Let Your Profits Run!
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I was pleased to find upon waking this morning that most of my open trades had not turned against me while I slept. Exiting positions as soon as I notice price has moved to the "wrong" side of the confirmation trendline so far appears to be keeping my average profit trade more or less equal to my average loss trade.
I have exited all but two of my open positions so that I am not forced to continue monitoring them while languishing in a market that appears to be lacking in volume and momentum.
However, It looks like I'm going to have to abandon USDJPY as well, and eat a loss in the process, given that this hour's candlestick is forming below the confirmation trendline, but I am still hopeful that GBPUSD will eventually climb high enough to hit my take-profit target.
Again, this week I am trading using primarily 30-minute charts, but in examining my USDJPY one-minute setup, it seems rather clear that once I am able to return to monitoring my positions full-time, it should not be all that difficult to vastly improve on the profitability of even this longer-term approach to Numerical Price Prediction (intra) day trading.
I have exited all but two of my open positions so that I am not forced to continue monitoring them while languishing in a market that appears to be lacking in volume and momentum.
However, It looks like I'm going to have to abandon USDJPY as well, and eat a loss in the process, given that this hour's candlestick is forming below the confirmation trendline, but I am still hopeful that GBPUSD will eventually climb high enough to hit my take-profit target.
Again, this week I am trading using primarily 30-minute charts, but in examining my USDJPY one-minute setup, it seems rather clear that once I am able to return to monitoring my positions full-time, it should not be all that difficult to vastly improve on the profitability of even this longer-term approach to Numerical Price Prediction (intra) day trading.
It looks like the markets have picked up a little bit, so I have entered a EURJPY long position @ 129.18 given that it appeared to have the best structure available out of all the options open to me at this still more-or-less "dead" period of relative inactivity.
(I imagine assets will begin seeing more action about seven hours from now when the London Session gets into swing.)
Virtually everything about AUDJPY is bullish, so it makes perfectly good sense to enter a long position @ 81.68.
However, if I step back and look at the bigger picture, I get a different story...
The pair has been in decline (more-or-less) ever since the end of January. Moreover, it appears to be losing momentum in the general region of 81.93, and it is displaying the same signals it sent when it turned over in May, June, July, and most recently at the end of September.
But at this point, none of the lower timeframe charts (i.e., 4-hours or less) is evidencing even a hint of the possibility that the asset might want to turn around. So in the spirit of objectivity over subjectivity, and purely in accordance with the numbers, I shall remain in the trade as long as candlesticks continue to form above my confirmation trendline.
However, if I step back and look at the bigger picture, I get a different story...
The pair has been in decline (more-or-less) ever since the end of January. Moreover, it appears to be losing momentum in the general region of 81.93, and it is displaying the same signals it sent when it turned over in May, June, July, and most recently at the end of September.
But at this point, none of the lower timeframe charts (i.e., 4-hours or less) is evidencing even a hint of the possibility that the asset might want to turn around. So in the spirit of objectivity over subjectivity, and purely in accordance with the numbers, I shall remain in the trade as long as candlesticks continue to form above my confirmation trendline.
At this point, my success rate when it comes to adapting Numerical Price Prediction (NPP) to a pseudo-swing style of trading is approaching approximately 70%, which is the absolute minimum of what I would deem acceptable to me.
I know there are professional traders who are perfectly happy with a 30% success rate. But it's always seemed to me that if one is right less than half the time, one's ability to trade profitably is not so much a matter of understanding markets as it is one's expertise at managing positions, managing money, and managing emotions (i.e., trade psychology).
Of course, there is nothing wrong with that. But personally, my preference is to approach this endeavor based on principles I see in Scripture. To paraphrase the Messiah...
“You have a saying that goes, ‘Red sky at night, sailor’s delight; red sky at morning, sailors take warning.’ You find it easy enough to forecast the weather—why can’t you read the signs of the times?”
“When you see clouds coming in from the west, you say, ‘Storm’s coming’—and you’re right. And when the wind comes out of the south, you say, ‘This’ll be a hot one’—and you’re right… You know how to tell a change in the weather, so don’t tell me you can’t tell a change in the season… You don’t have to be a genius to understand these things. Just use your common sense…”
“Look at a fig tree, or any tree for that matter. When the leaves begin to show, one look tells you that summer is right around the corner. The same here…”
So I am happy if my average profit trade is even in the neighborhood of my average loss (as it remains still) since my success is predicated on correctly forecasting price action the vast majority of the time and not necessarily on abiding by commonly accepted practices such as making sure average gains are greater than average losses, or the requisite 1:1 minimum risk-to-reward ratio established for professional traders.
Currently, I'm only about a third of the way to getting out of the whole I dug for myself going back to the beginning of this experiment on October 21, 2018, but if I remain patient and continue to apply the system according to what an objective assessment of the historical data suggests is statistically justifiable, I trust I will succeed at arriving back in the black within the week, or two weeks at the most, God willing.
Again, to paraphrase the Apostle Paul…
“Don’t be gullible. Check out everything, and keep only what’s good. Throw out anything else…”
I know there are professional traders who are perfectly happy with a 30% success rate. But it's always seemed to me that if one is right less than half the time, one's ability to trade profitably is not so much a matter of understanding markets as it is one's expertise at managing positions, managing money, and managing emotions (i.e., trade psychology).
Of course, there is nothing wrong with that. But personally, my preference is to approach this endeavor based on principles I see in Scripture. To paraphrase the Messiah...
“You have a saying that goes, ‘Red sky at night, sailor’s delight; red sky at morning, sailors take warning.’ You find it easy enough to forecast the weather—why can’t you read the signs of the times?”
“When you see clouds coming in from the west, you say, ‘Storm’s coming’—and you’re right. And when the wind comes out of the south, you say, ‘This’ll be a hot one’—and you’re right… You know how to tell a change in the weather, so don’t tell me you can’t tell a change in the season… You don’t have to be a genius to understand these things. Just use your common sense…”
“Look at a fig tree, or any tree for that matter. When the leaves begin to show, one look tells you that summer is right around the corner. The same here…”
So I am happy if my average profit trade is even in the neighborhood of my average loss (as it remains still) since my success is predicated on correctly forecasting price action the vast majority of the time and not necessarily on abiding by commonly accepted practices such as making sure average gains are greater than average losses, or the requisite 1:1 minimum risk-to-reward ratio established for professional traders.
Currently, I'm only about a third of the way to getting out of the whole I dug for myself going back to the beginning of this experiment on October 21, 2018, but if I remain patient and continue to apply the system according to what an objective assessment of the historical data suggests is statistically justifiable, I trust I will succeed at arriving back in the black within the week, or two weeks at the most, God willing.
Again, to paraphrase the Apostle Paul…
“Don’t be gullible. Check out everything, and keep only what’s good. Throw out anything else…”
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The best time to execute trades was actually about 12 hours ago, when GBPUSD, GBPJPY, and EURJPY were registering 24-hour lows, so I had to think a little as to why I did not do so. I thought perhaps I was taking a nap at the time, but then realized the corresponding hours transpired earlier than that.
Since I virtually never watch television, I decided to sign up for a trial Netflix account. Sunday I watched Black Panther, and yesterday I was watching Thor Ragnarok after which I ate dinner, the whole time completely ignoring the markets, resulting in my being totally aware of the opportunities that had presented themselves at the time.
Given that I am somewhat distrustful of a number of pairs whose daily charts suggests that they might at any time decide to make wholesale reversals in the opposite direction, the only halfway decent trade available to me when I woke up this morning was to buy EURUSD.
EURUSD one-minute chart:
However, I decided I would enter the trade using my one-minute chart setup. Indeed, this is how I SHOULD execute all my trades going forward—glance at daily charts for context, monitor 30-minute charts for possible trade setups, and then refer to one-minute charts to determine exactly when and where to actually enter a given position.
Theoretically, this should make it possible to use 10-pip stop losses more characteristic of my guerrilla style scalping approach to trading as opposed to the 35-pip stop losses required by the pseudo-swing style intraday approach to trading I am using now.
If this works, it will enable me to abide by the minimum 1:1 risk-to-reward ratio demanded of professional traders while still maintaining a 70%, and hopefully an eventual 90%, daily success rate.
Since I virtually never watch television, I decided to sign up for a trial Netflix account. Sunday I watched Black Panther, and yesterday I was watching Thor Ragnarok after which I ate dinner, the whole time completely ignoring the markets, resulting in my being totally aware of the opportunities that had presented themselves at the time.
Given that I am somewhat distrustful of a number of pairs whose daily charts suggests that they might at any time decide to make wholesale reversals in the opposite direction, the only halfway decent trade available to me when I woke up this morning was to buy EURUSD.
EURUSD one-minute chart:
However, I decided I would enter the trade using my one-minute chart setup. Indeed, this is how I SHOULD execute all my trades going forward—glance at daily charts for context, monitor 30-minute charts for possible trade setups, and then refer to one-minute charts to determine exactly when and where to actually enter a given position.
Theoretically, this should make it possible to use 10-pip stop losses more characteristic of my guerrilla style scalping approach to trading as opposed to the 35-pip stop losses required by the pseudo-swing style intraday approach to trading I am using now.
If this works, it will enable me to abide by the minimum 1:1 risk-to-reward ratio demanded of professional traders while still maintaining a 70%, and hopefully an eventual 90%, daily success rate.
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I moved my stop loss back to the level dictated by the numbers generated via historical data, though entering positions based on the one-minute chart remains a probable "best practice."
But given that I will not be monitoring my trades minute-by-minute, and as a result, will not be present to reenter trades at the appropriate time if and when 10-pip stop losses are taken out, using this tactic for pseudo-swing trading is not practical.
Also making this strategy undesirable is the fact that a guerrilla-style scalping approach to day trading leads to a repeated reaping of five-pip gains, which more than compensate for a 10-pip loss.
But a longer-term approach could lead to repeated 10-pip losses without securing any offsetting gains whatsoever in the hopes of eventually enjoying a perhaps 30-pip win that might not ever materialize, or might end up not being as substantial as originally hoped.
EURUSD sort of "popped" the last 15 minutes before the start of the next 24-hour market cycle on my OANDA MT4 chart, so I went ahead and closed out this trade here (with a small gain).
I only made four trades today, but at least they were all profitable...
Even making just a handful of trades, I never managed a 100% daily success rate before when attempting a longer-term approach to day trading (though a 90-100% daily success rate when scalping was completely normal for me) so I'm curious to see if I can repeat this again, and if so, how long it will take me (if ever).