Putting My System to the Ultimate Test

[expiated]

Thursday | August 4, 2022 | 6:15 PM PST

The craziness of the previous 24-hour market cycle gave me the idea of limiting my trades to a version of the "Boundary Violation" tactic that I'm going to call "Daily Peaks and Valleys." (The other tactic I'm using is the "Errant Son" strategy.)

The idea is to use my adjustable dynamic moving average envelopes and my instantaneous moving average baselines to buy each (selected) currency pair following the establishment of its daily low, and then sell each (selected) currency pair following the registering of its daily high.

Is trying to catch tops and bottoms really the ultimate loser's game?

If this works, many of the trades should lead to relatively significant payouts using a much less hectic approach to buying and selling throughout the morning, and usually without incurring any losses. Right now, I am short GBPUSD, and am already enjoying roughly 20 pips’ worth of profit.

 

[expiated]

The idea is to use my adjustable dynamic moving average envelopes and my instantaneous moving average baselines to buy each (selected) currency pair following the establishment of its daily low, and then sell each (selected) currency pair following the registering of its daily high.

At some point, each of my six positions was at least 10 pips into profit territory, so it would seem that this is where I should set my take-profit target. Unfortunately, at the time that I woke up from my "extended nap," AUDJPY was -$2.59 in the red, and EURGBP was down my -34¢, and there is no guaranty or promise they will ever come back...

In any case, "Daily Peaks and Valleys" (or some version of it) is likely to be my "go to" strategy, my "bread and butter" if you will, beginning next week and throughout the days, weeks and months to follow.

You might be able to make better sense of what you see if you try evaluating the micro moves in the context of the 35-minute price flow.

Use the 45-minute price flow (which is a more"stable" measure) instead.

 

[expiated]

From my perspective, the behavior being exhibited by price action right now is STUPID! And for this reason, I'm going to be satisfied with this morning's gains where they now stand and call it a day...

 

[expiated]

Friday | August 5, 2022 | 1:30 PM PST

I devoted approximately half of today’s trades exploring what it is like trading the U.S. Indices (or should I say, trading contracts for difference that are tied to their price movements).

Trading the Nasdaq (Nas100) was cool because one is rewarded with such a relatively large payout per position as compared with the other indices, and especially as compared to the foreign currency pairs.

Trading the Nasdaq (Nas100) was nerve-racking because one can quickly be saddled with a monstrous loss due to the fact that each position is worth such a substantial amount, relatively speaking.

This means I have to trade in teeny-tiny increments to avoid losing my shirt!

Still, I want to continue to experiment with such trades. For the time being however, I think I will stick with ONLY trading the S&P (Spx500) and the DOW (US30), using the configuration pictured below to aide with the execution of teensy-weensy entries and exits…

The gold moving averages tell me if market bias is bullish or bearish. If the sentiment is bullish, my plan is to enter when rates are beneath the blue and red "snake" (AND the gold moving averages?) and then exit while price is above it. If bearish, I plan to enter when rates are above the blue and red "snake" (AND the gold moving averages?) and then exit while price is below it.

 

[expiated]

Still, I want to continue to experiment with such trades.

I was doing okay up to this point. But unfortunately, I think the indices just initiated a reversal that I won't be able to escape and that is therefore likely to devastate my account balance!

 

[expiated]

Hopefully I learned a thing or two today about guerrilla trading the U.S. Indices (and can use these lessons to do better tomorrow).

 

[expiated]

Hopefully I learned a thing or two today about guerrilla trading the U.S. Indices (and can use these lessons to do better tomorrow).

Unlike yesterday, this morning I avoided getting trapped in any upside down U.S. index positions...

 

[expiated]

I think you're the only one I ever come across that trades on Nadex. Heard so many things wrong with it. Why do you trade on this? There are so many more exchanges/markets that are legit

Here is an example of what I'm talking about. Trading via a traditional broker, such as OANDA, with a minuscule balance (one or two hundred dollars) using the smallest available position size (0.01 lots), these two trades would have returned approximately 47¢ and 48¢.

Where as the exact same positions, entered and exited at just about the same time using NADEX knock-outs, with the same minuscule balance using the smallest available position size (one contract) would have resulted in a payout of about $10 and $11.

That's a difference by about a factor of 20! Yikes!!!

This is why I am now trading Nadex knock-outs as opposed to using "so many more exchanges/markets that are legit." The speed with which I can grow an initial balance of less than a thousand dollars is exponentially greater than just about anything else I'm aware of.

 

[expiated]

After the initial jump following the release of the U.S. inflation rate, the U.S. indices refused to pick a direction in which to navigate for any substantial stretch of time, and I actually found myself losing money after Trade #287.

Subsequently, I tried to just go with the flow, and I made up about half of my initial loss (see the red circle) and believed I was well on my way to making up the rest if I continued to trade in the same manner, possibly even finishing the day with a little bit of profit (as I was able to do previously between Trade #235 and #248).

Unfortunately, at about that time, I had to switch locations. It was also at this point that I came to believe the indices had finally made a decision, and were at long last ready to commit to a southbound trajectory. Convinced this was the case, I figured I could load up on short positions, and then cash in as soon as I got to my next location.

However, upon my arrival, I discovered that I was wrong! The Nasdaq, Dow and S&P all turned north again ten minutes after I left, taking out my stops so that now I was WAY in the hole—four times the distance I was before!

I am therefore increasing the average size of my positions, believing I can harness the power of Numerical Price Prediction to quickly dig my way out of this mess as market conditions become more favorable. (I will be very interested to see if I really can.)

By the way, I should mention that the entity expressing an interest in my system wants me to use myfxbook or collective2 instead. Consequently, I am no longer using this journal as a destination to which I can direct others interested in what I do—but am now merely using it as a place to record my wins and losses, primarily for myself.

Also, I have yet to compare the index knock-outs with the corresponding CFDs in the way that I just did with foreign currency pairs in the previous post. So, I'll still want to get that done before I return to trading knock-outs live, which I'm planning to resume around the middle of next week.

 

[expiated]

I have yet to compare the index knock-outs with the corresponding CFDs in the way that I just did with foreign currency pairs in the previous post. So, I'll still want to get that done before I return to trading knock-outs live, which I'm planning to resume around the middle of next week.

A Nasdaq knock-out spans 150 whole units and is worth about $157 + $446 ≈ $600, which suggests that every $0.25 change in price translates to $1.00 in profit or loss.

An S&P 500 knock-out spans 50 whole units and is worth about $422 + $88 ≈ $500, which suggests that every $0.10 change in price translates to $1.00 in profit or loss.

And finally, a DJIND knock-out spans 500 whole units and is worth about $104 + $399 ≈ $500, which suggests that every $1.00 change in price translates to $1.00 in profit or loss.