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

[MikeWolski]

Good morning Journal.

Let’s see. Where are we gonna go today?

How about we take a look at what’s going on in the market. Cause I’m still not in yet.
But after seeing yesterday’s numbers, I have an idea of what I’m gonna do. So, let me unravel all this and show you what I’m thinking.

Well, we have to start from what’s been happening already. The trends have not changed for quite some time now. Like, over a month now. Let me prove this to you.

If this is true, then the monthly running % changes should just about be the same, right? If no trends have been changing then we should be able to look back at this month and should be seeing these 2 tables look pretty much alike. Let’s take a look.

Remember, this is how the month progressed if you simply added each of their daily total % to the previous day. Aggregately speaking, of course. And so, what can we see by this? Well, it was the GBP that was the most bought currency for that month (+17.37%). And sure enough, just above, you can see that the GBP’s stated trend was trending high, the whole time. And then, we have the EUR. They were the next most bought currency that month (+12.69%), and also matched with their stated trend being trending high.

Next, is the CAD. You can’t see it, but May 3rd was the first time they started their trending high state (the last two weeks of April they were in a bear market, trending low). And so, it does match, their trend. They were more bought than sold. Also, they were bought more than the 5 other currencies below them. So…it matches.

Ok. So. The USD, and the JPY are a no brainer. Trending low states. They matched up. Then let’s look at the AUD. They ended up in negative territory (-6.33%) for the month. Since May 12th, technically, they ran a negative running %. The bias is down and it did match. And the NZD showed something a little similar. But more mixed than anything. Now with these 2, you should be able to see that at the beginning of the month they were wanting, and showing, some strength, comparatively. Remember, NFP Friday was on the 7th. Since then, it was all down hill from there. They both demonstrated a trending low state. Matched. And the CHF was pretty much in the middle, with more of a bias on the up side. Therefore they match their trend state (high).

I think I made the point. Right? No real trend changes. And well, that should spell some profits, as long as you traded along with the trend, that is. It was a good month.

But, another point that I always make is, that trend changes like, very much, to occur around the turn of a month. I’ve said it many, many times. How do I know this? Cause this is what I do best…keep track of the market. A lot of times it coincides with the end of the month profit taking. And all the way up through NFP Friday. So, we’ll just call it around a week prior to a week afterwards. But look up there, with the Comm brothers, in May. You can’t tell me the market was thinking about the idea of them taking over the buying. But it quickly fell apart.

Ok. That’s nice.
How about this month? Are we seeing any kind of trend changing occurring?
And this has been what I’ve been watching for, and waiting for, before I jump in with my trading. Let’s look at how it unraveled…all the way up through NFP time.

The top table is the month running. The bottom table is each days results, all by themselves. It’s the daily picture of what happened.

Well, Monday was the last day of the month. It was a holiday. And not a lot of movement occurred. Then comes Tuesday. Back to work. And how does things fly? Well, looks like the AUD has been bidding up. Actually, Mon and Tues. Comparatively speaking, they were (the bottom table will show you that). That’s the only mentionable thing I’m seeing so far. Again, the movements aren’t really going anywhere. The average for the most bought currency, for a day, will be between 3.7% - 4%. We’re nowhere near that.

Moving on.

Well, sticking with the AUD, what happened with them? They took a breather. That makes all kind of sense. And still, low volatility occurring. The CAD took the top spot. And the NZD took the bottom spot. Well, speaking of the NZD, they definitely were being sold off, more than anyone else these last 2 days. And then the GBP took a U-turn from a good sell off to some buying.

Remember, the market is getting ready for NFP Friday. Are we seeing any kind of lead up to it? Well, so far, I don’t think so. What’s the USD doing? Not much. Let’s see what Thursday brings us.

Oh yeah. Now we got some action (volatility). And who we talking about?
The USD. Look there, coming in with +5.86% that day. Yeah boy, that’s over and above the average top spot for a day. Well, we should know that NFP is centered around the USD. The market is calling for a good report. So. One one hand, it seems like the market is getting ready for some Dollar buying. That’s what the market does. It’s a forward thinking machine that gets priced in beforehand. Right?

On the other hand…it is true that market does this thing called buy the rumor, sell the news. Basically, the money is being made on the way up to the news. But then when it comes out, even if goes the way it’s supposed to, the market takes the profit, which means there will be a lot of selling. So…this is some of the stuff that I’m thinking beforehand. But, we have the USD going up. But also the AUD, and the NZD are being sold off. Really. That’s the only other thing mentionable.

Honestly, I really didn’t know what to think heading into NFP time. The closest thing I could make of it was more of a risk-off sentiment. The JPY and the CHF aren’t showing any kind of clues. And no one else is, either. So then, we just have see what happens. Trust me, I’m not gonna risk my money. It’s a crap shoot at this point.

Well, I still believe the most important piece of data comes down to what the EOD price is. But, I want to get a sense of what’s happening during this NFP time.
And so, the number came in. The data showed below analysts forecast. But not all too bad. Like, 650k predicted, and 599k it came in at (something like that). I mean, I don’t know, nothing real earth shattering. How’d the market react?

I had 2 minutes to view it, at that time. Basically, the market didn’t really move all that much. But the real picture comes later on afterwards. So, on my mid day break, I checked in with the market. And this is what I captured.

4 hours later.

The USD was sitting at -3.96% down on the day. Total amount of pips was -384.
The EUR was sitting at -1.34% down on the day. Total amount of pips was -205.
The GBP, and CHF about break even.
The AUD up a lot. +4.61% on the day. With a total of +499 pips.
The NZD up a good bit. +1.75% on the day. Total of +187 pips.
The CAD down. -2.38% on the day. Sitting on -236 pips. They followed the USD.
The JPY was being bought, +1.96% on the day. +240 pips.

And if you want to know, those totals numbers on the top right, would be if I were still trading my portfolio. I would be down -542 pips, in my basket. And don’t forget, that tells you how the market trend is faring. The market is not going with the trend today. Right?

Well, what am I gonna do? I mean, I can’t do anything until around EOD anyway. I just wanted to get a feel about any trend changes that might be coming.

Seeing any?

The Comm brothers might be. That might be the only thing I think could be possible. Anyway. I took one more pic just before I had to go. Any changes to what we’re seeing?

Can’t really tell. You know how the market traverses back and forth.
Well, how about the very EOD pic. I took this just before I ran the numbers.
4 hours later.

Nope. All the same. This is where they end up.
Let’s put this in the proper perspective.
Daily.

Well, remember me saying about the buying the rumor, selling the news?
I’m thinking this is what happened. It’s a complete 180 from the day before.

I thought long and hard about this. I’ll tell you what I’m gonna do.
This is concerning my trading. And how I properly navigate my chart reading.

I’ll go down the list. From no changes, to changes.
The EUR.

They are trending high. There’s nothing to tell me a change from this. Therefore, their stated trend will not change.

The GBP.

Same thing here. Trending high. Bias still holds for being bought, than anything else.

The CHF.

Trending high. They are not dropping. The bias is to the upside. And nothing tells me otherwise. So no changes here.

The JPY.

Well, they leveled out. Not dropping. But…we’ve seen this before. Right? Therefore, until we see something major, for a turn upside, their trending status is LOW. And that’s the way it has to be.

Now we’re gonna get into the trickier ones. I’ll have to show the USD now.
I have a secret weapon I’m gonna have to administer.

Look. As this week was unraveling I kept thinking (especially after Thurs run up)…this USD is trying to make a trend change, for higher. Just look at the last couple weeks. It carved out a floor. No more lower action. Even winding up (a shaking out of the sellers) time. Then comes Thursday. Broke up out of that higher. I thought for sure that NFP was gonna continue on up. But no. Continuing on with the trend.

But concerning my trading. And chart reading. This is my secret weapon. I’ve used this extensively with my back testing. It works.

Look at that -1000 gridline. I believe that is a resistance line. It got broken. And now has come on back down to it. It’s called a break & retest thing. Surely, for a trend change, this is possible. It would make sense. I mean, even look up above. This hasn’t happened this year yet. I’m talking about a consolidation, wind up, and then a trend change. And so, getting back to my secret weapon.

One more day will tell me.

This happens, more than not. And it’s saved me many times in the past. I believe in it. It’s the principle. I have to wait this out for one more day. And one more day only. I believe the market will tell me, at EOD Mon results, which way this wants to go. If it’s a continuation of the down trend, than it’ll move lower. Under that resistance line. And on the other hand, if the market wants to change trends, it’ll shoot up from there. Get it?

I will not be making a determination until EOD Monday. Therefore, until then, it’s still considered trending low. But…concerning my trading…I’m not gonna get into the market until EOD Monday. And then when that time comes, I will be, getting in.

There you have it.
And while I’m here, this will also go for the AUD, and even the NZD.
Take a look.

The AUD.

Same thing here. We have a resistance line at the -500 gridline area. Therefore, I believe if the market wants these guys to continue on down with the prevailing trend, then it’ll drop from here. If the market wants a change in trend, then up it’ll go.

This is what I believe. And I’m going with it.
If I’m wrong, then I will learn something from it. That’s all.
But moving forward from here, that’s how I will place my trades. According to what happens at EOD Monday. And then, I will have to keep this determination for them for the entire week. I cannot go back and forth. This is my rules. So, whatever happens at that EOD is what I will state for the rest of the week. I got to draw the line somewhere.

Here’s the NZD.

Boy, they like to make big moves. But as it stands, their trending low. And it’ll take quite a bit for them to change this trend. I would say it would have to go up and above that last swing high, for a trend change. That’s all.

And then the CAD.

Trending high. Nothing is telling me of anything different. Sure, you could call it sideways action, or even a ranging condition, but for me, it’s more of an upward bias than a downward bias. I’m not playing the middle ground. That’s nonsense. Things go either up or down.

Ok now.
Remember me saying this last week?

@MikeWolski

Well, looks like I better think about when I’m gonna get back in the market. Cause remember, I’m out still (remember that mistake?).

— Start fresh for the month of June?
— Wait for the week to unravel, then slide right in?
— Wait until after NFP Friday, for direction?
— Are we gonna have any trend changes around the turn of the month?

I don’t know, those are some of the things I’m thinking about.

Well, I think I went through this whole process quite nicely. I correctly waited it out.
And because of this weeks data, I need one more day.
My money will go on the line, for the start of Tuesday. And I will be riding it out till at least the end of the week, without fail.
It’s my strategy. And I believe in it.

But what would have happened if I would have simply followed the strategy all along?
Here’s the results of that.

Well, if you count Monday through Friday, sure, I would’ve been positive.
I don’t know. By being out, I didn’t really miss out on a whole lot. Right?

And I got to show you my latest data table. I absolutely love these numbers. Whether you want to see my trading results or not, it doesn’t matter. This is how the market sized up every pair.

How every pair turns out for the day is there in the first and second columns. And whichever currency is first is the one getting the profit (positive). My trading results are on the right column (if I was in the market). And I hope you can see how this way is absolutely the best way to go about finding back testing results. Right? And currently there are 16 pairs in my portfolio basket. 4 trending high against 4 trending low. 4 x 4 = 16. That’s why only 16 are being counted on the right column.

And look at that volatility tell. Left table, up above. See how the market works? It just drops and drops. Until that Thursday. Then bam! Off the market it runs. Boy…that was even more than what happened on NFP Friday. And if I might say…I have a feeling about Monday. I think the volatility will be high. Geeez. Look back at last months volatility. The Monday after NFP (May 10th). Yep. That’s a lot. 1745 pips the market had possible, at days end. So…we’ll see what happens.

Alright Journal, that’s what I got going on.
I’ll try to come in here tomorrow am. I always have stuff to talk about.
And again, thanks for listening, Journal.
Mike

[chamcham]

Wow, a 5-year old thread! Really curious how’s it going so far. I hope I also get the courage soon to share my trading journey to people. Wishing nothing but the best for you!

[MikeWolski]

Good morning Journal.

And thank you Cham.

Yeah, I guess this thread is getting a bit long.
I don’t know, I imagine we have people who pop on in here on a moments notice, just to see a whole bunch of nonsense. And I’m sure we have those who are new to the game (seems like a lot) on a daily basis that search around and find this thread, and simply have no idea of what I’m talking about. And I do think there are a couple people out there who actually have been around for some time and like the readings.

To those people, I cannot express my gratitude for your interest in my walk. I can only hope that we can all learn something along the way.

Actually, for absolutely anyone, who reads my thread I am deeply humbled. But look, I do get a lot out of this (nonsense). It helps me unleash a lot of my thoughts, all the things that I am going through, and it’s like a release. Kind of like how we feel better just venting to someone. Know what I mean? Who doesn’t want (need) that ear around. I surely do. Well, to be honest with you, I really love typing also. That’s another reason why I do this stuff. Sorry.

I’m sure it’s not easy to know what kind of person I really am, and exactly how my trading is doing…as Cham has conveyed. I mean, that is the nature of things like this. Especially as it’s very difficult to go back and see this non stop trading jargon from a long time ago. Where does it begin? Where did I come from? Where, along the journey, am I at now?

But, on the other hand, I’m not gonna rehash stuff every time I come in here, right? But this is kind of like what I do. For a couple years now, I’ve made it a common occurrence to come in here at least one time on the weekends. I’ll give an update on whatever I’ve been working on. So at least I don’t have to think about what to type. It’s simply whatever I’m currently going through. Good times. Bad times. I even like to type away about whatever I think the market is up to. Trust me, doing that stuff… is like my most favorite stuff to talk about. It doesn’t compare to anything else (well…nothing will substitute my love for the Lord…HE is my happiness).

But this thread has covered my entire journey. Well actually, this thread started 3 years after I embarked on this discovery (Jan '13). See, I absolutely knew this was gonna be for the rest of my life. That’s why I thought this thread would really be something, one of these days.

But, I do remember having some real good times in here (B.P.'s) before this thread got started. I had some good friends back then. We had our own thread and everything. Talk about fun! I wouldn’t trade those times for anything! I will forever be grateful to those guys for the times we had together. Man…we talked about some awesome stuff. Market stuff. Actually, I think it had a lot to do with macroeconomics. Cause that’s what really interests me. I think it was a thread on the Commitment of Traders (COT) data, that comes out every Friday.

Man…what good memories. I think there was about 4 of us who were pretty tight.
Remember that Peterma?

I guess we can’t bring those days back.

Sorry about that.
Anyway.

Well, your gonna have that. Times change. People get pulled one way or another. Well…except me. This thread of mine won’t stop. But…let’s see. How could I put some kind of summary of where I’m at now?

• I’m on my 8th year now.
• I know how to trade, successfully.
• I can trade consistently.
• I am operating my own trading business, just not in the full time setting. Swing trading style.
• I would consider myself only about half way there. God will take me as far as I’m gonna go. When I’m off the earth, is when I’ll be done. Until then, you Journal, will see all the progress.
• Being such a perfectionist, you’ll never see me arrive. All I can say is that I will only get better.
• Oh…and the most important thing about my business. It is not about money, whatsoever.

This is what I consider success.

— Being able to support myself (self-sufficient) from a business account
— Be able to, over time, continually grow a trading account

Look. Just to be able to survive and stay afloat in the market, I believe, is saying something. It is true, that I don’t care about the money. But you kind of need to know how to use it properly, grow it continually, and be that good steward of it. Know what I mean?

I think that the most happiness I get out of all of this is … THE JOURNEY.
This is fun!
And I believe true traders…true business people…can understand this.

Let’s see…some kind of overview of what happened in this thread?

So far, within this thread, my Journal has seen me operate this business on a definite confined part time capacity (when I was working full time in the shop). And that was spending 25 hours a week, in it, that way. Early mornings before work, and hours on the weekends. Quite some years this way.

I was mentored, Exceptional Trader. Bucked up quite a bit for this. Learned an enormous amount. Mostly regarding the business aspect of it all.

I operated this business as full time, for one entire year. It’s all documented in here. I thank God for the opportunity, absolutely. This was at the 5 1/2 year mark. But I wasn’t ready. Couldn’t do it. Learned a lot though.

And now, I operate this business, well, let’s say it’s like something in between those 2 extremes. Cause my full time job (school bus driver) is not full time. It’s a part time job. Therefore, I have ample time throughout a day that I get a lot of work done.

Look. This is where I’m at now.
I don’t know…maybe a lot of new traders might think this is absolutely nuts to spend so much time (years) on something that can’t sustain it for a living yet.

Right?

Maybe, just maybe, I’m someone who’s missing it. Absolutely, I could be stubborn, a one-man-show, ignorant of doing things the main stream way. Whatever would take me there, just don’t want to hear it, kind of person. Just different. And someone you don’t want to emulate. Yeah…someone who’s missing it.

I’m sure there’s traders who would be much more worthy of following. And I’m sorry. But I just want to carve out my own path.

But I do know one thing. I will trust in the Lord with all my heart. He’s my master. My destiny. Therefore, I will be content in however long it takes. And I will continue to enjoy the journey. With HIM. And with my Journal here.

So.
To all the new traders that come on by here…my advise would be…

• Try to understand and learn whatever you can from here
• Don’t be afraid to carve out your own way
• Be prepared for a lengthy journey
• If your sole purpose is to get rich, you’re not gonna get there this way
• Know who you are (a trader…business owner…or a dreamer to be rich)

Well, thanks for listening.
Sorry for all that nonsense.
Mike

[Jacob.FX]

Thank you Mike, you’ve changed my point of view. Really appreciate this journal. When you mentioned being rich, my perspective is that everyone who has day job, family and and doing trading is rich in heart. Financial status is changing everyday on better or worse…

[MikeWolski]

Good morning Journal.

Let’s talk market.
Well, I remember last weekend at this time, I really had the sense that Monday’s EOD results would tell me in which direction some of my trades should go in. Cause I was out of the market, still. But wanting to get back in.

Let me show you what happened.
I was mostly concerned with what the USD was gonna do. But, let’s take this one step at a time. This is what I was looking at on the weekend.

The USD.

If you look closely, in the latest, this is sitting right on a resistance level, -1000 gridline. It got broken last Thurs. And Friday it came back down to it. And now I need to know which direction it wants to go in. I believe that Monday’s EOD will show me. If it bounces back on up, then I’m gonna make the USD change trends, from low to high. But…if it drops back down, then I’ll just continue the USD’s trend back to low. And all this, of course, will determine which direction my trades will go in. Let’s see what happened.

Monday’s EOD. For the USD.

What happened? See it there? It dropped below that -1000 line. Therefore, this told me that the down trend will continue (this is all what’s going through my mind during this time). Ok. Well, that’s it. I’m gonna continue stating the USD with the trending low state.

Don’t forget. When I do this, this is what their stated trend will be for the rest of the week. I absolutely will not change it (whether on my tables or concerning my trades). I stay committed with this. You will not see me changing anything as the week plays out. This is a major rule for the way I size up the market. And also the way my trades play out. No back and forth stuff. Cause that’s not how the market works. It works on a weekly basis.

Well, there was only one other currency that I had this dilemma with. It was with the AUD. I needed to see Monday’s EOD result, in which will show me what to do about them. Let’s look at them like we did with the Dollar. This is last weekend.

See that -500 line? Back at around day 100, it leveled out there for a couple days, then dropped down, and then came right back up to it. Then dropped back down again. Then came back up to it (again). And well, that’s where we’re at now. Therefore, I believe Monday’s EOD results will be the tell of where it wants to go.

What happens? Well, it goes higher. Right?
And well, I stick to the plan. The AUD will be changing trends from low to high.
It’s not all that convincing, but I have to go with the plan.

So. This is how the week is gonna play out. And what trades I will be in.

Well Journal, this is what’s gonna happen for the rest of the week, whether it turns out to be true or not. Cause I’m not gonna change anything here. My trades will run…with no changes to them. And my trend determinations will not change either. Now, that will occur, if there should be some, on the weekends.

Like right now.

Well, let’s see how the week played out. Concerning these supposed trends.

So, I’ll go through the currency trends individually, and at the end you’ll be able to see how my account was affected. Cause remember, I trade a basket of trades. This time around I’m in with 15 pairs (as you see above).

Let’s go with the AUD. This is my only change (I haven’t made a change in quite some time, actually). I’m kind of nervous about this. We’ll just have to wish it north, that’s all.

That’s Tue EOD results. It came back down, just a little though. No big deal. And technically, it’s still above that -500 line. And that tells me that it is more bullish.

Wed EOD results.

Wow. Talk about slow moving. At least I’m not getting hurt here. And technically speaking, it’s still above that line. So I’m glad about that. And also, I’m glad this is not dropping back down. It seems supported. Sure, not really changing to higher ground yet, but not falling back down either.

Thurs EOD results.

Nice. Moving in the right direction. I’ll take it.
But…we do have one more day to go. Remember, the market plays the entire week. Here we go with Friday (just give me a high move, will ya).

Friday EOD results.

Nope.
It went down. Thankfully by not too terribly much.
But this is where we’re at now.

Now what?

Looks like I’m back to where I started at. It’s gonna be another repeat of last weekend, looks like. Well, this is what I see.

I’m at the inflection point again. And you should know what that means.

@MikeWolski

One more day will tell me .

This happens, more than not. And it’s saved me many times in the past. I believe in it. It’s the principle. I have to wait this out for one more day. And one more day only. I believe the market will tell me, at EOD Mon results, which way this wants to go. If it’s a continuation of the down trend, than it’ll move lower. Under that resistance line. And on the other hand, if the market wants to change trends, it’ll shoot up from there. Get it?

I was referring to the USD when I said that. But the principle is the same. I gotta wait it out one more day. Which means that I will not change anything until EOD Mon. I will still be long the AUD until then.

Well, let’s look at the USD (all in the same manner as these guys). But, instead of a change in trend, they resumed their down trend, remember? It’s up above.

Here’s the USD, Tues EOD results.

Ok. Well, I definitely was hoping for another drop down, but no. It came back up a little. But no real big deal. Got to see the week through. Remember, I’m short here.

Wed EOD results.

Ok. Not looking good, but nothing I can do. At least it’s not flying too high, though. But definitely in the high side territory.

Thurs EOD results.

Now that’s better. And look, it actually went below the line. That’s where I need it to stay below (for a low trend). Come onnnnnnnn Friday. Break down!

Friday EOD results.

Ok. That’s it. I give.
See how you have to play the week? It’s the entire week that’ll tell ya where it wants to go. And it told me, alright.

I got to switch the USD’s trend from low, to high now. It’s been awhile since I changed their trend. But it’s what I got to do. Surely there’s none of that waiting a day stuff. No way. This has been coming down the pike. I mean, just look there. They’ve been carving out a floor for the past few weeks now (since around day 97). Then last Thursday they get that blast upward. I believe that was a sign, for sure. But you know, the market has to go back and mop up and clean up all the sellers. Shake 'em out. It’s a typical trend change, if you ask me.

But, you see, it’s becoming clearer now. And I will forever believe this. That the market will show you in a weeks time. It’s the correct perspective, I believe. I don’t think it’s a secret. The USD is heading up. Now…if it doesn’t, that’ll surprise me, big time. But the market has the final say. We shall see. Right?

Well, I think those 2 currency’s were the only interesting ones this past week. Therefore, I’ll show you how all this affected my account balance.

This in one of my favorite tables. This tells me so much of what’s going on with the market, along with my account. Take a look.

Ok. Each day has a column. From the top to the bottom. And I’ll explain.
The top table is how the market resulted that day. Individual daily results.
That strip right underneath it, is just a tell of how the market trended. If it’s colored red, then it was a counter trended day. If green, then a trended day. And how much % of that. Daily %, also the weekly %.

See. That is important. You, absolutely, need to know how the market traded that day. Did the market go with the trend? Or did it go against the trend? Think about that. You might think you’re the problem, with the direction you have your trades going in. Especially if you’re a trend trader. But if the market goes the other way, and you see negative pip results from you trades, you just might be thinking you made a bad call. But that’s not always the case. Cause if you are correct in the way of the trend, then you are right. And the market is the one that’s not right. But see, over time, the market usually comes back around to the trend. My back testing data shows this.

That’s nice.
Anyway.

That second big table there is what I believe their stated trends are. That is what I believe the direction of the market should be doing. It’s what they’ve been doing. Therefore, I believe it’s not subjective, but objective. It’s facts. Plain and simple.

Then underneath that is what my trades are. You can see how I was out of the market around the turn of the month. Then just got in on the 8th (EOD 7th). Also, if it’s green then it’s long for the pair. If red, then short for the pair.

Then underneath that is a strip. That’s my account balance. I started this out at $10,000 on May 10th. And so, every 5pm daily, I take a screen shot of this.

And then the last small table is my trading pip results. I just like to keep track of every aspect of my trading. This is the net results of the amount of pips all of my trades result in.

That’s all good and nice.

Let me tell you why I think that next week is gonna rock and roll. I’ll give you a clue.
Volatility

This is what this week looked like.

This is how every pair turned out. Strongest to weakest. Only positive results. The left and middle columns. My systems results are on the right column.

But let’s just look at the volatility aspect. I cannot believe how low it’s been this past week. Here’s a break down of those numbers.

Look at the left side table. Compare this weeks numbers to what the average is. You can see what each days average comes out to be. Also a total amount.

Every day comes in just about half as much as it should be. Right? I mean, the market is not moving!

I bet you next week it does.
I’m gonna look back at this post and copy and paste this statement.

And for what I can see, I think the USD is gonna break out higher. And that should have some real affect on the other currencies. I’m not too sure exactly how, but you better believe I will be watching.

Alright Journal, gotta run.
We’ll be in touch.
Mike

[MikeWolski]

Hey Journal.

Well, I got some time now.
So, I’ve been sitting here wondering exactly what my game plan is, for the open.
I am in a bit of a dilemma.

But, I’ve come up with a solution. Hear me out.

I want to get in with the new USD trend change, from short to long. At the open. That means I will have to exit out of my 5 USD pairs. And then go long the USD currency against the other short currencies. Basically, much switching and rearranging I need to do. Cause I got these other issues to deal with.

Like the AUD. See. I told you I need another day to see which direction they want to go. And I still believe in that…rule. No doubt. And then I found the CAD is in the same boat as them. I do need another day, for clarity. But, I guess I never mentioned the fact that I always want to be in with the whole basket of trades, or not. It’s everybody or nothing. Know what I mean?

So…how do I reconcile this when some of them need another day, but with the others I’m all set. Actually, I want to get in. Like…it’s the 'ol FOMO thing. Sure, for one day only. But, still.

Well, look. Maybe I should consider that option more seriously. Like wait it out for one more day. At the present time, my trades are already running. It’s very difficult for me to not be on the same page with everyone.

I have a solution.

I’m gonna turn this one more day factor into slightly something different. I’m gonna call it a FREE DAY. It’s gonna be the one day that I will not have to follow the trend. It’s gonna be just one day where I can guess…speculate…bet… whatever you want to call it. I won’t be following the trend, or the plan, or whatever.

For just one day, I’m gonna guess where I think things are gonna go. And if (when) I’m wrong, then I just make the necessary adjustments at that EOD.

And then I will continue on with the strategy plan. See. The reason for this is just to get everyone back on the same page. But, I’m only talking about a couple currency’s here. Let me explain this.
And…for as much as I don’t like doing this…I have to. That’s comparing one currency with another. I will only pull this out when absolutely necessarily. And now is that time.

The AUD.

I have the AUD (red) and the USD (white). One reason why I am looking at these two together is because, remember, I’m convinced that the USD is heading high now. Like, a change in trend. But, you should be able to see that in the last few days (also throughout this entire chart) these two currency’s are in direct opposition to each other. If the one goes up, the other goes down. But, do you see that spike, from both of them, last week? The USD goes up, and the AUD goes down.

But, you have to see that they both have been on a down trend, for the last half of this year so far. Macro speaking. It hasn’t been so easy to tell between these two currency’s, as usually it is. So, moving forward, this is one of the reasons why I think a downtrend is in store for the AUD. How about another reason.

The AUD and the NZD.

AUD (red), NZD (dark red).
Well, if you can’t see the down trend of the NZD, then I don’t know what. They just happen to demonstrate much higher swings than big brother. So, this is another reason why I think the bias is low for the AUD (for the short term anyway).

Well, why we’re here, let’s see some correlation of the NZD and the USD.

Now these two are much more directly opposed to each other, than with the AUD. Just look at this last week. I mean, wouldn’t you think that if the USD is gonna rip up higher, that the NZD will rip on lower? Of course it does.

And one more currency. That I’m having a little trouble with.
That’ll be with the CAD.

Well, all by themselves, right now they are sitting at an inflection point. Cause you see that last swing low dip? That is where I was thinking their support level is at. And guess what…we’re only 5 pips away from that right now. So yeah, I need a day to see where it wants to go.

But, I’m switching to this new rule, remember? I’m giving myself this one day as a FREE DAY. Meaning, I can pick any which way I want to go. It’ll be my best educated guess. And then, at the EOD of that day, which will be Monday, I will have seen what everybody’s results are. And of course, that gets me back on track with following the trend (strategy).

But concerning this CAD. Which way should I go? Well, let’s compare these with the USD. Any clues here?

They were correlated, most of the year. All the way up to about day 77. Then they go in complete opposite directions. Let’s just say that they are not correlated anymore.

Man…I just don’t know. This is no help to me. Whatsoever. And, I mean, the CAD hasn’t even been correlated with the AUD, and the NZD either. They’ve been down most of the time that the CAD has been up.

This is gonna be nothing but a crap shoot. I mean, in what direction do I go with, concerning the CAD? The last bias the CAD had was the up trend. But now it’s breaking down. I mean, it hasn’t yet, and that’s the reason for another day. So, do I go with the latest prevailing trend? High? Or take a stab and go for low?

If the USD goes high, and I’m right on that, then what do I think the CAD will do? Follow them?

My gut tells me it will be precisely that.
The CAD to go high.

I haven’t seen the CAD follow the other 2 Comms in such a long time. I think that relationship broke down. What I have been seeing more of is the USD and the CAD follow each other.

Therefore, due to that reason only, will I choose, for one day only the CAD to go high. Long.

I could be wrong. Surely. But, you know what? It’s only for a day. Once I see this EOD result, then I’m gonna have to adjust all my trade directions accordingly. That’s all. So. This is what my open is gonna look like.

Those are the trades I will be going with, at the open through Mon EOD.
But then, once I see what the market shows me, then I will adjust according to which direction they are leaning. Either up or down.

The reason why I’m making such a big deal out of this is because once the decision is laid, for whatever trend I decide is the correct one, then I’m committed on it, for the rest of the week. No changing allowed. And that could mean a big difference of pips, one way or the other. My biggest fear is being wrong about what trends these currencies are actually in. I honestly don’t care about how my trades turn out. As long as I’m trading alongside the correct trend, that a currency is stating, then I know that in the long run it’ll turn out positive.

So. Let’s go down the line, on each of these.

The EUR.

• This is trending high
• Presently, no indication of a changing trend

The GBP.

• This is trending high
• Presently, no indication of a changing trend

The CHF.

• This is trending high
• Presently, no indication of a changing trend

The JPY.

• This is trending low
• Presently, no indication of a changing trend
• The recent flat lining does not constitute a change in trend

The NZD.

• This is trending low
• Presently, no indication of a changing trend
• It broke below the support level

Now. In my book, all of those currencies above, are correctly stated. And for each one of those, I will continue, as I have been, trading them according to their biases. Even if I would lose money, pips, on those trades, I would not feel bad one bit. Cause over time, I know it’s true, that there’s profit to be made trading alongside the correctly stated trends.

Alright Journal.
Thanks for hearing me out.
We’ll be in touch.
Mike

[MikeWolski]

Good morning Journal.

Wow. What a week we had in the market. Things are finally changing.
I had some good things happen to me, as well as some bad things, trading wise. Nevertheless, it was all out of my control. Nothing I could have done about it. But, that’s one of the reasons why I like to come in here. I can vent about it, and explain my reactions to how the market acted. I find it helpful to talk about it.

Let’s see. Where do I begin?
Well, how about here. This was last weekend. Concerning the USD.

@MikeWolski

Ok. That’s it. I give.
See how you have to play the week? It’s the entire week that’ll tell ya where it wants to go. And it told me, alright.

I got to switch the USD’s trend from low, to high now. It’s been awhile since I changed their trend. But it’s what I got to do. Surely there’s none of that waiting a day stuff. No way. This has been coming down the pike. I mean, just look there. They’ve been carving out a floor for the past few weeks now (since around day 97). Then last Thursday they get that blast upward. I believe that was a sign, for sure. But you know, the market has to go back and mop up and clean up all the sellers. Shake 'em out. It’s a typical trend change, if you ask me.

But, you see, it’s becoming clearer now. And I will forever believe this. That the market will show you in a weeks time. It’s the correct perspective, I believe. I don’t think it’s a secret. The USD is heading up. Now…if it doesn’t, that’ll surprise me, big time. But the market has the final say. We shall see. Right?

Ok. So. That’s what I did. I changed the stated trend of the USD from a bear market (trending low) to a bull market (trending high). And that means I have to adjust my basket of trades accordingly. And I did.

But let’s just stay with the USD theme for right now. Cause there was a lot of other things that happened. And I want to get into them, but by themselves.

So. What did the USD do, anyway?

Uhhh, yeah. I called it. And that straight up line was ever since Wednesday. I kind of forgot that we had the FOMC meeting coming that day (2pm). But anyway, at 2:30pm, I actually watched the speech by the chairman, Powell. Yeah man, he was quite bullish about our economy. Actually he felt very confident about what our labor force is gonna look like down the line. I mean, he basically was bragging about how strong the employment situation is gonna get. I don’t know for sure, but, I’m thinking the market rose up because of that sentiment. That’s the only thing I can correlate together, between the fundamentals and the technicals.

That’s nice. But, there’s other things that happened that I actually think are more interesting. Let’s see. I’ll throw up here a table and you tell me.

Here’s June’s daily (aggregate) results. Plus the weeks summary (on the bottom).
And so, go ahead tell me. What’s more interesting than the USD, for the rest of the week?

The JPY (purple).

Sure, the USD takes the week being up +16.44% aggregately over all the other currencies. But just look at the JPY. They want in on some of that. Just in the last 2 days they climbed +12.49%, to end the week being the second most bought currency with a total of +10.63%.

Now this is what I’ve been waiting for. But before I get into that, there’s other things here that are interesting. How about the volatility? You can see what the average weekly % amounts come out to be, by that AVG. WKLY table. For the top spot, the USD just about doubled that amount. Same goes for the other spots also. Quite elevated. But that should help put that into some perspective. And that’ll be what the average weekly amounts turn out to be since the beginning of this year.

You know what I think of when the volatility is elevated like this?
Well, moving forward, I think this is where the market wants to go. It’s like the consensus has all lined up. This tells me of the trend changes. Sure, we’re gonna have some kind of retracement. You’re always gonna have the battle of the bears and the bulls, but over the longer term the smart money always wins out. And that’s who I feel establishes the measurable trend.

That’s nice.

But there’s another very, very interesting thing up there. Look up at the other currencies. Who’s demonstrating something very odd?

I’ll give you a clue.
Think safe haven.

Who all are the safe haven currencies?

The USD.
The JPY.

And the CHF.

How has the Swiss reacted ever since Wed?

I bet you the SNB was working over time. I’m gonna go with (believe) the notion that they are doing everything in their power to keep their currency low. In fact, I think they just had their interest rate decision. Yeah. And I remember reading how they still think it’s too strong. Man…I’m telling you. This is like deja vue. In the past I remember this very scenario. Where just before they have an interest rate decision meeting that the market is very volatile, and the Swiss has dropped down like it’s hot. And then a couple days later we read how they believe they are just too over valued. And it makes all kind of sense that they are intervening. Man…I’ve even wrote all this up before. Why don’t I just copy and past this. Cause it’s gonna happen again in the future.

But they simply don’t want to be apart of the risk-off scenario. They see it coming. For sure. And they will make sure the market will go by way of the USD or even the JPY, to be the recipients. Just not them. I’m telling you…I believe this is what’s happening. Look up there…no one was more sold than the CHF, during that Wed, and Thurs. They probably dumped a lot of money into the market. Like…a lot.

Anyway.
This is interesting stuff to me.
Man…you have to know what’s going on in the market. Well, as much as we can, anyway. Right?

Alright. Let’s get back to what I think is the most important thing going on in our market. The JPY. This is their trajectory.

Technically speaking, does this constitute a change in trend?
No way.
So…what do I think happened last week?

• The beginning of a change in trend?
• Simply taking advantage of the situation, for some profit?

Look. The answer is…it’s too soon to tell.

But, I have to confess though. I was one to take advantage of the situation.
Sure. I understand. Cause I dug up my Anchor Trade III strategy and used it for this purpose. You might remember it. It’s my one shot, take advantage of an awaited opportunity type strategy. I only have one rule. One rule only. The result must end in profit.

Yeah, I will trade one pair (what kind of fun is that?). But…it’s for money…so I guess I have to do it. Boring.

But take a guess which one pair I traded?

There’s all kind of clues up above.

Who’s going up?

Who’s going down?

The CHF/JPY!

So, it went like this. Well, first off, the only opportunity I was waiting for, as a premise, was for the JPY to get strong. And my ship came in. So that was in my mind, for the longest time now. You know?

And so, comes Friday morning. Remember, I have seen what the EOD Thursday results were. And I was like…come on market…just continue with this for the rest of the week…just one more session and I’ll do it. So it was. Friday morning when I woke up early (as normal) I checked the market. It was time.

Yeah, I put a lot on it (half of the entire account). But…that’s why I wait and wait and wait till the right time. And so, when I get in…I get in. I’m not gonna play around. No stop losses. No take profits. No risk-reward ratios nonsense stuff. All I want is a profit. But, I do have a 10% increase profit, in mind. We’ll just have to see how it goes.

Journal, you’ve seen me trade this way. Actually, this is my 6th trade, for this strategy. And so far, all successful. Including this one. This is a pic just before I jumped out. This was at the end of the day.

Well, I didn’t get all of the 10%, but 9 something % works just fine for me.
I’m happy.

• +9.45%
• +46.3 pips
• Intraday (13 hours)
• Success

Look. It all made sense, didn’t it? The JPY turned strong in these last few days, thanks to the USD. And the CHF don’t want any part of the risk-off situation. So I went with it.

Yes. I am gonna keep track of this strategy. The reason is to prove to myself that I can trade. I can make money trading the stupid one pair style. Like I said, for as much as I despise trading like everyone else, I guess I got to make money some time. And sure, trading one pair is easier, than a basket of trades. But so much boring though. Well, maybe that’s why my position sizing is quite large. That does make things interesting, huh?

Let’s see. This account of mine has grown quite big. That first trade I placed was on April 29th. I started out with an account balance of $10,000. Now my balance is $14,516.08. That’s up 45.16% in like 2 months now. Pretty good.

And this is why I named this mind map Proof of Concept. I just want to prove, or at least see some evidence, that I can trade successfully.

Ok Journal. That was all good news.
Some bad news went down also. But, I mean, there’s nothing I can do about it. On my portfolio trading strategy things changed so much. And when that happens, it means some negative results.

Well, I do have to run now. But, I got major changes coming. I mean, you’ve seen what the market did at the end of this week. Right? Well, that means I’ve got to change and rearrange some things on the portfolio.

Given that, I’ll come back and explain all of that. I’m not embarrassed about it. It’s just the adjustments I got to make when changes occur in the market. Know what I mean?

Alright Journal.
See you later.
Mike

[MikeWolski]

Hi Journal.

Got some time.
I got to go over all what happened this past week. Changes are occurring. I’m talking trend changes. Not just for the USD either.

But let me start from the top. I’ll go through 'em all.

The USD.

Nothing is more clearer, simpler, and even accurate than this chart. The USD has broken out of the down trend that began back at the first of April. We’ll just have to see how this uptrend will turn out. It can be anything from a longer term, drawn out, higher and higher highs to something as a quick and short lived, false break out that eventually continues that down trend. We just don’t know yet. Will it take out that previous high established on April 1st? We don’t know. But we do know one thing. The last 3 days of the week was nothing but USD buying. That kind of tells me that the bias has changed. Therefore making the USD trending high now.

The EUR.

The bias is up. The uptrend is still intact. Nothing is indicating that the EUR will change it’s trend. Therefore, there should be more buying than selling for them.

The GBP.

Same thing here. It’s uptrend is still intact. Slowly but surely grinding upwards. The bulls have their way more than the bears. That’s all.

The CHF.

Now, technically, it’s tricky. We definitely need more time, say another weeks worth, to get more of a feel of where this wants to go. Surely it can turn and burn back on up. No doubt. But given their movement dynamics, that I showed you on that last post, plus the fundamental characteristics that the SNB wants, I’m gonna call this prematurely a trend change for down. Look. I could be wrong. And if that’s the case, then it’ll only be for one week. That’s all. Remember, we play the market one week at a time.

The JPY.

Well, same thing here. What can I say? It’s premature to be calling a trend change. We really need another week for a much better determination. Cause that’ll tell me if the money has really switched, or not. Did the bears give up? Do the bulls want more? Like enough more for a longer lasting trend change? See. I don’t have enough information to be answering those questions. But…concerning my trading…I have to decide on something. Right? For one week, I must use my discretion one way or the other. And for me, I’m going north. Cause I believe the JPY will follow the USD on up. That’s such a typical market moving dynamic. Believe me, the market has been through such a divergence this entire year between those two. The USD and the JPY are supposed to trade in lock and step. They move together. See. What happened on Thursday and Friday was completely normal. Trust me, I know. I have all the past historical data to confirm that. At least the market remembers what’s normal. Cause I surely do also.

Moving on.
The AUD.
Now. I need to show this progression. This week was a tough one for me. Let me explain how I went with them.
This was what I was looking at last weekend.

What am I supposed to think. It’s sitting exactly right on top of the dividing line. This was a down trend. And I believe that if it goes above that gridline there (-500) then I think it should be considered an up trend. But below it, back to the down trend. Makes sense, right? Well, I needed one more day. I need Monday’s EOD to tell me. That’s what I’m waiting for. And this is the result.

So, what do we have? A bounce up.
Geeez.
Now what?
Well, I stick with my thinking. I go long the AUD. And remember, it won’t change, nothing will, for the rest of the week. That’s precisely how I run my back testing. There’s rules I must abide by. So…what can I do? I have to count them as long for this week.
Let me just get to the final outcome, for the week. This is what happened.

Well, that didn’t feel good. Know what I mean? But, what can I do…nothing. Nothing at all. It’s ok. It’s not the only thing I have going on.

Needless to say…this AUD trend is back to the trending low state. If it wanted to, or even could, change to an up trend, this was it’s chance. But no. And look. It only makes sense. When the USD goes up, the AUD goes down. I showed you that last weekend. It’s called a convergence trade. It’s the normal market moving dynamics. That’s all.

The NZD.

Well, thankfully, I never had this problem with these guys. There is nothing remotely close to giving me any kind of doubt about the direction here. I’ve been trending low these guys. For quite a long time also. And up to date, it’s been a nice ride. Nothing but down. And it continues. But look up there at the -1500 gridline line. That was the latest support line. It got tested a total of 3 times. Then, on the 4th time, drops out lower. If it wanted a trend change for higher, then that’s the place it could have done it at. But nope. It dropped like it’s hot. No brainer here.

The CAD.

Now this is a surprise to me. I have to change their trend from high to low. Surely I thought they would have followed the USD. Higher. But nope. It’s all downhill. What can I say? Frankly, I don’t understand. I mean, fundamentally speaking, what about Mr. Oil? Don’t they like to follow that market? And the last time I checked, it was heading higher. Like, it’s around the $72 a barrel mark. Which is relatively high. Not low. I honestly don’t know what is driving the CAD lower. In any case, that’s where it’s heading. And I’m forced to call it trending low now. shrug

So, moving forward, this is what I got.

You can see everything in here.
The top table shows what the market produced. And if you compare that to what the existing currency trends are, the results are shown, just under that table. Look at what this week resulted in. On Monday the market trended. Only 2.06%. But technically aggregately trended. Tuesday the market trended. Only .92%. Barely. On Wed the market counter trended. 2.18% counter trended. On Thurs it counter trended alright. 11.73% as much. So then, just look at that day. Who’s the top currency? The JPY. Right? Well, I have them technically trending low. So that’ll make their 7.74% EOD result a minus (bad news). The USD is trending high, so that 4.54% is positive, which will bring the aggregate total down to -3.20%. Then the GBP is trending high, which adds their .59% onto the total (-2.61%). The EUR is trending high, but they ended that day being -2.53%. Well, that brings the total to -5.14%. The CHF is trending high, but their result was -4.55%. Not good. That’ll bring the total lower to -9.69%. Right? And so on. Ending with -11.73%. Pretty bad. Basically it was not going along with what the prevailing trend was. And actually, the entire week turns out to be -14.33%. Not good for a trend trader. But the first 2 weeks of the month turned out much better, as you can see.

Anyway. You should be able to see what trades I’m gonna go in with at the start of the week. 3 currencies going up, and 5 currencies going down. 15 pairs.

Alright Journal.
I gotta get going.
Thanks for listening.
Mike

[MikeWolski]

Hey Journal.

Well, we’re at the open now. And I just got done rearranging all my trades.
I needed to come in here and set the record straight. Some changes, from what I put up there previously. Which, predominantly, pertains to the JPY.

I’m going north the Yen.
I think I explained my thoughts about them, on that last post. But for some reason that’s not what it looked like on that pic I gave you. Anyway.

All my trades are placed. Here’s proof.

And this is what it technically looks like. On the last column on the right.

So. Fresh, brand new sized, trades now.
So, we’ll see how the week turns out.
Yeah, I’m a little nervous about the JPY. I really hope they continue getting strong, along with the USD. We’ll just have to see.
But, I tell you what. I will not change these trades this week. I’m committed for a week at a time.

Alright Journal.
Let the games begin.
See ya on the other side.
Mike

[MikeWolski]

Good morning Journal.

Well, this won’t be fun.
Bad week in the market.

But why?

Bottom line…it was a counter trending moving market.
Got to take the good with the bad. Learn something. And move on.
Ok well, type (talk) about it first, then move on.

Remember me saying this?

@MikeWolski

So, we’ll see how the week turns out.
Yeah, I’m a little nervous about the JPY. I really hope they continue getting strong, along with the USD. We’ll just have to see.
But, I tell you what. I will not change these trades this week. I’m committed for a week at a time.

Well, as usual, I follow the plan. And as the week unveils itself, all I can do is shake my head. Let the cards fall as they may. Nothing I can do about it.

This is what happened.

This is the last 2 weeks. Daily results, all sized up against one another. And then underneath, the weekly results, from strong down to the weak.

And while you’re there, you can get a sense of the volatility. See what the avg. weekly numbers come out to be? These results are much higher. So it was a market moving week. And needless to say, that line up, pretty much is the opposite of what last weeks was. Right?

I was hoping for a continuation from what happened last week.

Nope.

Here’s exactly how each pair resulted.

Just don’t be concerned about that right column. That’s my trades results. Look at the first and second columns.

That’s all good and nice, I know. But how can this help us? So many numbers.

Well, I’m used to looking at the market aggregately. Just like above. We can see that the NZD ended the week being +11.50% against all the other currencies. The highest. But this chart has all of what goes into that, in detail. It’s the break down. The difference being this is the actual pips, and the former in %'s. In that case, I’ll give you the actual aggregate daily results.

Ok now. If you would add up all of the NZD’s individual pairs, this is what you’ll come up with. See? Now that’s what I call the aggregate.

I read an article yesterday (on Forex Live) that gave a summary of what happened in our market this week. And he correctly said that the best pair to have traded was the NZD/JPY. I can confirm this easily by just looking at that top table and see that the NZD was the most bought currency and the JPY was the most sold currency. And well, put them together and I’m sure the pip count will be the highest. You’ll get that exact pip count on that second table shown. Like this…

• +82
• +68
• +48
• +17
• -16
• Total = +199

Actually, this is not true. I just ran some numbers. Check this out.

• GBP/JPY = +207 pips.

That’s the only other pair that has netted more pips. Is interesting.
Well, what explains that, is that every currency pair doesn’t travel the same amount. We’ll just call it their average daily range. If you look up what each pairs ADR is, they’re all different. The GBP/JPY does have a higher ADR than the NZD/JPY.

Look.
That’s nice.
But it’s all hindsight.
It’s all said and done with.
How can we learn something from the past, in which has no direct bearing on what’s gonna happen next, in the market?

Well, all I can do is tell you how I think about it.

What really happened?

• A bomb went off in the last 3 days of the previous week. Called risk-off.
• The market retraced that. For the most part, every single day this week.

Well, we need to know how much of a retracement. Right? Cause that answer could point to what’s coming next. Hypothetically speaking, if it retraces 100% then we know it has a very good possibility of continuing the risk-on scenario. Actually, we don’t know if the run is over or not. See, this is how I see it.

What happened that previous Wed was big. It was the USD getting strong. Along with the JPY. But look, any currency can have a good day (just like I would say about any professional football team…whether you’re in first or last, you can have a good game at any time). But what we’re talking about here (and why I think it’s big) is that it went on for 3 days (not one or two, but three).

And then, we have a retracement. Which is completely normal. Things always retrace. Even in a trend. Right? And in that trend it could go up half way, or 3/4’s of the way, or even 100% of the way and then turn back around to continue on with the trend. And still be called a trend. But, if it goes back up and over 100% well then, that’s when the trend can change, and no sooner.

So. How can we see what kind of retracement the market did this week (and don’t forget, it could be continuing on still)?
Well, the easiest way would be to see the aggregates again.

The top table is the month running. Bottom is the individual daily results.

You can see what was happening just before that big day (16th). The USD was leading the pack before the day began (EOD 15th at +6.40%). And the NZD was dead last at -12.96%. That’s much farther than anything else, by a lot.

Now. Let’s run some numbers together. Shall we?
Wed thru Fri (16th - 18th).

• USD = +15.50%
• JPY = +13.55%
• NZD = -9.01%
• AUD = -8.80%

This entire week.

• USD = -6.55%
• JPY = -12.78%
• NZD = +11.50%
• AUD = +8.18%

What do we got?
— The USD retraced 42% of Wed - Fri’s move.
— The JPY retraced 94.3% of Wed - Fri’s move.
— The NZD retraced 127% of Wed - Fri’s move.
— The AUD retraced 92.9% of Wed - Fri’s move.

Summary:

• The USD lost only about half of what they made in those 3 big days. Therefore, it’s possible, very possible, their strength is still alive.
• The JPY lost just about all of what they made in those big days. We’ll call it break even. But not any more. Therefore, technically, they could still get strong and continue on with this (strong) trend.
• The NZD got back all of their losses, and then some. Came out net positive. Therefore, they are on track for that strong trend to continue.
• The AUD got back just about everything they lost. But no more. Their at the break even point. Like nothing happened in the last 2 weeks. Therefore, they can go either way.

But remember. This isn’t over. We need more days to go by and see how the market wants to continue this. Will it remember those monster USD and JPY days? Or will it not care about any of that and just go with the risk-on scenario, regardless of what the numbers are doing?

Look. That’s all just one perspective. It’s just one way to look at what’s going on in the market. There’s other ways.
This is the way I prefer to look at it.

Each currency trend at a time.

The USD.

No one can argue what the current trend is here. Their bullish! As it stands, the bias is for an uptrend. They were on a down trend, consolidated and made a floor, then boosted on upward. Now, until they come back down to the earth, they are bullish.
There’s more of a chance the USD will be strong, than weak. At this point in time.

Therefore, I cannot and will not, trade the USD short. It has to be for long. This is what tells me that. If I do anything else, then I’m not a trend trader. Simple as that.

The EUR.

The bias is for up. Yeah, they leveled out a good bit lately. Not making any higher highs. No doubt. But on the other hand, they’ve been on an uptrend for a while now. And this chart is not indicating a change in their trend. Not yet anyway. Therefore, I must trade this currency for long. Simple as that.

The GBP.

Same thing here. It’s been an uptrend. And has not indicated a change in their trend. The bias is for up, and I will have to trade them long. No changes (like since the entire year).

The CHF.

Now we have something different. This is what we call a change in trend. I believe this is more than a simple retracement. That move on down was quite large in comparison to their normal moves. Right? Just like that last change in trend, from low to high. See that big move up? And look, it did turn out to be a change in trend. For a good length of time. Well, I believe the same thing is happening here. But look. I could be wrong, of course. We’ll just have to see how it plays out. But the chances are more in my favor of calling a change in trend, than just a big retracement. Therefore, my bias for the CHF is for short. That’s how I must trade them.

The JPY.

Well, last week my analysis was that we needed more info, to get more of an accurate trend. And now we have a little bit more. What’s this telling me? Well, just like above, you can see that the retracement was about 100%. But the thing is, is that it didn’t fall any lower. It didn’t continue on with the down trend.

I know I shouldn’t say this…but I need another week to tell me more. I won’t lie, this is quite dangerous. If the market does want some more risk-on, then this will continue falling. Simple as that. But, I’m making this hinge on the USD. And because my bias is up for the USD, then that makes me believe the JPY will go higher also.

I’m just gonna go week by week with this one. For that reason (USD). Now when, and if, the market forgets about what happened a couple weeks ago, and goes risk-on, then I’ll change. But until that point, I need another week to go by to show me more.

The AUD.

Their trend is a down trend. Until I see this chart rise up and above that gridline there (-500), it’s a bias for low. Plain and simple. In fact, it’s even looking like it wants to turn and burn back on down from here, huh?

The NZD.

Same thing here. Down trend. And my line in the sand is the -1500 gridline. It’s acted as support. And I think it’ll hold as resistance also. We’ll have to see. But the NZD really does demonstrate some big moves. It could possibly even go up to the -1000 line and turn right back on down. And still be considered a down trend. Therefore, my bias is short, and I must trade these guys short.

The CAD.

I believe they are still on this down trend. Yes. Their up trend got broken, after a sideways travel. And this hasn’t shown me, yet, that it has legs. We just need more time, but as it stands, my bias is for low. The chances are more for this down trend to continue than for the trend to change back to high, know what I mean? We have lower swing lows. Not any higher swing highs (it’s been quite some time since that).

Alright Journal. I got to get running.
But one more thing I did want to mention.
We are entering into the final days of the month. Not only that, but the end of the quarter also. And once again, you know what that means.

This trend stuff goes out the door.
I guess we won’t get a real taste of where the market wants to go until, probably, after NFP Friday. That’s next Friday. Ok well, that’s not too far distant. Right?

Alright Journal.
Thanks for listening.
Mike

[MikeWolski]

Good morning Journal.

What a week…what a week.
Got to talk about it.

Let’s see, where do I begin.
How about where I last left off.

@MikeWolski

But one more thing I did want to mention.
We are entering into the final days of the month. Not only that, but the end of the quarter also. And once again, you know what that means.

This trend stuff goes out the door .
I guess we won’t get a real taste of where the market wants to go until, probably, after NFP Friday. That’s next Friday. Ok well, that’s not too far distant. Right?

So. Like, what am I doing anyway?
Well, I’m just following the market.

And so, how did the market behave, in the last days of the month. Quarter?

3 days this week. This is what happened.

We got the daily line up, for each day.
What can we say about this data?

• Very small numbers. Meaning, the volatility was very low ending the month. The currencies were not traveling much against each other.

• The JPY came out strong, in the first 2 days of the week. Was about the most bought up currency since the open.

• It took a dive on that last day. Most sold currency. It sold off most of all those gains.

• The USD was being bought up in all 3 days. It continued their bull trend that they’ve been on. A big divergence happened between them and the JPY on Wed. That’s uncommon.

• The Comms (AUD,NZD,CAD) were being sold off.

• The CAD followed the USD on Wed. Bidding up.

• The GBP being mostly bought up and not sold. Followed their bull trend.

Again. These are not really moving numbers. The market was awaiting the turn of the month. And NFP Friday.

But do you remember what was happening just before this?

@MikeWolski

The top table is the month running. Bottom is the individual daily results.

If you remember, the headline news was all about risk-on. The Comms took over that week. See. This is the story we got to get straight. It’s all of what’s been happening in the market. Got to put it all into perspective.

• The safe haven (USD,JPY) bomb went off the 16th - 18th. Much buying of the USD, JPY. And the risk currencies were being sold off.
• Then the weekend came. Everyone gathered up their thoughts. Analyzed the crap out of it.
• The entire week goes risk-on. Big counter trend play. Like every day.
• The weekend comes. Another breather. More analyzing. Ready for the last 3 days of the month.
• We go back to 2 strong days of safe haven buying. It’s what happened in that previous week. The market hasn’t forgotten about that. Money still wanted to go there. And it did.

Well, the turn of the month occurred. Thursday was the 1st. Then Friday, NFP, was the 2nd. Let’s see which way the market went.

Bottom table is the individual daily results. Top table is the month running (the second day added onto the first day).

• Thursday was a nothing day. Low, very low, numbers. Barely moved.
• The USD was the most bought currency.

And so. Going into NFP time, we got to know that it’s all about the USD. What happens to them affects all of the others. So what happened?

• The 3 COMMS (CAD,NZD,AUD) was being bought up. Like the only currencies going long.
• The USD most sold off currency (-4.20%) that day.

So. This is what I want to know.
— Is this the classic buy the rumor, sell the news? Was a mixed report. But the headline number was above expectations. We’ll just call it a positive report.

If that’s the case, then moving forward, we should see a bounce back from the USD. They should get back on their bull trend. The consensus would be more buying of the USD like they have been. Here’s what their aggregate trend chart looks like.

I subdivided the months. April 1st started their down trend. And that continued into May. But in the last half of May they were carving out a bottom. Then June started their bull run. See that first spike up, in June? That was on the Thursday before NFP Friday. Then on NFP Friday, EOD, it dropped. The report was below expectations. But economically speaking, things were getting better (cause the report in the month prior was really bad). So then, the market digests that for a couple days. Then onto the bull market. As you can see, it went quite high. The USD took on a healthy retracement, and went back for some more. Double top.

And now what…

Look. It’s either gonna go up or down Right? Mr. Obvious here.
But more specifically, I think the narrative will be either one or the other.
Look back at that previous swing high. This could be another swing high, but lower. I’m sure the market hasn’t forgotten about the break-down of the USD. Remember all that talk? Like, who’s gonna replace the USD? And is the credibility of USA still an issue? I’m sure China has something to say about that.

That long period of selling shouldn’t go unnoticed. That’s 2 months of continuous selling. And now 1 month of buying? Is that it? If it is, then you can’t rule out another leg down. I’m just saying this scenario is probable (and trust me…I will come back in here and copy and paste this write up, if it happens).

On the other hand, maybe we’re just at the half way point. A consolidation, and a re gathering before some more buying. And make a higher high, in the context of the year. It would probably be on the back of it’s safe haven status. And maybe the JPY would grow some legs and join them on that.

I just don’t know. But I don’t know any other possible narratives it could take.
I kind of think the former. A double top, of a lower swing high, then back down. And you have to ask…who get’s the other side of it? The COMMS! The risk-on currencies, that’s who. Look. No one wants a strong Dollar. Surely the EM countries don’t want to see that. They’ll get killed with the interest on their USD debt they have to pay back. Not good.

Anyway. It’s been quite a long time since the Comm currencies have been on a bull trend. Sure, they’ll always have a good day or two, but I’m talking about their respective trends. So, let’s take a look at them.

The AUD.

The months subdivided. And see, they’ve been on a down trend since the end of Feb. That huge drop got the ball rolling. The bias has been a sell. You can’t argue that. One day or two of buying simply doesn’t constitute a bull market.

But look at the beginning of June. I really thought they were carving out a bottom. But no. Something happened at the mid point of that month. I’m sure the USD had something to do with that. Just look above. Do you see how these guys are on the opposite side of the USD?

The NZD.

Quite the same thing here. Although these guys like to travel much more than the AUD. But I’m thinking they hit bottom in June, and now wants to climb.

You can’t argue the point that they’ve been bearish for most of this year. I’m just thinking it’s time for some kind of high trend. Surely wouldn’t know for how long. But maybe the second half of this year could be mostly bullish these risk-on type currencies.

The CAD.

These guys are tough. You never know whether they will follow the USD, or the Comm brothers. But after seeing how they reacted to Friday’s shenanigans, I’m thinking they’ll join in on the risk-on scenario. Mr. Oil has been continuing on higher. You would even think that that CAD would be so much higher because of that. But that relationship has broken down. There’s no direct correlation anymore. I don’t know. Maybe it’ll come back. Who knows.

Again. I don’t know what’s gonna happen. But I can tell you that I will be following as closely as possible. That’s what I do best. Document. Follow. If you don’t know where things came from, where things are at, you’ll never know where things are gonna go.

Alright Journal.
That’s just some of the things I’m thinking on.
I’ll come back this weekend. So much happening.
Thanks for listening.
Mike

[MikeWolski]

Good morning Journal.

What a week.

Well, looks like I’m gonna take this humble pill now.
This is not gonna come easy. But, I think I’ve already digested it.

I’ve been sitting here this morning trying to figure out what happened, in the market. Like, where’s this market going? You’d think even afterwards, in hindsight, that you can come up with the answer. I mean, usually, yeah, I can get it. But I’m having a very difficult time.

But more on that later.

In any case, I’ll come clean.
I messed up this week. Like big time.

I haven’t fell trap to this in a while. So I guess it was time. Another lesson I need to digest. And the lesson is…

Follow the market, don’t guess where it’s gonna go.

Let’s see. What made me derail?

It’s how the market has been behaving lately. I think it’s been throwing some crazy signals. I guess you can boil it all down to the risk-on verses the risk-off dynamic. And the bottom line, for me, was that I thought, surely, we were gonna have some risk-on flying this week. And believe it or not, that’s contrary to what the prevailing trend has been. So, I went contrary to all my strategy. I changed everything. And here I thought I was preempting a change in trend.

I was wrong.

All I had to do is follow.
But I didn’t.

This is the prevailing trend.

The top table is exactly how the week went. Daily results. And then the big table underneath shows how the trend of each currency is positioned. And in between those two is the net results of whether the trend was followed or not. Green is positive, with a % of how much. Red is negative. And you can see that Friday was the only negative netting daily result. Slightly. But then I have the weekly total result (under Fri). That comes out quite positive (15.85%). And just take a look and compare that total to last Friday’s daily result was. It’s just about the opposite! Therefore, what happened in that one day, was all made up on this entire week.

Basically, what I’m talking about here is how the Comm currencies had a huge day on last Friday. And then this entire week they go ahead and lose it all. Something like that. Don’t forget I’m taking all things into consideration. All the currencies added up.

Anyway. That last row is what my trading results should have been, if I was trading my normal strategy. The week would have ended in the positive. +1355 pips. That means my entire basket of trades would have netted that much. Well, that’s a good week, if you ask me.

But guess what…
That’s not what happened.
Here’s what happened.

For as ashamed as I am, that’s how I positioned my trading basket. I totally rearranged all the currencies trends. You should be able to see that the Comms are trending high, plus the JPY. And all of the Majors I had trending low.

What a mistake.

Here’s exactly how many pips my basket of trades lost. This week, and month.

What a mistake.

I mean, all I had to do was follow.
But my only consolation is that my trading strategy should be followed.
That does comfort me.
But, I stopped the bleeding. I knew it was only gonna be for one week. I risked it. And lost.
So now I’m gonna get back to following the trend.
And if the market does make a turn, I’ll lose again, due to the nature of trend following. But at least I will be able to say that I followed. And it will take some time to get caught back up.

So. Let me go through and prove what each and every currency’s trend is.
These cannot be argued.

The USD.

Uptrend. And still.

It DID NOT make a double top, in which I thought last weekend at this time.
Wrong.
Ok. How about a triple top, now?

Nope. Wrong answer.
The right answer is that it’s trending high. And it will continue being stated trending high until the market shows me first otherwise. Meaning, it’s gonna have to come back down a good bit. Surely down lower than that last swing low. Maybe even to drop below the 0 line. In any case, ever since they carved out a bottom, they’ve been trending high. That is the bias, the truth, and until it changes, is gospel.

This is how you follow, and not speculate.

The EUR.

Uptrend.
Never deviated. No trend change cause.

This is how you follow, and not speculate.

The GBP.

Uptrend.
Never deviated. No trend change cause.

This is how you follow, and not speculate.

The CHF.

This is interesting. What do we got?
Well, the latest narrative was it changed from an uptrend to a downtrend. See back there at around day 118? That drop? See. That told me the trend changed.

And believe it or not, it still holds true. Yeah, we had a monster move from the Swiss this past week (I don’t know about you, but it shook me up). We had a risk aversion day take place on Thursday. Just look up above. No one goes as high as the CHF that day (+10.27%). Are you kidding me? That’s 2 full days worth of a gain, all in one. And all the Comms took a beating.

But, you know what? I don’t care. I’m not buying it. We’re gonna need another one of those days for me to change their stated trend. Cause you got to see the big picture. That’s all I’m doing here, anyway.

Stated trend is down.

This is how you follow, and not speculate.

The JPY.

Trend is down.
I don’t know how many times I must learn this lesson. Well, I guess one more time. I mean, I don’t know, maybe their in the process of carving out a bottom. But in the meantime, it’s still considered a short bias. It is nice of them to show us a swing high. For a minimum, we would need to see another swing higher up, at least to that height, before I could call any kind of change in trend.
Until then, it’s a down trend.

I guess sometimes trend changes take much longer than I would like.
Surely these guys are taking their time.

This is how you follow, and not speculate.

Alright Journal. I’m gonna do something a little different.
All this is concerning the AUD.

I just got done going back in time and looking at all my previous charts concerning the AUD. Lot’s of them. I even found the one where I said about the cliff. Anyway. I want to put these up in chronological order. I think this stuff is interesting.
Hindsight always is.

This is gonna be a real big chronological look back on how the AUD has been progressing. When I look back at it, I wasn’t wrong at all with these guys.
That’s one of the great things about a journal. If I said it, there’s proof. And this is gonna be one of the times that I want to feel good about myself (cause I need a lot of that today).

@MikeWolski

The AUD (red) & the NZD (dark red).

Well, I believe the market sentiment has changed, and these guys are on the other end of it. Basically what I’m saying is, that I think the risk sentiment is off. Especially after what the NZD demonstrated. Man…that drop says it all for me. Just like the JPY. They both had a meaningful move there.

@MikeWolski

The AUD.

Well, this year, their high came at the end of Feb, like 2 days before Mar started. What a drop, huh? Then retraced up about half way of that. But do you see where I put that dot? Boy, I remember, when that happened, my bias definitely changed. Since then, the AUD has been short in my basket. And so far it’s been true. I’m not gonna change anything concerning them.

The NZD.

It’s the same thing here. Where that dot is, I’m telling you, something changed. And their trend is nothing but down. Again, their in my basket of trades, going south.

@MikeWolski

The AUD.

Yep. According to what I consider breaking above and out of this downtrend, would be there at the 56 point (that’s the 56th trading day of the year). That drop right there. I believe above that point is back trending high. But no, it didn’t quite make it past it. Then Friday brings it all back on down.

How about the NZD?

Same thing here. At the 56th trading day. Ok. Sure. It went above that. But then what? Went back down on Friday.

All I know is, the more I’m typing here about these two, the more I’m convinced they’re not turning the trend. All things considered.

@MikeWolski

Let’s look at the AUD. Any similarities with the NZD?

This is a little different. Seems like we have a cliff here. Boy would I like to see it’s aggregate EOD count drop below the floor it’s pretty much sitting on now. Right? That surely would spell a lower AUD. Cause we do have lower swing highs. And a fall off this cliff would make me risk my money. So…I guess this is quite simple. I’m gonna let that be my trigger, or I should say my confirmation factor. A green light.
And that would be for a short trade. I would have to pick the long trade currency, in order for a pair.

@MikeWolski

The AUD.

Trending low .
Ever since day 39 - 40. That drop turned it, cause it broke below the support area (between the 500 - 1000 gridlines). No more higher highs since. The floor has been sinking lower and lower. And btw…do you remember me telling you, recently, that I think the AUD is gonna fall off the cliff? Well, I think the beginning’s of it started to happen this past week. See it there? (day 93)

And now fast forward to the present time.
This is the latest.

The AUD.

Downtrend.
And it has not changed ever since it started, way back at the end of Feb. Like on day 40. The bias is down.
There was a time there, between day 100 - 115. All at the -500 gridline. That was considered a support level. They had a chance to bounce there. Many days it kept coming back to that level. But nope. It broke on down lower. It didn’t even come back up as far as that level, either. That was an indication of a much lower move, as you can see.

This is the narrative for the AUD.
No one can argue this.
It’s a down trend.
And it will continue on until some real kick backs occur. And I’m not talking about normal swing highs either (like at day 124). We got to be setting newer highs if the trend will change.

I’ll be watching.
And as I’ve already proven, I can always look back and learn something from all of my documentation.

All I need to do is follow.
Oh…that’s right.

This is how you follow, and not speculate.

Maybe one of these days I will remember that (cause that’s why I have to continually repeat it). To myself.

Let’s move on.
The NZD.

Downtrend.
And that -1500 gridline has been holding as a resistance level. I’ve mentioned that before (recently).
Just like the AUD, no proof of a trend change occurring.
I don’t know, maybe it’s all gearing up for one, but I can’t go there. I must see it first. Dummy!

The CAD.

This just makes me sick.
All kinds of signs of a downtrend. Been slipping. Lower lows.
And this past week, it broke down (I was definitely hoping for higher…actually for all of the Comms).
Nope.
The chart tells you it’s coming.
It’s telling you, be careful!

And I’m an idiot to think otherwise.

I’m just an idiot.
Period.

Well, the Comms seem to be following each other. Like all 3 of them.
AUD,NZD,CAD.

We’ll have to see whether they want to change trends, again this week.
If they do, it’s gonna have to take more than one day of a move.

It’s gonna have to take more than one week. Cause we seen that one complete week (this is what threw me).

Let me explain.
Here’s the story.

• Week of Jun 18th. Risk-off. USD & JPY dominated the last 3 days.
• Week of Jun 25th. Risk-on. AUD,NZD,CAD dominated the entire week.
• Week of Jul 2nd. Mixed. NFP Friday caused a big difference.
• Week of Jul 9th. It was all about what happened on Thurs. Risk-off bomb.
• Then on Friday, that was a normal retracement move, from the previous day.

And so. Where do we go from here?

Oh…that’s right. I almost forgot.

"This is how you follow, and not speculate."

I’m just gonna rearrange all my trades accordingly. I got to get back to the correct trend. And then watch the fall out. That’s all.

That’s what I’m to do.

Alright Journal, thanks for listening, to all that nonsense.
Mike

[MikeWolski]

Good morning Journal.

Well, I do have lots to talk about.
But I’m not so sure I want to talk about it.

See, this is my safe haven. This is the place I can always come in to and simply talk. It’s my venting place. It’s just where I can throw out my thoughts, opinions, even talk about the market stuff before it happens and see what happens afterwards. Things like that. It’s fun. This place is like that ear that I need, cause sometimes there’s nothing better than someone just to be there to listen to. That’s all.

On the other hand, I do like very much to interact with intelligent people. Now that can be extremely fun. But of course, we’re talking about intelligence here. I think there’s nothing better than those who have the experience, who have put in the effort, and have learned a great deal about our industry. Our craft. Trading.

Even further. What’s most stimulating, in this field I think, is the fundamentals behind how we perceive how the market is moving. But, the macroeconomics subject in itself, is nothing but music to my ears. It’s nothing but relational dynamics at play, on a grand scale. That’s all.

That’s nice. I know.
Well, there is a reason why I wrote that. You’ll see in a little bit.

But, this week I got into something a little different. I explored the old market indicator the COT report. It’s something I’m familiar with. I have a history down that road. Because I was a part of a thread that explored the subject.

What good memories I was apart of. I joined up with a bunch of guys on the thread. Actually, we all were brought together because of it. Man…talk about the enjoyment I had being apart of such comraderyship. It was called COT Report Analysis - a thread on market sentiment - Trading Discussion / Economics - BabyPips.com Forex Trading Forum.

Well, needless to say, I went back and read through a lot of that. Honestly, I can’t ever remember having such a good time as that. The interaction with these guys that were on fire for the knowledge of…well…the market. Specifically, market sentiment. I mean, the effort of all the research that went on there was something. Look. I’m not saying that we were all genius’s. Or even experienced enough to be considered market smart. But, the passion, excitement, and effort that was expended on that thread was unbelievable. It truly was a special time for me.

Everyone of those guys that contributed in there gave it all they got. Sure, we weren’t always on the same page. One was good with numbers. One was good with the fundamentals. One had all the organizational skills. We even had a grandfather on the scene (experienced old trader). Computer savvy person. But the point here is that even though everyone came from a different perspective, we all tried to learn as much as we could in regards to the market sentiment.

You could even tell that we all had a different asset to trade. No one really traded the same thing. Whether gold, oil, the Russian Ruble, or one of the normal currencies. I mean, I don’t even know if we realized that, at the time. Cause I picked up on all of this as I was reading it.

But what we did have was a bunch of guys with a passion for learning, researching, and giving it all you got, on trying to find out what the market was gonna do. What good memories. I will forever cherish them.

Getting back to the COT report. I did wrap my head around it again. Researched the CFTC site. And even came up with my own excel data. I accomplished from '19 up to the present time worth of data.

But I went about it in a slightly different light. I didn’t go all into it. I went by way of a very, very simplified version of it. Just enough data to be able to tell me in which direction a currency wants to travel in. And then to be able to use that as an indicator and then compare it to what I have established already.

It would be like another factor, or confirmation indicator for direction. And that’s it. Not a full fledged use of the COT report, like we use to do.

Well, I did reach out to our leader, of that thread. ForExchange (FE). And he responded! Boy, it was nice to hear from him again. But I wanted to know if I should, could, continue on using that thread or not. He of course said yes.

And this is where I’m at now.
I just don’t know if that’s what I want to do.
Yet.

I know that if I open that thread back up again, I’m not gonna be able to do the whole entire COT report any justice. Well, to the fullest scope of what FE attained it to. No way. And if young traders come by and want as much information as possible out of the report, I’m not gonna be able to give it to them. Basically, I won’t be able to take the lead on the subject.

Or I could open up a new thread and confine it to the scope that I would like. Which is the COT report, but the most important parts of it. Which is one or two things. That’s all. But see, our old thread encompasses soooo much information on the subject. I mean, if a young, motivated, curious trader comes along and wants the full info about it, there won’t be a better place than our old thread.

Look. I know one thing. I’m not gonna be able to bring back the good old days (although I would give my right arm for that). For as much as I cherished those guys, it’s not gonna happen.

But I am a more experienced trader now. It has been 7 years, since.
Well, that 7 year number means nothing. If I could add up the actual hours spent on my business, now that’ll be a more accurate length of time.

Alright Journal.
I’m done talking.
I got some thinking to do.
We all came from somewhere (and thanks for listening to the nonsense).
But it is a new day.

We’ll see what happens.
Mike

[MikeWolski]

Good morning Journal.

Well, looks like this is the place where I get some work done. If it wasn’t for the new rule of not being able to post more than 3 posts in a row, I could have continued on with what the latest COT data turned out to be. Since I’m blocked out of that thread now, I’m not able to continue on with it.

The good news is, you Journal, allow me to ramble on and on (above and beyond 3 posts in a row without having someone else needing to enter in between). Therefore, I think I will just post what I’ve been wanting to, in here. At least I can get you to listen. Plus you don’t talk back and disagree with me. I prefer it that way anyway.

Now that that’s settled, you’re going to listen and learn what’s going on in the market. Cause I have this new indicator that enlightens me, and confirms a lot of my analysis of the current sentiments of the currencies. But that’s precisely what I want to do now. I’m going to lay out my normal methodology of determining how the currencies are trending and compare that to what the COT report tracking of them has been depicting. I think this stuff is interesting.

I mean, if you ask me, you don’t even need to be an expert in trading, to benefit greatly by this material. Think about it. The very least that someone could possibly reap some profits by my analysis would be like this. You look for one currency that is trending high. Then you look for another currency that is trending low. Ok. So, that’s your one pair. The long trending currency against the short trending currency. Place that trade. With these simply parameters. Even on demo (to prove to yourself that you can be profitable).

No stop losses. No take profits. You have in your mind that this will run for days. More specifically, for one complete week. From the open to the close. Now, by all technical accounts, if the trend has continued (for both currencies), that one pair will have to end positively. And so, that’s it. You close it up, and you’re done. Note how the pair moved throughout the week, and compare that to what their stated trends are.

Then find out (just by reading what I write, or do your own analysis) whether the currencies are continuing their respective trends or maybe have changed. In any case, there should be some kind of bias for each individual currency. And so then, just do the same thing for the following week. Take the long biased currency against the short biased currency. Open it up at the open, and close it up at the end. It’s a very simple matter. In fact, you can’t get any simpler.

Think about it. There is one, and only one, thing you got to get right. The direction. You’re not worried about how many pips to be gotten. You’re not worried about being stopped out. Not worried about when to enter. Or about when to exit. In fact, all of the worries that traders seem to get up all in a pinch about, are not there.

You’re simply playing the most simplest strategy, which is whether the trend has continued or not. Plus, it’s in the most manageable time period. One week.

And guess what? If it ends in the negative, you can let it go for another week. That’s with the stipulation that the respective trends haven’t changed. Now you have a really good chance for it to end positively. This year, do you know how many times the JPY has changed trends? NONE Do you know how many times the GBP has changed trends? NONE. Therefore, if you would have played the GBP/JPY pair, on a weekly basis, every week this year so far, how many trades would have ended in profit?

I guess we can easily look at those results. Weekly time frame. Green candles are positive resulting trades. Red negative.

And then, if you stick with the negative resulting trades for one more week afterwards, you would’ve made up some losses. And I’m not even saying if you let it go for a third week.

My only point is this. These longer time period trends, that I monitor and note, do not change back and forth all the time. The just don’t. If the trends don’t change then there’s a very good chance for profit. You just have to let the thing play out. Don’t restrict it with parameters that kick you out of the game prematurely.

There is a difference between protecting your account and giving it the room to run and play out. You know what that difference is?

Let the week play out.
Cause within the week, things always come back around. And then, if an anomaly would take place in that week, you let it go another week. You can see up there that the trend is what stays true, in the end.

Given that example, I do have to say that the JPY just might be changing their trend. They are getting less short lately. You can see the evidence there on the most recent candlesticks. Even the GBP has been wavering lately. And look, that’s what I’m going to be doing here. That’s showing you how the GBP is losing it, and how the JPY is gaining it.

Alright, I’m done talking. I’m just gonna do what I do best. That’s stating what the trends are. And if there are any changes taking place.

I’m gonna do a complete analysis on each currency.
But first, we got to look at the market as a whole. We’re nothing but a helicopter coming on in. Actually, I’m gonna start out being Jeff Bezos and see what this world looks like 62 miles high. Then I’ll make the descent.

That top table is how the month is playing out (monthly running %). The bottom table is the daily results all by themselves. And at the bottom is how the week ended.

• The CHF is the most bought currency this month, sitting at +7.04%. Been that way for most of the month.

• The CAD is the most sold currency this month, sitting at -11.37%. The first 2 weeks were huge selling weeks. Then this past week retraced those losses. Most bought.

• One of the most notable incident to happen this month occurred last Monday. Was a huge risk averse day. The JPY took the top being +7.16% in one day (that’s big). And the Comms were the most sold. All 3 of them.

• Let’s look at what’s normal. What is a normal % for one daily result? Cause 7.16% means nothing if we don’t know what’s considered normal. For this year, here’s the numbers. Average daily placements.

—1st place = 3.82%
— 2nd place = 2.49%
— 3rd place = 1.49%
— 4th place = 0.62%
— 5th place = -0.01%
— 6th place = -0.69%
— 7th place = -1.51%
— 8th place = -2.42%
— 9th place = -3.78%

• The other most notable incident to happen this month occurred on July 14th. That was the NZD having their interest rate decision meeting. Remember they hinted on a rate hike later this year? Well, on that day they were most bought coming in at +7.57%. Ended the week most bought also, but look at the other 2 Comms for that week. Most sold currencies. Interesting!

• The JPY having a decent month. With the climax coming in last Monday. But then retraced a lot of those gains since.

• The USD having a positive month.

I would surmise that what’s been happening lately is more risk averse play than risk on. Caution and safe haven buying has been happening way more than the contrary. Cause why would not the NZD be able to gain any traction? That’s the currency of favorite when the world is tranquil. And especially when they want to hike rates! But it’s not happening.

Let’s look at the particular trends.

The USD.

The trending high state is still intact. Maybe a little choppy lately, but it continues to bounce back every other day on it’s trajectory. So, no change, as has been the case for some time now. See, a weeks worth of movement will tell you the way.

That chart is the only chart needed for which to tell you where the USD is heading. I should just stop and go home now. It’s simply… buy the Dollar.

But I’m gonna pull out the COT report now and compare that to what we see there.

The most important data there for me is the right column (white line). Net Positioning. That’s the difference between the longs (green line) and the shorts (red line).
The chart does go back the entire year. I just showed the way I compile the numbers. The chart = the numbers. I just didn’t show the open interest numbers on the chart. The second column is the green line. The third column is the red line. The last column on the right is the white line, which is the most telling of the trend. And don’t forget that this goes by weekly. Apparently we had 29 weeks this year so far.

• Net Positioning is in positive territory. That means the background we’re in is more long (as opposed to being negative).

• Within this back drop it’s increasing. The USD is bullish.

• The shorts have been decreasing much more than the longs increasing. Meaning, the bears have let off the gas more than the bulls have been dominating.

The EUR.

Uptrend still technically in tact. It ranged a bit, a few weeks ago. But took on some more upward movement this past week. The bias is high, not low.

Very interesting here.

• The net positioning figure is in the positive. The back drop is in positive territory.

• In the past 5 weeks, the net positioning has decreased. Meaning the short open interest contracts that are open have been more than the long open interest contracts (hence the red line moving higher more sharply than the green line).

• The longs (green line) is higher than the shorts (red line). Meaning a more bullish bias than short.

Well, we just might be seeing a faltering of the EUR. This is the second leg this year of the net positioning amount decreasing. This is very interesting and something to keep in mind. You can’t really see this dynamic in the above chart.

The GBP.

Technically, the GBP is in an uptrend. Been that way all year, and no signaling of changes yet. Although at a slower pace, the bias is still high. Not low.

• Net positioning has, for the first time this year, dropped into negative territory. Meaning, the shorts have outweighed the longs.

• In the last 2 weeks, it’s dropped drastically. After long time sideways action.

• The shorts have rose up and over the longs (red line over green).

• Seems like change might be on it’s way. If this continues lower, the top chart should start changing. We’ll have to monitor this closely.

The CHF.

Technically it’s still on a down trend. You have to see that last major drop (day 118). It started to retrace some of that, but never yet got back up there. Big rise up occurred a couple weeks ago, but not enough to attain the previous swing high. Yet. This is a tough one. I can’t say that it’s on a bull trend until it get’s back to that highest swing high area. Until then, it is following a bearish bias ever since that massive drop. And even then it continued on down further.

• Net positioning is in positive territory.

• The longs are greater than the shorts. Signifying a bullish bias.

This is tough. All I can say is that the SNB is probably the red line (bears). And they are fighting to rise back up. But the safe haven players have the upper hand. It’s a battle. Especially given there’s so much caution in the market lately. And you just cannot dismiss the CHF during this time. Just keep these things in mind.

The JPY.

The Yen has not been able to break up and above the latest swing high. Technically, this is still in a down trend. Sure, no more swing lows. But it can’t break up and out of this longer running side ways action. I’ve been quite safe in my trading keeping with the short bias. Even last Monday, when it dominated every other currency. I kept with their short trades (of course that’s because my trading plan doesn’t make me change during the week). And by the end of the week, I’m in some good profit.

It’s sideways action. But I don’t go by that. Either long or short.
And the JPY is still trending short.

• The net positioning is in negative territory. Trying to climb out, by can’t.

• The shorts are quite many. Way much more than the longs. Meaning the bears are not gonna give up that easily. The bears are in control. And they like it that way.

The AUD.

Downtrend. Ain’t anything else to talk about.
No sign of changing either.

• The net positioning is in negative territory. Bearish back drop environment.

• The shorts have taking off lately. Separating away from the longs. This is a stark change from what’s been happening this year.

Well, this has seemed to get more intense. Bears in control.

The NZD.

The trend is down. It cannot break up and out of any swing highs. It’s more of sideways action, but definitely a bearish bias. Surely not bullish. They’ll have a good day now and then but can’t for an entire week.

• The net positioning is in positive territory. But getting close to not.

• The shorts are climbing on higher. Getting closer to the longs. Although the longs are outweighing the shorts. This is bullish.

Remember, it’s these guys that the market wants to go long with. When things are sunny and bright. But there’s just too many storm clouds out and about. That’s the reason for the downward pressure.

The CAD.

Well, they had such a fall lately, that this recent climb (this past week) is natural and probably over due. But technically, their in a trending low state. This is their bias. It’s been trending low for a good while now. But what a sharp fall as of late though. Geeez.

• The net positioning is in positive territory.

• The bears have been increasing way much more than the bulls have been letting up. Although the longs have been elevated lately. Coming off an extreme for the year. Falling pretty consistently lately.

I think the question is when will the bleeding stop? Cause this has been going on for some time now. I think the CAD has been following the other Comm currencies. As opposed to the USD. I think that’s more of the fundamental reasoning behind it all.

We’ll just have to see if this continues on, or what.

Alright Journal, I got to run.
Thanks for listening.
Mike

[maby1]

I have been going through this post and I must say I was impressed at how much time you spent on a demo account. it is nice to show others how valuable it can be as you did quite well over time from what I can see here. Thanks for sharing.

[MikeWolski]

Good morning Journal.

Well, that’s a month. Another one down.

So. What I should be doing now is filling out my Month Summary. I guess I’m gonna be a little late with that, but I will get it done though. That is one of my goals I set up for this year. I think it’s important. And hard to do. For some reason I didn’t follow through with it last year. Last year I only went up to like June. And I remember why too. Cause when you are not doing so good in the market the chances of you following through with a nice general report diminishes greatly.

This year I’ve been on it. And I’ve not had such good months too. Although this month of June hasn’t been so good. Probably the worst one. And it’s all because of one week. That second week, boy. I screwed up. Big time. In fact, all we have to do here is go back a few weeks worth. I mentioned what I did. I went totally opposite of what my trading plan dictated. I didn’t follow the trend. I deviated from it. And I thought if I was going to be wrong about it, well, it’s only one weeks worth. I’ll get back on track.

Well, that is what happened. But I took a hit like terrible. And the thing is, is that if I would have followed my plan, stayed the course, things would have turned out completely different. Like being much in the positive. Boy…I remember it. I’ll tell you what happened. I was deceived. I was overwhelmed with a delusion. I’m telling you…I think back to that and wonder where I went wrong. And it’s true. It’s like your mind gets taken over with thoughts of how the market should change it’s course.

More specifically, I thought we were going to the moon with the commodity currencies. Like some serious risk-on play. And when you look back, that was not the case. At all. It was a fake out. And my trading plan, I should say, the methodology in how I come up with what the trends are, really did not change these currencies’ paths.

Well, because of that, I had to keep 2 different models. One, how the market really should be, and two, how my trading actually takes (in which it could deviate). Look.

As my basket of trades are running, perpetually in the market, I keep a daily track of what my account looks like and how many pips it generated. Well, the latter is right there. What I did is on the left, and the model of how my trading plan should be followed is on the right. All you have to do is look on the right side going down. It’s the weekly total of the amount of pips. And then in blue is the monthly total.

Well, you can see how much of a difference I really messed up with on that second week. But, I did learn my lesson, and stayed the course for the rest of the month. See how the rest of the weeks totals match? But, I’m telling you, that was costly.

And it hurts.
I mean, all I have to do is follow the dog-gone plan.
But, I think I really did learn something from this. Let’s see if I can make a summary out of this lesson.

Recognize and be aware of a delusional thinking coming over me.

I remember something coming over me. I was tasting the emotion of it all. I really, really wanted to get ahead of this risk-on scenario that I hoped would have taken place. It never did. Boy, it went completely the other way. And you should be able to see how much other way it went. In the first 7 trading days my trading plan produced +714 pips. But because of my deviation, I produced -2607 pips. The difference is 3,321 pips. That’s the bottom line.

I’m pretty sure, well I hope, that I will remember this feeling. Just so I will stay on track. And the lesson should be, that if I’m going to lose or at least dip into negative territory then I should want to go down with the entire model. Not alone. Cause that, in fact, was what I was thinking at the time. This model is going to lose, and I don’t want to go down with it.

I don’t know. My consolation is that I have a good plan. And for as boring as it is, I need to keep matched up with it. Simple as that.

Well, speaking of that. I guess this would be a good time to segway into a change that my strategy is signifying.

My plan is quite simple. Follow the trend. When it changes, then change.

So. The current market conditions are stating a change of a trend. That’s what we’re going to look at now (and btw…this is not delusional…you tell me).

The CHF. It’s as simple as this. One itty-bitty chart.

The narrative goes like this. Follow me on the rational.
It started out the year on a down trend. It slips below 0. Indicating a downward bias. It even uses the 0 line as a resistance level. Then it breaks down even more. The downtrend continues. It encounters a 50% retracement at day 28. That’s not uncommon. That is not a fake out. Then it turns and burns on much lower. This time it’s steep. Very steep. Smooth sailing here boy. But then we encounter a pretty sharp retracement. Well, since the trend extended quite far down this little sharp snap back is nothing in comparison. In fact, I don’t even know if it retraced 50% back up. In any case, that only took 2 days, then back on down it goes. Continuing the down trend.

It found some support. Back and forth carving out some kind of floor. But it starts to make some higher highs, not lower. Well, it’s not making up a whole lot of real estate, until it breaks back on down. So we see then that the down trend has continued. It even makes a lower low. But not for long. We got a boost high like you won’t believe. That only takes a few days, not long at all. Well, when I seen that, I called that a change in trend.

We could go back here in this journal and see when I did. And I did change my trading model to the Swiss trending high. Well, this very well could have just been a retracement, only to come back down. But when I seen it not go down anymore, that’s when I called it. Going up.

Did it stay that way? Yes it did. My trades CHF trades were more in profit cause their bias did change for to go up. And all I’m doing now is watching this inch higher and higher. Confirming the trend. Plus it’s not moving downward, like at all. All this just continues. No surprises. Easy peasy all the way up.

But then we have a drop. Yeah boy, that hurt my trades, I’m sure. Well, because of how much far down it goes in such a short amount of time I call it a change in trend. You can see a days worth of pip losses. Every straight line is one day. And well, it goes lower. I mean, I’m not gonna think this is still on an up trend right? No way. The bias is for down. It’s taking out many, many days of the previous climb. How many days do you think it took for it to climb all that much? Then compare that to how many days it took for this dive? That’s a factor. Time. I feel that is very important to consider.

Ok then. What happens next? A very sharp move up. Almost straight up. Well (and we’re not talking about too long ago here), I seen it, felt the losses, but contained it. I kept with the down trend. Cause you just can’t be changing trends so quickly. You got to be patient about moves. That retracement didn’t go up to the 100% point yet. I felt, and was thinking, that for the previous uptrend to continue it would have to attain up and over that high point that it went to already. So I just kept with the downtrend this whole time.

Well, it finally happened. You should be able to see that this past week made the climb up and over that top. Now, there’s no doubt about what the trend is. It’s time to change. With the change.

Just don’t tell the SNB what’s going on here. They’re not gonna like it.

But…this is the game.
Trends change.
I’m a firm believer in knowing what the trend is. And following it. But of course that only comes when you document and track it. I don’t do these EOD numbers for nothing. In fact, everything I track is for a reason. I just need to know, that’s all.

This is a summary of their trends.
And my exact trades that will be running, because of that determination.

And for a refresher, my trades are determined simply by trading the trending high against the trending low. 4 high times 4 low equals 16 total trades.

See. I believe my trading is as simple as it can get.

The hardest part is following it.

It will continue.

Mike

[MikeWolski]

Good morning Journal.

Let’s see.
What am I going to talk about today.

Whatever you want.
I’m here to listen to all the nonsense you can get out.
Just type away and you’ll feel better.

Alright Journal. Thanks. Here goes.

I got this idea. But it’s unfinished. Quite.
I really don’t know if I’m on to something or not.
This could be such nonsense. But I have to follow this and see if it’ll lead to something.

At first, when it hit me, I thought I uncovered some kind of secret weapon. Something maybe that no one has every thought to try. It’s something under everyone’s noses.
It’s a tactic. A methodology. A way of caring out a trading strategy.

Remember, this is incomplete.
I’m just gonna get it onto print and see how it looks. Well, honestly, I did break out my journal (binder full of paper that I write in) and drew up some things about it. I’ve been sitting on the idea for a few days now.

I’ll tell ya where it all comes from.
Someone (a reader of my stuff) recently mentioned how much I demo.
Ok. Let’s go there.

Yeah I demo. That’s all I’ve been doing is demoing. In fact, I’m not so sure that I could be more fulfilled otherwise. It’s the journey. I’ve been on it, for some time now. It’s been years. At the end of this year, I will have completed 9 years on my journey. Most of it has been demoing, as opposed to a live account. Actually, this journal started when I first went live (Jan '16). And so, the first 6 months of my live trading journey has been documented. It’s not pretty. But, the whole point of it is, that I’ve felt, experienced, and operated in that setting long enough to learn the emotional control needed for that environment. Honestly, for me, there was not much difference between the two methods. It’s all serious business for me.

It just doesn’t make sense to me, when you don’t have enough capital, to be trading in a live account. Especially when everything you need to see, experience, and prove to yourself, with all the documentation of course, is enabled in the demo arena. Honestly, if you can’t prove it to yourself in demo, you’re not going to live. I don’t care who you are, pretend all you want, it’s not gonna happen.

With me, I’m not successful in demo yet. This reminds me of a very thoughtful conversation I had with my (very intelligent) brother one time, not too long ago. On the subject of my journey and goals. Coming from someone who is learned on a number of diversified subjects, like monastery monks’ visions and whatever they seek to attain, he asked whether I would be completely satisfied and fulfilled if I proved, with all the documentation, of a perpetually increasing account balance operated as a virtual business, rather than having a real life business entity that operates off of a live account and generates enough income to self sustain the business and also continually grows from there.

What is most important to me? The actual self sustaining trading business I desire? Or the self fulfillment attained from successful trading operations that is continually being proved over and over again, in the market? Virtually.

I don’t know, that’s a tough one. Cause I think I can die very peacefully knowing that I can do it, over the long term, proven over and over again. Able to build and grow a generator of funds from the market.

But then again, I do think that the absolute top in life, for me, would be a simple self sustaining trading business that ensures I don’t have to depend on anything else for my finances.

Well, when I get deep into this discussion, I always have to remind myself …"unless the Lord builds the house, they build it in vain who build it."

Now that’s what’s most important to me.

But, I guess it’s a two fold thing for me. Finances, sure. Self accomplishment, definitely. I can’t separate those. So. The answer is, “I just don’t know, Bob.” (bro)

So.
I will continue indefinitely with my demoing. Until I attain.
Bottom line.

Now. To continue on with my train of thought.

What if someone gave me a lot of money, enough capital for the business venture. How would I really use it?

I’ve always, always said. I would trade the way I trade in demo. Cause that’s the entire reason, premise of why I trade demo in the first place.

Seriously. If I ran into $300,000. I would have to determine how much % a month I should expect to generate. Look at my trading plan and strategy and just do what I’ve been doing but with the adjusted position sizes. I would expect to withdraw on that every end of month.

That’s just common sense stuff. But I took it a bit further. I asked myself whether I would still trade in demo. See. My first thought would be a no. I go ahead and just do what I do being live, that’s all.

But.

Why stop the demo?
(Now we’re getting somewhere)

Why would I want to discontinue doing what I’ve been doing for such a long period of time? No one’s making me stop demo. There’s no rule saying that it’s either / or.

Then this thinking leads me to my whole entire point.

Is there a way in which I can utilize my demo trading at the same time I trade live?

Can this assist my live trading?
An aid. A tool. A methodology. A developed system for minimizing trading risk.

Look. I’m not in the habit of reading how other traders are doing it. In fact, I’m such adversed as to how others are trading. Even if they are successful. I’ll just summarize my thought here. One of my favorite words is proprietary. It comes from within. And so, what I’m saying here is that I think this is original thinking.

And if by some chance this has been discovered, or experimented with by others, then so be it. But in my mind, this comes my own originality of thought. I mean, think about it. No one on the planet has demoed more than I have (surely I could be wrong, but somehow I don’t think so).

And now all I want to do is further this methodology. I’m not too sure that’s correct English. Or proper grammar. But the point here is that I would like to develop this into a tactic.

Again, this is by far anywhere near complete.
I’m just gonna start throwing out there a lot of thoughts on this. Maybe something will start to make sense.

What’s the difference between demo and live? Nothing but the pure and unadulterated topic of destructive emotional trading. Ok. Is that it?

I surely would love to know the answer to this. Is it true we trade way much more successfully the demo way than the live way. Well, experience tells me that’s not true at all. If it were, I should be way much more advanced than where I’m at right now. I mean, I can’t even go a complete year without stumbling in a major way. Even ending a complete year in the positive!! I can’t even do that yet. Demo wise.

There has to be other benefits to demo trading. Not just the emotional subject.

How about something like this. A way to have something run in the market and to be able to follow it. A precursor. A tell. An indication.

Look. I’m all about following the market. In my mind, a few years ago, I boiled it all down and to this day I believe in this mantra.
It is best to follow than speculate.

What if I followed a demo strategy instead of the live market?
Somehow.

The difference is in the time factor.

If I have a demo trading strategy running in the market. Trying everything to follow the market. Which is always the case for me. But then riding alongside I could have the live account determined in a way dependent on that, and not specifically the market. Like for instance, answering the question of whether I should be in the market to begin with would be determined by the results of what the demo strategy is doing.

I guess a lot has to do with what specific strategy we are talking about.
I have 3 strategies.

— #1 Anchor Trade = “Complete Currency Trade”. That’s a basket of 7 pairs running (all with a common denominator currency). High volatility type trading environment.

— # 2 Anchor Trade = “MWPortfolio”. It’s my basket of trades in which 15 or 16 pairs are running perpetually. Trending high against trending low pairs. Preferred method.

— # 3 Anchor Trade = “One shot.” I don’t really have a name. But it’s the trade that I use for unique opportunities only. I’ll pick one pair only. I should be sitting on the sidelines more than it being active.

I guess I should be looking at the most important questions regarding a trade, to begin with.

• When should I get in?
• When should I be in?
• When should I be out?
• When should I get out?

And in some fashion, instead of the market normally being the case, have my demo running trades answer those questions for me. For my live account trades.

I’m just wondering if I can somehow see whether the demo running trades are successful and mimic that with the live account trades. And when the demo is not going according to plan then I should be out. Or maybe just to do the opposite.

Can I avoid some pitfalls by following the demo?

Can I learn when to leverage up?

Can I learn when to leverage down?

— Both accounts would have to be the exact same strategies.
— Both accounts would have to be on different time frames.

Seems most logical.

Man, I don’t know.

Maybe the only way I will find out these answers is if I practiced it (like I do with everything else).

I guess you can’t go wrong with trial and error.

I need rules. A structure in place.
That’s my first thoughts.

But then again, why don’t I just develop a “live account”. Set it all up in my excel sheets (like I do with the demo tracking account).
Trade that somehow alongside the demo account and see the results at every end-of-month.
Will it be too much and ineffective. Detrimental?
Or can I really mitigate a lot of risk because of it?

Journal, I think I went off the deep end.
But I have to say, it feels good to get this off my chest.

I did a lot of talking, huh.
Maybe I am a talker.
Well, if I kept this to myself, then maybe I’m not.

Let’s see if I can summarize, compartmentalize these things and maybe come up with some correct names.

What am I doing?
------ I want to know if I can utilize a demo account to enhance a live account.
------ Is trading both accounts alongside one another more profitable?
------ Is it beneficial or detrimental to follow a demo account?
------ What specific strategies would work and which wouldn’t? Why?

As I am thinking about this, it really seems like I’m wondering if there’s a way to follow a demo account. Like, that’s the bottom line.

Normally, I follow the market. How? Well, every EOD I note the prices. Track the trend. And position my trades according to the corresponding currency trends. That’s following the market. My trades are following the the trends of the market.

Is that an easy thing? No.
Am I successful in that? Not as much as I would like to be.
If the market does not follow the trend (or I should say what’s normal…Tommor’s territory) then my trades do not fair good. Negative resulting pips. And that’s not my fault. But over time I am counting on the market to end more positively than negatively. It’s banking on the principle that the end result will always turn out more trending than counter trending. Ok. That’s all about following the market.

What about following demo?

Let’s see.
My trading results in both positive and negative days. Positive days correlate with the trending days. Same goes for the opposite. But is there a way in which I can be in just the positive, trending days? Only? And not in the negative?

See. That’s what I’m talking about in following demo. Doing the positive and staying away from the negative. Mitigating the risk. Well, somehow, anyway.

Seems like I would need some kind of rules to follow. And those would be indicators of when to be in, and when to not be in. Or…when to leverage up and when to leverage down, all by the position sizing. Hmmm. Which one would be easier? Be in or out? Or go heavy or light?

Yeah man, it seems like I always come back to needing to try it out. Experience it first hand. Trial and error. Well, demo it! That’s what I do best anyway.

I’m also thinking that the principle of discretional trading has it’s place. As opposed to strictly mechanical. In this way, I’d definitely be using discretion when following what’s been happening in the demo results.

Alright Journal. I think I’ve talked enough.
I’m gonna explore this demo/live side by side trading methodology.
Looks like all I have to do is open up a “live account” tab in my excel. I simply trade the way I trade on demo. But somehow follow that when I place my “live” trades. And of course keep track of the account balance.

Hopefully at the end of each month I can make a determination of whether this is pure nonsense or something effective.

Thanks for listening Journal.
Let you know how this plays out.
Mike

[Mondeoman]

@MikeWolski

Why stop the demo?
(Now we’re getting somewhere)

Hi Mike,
As usual I have enjoyed reading your journey journal. I hope this contribution will help you cement that idea a little.

What you are describing, from a business flow perspective, is what programme writers (I think they call them developers today) have used since the beginning of programming. This goes way back to punch cards used in the Jacquard loom for weaving patterns in cloth. See link:

Programming patterns: the story of the Jacquard loom | Science and Industry...

Nowadays, software engineers have a tool called sandbox. It is a computer play area that is isolated from the production system that is in use by the real business. It’s an area they can test their next version of software in. As software companies release their new versions on the public, there is a series of events that precedes version release (or there should be). The developers move from the sandbox (or development environment) to another box of tricks called the test environment. This is built as closely as possible to the current production environment. When all tests are completed on the new software version in the test environment, management approval is sought to release the new version into production (for the masses to use). Get the testing programme wrong, and you can bankrupt a company.

I consider your idea to be directly aligned with this practice. Let’s say you have a live account that has resulted from completion in your demo account of a strategy and plan that has been proven to achieve your Forex objectives in backtesting. Why would you want to stop there. You would want to continue applying the same to your demo account to make sure your assumptions as you move to the future are still valid.

You would also be curious to continue to experiment with the indicators and entry / exit parameters you had chosen in the first version of your “production plan”. What if a change of entry/exit criteria resulted in halving your trades, but improved your edge from 60% to 65%. Would you not want to complete the testing programme (backtesting your next version) and decide to release it to your production system (live account?).

Best of luck, please continue the journal.

[MikeWolski]

Thanks for that Mondeoman!!
Very insightful.
Most of all, I appreciate the encouragement!

Many, many thanks!!!

[Bertzaaaa]

good description, I really like such stories, when a trader can spend his time on such a description, well done