Good Morning Journal!
Good Morning Mike.
How you doing stranger?
I’m good Journal. Everything is ok. I guess I just needed some time, away.
Don’t get me wrong, I’ve been busy. Very busy. But, in regards to journaling, that kind of took a back seat. So, I guess now would be a good time to catch you up on all of the many things that I’ve been up to. Many changes. It’s kind of like I’ve been morphing. Being transformed into what I really want to be, when I grow up. Let’s see if I can bring it in.
First off, if you can believe it, I still haven’t gotten a decision on whether or not the unemployment compensation will be accepted. I mean, I have been getting paid every two weeks, since July 1st. I have almost 3 grand from that, in the bank. But, do you think that I will touch that before it gets the final approval? No way. Cause I would have to give it all right back, if it doesn’t go through. I’ve called them (even though they told me to wait, for the decision), only to find out that the examiner hasn’t decided yet. I don’t know what’s the hold up, but, I have to tell you, it’s nerve racking.
A couple days ago I had to attend the mandatory 2 hour class, for the U.C. program. They make you jump through hoops in order to collect unemployment. It was ok. I didn’t even care what everyone would think of me dressing up in a shirt and tie. That’s just what I wear, every single day, since July 2nd (Monday). Oh well. At least I looked like the instructor did. He was a nice guy. There was maybe 20 people there. Oh, and he asked if any one here was a veteran. Like he is. Well, I was the only one to raise my hand. And so, he asked me about that. All I said was that I was in the Army, and that it was a long time ago. –cou '86 gh– (for 6 yrs)
Well, I didn’t do that cough, but now that I think about it, it would’ve been funny. Oh well. But honestly, I didn’t get much out of that class. See, that whole point is employers’ trying to find employees. And vise versa. It is a good thing. They will do anything to get you a job. There’s even schooling available if you want, like for a specific field. But, where do I fit in when all I want is my own business? See, I just cannot reconcile that whole thing, for my life. I’ve done my time with an employer. It’s time to evolve. I’m just hoping that I can get compensated for these next 6 months. We’ll see what happens.
Moving on. Well, I still wake up at 3:45. I stretch, exercise, and stretch again. I’m working that elliptical. It’s ok I guess. Surely not the same as running, but what can I do. I’m hoping to get back to running one of these days, but until my body cooperates, I shouldn’t. I will have some good days, where I don’t feel any kind of soreness, and I will have some bad days. Something always seems to manifest itself, whether it’s my lower back, or my hips. But, I refuse to let it keep me out of the game. I do understand the difference between being hurt and being sore. Trish sometimes gets all bent out of shape when she sees me walking funny (we always go for early morning walks with Ben). I will get the third degree about over doing it. But honestly, I don’t think that I am. She just cares, that’s all.
Also, I’m not eating much, still. Oh yeah, I’ve dropped some poundage. But then, you get to that point where you level off. After the first 10, it just gets harder to continue it. Well, at that pace anyway. One of these days I’ll take another picture of myself. But, I want to make sure that there will be a difference. You know, the before and after ones. Cause, I do plan on going down pretty far. I’m mostly concerned with the balance between how much to eat - to how much to exercise. See, too less of eating is not good for the body when you’re burning off a lot. It’s a balancing act. All I know is that I am going down. I just hope that I can stay healthy in the meantime. And not hurt.
Ok. That’s nice. What else. Well, I did mention this last time. And boy, am I on it. This is my idea. I want to incorporate fundamentals in my trading. Mostly, because I enjoy it. Look. I know there are many ways to go about trading. And I guess it all breaks down into the 2 main categories. Technical and Fundamental. But, I’m discovering how I want to go about it. See, in the short term of trading, you invariably need to go about it the technical way. But the further out you go, to me, it only makes sense to know the fundamentals.
And given this fact, I do want to know why the market is moving. Sure, we all know that the fundamentals are already built into what the price is. That argument has been going on forever. I have even agreed with the big dogs here in BabyPips that it just might not be that important to know why price has moved the way it did. Man, I’ve pondered that, deeply. What’s the sense, in knowing why? It just does. And you can measure it, keep track of it, monitor it, watch price do what it does (that’s technicals). Believe me, I can agree with that. It seems like we really don’t need to why. The fundamental aspect of it. I mean, after all, isn’t it all nothing but making the profit? You make the profit, then go home. Do that consistently, and you’re good. I can understand that. Manage your money properly, pay your bills, and build your business accordingly.
Well, of course I plan on doing that. But, I just want to get to know my business better. I do want to know why things are moving the way they are moving. I don’t want to be short sighted, and even ignorant of what’s really going on in the realm of currencies. See, follow me on this. We’re talking about currency. The price of it. And how it’s changing. Not only that, but it’s the worlds’ currencies compared to one another. And it all takes place on the foreign exchange market. I know, Mr. Obvious here. But then, you have to see what’s really going on here. Us retail traders are really nobody in this game. We don’t make one little difference in what happens in that market. Therefore, I want to find out who the players are, and what they are doing and thinking, that causes price to move. And guess what, it’s not all technical. I think a lot of it is fundamental.
(Boy, this is reminding me of one particular person, who I look up to majorly in here. Gandalf. That would be Peterma. I remember, a few years ago, him developing a trading system revolving around fundamentals. See, he’s smart. Definitely an old trader, who’s been around the business since dirt has been.)
Look. I’ve been doing very much reading. And I’m far from done. But this is what I got so far (boy, I definitely need more wall space).
Besides the commercial businesses, that use the foreign exchange market just to exchange their currencies, it’s the central bankers that have the most affect on where price wants to go. They are the big money. So, well, why not explore all about those central banks? And I did. I got all 8 of those web sites. See, right now, I just started with the 8 most common currencies. One of these days I would like to explore others, like the EM countries.
Anyway. Let’s keep with the big. Ok. Now. Class. Raise your hand if you know who the central banks have to answer to?
(Peterma…put your hand down. Give the young folks a chance.)
I’ll give you a hint. What’s the entity that is called “The Mother of all Central Banks.”
…
You…in the back…go ahead.
Very good young man. You must have done your homework.
It’s the Bank For International Settlements
All Central Banks work under the umbrella of this entity. They are headquartered in Basel Switzerland. They supervise the money transmission around the world. They make sure the regional monetary policies are implemented accordingly. And let me tell you, they have a big balance sheet. But, they do not loan out money to anyone. That would fall under the jurisdiction of the International Monetary Fund. They can help out the struggling central banks.
Look. I’m no expert. I’m just scratching the surface. There’s so much to learn. But, you have to start somewhere right? And everything that I’m researching has to do with money, more precisely, currency. So, I’ll briefly tell you what I’ve been uncovering.
- How does the central banks use their foreign currency reserves?
- What happens, economically, to a country when their currency appreciates, and depreciates?
- What are the factors that influence the exchange rates?
- I have the websites that address each countries’ economic stats. For example, the B.E.A ( Bureau of Economic Analysis) for the US.
- Of course, the websites to the 8 central banks.
Then, I compiled quiet many economic indicators to the top 8 currencies. You should see my excel spread sheet. We’re talking from Current Account balances to inflation %'s. I compared them all. Well, it sure was fun uncovering all that data. But then, only yesterday, I found the website that I wish I would have in the beginning. Trading Economics. Geeez. Well, that makes life a whole lot easier. Then again, see, they say that Canada’s CPI is at 3.0%. Well, yes, that technically is correct. But, if you go to their website ( I forget if it’s the central bank one or ‘Statistics Canada’ one) they explain that the central bank doesn’t go by just one of those inflation indicators. They actually have 3. Let me remember. CPI common, CPI medium, CPI trim. But, the total CPI is at 3.0%, but those three are like around 2.0%. Anyway, the point here is that it’s good to go to the source for the information. Like to confirm those figures that this website has readily available.
It’s gonna take me some time to get all my ducks in a row. This is a MASSIVE undertaking.
Look. All the information is available for what the central bankers want to look at. Between all of the economic indicators that come out, all of the speeches, reports, and even what OECD researches, I can look at also. You know, the world has been pushing for transparency, and that’s what the central banks have been doing.
Now look, I haven’t completely fallen off the band wagon. This is stuck in my mind also. Once I believe I have some kind of system up, and organized in a way to utilize the important information, I want to compare that to what the market does. Hey, wouldn’t it be great, even in hindsight, to get some idea of why price moved the way it did? I mean, I know that’s a daunting task. Who really knows why it moved the way it did. But, then again, what are the central bankers thinking when they trade? Why are they buying up foreign sovereign debt?
Well, in any case, they will leave footprints, in the market. And that’s where we see it, in the technical realm. Nobody moves the market like they do. So, what do we know then? Trends. Changes. The flow. How about the strong, and the weak? I just think it would be smarter to uncover some of the answers to the question of WHY.
Ok. Enough of that nonsense. In the meantime, I will just continue to piece it all together. Needless to say, I’m enjoying every bit of that process!! Nothing in the world is more exciting to me than this stuff. NOTHING!
Now, concerning my trading. Well, I’ve made money every day this past week. Not trading today cause it’s about over. Months end. And, all I’ve been doing is trying to get my account back to where I started. But, before we start here, all I’m going to say is that I haven’t adopted any kind of strategy. Forget that. I beat myself up way to long concerning that. It’s not worth it. I’m not going to box myself in, just yet, and follow something. Cause whatever I’ve tried to do, just doesn’t work. I’m done with rules, regulations, stops, profit targets, the such.
For now, anyway.
This is what’s been happening. Journal, you might remember me telling you, one of the last things that I said regarding my trading was this. I need to find out what works. Well, in a way, I must have. Because, and I honestly don’t know exactly how many days it’s been, why every time I’ve gotten in I’ve ended up with profit?
Look. This is what happened. I crashed and burned (in my mind anyway). I traded and traded consistently all the way down to $450.00. From $500, started Aug 1st. I’m talking, every single trade was a loser. That’s many, many trades. All the way down. But then, I had a turn around. I traded over and over, all the way back up. Like I said, trade after trade was successful. And all I had in my mind was to get back to that 500 starting point. Nothing more. Every trade, all the way back up, started out with 1k position. Sometimes I added on to it, but never more than 3 sizes (3k). Of course, I only added size when it was in some good profit. Was like a confirmation that I was correct about the trend.
The most I ever made in a day was like $5.00. But see, day after day that adds up. Most days I would only make $2 or $3. All I did was watch my account grow one dollar at a time. And when your only getting like a couple cents for every pip, that means there was many pips gotten. Basically, what I’m saying is that it was a long journey back to where I started from. Cause, it wasn’t like it was all on one shot. It was like a real accomplishment. Or…I guess…I’ve gotten lucky on a consistent basis.
If I can boil it all down, to finding out what works, I would say this.
- Keep the trades running longer.
- Stack the odds by finding the best pair to trade. No more than 2 pairs picked.
- Start out with a very small position size, and if it shows a confirmation of the correct way, add more.
- Don’t watch the market. Keep busy and check in every once in a while.
When I see myself trading, I’m more of a discretionary trader. Well, regarding when things worked so far. And I know how dangerous this is, because nothing really can be examined, measured, analyzed.
This is what I found myself doing, every morning. I would check in with Dennis’ S/W table, copy it onto my excel table, then go to my NetDania site (in which I can quickly see which currency trends are taking place) and then pick one pair (one time I had 2 pairs) that I will trade. Then, and only then, do I open up my broker and wait for the right time to get in. This happens between 5am - 7am. Which is a couple hours before the US session starts. But, I will be out of the trade sometime before London closes, just before lunch time here.
I don’t know. All I can say is that it worked for me that way. It seems to be that when I relax more from the game, things work out better.
All I know is that I’m extremely happy that I got my account back up to where it was at the beginning of the month. And now I have a chance to work the other side of things, the profit side. Let me say that again. I have the chance to, anyway. I can’t assume anything in the market. Will all this continue? I don’t know. But surely I shouldn’t assume it will. I’ll just take it one trade at a time.
I know the big dogs should be coming back from the summer break. All I want to do is watch what happens. Cause, I heard, that the central bank traders watch the market more than trade it. So, why wouldn’t I want to do that also?
Another thing. All that nonsense up there is stuff that every trader has heard to do and knows. -Be patient.
-Take only the best opportunities.
-Trade higher time frames.
Etc…
But, there’s a difference between knowing stuff, and really finding out what works for yourself.
There must be some disconnect between what you know in your brain, and what you end up doing. And looks like the only way it comes is through experience. You just got to feel the pain before you learn something.
Journal, all I want to do is learn stuff before I die. Hopefully I am learning something.
Speaking of that, I’ve spent way too much time in here. I got more learning to do. I’m trying to piece together these fundamental aspects. Of course, along with the technicals. Cause, I think I beat that horse up too much. Time for some real knowledge. Whether or not I come up with something good, at least I will enjoy this road that I’m going down.
Mike
BTW Journal…I’m contemplating coming up with a separate thread dealing with strictly fundamentals. But in a way that correctly connects to our trading. Like, effectively. Not just nonsense thrown around that doesn’t correlate directly with our trades.
I’m thinking on that.
We’ll see.
)