure years and years of historical data amounts to anything. Think about where we’re at now. We are in a different era, than ever before. Given that, I’ve uncovered some interesting aspects.
I completed this year of a back test. 2021.
And I completed the year 2020 of a back test.
I’ve just started on the 2019 year. And plan to go back to 2018.
But what are the results so far, if I would have traded this strategy?
2021
Let me explain how I do this.
Here’s a sample month.
Well, I need to know which method is better. Picking the strongest and weakest % running pair. Or picking the strongest and weakest running pip count pair.
So. You got the top half, which is the % count. And the bottom half, which is the pip count. And in the middle is the totals. Compared side by side.
As you can see, both sides are in agreement with the GBP/JPY pair being the pair traded. And all I’m doing is adding up the daily pip results, on that pair. And keeping a running total for the entire year.
Let’s get to some results.
- Picking the % spread pair is the way to go.
- Very positive for the year.
- Presently ending around 2000 pips in profit.
This is pure vanilla. Meaning, if I picked the strongest against the weakest pair, from the % table, without any kind of tampering done to it, then this is that result.
Position sizing is not being a factor, at this point. That would be another back test.
But this simply tells me that this might be a viable option. For a long term running trade option. Right?
I should mention exactly what trade(s) were running, during this time.
By the shear fact of this method, you’re gonna have a very mixed up month of Jan.
This is the starting point of the count. Therefore, there is no way for any currency to start on an established trend yet. It’s way too soon. There’s not enough time passing by yet for all the players to have a consensus on something yet. And even then, if that does come to be, then who’s to say that should continue? That would make it too easy. Since when is there something easy about the market?
Anyway.
After this point, guess what?
We do have a consensus about which currency is the strongest and which is the weakest. The GBP on top, and the JPY on the bottom. This all started in Feb.
Well, this did not change for the whole entire year. Can you believe it?
That even stayed true for the pip count running method (that’s why the two lines above stayed equal apart from each other the whole time).
2021 was the GBP/JPY show. Plain and simple.
Sure. Someone (probably all traders do this) could just look at each and every one of the 28 pairs’ charts. If you would compare them all, and you were looking for the biggest mover, for the year. This would be the best pick.
First off, I don’t believe in charts.
I refuse.
I don’t.
And I won’t.
Look at them.
This is the biggest deceiver among traders. And everyone wonders why things don’t work out the way they want them to. It’s because of the charts.
I’m sorry.
But the answers are not there.
The secret is out.
Anyway. Where was I?
I come to the conclusion of the GBP/JPY pair to be the best pair to trade because of the % daily spread conclusion. It’s the widest. In another words, strongest to weakest. That’s my reason. Surely not because of what a chart shows.
Moving on.
The year 2020.
Results.
Different story here.
Probably because the world got upended. And this started the new era.
- Both methods end in negative territory. But the % method fares better.
- When the volatility goes haywire, going with the pip count method is better.
Let’s see what the month of March looked like.
Now you can see the difference between keeping track of the %'s to keeping track of the accumulated pip counts.
Bottom line here is that when volatility is high, picking the biggest spread of pips pair fares better than picking the biggest spread of % pair. That’s in the middle.
Let’s see. What can I say about all this?
First, I guess, I need to ask the questions.
- Is this a viable yearly trading strategy?
- Have I gotten enough back testing data to prove this?
- What is it that makes this work or not?
- Will running '19 & '18 prove anything pertinent?
- Does polarization (how clear a pair to trade) make that much of a difference?
I need to talk about that last question. This is what I’m trying to get at.
This year ('21) was a success (profitable) because it was a no brainer of which pair needed to trade? The GBP was on top the whole entire time. It was strong. I have all kinds of data to support that. And the JPY was weak the entire time. Same thing here. Everyone knows how much of a depreciation they went through this year.
Is it because of this one fact that this strategy worked this year?
I’m kind of thinking yes.
That’s why I’m calling it polarization. The market went by way of some real long slanting. The strong got stronger. And the weak got weaker. Like, all year long, so far. And this very well could be the one and only reason why this strategy worked out. This is not what happened in the year before. We had some real turns, last year. The USD got real strong. Well, all the safe havens did. All this was exponentially compounded in the month of Feb and March. Maybe even a little April. But then for the rest of the year it went by way of the opposite. It was all risk on.
But does that really matter though? We’re talking about who’s on top and who’s on the bottom here. Right? Does it really matter what market environment we are in?
Probably not.
Well, then, what explains what happened this year?
Having 2 anomaly’s? GBP, JPY.
Like, the perfect storm?
Will every year prove a different scenario? Results?
All I want is a viable way to have a trade run all year long, to take advantage of a possible anomaly. Which should be profit. But I’m not gonna know whether this happens until after the fact.
And you would think it should happen when you’re sizing them all up and taking the top and bottom currency. If the gap is large, and is long running, then that should spell some kind of profit.
It’s a chance. That’s all. I don’t know whether it will occur or not. But I think it’s worth a chance to take.
How about some amendments to the strategy, to ensure it’s viability?
Like taking some profits off the table along the way.
How would I do that?
Well, I need to take advantage of the time that I have. That is something I know for sure I will have on my side. This will have all the time in the world to play it out. I’m wondering, along the way, is there a way to compound profits, when it comes. And on the other hand, is there a way to minimize losses, when it comes.
Invariably speaking, the only way will be through the position sizing. Right? It’s the how much that I will have on it. I don’t see any other way. But how?
I’m just gonna throw some stuff out there. Like, how about every 100 pips of movement I take some action. Either add on some position sizing (moving in my direction). Or subtract some sizing (moving against my direction). Or take some profits off the table. I don’t know. There’s got to be a way to compound on the profits that are had, and minimize the amount of losses that are had.
Ok.
I’m getting lost here.
I think I need to quit. Typing. I’m just not getting anywhere.
I’m gonna proceed on with seeing how '19 & '18 years turn out.
What can I say Journal? This is precisely what I’m going through now.
Maybe some ideas will come through as I churn out the data. We’ll see.
I need to remember that all of this originated with the one idea I had. And that’s going with the dynamic of the strongest against the weakest pair. There’s got to be other ideas. To capture profit for the specified time frame. Something would be telling me which pair to trade. All year long.
Well, if that’s the case, then how about a pure discretion trade. I mean, if it’s all about what particular pair, which doesn’t have to be the same one the entire time, then why not my own pick? Whatever the most outlier pair I can find, on a weekly basis.
I could go with:
- The pair with the highest volume.
- A bell whether pair, AUD/USD or AUD/JPY, and pick which sentiment the market is presently in, either risk on or risk off.
- Determine which 2 currencies have the strongest trends and trade that way. A copy of what this year did (GBP & JPY).
- Copy last years dynamic. Stay with the biggest moving ones, USD & AUD.
Yeah, I wonder what dynamic I can dig up for '19. And even '18. Surely there is some kind of theme playing out. Even if it’s nothing but the back and forth kind.
Alright Journal.
I got some work to do. Continue.
Thanks for listening to that stupid stuff.
I’ll keep you up on what I’m gonna do.
Mike
1 Like