Here’s my ‘manage’ one.
Mike
This is my ‘exit’.
I pretty much had this one already. But as I now have seen, I didn’t go back and redo it according to the plan. Which is having the ‘exit’ in the middle, the subject. Then have my 6 friends all around, and ask these questions.
Man…
I’m gonna do this tonight/tomorrow.
Mike
Well, this is my last one. Time Frame.
It seems like it’s incomplete. Cause that’s all I could do with it. But, I now just realize something.
This is the ‘When’ of the whole strategy. My first thought of when is about time. So…time frame right?
Well, not really!
This is what I need to address. On the when.
When do I trade?
What do I do when I trade?
What do I do when I don’t trade?
It’s looking at time in regards to my trading strategy.
Yep.
Ok.
Mike
Hi Journal!
I got some time here. So, I’m gonna throw out what I’ve been up to. Been working on my mind maps. So, here’s my new ‘time’ one. It’s actually the ‘when’ back at my main trading strategy MM.
And then here’s my ‘exit’ one. For as important that the exit is, this should be more dove into. But, I feel that will come when I practice.
Mike
Hi Journal.
Now I’m getting somewhere. Not only do I need a strategy, but a plan to follow. I remember the things I was taught, so I’m implementing them. Here’s the logic.
From the top, the strategy. Mind Map.
Then the ‘why’ in that. Mind Map. (Goals)
Then the objectives. Mind Map.
So then, looks like at the end of each month I should have a report. And the way I set it up, as a no fail success, is if I do not so good, then I just put in more money to make the objective true.
I think this is a good way to start out. I need to start building and I don’t know any other way than from the bottom. This should be how to lift off.
Mike
Hey Journal!
Hey Mike! There you are. Where have you been? What’s going on? You still in the game or what? Talk to me goose.
I know, I know, I know…Man Journal, I don’t know what’s been going on with me lately. Frankly, I don’t want to talk too much about it. I mean, it’s upsetting to myself, more than anything. I get so upset because I’m just sleeping too much. Sure, I still wake up early, on the weekdays, but then I find myself falling asleep sometime afterwards. Then on the weekends I have a very hard time waking up period.
Believe me Journal, nobody spanks me harder than I do. I have a standard. And I want to keep it going. But…sometimes it’s very, very difficult. I don’t know, maybe because I’m getting older. Or something. Yeah, how about just old.
Anyway, I do realize that some of the problem has to do with the content that I’m working on. If I’m not grabbed by it, I eventually lose it. Like I think I’ve been mentioning lately, I’m back to square one. Finding that dog-gone perfect strategy. Ok…maybe that’s a little far fetched. But I have been struggling with coming up with how I’m going to trade. It seems like the threshold that I will never cross. (BTW…this is all the follow up that I’ve been going through)
I remember…there was about 3 times that I came on here and was going to spit out my plan. I started typing away. Then. Road blocked. I realize the holes in it. Then I run out of time and eventually hit the cancel button.
It has been frustrating. Cause I just want to get going with it. So, every morning, I will go over all my mind maps. All what I have down about it already. Oh yeah, all that stuff up there in the previous posts. Well, that’s nonsense. I don’t feel good about a lot of that. So, I keep going over it and over it. It’s all about the ‘when’ and ‘where’. But I have noticed, that over time, some things stick. It’s kind of like osmosis. The good stuff sinks to the bottom, and that’s what I don’t have to change. I just move on to the other stuff. See, there’s so many factors and variables in play. I guess it just takes time to sort it all out. With being such a perfectionist, it’s hard to be satisfied with the whole, when I only have bits and pieces that is good. One one hand, I need to get the ship moving. On the other hand, I want to make sure that my trading is backed by principles. And that requires asking a lot of questions.
For example, I was caught up with one thing for a while. See, I wanted an indicator to tell me when a pair is trending. It hit me pretty hard one day when I was reading someone’s blog, who I esteem as someone who is a very smart trader (N.F.), and he mentioned that he uses this indicator. It was close to something I used before. I surely am not going to pay the fee to be his pupil and take his classes to find out exactly why & how he uses it. But he did mention it. He uses the 8 & 21 EMA crossover, probably to find the trend somehow.
So, to be true to myself and my mind mapping, how do I answer the question of ‘why’ do I use that indicator? The truth would be for me to say that this guy uses it and that’s why. And it sits right with me.
What kind of answer is that???!!! It is no answer. It’s upsetting to me. So, I had to do some research for myself. Well, that took some time. I never really found that answer, cause it’s probably in his class, only.
I did learn some good stuff about cross over applications. And sure enough BabyPips has some rich teachings on that also. I would like to answer it like this. I pick the 8 EMA for this reason…and the 21 EMA for this reason… And these 2 compliment each other better than any other pair. It fits my time frame trading.
Back testing these two prove to work better than any other two.
Now that’s an answer to the question of ‘why’. Not because this guys uses it, or even B.P’s says to.
Anyway…that’s nice.
This is what I know.
EMA is exponential moving average. In my opinion it is better than the ‘simple’ moving average because it factors in the latest moves, as the simple does not. Simple is better for longer term trading. Exponential is better for shorter term (the curves are quicker). These are the smoothed averaged price. The 8 is taking the last 8 days of price and averaging it. Same with the 21, the last 21 days. So you have a shorter averaged price line against a longer averaged price line. And you have the current price, which is the candle sticks. Their relationship to one another is important. You can see where the current price is at in regards to the last 8 averaged days, and 21 averaged days. The rule of thumb is if price is below the 8, and the 8 is below the 21, it’s in a downtrend. If price is above the 8 line and that line above the 21 line, it’s in an uptrend.
Yep, that is nice. And all this tells me is if it’s trending high, or trending low. That’s the only reason why I use it.
Anyway, where was I?
Well, I guess I was explaining where I was at some days ago. Stuck on stuff. But, guess what Journal? I believe I have come out of it. I pretty much have settled on a plan. Oh…don’t worry. Your gonna see it, whether you like it or not. All of that up there? That’s nonsense. I got some revised mind maps coming.
And I got some more good news.
I found a broker. And.
Hold on…wait for it…
I got in on my first live trade, today!
Yep. Man…I was pretty upset of how it happened. But, I pulled the trigger.
See, it’s Friday, and I’m off today. Got up early. Good. But, I did fall asleep a couple hours later. Bummer!
So, everyone is off to work. It’s 8 am. Got back to working. But fell asleep! So I woke up, with the computer on my lap (on the lazy boy) and checked the market. Bammm!!! The market was flying! My way. This is what I’ve been waiting for. So, yeah, a bit late, but I’m in as the plan dictates. See, I guess there’s a lot I didn’t explain, like exactly how I’m getting in. That will all be laid out as I put up my MM’s.
Well, bottom line is, I’m in with $100 of an account balance. In a trade, with a stop loss of $5.00, if I lose.
(Man, I wish I wasn’t sleeping! Even if I was at work, I would’ve been able to see the action. And then to take action.) See, I was struggling with whether to keep my rule of waiting for the daily candles to close. I would wait for the pullback up to the line. Then get in. But…what if that never happens? That’s the other side to the argument. And so I think that rule is no longer. Surely I will learn more as the trading goes along. I think my positioning of these levels that I am waiting for are for major breaks that will happen. Which was the case now, in my trade.
So. I will put up the trade pic now. Then I’m coming back with shot after shot of my trading plan.
The first one is the daily chart. The green line is where I sold it at. I’m going south. Red line is stop loss, my much awaited line in the sand, support line. CAD/JPY . Short. At 84.386 . Stop loss at 84.840 . No take profit yet.
This is the one hour time frame shot. Along with the account at the bottom. See that…I was sleeping when it was moving on down!!!
Mike
P.S. Sorry can’t see much.
Journal.
Here it comes.
From the top.
This is pretty much cut and dry. Everything is put into perspective. Each of those red squares is a link. That’s where the explanations happen. I even have links within those also. This is as organized as I can get it. So, these first 3 are self explainable. The trading system, the goal, and how that goal will be achieved. (#1, #2, #3)
Mike
Journal.
This will be the ‘What am I trading’ from the original MM.
This is how I pick which pair.
This is basically under what conditions I want to be trading in.
Mike
P.S. This is a link in ‘How do I know it’s occuring’. I want to see all these lines moving down. JPY strong. Daily time frame.
Journal.
This is the entry.
Trust me, there’s not much to the 8,21 EMA mind map.
So, here’s my watchlist.
Basically, whichever one of those goes below the line, I want to get in with. The NZD/JPY was already below it, but I was on the late side. So, I never got in. I drew another line lower. Today, on the CAD/JPY line was crossed. That’s why I got in. And that line is the stop loss. I want to get in lower than that. Man…I was late today so it was a 50 pip stop loss. Pretty much for me, but, hey, I stuck with the plan.
Mike
More tomorrow morning.
Journal.
Well, can’t see that too well. And that’s probably my most important MM. Here’s a close up. I split it up into the Comms, Majors (first 3, and last 4).
Mike
Hey Journal.
Ok. So I’ve been trying to solidify the rest of the MM’s. The one thing that keeps coming into my head is that all of these rules to have just might not be gospel. Yet. Look…I have to start out with something. But, I have a feeling that when the trading is happening, then I will be able to solidify the rules more. It’s kind of like (my favorite moto) ‘living and learning’. There will be mistakes, and things for me to learn. It’s impossible for me to know all what can happen at this point. I guess I just need to jump in the pool, start swimming, learn what to do when the waves come, adjust to the conditions, stay above water, tread the water, and get stronger. Oh yeah, and not to drown.
See, I don’t have any experience with trailing stops. That’s gonna be something I need to learn. So my plan basically revolves around managing the trailing stops, because that’s where my take profits will happen. I figure I would be more safe guarding the stops than (as opposed to what I did before) to wonder how much I can get. That should definitely keep me in the game longer. And I suppose also that it’s gonna take so much longer to get to my end goal as well. See…I think I have learned something. I don’t have any take profit targets, just stops. But, what I do need to master is where to place the trailing stops, and also the sizing. I am starting out with such a small size. Like the one that I’m in now. I said that I would accept losing $5.00. My position sizing hinged on that figure. And I’m not going to go the route of how much of a %. Sure it’s there, if I figured it out, but it means more to me of exactly how much of my $100 am I willing to lose.
Oh, and another thing I know is going to be an issue for me. I said that I will trade only one of those JPY pairs.
Well, what will I do if by chance more and more of those pairs cross down over their respective lines? That would mean more of a risk-off condition happening. Will I trade them?
Well, I’m thinking I would want to. But then I guess I would need to weigh out how much risk is being totaled.
See, these are the things that I just do not know at this time. I guess the principle of knowing exactly how much is at risk, will be my answer.
Ok. That’s nice.
Here’s my ‘manage’ MM.
My ‘exit’ MM.
And how my time is spent.
Oh, I just remembered. I’m gonna come back with a mind map that means something to me. I’ll explain it in detail why I came up with it.
Mike
Ok Journal.
I remember getting to the point of losing perspective. All I have been consumed with was this dog-gone strategy. Sure, you cannot deny it. This is the way, means, the heart and soul of my business. This is the primary reason for the business. Cause without a good way of generating income, there’s no point to the business at all.
But.
I believe that’s not the correct perspective to have. Having that as the only all-consuming time spent on, is being short sighted. I believe it should be the business as a whole. And that got me to thinking.
So far, up to this point in my trading career, I have had this notion that my business will not start until I go full time. Meaning, what I am doing now is trying to develop a full time trading business part time. Utilizing what time I do have (which is not entirely too much) to building something to start on.
You know what? I got to thinking. Why cannot I have a business now? Does it necessarily have to be run full time? There’s a difference between having a business run full time and having a business run part time.
And that’s what I want. My own trading business. It just has to be run part time now. Which will be different than when it’s run full time. And that leads me to be making distinguishing differences in how the strategies are developed. How I trade now should be different than how I will be later.
Well, things are about to change.
And I started out with the mind map. Here it is.
All I know is, I need to keep this perspective. There’s more to running a business than trading a strategy.
The important things I’m going to be doing is this.
Monthly income statement --Moreso, my 1st objective of the 1st goal, which is the account increasing every month. I don’t care by how much, as long as it’s more.
Weekly Learning MM’s—I need to be consistently learning. The nature of this business requires more & more knowledge, and psychological development. Everything rests in what’s in my head.
And I don’t know if you have noticed, Journal, but that middle line going down means something. At the bottom is the most important aspect of a business, the bottom line ($). But, what it takes to make that more is the process that is above it. I’m gonna add onto the ‘knowledge’ square. I need knowledge of the market & myself.
So, this MM is what I’m going to be concentrating on. I want to be answering those questions above.
This is my business. I want to run it. Now. If it’s starting out small, so be it. This is what should be more important to me. So, I’m trying to keep this as my perspective.
Ok Journal.
How about one more pic. Daily charts. This is how I monitor these 7 pairs. Here you can see where all of the lines are drawn. And where the 8 & 21 indicators are at. 8 equals the yellow line. 21 equals the green line. I will only get in when the yellow line is below the green. And price must be below the big red line. Take a look. Looks like the NZD/JPY I maybe getting in, making the red line the stop. The USD/JPY is moving down pretty good. Yellow is crossing down below the green also. The AUD/JPY moving good also.
Don’t worry Journal. You’ll know my every move. Everything will be documented. This way I can learn from my mistakes.
Mike out.
Ok Journal.
This is my final touch ups. Now that I’m in with a trade, and something I’ve been wanting to do for so long, I will be documenting all of the details of every trade. So, 3 MM’s here.
This will be the beginning place where I will find all my trades.
Each trade will have 3 entries. ‘Entry’, ‘Manage’, ‘Exit’.
And every trade will be detailed.
Mike
Hey Journal!
Well, what a week. It’s been awhile since I had this much action. So much going on. And guess what? I’m gonna tell you all about it.
So. Journal. Unless you have been hiding under a rock this week, you must know the market sentiment.
Yes Sir. We have risk-off happening. So, just imagine what I’m thinking. Yeah man, all kinds of emotions. But, I did stick with the plan, I did make one mistake, and a lot of emotions kept in check. I’ll explain.
See, I remember, it was last Friday (a complete week ago), when I was off of work and that’s when I placed my first trade. And I think that’s when risk-off really started to kick in. I’m gonna put up a chart later to see it.
Then, Monday comes. It’s taking off even more, in which a lot of the other pairs I watch have crossed my signal line. So after work, at the end of the US session, I’m like, wanting to get in. Sure, there’s excitement! See, I have always have had a watch on what general sentiment is, and it’s been awhile since it was like this. And guess what? I kept thinking and saying to myself…“You have to be patient and wait till the close of the candle.” If it’s the real deal, then it should keep continuing, at least for more than a short period of time anyway.
After work, I’m scrambling. I’m pulling up my plan. I need to know what position sizing I’m doing. It’s all laid out on my ‘position sizing’ mind map. I mean, I do have the one pair going already, CAD/JPY. Definitely in the positive. So, the only real decision I need to make is how much am I willing to risk? I do have a cushion with the one pair, and now I’m gonna have multiple ones running. (I knew I was gonna be faced with this scenario). Ok. I’m making it only $5.00 of a risk. On each one. So, I’m looking at NZD/JPY. Their below the line. I simply run the numbers to make that happen. See, my stop loss line is already determined, cause that’s my signal line also. And in it goes. That was with 3k size, or put another way .30 a pip. Then I go to the USD/JPY. They are below the line. And again, I run it (BabyPips position size calculator) with $5.00 risk with the already laid out stop loss line. That ended up being 2k size. And one more pair I did was the AUD/JPY. That turned out to be only 1k size. And that’s it. Their all in. 4 pairs running.
One thing I noticed, which I probably would be spanked for, was the total margin level started out at around 50%-60%. Now, I’m not too versed on that factor. I haven’t studied much in the way of what’s too high, what/if that should be considered a factor anyway. I don’t know. It’s something I’m just going to remember and try to learn as I go.
Ok. So. That’s nice. Things are moving along very well as the week progressed. My account is moving up. I get excited. Then the account balance goes back down some. Sure. The emotions are there. I’m thinking things like…‘why wouldn’t I just take the profit and run?’…‘you mean I’m just gonna let the profits come my way and do nothing about it?’. But I keep telling myself that the most important thing is to keep with the plan. And the next step that my plan says that I would do (action #1) would be to move the stop loss to break even. When am I gonna do that? Yep. Good question. And see, these are the things that I just cannot think about in the planning stages. But, now, this is the time to be smart about it. And look, I’m not all that new to the game. I’ve been here before. Actually played with so much more money than this measly $100.
So…I kept telling myself this. And it helped a lot. THIS IS NOT MY MONEY YET! Sure, the account balance is moving higher and higher as the days go by. But, simply, it’s not mine. I should be more concerned about managing risk. That’s the purpose of my first action. Moving the stop loss to break even. This way my account is not in any danger. That is what is more important than anything. Ok then. Well, the market is moving like a freight train my way. I move everything up to break even a day later, I think it was Tuesday end of day. ‘Hey, if the market is moving fast, then let’s protect the account’. Meanwhile, the first trade that I got in with was wayyyyy in the positive, CAD/JPY. And this is where I made a mistake. Let me explain.
First off, as mentioned before, I haven’t used a trailing stop before. Well, now is the time to learn, I guess.
Wednesday. It figures I would do it then, because I can remember way back when, when I used to run the numbers and always see a turn at around that time of the week. Geeez. Ok, anyway. Well, that’s when I decided to put in a 50 pip trailing stop. Seems like a lot of cushion, huh? I thought. Nnnnnnope. That sucker got hit pretty quickly. I’m like, man…What do I do now? Look. It did end of being 123.1 pips / $21.78 banked money. I was at work when I noticed this happening. And I thought that I should be getting back in. So, that’s what I did. Basically on the fly. Man…what a dummy. Here I go again chasing the market. I got back in with a $5.00 risk to a stop loss. And guess what??? That got hit also!! I’m definitely chasing the market now. So, come Thursday, I got back in again. Things finally turned back around and the risk-off sentiment continued. This all transpired during Wed.'s high candlestick wick. Cause price just came back down and continued on. Well, at least I did not touch the other 3 pairs that I got running. Their stops are all at break even. AUD/JPY 100 pips, USD/JPY 50 pips, NZD/JPY 75 pips. Away out. And CAD/JPY about 40 pips.
So, what do I learn here? Uhhh…maybe don’t use trailing stops…??? Well, I don’t know about that exactly just yet. But, I do know that I have some decisions to be making here on the weekends. I do believe in a weeks time frame run. And that’s what I’ll do tomorrow (Sun morning). I’ll prepare for this up coming week, by looking at where I want my stops to be at, cause that’s where I will be taking the profit at.
Running short on time here, cause I have to work this Sat. Which means that next Friday…I’m off!!! Yay!!!
Ok Journal. Here’s some shots. The first is the field. Daily. All of the deep red lines are my signal/stop loss lines. The green lines are where I got in at. My broker is not open on the weekends, so this is all I can show you about where I’m at in the market. But, the last that I seen of my numbers on Friday was pretty much around $160.00 of a balance. So…I know…pretty scary right? I’m sitting good, for now.
BUT…THIS IS NOT MY MONEY YET!!!
It’s when the trade is over…then it’s my money.
Oh, and a shot of seeing risk-off sentiment. This started last Friday, that red line going up and down. These are one hour lines (time frame) since then.
Mike
Hey Journal.
Ok. Well, here’s my analysis, and the plan for this upcoming week.
Really, all I’m concentrating on is where my stops are going to be. But before I could do that, I had to do some research on trailing stops. Yeah, some good stuff out there. A lot of different opinions. Some like it, some don’t, you know. And as I read them all, I internalize the info whether it sits right with me or not. But, I have to say, I agree with one principle more than the others.
So, it comes down to this. I’m not going to use trailing stops. (And I remember where that whole idea came from. Terry. He suggested it. And I blindly thought it should be a good idea. But, I need to remember that this is my system.) Anyway, I would rather want to play the price action game than just any certain amount of pips. And I do remember having this as an idea already. This is what I want. I’m going to use previous days high as my continued stop losses. I can’t particularly say it to be the previous days high as a rule, cause of some exceptions. Like if you look at the USD/JPY. The last 2 days highs are pretty close, so I will use the 2nd days highs. But basically, it will be a recent days high. Also, I do believe in a days price action to be pretty important, you know the open, high, low, close. So, that’s my reasons. And I can’t say for sure when I will be doing the adjusting either. Another one of my principles has to do with what happens in a weeks time frame. I think it’s important to see where price wants to go at the end of the week also.
So, I got a good MM of my trades, and the plan to go by.
Also I think it’s important to keep track of the monthly/weekly/daily trend. I’ll shoot those shots out too. Very interesting to me what it looks like now.
Here’s the monthly charts. Starting from beginning of last year.
Here’s the weekly charts. Starting when the trend was risk-on. Yellow above Green.
Here’s the daily charts. Starting at about the beginning of March.
So, this is what we have. Monthly time frame equals risk-off. Weekly equals risk-on still. Daily equals risk-off.
Basically we had a pretty good retracement off of the risk-off, and the daily now seems to be turning it back that way again.
If I would try to think of any other scenario, maybe would be that the weekly is trying to change the trend, eventually for the monthly time frame. But we would need to see the daily come back around first. Until that happens, I think it’s a going back to the longer time frame risk-off sentiment.
I’m trying to be objective about it. I guess what will be the tell is what eventually happens on the weekly t.f.
Ok.
Thanks Journal.
Mike out.
Hey Mike!
I know for a fact that there some regular contributors to the forum that really want you to do well.
Now that you are back in the market at a reduced capitalisation level; what you are effectively doing is forward testing. Any type of testing should have an aim and a procedure. At the end of it you should have data which allows you to trade your strategy in the most efficient and profitable manner whilst staying withing your overall risk parameters shouldn’t it?
What sort of data are you hoping to get from taking trades “on the fly”, or what does a $21 win tell you?
Should forward testing give you the same thrill and excitement as playing in the Superbowl?
If you don’t learn from the mistakes you made the last time out you are in for more of the same, I don’t think that anyone wants to see that.
Win
Win…
I thought about what you have wrote. For a few days now. Very carefully. So, let’s take this point by point.
What I am doing is forward testing. Sure. At my first instance of seeing that, it seems like it’s a bad thing. To be honest, my first feelings are to get defensive. Cause everyone knows that you should have done the backtesting trials first, to get proof, data, etc…then, because of that, therefore trade that way. That’s taking the statistical edge (of history) and applying it (to the future) .
Well, I’m not going to do that. Why? Because, first and foremost, I don’t know how. I don’t like using the MT4 platform. I’m not a computer geek or anything close to that. And I’m not going to spend hours and hours learning something that gets me to knowing what has happened in the past. And that leads me to another point.
I am not going to put a lot of stock (weight) on the past. And to clarify myself (which I guess I must continually be doing here), ‘put a lot of stock’ means to some degree. That doesn’t mean I don’t believe it’s true that the past doesn’t occur again in the future. Sure it can. We just don’t know when it’s gonna happen in the future. I do believe things happen over and over again, like price action. We can see very large candle stick wicks with hardly any bodies to them. Yeah, normally we know what is going to happen. One way or the other, it’s gonna move. So, my point is…I do believe things that have happened in the past will happen in the future. And it is possible to find that statistical edge, by back testing a whole data set the number of times of it occurring again in the future. Sure. It is possible. And people do it all the time. But, principally, I don’t want to bank on what happened in the past to happen in the future. I think there’s too many other variables, factors, in play that cause an outcome. That whole concept of coming up with a strategy based on doing it that way just does not fit right with me. I don’t like it. I would be doing something that is not me. I would be doing it your way. Not mine. The best that we can agree upon is principles. That is something that can be black and white. What works in the market and what doesn’t work in the market. Principally speaking.
Therefore, I do realize that I am forward testing. Thanks to you for letting it be known. And I accept it. I have many reasons. For one, I want this ship to get moving. I want to see progress. If I allow myself to perfect everything before I jump in, then I probably will never get off the ground. I believe in learning from experience, moreso than history lessons, (forward testing than back testing). That’s a principle. And I hope you see the word moreso. Cause it doesn’t mean that I don’t believe in history lessons. Take for example risk-on/risk-off. It happened in the past, and I know it probably will happen in the future. And that’s predominantly the way I look at the market. Whenever I see risk-off occurring, then I should think about getting in. When it’s risk-on sentiment, then I should not be getting in the market.
Any type of testing should have an aim and a procedure. At the end of it you should have data which allows you to trade your strategy in the most efficient and profitable manner whilst staying withing your overall risk parameters shouldn’t it?
What your talking about there seems to be back testing. Cause you say ‘at the end of it’…‘which allows you’ …So this is something that should happen before you trade. It’s a prerequisite to trading.
Well, I don’t agree. This is your take. This is your way. And I don’t believe it’s the only way. Sure, your probably successful. And you always have good advise to give. But, what I want is principles. Like I was taught, “there’s many methodologies but few principles…”
And you think I’m taking trades on the fly? I guess I have to explain myself again.
This is how I trade.
Risk-off happening in the market, I can be in a trade. Risk-on I’m not in the market.
The levels are set on each of the 7 pairs that is possible for me to trade. These levels are support levels. They also will be my stop losses. I get in the market when price goes below this level, using that level for the stop loss and for calculating the position size. I will get out of the trade when I’m stopped out. If price keeps moving in the right direction, I move my stop loss to break even first. Then, if continually moving, I move it on down more. What I am doing is reacting to the market movement. It’s a defensive type of trading, because I am not planning on taking profit anywhere. If the market is going to move, I will make more money, if not, then I’m protected. I have given up on trying to determine how much can I make. I think that my strategy is based upon the principle of ‘let your winners run while cutting your losses short’.
I want to trade in the present. I’m trying to follow what the market wants to do.
Now…how can we even have a conversation together when we have two completely different ideologies?
I can’t back test what the market is going to do. I want to trade according to principles. Show me a principle of where I am wrong. What I am doing is following a plan.
Sure, this is gonna take a long time to perfect, well for better and better anyway. But, I’m more concerned with progress than anything.
Oh, and if you think that I won’t get any data from this, your mistaken. It’s called live and learn. I will learn something from each and every trade that takes place. It’s even possible for me to collect past, present, and future data if I wanted to (if I was a data freak), as opposed to simply just back testing.
It’s simple.
I’m in when a certain market condition is happening.
While protecting myself.
Learning how to navigate my stop losses for profit.
This is all a process. Including this thread. This is the way I trade. BY PRINCIPLE.
And the only thing I ever got out of you, that was constructive, was the principle of following a plan. Sure, that is good stuff. And I’ve always have known that. But now I finally have a plan. And it does not require back testing. I’m a forward tester.
So be it.
Mike
Journal…Me and You…ONLY.
Well, boy, do I have some work to do. Live and learn. And this is the place where I need to hash it out.
What a week it has been! Man, where do I start. Trying to think how to organize this.
I’ll tell the story, then I need to go over the trades. And that’s what I’m looking forward to, cause there’s a lot of adjustment I will to be doing.
So, basically, in the beginning of the week, things were going so well. My account kept going higher and higher. At the same time, (like I have mentioned earlier) all I was doing was telling myself over and over…and over and over again, no lie, ‘this is not my money, until the trades are over’. And you know what? I believe it to be true. I follow the plan. It’s funny…cause at my work place I have a good buddy who follows what I’m doing. He keeps asking me, ‘So Mike, how’s the account doing?’ And this happens multiple times in a day. I remember him saying, ‘Man, Mike, you need to jump out and take the profit’. That started when the account was at $40 higher. Then I remember him saying it again at around $60 higher. And then I said that if I had listened to you back at 40, then what? But I have always had told him, ‘nope Jay, I must stick to the plan…I’m riding out the trend’. ‘But I am moving up my stop losses’. So, time is passing by, and I show him the balances…$80…then my account doubled. I was up to an account balance of $200. He couldn’t believe it. And trust me Journal, honestly, I kept saying to myself over and over again that it’s just not my money yet. But, again, honestly, the mind remembers what’s going on. Surely I don’t want to see it all go away. Am I prepared for the drop??? I did tell myself that it’s probably gonna happen.
And it did.
Reality took over.
Approaching mid week, things were changing. And what made matters worse was I kept telling myself that it’s the end of the month happening. Not only that, I realized that it’s the end of the quarter also! I know there will be a lot of squaring up of accounts going on and it’s more of a skew of price action than where price wants to go. Now, of course, I can be wrong about that. But that’s what was going through my mind.
My account is dropping.
Man…I am mesmerized. I realize it also. It is an evil. There ain’t a couple hours passing by that I’m not checking my phone. I’M A SLAVE TO THIS!! And I hate it. This is all what’s going through my mind while this is going on. My account is dropping. I still keep telling myself that it’s not my money! For as much as I am battling this mind game, there’s a deeper, stronger part of myself that just cannot relax. It’s like there’s 3 Mike’s here. The outer Mike, which is the physical one. This is what I end up doing in this real world. Then there’s the smart(er) one that is telling me to be patient, stick to the plan, just giving me as much advise as I possibly can. And then, there’s the one deep inside that is only seeing the bottom line $ amount. He don’t care what happens afterwards, whether I keep to the plan or not, or even what will be the next course of action. It’s the here and now only. It’s what the account looks like…that’s it.
I am remembering what the plan is. And that’s my take profit. What I am doing is trading defensively. But, I guess I forgot that part. Things have been going so very well, that my mind kind of dropped the focus off of losing to how much am I going to win.
It’s a struggle. I realized it while I went through it. And now, I am going to do something about it. Believe me Journal, I have already started a mind map on how to rectify this problem. In fact, I started a major mind map folder. I will be keeping a ‘PROBLEM’ folder. Those things that I absolutely need to get under control, with solutions/course of actions, will be filed there. I’ll share that with you later.
So anyway…yep…there goes my account. Down.
Shaved off, bit by bit.
I’m [I]watching[/I] it, just too much. I have noticed how my brain remembers where the account went up to. That’s kind of funny. Sure, rub it in why don’t ya brain.
$200 was the top. $180 …ok, still not bad. Actually not bad at all. $160 …uh oh. Not good. Getting worried. $140 …yep, starting to panic now. (‘end of month, end of month’) … Geeez. Is this gonna continue?
$130… OK …I had enough. I watched it bounce back up a little bit. And sure enough, I’m out. Jumped completely.
I can’t believe I did it. I did the unthinkable. I honestly didn’t think that I would end up doing that. And my excuse was the end of the month. Well, then I promised myself that I would not get in any more until at least after April starts. I must have jumped around Wednesday morning, cause I remember at work for 2 days not looking at my phone anymore. There was no reason to. And I did keep my promise. I was done for the month, trading wise. Although I would take a peek at the market as I was working. I remember seeing it at a point where I thought it was gonna come on back down (my way). I had a sinking feeling in my stomach. I thought I made a mistake. But a couple hours later I checked and it was a real fake out. The market did end up going back up. Man…I tell ya…this intraday movements are really evil. For me. I cannot handle it. I know and keep reminding myself that I trade in the longer term. Well, it’s actually medium to longer. And yet I realize that I [I]watch[/I] the market way too much. I [I]watch[/I] it as a day trader, but trade it as a swing trader. Well, my strategy dictates it as swing trading. I do remember my principle. And I have questioned it to myself many, many times. How much do I believe in the daily time frame? I’m telling you Journal, I have asked myself that over and over again. I DO BELIEVE IT. I WANT TO BELIEVE IT. But why then cannot I act accordingly??? Meaning that it’s important to find where price wants to end up at the end of the day.
Well, things are gonna change. I’m putting in a rule. I’ve contemplated this so much before hand, because I know myself. I know how to obey. In fact, I will even say that nobody knows how to obey more than me.
Growing up with a step dad who knew how to punish me. Who didn’t hesitate to bend us kids over the bed many times. I have heard those words just too many times!!! [I]Bend Over[/I]
No one obeys directives more than me.
And then even to get shipped off to the Army, (my Mom highly suggested) shortly after high school. Like I hadn’t had enough beatings, the Army basic training would finish it off. That was not fun for me. And then for the next 6 yrs of taking orders. Just not free.
No one knows how to be obedient more than me.
I know how to obey, and I will obey myself. Now that’s who I want to obey, anyway.
See, I want this more than anything. This is my business. I can be true to myself. I can get to the bottom of myself. I will fight. And I will take care of these problems with the utmost of fervor. So, therefore, I know what my biggest problem is right now.
Take a guess Journal.
[B][I]Watching the Market[/I][/B]
I will not watch the market anymore. My privileges are gone. I don’t deserve to satisfy my curiosity about what’s going on, anymore. This has to be a rule of mine. Sure, I have a lot of other issues to hash out, but this being in place will alleviate many trading problems. If it’s true that I believe in end of day price, I need to see it before I make any kind of decisions. I guess what I really need to concentrate on is truly operating within the confines of my time frame trading. It’s longer term Mike.
Ok. That’s nice.
So, I have to take apart my trades.
That’s up next.
Mike
1 Like
Ok Journal.
Here we go. Trade by trade.
USD/JPY
First off, the top red line has always been my signal line. And that means that it’s the line that when price goes below it, will be when I get in a trade and that being my stop loss. I remember that Tuesday the 21st. I waited to the end of day to get in (after work). So, the bright green line is where I got in at. And the red line above being the stop loss. So, my first action was moving my stop loss to break even (bright green line). That was done. Then my next action taken was moving the stop loss into profit, which is the next green line down. That was the high price on the 23rd. Price kept moving down. Then I moved the stop loss even further (a little bit more) to the next high, on the 24th. Then comes Monday the 27th. Price opens quite low, and drops even lower. I’m so into profit at this time. Well, we can see (hindsight of course) what happened this week. Big bounce on up. Pretty much everyday. The blue line is where I jumped on out of all my trades. I forget whether it was the 28th or 29th when I jumped.
So, now that I’m on the other side of it. I want to talk about it, and learn something. What should I have done? Well, what was the plan to begin with? Mind you that I know that this is where I need to learn something for the future. Cause I know I need to have a better exit plan. Well, as I remember it, my plan is to ride out the trend. So, what would’ve happened if I had followed the plan to the T. I would’ve gotten stopped out at my latest stop loss. And the profit would’ve been 25 pips and somewhere around $4. or $5. But…I did mess it all up and luckily ended up with 66 pips and $11.
But what I really want to do is look at what’s happened/ happening. If I would’ve just stayed in period, I would’ve gotten stopped out at every level that ever was. All the way up to my original stop loss, signal line.
And now price has come back on down and seems like it wants to continue on with the trend.
Boy, I’m kinda stuck. Cause look. My principle does hold true. Daily ending of price. On the last day, Friday, price did climb up to great heights, but did end up down. Ok, so it’s nice knowing that that holds true. I can hold off, and when I don’t look at the market anymore other than at the end of the day. But what about my principle of having a stop loss established? Surely I cannot make it that I don’t have one anymore. It seems like those guys are doing a good job of taking out everyone’s stops. And it would’ve been me, if I didn’t do the stupid stunt that I did. nod,nod,nod…not good I realize that the worst thing that I can do is to not follow the plan, more than losing money. But, ok, so how do I rectify this? That top line means this to me. It’s my signal line. I simply do not want to be in the market above it. And if it gets broken, then I guess I get stopped out. Or…how about this…why don’t I just make it a rule to have that as a silent stop out place, and not marked. Since I will be only looking at end of day price, it won’t have an effect on me. Well, then again, what if price goes above it strongly and doesn’t turn back around. Yep. Then I’m screwed. I cannot assume this is going to happen the same way in the future.
So, looks like it’s a good plan to stick with: FIRST protecting the account by moving the stop to break even. This way I’m not going to lose. Then it’s to lock in some profit. And sure, I would’ve chalked up a little bit. Ok. Not as much as I could have, but I guess that’s just the name of the game. What happens afterwards I’m just going to have to deal with it. And it looks like I will basically have 2 options. Price will either continue back on down with the trend, or it’s not. In this case, it shot way on up, cleared out many stops, but came on down. I wonder if the end of the month play contributed to this spike?
So, I need to incorporate another entry plan. And I knew this. I remember wanting to come back in with the small lot sizing like starting back over. And that’s what I will do. Rinse and repeat. But, what’s gonna be my initial stop loss? Gonna figure this out now.
Ok. I’m back. Took a good look at, monthly trend, weekly, daily, and the level. This is what I determine.
I seriously don’t think price is gonna close above 111.73 , also I think the 112.00 level is good for the stop loss. So, I’m going to use that 112 level again, and calculate my loss to be $5.00. I can lose that much, but I don’t want to lose any more than that. Yeah, I do have more in the account, but I figure that with trading these other pairs will weigh on the risk also. So, that’s gonna be the plan for this pair.
Geeeez. One down, 8 to go.
I’ll try to shorten these.
Mike