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

[MikeWolski]

Good Morning Journal! And Merry Christmas!
Well, it’s here. Christmas. Vacation. Good times.
So, yeah Journal, I’m happy. Everything is ok. Well, not really. I’m not too bothered by the hit I took this past week. What can I say? The market turned. It’s just one of those things. I got in when I was supposed to, but all we seen was risk-on taking place. The JPY lost their butts. But anyway, this revealed something in my plan that I need to work on. A PROPER EXIT!! Yeah Journal, it’s embarrassing, So therefore, we’re gonna talk about it. I’ll explain what I was thinking. But, in any case, I need to come up with a trigger that tells me to jump. Anyway…this is what it looked like.

So, as you know, this is the 5/9 pips spread all totaled up. Last Friday was the first time in a while that the sum reached in the positive (2). Well, yeah, last week at this time is sure did look like we were on the up & up, right? Well, let’s look. Monday totaled a -4. Then went to a -48 (sorry can’t see that). Wed was a -110. Thurs the spread totaled -143. Friday ended up at -128. So, yeah, it was bad.
Ok Mike. So, it didn’t go the way we wanted. That shouldn’t matter. What’s the plan on when you should be getting out? Isn’t it when it crosses back over the other way? And you see the print on your table?
Ok Journal. Gloves off.
It isn’t that easy!!! Look.
CAD/JPY


Those 2 shots match up, being the last 9 days.
Now Journal…Look…my whole entire plan is based off of the crossovers. That’s what I consider most ideal. That is what I am trying for. Look up at my table up there. See the second row down, from the top? That right there is what I am trying to do. And you know by now that I’m only looking at where the crossover took place, the 5 ema price line, and where the opposite crossover takes place. So, the only thing I’m expected to do here is make 16 pips during this whole ordeal. Let’s take this step by step. (btw…those dates are wrong at the bottom of the chart…NetDania is goofy by that…their one off)
Anyway, my entry was pretty satisfactory. I’m not worried about that. So, let’s take it from Monday. End of day comes, and we have a red doji candle. Look up at my table. The pip spread is 12 (5/9 spread). The model shows 36 pips in the green (the starting crossover up to the latest 5 ema line). Ok, so, no problem here. I’m not gonna touch anything. Tuesday comes. Prints a green candle. My table shows the pip spread drops down to 9. The model drops only 1 pip to 35. And yeah, price comes up in between the 5 & 9. That’s to be expected. Haven’t had a green candle in a while. I can’t do anything yet. Other than start to wonder. Then comes Wednesday, end of day. There goes price. Shot above every line there. On my table, I print the back crossover. So, that would make it 16 pips of a done deal. And the pip spread goes in the red. Actually…I just noticed that I’m wrong. It shouldn’t be 3. It should be 0. Because 9 minus the 5 equals out to zero. Ok, anyway. What am I supposed to do at this point? Price is long gone. How can I get out at 87.897 ? The ship left. And I’ll be honest. All I have now is hope, and my notion that there is always a change before the end of the week. And to be really honest…I determined to go to the end of the week. That’s exactly what I did. I jumped out of everything minutes before the close. Hey…I got to go one way or the other. But, to back it up a little, look at Thursday end of day. Talk about feeling the pain. I knew that I had to go to the end of the week. But thank God Friday was a bit of relief. But anyway, how should I get out? What’s the plan that I need to take?
Well, looks like I need to work out my exits like I do my entries. I need to put on some effort of where they are going to cross back over. Even if I’m somewhat late. That would be better than the alternative. And I guess that means I need to do some serious work leading up to it. Like on Tuesday, or even on Monday, I should have been mapping out my exit, if the possibility were to happen. I guess I could have picked a price around the 21 ema line even. See, my rule of playing the ‘end of day price’ comes into question here. On this occasion, price wants to go up. And even farther up. That puts me at a disadvantage when I’m only considering end of day price. The ship wants to go!! When I think about it, I guess I do lack in the area of mapping out my exits. And I have to be honest with myself…I do place some stock in hope. But look, I’m not totally wrong about a turn towards the end of the week. It happens. Often. But I need to be smarter than that. I need to pick out when I should be getting out. Don’t worry Journal, I’ll get on it. That’s gonna be one of the things I will accomplish this week coming up, now that I’m off. I will find some triggers for the exits. And I’ll put it all in a mind map.

So, I’m looking forward to this week. I will be having very much more time (in the morning) to be getting some work done. Also, I plan on coming in here a lot more this week. We have much to talk about Journal.

Mike

[MikeWolski]

Good Morning Journal!
Well, I’ve just grabbed a second cup of coffee now. And I’m ready to type.
Christmas has come and gone. All the hustle and bustle…now done. Still have the Christmas tree up. Still wear my santa hat. All the lights outside still up. So, the feeling is still around. But, boy, is it great to take vacation this time of year. And let me tell you. I’ve been taking advantage of this time off, regarding my business. I’ve accomplished a lot so far already. And that’s why I wanted to come on in here and show you. This morning, I’ve finished up the task. Remember what I told you that I was going to do? Well now I get to explain. (Believe me, this will be very beneficial to me)
I’ve been thinking a lot about this lately. What I’ve been doing, really, is preparing for next year. It’s like…I am wanting to have such a good year coming up. And the better I prepare for it, in these last days, the better. Cause all I want to do is follow the plan. You know, no more small changes to it. And it is all about following the plan. Which, in turn, means that I will be following the market. I, whole heartedly, believe in this plan. So…ok…that’s nice…here we go.

So, I’m not going to go through and explain everything there. (Oh, I thought about it though) But, what I want to do is put all of this in simple terms. Because my system is very, very simple.
As opposed to what I used to do. And probably what most traders currently do. My goal, now, is not to: make as much money as I can, follow a predetermined path (results oriented), get the most out of a trend…or any mindset like that. When I trade, this is the only thing that I will be concentrating on, shooting for, hoping for, striving towards. (It’s all been spelled out before) (but it’s what I need to always, always remember)
Match my crossover Model This is what that means.

Rule #1 - If I print a crossover, I need to be in, by then.
Rule #2 - Get in as close to the printed price as possible.
In this case it’s 109.691. You can see the 5 was above the 9 in those first 2 days shown. Then by the end of the 5th of Sep, it occurred. If you look closely, on that printed crossover, the light blue (5) is below the dark blue (9). This is all I’m concerned about, regarding the entry. I don’t care about money. I don’t care about support / resistances. I don’t care about anything else other than that number. I just need to be in. And close to it. If I miss it, I need to get in anyway. I don’t care where. As long as I’m in within a day around it. Needless to say, there’s a lot of work needed around that print. It’s the preparation time before hand. And it’s the urgency afterwards. I will be taking losses in trying. But, as long as I can say that I’m in, whenever it’s printed, then I’m good. Now, for the managing part.

I guess the only part of managing that I haven’t really addressed, is the adding position sizing. I’m not gonna be too concerned about that now. That will be more necessary much later on down the road, when I get more proficient with getting in and out of trades properly. I’ll show you what I have so far. But, I need way more specifics on it.

Now, the exits. I feel good about what I have decided on now, about my exits. This is what I got.

I realized something, this week. And it hit me pretty hard. I am making a very hard rule. Because I just got done learning the lesson, the hard way last week, in the market. Look at the ‘How’ & ‘Loss’. I am making a hard rule. If, at the end of the day, I have a 5 above the 9 printed, it will be an automatic exit. I mean, I’m tired of any more hope. I will not stand for any more of the turn in the week. I’m just going to have to get back in, if there’s a turn back (5 under 9). So, I’m basically shooting for getting out of a trade at the crossover point. That will be the profit that I want. It’s the printed crossover. Not…hoping the market has more to give. See, I believe in letting the market tell me when the trend is over. And, when it crosses back over, that is the answer. That is how much, and only how much, I should get.
I need to remember…I only follow the market. And I only have 2 points in which I need to concentrate on. The better I get, at getting in and out, closest to them, the better. In the long run, I know, without a shadow of doubt, this is very profitable.

I want to talk about principles for a bit.
I realized, as I worked on all of this, that there is one principle that I won’t change. It’s the principle of letting price run it’s course, in the span of a day. I’m sorry, but no matter what my plan turns out to be, I cannot abandon how I feel about that. I believe it to be true, so much so, that if I have to take a loss at the end of the day, then so be it. It is tough, knowing that if I’m wrong about the direction, that I have to wait till the end of the day to find that out. It’s a hard pill to swallow. Actually, if you haven’t noticed, I do not believe in stops. My stops, inadvertently, happen to be at end of day price. That’s because I don’t trust myself, more than I trust the market. Who do I think I am, thinking I know when is best to get out of a trade? Also, all of the games the big dogs play, pushing price so far one way, (stop hunting, I believe it’s called) just to come on back? I’m not going to think that I can outsmart them. Nope, nope, nope, nope, nope. I believe the best way, for trading the daily, weekly time frames, is counting on where the end of day price ends up. That’s why, on my mind maps up there, mostly all of my decisions will take place at the end of the day. I believe that’s the truer tell of where price wants to go. So, if I’m going to lose, concerning direction, then so be it. I will only let things go for one day. And that’s it. Needless to say, I have control over my position sizing. And that’s actually more important anyway.
That’s all good and nice Mike. Any other principles you had in mind?
Well, you know, the old turn at the middle of the week. It does happen. Sooooo often. But, I’ve decided not to make that a factor in my trading. Man, I’ve thought about it, a lot. What I really am doing is assuming, predicting that that is what the market will do. Sure it happens. I’ve been right about that many times. But it is too dangerous to have that as a principle, for my trades. That’s all. I don’t need that incorporated into any plan to have.
I believe in trends. I kind of think that it’s the same thing as saying humans are creatures of habit. In the financial world, those who make their living pushing money around, will want to do that one way, for a time. Capitalize on that while they can. And that leads me to my crossover system. I believe in that big time. That is what’s telling me: when it’s trending & how long it trends for. And there can be some major trends happen. But anyway, it’s nice to finally have something to tell me that there is a trend taking place. And boy, am I taking stock in it. It’s almost like cheating. When I see, and print, a crossover on my table, it’s like …giving me the answers. All I got to do is act on it. There is no assuming of mine. There is no predicting of mine. All I’m doing is watching, and following it. Oh, and no hoping either. I am just tired of the hoping business. Let me see it happen, then act on it. This is what I am striving for.

Journal…thanks for listening.
We’re at mid week, of my vacation. And I hope to be getting a lot more work accomplished.
Let me rephrase that. I will be coming back with more accomplished work done.
We’re gonna talk about what this past year looked like.
Where I’m at now.
What’s in store for next year.

Mike

[MikeWolski]

Good Morning Journal!

Where we at now?
Oh, I know. I want to think about what’s gonna happen next year.
2017 is gonna be a good year. This is the plan. By the end of the year I must have 50K in a trading account. Without fail, whatever it takes, this should happen.

Yeeeeeeeeaaaaaaaah…
No.
This is what’s gonna happen.
I have no plans. I am not going to plan. I simply just do not know.
I will concentrate on the process. I’m using the Kaizen process. One step at a time. I will get the most out of every single step of the way. I will chew, and chew, and chew on some more till I get it. Get what? Get whatever I am being taught. I will not deceive myself into thinking I know something, or know the market. I will remember the spanking that I took from the market in 2016. I want to be in control of my trading. That’s what Terry has said. ‘We need to be in control of our trading’.
I do know that come January I will be learning about my trading culture, trading structure, and trading performance. (I have that map posted a few pages back). It’s gonna get interesting now.
It will be a slow process.

Yeah Journal, I’ve gone back in time. I’ve been reading what it was like a year ago here. Well, I got to tell you, it is interesting, in reading about how you were. Look…a year ago is really not that long ago. But, there’s always something to learn from hindsight.
So, during this time last year, I was being mentored. I was in between the 2 major parts of the program, at this time. We would start back up after the new year sometime. Look…it’s all documented back there. I should just cut to the main points.
Yeah right, Mike. So, was the whole mentoring program worth it? What was the most important things that you got out of it?
Well, when I think about it, I surely didn’t realize what real benefits came from it.
Man…I got to tell you Journal. Writing all of this stuff now, makes me think that I’m much smarter now than I used to be. Kind of like, that I have arrived. There’s definitely a dynamic, in my thinking right now, that I am sooooo much more smarter than I used to be. It’s kind of like I will want to talk down about myself. So, I just want to say, that I am much more smarter than I used to be. More experienced. More mature, in the business. But…come next year at this time…I guess I expect that I should be even more advanced than I am right now. I will review this post, and only hope that I have made much more progress than where I’m presently at. So therefore, yeah, I learned so very much, but will always need to know and experience so much more.
Ok, that’s nice. Now, back to the mentoring. I have to admit, the biggest thing that it did to me, was slowed me down. It is all about looking at the really important issues. Embracing principles, I would have to say meant the most to me. Look, in all of the work that needs done, (finding your strategy, developing excellent habits & routines) needs rooted in good principles. And I need to be aware of that.
I remember when it was all over, how I felt. I had so many tools & resources made known to me. I called them blocks. I had so many blocks that I needed to put together. My way. And that was gonna take some time to do. In fact, that process is still going on today. Probably will for a very long time. See, he gave me so much information in so little time. Even though I felt as if my head was spinning, with all of the material given, I did feel equipped. I know it will take a long time to sort through all of those gems. Bottom line…the process is long, but I’m enjoying it. The good thing is, I did give out all of the material right here in my journal. So, I guess I can always refer back and review it!
Well, that pretty much was the beginning of the year. Then, the rest of the year had to do with coming up with my strategy. Slowly, and I mean slowly, but surely, I found it. I have to give the credit to Terry. He helped me immensely, in finding out how I should trade. You know…all he did was ask the right questions. He made me think. Mentoring is all about getting out what’s inside of you. That’s what he did. And I’m a better person, trader, because of him.
Well, I eventually went back into the market again. This time was different. Smaller amount of money. Smaller position sizing also. I would have never thought that I would be trading .01 lot sizes. But, you know what? I got used to it. It isn’t about how much money to win. It’s all about whether the trading plan is working or not. That reminds me…this past year, trading wise, was really all about finding the plan to follow. I honed in on it, slowly but surely. Lots of tweeks took place, but at least I was in the same ball park the whole time.
I told you how me and Trish go over our year, at the end. And I remember telling her my thoughts about my business. I was calling 2017 the year for progress. I do like to come up with a word or two for things like that. It’s easier for me to remember that way. Progress, was the word. I have to tell ya…it sure was! I made all kinds of progress. I feel really good about how far I’ve come. And I’m not talking about results either. This is more of a deep…confidence. It’s internal. I guess it’s like, the more I experience, the more assured I am. I want this. It is coming true.
I went through some changes this year. One thing that hit me, as I was reading last years posts. I don’t wake up at 2:30 anymore. (that was my schedule for a couple years) That took too much of a toll on me. I backed it up to 3am, along with taking naps. Let me tell you, that makes a big difference, in the long run. You know…it is all about the long haul. Man…that is a good principle! And can surely be applied to trading.

Journal, I need some more coffee. Break time.

Ok. All better now.
Yeah, I’ve been reading my posts from last year. You know, when I think about it, pretty much every move I make regarding my business has already been posted. So, on the one hand, I kind of think this is a waste of time. But, over time, I guess some things get forgotten. What I need to keep remembering, on this post, is to stick with the biggest things. So, let me regroup and reiterate.
LAST YEAR was the year for equipping of instruction. And then a search for the strategy.
PRESENTLY where am I at?
I found the strategy. It’s been such a gradual process that I cannot pinpoint when I actually started trading it. But, I have been trading it and, to some degree, have been getting acquainted with it.
2018. This is going to be the year of cement. Let me explain.
“Cement : To become cemented; join together or unite; cohere.” I want an underlying theme of cementing going on. I guess it hit me, as I wrote above, how I had many ‘blocks’ given to me as I was mentored. Well, I need to get back to that and start cementing some of those things together.
In regards to the business, I need to build. Just like a mason does. When he builds a building, what is he doing? He cements all the bricks together. Now that I can stop concentrating on the dog-gone strategy, I will be freed up to build my business. Look, I was taught that in the material I was given. I want to get back to that. I want routines in place. I want proper practices also. I just want to put into place the foundation of my business. (Looks like I’m going to have to review all of that material, spelled out right here in my journal)
In regards to my trading plan, I want cementing of my entries and exits. I want to get used to doing the same things over and over. You know, getting in the market that same way. Getting out of the market, the same way. The whole ‘rinse and repeat’ process.
I just believe it’s time to start laying down some foundation. Trading is not all about the strategy only. It’s about the business. How am I going to operate it? Even part time. What are the essential things that need to be adhered to – daily, weekly, monthly? Since I am a swing trader, I should definitely have the time to be working on all of this other stuff.
Look, I’ve spent most of the entire year on the strategy. It’s not all for nothing. I don’t regret any of it. But, I want my own successful, thriving, trading business. And it’s about time to start putting the blocks together. With cement.
Journal, this is just my theme this year. I surely don’t plan on coming back in here, next year, and thinking I have to have it all set in stone by then. Well Mike, what would you like to see next year at this time then?
As long as I’m much closer to my goals, I will be very happy. Remember my vision? (yep, that’s what we established this past year) Well, I just want to know, for sure, that I’m getting closer, that’s all.
Needless to say, I will be working very, very hard for that, every single day. Just has I have been.
Every.
Single.
Day.

Ok Journal. I’ve got to cut this. But, boy, do I have much more I want to talk about! So many exciting things I’ve been up to lately.
We’ll talk about it. (Gonna try to fit it all in, this weekend)
Mike

[MikeWolski]

Happy New Year Journal!
2018
Well, we’re only 4 hours into it now. And yeah…I brought in the New Year…But, boy…I’m gonna be needing some naps today. But, it’s ok. I got all day to relax. This is my last day off. Then tomorrow, it’s all back to work.

Well Happy New Year to you too Mike! And, as far as I’m concerned, I can’t wait to see all what you will have for me this year. I believe in you. And I know your gonna get there. It’s only a matter of time. Don’t worry, we have plenty more of it to come!
Well, thanks Journal.
Ok. So. This is what I’m bringing. I finally got my ducks in a row now. See, I placed an open trade at end of day Thursday. (Don’t worry, I’ll get to that more in detail later) So, dummy me, when the end of day Friday came, I kind of forgot that it was running. I’ve been reading a lot. (I’ll be getting to that also later) So, my broker ends and closes it all down, like usual. So therefore, I couldn’t go back in to see what my ending balance was for the month. Let alone, end of year! That’s why I’m kinda late on how the month ended up like, in particular. But, luckily, Sunday night it came open. And I finished up with all of the numbers. Look…it ain’t all that good. But, I’m not worried at all. I have such positive expectations for this coming year, it ain’t even funny (and I’m gonna get to that also). So, let’s see some bottom line stuff.

Well, that’s what my account balance looks like at the present moment. Surely nothing to brag about. It was a losing month. But, it’s ok. You can see my open trade also, which is in the positive, which makes the total equity balance a little higher. And we know by now, that doesn’t count, cause it’s not my money yet. Here’s what the last few months looks like on record.

Journal…I’m not even worried. You know…I see all of this like this. Visualize a race car. The back wheels are chocked up off the ground. The engine is running hard. Those back wheels have come up to speed, and are spinning ferociously. And guess what. It’s time for those back wheels to drop to the ground. We know what’s gonna happen next.
Look, I’m sorry. But, I can’t help having this much anticipation and excitement for what’s in store for me. I just feel really good about the process that I’m on. I am excited.
Ok. That’s nice. Let’s take a look at my other table. This is the one that compares my system’s output, to mine.

I showed you this before. It’s self explanatory. The left is what happened in the month, the system (ideal) & my trades. Now, the ‘ideal’ happens to be the pip output of the 5/9 crossover system. You can see, for instance, that the USD produced only 12 pips positive of when the 5ema crossed down below the 9ema. And my USD trade(s) produced -62 pips, that month. So, anyway, the purpose of this is to know what my system produces. I did tell you that the system doesn’t produce a negative amount. It is true. In the case of the AUD, (actually all of the Comms) the reason why it’s showing a negative number is because their respective runs ran through both Nov & Dec. If you will add up both months total pips, you will see that it’s positive, for all of them. That’s why it would be dangerous to get into a trend simply at the beginning of a month, cause it can all be downhill from there, to the end (in which that was the case with all of them). Anyway, the middle column is nothing but the totals. And the right column is the running totals. By the way…I started the tally from July, so the ending total amount of pips my system generated happened to be 3945, for the last half of the year. And look, I know this is pip counting. Like I said before, it’s only half the battle. But, it’s how I have to start it. This is just a good way for me to judge how far off I end up being, from my trades, in comparing to what gets printed from my system. So, all I’m going to be doing is shooting for this standard. I want these numbers. Heck…I just want to be getting closer and closer to them, that’s all. That’s more important to me, than anything. This is what I am modeling after. And guess what. I’m going to start all these numbers over. There’s not a better time than to start fresh, from the beginning of the year. We are even now. I’m gonna try my hardest to keep up. And all I have to do is follow the plan. Believe me, I understand that it’s almost impossible to catch every crossover when it happens. And get out at every back crossover. I fully comprehend that. But, I don’t see any reason why I can’t get close. Relatively close. Believe me also Journal…it is not in my mind, to even think, that I can beat it. That’s just suicide.
Ok, that’s all nice and good. What else do I got?
Oh, I wanted to show you what happened on my first trade. It’s kind of messed up that it took place last year. By only a day. But, oh well, what can I do. I have to obey my plan. Let’s take a look.

The top row, is the 5/9 pip spread. We can see how it was diminishing. Well, on the 28th, Thursday, end of day, as I was printing those numbers, look at where price dropped down to. Uh, yeah, pretty down there. Past where my 5 & 9 prices were at. So, again, this happens all the time. (Sorry your gonna have to hear all of this again, but, we’re gonna have to get used to it, cause it’s the nature of the crossover game) I missed the boat. I’m sitting there…thinking…well, the crossover hasn’t taken place yet. I didn’t print it yet. But, it does look like it will be somewhere around 113.05(?), I was thinking. And price is below that now. Great. Well, this happens to be my first pair that I start with. Let me finish all the other ones, and I’ll come back and do something. And that’s what I did. But, guess what…price was rising up more by the time I was done. Awesome! Thanks Asia! So, I’m like…I must get in no matter what. My rationale was…I’m close enough. So, I got in. Market order placed, at 112.953 (3rd row from the top is my trades row). I put it there because it was at the start of Friday. Then comes Friday. Well, well, well. Thank God. Price dropped down more and ended that way. Sure enough, the crossover took place also. But where? Look…113.041. That puts me only 9 pips away from the crossover. Heck, I’m more than happy with that, are you kidding? And this is what I do. I don’t care (well sure I do, but you know) what price wants to do, I got in when I’m supposed to. I obeyed. I got a crossover print, and am in a trade relatively close to it. That’s step one. We’ll see what happens hereafter. Anyway, from the top, the second row down is my model. Like I said, this is what I’m after. Nothing more, nothing less. So it’s showing now that if I got in exactly at the crossover, I would have 12 pips accrued into the trend. Ok. Well, I’m only 9 pips off of it, so, I’m in good shape. Also, (in explaining that chart) we can see what the total output of my system was for the month. 12. You can guess that for the remainder of Dec the JPY didn’t trend at all, except that very last day. And as I said before, I count only the crossover point to the 5 ema price, not current price. 113.041 minus 112.924 equals 12. That means for the month of Dec the system only produced that amount. And right underneath that is what my trades equaled out to be (both in bold, bigger numbers). And then directly underneath that is the monthly time frame line up. What can we make of that? Well, that’s the most extreme trending high, USD to the JPY, line up. Then down and left to that is the weekly time frame line up. That is always over a Friday, of course. What’s to make of that? Well, price and the 5 & 9 are above the 21 line. So, technically the USD is trending higher. But it’s noteworthy to know that price dropped below both 5 & 9 ema’s. And then below that is the daily time frame line up. Man…price has dropped below the 21, by 30 pips. But, again, need to remember that for a trend to be somewhat strong, you need both the 5 and 9 lines to below the 21. And their not, yet. Surely there can be a bounce. So…it is interesting though. This is how trends start. But, not always. All I’m concerned with (for my trading) is the daily crossovers.
Here’s the chart look, matched with my table.

Ok Journal…Let me guess Mike, more coffee?
You got it. I’ll be right back.
The good thing is, everyone should be sleeping in this morning, cause of the very late night. I’m happy about that. More time to get some work done.
I’m only beginning here.

Mike

[MikeWolski]

Journal…
Ok. So. Remember me giving you that teaser a few days ago? Well, yeah, we need to talk about it. I was a little bit more excited about it, in the beginning, when I first discovered it. But then, the more and more I pondered what differences it would have on my trading, if any, I’m starting to doubt myself. I just don’t know. Maybe at the end of this, I will have realized something. I just don’t know. So, let’s begin. I’m gonna show you the comparison.

Normal Japanese candlestick charts.

Heikin Ashi Japanese candlestick charts.

I’ll tell you what I know, in layman’s terms.
It is all about finding/seeing average price. It’s constructed so, with the average price being most important.
It still has the 4 crucial end points of price: open, close, the high, the low.
The high and the lows, of the candlesticks, are the same. No difference there, within their time frame.
The open of a candle will be at the middle of the previous candle’s open and close. See, we’re not used to that. We’re used to seeing where price was last at, and then continues on from that point. But, this new starting point will begin at the midway point of the last candle (of it’s open and close). It’s easy to see that on the chart when you look at it, with that in mind.
The close of a candle…kind of fuzzy on this…but I think it’s the average of all of them – open, high, low, close.
And doesn’t it figure, when we look at a live chart, we see what the price is. And it’s such the average price. Needless to say, it’s not what the current actual price is. So, therefore, the question would be, how important to me is what actual price is? …I’ll come back to that in a minute.
Before I forget, I want to mention this. Just look at the difference of those 2 looks. Talk about seeing a trend easier. It’s no contest. Heikin Asi has it. It’s smooth. Look at the colors. They pretty much stay grouped together, more than the other. So, that’s a big plus. Also, how many times have I said to you Journal, that price is all over the place. And to me, that’s fooling! That’s precisely why I want to trade average price, than current price.
Another cool thing to know, is when you look at this chart, when you see a high trend, there are not wicks on the bottom of the candles. Likewise, a trend going down, no wicks on the tops of the candles. Basically, that means strength. Conversely speaking then, where there are wicks, that’s what price is feeling out. And probably where it wants to go. Just look at the charts, with that in mind. It is amazing. And I need to tell you, I did do a lot of comparisons, between the 2, in regards to what the differences of the crossovers are. Guess what? There is none! Maybe a pip, but not any more. And that does only make sense. Because that’s exactly what we’re talking about, with the 5 & 9. Average price. So, they do match.
I just have one, little, itty, bitty, problem. When I place a trade, ok, say a market order. I am going to want to know what the actual price is. Right? Cause that’s where I’m getting in at, at the present time. And on this platform, it doesn’t show me what the actual price is, unless I switch it over. Look…I guess I’m just making the point that what I need to do in the present, I can’t have the average, at that time. I need present price. That’s all. This is my only hang up.
But, I just remembered something, as I was typing this. See, I keep forgetting that I have an account with Tradingview. Yeah, I buck up like $40 every month. For some time now. But, I just don’t use it. So, recently I jumped back on there and made up some charts, this particular way. And guess what? They do show you both present and the average price at the same time, as what the final closing price is at. So, I’m real happy about that.
So Journal…I do think that I’m going to make the switch. I’m going to convert. Bottom line…it all aligns more closely to my principles. I want to trade average price.
Even at the end of every day, when I make my table, the only real difference is gonna be that the red figure will be the average, not the actual. All of the other lines will be pretty much the same.

Here’s my TradingView shot.

Well Journal, I’ve got to run.
Sorry. What can I do…getting busy around here now.

Mike

[MikeWolski]

Good Morning Journal!
“Rise and shine…sunshine!” Man…I remember my mother used to tell me that, when I was little. What good memories.
So Journal, we have some things to talk about. I want to talk market, and then, finally, maybe I can get to telling you about this book I have been reading. It’s a real gem. I’ve been getting a lot out of it. I think it’s one of those books that pretty much every trader has read, and if not, will eventually. Well, in any case, I think I want to go through it here. Remember Journal, when I mind mapped another book, in here? Well, I want to do something similar to that with this one, because it’s definitely worthy of that.
But first, I’ve been wanting to talk market. I haven’t done that lately. And also, don’t forget about my open trade. I want to check in with that. I don’t know, maybe it’s not open anymore. We’ll take a look.
So…yesterday, I prepared for our talk about what’s going on in the market. I took some pictures. And I always feel the best way to approach the present, is to catch you up on what has already happened. Ready for some perspective?

Well, this is what’s most important to me, the JPY. And that should answer the question. This is my 5/9 aggregate pip spread for the Yen pairs. As you can see, it’s not looking so good. As a whole, the Yen has been selling. Right now, the total pip spread is -174. To look at how this past week went, which was the first week of the new year, just count back 5 blocks from the end. Monday’s count didn’t move any more or any less, from the previous Friday. But, we need to remember that that was the holiday and it was very light trading that day. Tuesday got a little bit better. Even Wednesday was looking up. But then, here comes the mid-week turn around. Going through the rest of the week, the Yen pairs were being sold off pretty good. We can’t forget that Friday was NFP day. So, aggregately speaking, it was risk-on sentiment. Needless to say, given the depth of the negative number, there’s pretty much no JPY buying. Well Journal, that’s what I’m most interested in. Does that mean that I have a bad trade running? We’re gonna have to take a look and see. But, I want to see the field first.

This is what the month of Dec looked like. At the top, is the daily time frames. Under every Friday is the weekly time frame line-ups. And the monthly Dec 1st line-up is at the beginning. The color purple is me. Yeah, that’s nice. But what I think is interesting here is the reddish colors. That’s the Comms. You don’t need to be a genius to see that all 3 of them have been dominating the scene lately. So much so that it reflects in the weekly time frame standings. They’ve moved on up. So now that we know what’s been happening, let’s look at the first week of the new year.

After a bit of a drop by mid week, the Comms stick together to end the week on top. That’s on the daily. But look at the weekly standings. Slowly but surely, they are closing in. You know…more and more now, the way I view the weekly time frames is this. It just tells me how long they have been strong. Meaning, it’s the length of time that’s important to note there. For such a long time now, both the EUR and the GBP have dominated. They have been bought way much more than any other currency. It surely has been the trend. But the changes I see, are now coming from the Comms. And what sticks in my mind, because of reading the news, is it’s the metals (in the commodities market) that’s making some kind of comeback lately. I mean, I do see many other things happening here. Like China, which is the big player when it comes to these currencies. Oil, in regards to the CAD. And, of course, it’s just the whole risk-on buying taking place. In a sense, the whole commodity market. So, that’s kind of what I see as a reason. But, in any case, does it really matter? Well, it is interesting. I do like to see the group dynamics play out. The 'ol risk-on vs. risk-off.
Well, how about a chart. I don’t throw much of these out there anymore. But, I do have to say, I like my new Heikin-Ashi charts. There’s no excuse not knowing any kind of trend here.

Oh boy Mike, I think you better start telling me about your trade running, with the USD. Cause that don’t look too good up there.
Journal, you need to relax. I’m not worried one bit. I trust my system. I’m following it to the tee so far. I got in when I was supposed to. And when it’s time to get out, then I will.
Nice Mike.

Now, don’t forget Journal, I’ve switched over to average prices. So therefore, the red blocks is not what the current actual price is anymore. Instead of it used to being the actual closing price, now it’s the average of the open, close, high, & low… closing price. Anyway, you can see that I bought it (sold it) at 112.953 (third row down, from the top). And yeah, price has now come on back up to it. I know, I know. Thanks a lot NFP. Well, looks like it’s time to jump. But, what’s my plan dictate? Well, we have to look closely at this.

Is there a crossover yet? Meaning, did the 5 ema crossover above the 9 ema? Not yet it didn’t. Ok, so , that’s a fact. Another fact is, that the current price is above where the crossover will take place, if it continues to go in that direction. So, the plan is, to be getting out around where the crossover will happen. So, I feel like I have a choice right now, between 2 scenario’s. Wait one more complete day to see if price will continue on up. Or get out at the open.
See Journal, so far on this trade, I have executed it like I’m supposed to. And I feel good about that. I really don’t care about what happens here, as long as I follow the plan. I know trades will go like this. You know, the trend just might not materialize yet. I’m not going to take a guess. But, I do need to prepare myself for the exit, right now. Because, another fact is, presently, that the 5 & 9 ema’s are pointing up. That right there should tell me to get out. See, I could be thinking like, oh, well, price went all the way up to around 113.30, which hits the top of the resistance, but now is on it’s way back down. So, maybe I should wait one more day and hope it continues on down. Just one more day. Look…I guess it could end that way, but honestly, I think that’s what you call ‘hoping too much’.
So, I have decided, right now, that I’m going to cut my losses short. At the open, I’m out. Look, it just didn’t take. And come Monday, end of day, if there’s a turn on down, then guess what? I get in again. That’s all. Plus, I’m not losing a whole lot here. I did take a picture of my account before it closed down for the weekend. Let’s look at it.

Ok, so, that’s all good and nice. I got the plan. Will execute it as soon as the market opens, in like around 12 hours from now.
Well, Journal, that’s all the market I wanted to talk about.
Now, time for some more coffee.
And I’m gonna come back and we’re gonna finally talk about this book I’m reading.
Yep, getting a little bit more educated.

Mike

[MikeWolski]

Journal…let’s go.

First off, this is the first book that I bought, on my phone, only. I don’t have it as a hard back or anything. So, anytime I want to read, all I need is my phone (which, by the way, is with me everywhere I go). It’s on my ‘ibooks’ app. on my Iphone. Pretty neat! I mean, when I stumbled upon it, and thought it was worth getting, I bought it through my phone, and the next thing you know, bam! It’s there, now. Like, in an instant. No more waiting for it to come in the mail! I don’t know, maybe I’m just too old, and this has been a thing, but…who cares…I love technology!
So, not only have I been excited about reading a book anywhere I can go, but this particular book, is so awesome also!!! I just love getting educated.
Well, let’s talk about it. First off, what I’ve found very interesting is this. See, in much of the beginning chapters he goes on and on about how this approach, of trading the markets, hasn’t always been. In fact, he states that Wall Street, even presently, does not scribe to trend following. They do like a, reversion to the mean, type of way of making money. And I don’t fully understand that way. I mean, I guess I understand, in theory, that if price has gone away from what it’s value is, then price should come on back to it. They place bets that price will come back to fair value. Also, there’s a lot of fundamental analysis going on with the big money players. Which is contrary to the technical analysis method. Anyway, I’m reading all of this stuff not even knowing that there was any other way to approach the markets. Look at all what we learn right here in BabyPips. Sure, there’s different aspects to exploit about the trend, like breakouts, ranging strategies, buying the dips, selling the rallies, support/resistance exploiting…etc. But, in pretty much all of those types of approaches you kind of have to know what the trend is. Trend is central, in which all new traders are taught. But, this book makes it well known, that this is not how it used to be. And especially how the big money traders on Wall Street simply do not trade this way. So, he has made known, how this new idea of approaching the market has caught on. Also how it differentiates from what the conventional method has always been. So basically, it was confirming what I have always thought was the best way to approach the markets. Man Journal, I even just got done telling you that I believe humans are creatures of habit. And that it will be evident, in the market, as a trend. Ok…so…a lot of confirmation for me in this area.
I’ve heard of the Turtles before. That’s a pretty big following. But, I’m not exactly sure who was the founder of that. But, I kind of have a feeling that this guy might be him. Or if not, maybe one of his buddies was. I’m just not quite so sure about that yet. I just haven’t studied the Turtle method, in depth. I do know that BabyPips has a thread on it. And I have heard about the famous story of a guy who did an experiment, by taking some people (so called off the street) and turned them into trend traders. Some of those people moved on to become some incredible successful traders. In any case, I’m a little fuzzy about it all, but I think that this book has it’s roots in the Turtle’s method. Maybe by the end of the book, it’ll all be clear.
So, let’s see. This is a pretty big book. And I’m just wondering how I should explain it here. Surely, I would like to go through it chapter by chapter, but, I think that will take such a long time. I do have to say, that I do know, and am familiar with a lot of the material. So much rings true and is undeniable, in my mind. Lots of confirmation. But, I guess I will touch on what is most meaningful to me. And exactly what I am learning.
Well, I want to explain what happened already to me. See, everyday, I’m always wondering what am I accomplishing, in regards to my business. And of course, this book has been my attention getting lately. So, exactly what kind of work am I getting done by reading this book (I ask myself)? Well, is learning about some really great trend traders contributing directly to my business development? Uh, no, not really. So, this has been going through my mind pretty much every morning. But…as I’ve been moving through the book, kind of rapidly through those sort of things, I’ve finally come across some good stuff. Boy, it hit me. Now…I’ve got something. There’s a chapter…well, let me just show you.

Decision Making!
Yes! Well, guess how that directly applies to my business? I’m sure you remember Journal, that’s one of my core trader skills. And I even have a mind map on it. So, that’s what I’ve been working on, as of late. Hey, look up there, at the top right. See the ‘notes’? I’ve been highlighting notes in my book. All that I deem important to me. Like I used to, with real books, with a yellow marker. Really cool. Well, I’ve come up with another mind map on decision making. But, to be honest, it’s not quite done yet. So, rather me try to explain all what I got down on it, I’ll try to show you my mind map of it. It’s quite big.

Well, there you have all of my highlighted stuff from that chapter. And why I’m not done with it yet, is because I want to simplify everything into principles. I got the top right one done, and also the second one (sorry you can’t see it), but that’s it. And then, when that’s done, I want to redo my decision making mind map for how it should directly apply to my trading business. You know, with the idea of using the decision making skill in…well…making the decisions that I have to make. That’s what I have in mind. Now, that’s working on the business.
So Journal, I am excited about this book, and all that I can get out of it. Let’s take a look at some of the other chapters in it.

Ok Journal…got to run.

Mike

[MikeWolski]

Good Morning Journal.
Good Morning Mike! Hey…what’s wrong buddy? Why the long face?
Well, what a bad morning it’s been. Look, it wasn’t my fault. I was up. Like always. But…guess what the whole world depends on? Yeah…the dog-gone internet. I didn’t have any internet connection. Boy, was I bummed. I mean, if there’s any time that I cherish, it’s this time. In fact, honestly, in a span of the entire week, this is my most looked forward to time, than any other!!! I even prepare for it sometime Saturday, late. I produce all of the screen shots that I want to use. And needless to say, I think about what will be the main points that I will be talking about. I thoroughly enjoy grabbing for some more coffee, resetting for some more conversation.
Look, I realize how much I enjoy it all. And I don’t take it for granted. I am thankful. But, it couldn’t happen this morning.
So, what did you end up doing this morning, Mike?
Well, I finished that book. And worked on my ‘decision making’ mind map. Then, come around 6 something, I took a nap. So, at least I was somewhat productive. Well, the internet finally came back on. But now, the house has awoken. Needless to say, I’m going to have to quickly touch on the main points that I wanted to. So…let’s get to it.

Well, Journal, let me tell you what happened this week. Boy, I remember, it was like Tuesday, or Wednesday night, (end of day) that the market changed! The end of day numbers just went crazy. And guess what…it went the way I wanted. Say hello to the Japanese Yen! They awoken. Man…I remember wanting to get through my 2 tables quickly, because I just had to be placing trades. So, the way I ended up doing it was, after finishing each pairs’ ending daily numbers, it was then that I got it with them. Then, went on with the next pair, and did the same. It was with, I think, 4 pairs that ended up being market orders placed. And 3 pairs being limit orders. But, 2 of those limit orders took within a days time. That made me be in with every pair, except one. Boy am I glad that didn’t take yet, because they have not yet made a crossover. That’s with the NZD. I’m so glad that I made that order much lower, for it to take, because it just ended up going higher. In any case, that was a pretty exciting night. It was pretty obvious what was happening. I remember Trish wanting to go for our nightly walk, with the dog, but I begged that we could wait for just a few more minutes. She understood what was happening. So, all went well with it. But, what was happening was the Yen took major strength earlier that day. This was just a continuation of that flow. Now that I look back on it, yeah, the JPY got strong, taking out everyone, for a good length of time, with being confirmed by ending the day that way, and plus continuing on in that manner. So, I do believe that this was a major turn of events. Like a trend change. It felt like it, at the time. It still looks good, end of week wise. And we’ll just have to see how long it lasts. But, anyway, I did good by getting in when I’m supposed to. We’re gonna have to see how the rest of it plays out. That’s the managing part, and the exiting part. Let’s take a look at the tables. You’ll see what I’m talking about.

Here’s the cumulative 5/9 pip spread. No brainer here. All this tells me is, how strong the Yen has gotten. And that it is across the board, because for those amount of pips, you need to be having it against all of them. And only time will tell how long this will last. But, given the angle of that line, comparatively speaking, I think this won’t be so temporary. Meaning, there should be more to come.
Ok. That’s nice. What else. Oh. Well, for a summary of what my trading looks like, here’s my weekend mind map.

Well, what I did on Friday, towards end of the day, I wanted to add some more position sizing, before the weekend began. And the only pairs that looked good to me was the USD, and the CAD. Doesn’t that make sense, on my line up. Anyway. That’s all what’s going on with my trading.
Oh, by the way, you know that I’m still sticking with my Heikin Ashi charts. And the more I think about it, the more I trust them. Because, when I say that I want to trade average price, this forces me to abide by it. See, look up there at the ‘trades’ part. The last price there, is not what the actual price is. I’m actually getting more and more away from even finding out what the actual price is. All those numbers come from my new charts. That means that those last prices are actually the average of it’s open, close, high, and low are for the closing price.

Anyway Journal, I got to get going here. But, I wanted to mention about the book. As I told you, I finished it this morning. Well, of course it’s a good book. But, honestly, I didn’t get a whole lot out of it. I think it’s meant for those bigger players who trade the ‘buy and hold’ method. Institutional investing. Us retail traders already know that it is tried and true to follow the trend, instead of shooting for what the benchmark index is.

So…for as much as I enjoyed reading again, I’m going to have to find another good book.

Oh, Journal…man…I wanted to tell you about what Trish has been up to. I know, what does she have to do with my trading? Directly? Well, let’s see if I can boil it down, very quickly here.
She’s been out of a job for quite some time now. But, in trying to find a new job (office manager/ secretarial), she’s getting very close to this new possibility. This coming week she will have another phone interview. I’m excited about this! Guess what kind of company this is? It’s an investment firm. Boy…I couldn’t have hoped for any other business. Her last job (of like 10 years) was for a tax office. I heard so much of tax stuff before, but now, hopefully I can get an earful of investment stuff. Basically, she knows how to run an office, and be an assistant to whatever the job is about. The first interview went so well, It’s a small investment firm run by a father and son. They work with only 56 million dollars worth.
We’re hoping so bad for this. Their willing to pay good money for this position. But, they are weeding out so many applicants. Like 80 down to 10. She’s in the running, still.
We’ll know more this coming week.

Journal, I got to run. Times up.
Mike

[MikeWolski]

Good Morning Journal!
Well, after such a bad weekend last time, I’m taking full advantage of you, Journal, this weekend. Yep, it’s Sat. morning right now. It’s early…it’s quiet…peaceful…dark…and time to get some work done.
Boy Journal, I got a lot going on in my head lately. Concerning the business. And I’m thinking I need to sort it all out here. Or, at least, need to talk all about it.
Ok Mike. That’s what I’m here for. ----‘Talk to me, Goose!’-----
Ok. Well, I guess I should start from the beginning, huh? Just kidding. Look, ever since I finished this book, things have been jarring me. Man Journal…I’m not quite sure I told you about this other book that I got. Well, when I finished that other one, I jumped back on my phone and did the search. Yeah, it was on the weekend, of last. So, once again, it’s a beautiful thing to get this newly purchased book in an instant. I can definitely get used to that. So, anyway, I found the right book for me. And I remember, when I was doing the search, that I didn’t want to get that same old ‘teaching’ books. You know, ‘just trade forex this way and you can be a millionaire also’. Nope. I wasn’t looking to be taught something. I think I’m passed that. Sure, the things that I need to do research on is one thing. Learning will always be with me. But, when it comes to the way I approach the market, I’m already grounded. It’s a personal thing. So, I was looking for something different, in the forex world. Another way that I can be taught something. Well Journal…boy…I found it alright. Are you ready for this?

Ok. So. As I have it up on my phone now, I had to look back at the beginning, at the preface, to see if this really was fiction. And yep, it sure is. But boy, you wouldn’t know it. The way it’s written, is like an autobiography. All the details that surround Harry Banes is so incredibly real. It’s about how his life, as a trader, came to be. Sure, everyone has their own particular walk. Everyone is not exactly the same. But, I tell ya, there are many similar feelings that we all share and feel. But, for me, I did realize one big particular difference between me and Harry. Being older than he was, (in his mid 30’s), I know that my initial attraction to trading wasn’t all about becoming rich. And surely, I didn’t think that I could get that wealthy in a short amount of time. That’s just not realistic. But, I guess a lot of people think that it is possible though. That seemed like his only motivation. Yeah, it all started, because he found a trading software program that would supposedly make him rich. And boy, that’s all he thought about, was the money. Sure, I guess I can understand, that maybe it is possible to hit the lottery. Well, for that to be in people’s minds anyway. I know the human mind. We can easily deceive ourselves into thinking that we can get rich quick, or, for that matter, anything. So, for me, I didn’t relate. But, what I did relate to was the process of how he took trading seriously. See, he was being mentored. And one of the first big lessons he needed to get was about being honest. Not only did he need to be honest with his mentor, but with himself more so. Well, it’s hard to describe, but it’s that real hard look deep inside of yourself that you need to get to. Pure honesty. An accurate assessment. But anyway, yeah, he got broken down. And all he needed to do was listen to his mentor Harvey Winklestein. Now that guy…man…what a god. Boy…I guess it’s all about who you know.

Journal, need some more coffee. Come right back. I got to tell you about this guy.

Alright Journal…better now. Boy, this is taking just too long. For as fast as I can type, it’s amazing how long it takes me to journalize. I don’t know…this just takes me so long to do. But, I’m trying. I have so much going on in my head, and seems like I can never get everything out, that I want to talk about.
Ok. That’s nice.
See, the setting of this book is in New York City. Wall Street. That’s where Harry lived and worked. Downtown. And that’s where the U.S. National Bank was also. They have a trading floor there. But, to back it up a little, Harry experienced what it was like to be on a trading floor of a major Wall Street firm. By the way, it ended up being in the same building he has been working at for the last 11 years. It was on the 31st floor. And it was awesome! It’s what you would see on t.v. So many traders looking at their screens. So much yelling going on. Nothing but excitement. He absolutely loved the atmosphere there. And it was there that he made a lot of contacts. But…he also made the one and only contact, what was to be his mentor, Harvey Winklestein. This guy was a trader at the U.S. National Bank. And what a contrast, of his first visit to this place, than to that previous trading floor. This place was quiet. There were hardly any computer screens on the floor. Mostly older guys worked here. Everyone had their own desk. And he says this place looked like an expensive steakhouse more than a trading operation. And there was Harvey. 6 1/2 feet tall, old guy who has been around for some 40 years. The nicest guy you would ever meet. And they did. In hindsight, what you have is a newly aspiring, hungry, baby of a trader encountering a wise, experienced trader that happens to have a history of mentoring traders. He has a gift of reading people correctly, and somehow knows what your able to accomplish. Well, because of his gently, but brutal style of mentoring does Harry learn some very good lessons about becoming a great trader. Boy, I tell ya, that does so much for me. I just love to see experience like that get transferred to the inexperienced. It’s touching. And I got to thinking, in my own trading life, who have I (met) that is the likeness of that. 2 come to mind. It should come to no surprise that the most meaningful person, for me, was my mentor, Terry. I remember him well. And you probably remember me writing about him. It was like I was talking to God, back then. I realized it and felt it. The experience of someone like that is priceless. (Talking to old, experienced people like that, have that affect on my anyway) So, that’s nice. But, this other one is gonna sound pretty silly. But, there’s a point to it. The other person that comes to my mind…First off…I have to mention this. See, pretty much throughout my entire career, I’ve been on BabyPips. Therefore, this is the arena where I would encounter any other traders. No where else. And given the fact that I don’t reach out and try to develop relationships via the web, there are those who will make such an impression on me. There is one particular trader that I have seen in here, that I have the utmost respect for. I mean, I have not heard anyone talk, explain, understand, teach something better than anyone else, has ever. The intelligence that this person possesses is absolutely unbelievable. I have never met, or in fact, never talked to him. But, I guess you’ll have that in a place like this. Clint Eastwood. And in my mind, when I read of Harvey Winklestein, they have to be the same guy. That’s all I have to say about that.
Ok. Well, that’s all good and fine. But, I got to move on here.
Journal, I remember what happened when I was done with the book. I thought to myself, what do I take out of this book? It’s not the instructional kind that afterwards you go out and work on it. But…in fact…it did, dog-gone it. It gave me the idea to. I haven’t yet. But want to. It’s about the carry trade. Man…I can’t explain it all. I’m not that adept in conveying how that concept struck me. The importance of it. It’s kind of like a sneaky, smart way of making money. I mean, I understand the idea, but somehow I feel a real need to get to the bottom of that. See, Harry was instructed to research that. And he did. He sort of became famous for his work on that. And made a lot of money that way. But see, somehow it kind of coincides with my type of trading. Maybe the opposite of what I do, also. But, the roots of it all have to do with the JPY. I don’t know, I just can’t explain it, but, I feel the great desire to do some research on that subject. It’s because he did, and became successful doing it. It has to do with the difference in the currencies’ interest rates. Taking advantage of that. Look…that’s just one of the things that I have to get to doing. That’s all. But, there’s so much more.
I’ve been experiencing more of a fervency of my business lately. Actually, I was thinking of changing my yearly outlook sentiment of ‘cementing’ to ‘fervency’. Or maybe I can do both this year. But, all I know is that I want to work so much harder. I want things done! I want to see some real progress in my business. You know, it’s not how much time I spend working on it, but more so the quality of work that I’m doing. Am I working on what’s most important? How do I know if I’m making progress? And how much progress? The most amount? Or the least? Am I understanding everything that I need to know about my business? Am I trying to find any other methods, or systems that I can use?
Look…it’s all about fervency. Is the quality & quantity, of my business operations, where it should be? At the maximum?
Basically, what I’m trying to tell myself is this. It’s time to get off of relaxation, onto the edge of my seat, and make some real progress. I want to get there.
I think about this all the time Journal. But, this book impressed me to do something about it.

Ok. Got some time left still. Gonna embark on this carry trade research now.
Will come back tomorrow.
We always have stuff to talk about Journal.

Mike.

[MikeWolski]

Good Morning Journal!
ssssippppp…ahhhhhh
Nice to see you again, Journal! Ok. So. What’s on the docket for today?
Well, we have to check on my trades, like what happened this past week. Find out what the market sentiment is. And uh…I don’t know. How about…Well…looks like we’re just gonna have to find out.
So, let’s talk some market.
Ok Mike. Yeah, you have to explain what happened to the JPY this week. I heard that it wasn’t good.
You go that right Journal. Hey…I don’t know. But, I did my adjustments like I should. So, that’s all I can do. Let’s take a look.

Sorry, can’t really see the last couple numbers, so I threw in the totals bar at the top. And yep, don’t need to be a genius to see those last 5 days. All down days. And let’s not forget, this is the aggregate number. 5/9 total pip spread. Man…what a difference than last week. I know I was telling you that I thought this was gonna be the start of something pretty big. Well, if it is, not yet anyway. Maybe it’s just getting geared up. We’ll see. I actually doesn’t matter, because all I’m doing here is following the market. That is, follow the plan, which essentially is set up to follow the market.
Good job Mike.
Thanks man.
Welp…this is what I had to do this week. I cut them loose. Yeah, at the start of last week, I was in with everyone, except the NZD. And by the end of the week, I’m only in with the USD, and the CAD. So, in regards to following the plan, I think I did good. Let’s roll the tape and find out.
The EUR/JPY trade.

Well, everything’s there for ya. I lost 141 pips. But my system shows an 18 pip gain. shrug What can I do? That’s the closest I can get. I got in 59 pips too late. I got out exactly 100 pips too late. But…at the end of the day, I was spot on. You can see up there that my trades were placed within the same days as when the crossovers took place. And that’s all I can do. And in hindsight, good thing! Yeah, this is exactly what they always say, ‘cutting your losers short’. Cause look, price just kept taking off. I jumped out at end of day Monday. No more hoping going on here, anymore. So…in hindsight, so far…look. Up there. All we had is a pretty good dip occur. It happened to go into the trending arena for the Yen. It (my system) went down to grab some pips, let’s see…it started 2 Mondays ago (look at the 5/9 counter on top). And it went pretty deep for only 4 days, then did a U turn. Never looked back. It’s evident by looking at the (red) price on the bottom row. Price (let me remind you, again, that this is all average pricing) shot down below all the ema lines. Even the 21, technically trending, line. So…what can I do…But, I have a feeling that this might be a precursor to some more trending. But, it doesn’t matter. All I’m doing is following the plan. Whenever it turns out to be a formidable, longer lasting Yen trend, look out. I’ll be in it.
Anyway, this was a carbon copy of the other pairs. I’m not ashamed. Let’s look.

GBP/JPY trade. Bottom line, I lost 73 pips. The system made 20. shrug Better…but sucks.

CHF/JPY trade.

Same old story.

AUD/JPY trade.

Well, how about that entry, huh? I happened to get in exactly at the same price the crossover took place. And that was 2 days earlier! …Yeah, that’s nice. What a short trend though.

Now. these next 2 are different. First, the USD.

So, on 1/10, I got in the first time. That happens to be at the same day that the crossover took place. Nice. Then last Friday I took another position. And then, this past Friday, it was towards the close that I wanted to get in with another position, and did. I will chalk that up as beginning on Monday. But anyway, this trend has some legs to it. So let’s see. Let’s compare the pip count, mine to the systems’. Well, since I keep the running total of the system there already, that number is 186. (Don’t forget, that the system counts from the crossover to the latest 5ema line) So the ending figure is 110.984. My first trade has how many pips? 112.748 minus 110.984 equals 176 pips. My second trade is 111.025 minus 110.984 equals 4 pips. So, that would be 180 total pips. (I’m not going to count the 3rd position yet, cause that just started) Ok, so. I’m close. 180 pips compared to 186 pips. I’m happy with that. Pretty dog-gone close. So, I guess I’m going to have to learn how to juggle these open positions. And to be honest with you, this will be a first. I better be on my toes about it. As I think about this now, looks like I’m going to have to watch what the system is producing, cause that’s what my whole entire goal is about. Matching that number. So, if I see that number start to decline, then I got to do some cutting.
So, we’ll see what happens. That’s just what I need to remember, moving forward.

And lastly, the CAD trade.

I don’t know why I kept this for last. But, let’s see what’s happening. Well, my entry, pretty awesome. Within 2 pips. Then last Friday, like with the USD, I took another position. Ok, so, no harm. But, you have to admit, that something is interesting going on here. I think it was like Wednesday, or Thursday, that the CAD central bank raised interest rates. Normally, that spells trouble. Price shoots way high. And we did see that, on Thursday end of day. I was a little nervous about it. But couldn’t help notice that the trend leading up to it just didn’t change much at all. So, that’s what kept me in the game. I follow the trend, nothing else. So, ok. Well, how many pips do I have running now? Let’s see. 59 pips for me. The system has 76 pips. I don’t know, not all that bad. Kind of close. But, I remember being in my car, as soon as I got done with work, on Friday end of day, before I drove off to home. It was close to 5pm. The market will close up very soon. So, at that time, I chose to go in with another USD, but not with the CAD. And I can’t fully remember why, but, it just didn’t look right. (of course this was before I ran these end of day numbers) I don’t know, maybe if I would have seen these, I might of went in again. It’s not all that big of a deal anyway. I do remember seeing that with the USD, I think price broke down below a support level, there at the end. Ok, so, let’s see what the charts look like on these 2.

Ok. So. We have the USD/JPY. The left chart is the Heikin Ashi chart. The right on is the normal one. Well, I don’t know exactly what support level I was looking at. Maybe the one back at the end of Nov. I don’t know, we’ll see. But, in any case, the trend is on. This is going good so far.
The CAD/JPY.

Uh oh. Now this is interesting. Look at the difference in the ending prices. The one on the right is the normal candlesticks. The left is my average prices. Well…I don’t know. Sometimes I think it is better to watch the average price. The left one is sitting right on the support level. For the most part. The right one…I don’t know…seems like thats kind of fooling to me, when I think about it. Yeah…you know…the more and more I ponder these 2 differences in charts, the more I come to conclude that I prefer average prices better. You just caught me with my first initial reaction to what the actual price showed. It is kind of concerning, seeing that large down candle. But, again, price is everywhere. No one knows where it’s going to go. And with that, I’ll just leave it with that.

Mike…go grab some more. I’m here with ya.
Good. We got some more time yet.

Ok. So. I’m done talking market. What happens, happens. I follow my plan, and that’s all I’m concerned about. So, I guess I should pick up where I left off. Yesterday, I did do a lot of searching on the ‘carry trade’. Well, I guess I should show you the mind map of it. I’m not all that impressed with it. Not a whole lot on it.

Well, let’s see. To be honest about it, I’m starting to lose interest (ha! that’s funny!) on the subject.
This is what I know, Journal. Every day at 5pm EST, if your in a trade, someone’s going to be paying interest. And that’s because of the overnight interest rates that the banks always has to deal with. Someone’s going to buck up. It’s kind of like that’s just how it is, when you own a security. Given that fact, regarding the pairs we hold over a day, one of them is going to be higher than the other. Meaning, the difference has got to be paid. So, if I am long the one that has the higher amount of interest that needs to be paid, then I will get that difference of interest. If I am short the one currency that has the higher amount of interest, then I will have to pay the difference, of that amount of interest. And, I’m not sure if it’s compounded at a daily rate, or what. Maybe each broker plays it differently. I guess it could be either not compounded, that would be just the yearly rate. Or compounded at a monthly rate, or daily. I kind of think it’s a daily thing. Anyway, compounding at a daily rate is better than anything higher. So anyway, I’ll make the fine points that I’ve come up with on the subject.
— Long term trading benefits this method more. That only makes sense. The longer, more money accrued.
— The movement of price between the 2 currencies, is the biggest factor. The interest is just the little bit of gravy that’s left over and the end, whether is helps matters or not.
— The carry trade usually signifies a Comm against the Yen. Comm long.
— I think it’s enlightening to know that this could be a very good reason why big money would want to trend high against the JPY. For the trend to go that way for a much longer time period. When your dealing with millions of dollars.
— I didn’t realize that the CHF was that low. In fact, lower than the JPY. Interesting relationship between those 2.
Ok, so that’s all nice and good. But, how does that affect the way I trade? I guess I realize more about the horse I am riding. There’s a good reason to go long against it, that’s for sure.
Well Journal, I guess this is a good segway into what I’ve been wanting to talk about.
When I step back and look what I’m doing. How I’m trading. We are talking about baby steps. See, I get into the market one, and only one, way. It’s only with the Yen. Not only that, it’s long the Yen, only. Yes, it is simple. (Just like me). And not only that, it’s also simple that what gets me in is the crossover, and then the opposite crossover. It’s all a no-brainer. And I know that what I’m supposed to be doing here is practicing that technique. This year is the year for it. And I am doing just that. Have been, for some time now.
But.
I can’t help think, that this pace, might be a little bit on the slow side of things. I mean, look, I have solidified some real foundational principles, techniques to follow. I’ve been wondering about the need to branch out. Expand a little. You know, broaden my horizons. Look Journal…honestly…this has been on my mind for quite some time now. How many times have I mentioned to you that there is much on my mind. And I never get around to talking about it. And then I go ahead a read a good book that ends up making me want to go further and further. I don’t want to sit here, day after day, waiting to see whether I this system is going to work well enough, or not. I’m wanting to take some bigger steps now. The only thing that checks me is, the 'ol, “don’t go to fast, mentality” or “you’re getting to impatient, young man.” You know what I’m talking about Journal? There has to be a balance. Where does the balance lie, where I can give it my all, with all the fervency I can give, at the same time that I’m not moving too fast?
I know, it’s a rhetorical question.
Let me show you what I worked on this past week.

I know, kind of stupid right? But, let me explain.
My purpose was to boil down, in the most simplest of terms, my strategy. The top row is every currency. And I pick the JPY. It’s green. That means any combination that I pick will be one of these, JPY strong, & every other one short (red). Then under that, is what makes me get in a trade. (That’s not correlated to the GBP,CHF,CAD. Supposed to be a separate entity) Now, where was I supposed to go from here? Well, it should be able to give me the next most logical steps in order to branch out. Like any other possibilities. The question should be…what would be the next biggest step that I can take? I had some ideas. Like, how about this. Maybe it would be, to stick with the JPY. And if they are not trending high, then take them trending low. Let me change this view, now.

Ok. How about this.

Would this be the next baby step? Staying with the JPY. If they trend the other way, then I would be taking advantage of that trend, which would be Yen weak. This could work if the Yen stays one way or the other most of the time. It wouldn’t work well if it’s a constant changing of the trends. Cause I would lose with the natural slippage that comes with the territory. So…that was the first thing that came to mind.
Another possibility would be to pick another horse to ride. Well, it can’t be any other way, cause there isn’t anything more than either up or down with them. Well…yes there is. How about this. Since I keep track of every one of them, whoever ends up trending high, that could be the one I go in with. But…as I see on my tables, that changes way too much. On the daily time frame anyway, believe it or not. That would be too much slippage, again. So, back to the possible changing of the currency. See, I’ve always known that the JPY was an outlier. They do make the most sense. Now, because of that interest rate table shown above, the CHF looks to be the only other probable possibility. We all know that these 2 are the safe haven currencies. Isn’t it funny that both of them have such small rollover interest rates? So, it’s like, their both attractive, yet, not attractive. Go figure.
Well, as I think about it now, the only other major thing that I can think of is the old Major vs. Comm dilemma. It’s the risk-off vs. risk-on scenario. I’ve been down that road before. And it can get a little bit tangled. So, I’m not going to consider that now.
So, as I’ve written up there. Seems to me like it would be between sticking with the JPY, completely. Or switching over to the CHF. Ok, maybe just adding them, long only. Along with the JPY long. I don’t know yet.
If I go with the JPY, in total, then that means I would be in the market at all times. That kind of scares me. Maybe too risky. If I only just add the CHF long, then I’m only adding one more component. Let me view it like this. Give me a second.

Ok.

Hmm. That don’t look too bad.
You know, I did think about this. If I were to go in with the Yen, full time, I could demo it only. In fact, you might remember, Journal, that I did mention this a while back. I was supposed to do that very thing. But, I found that it was quite difficult to do, for some reason. Therefore, I stopped doing it. It was like I forgot about the demo thing, and just paid more attention to the live market action trades. It is tough to demo it, when you really believe in the system. You just want the live action.
Ok Journal. Looks like I got to run.
I don’t know what I’m going to do yet. For sure, today, I will contemplate this. But what seems like the answer is, back testing. I should want to know what history has shown. Does the JPY trend more than it ranges? Does the CHF trend more than it ranges? Somehow I think I need to find these answers.
But, whatever I come up with, you will surely know. Cause, I need accountability. It all happens right in here, Journal.

Mike out.

[MikeWolski]

Good Morning Journal!
Good Morning Mike!
Well, thanks for joining me this morning Journal. Yeah man…I’m gonna need some help. What I should be doing right now is getting some work done. Not that this isn’t…Journal…but…I’m just in the middle of something that I’ve been wanting to get to the bottom of. So, here we are, me and you, at our appointed time, but my mind has been in such a tizzy lately. So therefore, looks like I’m just going to have to use you to sort this all out. And maybe, by the end of this, I can figure something out.
What’s going on Mike?
Well, earlier this past week, during my working hours on the business, boy…something hit me really hard. I mean…I just know that I need to do this. So, instead of walking you through my whole thought process, I will just take a picture of some of my notes that I wrote down. It should explain what’s been going through my mind. And, of course, maybe we can come up with the solution that I’ve been wanting. So…take a look.
Nope. Can’t take a picture of my notes. So, let me spell out all of the questions that I got down.

Realistically ----If I have enough money to run my business - right now - full time, how would I run it?

• Prove to myself that I am able to run my own trading business.
• What would it look like?
• How do I know that I’m able to operate a successful trading business?
• How do I know that I’m worthy of this?
• Am I intelligent enough?
• What are all of the thing’s that I need to know?
• Is MONEY the only thing missing?
  I’VE BEEN GIVEN $ 100,000. What would I do now?

Ok Journal, there you have it. That’s what’s been bugging me lately.
I want answers. I want the truth.
The only way I would know those answers, without it actually happening, would be to assimilate, or pretend in the most realistic way, all of the things that I would do. So basically, I want to map out, in complete details, the plan to follow, once I begin. But, before we begin, the whole reason why I want to do this, is because I want to start applying all of this to reality, now. You know, this is kind of like the thoughts that I have regarding the demo/live trading transition. I’ve always thought that the best way to transition into live trading is to demo trade in the very same way. Theoretically, it will work. If you trade profitably, over time, on demo, there’s no reason why it won’t work in the same way live. Given you do the exact same thing. And that’s the big question…can you do it in the same exact manner. In any case, this is like the same thing. I want to start treating my business, now, like I will when I go full time. Trade, like I would. Portion out the money, like I would. Just operate the entire business in the same manner, so as to prove to myself that I can. And then when the time comes, theoretically, there should be no surprises. I can just concentrate on building it better. So…I’m looking for proof, now. I want truth…now. I just want to know where I am at, on my journey, at the present time. And I don’t really care, realistically, where I’m at now, as long as I know that I’m on the right path. I want to know that I’m getting closer.
I WANT REALITY, ON WHERE I’M GOING.
Ok, so let’s go there.
Right now, what would I do if I had, free and clear, $100,000 ? (That amount, even, is suspect to reality)
Well, naturally, the first thing I would do is put that money where it should go.
$50,000 would go into an account that will be used to live off of. Estimating that we need about $5k per month, it should take us to about 10 months into the future. In actual terms, we’ve been used to less, but I’m going to round it up some. (But, to be honest with you, after our conversation about this already, we’re planning on running all of the numbers soon. I want to know exactly how much we’ve been dishing out every month. I want to know how we’ve been living, in actual numbers. So, very soon we are going to do that.) So, let’s call it, conservatively, between 6 months to 10. Our bills will be paid up to then.
At the end of every month, I plan on apportioning out all of the money that we will need for the coming month. It will be like getting paid once a month, from an employer. I want all living expenses taken care of up front.
The other $50,000 will be put into my trading account. I will have to be serious about what broker I will deal with. See, I live in the U.S. (The worst place on the planet, regarding trading big money in the Forex) So, I will first call my broker. They are based out of London. I just looked, I have their address and number. FinPro trading. Before I deposit 50k, I would want to talk to someone live, and let them know what my plan is. Things like how I will be transferring money in and out of that account, on a regular basis. I would also need to know about what kind of taxes I will have to pay, at the end of the year. So, therefore, I will have to have an accountant set up. I would want to know what I’m dealing with. I do already have a contact at H&R block about this. I gave her heads up already, some time ago, but now I would get some kind of plan in place, with her, about the taxes that I will have to deal at the end of the year.
Ok. So. I have the accounts in place. The next thing that I would naturally do, is quit my job. That will be a couple weeks transition period. During that time, I will start setting up a office for me to conduct my business, here at home. That will be a fun thing to do. Cause when I think about it now, I will be setting myself up as to be the employer. See, that’s all I’ve known in life, regarding work. You have an employer. You will get paid on a regular basis. You have health insurance, and a doctor already in place. So, now, it will look differently. I will be the employer. Meaning, I will be the one that generates my income. It won’t be at the workplace anymore, it’s going to be at my office. This is where I’m going to be spending a lot of time at. Therefore, I will have to be set up for success. I will have to think about all of the things that I would need to run my business. Equipment, supplies, even my attire. It’s all gonna change. And that probably is going to be some money. Called business expenses.
Ok, so, that’s nice. It is nice to think about that. But, what I want to do here, now, is more of the nuts and bolts of how I can emulate my trading in the same way as I would. What I need to know is, how is the flow of money going to look like? I should have a plan on what kind of money will I be generating. And if I don’t produce any, then what? I do understand that one big difference, of having an employer (which was a guaranteed paycheck) to trading, (which is not guaranteed).

Ok. Well, let me grab some more coffee and I’ll tell you my thoughts.

Ok. So. It hit me this week, as I have already been down this thought process, the question really is : How do I know that I can be profitable? And by how much? Well, the first thing that comes to mind is a track record. Sure. It’s proof. It is, though, looking back at history. It’s what I’ve already done. But, there’s more to it. This is what hit me pretty hard. What am I basing my trading off of? Is it hope? Or is it something more concrete?
It’s my system!
See, there’s a difference between me, and my system. I follow the system. That’s how it should work. Now, whether I follow it 100% or not, is a variable, or factor. The definition of a system is this —any formulated, regular, or special method or plan of procedure. ( I cut and paste that)
I wrote that down in big print. You see, there’s a big difference in finding out what the system produces, and finding out what I produce. I think this is the best that I can do… Find out exactly what my system has produced, in the past. (Since you can have concrete numbers regarding it). Find out how close I have followed the system. (Which will be my documented track record) And between the two, I should be able to verifiably come up with a projection of what I should produce, in the future. And see, this is what I want to do. I want to see if I can trade, in a scaled down manner, in a way that will support a business. I trade live. So, what I do produce is real money. It’s just at a smaller amount. But, the good thing is, there’s something that can connect, relate, both sides…and that is a thing called percentage. It’s a commonality. Thank God for that. Therefore, there should be no reason why I cannot simulate a trading account, a trading system, my results, as I would on the bigger scale. But, the only thing I cannot really do,…well, now that I think about it, sure I can…I should be able to take money in and out of the account, whether it’s a small amount of money or not. But, maybe I need to scale it up more than where I’m at right now. Like a 1k account.

Well Journal, I’m starting to get lost here. The house getting up now. So, I better put out more of what I’ve been thinking. In short.
I was wanting to talk about the money flow.
The question needs to be asked. When do I balance out my accounts? At the end of every month? After I make a certain amount? Basically, when do I pay myself? This is interesting. Given the nature of the business, nothing being guaranteed, I need to do the most smart thing. I feel what’s most important is longevity. I need to secure our finances. Therefore, since my trading results will affect me 6 - 10 months out, this is the plan.
– Whenever I achieve a 20% increase (10k) to the account, that’s when I will square up the accounts.
– I will transfer that amount into my living account.
– I will continue to do that till I have one full year secured to live on.
When that time comes, I can start building up the business. So, instead of transferring that money into the living account, it will go into the business account. That will be a new and different era.

Journal, this is getting very difficult to continue now. I have to go.
But, what I’m going to be working on is this…I need to determine what my system produces. (At least, what it produced last year) And I need to look at my trading, in relation to the system.
It all has to do with finding the proof, and the truth.
For myself.

Mike

[MikeWolski]

Good Morning Journal!
Well Journal, we don’t have a lot of time today. Yep, it is Saturday, but this is one of those ‘once a month’ work days for me. But, I’ve been pretty dog-gone busy with the business lately, Journal. And if you want to keep up with me, you’re gonna have to start listening. I have a lot on my plate. So, if figure, today, I will throw a lot of data at you, and tomorrow we’ll get back to the subject at hand. So, today, tables, tomorrow, talking.
Ok. So. Here we go. We have the first month of the year, under our belts.What does it look like. How about some bottom line numbers.

Well, there’s the history of my trading account. Basically, I’m only going to be putting down the balance and % increase/decrease from last month. But, I do have some changes going to take place with the account, soon. I plan on beefing up the amount. So, stay tuned about that. But anyway, I’m not all that upset about it dipping down, cause there was a point earlier in the month that I was way down there. I did make a huge comeback (from like low 200’s).
But, I’m making progress, Journal. Check out what I’ve been working on.

This is just the precursor to what I really want to show you, cause it’s gonna take some serious explaining. What we have here is what my system produces, and what I produced. The ‘ideal’ is my system. That is – the number of pips that the JPY has trended against the other currencies. Specifically, how many pips the 5 ema was below the 9 ema. You will see them all individually when I throw up the other tables. So, for example, the JPY’s 5 ema line was below the 9 ema line 391 pips against the USD. And so forth. That also shows the strength and weakness between them all. But anyway, we have a total number…705 pips. Now, that’s what I’m calling the system. The system produced that amount of pips. And there’s my total amount of pips, of all my trades. Now…that column right next to the ‘total’ column is this. That’s the dollar column. At the top, is what my account balance was, at the beginning of the month. Since I trade .01 lots, that equals out to .09 per pip. Ok, so, 9 cents a pip times the total number of pips will equal what? Well, there’s the numbers. My system produced $63.45. I produced $27.9. And my total account balance is there for that reason, to know how much of a percentage of increase it was. My system produced a 22.38% increase to the account, and I produced a 9.84% increase. BTW Journal…these don’t equate exactly, because of the brokers commission, rollover, etc…This is just a benchmark for me to see how I compare to the system. (And I know that’s probably not the right word for it, system, but I’m using that word anyway). The last column means this. The top number is the difference of what I produced compared to the system. I’m 12.54% off of what my system produced (22.38 - 9.84) . Now. How do I know how good or bad that is? Well, that’s where history will come in to play. Take a look at the stats from last July.

Those red numbers are the bottom line figures, for the month, but are averaged with the previous months. So, I started keeping track in July. I’m 22.48% off of what the system produced. In Aug, I was up 19.3% for the month. But, I want to keep a running average. So, I average them out, ( -22.48 plus 19.3 divided by 2) equals -1.59. That tells me that my running average for the 2 months equals out to a -1.59% off of what the system produces. Then, my running average after the first 3 months came out to be -7.49%. So, you can see how much of a difference I did compared to the previous month. Then October came and really did bad. But, that looks like a bottom. Cause the next month was better, which brought up my running average. And then Dec was better than that, which kept bringing up my running average. And so forth. But look, this past month, I was off by 12.54%, which is not any better than Dec’s 10.95%, but, it did bring up my running average. From a -2.79% up to a -2.19%. Basically, this is telling me that I’ve been doing better.
Look…all I’m doing here is 2 things. Comparing my trading to what the system produces, and also seeing the progress. Of course, you have to remember, that I’ve done a lot of tweaks along the way. But, I feel that I’m leveling out now. This year should be a good year for the numbers. And remember, all I’m doing is trying to match what my system does.
Ok Journal, that’s nice. We’ll get to more of that as the year comes and goes.
Let’s quickly look at the month, and my trading.

The USD. My best trades took place here. Look at the bottom line, on the right, top corner. The system produced 391 pips. I produced 540 pips. That’s the power of compounding positions. You can see my three positions, there in the middle, which added up to 560 pips. But I took a 20 pip loss at the beginning of the month.
Ok. That’s nice. I got to roll all of these. No more talking. Figure them all out Journal. Your smart.

Well, I’ve got to run Journal. But, if you couldn’t figure it out by the tables, I did jump out of all the trades, a few days before the end of the month. Yeah…good thing huh. But guess what, my AUD/JPY limit order took, late day yesterday, just before the close. So, that’s the only trade that I’m in now. All you have to do is look at their table. The system says go, therefore I’m back in.

We’ll talk tomorrow morning.
Much going on. Will get back on subject.

Mike

[MikeWolski]

Good Morning Journal!
Ok. So. Let’s get back on track, huh? Sometimes I think I start to lose perspective on where I’m at. I tend to forget the subject matter at hand. So, that’s what I want to do here, today.
First off, where are we at now? Well, it’s been one complete month now under our belt, for the year. Remember, this is going to be a year of cementing, and fervency. And well, so far so good, I think. I mean, I am making progress. As I showed you, I am now able to track my trading to the systems’. I think it’s a good benchmark way to do it. So, it’s like I’ve built some of the structure. That’s cementing. I’m happy about that.
And, what else have I been up to? Well, I was hit with something pretty hard recently, and meaningful. Remember…what would I do if I had $100k, right now? Would I know what the smart thing to do would be? Would I know how to run a full time trading business? Well, let’s get on the road to proving it. Let’s assimilate. Let’s trade like I should/would. I want to run the business like I will, when the time comes. That’s where I’m at now. And as I have been on this journey now, it led me to be focusing on the ‘system’. And I want to talk way more about that. But, before I do, I need to back it up a little. I need to finish my thought process on running the business. (I gave this some serious thought on my drive back home from work yesterday)
Ok. So. Follow me on this. I guess the question is this…How should I assimilate my trading now, as I would when I run it full time? Ok, so the plan is to secure my finances for a year out. If I’m set up already for 6 - 10 months out, then I will be working on the rest. And the plan would be to balance the accounts every 20%. Once I reach a 20% increase, I would transfer the money from the trading account to my living expenses account. (10k) Well, how do I even know that’s the right amount? I need to know how long it should take me to achieve that. Cause if it takes me a couple months to do that, by then my living account will be dropping down faster. Basically, when I think about it, I need to know that I can produce more in a month, by trading, than what I will be withdrawing every month, from the living account. That will just have to be the case. (Man, I need exact figures. I’m going to have to get that, like today) But, for now, let’s take the 5k number. If I will be withdrawing 5k every month from the living account, then I will have to be producing at least that amount from trading. That turns out to be 10%, of the trading account balance. I wonder if I should make it every 10% increase balance out the accounts. So therefore, if it takes me shorter than a month to achieve that, then I will be adding onto the process of securing up a years worth of financial security. If it takes me longer than a month, then I would be going backwards. Meaning, I would be losing money every month and eventually it will catch up to me. Boy, this is some serious thinking. It’s kind of scary to think that I couldn’t make it every month. I can see that I would need to know exactly how much of a percentage of my trading account that I need to be producing every month, for a progression, than a minimizing. And of course, the more money in the trading account would equal a lesser of a percentage. (And I’m sure that’s why all the big dogs tell the little people, like me, that you need to be fully funded. Basically, you need a lot of money.) Look…I don’t want to be in the position of having to trade under pressure. Surely, the game is built upon risk itself, period. But, that buffer in between, is what’s gonna make all the difference. The more buffer, the better. (Buffer meaning banked money)
Ok. So, let’s get back on track here. Looks like I’m going to change it from 20% to 10%. Every 10% I need to balance out my accounts. If I produce a 10% increase, I will transfer that money from the trading account, into a living account. Now, in real life, I guess I can just make a separate account to put that into. I should just use my ‘so called’ business account. Which I do have in my bank. So, let’s say that I really do need that 10% of 50k to break even every month, from my trading account. I guess I have some options to work with. Option #1. Do I wait for an entire month…enough time for a trading system to gain traction, play out…and at the end of every month see what the balance is? And if I have at least 10%, transfer it out into my living account? Keep the rest running to get the next months quota? I know I will have good months and bad. This will be the good month scenario. Any extra will contribute to the following month. But, what about if I had a bad month. This means I wouldn’t have produced that amount, (<10%) in that time frame. Well, I wouldn’t get paid. But, I will still have to take out my living expenses amount to pay the bills. That balance will decrease. And that’s what the buffer is for. I guess I could still take out the 10%, but my trading account balance will drop. Ok. The other scenario would be if I had a losing month. Well, that means my trading account balance will drop a lot, the losing amount along with taking out 10%. That’s all given that I would be taking out 10% every month regardless. Ok, that would be the worst case scenario.
Let’s look at Option #2. Do I take out the 10% amount as soon as I produce it? See, I guess I was originally thinking that this would be the better case scenario. It’s kind of like, take the profits when they come, and start over. Why confine myself to the monthly time table? I mean, I never know when the Yen is gonna have their roll. Does the market operate on a monthly time table? Uh…well…I guess that’s why we see the months end play take place. But, that’s the money managers. Not really the market. The trends in the market carry through months at a time. So, the answer is no. The market doesn’t operate on a monthly time table. And therefore, why should I? I’ve got to play the market in it’s own time table. And pay my bills on it’s own time table. And those 2 just happen to be on different planes, or time spans.

Time out on the field!

Ok. So. Where were we?
Oh yeah, so, how about this. How about I trade, in real life, right now, like this. Oh, Journal, I forgot to tell you. Now’s the perfect time. I plan on making my trading account balance a cool 1k. That’s the plan. And it should be pretty soon. As soon as my income tax money comes. (Should be any day now) So, it’s like I’m going to add just over $700 to it. Ok, so, that’s nice.
Now, how about this. Say I got 1,000 in my trading account. I can keep track of my trading like this. Whenever I reach $1,100, as a balance, I will withdraw 100. In real life. I can put it into my business account. Keep track of it. Surely, I would want to keep records of how often this takes place. I would want to keep track of those 2 piles of money. On a monthly basis. One pile…my trading account balance. The other pile…my business account balance. That would be equivalent to my living expenses account down the road. So, what I can do is correlate the future living expense account to my present business account. And that will equate to $100 every month, that I would need to keep everything afloat. That means that I would expect to see my business account grow, at least by that amount every month. I can keep track of this. See Journal, this is what I’m getting at. I want to assimilate the flow of money now, like it would be. In real terms. I need to see this play out. I need to know what kind of comfort level I will be at, (or pressure level, for that matter) on the specific %‘s. I don’t know…is 10% on the high side? I’ve done my due diligence on the subject. They say anywhere around 5 - 7% a month is considered being a very good trader. That is, over the long haul, you can be dependent upon producing that amount consistently. I understand that. But, I need to remember that I’m not shooting for 10% a month, every month. In fact, I don’t want to confine myself to the monthly standard yet. I would like to know how long will it take me, on average, to produce 10%? If I keep records, I should be able to determine what kind of time frame my trading produces. And I should be able to see, in real dollars amount, what the accounts will look like. So, what’s going to be the plan? Start off with a 1k account balance. Trade the strategy. Once I produce $1,100 worth, I will transfer out $100 to my business account. That brings me back to the $1,000 trading account amount. I will have to keep records of how long it takes to achieve that. I’ve been thinking now. See, there’s a variable here to consider. And that’s the position sizing that I have to choose. If I pick too large of a size, I might get there quicker, but is more risky. Cause I would be in danger of not even making it, period. But, if I pick too small a size, it just might take longer than what is necessary, according to my system. Well, we’re gonna talk more about that in a minute. But I need to put a cap on the money flow plan, now. The data that I need to know, records to keep, is …how does my business account balance grow, over time? What kind of consistent time period does the 10% increase, to the business account, look like? Also, I want to know what my system produces given specific position sizings, on average. Of course I’m keeping track of how my trading compares to the systems’, but how close do I consistently get to it? These are some questions I should be able to answer if I trade in an assimilated manner. And keep records of.

Now, I don’t know if I’m going to have enough time to cover all of this today. But, I guess I will start on it. I want to talk about my system.
I am trying to get to the bottom of this, myself. I even made a mind map on it. Surely not completed.

Well, spill the beans Mike. Let’s see what you got so far.

Ok. Ok. A good place to start I guess.

Boy, as I have developed this, it’s surely making me think. Let me walk you through it.
First off, what I needed to do is define what the system is. Top right. It is the amount of pips that the JPY trends when the 5 ema line crosses down below the 9 ema line. See, this is not what I originally started out thinking it should be. Cause I could easily have said that my system is this. (Which, honestly, was my intent) Getting in at, or as close as possible, to the first crossover. And getting out at, or as close as possible, to the second crossover. You heard me say it, Journal. That was the original plan. But, because of my exit strategy development, I’ve been realizing that what I’m really after is the amount of pips it produces. It’s that in a nutshell. Which is quite different that specifically getting in at a particular spot, and exiting out at a particular spot. You see? It’s more delving into what I am making my system out to be, exactly. So therefore, I’m choosing my system to, specifically be, the amount of pips that are in between the 2 crossovers. You know, when you look at my table, the second row from the top, is the amount of pips that the system is producing. I keep a running track of what it’s doing. So, consequently, when I want to know what the system is producing, I just look at that row. And, as you know already, that’s what I’m shooting for. That’s what I’m trying to emulate…copy…match…equal. Because, what it really is saying, in truth, is how many pips that the JPY is trending. In that context. What I deem important regarding my trading. So, that is what the system is. Now…how to match that, is gonna take a strategy. Look, I don’t need to state the obvious. In simple terms, it’s very difficult to determine where, at the end of a day, the crossover will take place, based upon an average of the previous 5 days closing prices. Once I find out where the crossover takes place, it’s already too late. Price is constantly moving. And then, it’s even harder to know when the trend is gonna end, or continue. In any case, it’s difficult, to be exact about those entry/exit places. So therefore, I think I should be looking more at the amount of pips. Let me show you the 2 extremes. I did really good with one, and really bad with the other.

With the USD, I did good! It’s only because of the multiple positions, that got me there. Surely, I cannot compete head to head with the individual pips. That’s incredibly difficult. But, with multiple positions, it can be done. As you see there! I racked up 560 pips. That’s with 3 positions. And the system produced over 300 some pips. It’s still running now, but it just might have topped out at 370 pips. So basically, this tactic makes it possible for me to have a chance of matching, or even beating the system.

Now with the bad.

Look there, in the middle. The trend was coming back down, according to the 5/9 pip spread at the top. I put in a sell stop limit order at 135.00. Well, it took. And you can imagine what the real price action looked like on the chart. It dove down. Took me in. Immediately went back up. And so, what am I going to do? Wait? Hope, that it will come back down? No. I jumped. I lost 100 pips. The crossover never took place. Well, that’s what I’m supposed to do. But, then the following week comes. Yeah…And then comes the crossover. It took place at the end of day Monday. Yet look! It ended up being at 135.418 ! That’s quite far up the scale. And you better believe that I was thinking that I should have just stayed in. But, I didn’t stay in that mindset. I moved on. So, then, what did I do? Well, I placed another sell stop limit order. At 135.000 again. Well, you can see what price did. It’s in red. Boy, it dropped down even more, than what it did the week before. And as you see there, I took profit. A day later. Racked up only 24 pips. But, just got tired of taking losses. And that’s a lesson I’ve been learning, lately. It has to do with my exit strategy. Man…I need to be taking profits, instead of losses all the time. So, in hindsight, I did good by doing that, because price wants nothing but up. The back crossover took place on the 1st. And you can see, by the ending results. That for this month, my system produced only 38 pips. But I ended up with a -217 pips. That’s way too much of a spread. So, the point here is, go after the amount of pips the system produces, rather than the particular entry/exit points.
So, couple that mess with my other nightmare.
The CHF.

This is just a disaster. I got in when there was no real reason. Then bam! There goes 168 pips. I don’t know. I will remember this. At least I have a good reason for that first trade, that ended up losing 89 pips. I got in during the same days as both crossovers. That would be acceptable, for a system that would concentrate on the specific crossovers. But, again, I’m getting away from that. Anyway, I lost 257 pips against the CHF this month. And the system produced 32 pips.

Ok Journal. I’m starting to get lost now. You know…talking going on in the house.

Where we at?
Well, I will be working on that mind map. Pretty much, that will outline the way I trade. Then I’ll get to honing in on the exact specifics with my ‘entry’, ‘manage’, ‘exit’, mind maps, on the strategy.

Alright Journal…thanks for listening.
Mike

[Newgenfitness]

Dude, Im going to be brutally honest. To begin, I just started live trading about a month ago after a year of studying and 4 months of demo trading so I am by no means an expert. The way you are going about trading is not the best way at all. As a trader you should never try to hit quotas or goals every month. You can not dictate to the market how much pips it is going to give you. Secondly, your only goal should be risk management. That is all. Enter a trade and have a set amount of money you are willing to risk on every trade. Stop loss on every trade. Your position sizes are to large for your account size. risk 2 percent. So on an 1000 dollar account you should be risking no more than 20 dollars per trade. These large gains in your account do not matter because your losses are equal to or greater than the profit. All the planning in the world is going to mean nothing if you dont regulate your emotions. That’s all. The top traders in the world have roughly a 60 percent win ratio. That tells you that they are profitable not because they are always right, but because that when they are wrong they cut their losses and keep them to a minimum by managing risk. and when they are right, they still had a set point to protect their accounts and they let their winners ride. Sorry for this lengthy paragraph but Ive read a huge portion of your journal and I believe the only way you are going to be successful is by trading without your emotions affect your trade, and by only risking 2-5 percent of your account per trade. There’s no way around it man.

[anon98339083]

Your position sizes are to large for your account size.

I must have missed something here (perfectly possible!). Where did Mike give his position-sizes?

[MikeWolski]

Good Morning Journal!
Well, what a week it has been! Man, Journal…have you been in touch with the market lately?

Of course.
But, the real question is, how have you been handling the profits, Mike.
Talk to me goose!

Yep. And that’s why we’re here. You get my honesty, and the inside scoop.
Oh, sure, Journal! Naturally I’m happy with the brutal spanking the Yen has been dishing out. Like, it’s about time! I mean, I’ve said it. “My ship has finally come in.” See, I think I told you about my buddy at work. Older guy, who watches his 401k plan balance a lot. And he knows how I trade. So,whenever the stock market goes down, he knows that I must be doing good. And boy, this week, he’s not been too happy. At one point he barked out…“I’ve lost over $4k in just one day!” And so, we will have the same old conversations about it all. Like, how his hedge fund, will always eventually make him money over the long haul. And on the contrast, of me, playing the market on a shorter time span. But, needless to say, I think he’s been remembering what has happened to him back in '07/ '08. Boy…he has told me how he lost thousands. And never did get it back. And that’s all retirement money. What can you do. He’s old school, though. Everything’s gonna be ok, for him.
I, on the other hand, am happy. But, also, distraught. I simply will not rest until my trading plan is complete.
See, lately, I’ve been dealing with the taking of the profits. I mean, I have to sometime, right? And because of that, it reveals the incompleteness of my exit plan. Look, I do realize that my trading plan is a process. And I know that it’s not completed yet. But, the day will come, when I will know exactly when I want to get out. Why will I take profits, or losses. And exactly how will I execute that plan.
But honestly, this week has been bitter/sweet. Sure, it’s been nice seeing my account up 33% for the month, 27% YTD. But, I’m bugged to death about THE system, and MY system. See, money is not the object here. It’s not about how much money I can make. Or even how much of a % I should be making. What I’m more concerned about is this. What is the system producing? That is the benchmark I am most concerned with. Not only that, but what is the way that I can follow, most closely, to what my system is producing? I need a plan to follow the system.
I think I’m a broken record. Cause I have a feeling that this is what I’m continually saying to you Journal. Over and over again. I’m sorry about that. But, honestly, this is what eats at me on a daily basis. And it was taking place while I was making money, also. (Which is a switch) (So, there’s something new for ya Journal)

I’ve been working on it.
And we have got to talk about this.

But first, some more coffee.

Mmmm…mmmm…mmmmm…The simple pleasures of life. Boy, do I love this particular coffee. It’s the Dunkin Donuts flavored coffee. French Vanilla & Hazelnut. I got those 2 for Christmas. I was so happy. Then I ran out like a couple weeks ago. But guess what…she got me some more.
This is just so awesome.

Ok, so, yeah, that’s nice. Where were we.

Well, I got to tell you Journal. Every single morning I’ve racked my brain on the subject. I’ll sit there, in my chair. With the laptop nearby, with this mind map open. I’ll close my eyes. Ponder. Meditate. Talk to myself. Listen. Ask questions. Anything and everything. All in the hopes of coming up with some answers. And then it came to me. It took a couple days for it to be completely revealed. But, I felt that the key to what I’ve been looking for is this. You see it there. Under HOW? It’s the 5/9 pip spread.
Let’s back it up a little. The way you read my mind map is like a clock, starting from the top right and going around clockwise. So, I defined the system. Then I defined my trading objective. Then onto the specifics of how.
Yeah Journal, what’s up. I feel that the key to this system is the 5/9 pip spread. And I’m going to use this as an indicator. Basically, I feel that this tells me what kind of trend is going on inside of the trend. And even outside of the trend. I believe that this tells me a whole lot. See, in between the crossovers (the beginning & the end) there’s much going on. The pip spread tells me how strong/weak it is. It also tells me whether the trend is increasing or decreasing. Right? Not only that, but outside of the established trend, the pip spread tells me whether we are getting closer or further away from an eventual crossover to take place. I mean, this only makes sense to me. And also, because of the difficulty of getting in around the beginning of the crossover, along with the ending crossover, I don’t want to be locked into trading only when it’s technically trending. Because I need all the help I can get, when it comes to following the trend. Not only that, but think about it. Something can be trending way before it technically starts to. Also, the trend can be ending way before it technically ends. And what else do I have, but the average price, to tell me what’s going on there? So therefore, I want to utilize this spread. As an indicator.
At first, I was thinking of making this pretty dog-gone simple. Just the way I like things. But, I think that might be detrimental. The simplest way I can do it is like this. (And it all does come down to this) The trend is either increasing, or decreasing. Sure, there are times that is stays the same, but very hardly. I have the numbers. It’s constantly moving one way or the other. But, I can do something like get in only when there’s an increase, and be getting out when there’s a decrease. I can make some parameters of exactly when to utilize the increase and decrease aspect of the spread. But, you have to think about that. That’s a little too simple. You have to break it up, into parts. And that’s what I did. Look. It is going to either be trending, or not. That’s 2 parts. (Green, Red) Then, within those 2, you will have it being either increasing or decreasing. That’s 2 more parts. So, I guess we can boil it down to whether it’s increasing or decreasing within whether it’s technically trending or not. Not only that, Journal, but every pair operates on different amounts of pip spread amounts. So, their all going to be a bit different. You better believe that the GBP/JPY pip spread will be much higher than say the USD/JPY pair.
And…there’s more. What I want to do is find out what the average pip spread will be for every pair. You can see what I want under the “averages of each pair”. There’s 4 things there. The top one is what the average pip spread will be when it’s trending ( the 5 under the 9, green) and increasing. I tried to make it clear. 0 > means the pip spread is increasing when it’s trending (moving away from zero). Then, I want to know what the average pip spread is when it’s decreasing, when it’s trending. 0 < (getting closer to zero). Then, I want to know what the average pip spread is when it’s not trending, but increasing, > 0 (moving closer to zero). And lastly, I want to know what the average pip spread is when it’s not trending, but decreasing, < 0 (moving away from zero).
I guess it can get a bit confusing. But, this is my thought process. (And this is exactly where I’m at now)

I’m going to start here. This is the earliest records I have for the first time the USD/JPY trended, back in June. I will be concerned with that top row. That’s the 5/9 pip spread. So, you can see the beginning and the end of the crossovers. What I’m going to do is find out what the average increasing pip spread will be, and find out what the average decrease pip spread will be. That will be for when it’s trending. Ok. Well, I guess I can start right here with you Journal. Let’s see. I’m going to count all of the increased numbers. 16/27/36/40/18/19/23/24/22/25/37/22 …which equals 309. That divided by 12 (cause that’s how many there are) equals 25.75. That tells me that during this trend, there is an average amount of 25 pips per single increase. So, what about the average decrease? 27/22/7/14/35/32/23/21/18/3 equals 202. That divided by 10 equals 20.2. That tells me that 20 pips is the average amount of a single decrease, during this trend. Now, this is just a sample. But I was thinking this. Once I find out what all these averages are, I can make a certain number amount, that I will see take place, to make me get in. And also to make me get out. But, as I was doing this now, I don’t know exactly how much of the average number I will use. But, at least that’s a number that I will need to know. Then, I can always go back and do some back testing on the particular numbers.
But, my point is this. I want to come up with a number, that when I see it take place, it tells me that I should be getting in. Likewise, when I should be getting out. It will be telling (about the trend). It will be something that I can follow. It will be the mechanical aspect that I’ve been looking for.
Now, the only thing that kind of bothers me about this, is about how closely will this system match up against the system? Think about it. The system entails the pips in between the crossovers. That’s it. But, now, I was just trying to find the most optimal timing of entries and exits in a general sense of the 5/9 pip spread, whether it’s trending or not.

Journal, I’m getting lost now. But, you get the point.
Once again…I’m getting closer & closer.
I will not rest, will not be at ease, until I get to the bottom of it.
At least you see what I’m up to.

I got to get going Journal.
I thought about showing you how the JPY is tearing up the market. But frankly, I really don’t care about that. I don’t even care about how much money I’m making. It’s pointless. Cause, if I can’t rinse and repeat the process, over and over again, what’s the point? It’s such a long road…for consistency.

Mike

[MikeWolski]

Good Morning Journal!
Good Morning Mike!
Well Journal, there’s so much going on with me, lately. But, the thing that I’m most excited about, is this book. Yep Journal, check this out. It came in the mail yesterday. I’ve been waiting for this with so much anticipation!
This book…is the book of all books. I mean, I think this will be the last book I ever buy. Cause I don’t think I’ll need any other, after I’m done with this one.
It’s called Principles. By Ray Dalio. Oh my goodness. Journal…this is a good one. I started reading it yesterday. And, no lie, after the first paragraph, I knew I got my money’s worth. Even if that’s all I read! And that got me to getting my computer out and making a mind map, as I go through and read it. Well, first off, you should know what I think about principles anyway, Journal. I have told you how I want my trading to be based off of principles. That was during the time when I got mentored. So, you do know that I’ve been walking down this path already. But, this guy…he’s a genius. He’s one of those old guys that have been around finance, the market, for such a long, long time. And there’s nothing I love more than to glean from those experienced. And, I feel like he has a mind like mine. The way he thinks. This is who I will be 40 years from now. Can you just imagine how much experience that carries? Well, that’s what I got in this book. Just wait till you see this mind map. Talk about having answers. This has it all.
Geeez Mike. Sounds like your talking about the Bible. You know there’s no comparison, to the book of Life. Come on.
Yeah, I know.
Sorry.
I’m just so excited about it. That’s all.
So, what do you say we get through this work relatively quickly now. Cause I do want to get back to it, and be drawing up more of the mind map.
Well, spill it Mike. What do you got so far?
Ok. Ok.

Ok Journal. Let’s get some work done here, huh? Let’s see. What are the points I need to touch on.
Well, there’s only one thing that’s been totally consuming me lately. Journal, it’s the same old song and dance. And, frankly, I’m getting tired of telling it to you. But, I know that it’s the most important thing that I have got to get to the bottom of. It’s the specifics of my trading plan. I mean, it’s killing me, on a daily basis.
But, I knew that this book was coming. And, which normally is the case, everything else will be put on the back burner, once I get into a book. And, I cannot afford any more time away from what I’m trying to get to the bottom of now. So yesterday, I tried my hardest to get as far as I could, on the subject. And I did. I feel good about what I accomplished so far. I know that this might seem trivial, but it’s very important to me. Check out what I got. And then I’ll explain my thought process.

Boy, after so much thought, I think this is the best way to go about it. Instead of the old ‘enter, manage, exit’ method (in the way which my mentor taught me), I will go about it this way. It will be like a chronological sequence of events. So, the very first action that I would take, in placing trades, would be placing a trade order. Then I go on to explaining all of the reasons of why (under it). What I really want, down in there, is everything possible of what makes me enter a trade. You know, all of the ‘who, what, when, where, why, & how’. I want exact details. I want reasons. And you know, I won’t be satisfied until I get to the bottom of it. Anyway, I’m, by any means, not done with this. But anyway, my plan is to follow the progression of a trade. What would follow, entering a trade order, is how it’s first starting out. I called it the ‘trade infancy’. First off, it could be before the crossover took place or afterwards. (I’ve noticed my wording might be incorrect, about whether it’s over the crossover or under the crossover. Gonna have to change that. Should be within the crossover and outside the crossover). Then, I explain my reasons for whether I stay in it or not. As I look at this, I think I need way more specifics. But, it’s a start. So then, what would be the next possible action that would take place? Well, if I’m still in the trade, then it’s a ‘positive running trade’. My first action will be moving the stop loss. Then I’m only watching what the pip spread is doing. That will dictate to me what I need to do. Btw…I’m using the 5/9 pip spread as an indicator. It will tell me what I need to do. And I think I need to be more specific about it also. Well, like I said, I’m not done here. But, this is what I’m working on. (And probably will be for the rest of my entire life)
Look…it’s frustrating. Cause presently, the market’s moving. JPY strong. And I’m in it. And honestly, I’m trying to figure it out, as it’s unfolding. Probably not the smartest way to go about it, but, at least I’m getting somewhere.

Well Journal…let me grab some more coffee. And let’s talk about some market. Believe me, I am more interested in my plan of attack, from beginning to end, than anything. But, it is interesting on what’s happening out there. Hold on.

Ok Journal, here we go. Let’s start from the top down. Cumulative pip spread, for the Yen.

That’s this year, so far. But, presently, there’s a total of 370 pips the JPY has over all of the other currencies. More specifically, that’s the total amount of pips the 5ema line is below the 9ema line (considered trending). All added up. The higher it goes, the stronger it is, comparatively to the other currencies.
And, of course, this puts it into perspective also.

You know their strong when their weekly time frame stats show it. You know what I find interesting? And I’ve seen this time and time again. How a change in guard will take place coinciding with the beginning of a month. Surely it’s evident here, for Feb. Also interesting is how the market kind of knows that it’s gonna head north, at the end of Jan. So therefore it will drop down pretty good to get a good bounce on up. But…I tell ya, you would never think that at the present moment, back at the end of Jan. Well, I have to assume that someone knows that it’s gonna happen, at that present time. I’ll just call him Mr. Market. So, what else do I find interesting? Well, I remember only a couple weeks ago that the CHF central bank stated that they might have to jump in and devalue their currency. Man, I’ve been waiting. I’ve been wanting to see it. I would take the JPY long against them. But there’s no way it occurred yet. They are just too strong. Also, I think they are more concerned about their relationship with the EUR, GBP, USD. Than anything. I don’t know. But, I’m still waiting for it. What else…The Dollar had a pretty good run so far. But, look. This past week. They dropped like a knife. But wait. Is this gonna be the same scenario to take place as the Yen? Giving it a nice big drop, before the climb? Hmmmmm…I kind of think so. I mean, in March, the interest rate is going up. So why not climb high beforehand. Then we can have the so-called ‘buy the rumor, sell the fact’ scenario take place, when it comes time. I don’t know. We’ll see. But, how would that affect me? Well, the Yen rose up with the USD at the beginning of the month. So, it’s possible to happen that way again. Who knows.

Well, let’s look at the USD/JPY. My style.

The top row shows the 5/9 pip spread. You can see that at the beginning of the month is declined a lot. Especially from where Jan ended at. That’s why I was scared to get in. Then it started to climb again (JPY strong). That started on Feb 8th. You can see that I made a trade (the 3rd row is my trades row) on Feb 9th. I was in and out in one day. Ok. I admit. I was scared. I took profit. Only made 12 pips. And, of course, it just keeps on moving JPY strong, from that point. Well, I got in again last Thursday the 15th. Now, I wonder if this is a mistake. Are we at a top now? Remember that last table? Is the USD going to climb now? See, now I’m running scared. I have all these clues around me. That’s why I need to work on my re-entries. I need more specifics on when to re-enter a trending market, after I’ve already taken profit. I just should have stayed in, back on the 9th. But I didn’t. See…I even want instructions on what to do when I go wrong. What’s the plan then? I want all plans of actions, given any situation I find myself in. Well, this is what I’m shooting for Journal. I guess what I’m going to do is adjust my take profit to break even. If, at the open, I’m losing, then I’m jumping. If not, then it’s stop loss adjusting. That’s all.

Here’s an interesting one. GBP/JPY pair.

So, we have the crossover, on Feb 6th. I’m scared to get in, then. So, I eventually put in an order. It takes on the 9th. But then I jump out. Taking the profit. That was on a Friday. Then I place another order. It takes the next day, on Monday. And once again, I take the profit. And then I see that it’s still trending, Yen strong. So, I put in another order, which takes, last Thursday. And this is where we are at now. But look Journal. What’s happening to the 5/9 pip spread? 3 days consecutively on the decline. Not good. But…take a look at what the system is producing (2nd row down from the top). It’s still producing pips. Meaning, the 5ema line (light blue) is still moving down (Yen strong). So, I kind of have a divergence happening here. Well, I don’t know what I’m going to do yet. I guess I will wait for the open. Move the stop loss to break even. And let it go. But…what about some take profit? See, that’s another thing I need to get to the bottom of. Where exactly, when exactly, will I take profit. And that’s on these re-entry trades.
See Journal, I got much work to do.

Well, this is what I’m going to do. I’m gonna give it my best shot today. I will work my mind map. Try to solidify as much as I can with it. Then the plan for the week is going to go back to the book. Each morning will be devoted to that. And I will be developing the mind map along with it. I guess maybe at the end of each morning I can shoot out to you it’s progression. Well, it won’t be immediate though, because the book is divided up into 3 parts. The first part is his story. Then the following 2 parts are life principles, and work principles. This book is jammed with golden nuggets of principles. That’s when I will be continuing the mind map.

Stay tuned Journal.
Gonna have some heavy stuff in here.

Mike

[MikeWolski]

Good Morning Journal!
Hey Mike!
Soooooo…talk to me. How’s the book?
Yeah, I guess I was pretty excited about that, last week, at this time. But, I’ve been reading it. And I guess it’s turning out a lot different than what I thought it would.
Oh man…So…not the last book you’ll ever buy, huh?
Nope.
I mean look. It is a good book. I’m still going through it. And we will too. But, well, let me explain.
Well, like I said, it’s pretty much divided up into 3 sections. And I got through his story by the middle of the week sometime. And yeah…what a great story it is. I mean, I haven’t heard of this guy before. But, it turns out that he’s, like, one of the greatest. I mean…like…what he built…is just awesome. He’s definitely one of the greats, in the business. And I didn’t know that beforehand. So, that made it even better. Cause, I like surprises. I mean, I really like to see how things unravel without knowing beforehand. Just like movies…for me, boy, I don’t even want to see any previews for it. The less I know about something, before I watch it, the better. Cause I really, really, like to see the progression of things without any kind of preconceived knowledge beforehand. Ok Journal. Hang with me for a minute. But, take this for example. It’s one of my favorite surprises. Movie wise. There’s a movie out there called the ‘Martian’, with Matt Damon. Somehow, I got to see it without any kind knowledge, and I mean none, beforehand, about what the movie is about. So, as it goes, in the beginning, a team of spacemen visited, and landed on the planet Mars. Yep, it was pretty interesting. Man landed on Mars. So, there ended up being an incident that happens when they are taking off, and leaving the planet. Things go real screwy. And guess what…the main character gets left behind. The team thought he was dead. But, they had to go. So, it turns out that he wasn’t dead. And subsequently, the rest of the movie was about how he was able to survive on the planet, until he was eventually rescued. But, Journal, I’m telling you. It was awesome. At that moment, when he woke up from being knocked down, and seemingly dead, left alone…man…what a situation that was, to be in! I was like…are you serious!!! He’s alive! And now what!
Well, my point here is, that, probably everyone already knew that the entire movie was going to be about how Matt Damon is going to survive, alone, on the planet Mars. Which is cool, even to begin with. Sure. Should be a good story. But…I was lucky enough to not even know that that was going to happen. I just did not know what the movie was going to be about, other than him being in it. Now that…was a great mind journey. What do you do in a situation like that? And hence, it unfolds. With yourself feeling all of the emotions that go along with the characters’. So, yeah, it was an awesome ride.
Now, back to the book. I just didn’t know, beforehand, that Ray was a ‘great’. I mean, he’s got to be one of the most successful people, that has ever been, in the business. No wonder. He’s a real genius. Every since he was a kid. And that does say a lot, also, when you discover who you really are at such a young age. Having a life filled with so much experience, is priceless. He was just bent that way, realized it, and operated in it his entire life. He loved the markets. He learned so much about them. And it was fascinating about how he handled the commodity business, early on in his career. He said he could visualize how and why things moved the way they did. I can’t explain the whole process, like he did, but basically, all of what happens to cattle, in the natural, affected how the price moved in the market. It seemed like he just knew what was going to happen to price because of every factor involved (the weather, the feed, etc…). Let’s just say that he was a natural. A real genius.
One thing that intrigues me, also, is how he must have made a lot of money. But, he doesn’t talk about that aspect. He does say that he has had everything. You have to read between the lines and realize that he had made a very large amount of money, in his lifetime. But. I love to see it, when he reflects back on his life, how he just does not talk about how much he has made. It isn’t about being rich. I mean, he even said it. It’s almost a page out of the Bible. There’s nothing better than to eat, drink, and have good sex. (Like I said…almost) But anyway, he valued all of the relationships in his life. That is what was most meaningful to him.
So, being extremely successful in building his company, Bridgewater, he’s developed a lot of principles along the way. If there would be one theme that could summarize what he’s about, it would be this. And he’s said it, over and over again. You need to dream big. Make some major goals. And go for it. Along the way, your gonna encounter some problems. It’s all about dealing with these problems that are in the way of your goals. But, you need to have some real rooted principles laid out in order to solve those problems. You will fail along the way, but, you must know that, be ready for that, get used to that, then learn what you need to, in order to achieve what you really want. I think my favorite little nugget was this. Dreams + Reality + Determination = A successful Life. Man…that’s deep. You really have to think about that. That’s an iceberg, cause there’s so much meaning to every one of those things.

Well, we got half time now. Man…it seems like I’m not getting anywhere. Time flies so quickly. Three hours into this. Geeez.

Ok Journal.
Well, I’m just going to throw out to you what’s on my plate. These are the things that I am currently dealing with, the most important subject matters.
-The book. I have skimmed through it. There’s the life principles, and the work principles. At first, I thought the work principles would be the topic I would be delving more into. But, no. I was definitely disappointed because it mostly has to do with how you solve problems with people, in a company. Sure, being the boss, or the owner, you need to know how best to deal with people and the problems that come with dealing with them. First off, I don’t like people. Talk about frustrations. ( I don’t even want to go there…cause there’s not enough hours in a day for me to explain why I think that people are irrational ). I can’t even get to the bottom of myself…let alone people, who don’t even know what real truth is. So, why bother. That’s why this business is perfect for me. Cause it’s only me!! Anyway… back to it. There was something that really grabbed me in the beginning of the life principles section. And that’s presently where I’m at with this now. I’m taking this, and trying to apply it to my goals, problems…my whole business. Take a look.

Yeah, so, talk about putting all things into perspective. This is major stuff. I mean, I can use this in a lot of different levels of my business. From the most outward of views, I can use this model to work on my ‘vision’. Which is to operate, full time, my own successful trading business. That possibly can be the one clear goal. Then identify all of the things that are in the way to achieving it. Or…I can set out all of the specific goals that I know I will have to have accomplished to get there. You know, like one by one individually, mapped out. Or…I guess I can use this as a model to use in whatever particular problem I am encountering at the present time. So, the options are there. This is just what I have been thinking about lately. I will embark on something particular, soon.
So, that’s that.
What else is occupying me?
- My trading plan.
Man…this is just a forever thing. I should write a book on what it takes to come up with a trading plan. This has got to be the most worked on thing, (most important thing) in trading. See, I’m all about details. I won’t be completely satisfied until I get to the bottom of every aspect of my trading execution. And where I’m at now is this. I need to know how to follow my system. How do I follow the 5 ema price line? I mean, I want to know the best way to do that. How do you follow something (in the present) that makes itself known in hindsight??? How do you connect the past, with the future? Well, at least I feel good about using average price. I fully believe that average price is better than current price. It is more smoother. So, all I know is, that my holy grail, will be when I find the best way (for my trades) to follow that 5 ema price line, in conjunction with the 9 ema line. And then along with the 21 ema line.
I think about this so very much, Journal. On a daily basis.
Take a look at what I’m saying.
The USD/JPY.

First off, the second row down, from the top, is what my system is producing. That’s a daily cumulative running total of the amount of pips it produces. Now, notice that I closed out 3 good trades, on 1/25. Those 3 equaled 560 pips. Yep, I did good. Yeah, that’s nice. But. Look how the trend just continues. And continues. And continues. And, in the meanwhile, I take 3 more stabs, raking in a couple of pips here and there. I’m just scared of a big long trend, that’s all. I just want to figure out a way that I can follow the dog-gone 5 ema line, while it’s below the 9 ema line. Take a look.

I just want to know why my trades can’t mimic that 5 line. Sure, it gets hairy at the beginning of Feb, but it just does not cross above the 9 line. Well, I should say it doesn’t close above it. Count. There’s 7 days in a row that it does go above the 9 line. But no closing. Oh…my bad…There is one day, at the end of Jan, that it does. Then look towards the end, last Wednesday, it did close above the line, but comes back down below it again. We just don’t know if the trend is gonna break, or continue, during real time. But, my question still remains. How do I keep my trades in when the 5 line doesn’t cross above it?
It’s got to be psychological.
I mean, do I make a rule that it has to close 2 days above it? Man…if I do that, then if it does turn up, I would lose my butt on pips. But, then I think about what I thought about before. Maybe I should wait out the week. Cause, remember, it is true that there’s always a turn before the end of the week. (Profit taking) Let’s see. What day of the week did that the one candle, in the middle there, take place on? Well, just look above, at my table. Feb 2nd, Friday. Yeah, well, there goes that idea. So much for the turn of the week happening before Friday. But, look at the other candle, at the end. Wednesday, it closes above the 9 line. But, the turn happened. And, before Friday ends, it’s back down below. So, my theory holds true, with that instance. I don’t know. Maybe I should just use that 21 ema line? How about a close above that line takes me out? Surely I shouldn’t use it as a stop loss, cause you know price…it can go as far up as it wants to. That’s why I prefer closing price, than anything.
Anyway. That’s all good and nice. I just want to find the best way to follow the 5 ema line. It’s simple. Get in at that price line, when it crosses below the 9. Then, stay in the trade, as long as it’s below the 9. Then get out at that price line of when it crosses above the 9.
Well, that’s my system. I just want to follow it. Emulate it. Copy it. Look back, and see my trades start and end with its same prices.
Man…I’m blowing it. I remember thinking, back at the beginning of the year, that this year I’m going to do this. Well, now that we have a really huge trend take place, I can’t seem to stay in. Looks like I’m afraid of profit. Or maybe, I’m afraid of losing my already gotten profit. Either way. I’m afraid.
But, what’s most important of what I want here, is to be able to say to myself that I can follow a system.
I can’t yet.
But, when I do, I’m gonna brag about it.
You know…talk about being honest myself. I would like to say this. (And I was just about to write this in, now.)
It’s not about the money!! It’s about the system!!
Well, guess what? Mike ?
It is about the money!! I apparently care about —not losing. About not being in the red.
I admit it. (I don’t care what it looks like anymore).
I want to win. I want to be in the green. And when I’m up a lot, I just want to keep it there. Therefore, following my system takes a back seat. It is. It’s more about the money. I admit it!
I admit. I care more about how much money I am making, more than anything else.

But, I don’t want to be this way.
What I want is to follow the system.
I would like it to be that I can care more about that than anything else.
I think that’s precisely why I want more structure & exact details of when I get in, and when I get out. And you know that I’ve been working on that Journal.

Well, I got to get going.
Maybe I should use that 5 step process in tackling some of these problems, huh?
Now that is a novel idea.

Still working, Journal.
Thanks for listening.
Mike

[MikeWolski]

Good Morning Journal!
Good Morning Mike!
Well, you don’t know it, but I just spent the last 3 hours talking to you. And I just scrapped the whole thing. I’m getting tired of rehashing over the same old thing.
Sorry Mike.
Well, tell me something new. What cha been up to lately?
Well, after some very good advise (from a friend in here), boy, I got to thinking.
It all has to do with finding the best way to follow the system. The system being getting in at the crossover, staying in it, until it crosses back over. Well, bottom line is, I think I’ve been focusing too much on one aspect only. The 5 ema price line. I think I last told you that all I want to do is follow the 5 ema price line. But, that is being too short sighted. I’m dealing with a whole lot more. I mean, did I forget? I got, not only the 5 line, but the 9 line, and the 21 line. And of course, the current price. Actually, it’s the average price, that I’ve charted. (Heikin Ashi charts)
Anyway. So, I’m trying to think outside the box. And this is what I’ve come to realize lately. I need to follow the 9 ema line, instead of the 5 ema line. I mean, what’s the difference? Well, the 9 line is smoother. It doesn’t fluctuate as much as the 5 does. And when it comes to the crossover point, the 9 is just as important as the 5 is anyway. In fact, it is the line that is to be crossed over. Period. I don’t know why I didn’t see this before. So, the 5 line is the traveling line. It’s not really that important, until it touches and crosses over the 9 line. The 9 is the one I should follow, meaning it’s the price that I should concentrate on most. Cause that will be where I will be getting in at, and getting out at, whenever the 5 crosses it. Now, the 21 ema line has its function also. That tells me in what era we are in. Either trending or not. Above it is Non-trending. Below it is Trending. I know I need to be careful when the 5/9 crossover takes place above that line. I’m still trying to determine the rules of engagement concerning that. So, what I’m saying is, that I need to relate my trading to each of these lines.
For instance, once a trade is running strong in a trend, I can use the 21 line as a stop loss line. I can use the 9 line as a take profit line. If I take profit, and the trend continues, what would tell me to re-enter? As you might have guessed, that’s what I’ve been dealing with lately, given the present JPY run. My plan was to wait for the 5 line to go above the 9 line, then use the 9 price line as the re-entry point. But, in a strong trend, that just doesn’t happen too much. So, I’ve been stuck lately, on a re-entry of the trend. Cause my ship hasn’t come back in, to get on it. It has been frustrating for me. You know, being forced out of play when the market is relentlessly trending strong.
Well, that’s some of the stuff that I’ve been thinking about lately. But, it has been monumental, to me, about how I need to follow the 9 line. I believe this will make a huge difference in my trading.

Well, that’s about all the time I have for now Journal.
I guess I can leave you with some screen shots.
End of month numbers.

Big picture JPY trend. Cumulative 5/9 pip spread.

Just when you think the trend is over…think again.

This is my effectiveness table.

I actually did real bad this month. See, it’s not about the money. It’s more about how closely I follow the system. My problem this month was not learning how to stay in a long trend. Man…it’s not easy.
I got so much work to do, it’s not even funny.

Mike

[Mike18]

It’s an interesting magazine; everyone can find something there to pay attention to. I often come across a lot of questions about the demo account. Especially questions about how long it is better to stay on it.