1.8% Profit per Day Compounded over 220 Days
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It has been a month since I last added an entry to this thread, so I just wanted to stop by to note (for myself) that what I posted at that time still apparently holds true...
This was a "bad" day of trading due to a number of currency pairs reversing their day-to-day trends, yet with the "enhancements" I added to my system during the past three weeks, I was still able to (at this point) manage about 4% profit for the day, well above the 1.8% mark that is "ideal."
Also, this was accomplished while devoting much of my attention to other endeavors, so I'm hoping this bodes well for when I resume trading "seriously" in March of 2019.
Also, this was accomplished while devoting much of my attention to other endeavors, so I'm hoping this bodes well for when I resume trading "seriously" in March of 2019.
The "pilot study" that I "officially" launched on February 27, 2018 was suspended when I began entertaining the notion that I could improve on the variant of my system I was using at that time, and therefore began experimenting with numerous other modifications.
However, everything I'm seeing at this moment leads me to believe all that "fooling around" is probably over with and it might therefore be worthwhile to initiate a second "pilot study."
More specifically, I currently have about $120 in my live trading account and I want to see how long it takes me to double it to $240.
Given that other priorities are forcing me to take a rather lackadaisical, halfhearted approach to trading at this time and probably for the next four months at the very least, I figure however long it takes me to reach this goal (assuming I am able to reach it at all) I will be able to double my balance again in at least half the time once I am able to go back to trading seriously.
So, I am noting my starting date as November 11, 2018 and posting this entry as a reference point.
Recently I posted my results from July 5, 2018, in which I spent a day scalping 5-micro-lot-sized trades from my demo account for about a $22 gain using my old guerrilla style of day trading—for the purpose of illustrating that it is possible to day trade profitably without relying on a few winning trades to offset a vast majority of losers—and I had a contributor to this website respond in a manner suggesting that one day spent reaping gains of between 40¢ to $2.00 for a total of a mere couple of dozen bucks rather than working a regular job means nothing.
However, this reminded me of when the Jews returned from captivity in Babylon and began to rebuild the temple in Jerusalem…
For a time, the work languished. So Yahweh sent the prophets Zechariah and Haggai to spur the people on to finish the rebuilding. Their message was encouraging—that the people should not despair over small beginnings because Yahweh would see to it that the temple was completed. As insignificant as the work might seem, it was not contemptible because Yahweh was watching, directing, and regarding it with favor.
So now that I am making trades of a single micro lot from my live account, I do so with the same attitude, though I of course have no prophets by my side assuring me that I am being watched, directed, or regarded with favor.
Also, I’m beginning to get bored with making forecasts and then posting winning trades, so I think I am going to begin focusing on my losers, starting with Friday’s NZDJPY short position. (Had I remained in the trade, it would have ultimately hit my take-profit target and I would not have had any losing trades on Friday.)
I abandoned this trade because candlesticks began forming north of my (black) intraday trend line, and given that it was Friday, I feared there might not be enough time left in the week for things to turn back in my favor.
However, with hindsight, and having had the time to think things over/reconsider... given that my confirmation bumblebee (yellow and black) moving average still displayed a negative slope, there was reason for me to hold out hope and remain in the trade!
But on closer inspection, it looks like my confirmation trendline might have just begun hooking to the north when I exited the position (upon the formation of the blue candlestick in the white circle). However, I do not recall if this was the case, or if the hook formed with the following candlestick.
If the formation of the hook took place at the close of the blue candlestick, then my abandoning the trade was justified and I have no reason to second-guess myself.
On the other hand, assuming the opposite was true, there were two more factors to consider...
Most importantly, at the close of the blue candlestick, price was not that far below the upper limit of the intraday price range (the purplish upper band of the envelope) which I regard as statistical resistance.
In other words, there was reason to believe that the statistical odds were in favor of the short-term trend reversing direction and heading south from there. So it would have made sense to remain in the trade for at least one or two more candlesticks and observe whether or not this indeed happened.
Countering such a decision however is the fact that the day-to-day trend line (the black and green moving average) is so bullish.
So in the end, I’m still not sure whether I “should” have abandoned the position or not. But what I hope to always remember to do going forward (I don’t want to construct a checklist until I’m relatively sure I cannot remember on my own) is to not only consider what is going on with the trendlines, but to also note exactly where the rate is within the intraday price range!
P.S. No, abandoning the position WAS justified, because I ALSO have a guideline directing me to do this if and when a candlestick opens and closes on the opposite side of the confirmation trendline, which the blue candlestick did indeed do.
(Whether or not it makes sense to give a rate's position with the intraday price range precedence over the confirmation moving average guideline will need to be determined by Friday's observations in tandem with those made in the future.)
However, this reminded me of when the Jews returned from captivity in Babylon and began to rebuild the temple in Jerusalem…
For a time, the work languished. So Yahweh sent the prophets Zechariah and Haggai to spur the people on to finish the rebuilding. Their message was encouraging—that the people should not despair over small beginnings because Yahweh would see to it that the temple was completed. As insignificant as the work might seem, it was not contemptible because Yahweh was watching, directing, and regarding it with favor.
So now that I am making trades of a single micro lot from my live account, I do so with the same attitude, though I of course have no prophets by my side assuring me that I am being watched, directed, or regarded with favor.
Also, I’m beginning to get bored with making forecasts and then posting winning trades, so I think I am going to begin focusing on my losers, starting with Friday’s NZDJPY short position. (Had I remained in the trade, it would have ultimately hit my take-profit target and I would not have had any losing trades on Friday.)
I abandoned this trade because candlesticks began forming north of my (black) intraday trend line, and given that it was Friday, I feared there might not be enough time left in the week for things to turn back in my favor.
However, with hindsight, and having had the time to think things over/reconsider... given that my confirmation bumblebee (yellow and black) moving average still displayed a negative slope, there was reason for me to hold out hope and remain in the trade!
But on closer inspection, it looks like my confirmation trendline might have just begun hooking to the north when I exited the position (upon the formation of the blue candlestick in the white circle). However, I do not recall if this was the case, or if the hook formed with the following candlestick.
If the formation of the hook took place at the close of the blue candlestick, then my abandoning the trade was justified and I have no reason to second-guess myself.
On the other hand, assuming the opposite was true, there were two more factors to consider...
Most importantly, at the close of the blue candlestick, price was not that far below the upper limit of the intraday price range (the purplish upper band of the envelope) which I regard as statistical resistance.
In other words, there was reason to believe that the statistical odds were in favor of the short-term trend reversing direction and heading south from there. So it would have made sense to remain in the trade for at least one or two more candlesticks and observe whether or not this indeed happened.
Countering such a decision however is the fact that the day-to-day trend line (the black and green moving average) is so bullish.
So in the end, I’m still not sure whether I “should” have abandoned the position or not. But what I hope to always remember to do going forward (I don’t want to construct a checklist until I’m relatively sure I cannot remember on my own) is to not only consider what is going on with the trendlines, but to also note exactly where the rate is within the intraday price range!
P.S. No, abandoning the position WAS justified, because I ALSO have a guideline directing me to do this if and when a candlestick opens and closes on the opposite side of the confirmation trendline, which the blue candlestick did indeed do.
(Whether or not it makes sense to give a rate's position with the intraday price range precedence over the confirmation moving average guideline will need to be determined by Friday's observations in tandem with those made in the future.)
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I was stopped out of EURGBP, which confirmed an earlier conclusion and answered my question as to whether it makes sense to give a rate's position within the intraday price range precedence over the confirmation moving average guideline.
The answer is that the confirmation moving average guideline probably takes precedence over everything else, especially the day-to-day moving average. I will therefore, for the time being at least, predicate all my trade decisions on this conclusion.
NOTE TO SELF...
Plot the moving average in the main chart from which you generated the original oscillator in the lower panel and call it the short-term confirmation trend line. You will therefore need to change what you call the former confirmation trend line by renaming it as the overall confirmation trend line.
Plot the moving average in the main chart from which you generated the original oscillator in the lower panel and call it the short-term confirmation trend line. You will therefore need to change what you call the former confirmation trend line by renaming it as the overall confirmation trend line.
Focusing on my losing transactions has led me to conclude that perhaps the best setups for executing successful trades occur when the candlesticks are forming below an upward sloping longer-term confirmation trendline, or above the same moving average when it is sloping downward.
So then, the key is the location of price, but I cannot label what I do as “position” trading in that this would imply I am holding positions for weeks, months, or even years at a time, when I am actually doing quite the opposite.
Since I will only enter positions at certain key levels, this is another term I might incorporate in a new moniker for the limited range of tactics I began applying today, but such a title might be easily confused with Level II trading, so I should probably stay away from that term as well.
Price range is intimately involved in my approach, but “range trading” already refers to a previously existing methodology, as do other factors involved in the techniques I employ, such as overbought and oversold (conditions), and supply and demand (zones).
I have therefore decided to label the tactics on which I am now focused as "Dynamic Probability" trading.
Based on today’s activity...
...I am hopeful that Dynamic Probability Trading (a subdivision of Numerical Price Prediction) will not only enable me to continue doing something I was unable to do for seven years—trade successfully on a consistent basis using a strategy other than scalping—but to also do so at a daily success rate approaching the 90% plus I was able to realize previously using guerrilla style day trading.
That would be Entry: #174 (in case this helps me find it later on).
My goal for this first week should be $9.33
As of today I am at $7.85.
When I was using my guerrilla style approach to day trading (scalping), it was not unusual for me to go several days without experiencing a single loss.
However, my ultimate goal after switching to what I think of as a pseudo-swing style of buying and selling currency pairs was to manage a 90% daily success rate, which I came close to doing yesterday, and was actually able to accomplish today.
However, at this point I'm thinking the consecutive days of 100% success that was a regular occurrence back when I was scalping might not be outside the realm of possibility even now, given the specialized "Dynamic Probability" trading I began to try out yesterday (a derivative of my Numerical Price Prediction day trading system).
The new technique's setup, which consists exclusively of proprietary moving averages and moving average envelopes, has greatly simplified my main charts...
Moreover, my average gain today was more than double my average loss. That used to never happen with me, but began to occur sporadically within the last year or two. However, if I can manage to start doing this consistently, that would be icing on the cake!
Again, it's not so much about the trend as it is about the statistical probability of what price is likely to do given its position (relationship) relative to: (1) the intraday trend; (2) the day-to-day trend; (3) the intraday price range; (4) the typical day range; (5) historical levels of support and resistance; and (6) reoccurring price patterns.
Yes, the trend is my friend, but not necessarily because it informs me as to which direction price is headed. I am better served by regarding it as a "sounding board" I can use to make "real-time radar reflectivity calibrations," providing me with the information/data I need to successfully navigate the Forex environment. It doesn't matter so much whether the market is bullish or bearish, but rather, how all of the various factors are interacting with one another at any given moment in time.
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It turns out that today was a particularly volatile day of trading, which presented me with a number of additional trade opportunities, four of which I was able to take advantage of. As a result, my total for this week (so far) actually ended up being $12.74 and my success rate for this 24-hour market cycle was somewhere around 93%.
When isolated from the rest of the week, today's percent profit was somewhere in the neighborhood of 20%, well above the 1.8% target.
Of course, I'm not counting on this happening every day, but if today (and the second half of yesterday) is any indication of Dynamic Probability Trading's potential, then doing half as well, or even a quarter as well, on a relatively regular basis (if I can manage it) just might put me in the driver's seat with respect to my financial well-being by the end of 2019, God willing.
(P.S. It should be possible considering that what I am doing right now I cannot even regard as trading "seriously.")
(P.S.S. Just playing with words... Dynamic Probability Trading is a day trading system predicated on the belief that it is possible, via an extensive statistical analysis of a wide variety of simple moving averages, to isolate a specific non-standard moving average that reflects the actual direction of price with respect to a given time frame far better than any other measure—a contention that led to the development of Numerical Price Prediction, of which Dynamic Probability Trading is an offshoot.
But rather than regard trend as the trader’s “friend,” Dynamic Probability Trading conceptualizes it as a reflective surface off which price is continuously bouncing output pulses, enabling a trader to safely navigate the market thanks to the “sonar imaging” this process generates as the trader measures and monitors the seismic reflections between the surface [price] and the seafloor [trend].
However, the key to success is being able to correctly interpret the "echo map" resulting from this entire process.)
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