That’s an excellent point! And I embarrassingly admit I have to be more conscious of that! 
KC
Good morning Journal.
March 7th now. First full week, in the books.
Where we at?
Well, all is fine. I mean, I feel good. Like, really good about my trading system that I got going. Now…do I feel good about how I traded in Feb? Nope.
There is a huge difference between my trading strategy, and how I actually trade. Therefore, I’m not gonna throw up here my results from last month. Look. I did spend a whole lot of time on that, last weekend. That’s where my time was spent (instead of in here). But boy…do I like writing down everything in my Business Journal. But, the thing is, I got everything out there on the table. All my stats. What I did wrong. What I did right. A Cash Flow statement. An Income Statement. I’m even dissecting every JPY trend from beginning to the end. That’s a process that will continue on. Presently we’re on trend # 5. Bull trend.
Anyway. That’s nice. I just know that I’m covering every aspect of my trading. And for the month of Feb, I do have it all down. I am moving on now. Therefore, I do not want to rehash all that (nonsense) again. I’ve dealt with it all. Needless to say, I am learning a lot.
But Journal. I do have to say that I’m very intrigued about my system. Do you by chance remember how I’m tracking this systems Proof of Concept? Well yeah, that’s an ongoing process. And the results are getting very interesting. I will get around to showing you what I’m talking about shortly.
But first, more coffee.
Then, let’s see where we’re gonna go next.
Alright.
Well, let’s talk about the market a little. Unless you live under a rock, you’ve got to know that the market is moving. There’s pretty much only one thing it’s concerned about. The coronavirus. And all of this is affecting my currency, the JPY, in a major way. Let’s take a look.
I’m gonna unveil what’s going on this way. Comparatively.
I track the JPY trend.
It’s strong now. But how strong?
I’m gonna show you a shot of when the JPY got the strongest last year.
This is all you need to know.
That is the JPY bull trend (green). The line graph corresponds to the table underneath it.
The numbers signify how strong of a trend it is.
We can see that when the month of August came, well, so came a very strong JPY. Just look at the numbers. From 33, to 70, to 98, to 232, to 352, to 441. And that’s the top. It all went downhill from there. That’s a quick strengthening of the Yen. That’s 5 straight days of massive increases.
I’ll throw up the same pick, but with the actual daily pip count that corresponds to that.
That top row of numbers are simply the total amount of pips had if you added up all of the 7 JPY pairs. Daily results. For that particular day. The bottom row is what the running totals are since the beginning of the year. So, just forget that row. Let’s look at this. Technically, it was a bull trend already (green) heading into the end of the month. The Yen was getting strong. If you were holding all 7 JPY pairs, going south, on July 29th, you would have ended up that day with 70 pips. Then July 30th produces 184 pips. Then July 31 produces 128 pips. Then Aug first, end of day, produces 971 pips. That’s a lot.
You get the idea. This should shed some light on what happens during, and within, the life cycle of a trend. Well, this particular one anyway. Let me highlight the important numbers.
- 1,981 consecutive pips accumulated
- then one day of -256 pips of a correction
- followed by 800 consecutive pips
- followed by one day of -838 pips of a correction
- from beginning to end totals +2496 pips
What I’m saying here is that if you had the 7 JPY pairs running continually (short, JPY strong) for the entire month of Aug, plus the last 3 days in July, that’s your result. A lot of pips. 2496 pips.
All I’m doing here is looking at a trend. It’s output, in pips. And how it transpires. This was the biggest JPY bull trend of 2019. Now. Let’s compare that to the latest JPY trend happening right now.
For some perspective, I backed it up to the beginning of Feb. So, what do we got? Well, technically speaking, the JPY bull trend started Feb 26th. But it got a running start since Feb 24th. In hindsight, that’s the day the buying of the Yen started, right? Cause the 24th produced 629 pips in favor of the JPY. The next day produced 171 pips JPY strong. And so forth. Ok. So. Let’s look at the metrics of this JPY bull trend so far.
- 1751 consecutive pips, the first 3 days of the trend
- followed by a -377 pips of a one day correction
- followed by 551 pips one day of a continuation of the trend
- followed by -349 pips of a one day correction
- followed by 959 consecutive pips (the last 2 days)
This trend, so far, is producing 2,535 pips.
But the story is not over. But, so far, to compare this to last years strongest trend (above), I think, is interesting. Look up there, at both charts.
What was the top trend strength number, for last years one?
- 441
Where are we at presently?
- 441
I am not making this stuff up. What that number right there means is this.
All I’m doing is adding up them all up. The total is on the right.
Now. Visually speaking. This is what it looks like on the charts.
Each currency pair is matched with my table above. So like, the USD/JPY pair has 90 pips between the 5 and 9 ema lines. That’s all. And all I’m doing here is adding them all up. Including the CNY. That’s a different animal, though.
Anyway. That, right there, is how I come up with my trend indicator number. And right now, that number is 441. Which is shown on my line chart.
- This is how I measure the JPY trend
- This is how strong the trend is
- This, right now, has matched last years highest number
Let me state the obvious. Every trend will be different. Between the strength, and the duration, no one trend will be the same. Just like every single snow flake that falls to the earth. Different.
But, according to the way I measure the trend, we have matched last years strongest run. And I can’t believe it actually has matched exactly.
Look.
I’m not lying. This was last years table. Monday Aug 5th was the top, of that trend.
You can see that I measure it all the same. Although the GBP was the weakest (120) against the JPY, then.
And look. I’m not going to put this out there (like a lot of analysts do) to insinuate that the market will do the same thing next. Like go down from here.
No way. Know why? Cause in my trading all I will do is follow this trend, to the end.
I think there’s a big difference between speculating and following. Man…I’ve thought about this, this week. I kind of think that mostly everyone who trades, speculates. As opposed to follows. And I think that just might be what separates the winners from the losers. In the long run.
I don’t know. This can be a very insightful discussion. For me, I would need much more thought on this subject. And it would come down to this very question.
Do you speculate or follow?
Is there a difference?
If there is, could there be anything else?
Does our trading boil down to this?
Is there any other reason behind HOW we trade?
Speculating.
- I think it will go this way, therefore I do this.
Following.
- The market dictates what I will do next. And I act accordingly.
Yeah, the more I think about this, there’s a difference. It comes down to answering the question of what makes us do what we do? It’s a psychological matter. In fact, that’s what trading is. Our decision making abilities.
Anyway.
Enough nonsense.
I’ve run out of time.
Got to go.
Mike
P.S. - For documentation purposes.
- I started the month with a account balance of $19,188.00
- +9.30 % first week of the month (unrealized balance now is $20,973.66)
- The latest
Man Journal…I guess I didn’t get around to telling you about my take-profit action. Well, in short, do you see up there, on every pair the sell .19 lines (19,000 units)? That number comes from my account balance being $19,000. That’s one standard position size, on each. Well, I start out with 2 sizes on each, which was .38 (38,000 units) on each. But come end of day Thursday this week, I took profit. Why? Well, NFP was coming up next. And plus, I was in much profit already. So, I took .19 off of each pair. And this is the result. See. Now, I’m able to continually have a position in the market at all times. While having the opportunity to bank some profits.
- +456 total pips @ 19,000 units on each
Now, when will I go back to another size on each?
- After a major correction
- At a change in trend
Alright.
I’m done.
Mike
1 Like
Good morning Journal.
It’s Sunday morning now, and I have some time.
Well, I did mention this to you yesterday. And now I want to talk about it. Cause I’m very perplexed about this.
I’m talking about my proof of concept, regarding my system.
Ok. So. Let’s begin from the beginning.
What is my system?
Point by point explanation.
- This encapsulates the way I trade
- A basket of trades
- As opposed to the game of getting in, getting out
- EOD is the time when you stop and count the progress
- Running progress, in pips, from the years start
- Which direction the trades are going, all the same
- Day late means at EOD, if the trend has changed, then so do my trades
- Results, of an outcome in pips accumulated
This explains my system. But will also explain the charts below.
See. I’ve been trading the JPY this way since the beginning of the year. Yeah, that’s nice, I know. But, I’ve tracked this system as if I traded each of the other currencies also.
So. How about some results of this trading system with the respective other currencies. This can simply be called complete currency trading results.
-GBP-
Alright. It’s simple. If you had the 7 GBP pairs running, according to my stated trend, then all along the way this is what the results would be, in pips. It’s the results over time. I just didn’t show you what the stated trend was.
Well, I started with this currency. Which is the worst of the 8. Know why? Well, it’s because the trend changes frequently. But also when it does, there are a lot of pips lost, due to the day late way. Let me show you a little of that.
I’ll just give you one instance. On Feb 13th. The trend changed from a bear market to a bull market. Well, see, you don’t know that until the end of the day. And that day produced 843 pips. See it there? Well, in a perfect world where you knew before the day began that the trend was gonna change (we don’t) then you would’ve been up +843 pips. So therefore, that’s a result of -843 pips. Then, at end of day, do you change directions. Hence, day late.
- Changed trends 6 times so far this year.
- YTD pip results = -3,510
- Current trend = Bear market
Anyway. This system is easy peasy.
But, with the GBP, it’s not looking like a profitable way, right? Well, let’s move on to the others. Will there be a difference, between them all?
Next up, the CAD.
- Changed trends 3 times so far
- YTD pip results = +1014
- Current trend = Bear market
Not bad at all. You can see that most of the time the running daily results were in the positive (above).
Next up, the AUD.
- Changed trends 3 times
- YTD pip results = +1254
- Current trend = Bear market
Getting better. Most of Jan was in the negative territory. But on the 23rd trading day of the year, Jan 31st, the system hit a top, came back down, but really didn’t go into negative territory. So…lots of positive results since.
Next up, the USD.
- Changed trends 2 times
- YTD pip results = +1303
- Current trend = Bear market
Again, the systems expectancy started to turn around beginning of Feb. After the 23 day. Well, I guess you can see that my system didn’t produce much during the month of Jan. Kinda across the board. But then things did turn around.
Next up, the EUR.
- Changed trends 5 times
- YTD pip results = +1456
- Current trend = Bull market
That is a lot of changing of the trends, which adversely affects my system. It was only in the last 7 trading days which brought up the YTD total amount, a whole lot. So…is interesting.
Next up, the CHF.
- Changed trends 2 times
- YTD pip results = 2,177
- Current trend = Bull market
Now we’re getting somewhere. If you would have traded the CHF as a complete currency, this year, just letting their 7 pairs run continually, there’s a whole lot of potential with my system. Many pips equates to positive expectations. But then you have the position sizing factor. That’s for another discussion.
The best for last. The top currency.
NZD.
- Changed trends just one time (Jan 7th).
- YTD pip results = 2,726
- Current trend = Bear market
Well, just like most of the others, Jan was not so good of a month for my system. But things did take off heading into the end of the month Jan.
Mind you…we’re looking at the day late system results. This is easy to follow. Seriously. At the end of every day, whatever the trend turns out to be, that’s the direction your trades will be running in. And nine times out of ten your not gonna have to do anything. Just let them ride. See. For instance, the NZD. The only time you would have any action to take would have been on Jan 7th. At that end of day, you would have exited out of the long NZD positions, and then re entered going short. I’ll show you.
You can see that the only difference between those 2 systems was on Jan 7th, the perfect system produced 41 pips. But the day late system produced -41 pips. That’s nothing.
Anyway.
What am I looking at here anyway?
My system, simply is :
- Following a trend
- I change directions when my trend indicator changes direction
- Over time, there’s a positive expectancy.
So far, as you can see, it’s being proven. Now. Over how long of time? Time will tell. What would we say if I ran these numbers for the month of January only? That this system doesn’t produce much results. Right? Well, for most of them anyway. Forget the GBP. I don’t know. Maybe they will sometime throughout the year, we’ll see.
Now. Where does my JPY stand, in comparison with those?
Did I pick the best currency to trade this system with? Or not?
Here’s the line up.
From worst to best.
- GBP
- JPY
- CAD
- AUD
- USD
- EUR
- CHF
- NZD
So yeah, I almost picked the worst one. Maybe that’ll explain much of my struggling, so far this year. Let’s look at it, in the same format as the others.
- Changed trends 5 times
- YTD pip results = 189
- Current trend = Bull market
Uhhh…yeah Journal.
Now do you understand my struggles?
I have made some very good trading decisions this year. Cause if you remember, for the month of Jan I came out in the positive. My account ended +2.18%. And if you look up there, that was at the end of day 23rd trading day. -429 is the number (it’s hard to see I know). So, for that month I did better than the day late system. Now…for the month of Feb, I made some grave mistakes (which won’t happen again). And as you can see, making mistakes, along with a naturally producing negative expectancy, turns out not-so-good.
Ok. I’m about done here.
But, I got one more chart to show you.
How about this question…
What would it look like if I had combined every currency, and run this system?
Or more like, if I had 8 separate trading accounts (one for each complete currency), what would the total outcome be?
Stand back.
Here it comes.
You can forget about that top green line. That’s the perfect system.
The bottom line is the day late system.
Look at where the last day of Jan was (23rd). See. I’m telling you. There’s truth to the fact of the end of month flows. It surely escalates.
Where’s the last day of Feb? It’s the 43rd trading day of the year. So, going into Mar has been a very positive expectancy of my system. Aggregate.
Well, the bottom line number is 6,609 pips.
That’s the total amount of pips, from the beginning of the year, if you ran this system on every one of the 8 currencies. All totaled up. Day late system.
Well, my bottom line is this.
- So far, I’m calling my proof of concept positive.
- Positive, on a monthly basis.
I will continue to do what I am doing.
JPY is my currency to trade.
I will continue to keep track of the others.
Thanks for listening Journal.
Good things are happening.
Mike
1 Like
Mike, love your discussion here. Can you please help with the list of the books you read? I will love to read them too. Thank you man.
Good morning Journal.
It’s Sat. Mar 14th.
Well Journal, I do have to say, it is getting interesting around here. And I’m not particularly talking about trading wise either. I’m talking about life. Let me explain.
This Coronavirus. It has affected my life. Now. To begin with. Let’s get one thing straight. I do not have it. And I do not know anyone who has it. But. In the most simplest terms. I am out of a job for the next 2 weeks. As you know, Journal, I’m a school bus driver. And well, yesterday, it was just minutes before we were to pick up the high school kids (at days end), that the word came out from the schools website that there is not going to be any school for the next 2 weeks.
This was precisely at the time when Trump was in the middle of declaring a national emergency (live on tv). Also it was around the same time that our mayor, of PA, announced that every school in the state will be closing. Man…I’m telling you, there was much going on ever since about 2:30 pm yesterday. Friday the 13th, mind you.
You know Journal…in my lifetime, I honestly haven’t experienced something like this before. A pandemic. A disease spreading, contagion that is globally reaching. But look. I understand what’s going on at the present time is a lot of precaution. Sure. Because who doesn’t want to get it. Right? I mean, the good thing for us is that we were not the first country to experience it. China. Then South Korea. Japan. Then on over to Europe, particularly Italy. Geez.
Sure. It has had a very big affect, on a lot of people. Worldwide. But…is it real? All I want to do is put this in it’s proper perspective. Is this being blown out of proportion? Like. Have we (as a people) ever focused on the influenza before, like this? It seems like we haven’t. Because, annually speaking, there are many, many deaths that occur because of the common flu. It’s just what happens out there. When old people get sick, well, a lot of times it just doesn’t end well. You know what I mean? And now, the whole world will all of a sudden become experts on how many people die due to the flu. In particular, this strain of the flu.
I don’t know. I would like to know what’s important about this and what’s not important. What’s the nonsense, and what do we really need to understand. Know what I mean? All I know is…because of this…I’m not able to go to work. For the next 2 straight weeks. And they even say that it might even be longer. Cause they have to assess the situation, come then.
But that is what’s real. Having to stay home. And you want to know what else is real? Check this out. See. Me and Trish do our weekly shopping every Sat. But, due to what’s going on out there, we thought that we should get this done sooner, than later. And well, yep, we went out last night. After work.
Talk about a run on the shelves. It was bad. Look. It wasn’t a complete apocalyptic scene, but surely it was close. This was something you normally don’t see. Good luck trying to find some toilet paper. There’s simply none to be found. I’m so glad she picked some up a couple days ago, or else we’d be in trouble. But yeah, a lot of empty shelves. Both at Walmart, and Aldi’s.
See. I really don’t know if it’s normal for people to go shopping on Friday nights. Cause we never do. So I don’t know for sure. But it was crowded. I guess everybody else was thinking the very same thing that we were. Kind of like, tomorrow just might not come. Get what you can now. Whatever is left, that is.
As we were shopping, I kept calling it end of days. Cause that’s exactly what it looked like. I mean, it is hysteria. No doubt. So therefore, we can play that game too. You never know, maybe people are on to something. We are dealing with an unknown here. Maybe, just maybe, we will be holed up in our house for a long time. You never know.
This was the prevailing thinking, last night. No joke. But…is this all blown out of proportion?
Well, I do know one thing. If we would have waited to do our shopping today, we wouldn’t have gotten anything! Cause we surely contributed to the emptying of the shelves. I’ve taken the last of many different items.
Anyway. I’m done talking about this. It is kind of stupid. Look. There was a run on grocery items last night. Sure. But the shelves will get restocked. Life won’t collapse. Not now, anyway. I just got to think about what I’m gonna be doing for the next 16 days. Now that’s real. I will be filing an unemployment claim, today.
Well Journal, you know what the first thing comes to my mind, don’t ya? Sure. I’ll be working on my business. I’ll have to find something to do regarding that. Maybe I’ll run some more back testing on my system. Or some kind of project. I just don’t know yet. I got to think.
Hold on Journal.
Time for some more coffee.
Then, let’s talk market.
Alright Journal. I’m back.
But I’ve decided to cut this short.
I want to talk market, and trading stuff on a clean slate.
See ya shortly.
Mike
Journal.
Here we go.
What a week I had.
All I have to say is this.
There’s some really good advantages of having a strategy of perpetually being in the market. Being in the trend. And the trend continuing. Mind you, with no stops.
I just remembered. I took a picture of what the market open looked like. Look.
This is what trading a complete currency looks like. Daily time frames.
- 7 JPY pairs
- Dotted lines is my entry places
- With the trend (5 ema yellow line, 9 ema green line)
- What an opening weekend gap
But yeah, let me back this up a little.
I am not restricted to stop losses, or even take profit places. There is a method to my madness. As I have stated before. Time and time again. I am not playing that silly game of trying to guess when to get in, and when to get out.
Why?
Cause you never know what’s going to happen!!!
So why pretend and convince yourself that you can figure it all out.
I’ve learned, and realized that.
All I want to do is ride out the trend. That’s my strategy in a nutshell.
Look up there. You can see the trend, on all of my JPY pairs. It’s the 5 & 9 lines. When the yellow line (5 ema) is below the green line (9 ema), on the Yen pairs, that means it’s a JPY bull trend. And when did this start? Well, you can clearly see that it was some days ago. On each and every pair. I just got lucky that it’s continuing.
See. That’s the theory behind my strategy. By following what’s going on in the market, will prove to be profitable, over the long term.
But, to give you some kind of idea of what it looked like on my account balance. When the market closed, last Friday, it was showing around $1,100 in profit. Then at the open, it basically doubled. Take a look.
I started the month of Mar with an account balance being $19,118.00.
Needless to say, I’ve seen some awesome numbers on my account this past week. It all fluctuates of course. And remember, the good news is that I’m not being stopped out of the market. But, the bad news is that I’m not taking all of the profit either. This is a perpetual running thing.
I have incorporated some adding of position sizing this week. And I’ve taken some profit also. So, I’ll just try to show you a little bit of that, with the pics.
This is when I added another position size. You can see that it’s at the beginning of Wednesday (or EOD Tuesday). And my reason was because of that nice bump of a counter trend day Tuesday. You know what they say…Sell the rallies. That’s precisely what I did. It actually helped to see the daily candle starting out red, pretty much on every pair there, see it? I think it was like 6 o’clock that night.
Anyway. This is when I took that profit off the table.
That pic was moments right before I took off some profit. And what I did was take the profit from the original placements. It’s the .19 lots on each of the pairs. I was like…that was a lot of work into it, why not take that profit off the table? And so I did. It ended up being 1,969 total pips.
See. Here’s the proof.
So. Let’s see what the present situation looks like now.
You can see that on 4 of my pairs that I’m in the negative. Was a nice correction on Friday.
But, it’s ok. This should give me another chance to sell the rallies, right?
Well, here’s my account balance to date.
So, from the month start, I’m up 20.3%. That’s counting the unrealized (equity balance).
Ok. So. Now what? Are we gonna have a change in trend, moving forward?
I don’t know. And guess what…nobody else does either. Everybody can guess what they think is gonna happen. Great. Go right ahead. All I’m gonna be doing is following my trend indicator. In the long run, it’ll work out. I’ll show you what I’m watching.
- It’s a JPY bull market
Uhh, that’s it. That’s the only real thing that’s important to me. I follow that.
But, some metrics.
- +437 pips of strength
- The JPY is trending against all 7 other currencies (7-0)
- Monday’s EOD pip count was 1,665 pips.
- Tuesday’s EOD pip count was -1416 pips.
- Wednesday’s EOD pip count was 858 pips.
- Thursday’s EOD pip count was 899 pips.
- Friday’s EOD pip count was -1635 pips.
- Aggregate sum total = +371 pips.
Here’s another look. This is the yearly cumulative running amount of pips for my system, for the Yen.
The last day of Feb was on the 43rd day of the year.
So you can see that this month is proving positive for my system. Which is bringing up the YTD running total to 560 pips, since the beginning of the year.
I’ve explained all of this last week. But, this is the day late system’s results.
Meaning, if you had all 7 JPY pairs running since the years start, following the trend at EOD, this is the outcome in pips, at each end of day.
And speaking of proof of concept, Journal, you would not believe how my system fared with the other currencies. Truly unbelievable. Let me show you that aggregate pic, like I did last week. But up to date now.
If you used my system on every one of the 8 currencies, this is EOD yearly running results.
- +14,472 pips of proof that my system works
But what is this saying about the market? I’ll tell you.
Ever since March (starting on the 44th day) the market is trending way more than it’s counter trending.
Alright Journal.
I’m done with this nonsense.
See ya tomorrow.
Mike
Good morning Journal.
It’s Thursday Mar 19th.
Well Journal, I figured I should update you on things. Plus…I have the time to do it.
See. We (the whole world it seems), are stuck at home because of this coronavirus scare. And I know I’ve talked all about this previously, but as more of this unravels, the more interesting it’s getting. And we’re (I’m) not even a week into it! Needless to say, this is uncharted territory.
And there’s no end in sight.
Yet.
But, let’s see. What have I been up to?
Actually, a whole lot.
I realize that I have to make the most of this opportunity. Of being home. Of having time on my hands. And that’s exactly what I’ve been doing. I still wake up very early. I mean, I don’t set my alarm or anything. But since I’m a morning person it’s very easy for me to wake up at 3 something on my own. But, being honest about it, some days I’ll sleep in till 4 something. And the closer to 5, the more upset I get with myself. Cause look. There’s no excuse of not being productive. For me anyway. It’s just how I am.
And, I also won’t sacrifice not starting the day out without Him. Reading…Praying…Just spending time with Him. That is what’s most important to me. First things first. Then everything else falls into place.
Alright. Enough of that. I know.
But then…I’ll be getting to work. See. I knew I was gonna have this time coming, ever since this past weekend. So, I decided on a project. My project was gonna involve doing some back testing of my system. Journal. I’ve told you, and shown you, all of my proof of concept data. But, I’m doing that as this year is progressing. I’ve been very curious of what last year results would be. Hence the undertaking.
Hold on. Let me explain what I’m talking about proof of concept.
In my mind, when I say that, I’m thinking about my system’s results if I were to use it on every one of the other currencies. Cause, as you know, I’m trading it with the JPY. Only. I just would like to know what the results would be if I traded the “XXX” currency. And what the differences would be, between them all. Therefore, proof of concept, means how I trade. It’s my strategy. That’s all.
Man…before I forget. I had an idea of trying this strategy out on other things, other than currencies. Say, for instance, on a commodity. You know, in the futures market. Then, after that, I would venture into the bond market. But, the last thing I would try would be stocks. Man…I have such an attitude about the whole stock market thing.
Why???
I know why. Journal. I absolutely just hate being a follower.
The whole world seems to flock, follow, and love the stock markets. And deep down inside of me, I don’t want to be like everybody else. And also…the stock market is nothing but buying and wanting it to go in one direction, only. How’s that interesting? I don’t know. But it isn’t to me. I mean, think about it. Everybody is putting their money into a company. Supporting it. And over time, hopefully to reap it’s benefits. That, to me, is investing. Ok. Great. No problem.
It’s just not my cup of tea.
To me, trading involves much more.
Alright Journal. Sorry about that. Where was I?
Oh yeah. I just wonder what kind of results I would get if I used my method of trading, say, in the futures market. I mean, all we’re looking at here is trends. Right? The more something trends, the more effective my system will be. Man…I need to remember this thought. It’s kind of hard because currencies was my first love. And all I want to do is continue down this road.
Anyway. Speaking of currencies. Let’s get to it. What have I been up to lately? Well, the market is flying like crazy. And you wouldn’t believe my account. I want to talk about that. Plus, I do need to document how this month is turning out.
Journal. I’m gonna cut this short.
I want to come right back with the numbers, and charts.
See ya shortly.
Mike
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Journal.
Here we go.
Documentation time.
- Account balance at year start = $30,000.
- I started out the month (Mar) with an account balance of $19,118.
- End of Feb, into Mar began with the last day of Feb not being in the market (mistake) and entering the market just before the close
- With 2 position sizes on each trade (basket of 7 trades), 0.19 lot sizes
- Mar 5th (Thur) - First time (ever) taking partial profits. Resulting in +456 pips. Reason being, this was the day before NFP Friday.
- Mar 10th (Tues) - EOD added on another position size, 0.21 lot size. Reason being, big daily counter trend candle, “sell the rally”.
- Have 2 sizes on each now. (0.19 lots, 0.21 lots).
- Mar 11th (Wed)- EOD took profit. Took off the 0.19 lots. Resulting in +1,969 pips. Reason being, big pip resulting day.
- Have one size on each now. (0.21 lots)
- Mar 15th, market open, added another size on each (0.23 lots)
- Have 2 sizes on each now (0.21, 0.23)
- Mar 18th, took profit. Took off the 0.21 lots. Resulting in 2,125 pips. Reason being, much in profit.
- Present time now - have only one size on each (0.23 lots).
I will put some pics to these. In chronological order.
This is my original 2 lot sizes on each, (0.19, 0.19). This was taken on Mar 5th, moments before I took profit, for the first time. And my account balance was showing this.
You can see what +456 pips will reap. It’s the difference between the balance and the equity. I’m gonna keep more track of the generated pips than the dollars. There’s so much financing involved, which comes with the territory. So, in regards to my strategy, it’s the pips that I’m most concerned with.
Let’s move on.
This is what my account balance looks like at the end of the first week of Mar.
- +9.70 % - For this month. Unrealized, running.
- -30.08% - YTD
So then, in the second week of the month, this is when I added on another size.
I need to tell you. Regarding the AUD, and the NZD. Those big wicks. I strongly thought that price will go back down there. If you remember, all that happened over that particular weekend and was part of that huge open gap. That’s a big reason why I didn’t hesitate to add on another size.
Remember…sell the rally notion? I guess it helped to see all the candles showing red quite soon into the day. I went with it. Well then, I couldn’t help but take profit after seeing the results of this end-of-day. Look.
Well, a couple of them looked good (EUR,GBP,CHF). Right?
And this is what my account balance looked like afterward.
Then, this is my account balance at the end of the second week of this month.
- +9.68% - For this week. Unrealized, running.
- +20.32% - For the month. Unrealized, running.
- -23.32% - YTD
And now, I’m in the third week of the month.
This is when I added my second sizing, at the open of this week, by a couple hours.
So then, the only other thing that happened this week was my taking this profit, yesterday at EOD. Take a look.
This was moments before I took all the 0.21 lots off the table. This is what it looked like. All good. Except with the USD/JPY (top left). That’s definitely in the negative, on both open trades running. It’s ok though. I’m in good with others.
Here’s what my account looked like moments after taking profit.
At least my account is looking better. Right?
The unrealized balance is pretty darn close to what I started the year with. So, I’m happy about that.
This is Wednesday’s EOD pic. My last running one.
Back it up a little Journal. Remember me telling you about those huge wicks on the AUD, and the NZD? Well, yep, it did turn out that way, didn’t it. Especially on the AUD/JPY, and moreso.
Well, you should know, Journal, that my trades continually run. I am always in the market. All I do is follow.
But, as we speak, and what has been going on today (Thurs), I think we have some kind of turn going on. Therefore, I’m gonna be losing some pips, coming up. It’s ok. That’s the game. It’s been a great run.
Alright. I guess I’ll leave you with a live shot. The most present look will be right now. Here it is.
Mind you, this is not the end of day. It’s mid day. But, those wicks that extended down on the AUD, and the NZD, I feel are telling. We’ll probably start going up now. It’s ok.
The USD/JPY is heading it all up. Literally and figuratively.
Good thing I too profits off the table yesterday EOD!
Alright Journal.
See ya later.
Mike
Hey Mike, what are your criteria for the trade? On any chart, if 5EMA is below 9EMA, you buy and if 5EMA is above 9EMA, you sell?
I ask because I saw your charts and thought looks like you’re onto a winner, so I coded up a quick EA to back test it, but my results are nothing like as promising as yours (across all 28 major pairs).
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Good morning Journal.
Well, it’s the weekend. Mar 21st.
Actually, every single day around here seems like the weekend. So like, no difference today. I mean, look. I’m not all that upset about what’s going on. No one’s sick. In fact, I can’t even find anyone who I know that’s remotely sick. So, that’s good. And plus. Who doesn’t need time off to relax. This is all kind of like a mandatory relaxation time. That’s not a bad thing.
Sure. I know we all need our jobs. And I’d be lying if I said that I wasn’t worrying a bit. Of course. Especially after yesterday. Listen to this. So. I get a text on my phone (from the school district) telling me to go to the school’s website. There’s a very important message there, for me. I’m like, ok. So I go there. And there’s an alert. Can’t miss it. It says…
Wait. Back it up a little. The last word for us (our school bus company) was that we’re gonna be closed until the end of the month. Like 2 weeks. Until further notice. Ok. I mean. We all know that things will probably change. Cause, this is all uncharted territory, right? Well, I just got the next change.
My school district will be closed until May 1st. And that basically means I won’t be able to work until then. It’s like everything’s contingent to the school district. Cause it’s very, very big. And mostly all of our work, and in fact the community, revolves around them.
Man…I was sitting there. Starting to panic. Thinking. I mean, just thinking about everything. The whole big picture. Like. Do I need to start making some changes? For my employment? Cause, I just went through all of this last year, around the summer time. That was a very tough time for me. The whole getting back out into the work force thing. Changing careers, or whatever you want to call it. Cause I jumped out of the car business (of the last 21 years).
Yep. I started to panic. No lie. But then. It hits me. You know what? I really don’t need to be worried. Honestly. God is in control. Of my life.
Look. I can continue on, with this point. Believe me. But I’ll just shorten it all, by saying this. In life, there’s a purpose for everything that happens. And my only job, on this earth, is to follow His will for my life. It’s getting to know your creator. I mean, nothing else makes any more sense. To me, anyway.
But anyway. Things are gonna get interesting. And all I know is, if I’m to make some kind of move, then I will do so. If not, then I’ll just stay put. He’ll let me know. We’re gonna have to see what happens.
That’s nice.
I know.
But, other than that. Yeah. I’ve been busy. With my business.
In particular, I’ve been working on the back testing of my system. 2019’s results. It’s a daunting task. No doubt.
This morning I finished up the numbers for what happened this week. So let’s take a look at them. For documentation purposes.
This is my account balance for the third week of Mar.
- +16.34% for the week
- +39.98% for the month
- -10.79% YTD
That’s the current unrealized running totals.
And I have to do it that way, cause I’m always in the market. There’s not a time when I will take profit and basically start over.
Well, adjusting my accounts at months end is another matter. I don’t want to get into that now. Cause, there’s a big difference between live accounts and demo accounts.
Wait. I’m not too sure about that YTD figure, up there. Cause I’ve drawn out money every months end. That’ll be twice (Jan, & Feb). Man…I got to think about this. Somehow I don’t think it’s as easy as taking the current balance and subtracting it from my original starting balance of 30k, then dividing it by 30k. Know what I mean?
Well then, I’ll have to go back and see what each month’s result was. Then just add them up. Hold on.
- Jan result = +2.18%
- Feb result = -20.01%
- Mar result (so far) = +39.98%
Total = +22.15%
That’s how much I generated out of the market, so far this year. And since I followed my strategy, that’ll be how much my system produced this year, so far.
But, when you account for all of your expenses (paying myself, and my broker’s financing charges), it’s a different story. This reminds me of the difference in the numbers of my cash flow statement and my income statement. The latter takes into account my expenses. The former doesn’t.
That’s business for ya.
And I absolutely love it.
Ok. Yeah, that’s nice.
I’m happy with my system. I do feel it’s working.
Therefore, let’s look at those proof of concept numbers and prove it.
Boy…this month is unreal Journal. You have to see these figures.
This is the aggregate total.
The last day of Jan is the 23rd day. The last day of Feb is 43rd day. Those 2 lines are amounts of pips. This is the result if I were to trade my system with all 8 currencies. Hence, aggregate total. The green line (perfect system) is not possible (explained before). In fact, I don’t even look at that line, honestly. Now, the red line is very, very easy to follow (again, all explained previously).
Well, let’s start looking at the individual currencies. How about we start with the USD. If I ran my system with them, only, what will the results be? That’s running the 7 USD pairs, continually in the market, according to their stated trend.
That starts on Feb 1st. Every day, at days end, if you would add up the 7 USD pairs pips, those are the results. These are the running totals since the beginning of the year. (For instance, an easy one, how many pips were generated on the 32nd day? A minus 2 pips. Subtract that from the total on the 31st day. 198 - 2 = 196. Then the next day generated 23 pips. You add 23 to the total, equaling 219. And so forth. But…this is what it would look like if you had no stops, no take profits, and just let these 7 pairs run, continually, stopping at every days end and tallying the pips. In fact…yeah…that’s my system in a nutshell. Playing with extra position sizing for take profit reasons are other factors.
Ok. Enough explaining.
The USD boomed this past week. In fact. Let’s add them up. At this time last week, the running total was 302. That’s 302 pips since the years start. And the latest pip count is 3,253. Ok then. Let’s subtract. 3,253 minus 302 = 2,951 pips. That means that if you had the 7 USD pairs, running perpetually all week, that is the result. And of course they are in a bull market. So you would be long the USD. According to my trend, they turned bull on Mar 12th. Which was the Thurs prior. That’s important to know, right? For the direction.
Ok. Now. I’m done explaining. Let’s move on to the others.
Oh…one more thing. All these charts follow under the day late system. So…there’s absolutely no excuse why anyone couldn’t produce this. Honestly.
Here’s the EUR.
This week = +369 pips.
In a bull market.
The GBP.
This week = +1,357 pips.
In a bear market.
The CHF.
This week = +82 pips.
In a bull market.
The AUD.
This week = +1,670 pips.
In a bear market.
The NZD.
This week = +1,294 pips.
In a bear market.
The CAD.
This week = +9 pips.
They were in a bear market, up until Friday. Then it changed. Bull now. So then, due to this being a day late system, that accounts for Friday losing -518 pips. See how that works? You don’t know when the change in trend will come. And when it does, you’re gonna be set back.
I’ll show you what I’m looking at.
Three things there. The top is the stated trend, with the strength of it inside.
In the middle section is the perfect system (top row is the daily pip count, the bottom row is the running pip count since the years start).
The bottom section is the day late system (same as above).
So, you can see that in both of the lower sections, the daily pip counts will be the same. Cause there hasn’t been any change in trends. Except on this last day. The perfect system gets +518 pips. But the day late system gets a -518 pips. Right? Cause you didn’t know when the day started that the trend was gonna change. Well, if you look at the strengths, it shouldn’t be all that of a surprise. Look. On Mar 9th. That was the top of their bear market. All downhill from there. They progressively got stronger.
Follow me. On Mar 9th, CAD short (in a bear market), produced 2,051 pips. Then on the 10th resulted in -830 pips. Again, this is all CAD short. So that day was +830 pips if you were long the CAD. All of these results are contingent on what market they are in. Look over to the 13th. Their result was -1570 pips. That’s a big loss. On that day (it was a Friday) the CAD got strong. Basically, it was a counter trending day. I base the resulting pips off of what trend their in. If it’s with the trend, then positive results. If it’s a counter trended day, then it’ll be negative results.
Being in the trend = positive pips.
Negative pips = counter trended days.
And that’s the reason why I’m keeping track of the perfect system. Cause there are clues. Don’t get me wrong, we will always not know what’s gonna happen tomorrow. But, in hindsight, we can learn some kind of edge. And if used with some risk management, well, then there’s an opportunity for ya.
All I’m doing here is showing what following a trend can produce.
It’s the heart and soul of my strategy.
Alright Journal.
I’m done.
Again. Bottom line is.
My system is proving itself.
Well…this month anyway.
Mike
Good morning Journal.
Let’s see, what do we got?
Today is Sat. Mar 28th. We just completed the 4th week of the month. 2 more trading days to go in the month.
Still living the quarantined life. I mean…I’m ok. See, for me, this all reminds me of last year. That was the year, an entire year, that I was home and out of the work force. I was living the day trading life. I’m sure you remember Journal. Cause I was coming in here a whole lot. Remember the pictures I shot over to you of what my office looks like?
Well, at least I had the chance to experience my dream life. Having my own trading business. Believe me Journal, I am grateful for that time. It was what I’ve always wanted. Having my own business. Being the boss. Not having to answer to anyone. But…having all the responsibility of failure and success rest upon myself. Not having to rely upon anyone else. Having my decision making skills really mean something. And possibly produce something really great. Just being self supporting, sustaining, and independent.
I don’t know…who doesn’t want that? Right? I mean, that’s what having your own business is all about. Having all the freedom and possibility to make something of yourself. Totally out of your own control.
Being the master…instead of the slave.
All my life I’ve dreamt to experience this. And…for an entire year…it was mine. I am deeply grateful. I mean look. I’m even made this way. Do you think it bothered me not being around other people? No way. For an entire year, I was thankful that I didn’t have to physically talk to anyone. Each and every day that went by, I realized that. Which made me very happy. See. I’m not a social person. (I know I get that from my dad)
It’s just one side of me. See. We all have sides to us. I happen to think that because we come from 2 different people (a mom and a dad). My dad was a loner. Big time. He was a shy person. Not popular. Just not gifted with any kind of social attributes. Just like me. But, my mom on the other hand, was pretty social. I don’t know…she just liked people. Being around them. Talking to them. Relationships. Just like how women are, I guess.
That’s nice.
What’s my point anyway?
I was formulated, made, to have my own trading business. And I lived it. And everything that comes with the territory, was absolutely awesome!
Except one thing.
I wasn’t successful.
I couldn’t sustain it. Reality shows up and teaches us what’s what. See. Every business needs to generate a profit. And I couldn’t do it. At the time anyway. Sure. I learned a whole lot about myself. My business. And all the reasons why it didn’t work out. Mostly…I learned about truth. What my truth is. The truth about my business. The truth about who I am. And the whole purpose of life.
A lot of it comes down to timing. This is still who I am. I’m not living a lie or anything like that. I’m not deceiving myself. I believe I am a trader. I’ve always told you Journal that I was born to be a trader. That is truth. My truth. But…also…I was born a child of God. I belong to Him. Therefore, I needed to put all things into the proper perspective. First things come first. And the trader in me, my business, shouldn’t come first. He does. Now that was my mistake.
When I think about it, nothing makes more sense than to follow this logic.
God knows everything.
He knows me.
He knows trading.
He knows business.
He knows success.
God knows perfection.
Therefore, why don’t I follow his lead, in the way I should be doing things?
How should I trade?
Why should I trade?
Well, that’s what I’ve been doing lately, Journal.
Sorry about all that.
Every now and then I like to put all things into perspective. Which requires me to look back and see where I came from, and where am I going.
And my whole point is…I’m not bothered, at all, by being stuck at home. (I’ve told Trish time and time again that I wouldn’t mind it if I didn’t have to see another human being.)
I also know that He’s working on me.
But…I’ve been busy with the business.
Backtesting.
Journaling.
Therefore, how about I come back with some results.
I’ll show you what’s been happening, Journal.
Thanks for letting me type.
Mike
1 Like
Journal.
Let’s talk trading, market stuff.
Well, I’ll get the documentation out of the way first.
- +5.59% for the week
- +47.82% for the month
- +29.99% for the year
My latest account balance.
Yeah man, those are some good numbers. I’m encouraged. And look. Believe me. I’m not bragging, by any means. See. I need this. Cause this week, I’ve been pretty discouraged. The reason why is because I’ve been back testing my system for last year. Man…last year was absolutely horrible for my system. Well, for the first 3 months anyway. That’s how far I’ve gotten, so far. And I’m really trying to continue on with it.
I realize that this year is some kind of year. In fact, I do believe this is unprecedented. The volatility is like never before. It’s all what we’ve been reading lately. Right? But what does that say about my system? Do I really have a good system? Or does anybody and everybody who has a trend following system feel like their genius’s lately. Know what I mean?
Look. It’s written, in just about every literature, including BabyPips school of pipsology, how certain strategies work well in certain market conditions. And how they will not work well in other market conditions. Ok. So. What are the conditions we are talking about. Well…the market is either trending or ranging. I can say that, or I can say this. The market is trending or it’s counter trending. It depends on what perspective you’re coming from. My perspective is more of the latter. Cause I believe the wording of what’s considered ranging is way too subjective. What I think ranging is, is not necessarily what the market might think ranging is. But…when you simplify and boil it all down to a trend (a positive), the only other possible thing you can have is the opposite, which is a counter trend (a negative). Right? Plus. You can always have degrees of trend. Long trend. Short trend. Quick trend. Drawn out trend. Constantly switching of the trends.
Anyway.
It really doesn’t matter. My point is.
What makes a good system?
Simply whether it works or not? Cause my system is working this year. But it didn’t last year. So far, anyway.
Believe me, Journal. I’ve been asking these questions all week. Here is what I have down in my Business Journal.
- Over how much time constitutes proving that my system works?
- How effective is my system in following the trend?
- Trends have factors that make a difference - in how well or not my system works. What are these factors?
In fact, I’ve had to go back to the beginning. And ask the most important question.
WHAT IS MY SYSTEM?
- Staying in the market
- My account balance reflects positively or negatively
- The goal (objective) is for a continual increase, over time
WHAT IS MY MAIN OBJECTIVE?
- At the end of every month, withdraw what I need
- Can’t run out (account balance)
- Must increase (account balance)
I think that about sums it up.
Wouldn’t that be considered success?
In my mind, anything else would be entirely subjective. Like putting an amount on how much I should be generating. I’ve realized that a long time ago. And that’s the reason why I can’t trade in the most conventional method. Which is trying to find the best place to get in a trade, and when to get out. Being such the perfectionist I am, that’ll end up putting you in a mental institution. It’s a very hard thing to do. Therefore, my methodology is :
- I trade a basket of trades
- Perpetually running
- With the trend
- With no stops, whatsoever
- Complete currency trading
So, when you think about it, what makes my system work or not will highly depend on how much it trends? Right? Because the more it continues in the trend, the more it should produce. Well, now we’re getting into the factors of the trend that makes a lot of difference ( which I mentioned above). Which are:
- Net production - How much pips are generated at the end of the trend
- Switch Slippage - On the day of the change in trend
- Trend frequency of changes - How often the trends switch (between bull markets and bear markets)
That’s nice.
Let’s get to what happened this week. We had a switching of the trends.
The JPY switched from a bull market to a bear market. But, before that took place, I made a move at the open. I added on another position size, going with the trend. Which was JPY strong. Cause that was where they were at, at the time. I didn’t know we had a change in trends coming. So, look.
This is the pic just before I added another position size, at the open.
This was 2 hours into the market open. Look. Many red daily candles showing already (except the USD/JPY). So, since I only had one size on (.23 lots), I go with another one. Look.
There’s proof. Got 2 sizes on each now.
What’s the result?
Well then, there’s what Monday’s end-of-day looks like. Price action, across the board, is not going down anymore. It’s going up. But most of all, my trend indicator was showing me of the change in trend. Therefore, I switched. I had to take a loss.
The resulting loss was -817 pips.
You can see up there where the change in trends did take place.
- USD/JPY
- EUR/JPY
- CHF/JPY
The 5ema is above the 9ema (yellow above green). But of course, my final trend indicator is the aggregate of all 7 of those pairs. And it was this end of day that told me to change. And that’s what I did. And now, going north (JPY bear market), with .25 lots. And at this time, I did forget to get in with 2 sizes on each (that’s the plan). So I had to immediately get in again with another .25 sizes on each. That’s why you see some double lines up there, cause there’s 2 .25 lot sizes on each pair.
So, let’s see what happens next.
Well, this was only one day later. I was very excited to see the trend continue. And I’m in the money alright. So I take profit. Cause I don’t know what’s gonna happen tomorrow. I just might lose it all, who knows. Plus. It’s not like I won’t have any position on. Cause, my plan dictates that I’m always running along with the trend.
This is what it all looked like when I took profit. So, one size on now. And running. Well, let’s see what the end of the week pic look like now.
I forgot to tell you Journal. I added on another size (0.28 lots), just before the weeks close. Sure. It could be a mistake. Just like what I did last weekend, at the open. But, in hindsight, the trend was old. And that’s what I feel is the difference this time. This new trend has just started. It’s a JPY bear trend now.
Alright Journal. I’m done babbling.
I guess I’ll see ya when the month ends (next week). Cause that’ll be when the first quarter officially ends. So I’ll have to put a summary to it.
That’s what I do best, Journal. Putting all things into it’s proper perspective.
Thanks for listening.
Mike
You never answered my question, Mike. I tried backtesting your system with an algorithm, far quicker than manually doing it. Last year it would have been just better than break even and the year before it was a loss. But that’s assuming I got your strategy right. I think the extraordinary trading conditions this year have helped your system.
Hi Mike’s journal.
Maybe you could tell Mike that he’s wrong with that , completely wrong, couldn’t be more wrong.
How do I know?
Because a few minutes later a thought came into his head, he told you this thought.
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Ok Chester…here we go.
I’ve spelled out my system time and time again. It’s quite exhausting to spell out. But, I will now. Good luck back testing this.
The WHAT :
- 7 JPY pairs (USD/JPY, EUR/JPY, GBP,JPY, CHF/JPY, AUD/JPY, NZD/JPY, CAD/JPY)
- This is a basket of trades that run as one. Same lot size. Same time entered. Same direction entered.
- Always running trades. Which means there’s no take profits. No stop losses. My account balance constantly fluctuating.
- My only action would be when I change directions. That will only occur at an end of day.
My INDICATOR :
- 5 ema & 9 ema lines on each of the 7 pairs
- The pip spread between those 2 prices
- Added up between all 7 of the pairs
That one aggregate number will tell me which direction to go in. Which will equate to the JPY being in either a bull trend (short) or a bear trend (long).
All I can do is tell you the days in which all of my 7 pairs will be traveling in.
Chronologically. I have this years and last years dates.
But, before I lay it all out there, this is in important point. I keep track of two systems.
- The perfect system - At the end of every day, the trend is determined. Whenever the trend switches, the pip results will always reflect a positive result.
- The day late system - At the end of every day, the trend is determined. Whenever the trend switches, the pip results will always reflect a negative result.
Notice when the change in trends occur. Jan 3rd. There were 515 pips of a result that day. If you knew that the trend would change that day (before it began), you would net 515 pips (btw…I did that very act). But, if you do the most common sense thing and switch trends at that end of day, then you would have lost 515 pips. Cause you were long. But then turn short, due to the end of day result.
Then on Jan 9th, the trend changes again. We’re only talking about 67 pips.
JPY bear market = North, or long, on the charts.
JPY bull market = South, or short, on the charts.
The year starts out with JPY in a bear market. (pips of a difference)
- Jan 3rd switches to bull ( 515 )
- Jan 9th switches to bear ( 67 )
- Jan 23rd switches to bull ( 264 )
- Feb 19th switches to bear ( 905 )
- Feb 26th switches to bull ( 140 )
- Mar 24th switches to bear ( 656 )
2019 starts the JPY out in a bull market.
- Jan 15th switches to bear market ( 189 )
- Feb 7th switches to bull market ( 195 )
- Feb 13th switches to bear market ( 246 )
- Mar 8th switches to bull market ( 136 )
- Mar 14th switches to bear market ( 130 )
- Mar 21st switches to bull market ( 119 )
- Apr 3rd switches to bear market ( 231 )
- Apr 10th switches to bull market ( 27 )
- Apr 11th switches to bear market ( 215 )
- Apr 19th switches to bull market ( 3 )
- Jun 11th switches to bear market ( 55 )
- Jun 13th switches to bull market ( 118 )
- Jun 26th switches to bear market ( 482 )
- July 15th switches to bull market ( 29 )
- Sep 5th switches to bear market ( 413 )
- Sep 24th switches to bull market ( 94 )
- Oct 10th switches to bear market ( 678 )
- Nov 12th switches to bull market ( 91 )
- Nov 26th switches to bear market ( 85 )
So basically, all I do is run these 7 JPY pairs in the market according to the respective trend. It’s just the matter of when exactly do I change with the trend.
You will see that there is a huge difference between the perfect system and the day late system. In fact, all you have to do is just add up all those numbers in parentheses. And then double it. Look up above, at the example. See what the perfect systems running YTD total is? At end of day Jan 3rd? 236 pips. And what’s the YTD running total for the day late system? Jan 3rd? -794 pips. That’s quite a difference. That’ll be 515 doubled! 1030.
Anyway.
That’s my system. My trading ends up somewhere in between those 2 ending results.
Well, if you have any other questions, shoot.
Thanks for inquiring.
Mike
Thanks Peterma!!
I appreciate the encouragement!
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Thanks for the detailed reply. I was mostly interested in which specific way you are deciding to take the trade, because I wasn’t entirely sure if you were referring to the JPY or the JPY pair when you mentioned 9EMA being above 5EMA and vice versa.
I’ve not got much time this morning to dig in to anything, but I think I have it correct now, because I can see that when the market is trending, the system works well, which is what you want. When the market is ranging, it’s horrible. Look at this screen shot:
We have a nice trend down that I highlighted in blue, your system is great here. You got a nice entry and slightly late exit, but lots of pips. Something like 500 pips up.
But look either side of that where I’ve drawn red lines, it’s constantly taking losing trades. Most of them are small, maybe 5-10 pips, but there’s about 15 of these losing trades and they add up. Then there’s 2 big losing trades that are something like 100 pips each.
Look at the account balance and equity tells a story:
The equity is constantly above the balance, that’s telling you that the trending trades are doing well, they’re open for longer and building up profits. But the balance is constantly bleeding away, this is the ranging markets that are constantly switching direction and your system is losing a small amount of pips often. Then at the end, we get the coronavirus market, which your system seems to have worked well on.
This is analysing all 28 major pairs. Your system is absolutely brilliant if you could only using it in a trending market, however we find it very difficult to identify a trend that hasn’t yet started. Perhaps integrating a larger time frame might help too?
Weirdly, you’d think trading the opposite of this system would give you a nice profit because the graph would be mirrored. Well, it is mirrored in that you can see the same shape turning in the opposite direction. But once swap and commission is factored in, it also loses money.
I don’t think this should be too disheartening though, I think the system has potential (that’s why I copied it), I just think you need to work on identifying when it’s likely to be a trending market and stay out of the ranging market. It also may be true that certain pairs will work better for this system than others.
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Hey Journal.
Happy April 1st.
End of month, and end of quarter now.
I just completed my first quarter. And things are moving right along. I’m happy.
Let’s bring it all in now, huh Journal.
Well, this is my year of assimilation. What does that mean exactly? Well, I guess you can back this up a year ago. That’s when I had the opportunity to run my trading business full time. For a complete year. And well, it didn’t work out. I thought I could do it…my life’s circumstances gave me the opportunity…it surely was worth the shot. But in the end I had to get back out into the real world.
It’s ok. I’m just very appreciative of the chance. But, do you think that’s the end of the story? No way. Lots of changes came my way. Not only in regards to trading, but in life. So…you can say that I’ve started over. And that’s when I got to thinking. You know what? I can actually run this business in the same manner assimilated as I would for real. It’s nothing but numbers. And a demo account.
And that’s what I’ve been doing all year. I’m running my business. See. I’m a swing trader. So, there’s absolutely no reason why I can’t prove whether I can do this or not. It’s all real to me. You’re gonna see this in a minute. Cause guess what…so far this year my bills are being paid. And that’s what we’re gonna be doing today. Looking at precisely how I’ve been paying my bills.
JAN = $30,000.00 start
JAN = $30,654.16 end
- +2.18% trading results
- -$3,000.00 pay myself (withdrew)
FEB = $27,654.00 start
FEB = $22,118.37 end
- -20.01% trading results
- -$3,000.00 pay myself (withdrew)
MAR = $19,118.00 start
MAR = $25,296.48 end
- +32.13% trading results
- -$3,000.00 pay myself (withdrew)
1st quarter trading results
- +14.48%
Total withdrew (paid myself)
- -$9,000.00 (-35.19%)
In business, you have to account for everything. What I withdraw for myself is considered an expense. You would see that on my income statement. As opposed to my cash flow statement.
Speaking of that, I’ll show you a little of how I’m keeping track of it all.
You can see my 3 accounts, that I keep track of. And you read this from left to right. So, the latest would be this. At the start of April, my account balance for the trading account is …, and the business account is …, and the checking account is…(numbers above).
You have to realize it’s a little premature for me to be dealing with my “business account” balances. That’s why there’s nothing in there. I do have plans for that account, and exactly how it works. It’s just not the time for it now. Every business has one, I just need a lot of time to get it built up.
Here’s my income statement
Ok. So. This is what I’m talking about. Keeping track of the money flow in and out of my business. Where does it come from and where does it go. Right?
See what I’m talking about, how there’s no difference between running a trading business simulated as opposed to real?
I’ve talked about this before, but, what’s the most important thing here? Well, as long as I can continue paying myself, then I’m good. That’s how I pay my bills. Of course, over time, I’m gonna have to be generating money out of the market more than taking it out of the trading account. And see, that’s starting to get into the business account dynamic. Cause that’s supposed to be the buffer account in between the other two. It should be built up. But look. I do plan on building that up. It’s just, I prefer to be paying myself right now than building it up. That’s all.
Now. I’ve asked myself this question, especially in lieu of what’s been going on in the world today. Cause it’s looking like I won’t have a job for quite some time (like next fall). But.
Is this exactly how I would be running my business? My strategy? Absolutely everything?
I believe yes. And the more comfortable I get, without making mistakes, I think the better. Cause in Feb I made some fatal errors. And I seriously don’t think I’m gonna make those mistakes again. So far so good.
Looking forward… I am very excited. I have some new things going on. I kind of see this as a maturing strategy. One that works, but can get better and better. There’s reasons for everything that I’m doing. Like keeping track of the other 7 currencies. You know that I trade the JPY only. But I’ve been bothered, greatly, by seeing the great results of the other currencies. Cause, believe it or not, the Yen is not always the best currency to trade. And I’ve wondered what I should do about this revelation of knowledge that I’ve been sitting on.
Well, I’ve been enlightened.
This is what I’m gonna do. Just a little addition, that’s all.
I’m gonna be trading the AUD. Along with the JPY. Trust me, there’s a dynamic between these 2 currencies.
Anyway.
2 separate trading accounts (demo), to easily keep track of. I opened the AUD account at 30k. Look. I don’t know how this particular aspect will correlate to real life trading. I mean, I honestly don’t think I’ll ever be able to come up with a total of $60k dollars. And then to separate that into 2 trading accounts. So. I guess I’m just wanting to experience another currency using my system. Surely I can’t be using them both on one account.
I just don’t know.
Anyway. I started this a day before the new month started. So, just be prepared to be seeing something more than JPY stats.
How about I show you what each of those did this year so far. You’ll see.
This is the day late system. Very, very easy to follow. No excuses. Those are guaranteed pips.
If you traded the AUD as a complete currency (7 AUD pairs) this year, perpetually running, those are the daily pip results. Btw…Mar. starts on day 43. And I guess I got to show you in what trend they were in.
Well, you don’t need to be a genius to see that they hardly changed trends. Started out in a bull market. Quickly turned to bear market, on Jan 6th. Then switched to bull on Feb 11th, for a short time, then back to bear market. And look there at the end of this month. On Mar 30th they switched to a bull market. So. Well. What do you think I’m gonna do? Yeah, sure. I’ll get in on that bull market. I was originally thinking that I should start on April 1st. But instead, I got in only a day earlier (EOD 30th). Well, that was not such a good idea. The pip count for the first day for me was a -390 pips. See it there?
But then today happened. Bad news. Their gonna end the day a whole lot more negative. And I’m sure the trend will switch back to bear (red). It’s ok though. I’m not all that upset, know why? Cause I followed the plan. If it’s in a bull market, then I’m long all 7 AUD pairs. I switch when that indicator tells me to. Nothing means more to me than to follow my indicator. The money will then follow.
Let’s take a look at how the JPY did this year so far. Compare the two.
Again, this is the day late system.
There’s no comparison. It would have been much easier trading with the AUD.
You get my point.
I want to bring up another aspect of my trading that needs a lot more attention. It’s the fact that I’m adding on more sizings. I’ve finally caught on to this. Mar 5th was the first time I actually pulled the trigger. And have been pretty successful. So much so that I couldn’t believe my numbers. I went back and counted up all the pips. And then compared them to the benchmarks. Check this out.
- Perfect system = 5,185
- Me = 3,531
- Day late system = 91
Just look above to that JPY chart. That 91 pips is at the end. That’s where that comes from. Anyway.
That’s for the entire year. I did much better than the day late system. And to boot, all those extra pips came in this month alone. So…can you see why I am excited moving forward?
My only point is, that I feel that I can attain to those perfect figures. And then to use that as a benchmark, for any kind of decision making. I wrote all of this in my notes. So, it’s like I’m gonna start over with this new quarter.
Well, I’ve done a lot of work on this already. I combined both the AUD and the JPY currencies. Simply, all I’m doing is adding up their respective daily pip counts. So therefore, if you were to do that, this year, this is what it would look like.
That red line is what you an expect to produce, using the day late system. Basically, that’s the minimum amount of pips achievable. Extremely easy.
So, that’s what I’m after Journal.
I really am excited to see how this will all play out.
Alright. See ya on the weekend.
Mike
You have an impressive way, you were practically at the origin of modern trading, I think that your experience and colossal knowledge will help you to achieve success this time, be sure to share the results…
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Well, what can I say - I wish you good luck, although this is not the main component of success. Then I’d rather wish you strength and time for everything you have in mind for yourself. And if you need help - be sure to ask, there is always someone to help.