Oh, and one question, you are short GBP/JPY correct ?
If so, with all due respect, what was your entry?
The Ever Questioning The Status Que VIPER
Good Morning Journal! How you doing?
Iām good. Iām meanā¦all things consideredā¦pretty dog-gone good.
So, we have a lot to catch up on, Journal. Cause the end of the month was like last Monday night at precisely 8pm for me. (Thatās 00:00 GMT, and the start of a new day) At that time I take a look at my account and see where Iām at. Itās my milestone, where I take stock in how things are progressing. I took a picture at that time, since I have running trades. And when I calculated it all up, what a shock I had. After that last post I did, realizing percentages to an account, I was really amazed. Bottom line isā¦Iām doing good. Iām doing better. Definitely progressing. And that is all I care about. I just need to know that Iām getting closer to the goal. This month is by far the best month so far. I know thereās more to it than just the $ amount bottom line. But when that is growing, it has to mean something. So, let me show you my table. And BTWā¦I did not add any money to the account, since last month. Itās all from the market.
See, Iām telling you, that last post I wrote up made me realize a lot. I have reread it over and over. It is very important to me. This is something I need to remember on a daily basis. What was it about again?
Itās all about the system, not the money.
My concentration should be on everything that goes into the system. Not on how much money I need to make.
But, I tell ya, when I see some good results like this, itās a good sign.
Run the numbers Journal. I made 30.6% this month. That is telling! Sure, at first, when you see the amount, it isnāt all that much. Whatās a couple hundred dollars? But on the other hand, 30%? Are you kidding me?
That made me think otherwise. Iām doing good.
My system is doing good. I mean, look, I was patient. Sitting there twittering my thumbs, waiting on the JPY. It wasnāt easy. I remember it all too clearly. The market was dancing without me, risk-on. I was sidelined. I was even wondering if my business was going anywhere. Then after so many days and weeks go by, I seen it coming. It started with the USD. And boy did I get in at the right time, beforehand. (Itās all noted up there). Then the CHF right behind them. I even got some extra positions with those two. Yeah, then, got spanked by the NZD. Learned something. Then the others have come along now. So now, thatās where Iām at, in the middle of the run. Itās not over yet. Weāre gonna have to see how it ends up. Iāll have as much data as I possibly can for my time in the market, during this JPY run. Itās all being noted as I go.
Well, hereās my end of week shot of all my trades running.
Thereās only 8 open there. (Couldnāt get it all on one shot on my phone)
You can see the dates when they were opened. Latest on down to the earliest.
One thing did happen this week that is not reflected there. I had a bout with the GBP. In fact, it was similar to the NZD. I lost. But the difference was I only let it go till I lost $9 and change. I jumped out then. And then of course, they come on back down. I got back in with them (GBP/JPY south), during Thursdayās huge drop. So, the AUD and the CAD got in with the action. Their sell stop orders kicked in. And I guess I didnāt mention that I got back in with the NZD. I put in another entry order that eventually got kicked in also.
Hereās my bottom line to date.
So, Iām gonna cut this short. But I must come back and do some explaining. Iāve been questioning my indicators. I feel that Iāve found a better way.
Just take a look.
Different huh. Donāt worry, Iāll explain. This is much better.
In any case, you can see all of the dotted lines that Iām in short with. Everyone except the EUR, at this time.
Mike
Journalā¦
Mike, Mike, Mikeā¦what are you doing? Are you crazy? ā¦Just kidding big dogā¦Talk to me. What you been thinking here?
Well Journal, Iām questioning everything. This has been nagging me since the beginning. You know that little voice way back in your head? Saying that something is just not right? Well, I wanted to get to the bottom of it. I did a good bit of research. And all of this has to do withā¦the trend. Everyone needs something to tell them when something is trending. Whether an indicator, a pattern, I donāt care, something needs to tell you that a trend is taking place. And I picked the 8,21 crossover method. And if you remember, Journal, we talked about this. My most bottom line of āWHYā really wasnāt an answer. I believed in it because someone else did. A well-known trader, mentor, teacher uses it. That is not a justifiable reason. It should be more of a concrete, personal belief of why I think it works. So, I did some investigating.
First off, my trading has not been that bad. In fact, Iāve been making some real head-way. I do believe in the fact that success in trading comes more from the trader than the system. I think Iām living proof. Iāve been able to manage myself into a trend, not because of my indicator, but because of many other factors at play (some would call them confluences). When you really think about it, how many different ways are there to tell you when something is trending? Probably a million and one.
And so, what weāre talking about here is what tells me when a trend starts and when it ends. My system is designed to get me in a trend at the beginning and ride it out to the end. So, I need something to tell me that itās trending, so that I can get into it then. Iām learning that it takes some finesse to get into it at a certain point (for instance the crossover before). And I need something to tell me when the trend is over. My exits will need finesse also. But, I at least need something to see, for it to tell me itās over.
Ok, thatās nice. Iām coming out with it.
Bollinger Bands. I seriously donāt want to get into the whole process of how I came up with it, because itās extensive. But, needless to say, it was because of some good healthy research.
I was not going to ban an EMA. That, to me, is important. I fully believe in smoothing out past price action. Everyone says that that is a lagging indicator, and talks like that is a bad thing. I canāt tell you how many times Iāve heard that. In such a condescending manner also. Well, you know what, I have news for you. **Everything is a lagging indicator, EVEN PRICE !!! ** This is how I think. What happened a second ago, is history, just as much as something that happened a day, week, month ago. Everything is history. Theoretically speaking, Iām not wrong. The only thing that is considered present, is ātodayā. Itās in a general sense of the word. But, in the market, in actuality, all that happens is in the past. Think about it. When a big trader (fat finger) thinks about what he is going to do, he has already decided. Then, he hits the button. Itās in the past already before it even shows up in the market! It is a theoretical discussion. No one can say that thereās a difference between a millisecond and a month. They both have taken place, in the past, not the future, and not in the present.
And Iām still waiting to hear a concrete time when the present begins and ends. Anyway, I donāt buy into the saying of something being lagging. I do want to know what the average closing price over the last so many days were. Price fluctuates so much that there has to be a happy medium. I believe in a day. I believe in the closing price. And I got to tell you. My favorite setting for the EMA is 21. That is pretty much how many trading days are in a month. So, I stuck with that. It is all in the Bollinger Band.
After searching out B.Bās, boy do I feel much better this way. Itās easier, and I do believe price reacts real accurately to the bands for support and resistance. I learned the best setting for the bands is 2.5 standard deviation, as opposed to the default of 2.0. So, itās simple. How do I know if something is trending? If itās above the middle line (21 EMA) itās trending high, below that line is trending low. Thatās what all my pairs will be hoping for. JPY trending high will be below the line.
All I need to do is see what side of the yellow line (21) price is at. And you can see that price is below that line on everyone except the EUR.
I donāt have much changes to my trading. I will use that yellow line as my entry point, for lower. Hey, if itās trending, I want to be in it. And when itās not, Iām not in it. Itās that simple.
I have much more work to do, especially in regards to upping the position sizing (managing) , and also for the exits.
Got to run Journal.
Weāll be in touch.
Mike
1 Like
Ok got it, gone have a great life.
The Ever Gone VIPER
This journal is not unlike Livermoreās jotter with itās pencil and red ink entries.
It was reviewing those notes that Livermore realized the value of what we call levels.
Mikeās journal has a different approach, we see ālevelsā in the form of maās, but more importantly we get to see inside the thinking of a person trading the market.
This is unique and to be cherished, many thanks to the journal for listening and sharing.
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Good Morning Journal!
Me and You here Journal.
Only Me and You.
Soā¦I got a lot going on, Journal.
See, first off. I got to tell you. I think so much about you Journal, throughout the week. In my morning times, the things that Iām working on, is very constructive, I think. So much that Iām always wishing that I can be journalizing right alongside. But I canāt. I donāt know, maybe I can give it a try. I mean, honestly Journal, it would be awesome because then it wouldnāt be so difficult on the weekends, cause, like now, I have to go back and remember all of the things that I wanted to write down and talk about. And of course, I never get to everything I wanted to. So, anyway, look out for some material during the weekdays. I know youāll always be there to listen.
Ok. Yeah. Thatās nice.
Soā¦Journalā¦unless your under a rock, you have to know whatās been going on in the market lately.
Of course I do Mikeā¦but letās pretend that I donāt know. Tell me some good news. Risk-off sentiment still prevailing for you?
Ohhhh man. Yes. Yes it has been. And my account is rolling on. Let me show you.
Here are all the trades. 10 total. 7 = all of them, plus 3 that are doubled.
And this is the market snapshot. Again, dotted lines are where Iām short at.
As you see there, every pair is trending high on the daily time frame. So to me, that means they are the strongest currency, on the daily. The next strongest currency will be the one who is trending high against everyone except the JPY. And so forth on down the line to the weakest. I told you a little bit ago that I keep track of this. So, hereās the picture. Just look at the Yen (purple).
In the middle of the pic is the monthly time frame standing, taken Aug 1st. Then above that, the group of 2, is my 2 weekly time frame shots. They are done on Sundays, and that is the standings on the weekly time frame. The group of 5 is the daily time frame standings. This is the best way I know how to put it all into perspective. Strong down to weak. But this way, I can always see whoās moving up or down. And since my horse is the Yen, just look how fast they climbed to the top. Manā¦I was riding them even when they were still on the bottom (daily time frame). Ok. Iāll back it up a little and show you what last month in total looked like.
You can see there that they pretty much started to rise up on the last day of the 3rd week, standings wise. Then on the 4th week, made a good move up. But, I took my first trade with the USD back on the 12th. That was during the 2nd week of the month! So, you can see that when they start moving up on the live charts, it doesnāt get reflected so quickly in the standings. Itās a real delay. And thatās precisely how Iāve been making money with them during these last few weeks. They have been climbing on up the charts. Itās all relativity. To the other currencies.
BTWā¦I donāt care about levels. The only real level is the yellow line, 21 EMA. If price is above that line, the base currency is trending high and the counter currency is trending low. (BASE/COUNTER) Likewise the opposite when price is below the line for the counter currency to be trending high. My JPY is always the counter currency, so I want below the line.
In any case, my Yen has been climbing up through the ranks. Iāve been on them the whole time. But now, itās gonna be a matter of time till they eventually fall. So my exit plan will be similar to the beginning plan. I will want to start jumping out when I see the changes taking place. On my daily table, I will have to be seeing changes. See, this is the game. No one knows how long strength lasts. Manā¦I have 3 yrs of documentation of these currencies, in a similar manner. I used to have tables and tables of strong/weak relationships. Iāve seen the Yen on top for a couple months straight before. But of course, thatās history. All that tells me is the possibilities that can take place. In any case, Iām entering the phase, in my trades, where Iām gonna have to figure out when Iām done profiting. But I need to remember, my rule of thumb is, if itās trending, Iām in it. When itās not, Iām out. So, I will wait until I see price start rising up close to the yellow line. Sure Iām gonna be losing some when the time comes. But, who knows, the Yen just might be starting. I want to ride out the trend to the end. Cause I really donāt know when it will_actually _end.
Needless to say, Iām going through the good times right now. This month my account is up 31.9% . Yeah, thatās awesome, I know. But what I need to remember is thatās itās not my money yet. Thatās called the unrealized profit. It gets realized when I close my trades. But my trading strategy is not yet completed until the JPY is done trending high. Who knows? I might never see my account up this high by the end of the month. On the other hand, this might be low compared to what the market might have for me. I just donāt know. But, I will let the market dictate to me when I need to get out. See, I want to follow the market. Cause I believe in the trend. All I can do is follow it and hope that it will be long. Iāve seen some long trends before, and it can simply be amazing. Weāll see what happens.
Journal, I have sooooo much more I need to run by you. But, once again, I got to cut this short.
Iām gonna try to come on back.
Mike
Journalā¦letās begin.
Remember, itās all about the system. What I mostly want to talk to you about is My System. Do you remember when I took (paid good money for) those classes? All of what I learned then was about what your system should entail. I believe I got my moneys worth, because everything that was covered is precisely what goes into your system. Believe me, there is so much. It kind of reminds me of what the scientists think of the big bang theory. In the beginning, everything that came into existence was compressed into a very small particle. Then there was a big bang that occurred that spread everything out. And is expanding. Well, in a similar fashion, I believe that I was given/taught all of the things that I need for my system. That would entail everything that goes into what a trading business should encompass. There are so many aspects that they need broken down and need worked on. And thatās what I want to continue on in here. See, I love to put all things into perspective. There is nothing more vital for me to do than that for my business. All things need to be laid out, put into perspective, broken down, and to get to the bottom of it all. All for the reason of control. I can remember him telling us, āWe need to be in control of our tradingā. For as much risk that there is in this business, the more control we must strive to have.
Well Journal, let me show you something. You know that mind maps are my greatest tool. So, that has been the best way for me to compartmentalize all of the different aspects of my business. I want to get more organized in that way. This is where I stand now. This is just a glimpse of what I look at everyday. Every one of those red Xās is a mind map subject. This shot is what my desktop looks like.
Pretty unorganized huh. Well, to some extent it is. I know all of the titles there are pretty much abbreviated, due to space concerns, but maybe you can get some kind of idea of what they are. My objective is to organize all of these mind map subjects much better. But, as it stands, this is my system, in plain sight. Donāt worry, Iāll explain what everything is. For now, what I see is, bottom row is my core trading skills. Second row from the bottom is a lot of my trading values. Boy do I have a lot of work to do in that area. I want to augment many of those subjects. Some belong, and more needs added. Then in the third row from the bottom, the first 4 MMās are important, not the rest. And up at the top row, those MMās mostly have to do with my strategy. And I honestly donāt have much else in the way of organization there. As you can see, I have a lot of work to do. I know I can get it better.
In fact, I have a ton of work to do period! So, this is what we are going to be working on Journal, for some time. This is actually what is most important to me. Not only the organization of it all, but the contents.
Iāll show you what I was working on this past week. See the third row from the bottom? Most right side. That one is āMy Core Trading Beliefsā, then left of that is āMy Trading Weaknessesā, then left of that is āMy Trading Strengthsā. I was working on the weakness one. That was pretty humbling for me. I did feel good about how I worked on it this week. And Iām not so sure I want to show that mind map. I donāt knowā¦itās humbling.
Let me look at it again.
Ok. 2 shots here. The first one is what I had before on this mind map. This was the original draft.
This is the leg that I worked on this week.
Well, itās personal Journal. So donāt tell anyone. I hate to think of going backwards, and learning lessons again. Butā¦I am entering into a new era of my trading. So, I need to combat it thatās all. I am honest with myself, even if it hurts.
Iām glad you understand also Journal!
Well, this is just the tip of the ice berg.
Organization will be mine!
Mike
Good Morning Journal!
Well, itās so nice to visit you on a Sat. morning, finally. Iāve been wanting to. But for whatever reasons, it just doesnāt work out. But today, success. I woke up to the alarm, 3am. (Itās always set, & on, for that time)
Pretty much jumped right out of bed. I couldnāt believe it. Iām finally happy with myself, cause I can finally take advantage of a full weekend of productive time. Sat am, & Sun am.
Soā¦coffee is hotā¦got my figures tallied alreadyā¦and now Iām ready to type. So. Letās get the good news out of the way first, then weāll get back to the āsystemā.
Howād your week turn out Mike?
Well Journal, it turned out good. Was a bit of a roller coaster ride. But boy, I tell ya, thank God I believe in a āweeks time frameā. My account was just shooting higher and higher, then somewhere around mid week, it drops pretty low. Lower than what Iāve seen in a while. Then back on up at the end of the week. Iāll show you the details.
So, yesterday, I worked only a half a day (at my day job), which means I was able to check in the market before my broker closed it. I took this pic pretty close to 5pm. Here are all my trades open. Their in chronological order of when I placed them. Man, Iām sorry you canāt see there an actual date they were taken. But, I do have that data on a mind map. So, the last 2 trades there were taken on the 14th. This past Monday night. Well, I wanted to up the position sizing. And I did. But, they didnāt really take yet. Price has pulled away from it, but came back now. I donāt know how this is going to turn out yet. Hopefully this wasnāt a mistake with these 2 pairs. Iāll show you. Itās the bottom row, first and second ones from the left. (AUD, NZD)
Man, that Aussie has been a tough one (bottom left). You can see my dotted lines where Iām in at. This 3rd position has definitely been a hairy one.
So, letās back it up a little. Check out all my trades. It is a wonderful thing to see the pips. Look at the āLot P/Lā column. Iām playing in the hundreds of pips. Yes. It is an awesome thing. But then you look at the āNet P/Lā column, which is the dollar amount Iām making per trade. Andā¦well, itās not all that, to write home about. Butā¦then againā¦thatās when you got to see what the percentage of the account is. This month, up to this point, Iām up 34.4 %. And to me, thatās a whole lot.
Look Journal, all Iām doing here is showing you, in slow motion, what Iām looking at, when I look at the account. All that. But, then, the next thing that goes through my mind is this. (Iāve already have stated this, but Iām going to say it again, cause I need to) **This is not my money yet ! ** My trades are not closed out. The Yen is still churning. And the strategy is not yet completed. I havenāt even navigated my exit strategy yet. I need a reason for my exits, and up to this point, I havenāt encountered them. Butā¦Journalā¦Iām starting to wonder, now. Cause I see something. And we have to talk about this. Now.
These are my reasons.
The biggest thing that made me ponder jumping is the USD/JPY. Just look at the latest price action.
Daily chart, extending back to the beginning of the year. You can see where I got in at. Dotted line. Actually I have 2 positions there, separated by only 3 pips. Yeah, thatās pretty impressive, I think. But whatās eating at me now is the latest price action here at the bottom. A long candle wick. Also, this is what they call a double bottom. But, that of course, is assuming thereās going to be a bounce from here, on up. We have now a second doji looking candle, and it is scaring me. I meanā¦do I really think that price can break down below this area? If it does, it will pretty much be in the lows for the year. Ok. So, let me give a possible scenario for that. This can possibly be the time when the US stock markets make the much awaited crash. Which will mean, in the currency market here, that money will flow to the safe haven Yen.
Ok Journal. Sorry. Iām back now. Got more coffee. And done a little research. Letās take a look at this.
Red is the S&P, blue is the USD/JPY. This is the weekly time frame, extending back to the global depression era. My question is whether they correlate to each other or not. Should I consider this in my thinking?
Iāve always thought that when the equity markets dive, the money flows into safe haven currencies. Well, itās probably true, but not always. Ok, so, letās talk about this screen shot.
The stock marketā¦in redā¦left of the screenā¦takes the dive heading into 2008. Yep, 2008 was a real bad year, globally. As we all know. Then the climb begins shortly after into 2009. And itās been nothing but up since then. But look at the USD/JPY. At the start of the whole ordeal, it was at a top. The USD was boss. King Dollar. Yen trash. But, when all hell broke loose, the tables turned. It was an influx into the Yen, and a selling of the Dollar. You cannot deny that. In fact, look closely, that pair was crashing before the market was. I wonder if the pair was a precursor to the event. Is this the leading indicator? Anyway. In plain jargon, the Dollar was being sold, and the Yen being bought, from that time all the way up to the year 2012. Meanwhile the market was marching higher and higher for 3 years already. Look, another thing just hit me. We have to realize what was happening also through this time. We started into the quantitative easing era. The governments made money for businesses to use, oh, and bail outs also. So, yeah, Iām sure thatās why the market was able to rise up again. Ok. So, the Dollar came back to life approaching into 2013. And I was trying to remember what was going on then. I remember (cause thatās when I started into this business). Thatās when the Yen did their massive quantitative, devaluing of their currency. Between their new central banker and emperor (or whoever), they just let it loose. I didnāt realize it a whole lot then, but apparently that was easy money to be made. I wish I was aware of what was happening back then. Cause it was definitely big news. Manā¦I bet you our FX men here made a lot of money back then, selling the Yen. I canāt imagine. That was probably good times for those traders. I was in diapers and learning how to breath back then. Oh well. Ok. So. Where we at again. The Dollar made another top, thatās at the same height of when the depression began. Interesting. Middle of 2015. The stock market took a couple big hits during that year. And here comes the Yen. They got much stronger when the market faltered. So, we see the change occurring now, 2015 leading into 2016. Then Yen gets strong, the Dollar gets weak. And Iām trying to remember when the US first started the easing cycle. Well, I do remember the first interest rate hike. It was in Dec of 2015. Maybe that explains the drop in Dollar through 2016. Then I remember another hike in Dec. of 2016. Well, I think so. Look, Iām not an economist. Thereās so many factors that can be mentioned. But I just donāt know which ones take precedence. Letās look at the chart technically speaking. We have a top for the USD/JPY in '15. The next swing high comes just before '17. This is a lower high. And since then itās on the down slope. So, the way I see it is, thereās room for it to fall. And what about the stock market? Well, you donāt have to be a genius to see their due for a real correction. But, it seems to me that the currency pair is preceding the market. It kind of looks like what happened back at the beginning. Huh? Thatās what I see anyway. Soā¦where we at again? I said up there a little bit ago that it looks like a bottom can be occurring. But now I made the case that it can be the opposite. Maybe price wants to break on down through? Soā¦how am I going to play it? With my trading?
Good question. I can take my profits off the table now, and see what happens. You knowā¦I need to remember something here. Iām trading off of the daily time frame. But weāve been looking at the weekly time frame. Thereās no doubt thereās possibly more time for price to range, or even rise up before a fall. So, Iām thinking maybe I should take my profits now. And if price falls below this present level, then just get back in.
I know Journalā¦I can here you sayā¦Mike, stick to your trading plan. Ok. So that would be staying in the trade until itās not trending anymore. Presently, that would be at the yellow line, which is at 110.35 . Thatās 115 pips above where weāre at now. So, do I sacrifice around $10. or so, for the sake of following the plan? Or do I follow some intuition and count on price action. This would be considered navigating an exit. Cause if price action turns out to be a truth, then price will most likely rise on up to my exit. Iām thinking I should take the profit on this one. I mean, unless North Korea and Trump exchange words before Sunday night, I should exit my 2 positions and start afresh.
Nowā¦what about my other trades? Well, see, my question is, does the USD/JPY set the stage for the entire field? One one hand, if the Yen is most dominant currency, then of course it will. If their strong, then they will be strong across the board. If their weak, likewise the other. But what about the Comms? If the Dollar is weak, that can definitely make a strong commodity currency. But I will have to know whoās stronger then, the Yen or the Comms.
Ok Journalā¦Iām done. What you have there is a lot of thinking going on. Out loud. Plus, I got a lot of typing in. Yay! (Man, I love typing)
Well, the weekend is young, and I got a lot more to talk about.
Be back soon.
Mike
Good Morning Journal.
I was productive this past week, concerning my system. I feel good about what I accomplished. I guess what Iām mostly concerned about is how best to be organized with it. My ideal format would be some kind of way that I can have it all laid out systematically. I really like how I have it all on my desktop. I do wish somehow it could be a 3D view, but thatās impossible, given this is a one dimension screen. But what I need is the depth. Which is in effect subdivisions. But, the best I can do is utilize my mindmap attachments effectively. That gives depth. So, this is what I think is the best way for me to view my entire business. Itās not done, but my idea is taking some kind of shape now. And all of this is done for the purpose of viewing it, in itās entirety. This way I can look at all of the components, at any time, to be picked apart, worked on, added or taken away. I guess itās all for controlsā sake. I just cannot afford to have surprises in my business. I believe everything should be monitored in a business, doesnāt that only make sense? So, this is the way I want to have it laid out.
This is my thinking. What would be at the heart, the center most important parts, of my trading business? (And all of this stuff is what I learned from the master)
Why am I doing this? Whatās the driving force behind it all? What is it that makes me motivated? The answer to those questions lie in my purpose statement. And my vision. This stuff belongs in the center.
So, Iām going to put it in the center of my desktop. And Iām gonna surround that with the most important, biggest asset that will get me there. ME My core trading skills, values, beliefs, strengths & weaknesses.
This is the stuff that everything else will derive from. This will be who I am. This is gonna be a forever worked on project. Iām not there yet. But all of the things that I learn and experience to get me to where I want to be, will be mapped out. All this will be core stuff. How do I think? How do I learn? How do I make decisions? Why do I believe what I believe? Etcā¦So, the heading I have for all of that is My Trading Culture. So, let me through out there what it looks like so far. And Iāll explain it from the top down.
So, on my desktop screen, on the right side, I will be putting all of my values (mind maps). On the bottom will go my core trading skills. And at the top of my screen will go my trading strategy, kind of like how I have it now.
This is why I wake up in the morning.
This is what Iām shooting for. Plus what it entails to achieve it.
I scrapped all of the ones I made before. Iām starting over on this subject. So, these are the two that I did this past week. I plan on having multiple, multiple values in here. I just want to go through them carefully. So, there will definitely be more to come.
I have big plans in this area. I will review my mind maps on each of these skills. But my plan is to eventually have each of these skills to be consistently utilized, in my business. Like, I want to know how to think properly, in all of the different aspects that I will be doing. I want to know how to learn properly, in all of the things that I need to learn. Can you imagine how much stuff I need to learn? Well, I just want to do it in the most effective way. Same goes for decision making. You know how many decisions I (we) make on a daily basis? Thousands. I just want to be most effective in that way. Bottom line is I want to establish these core skills in a way that I will be constantly using them most effectively.
This mind map will eventually be a massive one. I done this a couple weeks ago. And what Iām trying to do here is discover some real core trading beliefs of mine. Points that I think are very fundamental, in which I need to remember. Iām sure I will be changing these as time goes on, cause I need to know whether Iām right or not. I could be wrong, but I would need proof of concept. Maybe thatās what I am looking for in hereā¦proof of concepts. And itās about what I believe about the market.
Well Journal, I just touched on the heart and soul of my trading system. Just there is a massive amount of time needing spent on. Iām getting closer to organizing it all.
The work will continue.
Forever.
Mike
Good Morning Journal!
Well here we are again, Me, You, hot coffee, and a quiet world right now. Just how I like it for a (very) early Sat morning. Time to reflect and see where Iām at, where I came from, and where Iām going.
Looks like I need to back it up again. Sorry Journal, again, I wish we were tighter, but itās so hard to do during the weekday mornings. My time is so limited.
Ok. So. After talking to you last weekend, I definitely determined to jump on out of the market. See, I know I better have a good reason, cause this whole JPY run has been a good one. In fact, for me, this is the first time I have completed a beginning, middle, and end, of my trading strategy. And Iāve always have been wanting to collect, and review so many of the details of a completed strategy. And I have. Weāll talk about that later.
But whatās very important is whether Iām in tune with the pulse of the market or not. I need to be on the same wave length as it is. So, these are the reasons why I jumped. First and foremost, was the price action of the USD/JPY. Bottom line there was it was looking like a bounce was gonna take place. Second, I got to thinking about what happened the prior week. Across the board, the Yen took a very big hit. I thought that was very unusual. Lookā¦I know anything can happen in the market, but when theyāve been rolling strongly for awhile, this seemed kind of out of character. They bounced back by the end of the week. Yeah, it was all too scary, I know. So, Iām thinking that it was a sign of things to come. The ending. So, that was the second major reason for an exit. Another one was, that they had a relatively long run already. I think a good amount of days have passed for a satisfied run. Look, no one really knows how long runs are gonna last, but there has to be signs of an exhaustion. I mean, the USD/JPY ran for 27 days. That seems like a long time to me.
And then I was confronted with the question of do I follow suit with the other pairs? Do you mean Iām gonna jump out of a pair due to what the others are showing? Yeah, that kind of seems like nonsense, on the one hand. But, on the other hand, I tend to see the bigger picture. The whole perspective. And that is that I am trading the Yen. Period. I put more of an emphasis on the pulse of the market, than any one individual pair. I think the risk-on vs. risk-off view goes across the board. So, those are the things that Iāve been thinking about. Oh. And one more thing. In total, I am killing it! There has to be a time to take all the profits off the table. I just want it to be around the time the market wants a change.
And thatās what I did. Sunday night. My broker opens up trading at approximately 5:05 pm. There was a couple pairs that I couldnāt get it done until around 5:15. And thatās that. Did I do good? What if I made a mistake? Whatās gonna happen from here? Whereās that leave my strategy? Yeahā¦lotās of stuff rolling around my head at that time. But, I figure, this is the time Iām gonna stay out of the market. Itās that simple. I just have to go that way. I will be happy with what I got. And nowā¦itās my money. Iām gonna take it, and run. Whatever happens afterwards, happens. So, I spent the entire week collecting, organizing, laying out all the data from this run, as best as I can. Man, thereās a lot. I havenāt even finished it. I should show you. Interested Journal? Why, of course I am Mike. Awesome!
Now, before I go on, a lot of the hindsight data is not quite yet available on the mind maps, because I need more days to come and go to see whether I got out at a good time or not. So far, I have this entire week that came and went. I can get somewhat of an idea, but I think I still need another week or two, for a complete wrap up of how I did. Well, letās take a look at this one, only.
And that reminds me, Journal. I forgot to tell you what else I did. Manā¦I got to thinking. It hit me on the close of Monday, that if Iām convinced enough to jump out, and I think that the Yen is in for weakening, then why not demo and see what would happen if I went against the Yen, across the board. I mean, itās not gonna hurt. Letās just see the opposite side of going with the Yen. Iām sitting out on the live account, but at least this way I can have an idea how the Yen fairs against everyone else. It would be data none the less. So, thatās what your seeing there on that last pic, where I went long the USD, short the JPY. Ok. Thatās nice. Letās move on.
These 2 are my losers. The blue lines are where I shorted them and exited them. I entered at the lower blue line and exited at the top blue line, for a loss. These 2 trades have shown me a valuable lesson, as you can see on the mind map. But, up at the NZD/JPY, the green dotted line is where I came back in, for short. And of course the red line is where I exited it. Also you can see I entered the NZD for another position towards the end. So, this is the rest of the NZD trades explained.
The green lines are where I went short at. The red line is my final exit.
And this is the last of the trades. As I said, I didnāt get to finish this. So no snap shot of them, yet.
Yeah, I just didnāt get to explaining them also.
But anyway, what do you think Journal?
There were 14 trades taken. 10 winners, 4 losers. And I somehow canāt believe the win rate. Is that true? I mean, let me explain. My trading account balance was $278.46, at the time I placed my first trade. So, whenever I calculated anything, I subtracted from that total, a % above that. I think thatās right. And my ending balance is now $470.39 . That just seems like a lot. That makes me feel better, because I did see my account climb over $500 a few times. But, again, that wasnāt my money. That, right there, is my money.
So, thatās all nice. Weāre moving on. In the mean time, Iām out of the market now. And good thing, because I do think a change is occurring. Just look at my daily table, for this week.
Bottom right block was this past week.
You donāt know how happy I am to see the purple move on down.
So, the Yen moves on out. The dog-gone CAD comes on back up, along with the CHF. Those 2 manā¦I meanā¦looks like the SNB must get back to some more intervening, or something. They aināt gonna like it for long. And we just cannot get rid of the CAD. They were very strong the whole month of July. Took a step back, but now pushing their weight around again. Their tough. Surely they are not getting any help from old man Oil. Oil isnāt going anywhere. But now, I wonder if they will give some kind of boost to the other commodity currencies. I sometimes think the US has some benefit to Canada also, being neighbors and all.
Also interesting is the EUR. They are not going anywhere. Been strong and staying strong, probably for a long time to come, too.
Alright Journal.
Gonna get going.
See you tomorrow.
Mike
Good Morning Journal !
Well, we have a lot to talk about. And what a better time than this weekend, cause itās a 3 day weekend for me. Woohoo!! So, I got three times to come visit you this weekend.
Iām sorry that I missed the boat this morning. Bad night, and couldnāt wake up. But, Iāve already been preparing beforehand, so maybe I can catch up quickly.
Ok. So. From the top. End of the month just occurred. Whatās my account look like now?
Those are the figures posted at the beginning of that month. And I threw in, on the latest 2 months, how much of an increase from the previous month. (I didnāt add any money, from the outside, on those 2)
Ok, so, we need to talk about this. What we got here, is, nothing but, gaining traction. As I look back on it all, the biggest thing was getting the strategy into place. That took place around the beginning of summer. Then I was doing a lot of waiting on the market for the right conditions (a JPY strong run). And to date, I have finally completed my first beginning, middle, & end to my trading plan. That took place on July 12th and went to Aug 20th.
Ok. So, thatās all good and nice. Bottom line is, Iām making progress. Iām on the road. Iām on the journey. Everything is pretty much in place at this point. And all I have to do is keep following the market. I think thatās the key. FOLLOW THE MARKET Not get before it. Not second guess it, or predict it. Just follow it.
Soā¦speaking of that, now that 2 weeks have past since I closed up my trades, letās look at the whole JPY run. I know Iāve done much of this already, but I think Iāve compressed the entire ordeal in a good way.
Here are my trades, in order, for the most part. These are all put into perspective. You can see exactly when & where I bought them (sold the pair), in what order, what the market was doing beforehand, what happened afterwards, as much of a visual as possible for hindsight.
What needs to be mentioned here, regarding my entries, is the fact that the JPY has been on a long (relatively speaking) depreciation. On the USD/JPY chart, the last time price crossed up and over the 21 EMA line was on June 15th. So, basically Iāve been waiting an entire month for this. I canāt tell you all of the different market factors that were going on at the time, but I had a good sense that the sentiment was changing for a favorable Yen. The USD was the first pair to eventually dive below the 21 line. I think itās important to know how the Yen is fairing against all of the others. This dynamic tells me how strong they are/have been. See, Iām aware that I shouldnāt automatically assume that they are gonna take out all of the other currencies. All Iām doing is taking advantage of their strength. The more pairs they trend high with, the stronger they get.
But, what I want to do here is compare the when and the how the JPY took strength against them all. So, after the USD came the CHF. Even though I went in with both of them, at the same time, on a Wed, then 2 days later, the CHF didnāt really get going for about 2 weeks later than the USD. Now, the ending, was good. Iām satisfied. Sure! But, to note, I did get out around a week early, with the USD. I remember thinking that the turn-around was gonna happen imminently. (Remember me mentioning about the 2 price action candlesticks?) Wellā¦No. Actually there was more money to be made. Itās ok. No one can call tops and bottoms.
The green lines are where I went long, on the demo account. And if I donāt say so myself, I did good. They all are still running. Iāll talk about that later on.
Here are my 2 early-on losers. # 5 & # 6
Do you see where I ācut my losses shortā ? Both of them. Exact same pitfall. Both were on a Wednesday! I jumped before the end of the week. (I wonāt beat you down anymore with my new rule)
Well, at least I got back in with them. And both second trades were great. But doesnāt it figure, and youāll see, the NZD was the only trade that didnāt go for the opposite (demo-northbound).
The next 2 here are the EUR, and the CAD, the strongest currencies lately. I guess I didnāt do too bad.
Look at the CAD. I didnāt make many pips on this one. But the thing is, there was many pips there. I mean, even looking back on it, what tells me that thereās a bottom? Nothing. No real price action indicating that.
I keep looking at the chart. Thereās just nothing I can learn here. Look, thereās a nice real drop down. I mean consecutive red candles. So then, it retraces. Yeah, thatās always the case. I donāt know that this retracement will actually be a U-turn, cause thatās exactly what this is. What I do see here possibly is this. Do you see on the 17th, that pretty big red candle? Well, that day is Thursday. Look what happened on that Monday through Wednesday. Nothing but up. And you know by now my rule. Thereās always a turn before the end of the week, (usually mid week). This red candle was the turn. Naturally I donāt know whatās going to happen on Friday, but theoretically I guess I could have gotten out then. Waitā¦No way. I wouldnāt of. And I didnāt. Guess whatā¦I did jump after the very next day. It was the weekend, and I got out right at the open. Nothing really I could have done here. Plus, I donāt itemize my trades. Not yet anyway. I went all out.
So, hereās the AUD/JPY.
2 winners, and 1 loser. I donāt know, not much here to learn.
One thing I do know is, I definitely called it, the end of the JPY run.
The demo account is up around %10. Thatās awesome.
Mike
Good Morning Journal !
Finallyā¦Me, You, and peace and quiet.
So, I was just pondering what weāre going to talk about. Donāt worry Journal, we are done with those trades. Itās time to move on.
Well, ok then, thatās what I did. I had some conviction about where the market might go. Away from the JPY.
Soā¦put your money where your mouth is, Mike.
Whoa Journal! Thatās a little harsh, donāt you think?
Well, thatās exactly what I was thinking. But, we know whatās the ultimate, most important part of trading.
Coming up with a plan, and executing it. (Actuallyā¦when I think about itā¦thatās dog-gone good advise for lifeā¦ periodā¦Stop, think, plan, executeā¦I like it.)
But, on the fly here, I guess I did the next best thing. I went demo. I got the ball started. Hereās what I got so far.
The first shot was at the original time that I set the trades. The second is the latest now. And then the results. Then, my perspective mind map.
This is my thinking. See, my strategy all boils down to trading the JPY currency strong. Thatās one currency, one way. Thatās one certain market sentiment, which requires a lot of waiting around for it to take place.
But, if I were to branch out, in sort of a baby step, then that would naturally lead me to be sticking to the one currencyā¦period. It still sort of follows the risk-off vs. risk-on play. Buying the JPY vs. selling the JPY.
It still holds true. Iām just testing out the waters with this.
One thing Iām seeing is this. Just look at the NZD. Thatās a weak currency. See, I guess Iām fortunate to be with a currency (the Yen) that is known for being really strong or really weak. And sometimes thatās just not always the case. So, trading in this fashion, Iām kind of forced to accept the loss along with the gains. Which, I guess, can be acceptable, as long as the gains are more than the losses. So, thatās just a point I wanted to make.
Another point to be made is that this is not the complete opposite way that I trade. Cause when I enter into the trades, they are itemized. Meaning theyāre all individuals. Iām looking at the trending conditions. I get in when they individually start trending. So, for me to make it a complete opposite way of trading, I would therefore have to individualize getting into each one. That would require a whole lot more work. Then it starts getting to be not-so simple.
I donāt know. Iām not looking to milk out the entire market. Lookā¦being up almost 10% in a week and a half isnāt bad at all. But, on the other hand, you donāt have to be a genius to know that the NZDās central bank wants a depreciating currency. Fundamentally speaking, they are being pressured.
Iām not going to go back and forth on these points.
All Iām going to do is see what happens. If, at some time in the future, I decide on switching over to trading it live, then I would already have proof of success on the demo. And the transition to live should be no real difference. What Iām talking about is trading the JPY not only long, but short also.
You know. This brings me to a good point. I keep looking up at my title, of this journal. And I sure do remember my original philosophy when I first started trading. TRADE DEMO LIKE ITāS REAL, HAVE PROOF OF CONCEPT, THEN GO LIVE, AND THERE SHOULD BE NO DIFFERENCE. You know whatā¦thatās what Iām going to do again. With this.
Manā¦I remember when I first went live. Everyone talks about the psychological aspect that throws you. Well, it didnāt with me. I even stated that afterwards. Manā¦itās all psychological, demo or live. Iāve heard it a million timesā¦If you play seriously, that is the only way to be. And it is true. Itās a mindset. But, that is just one aspect that can derail you, not the only one though. Your system has to be right. Your goals have to be right. And most of all, your experience, if learned, will carry you through. To success.
Ok, so, letās back it up a little. Iām not in the market. Butā¦I am. Iām JPY short. And as it stands, they continue to be, until I see a change. Iāll show you proof.
Ok, so, the top half is Aug. Bottom half is Sept. You can see my monthly time frame line-up on Sep. 1st. Strongest down to the weakest. That tells me whoās been strong over the longer term. Letās compare this newest line-up to Augās. The biggest thing that I see, that happened in the last months time, was the CAD. Theyāre the biggest mover. They went from 7th to 2nd. And itās no surprise. Just look at the weekly time frame standings. (central in the picture, Aug 6, 13, 20, 27) They are the second strongest for that entire month. Then for Sep 3rd, theyāre 1st. And to stay on the subject of the CAD, look at the latest daily time frame standings, as of Friday close of business. They are number 1. Iāve mentioned them before. I kind of think they are benefiting from the US, more than anything. Well, actually, they did raise interest rates not long ago.
So, yeah, their hot. And itās not because of Mr. Oil either. Ok. So, what else do I see? Well, we must look at my JPY. Daily time frames. Boy, they got hot throughout Aug. But then, declined. Soā¦when did I jump out of them again? Oh yeah, the 20th. And the delay kicked in that very week. By the end of the week, their status dropped on out. Geeeeshā¦look where theyāre at in the presentā¦second to the NZD, for last.
You know, thatās all Iām trying to do here, is follow the market. And I did good with the Yen. But, look at some of the other ones. How about the USD? Man, theyāre everywhere. That would be almost impossible to follow. I think. They were down low at the beginning of the month, came on up, but dropped on back down by the end of the month. Man, same with the CHF. They actually was the lowest, hit the highest, then came back down low. Talk about all over the place. Well, letās look at the end of the month play. What happened on the last week of the month? The most obvious thing I see is with the USD. They seemed to try to make a break out higher, but was shot down. It was a NFP Friday, but it was on Thursday that they got the shaft. Interesting, thatās all. Another interesting one is the GBP. They seem to have broken out high at the end of
the week. Thatās noteworthy to me. Definitely seems like some risk-on players have moved up to the top. And what can we say about the NZD. Theyāve taken a beating. Lookā¦this is nothing I havenāt seen before.
They are known for hitting bottom, only then to rise up like a Phoenix. I wonāt assume their out for the long haul. Iām just talking about the possibility exists that they can rise up again, and join the risk-on crew.
You know Journal, I think itās going to get interesting this month. This is the time of the year that mostly everybody is coming back to work. I mean, the kids are going back to school. The finance industry should be coming back from vacation. Even Congress is coming back to work. (Rightā¦ if you consider that workā¦bunch ofā¦) Anyway. I just have a feeling that some things are gonna fly. Volatility should rise. And I think that weāre going to go back to some risk-off mode. Thatās actually what Iām waiting for. But most importantly, all I want to do is follow the market. Weāre just gonna have to wait and see what happens.
Mike
Good Morning Journal.
Well, this is interesting. Itās Monday morning. Labor Day. Day off (yay!!!). Nice and early now. And you know what? I wasnāt planning on coming on in here and talking to you.
Oh, Okā¦ thanks Mike. Leave me in the dust, why donāt ya. I see how you are.
Sorry Journal, but I kept thinking about it. I was gonna get some work done. And thatās what I started to do this morning, after I got my first cup of coffee. But, let me explain whatās presently going on. And what brought me in here.
So, I plug in my phone, to charge it. (Every morning I do, since itās always nice and early to, before the day gets going) And as I did, I see some notifications that perked my attention, about the market, of course. Then that makes me take a look at whatās going on. Weāre only talking about like a half hour ago. And boy oh boy, Iām starting to get antsy. Manā¦the Yen is rolling. Weāre talking their taking strength. And it pretty much started at the open. If you look at how the market started this week, youāll see there was some big gaps, across the board, Yen strong. I seen it yesterday pretty much after the market opened. I was at a boring Labor Day party. We were still there when the market opened up. But, itās natural for me to read stuff and look at whatās happening in the market, especially at the open anyway. But, I noticed such large gaps that took place. And they were all in the process of being filled. Meaning price opened up so far down on all of the JPY pairs. But were immediately climbing. So, I was pleased to be seeing that. That was going on for a couple hours afterwards. And during this whole time I kept thinking that maybe I should be putting in some sell stop orders. I mean, am I prepared for if WW III would break out so soon? I definitely was thinking that there should be a good reason for these huge gaps to be taken place. Sure, theyāre gonna get filled. But then what? Is this a sign that price eventually wants to come on back down here? You know, like a sign of things to come? But, I kept wondering if I should just put in my sell stop orders, just in case. And Iām talking about on my live account. See, that is pretty much one of the first steps of my trading plan. (And weāre gonna get to that shortly here) This is all what I was thinking last night before I went to bed. But, the market was all on the rise. No doubt all of the gaps were being filled. Soā¦I just left it be.
And then I woke up. London had just started. And all I am seeing now is red daily candles on my JPY charts. And to be honest with you, Iām getting quite jittery. My first thoughts were that I missed the boat! The market is taking off without me! North Korea has struck again. And Trump doesnāt like it. I mean, I seen the news when it actually happened. It was sometime during the holiday weekend. And to be honest, I was starting to get worried that we would have some big gaps for the open. Sure enough, itās all coming true.
And here we are now. All I was going to do was get some work done. I planned on polishing up some mind maps. Thatās pretty much the work that I do, in the morning times. So, anyway, Iām getting jarred about the events that are taking place in the market right now. Bottom line, Yen rolling. And Iām not ready. I mean, itās too soon. Arenāt we supposed to have some days or weeks go by before the Yen takes over again? I wasnāt expecting to see price, across the board, to be dropping below my 21 EMA line so soon. But, itās happening now. And Iām talking aboutā¦right now. Iām ill prepared. My trading strategy consists of having pre-planned orders placed. But I donāt have them set up yet. And now itās too late.
Soā¦Iām sitting hereā¦thinkingā¦what am I going to do? ā¦calm downā¦yeah, the market can turn on a dime at any timeā¦butā¦since when is it good to be hasty when making trades? ā¦Neverā¦Especially swing trading.
So, I turn to my āEntryā Mind Map. (Thatās what I should be doing in times like these, when I need guidance) Ok, so, letās take a look at what I got.
Well, as I have already articulated, my strategy for getting in pretty much stems upon the fact that I am prepared, and have sell stop orders already in place. But, I donāt. Then I got to thinking about some of my principles. And I have a couple of big ones. I thought I had a different mind map addressing them. I donāt see it anywhere. Looks like now is a good time to put it in somewhere. And Iām thinking on this mind map, the entry. Journal, you know my principle. I believe in the End of Day Price. I do not believe in trading intraday. Iām a swing trader. Whatās most important to me is where price ends up at the end of the day.
The market swings so much, and given the time frame that I trade, I just should not be worried what price does within a day. So, that is one of my principles. Right now, Iām not looking at a complete daily candle.
Itās not completed yet. But, boy, is it easy to forget that fact.
And the other principle that Iām trying to remember, which I deem very important, is what Iāve just got done saying this weekend. Follow the market, donāt precede it. Actually, when I think about it, thatās a very subjective statement. Sure, Iāll follow it, but it could possibly mean going back and forth, back and forth. Cause thatās what it does. But I think I need to follow the market on my time frame. Not on anything shorter. What does the market tell me on the daily time frame? And also weekly time frame? Those are the things I have to always remember. And Iām trying to.
This is whatās also going through my mind. Today is a major holiday for the US. And everyone is going to be coming back to work tomorrow. So, it shouldnāt be such a busy day in the market, right? Well, what if Asia got a good footing before the big dogs come aboard? I mean, did they get a nice good head start, on whatās to come? That would surely make sense to me. But, at the present time, I donāt know what US has in store when they come back. They could easily turn the whole ship around, and disagree with the current flow. Manā¦this whole scenario strikes some memories of mine. I know for a fact that this has happened before. I remember thinking these very same thoughts. Seriously. I know it has. I just canāt remember the outcome. It has to be last year at this time. Or maybe whenever the US has had some holiday on a Monday before. (We have multiple holidays that always fall on a Monday) . Cause I distinctly remember wondering whether the US will follow suit or not, when the rest of the world is playing the market already.
Ok. So, I need to back it up a little. (Wait, I need some more coffee. Be right back.)
Alrightā¦much better nowā¦where was I?
Oh yeah, my mind map. Journal, do you see anywhere there what I am to do if Iām not prepared? Like if Iām missing the boat? Kind of like exactly whatās happening now? I mean, why donāt I have a back up plan in place, just in case I didnāt place any sell stop orders, and price takes off past my desired entry points? Well, weāre going to do it now. Together. Me and You. Now.
So, whatās the right answer. What should I do. Well, like I have done already, I need to remember some of my principles. (I should always be guided by principles. Man I love that word.) I should start with those.
Ok Journalā¦this is what I got. I think itās a good start. I spent enough time on it for now. (My mind maps are never completed. They always need adjusting, polishing)
Well Journal, the sun is up. And all this typing and working has definitely calmed me down. The bottom line is I just have to wait it out. I mean, being hasty is never a good thing. And, as you see, there is so much that I need to keep in mind, and always remember.
You know, I never did show you a shot of what the market looked like a few hours ago. Now that Iām under control, letās take a look together. I actually hope that itās worse than before. Just so you can see where I was coming from.
Phew!! Man!! This is not bad at all. Geeeez. Now I feel pretty dog-gone stupid. I was out of control when I first woke up this morning. Price has been retreating back on up. If you look closely, the candlestick wicks are lengthy on the bottoms of this days candle. Sure, itās probably gonna be a down day for most of them, but not as bad as when I seen it earlier. Seeā¦Iām telling youā¦the daily close is the most important data for me. Itās all just another lesson I need to remember. I need to be patient, and wait it out. But what definitely has gotten me through this time, was running on in here and telling you all about it. Cause frankly right now, I donāt care what price does today. Itās where it ends up thatās important to me.
And as I took that picture, another thing hit me. What about my demo account trades that are running? Their going long. Should I nix them? And just wait it out till I know which way the market wants to run?
Why, I think I should.
You gonna wait till the end of day errrrr?
Yes Journal, I think thatās a novel ideal. Yes I will. Thatās when my trading really takes place.
Good. Now get back to doing some polishing.
Yes Sir, Journal Sir!
Mike out.
Good Morning Journal.
Good Morning Mike ! How you doing bud?
Iām ok, thanks! I feel good. I mean, Iām always so very happy when the weekend comes. I really like it when I can wake up nice and early Saturday morning. And every now and then Iāll somehow wake up earlier than my normal. Like what happened this morning. Boyā¦I had to go to the bathroom, bad, at 2:15. So, what am I going to do now? Go back to sleep for only an hour? Given that itās Sat, thereās a good chance that I wonāt make it, and get lazy, and next thing you know the sun will come up. Iāve had too many of those times already. But not todayā¦Nopeā¦Success! I was able to get over that threshold of being tired. I went straight for the coffee. And then next thing you know, Iām wide awake, ready to get some work done. Iām actually on my second cup already, right now. I didnāt quite know what I was going to do this morning, actually. But, after reading some emails, and good articles, I finally got around to you, Journal.
Ohā¦OKā¦
Ha, ha, ha! Sorry Journal.
Yeah, well, letās see. What happened this week?
From the top down. Iām in the market. Not doing too bad. It was a roller coaster ride though. Manā¦I was wondering if I made a mistake by entering in some trades this week. So, as I remember it, I got in on 3 trades at the close of day Monday. (Remember it was my day off, and I waited it out till then?) And then, at the same time, I put in all of the sell stop orders. And then it begins. In the market again. I actually didnāt think I would be in so soon, since the last run. Itās only been like a week or so. But, you know, I got to thinking about it. I mean, all Iām doing is following the market. And my strategy. Price, pretty much across the board, is bending on down to my level. So, itās like, here we go again. And Iām a bit nervous about it. Sure, North Korea struck again. But, is this just a quick flare up, or are we going to enter into another Yen trend? I mean, everyone is coming back to work. And I believed things are going to fly. You know, volatility. But, the bottom line is, I have to play the strategy. The good thing is, Iām still only going in with 1k position sizing. Thatāll be 9.1cents per pip. Per trade. Thatās not bad at all.
Next thing you know, by Tuesday end of day, all of my sell stop orders are kicked in. Iām in all 7 trades. (Thatās everybody) Ok. So be it. The Yen is moving. Good! Butā¦what a roller coaster ride it was to the end of the week. Manā¦I shouldāve seen it coming. That dog-gone CAD. They raised interest rates on Wed. Wait till you see that chart. It doesnāt bode good for me. They went straight up. Man, I lost some money. So, you remember my rule? A turn before the end of the week? I believe it to be true. Therefore I kept them running, for one more day. Thursday comes. End of day. They still didnāt go down. So, now what? Do I cut my losses? Does that rule extend to the end of the week? Wellā¦I then jumped. They can go to the moon for all I know. I kept all the other ones running, but took my loss with the CAD. Oh, and then on Thursday we had the EUR action. Man, I was contemplating whether I should tough it out with them or not, cause I knew that was gonna fly one way or the other. But, I stuck it out. ( I know Journal, I got some big ones)
Letās see the chart, huh?
You can see where I precisely got in at. And exactly when I got out of the CAD. So, presently, Iām still in all of them except the CAD.
The green lines means Iām in the positive. The red lines are my negative ones running.
Just look at the CAD. Wouldnāt you know. I did it again. Jumped out right at the top. And my rule is, that thereās a turn mid week. Well, looks like I should extend it just a little bit longer, like all the way to the end of the week. Man!
Oh well. What can I do. I mean, really. I lost $17 and change on that one. That was -3.6% of my account balance. I can live with that. Maybe I should show you my mind map of this new JPY run.
Yeah, I couldnāt get it all on one screen. Top and bottom split there.
There is one thing that keeps bugging me. The chart above is my Netdania platform. I like that so much better than my broker. The biggest difference is the open/close times for the daily candles. On NetDania, which I prefer, the closing times are 8pm. Thatās 00 GMT. I have always liked that better than any other time. It opens when Asia starts, and closes a couple hours after the NY session closes. Now my broker uses the open/close times at 12 am my time (EST). Thatās stupid. I mean, whatās that? Who goes by that time anyway? I know a lot of people follow the NY closing. Thatās good and close to what I like. Then it would be good to follow the UK time, cause theyāre pretty much the financial capital of the world. They start at 3am my time. I can understand that. And then you have the GMT. The universal clock. Their 00 hour is my 8pm. Butā¦00 EST ? I donāt get it. And thatās the open and close times for my daily candles on my brokers platform. Therefore my one and only indicator (the 21 EMA) is different with my broker than with NetDania. Cause they use the close of the day for price calculation. I guess I need to try harder to find out if I can get this changed, with my broker. Therefore, that should explain why the places where I enter the trades on my NetDania platform donāt match up with the 21 EMA lines drawn. (Of course they do with my broker) Anyway, I need to straighten that out.
So, basically, my account is up a little. For this run. You can see my loss with the CAD. But, that amount is pretty close to the positive that I have running with the USD. So, I donāt know. Itās all good so far.
Boy am I glad I hung in there with the EUR. You see what happened on Thursday, donāt you? Wow. And thatās what Iām talking about. Intraday is a killer. For me anyway.
And the way it looks, so far, is an infant Yen trend. Iām still in stage 1. (I have 3 stages my trades go through. 1,2, & 3 ) The first stage is the beginning, where Iām still trying to find out if there actually is a JPY trend. Thereās doubt. Stage 2 is when thereās no doubt. Iāll be thinking of adding position sizing. Stage 3 is the ending. Iāll be working on exiting positions. (I have all this explained in my āmanageā mind map. Iāll show it to you one of these days)
OK Journal. Getting a little tired now. Gonna take a little nap. Sun starting to rise.
Weāll be in touch.
Mike
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Good Morning Journal !
Well, this is one of those short weekends for me, Journal. Yeah, I had to work yesterday. And that always never leaves me with a lot of time to spend with you. Butā¦I did get some work done though.
Oh yeah, Journal, donāt be thinking that Iāve been slacking and are lazy. I got quite a bit done. Actually, what I did was prepare for this time that we have together right now. Becauseā¦Journalā¦it went down. The market turned. Iām out now. No more Yen trending. It went totally the opposite.
So, Iām out of the market. Yeah boy, itās not pretty. Man, I knew it too. It just didnāt feel right when the Yen got a boost just after Labor Day. Remember, when everyone came back to work, school? I was thinking that things were gonna fly. And they did. Sure. But, last week at this time, I should have gotten out.
And thatās what I want to do right now, put it all into perspective. Itās gonna hurt. But, I got to do it. And thatās what I did. I completed my mind map of this last JPY run.
So, what we have here is my second complete JPY run. Thatās what I call it when I have gotten into the market when I felt the Yen started to trend high. This stretch ran short, as opposed to the last one. And lookā¦I knew I was gonna have to encounter these times. But, I guess itās time I experienced it. Yep. I have experienced the loss. And instead of running and hiding, and just forgetting about all what happened, I guess I need to learn something here. This was a run that didnāt materialize. So, time to go back, embrace defeat, and see what I need to change.
First, let me start by showing you what it looked like as soon as I jumped out. This is a shot of my brokers platform.
Ok, so, itās important for you to see where I got in at. I did follow my plan with the orders being at the green line (21 ema). All except with the NZD. So, for the most part, I did follow the plan. But, you should be very well aware of the fact that I donāt like my brokers daily closing candles. This has come to a head. Things are going to change. They even have Sunday as one complete candle !!
Now, take a look at my Netdaniaās platform. You can see where I got in and out of the trades also. We have some hindsight here also because I just took this pic yesterday. See, I jumped at the end of day Monday. So we can see where prices went to by end of week.
Ok. So, thereās much I need to say. But I think youāll get most of it by seeing my mind map.
USD: .6%
GBP: -4.4%
NZD: -1.5%
EUR: -1.6%
CHF: - .5%
AUD: - 1.5%
CAD: - 3.6%
Well, I donāt want to talk about any of that, too much. Money management. Yeah, itās a lot. But, it is in the nature of the way I trade. The only thing that makes me feel better is comparing that with my winnings.
I win more than I lose. But, it still hurts. I know I must cut that down. For as painful as that was, I donāt think Iāll lose any more than that. I want this to be my deep drawdown threshold. I know Journal, itās embarrassing. Donāt worry, you canāt beat myself up more than I already have.
Anyway, I made a revolutionary change yesterday morning. I mean, it was like a light bulb went off in my head. You know what? Itās all the difference in the world about the daily closing price, and my 21 ema line.
Just compare the 2 platforms above. You can plainly see that on Netdania, where the daily closing prices are at 00 GMT, mostly none of the pairs were trending. But, on my brokers, they actually did start to trend.
I believe I did what I was supposed to, but against a backdrop that is inaccurate. I mean, look at both CADās. If I wouldāve had placed a sell stop order at the Netdaniaās 21 ema line, I wouldnāt of gotten in.
Look, Iām well aware of the fact that price likes to go all the way down to the 21 line, and then reverse itās way back up. I know thatās a dynamic I must reconcile much better. And my strategy is not necessarily when price hits that line that I get in to it. I guess itās a discretionary move. Iām still putting the exact pieces together as I go. I mean, I have heard that traders like to wait, once price breaks a particular threshold, for it to make a retest of that line. Yeah, thatās common. But, in a similar fashion, I know price sometimes just shoots down and will never see that line again, also. Itās all a judgement call. But, thatās why I want principles to be more important than hard-line rules. And so, Iām thinking of this. I need to start seeing some evidence of a trend beginning. And if you compare the 2 platforms, thereās just more evidence that the Yen has not trended high yet, with Netdania. And I think if I realized this, and put more stock into their 21 line, then I donāt think I wouldāve gotten into so much trouble, as I did, with my broker. See, I fundamentally, always, have to ask, āis it trending?ā And that is at the end of each day. I mean, how many days will I let it go if I keep saying ānoā ? I donāt think too many. And on the other hand, I think I can let one day go by that is in the trend and then therefore to get in, then.
You know, another thing. This whole so-called Yen trend was like pulling teeth. I should have waited it out until I knew for sure that they were taking off. This is something I want to remember. If thereās going to be such doubt, I just shouldnāt be in. Journal, you should remember me telling you that I couldnāt believe it was happening again already. I should go back and show you.
Ok. Yeah. So, maybe I do get a little excited when price is coming back on down to my line. It was with the USD. Not all that much with the others. Well, now I know. I have gotten spanked. And I want to remember these mistakes. But look, when you think about it, itās the game. Itās easy when price is so far away from my line. Iām not in the market. The Yen is so very weak. Risk-on is having a field day. I have no worries.
On the other extreme, which I have tasted also, is when the Yen is so strong. Iām in all those trades. Profit just keeps collecting. Iām not too worried if I lose much in a day because Iām up so much as it is. But, the hardest part, naturally, is when they start getting strong, from being weak, coming back on to my line, wondering whether itās time or not. Thatās all. Itās the game.
Another lesson I need to circumvent is the currency relationships. You know, like an assumption that just because the USD is trending low against the Yen doesnāt necessarily mean the others will follow suit. Look, there is no doubt of some of the dynamics that take place. You got the Comm currencies. Sometimes they ride together, sometimes not. The safe haven Swiss. Sometimes they are, but other times they just tail the EUR. Man, I can go on and on about what kind of tendencies exist between many of the currencies. Butā¦thatās all what makes this game the greatest. Dynamics exist, but also change.
Ok Journal, got to run.
Try to come back a little later today. Weāll see.
Mike
Good Morning Journal !
Well, itās all an evolutionary process Journal.
What ā¦are you talking about ā¦Mike.
Yeah, I know, OK, here we go. See, this is whatās going on. First off, as you know, Iām not in the market. Man, that Yen is weak. Iām on the sidelines, donāt worry. But, Iām still watching my system. And I got to tell you, Iāve been bothered lately, about it. Manā¦I donāt want to go all into what Iāve been thinking about doing. So, Iāll just give you the major details. (ā¦ok, maybe a little bit more)
I need something else. Something more. For the reason of getting me into a trade. What I do have is something that tells me when a pair is trending. Yes. Thatās my 21 ema line. I like it, and I believe in it. But what Iām coming to realize lately is that I need like a heads up, time to get in. I guess it would be like a supplement to the trend indicator. Manā¦for a little while I was thinking it could have been the āIchimoku Kinko Hyoā Cloud. You have a lot of data in that thing. That tells you when itās trending, weak or strong, support & resistance levels, momentum, and signals also. I even started a mind map. I thought this was it. But, the more I looked at it, and compared it to the last good JPY run that I did good with, it just lags so much. I did better than what that showed me. I guess what it all comes down to is simply the settings. It uses the average high and low of the last 9 days, 26 days, and 52 days. By the time that gave any kind of signal for me to get in short (Yen strong), the trend was already happening, and I was in already. So therefore, that just does not help me out any. So, ok then, what it does come down to is the correct setting. And thatās a setting having to do with an ema line. I definitely believe in moving averages. They tell you where price has been. Sure itās a lagging indicator, but there is nothing else (OKā¦stopā¦yesā¦there isā¦volume) . Ok then, other than volume, there is nothing else that we all have, than where price has already been. Thatās the only real thing that everyone is looking at. Price. And where it was in conjunction to the latest and present time. Every single indicator is basically telling you something about what price has already did. We can see where price stops, gets hung up, moves away from, how long it travels in a certain direction, even what price does or behaves at certain areas. Itās all about what price has done, in the past. All Iām concerned about is pricesā movement, in a consistent manner. Itās direction. Ok, itās constant movement in a particular direction. Yeah, we call it the trend. I believe thatās the best thing to bet on. Iām banking on the fact that humans are creatures of habit. And all I really need is something to tell me where the average closing price has been, over the last so many days.
And thatās the million dollar question. Over how many days, holds most true, does price act in a manner most consistent.
This is what I got. I still believe in, in my trading time frame, of the 21 EMA line. That tells me the trend. And I still keep track of each currencyās strength to one another by that line. Whoever is higher than that line is trending high, likewise lower trending low. Now, I have made a signal to get me in. This is very similar to what I started out with before (youāll remember Journal). I pick the 5 EMA line, and the 9 EMA line. Iām looking at the 5 to cross down over the 9. When that happens, thatās precisely where I should get in at. And what tells me to be getting out is the 5 line crossing up over the 9 line, well, no later than that.
Journal, I feel real good about this. And youāll see, all I have to do is show you what it looks like on the charts. Iām going to do that here in a second.
Another thing I did this past week, which is very beneficial to me, is went back on all the charts and marked exactly where all my trades took place. This way I can easily keep track of my progress of all my trades taken. I believe in living and learning, also hindsight. For the future. Soā¦letās take a good long look at my history of trades, along with my newly designed indicators. We can see how if I have followed this, I wouldāve been pretty much right on. Remember, this is my new rules for getting in a trade. When the 5 EMA line (light blue line) crosses down over the 9 EMA line (dark blue line) thatās my place to enter, at that price. So therefore I will set my sell-stop orders at the 9 line beforehand. And the idea, of course, is to ride that down until the cross-back-over. That will be my ideal trades to get into. And weāre gonna be able to see where my mistakes were at that last Yen run. Only if I wouldāve followed, exactly, the new rules, I wouldnāt have gotten in many of them. Here we go. One at a time.
I got to come back Journal.
Mike
Hey Journal.
Yeah, I normally do look back at our conversations, actually I always do, reading it over and over and over again. I always need to digest what we talk about. So, as I just was looking at my charts now, I got to noticing something. Manā¦just look at the Comms, the last 3, and also the CHF. It looks like I need to be putting my new sell-stop orders in! Tell me it doesnāt look like weāre entering into another JPY run. Of course it does. But, Iām not ignorant of the fact that this could just be a good retracement also. The facts are this JPY sell off has stalled. Itās actually consolidating. If we break it up into groups, the Majors are stronger than the Comms. They really only have one good day of a pull back, that was Friday. Ok, letās look at this together. All in one shot.
So, I have all of these dated back to the beginning of the month. Remember back then, I thought when everybody comes back to work, weāre gonna go into a drop. Risk - off. Well, one pair actually did. USD/JPY. Yeah, thanks US! But, my big problem is thinking the others will react in the same way. And as you see my trades, (green was a positive trade, red was a negative) it didnāt turn out that way. Lookā¦I canāt get all that upset with myself. I mean, I do know this is gonna happen when the time comes when price navigates around the deciding line. At least I err on that side, as opposed to erring if I wouldnāt get in and price drops and I missed the boat. I donāt know, Iām slowly but definitely learning the navigation part. Actually, thatās all it is anyway. Whenās the best time to get in and get out.
Ok. Thatās nice. So. Back to the charts.
Because of the fact that a good amount of days that have transpired now being Yen weak, I think the possibility exists that we could be starting on a turn down. I knowā¦I sound so stupid, like a brand new newbie, always hoping, wishing, praying that that is what price wants to do. Sure itās possible. Anything is possible! Sure, Iāll just convince myself that itās the only thing that makes sense.
Sometimes I wonder if Iāll ever get tired of falling trap to each one of those things I have just mentioned. Itās a mind game. If Iām psychologically stubborn, I will lose. Well, at least Iām aware that it exists. But, what I want now is evidence & proof that the trend is changing. So therefore, Iām still going to put in my limit orders (cause thereās no excuse for not being prepared), and if they take, I know that I need to see price heading down to the trend line. If I donāt see price wanting to go below it, I need to reconsider. Yeah, like jumping out early. Wowā¦I have just realized that I have a new dynamic here. Thatās how the 21 line is related to my signal lines. See, before, I just had 2 lines, and one of them was both the signal line and also the trend threshold line. Now, I must figure out how they are going to relate to each other. Cause, Iām looking to get into the trend before the trend begins. Soā¦I guess I will be assuming that once the 5 crosses below the 9 line, then therefore it will cross below the 21 line. Well, what about price, itself? I know that price moves the quickest. Look up there at the AUD/JPY. Last Friday price did drop below the 9 line and came back up. Good thing I believe more in, the end of day price. But, what I want is the actual crossover of the lines, to get into a trade. But then, I guess I am wanting no less than price to eventually go below the 21 line. But what if it doesnāt? What do I do? I guess that will be a cushion for me to use. If thereās a struggle to go below it, then I should jump.
Well Journal, weāre just going to have to see what happens.
Iāll keep you informed.
Mike
Good Morning Journal !
Good Morning Mike ! Better late than never huh?
I know, I know. Man Journal, Iāve been real busy. Donāt worry, your always on my mind. Thatās why I planned this out, for Mon. early morning. I figured I can give you the details that happened over the weekend. Iāve just been so very busy.
And yes, with the business. Iāve been working super hard, ever since I started compiling the end of the month numbers. So, here we go. This is precisely what happened and how it all went down. And you need to know, Iām not done. I figured I can catch you up on everything, and maybe things will become more clearer to me, in the direction I should go, or even if I should continue. Youāll see.
So Journal, whatās the most important thing at the end of the month?
Uhhā¦results?
Yep, of course. So, letās get this out of the way quickly. It wasnāt a good monthā¦ In fact, it was a losing one. In fact, I donāt even want to talk about it. I didnāt even want to face it, but I did, head on. And this all lead me to the road that I embarked on, which might be really long. Weāll have to see what happens. But anyway, here we go. Reality check.
So, the first thing that comes to my mind isā¦what went wrong? Is it something I did? Or is this just how it goes? I can accept it if itās a month that just didnāt trend high for the Yen. Sure. And I should just be trying to keep the loses to a minimum. But, I need to know. You know, live and learn. What are the adjustments I need to make?
Well, for me to answer those questions, I need to know exactly how my system should operate at itās best, first off. Right? Itās like, I would need a model of it, in which I can compare my actual trading to. Say, if the Yen starts to take off, and I get fooled, and then doesnāt. Actually it would be like a little bit of risk-off condition happening in the midst of a major risk-on era. You know how I am. I can get excited when I see it happening, and want to get in when it starts. But then wait too long before I get out. Thatās what Iām talking about. Sure I can accept those losses that naturally occur under those conditions. But what I really need is the model. Itās the way that I should be trading under those tricky not-really-risk on,- risk off-conditions.
And thatās what Iāve embarked upon now, Journal. Itās not easy. Especially now that I have incorporated a new crossover system for early entries into the trend. So that means that I have to go back to the beginning and learn how all of the EMAās relate to each other. And of course it all ends with the most optimal timing for my entries and exits. I have a feeling this is gonna take a long time to do. Iām in the middle of it now. So, let me quickly give you a summary of what I got so far.
How about, letās start with a view of what the month looked like on the charts. You can see my trades, those are the dotted lines. The green ones are positive ones, and red negative. Iām still in some at the present, which will be the ones that extend to the present candles.
Itās pretty plain to see where some of my mistakes are. You have to look closely. But, I see, that every time I have gotten in a trade, the 5 ema line (light blue) doesnāt always cross down over the 9 ema line (dark blue). I think thatās probably one of my most major problems. Fundamentally speaking. Donāt worry, Iām working on that. And it looks like I need a lot more patience.
Well, I donāt have a whole lot of time here. So, let me do this. This is the mind map that Iāve been working on this entire, and I mean entire weekend. I will try to explain all that I can. But, at least you have something to chew on.
Well, there you have it Journal. This is my thinking.
In order for me to know when I should be in a trade or not, I need to know what are all of the possibilities that exist with these variables. Price. 5 EMA line. 9 EMA line. 21 EMA line. Those are the columns. And under each column is whether I should be in it or not. And then under that is an example. As you can see, Iām not done with it yet. But, Iāll show you what the left extreme column is and the right extreme one is. But first off, from the left over to the center is the condition when the Yen is trending low. And from the right and over to the center is when the Yen is trending high. The ends are the extremes and progressively gets less as you go to the center. So, this is what the left extreme (non-trending state) looks like.
Itās common sense. You got the closing price at the highest, then the 5 ema, then 9 ema, then 21 ema. Clearly price is above all of them. So then, price will eventually come on back down, and make other different combinations, which are stated on my possibility chart. But, hereās the right extreme example.
Again, itās the end of day price that is below all of the other indicators. And of course, this is when I would want to be in a trade.
But, to get all of the possibilities, was a daunting task.
Journalā¦I got to run.
But, this is what Iām working on. So, I will be referring to all of this, next time.
And hopefully have a point, solution, or something to it all.
Mike
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Good morning Journal!
Ahhhhā¦here we are again. Boyā¦Iāve been getting some good work done lately. Yep, been very productive on the business. Itās always a bummer when I have to work the once-a-month Sat. deal though. And that was yesterday. So, that means I have to cut my time here short. I mean, I did get a lot accomplished, but it always makes for a shorter weekend though. But nowā¦this is the time that I can capitalize on the time that I have with you, Journal. See, thereās nothing more important for me than to be productive. 3 am has come now. And all I have in mind is you Journal. (Ok, and some coffee also) And my business, of course. Itās the time that I have to compile everything that has been going on lately. See, your the recipient of who I get to sound off to. And Itās more fun for me when I get to tell you a lot of good news. Soā¦letās begin with it.
How about that market, huh? Yeah man, it is rolaaaaaan. You know that Iām in it. And finally, thereās no doubt now, that the Yen is strong. Boyā¦I was a bit nervous on Friday. You know, NFP. But, what kept me optimistic about the Yen was just how they have been on a steady climb lately. Look, I know itās all about the USD. But I just donāt know what kind of effect itāll directly make on the JPY. I was seeing them get stronger every day this week. But, what was going to happen on Friday? A change of direction? Well, to be honest with you, I did monitor the market that day. Look, my trades have been running. And Iām not making any trading decisions in the middle of a day. That wonāt happen. But, it was interesting to see that when NFP time came, there was no real change. A little bit of slippage, for the JPY, but not much. Thenā¦something happened at the 10:00 hour. Thatās about an hour or so before London closes. Manā¦the skies opened up, the sunās rays shown down, and all I know was it was like God himself bestowed favor onto the Yen. The JPY got real strong! Across the board. You wouldāve thought that āmissile manā shot off another missile or something. I just donāt know the cause yet. Iāll have to search and find out what went down. But, all I know is, my account balance climbed a whole lot, percentage wise. I did run the end of day, end of week numbers late that night. Boyā¦wait till you see the standings now. We have definitely turned the tables now. Ok thenā¦letās look.
We got the daily line-up table. In the middle, up top, is the weekly time frame standings. Bottom is the Oct 1st monthly time frame standings.
So, the Yen has been riding on the bottom (daily time frame) for a good 3 weeks now. Yeah, they did inch up to second-to-last for one week now. But, Thursday, the tables turned, and then continued into Friday. Iām sure the USD strength has something to do with it. Well, I donāt know, maybe, maybe not. Ok, thatās nice. Letās look some more.
So, you can see there where my trades are. The only one Iām not in with is the USD of course. Boy, I tell ya, the CHF has been one tough cookie. It seemed to take forever for them to crack.
This is what I see on the charts. First off, when price is below the orange line (21 ema) then itās trending high JPY. And as we can see, they are now trending high against everyone except the USD. And thatās why they are ranked 2nd, to the USD. Then, for my trades, I look at the blue lines. My ideal is to get into a trade when the light blue (5 ema) crosses down over the dark blue (9 ema). Thatās the most ideal time I want to get into a trade (itās not the easiest thing to do, as long as I can be close about it). If you look closely, Iāve pretty much gotten in before they have eventually crossed. All I know is, I want to be in it when they have crossed. And the goal is to ride out the trade as long as the 5 ema line is below the 9 ema line. So basically, those 2 lines have to do with my trades. The 21 line just tells me how much itās trending. And of course, I would feel better when price is below it, than being above it. Take a look at the USD/JPY, top left. We can see that price has finally come down below the 9 ema line. Butā¦those lines havenāt crossed yet. See, if I wanted to get in when they cross, it would be too late now, because price is below it. I would normally set a limit order at that 9 line, but, I didnāt want to do that, just yet. Look how far down that 21 ema line is, pretty far. I think that there will be an opportunity to get in by playing the olā retracement game. Thatās waiting for price to come back up to that line, at the same time that that line drops down further. I donāt knowā¦the USD has been quite strong lately. I kind of think that this ending of the year is going to be strong for the USD. You know, itāll be the third year in a row to get an interest rate hike in December. Seems to be the trend. So, why not start with the climb now?
So, all Iām gonna be doing now is watching those blue lines, and staying in the trade till they cross back over. It does look like it will be a nice lengthy run. Weāll see.
Ok Journal, Iām gonna break this post now. Get some more coffee. And then come on right back with what Iāve been working on. Remember that last post? Well, I finished it. And I have the figures for the month of September for ya.
I think itās good stuff. But then, just wait till I show you my 2 good other months, July and August. Yeah buddy.
Mike
Sipā¦Mmmmmm
Journal.
So, this is where weāre at. From the top down. I had a not so good month of September. But then, I got to thinking, well, how bad was it? Was it supposed to be bad, because of no real Yen trend? Did I trade badly? Basically, to what am I supposed to compare my trading to? If I have followed my plan to the T, then what should my results actually be? No matter if itās in the positive or negative. I need to feel good about; whether I followed it exactly, and whether itās a good plan to begin with. It shouldnāt be about how much did I make. Cause I know the market will do what it wants whether I like it or not. I just need to position myself most effectively under itās conditions. Whatever they turn out to be. Bottom line, for me is, looking back, how should I have traded?
Therefore, I need to know what the ideal is. What the actual is. What the max is.
Letās talk about what the ideal is. Isnāt hindsight a wonderful thing? I have thought this from the very beginning. I want to close the gap between the past and the future. That means seeing what happened and how I have performed, and then to compare and remember that to the present market situations. I donāt know exactly how to explain it, but in my mind, closing the gap means something. Letās just say that everything that Iām doing here is closing the gap. Ok, thatās nice. What the ideal is, is how I should have traded. Itās like the standard that I should be trying to attain. Itās like what should happen if I have followed the plan. Itās what I want. More than simply making money. I will be happier trading the ideal more than getting lucky and making a ton of money. Cause I know, in real life, luck runs out quickly, and cannot be duplicated. So therefore, I need to know what that looks like.
And we have the actual. Thatās a no-brainer. Itās what I did.
Now the max is this. Itās kind of like what was possible to achieve in the market if I was super smart, or got extremely lucky. What was the most best scenario that could have taken place? Under realistic terms. See, I cannot possibly assume that I can take profit when a pair shoots so far down during a day when I do not trade during the day. I only look at the end of day price. Therefore I canāt think of taking profit any other time than at an end of day price. So, the max will be a very possible limit to what could possibly happen. Just so I can know what it was. Maybe some months can come on by and I was trading at that extreme.
So, what I am hoping for is to look back and see my trading to be as close as possible to the ideal. Thatās where I should be. Thatās even a feat in itself. I do have a lot more work to do on it, because the money management aspect of it needs to be ironed out. The questions there are like - How much of a position should I be trading with? - How much is too little? - How much is too large? - How many added positions should I have on them? Etcā¦
But for now, what I have is simply the amount of pips a trade has taken on. Itās a good starting point. Also, I have noted whether I should be having more than one position or two. Also, since I trade with the lowest amount of position sizing possible, given the amount of my capital, thatās not a huge factor at this point. When my account gets bigger, sure, Iāll need to know when I can up the sizing, and how much.
Ok, so, that should be a good precursor to what Iām going to show you. Hopefully youāll understand what I got here. Iām going to show you the bottom line first. Then Iāll show you how I came up with the results. Common sense.
On the right, is the bottom line. Being the golfer that I am, par is my word for what I should expect. I should have only gotten -125 pips for that month. Itās called a losing month. Thatās just how it is. Bad month for the Yen. Oh well. But I ended up with - 731 pips. And if I was a real genius, the most top would have been a + 312 pips. Let me through out there some of the data.
Ok, so with the CAD. My actual pips won/lost is noted above the trades taken. Add them up, and thatās what they are. The ideal pips that I shouldāve gotten comes from, at the end there, where the light blue line crosses down over the dark blue line. Basically in the last 2 candles. I didnāt mark it, but itās pretty much at where the 53 number is. And itās at that point to the end of the month price. It would of been 32 pips. And the max figure you can see the circle and line drawn to what would be possible to get. I could have put in a sell stop order where the 9 ema line is at, and price dove down below it. It wouldāve triggered. So, thatās the idea. But, as you see, I just should not have been in any trade during the whole month, at least until the end. Look at the second candle, on the 4th. Price did dive below it. Even closed below that 9 ema price. Well, thatās where I got in at. But it was premature, because the 5 ema line didnāt cross below it. I shouldāve waited at least one more day, to see it more clearly. So, there I have it. Live and learn. But, now, look at the ending of the month. I can see how the 5 ema line gets much more closer to the 9 ema line. Itās a better indication that it will cross, more than it was at the beginning of the month.
Ok. Another one.
The EUR. The actual pips gotten was -10. But the ideal was actually -112 pips. As you see my writings, according to my plan, I shouldnāt have been in those until the 5 ema line dropped below the 9 ema line. And then price closed below the 21 ema line. That candle right there spells me getting into it, according to the plan. So, then I wait till the next day, and itās a loss. So therefore, I get out. Yes. Thatās understandable. Price very well could have broken down and went south, but, no. It just didnāt. And if you look at all the other days, the 5 ema line doesnāt really go down below the 9 ema line. So therefore, I shouldnāt have been in any other trade for that month. Well, I was. At the end. And I got lucky. 70 pips worth. So, you see where the ideal comes from. Now the max comes from the idea that I couldāve been real patient and just waited it out. I feel thatās the best scenario that couldāve happened.
I know Iām only talking about pips now, but thatās all I got at the moment. Like I said, thereās so much more to the trading.
How about another one.
USD/JPY. My actual is +33 - 92. Man, did I get too impatient on the 24th. I must have had a set entry there. Price comes and gets it, and then rides high. Thatās messed up, cause I should (again) checked and seen how much the 5 ema line is away from the 9 ema line. Just too much. Ok. So. How about the max. You can see it there with the 2 circles and a line drawn. The exit was on the weekend. That was end of day Friday. I wouldāve been looking at this 200 pip profit over the weekend. And I feel I could have taken that profit, mostly due to the long wick that it had there. Oh, and about the ideal. I have the 2 circles and line drawn there, for 44 pips. Itās when the crossover happened, on both sides. Soā¦I donāt know. It is what it is.
The AUD. I shouldnāt have been in until the end. The circles and line drawn for 23 pips. That would be the real first crossover. The max is the other circles and line drawn for 69 pips. I think that was the best that I can expect. But, I did get pretty lucky with my trade just before that, 5 days away from the end of the month, and through. But, to back it up a little, at the beginning of the month, you can see how price toggles back and forth from all of the lines. I mean, all of the lines are so close to one another. Yeah, it can be tricky. Even on the 7th. Price closed below everything! And guess what? Thatās the weekend? Who wouldnāt have thought that we could have been embarking on a trend? Manā¦kind of reminds me of the other one I just wrote up about. Oh well.
Ok Journal. Iām running out of time here for now.
You got the picture. (Literally)
It is a work in progress.
Ohā¦I forgot. I am working on the Aug month. Yeah boy, much better than Septās. When Iām done, youāll see it.
(Whether you like it or not. Ha!)
Mike