Mickey's Journal

[wiseambitions]

Hi Mickey
I haven't been on the site for a few days even weeks, but pleased to see you're looking at what I said about those two emas.....


Sometimes I get in trouble on here for talking about stuff which is not entirely alligator/box/AO related, however I have often alluded to another observation which nobody has chosen to pick up on.

As well as your gator, ADD a new line, which is to be 25 EMA, and NOT shifted, preferably paint it WHITE.

Watch the behaviour of this line relative to what the RED line of alligator is doing, and price action.

If WHITE goes up through RED, preferably at times the AO is not far away from Zero, it is a good sign to go LONG, the price often rises soon after. Even if inside the Aims Box.

Then if WHITE goes down through GREEN, probably a good time to take the profit (which there often is!), unless you have already taken a few pips off the table.

Converse applies to downward crosses.

Yours is the journal blog I always look for, as your philosophy is similar to mine

Keep at it

[kiravon]

December 1st > T20 Trades

Trading Plan 3

Trading Plan (3).pdf

November 9th -19th T20 DS 20/20 26%
November 20th - 30th T20 DS 20/20 33%
December 1st T20
1) -1% DS 1
2) +1.5% DS 1

Hello Ray, yes QQE ADV can keep you out of losing trades, but about 'Rebellion'
- he doesn't give any regard to HTF which to me is the most powerful
'indicator of all! - see Immy's thread on 'Simple but Powerful Technique',
it needs practice but when you get in on momentum the results can
be phenomenal - my last 40 trades have been based squarely on this.

Trade 2 EURUSD M5M30 +1.5% DS 1
Nice trade targeting 2R at TZ1 but when I saw that burst burst of momentum
on that last candle I got out quick for 1.5% - fortunately! price reversed sharply
after that. Interestingly it was a knee jerk reaction based on intuition but I
won't give a minus DS for that.

Averaging around +30% per T20 last forty trades so I think I will review my
Trading Plan

Assuming each T20 continues to be 10 calendar days that's averaging 90% pm
so I think it should be extremely realistic to set a goal of +3% per T20

That could be around +10% per month which is very, very good! 312% pa
and I really think that's realistic now if I just keep on doing what I'm doing

When both TFs are indicating a move in the same direction and there is
actually movement in the market ( very important ) then you will
definitely have an edge - nothing more or less than that.

No system or indicator or filters can tell you when to get in or out
with any certainty. Nothing can

1d.jpg

[kiravon]

99.6% will Fail!! ( It's official )

But if you're reading this it isn't all bad news - on the contrary
If everyone was winning that would be bad news

So what are the true stats as opposed to the many opinions floating around?

A meticulous survey of 300,000 traders over a fifteen year period revealed that
98% of traders ended up losing money and only 2% made any money! I've
heard these stats many times before, it's nothing new.

but I was forgetting to factor in the 80/20 rule which is unerringly accurate.

In other words some within the winning 2% might have come away with just +$1 after
fifteen years -iterally, yet technically they are still in the winners enclosure so to speak.
so of the 2% only 20% of them would have had real success and accumulated
significant wealth through their trading endeavours, 80% would have come away with
peanuts, or pocket money at best.

So a person's chances of achieving true financial freedom, making true wealth in trading
is a mere dream shattering 0.4% chance of really making it.

99.6% will not make any significant money in Forex trading!

So for everyone of us that should be something of a reality check

So for me personally, having made over 60% in November, ( maybe
more if I count trades on my other thread ) I would probably do very well
to make a very sober evaluation of my financial situation and prospects

So for example, in my latest trading plan in the last post, instead of assuming 60%+
account growth each month, I assume nothing, but set a goal of 10% pm

Am I really so modest? No, I'm not particularly modest at all but I am a realist.
Yes I would like my trading to bring in over $400,000 over the next four years
but as a definite 99.6% fail to make almost anything it might be a tad
presumptuous to assume it's money in the bank

- especially given my track record of undisciplined, harebrained system hopping
over the last few years, never really making consistent profits.

actually I view my goal of 10% per month as quite ambitious

So just how hard must trading be! Well you might conclude very hard, and
in a sense you would be right but possibly not for the reasons you think.
To learn technical analysis can indeed be a lifetime's work! It cannot be
learnt overnight by reading up on 'Babypips' although that is an
excellent resource.

Actually, this may be a little controversial but you don't need any
technical analysis skill whatsoever! You don't need any indicators
whatsoever.

Here is a system that will make you over 70% per year and has done I believe
every year for the past 45 years!

On the Daily charts if the last candle is Green - Buy!
If the last candle is Red - Sell!

Set a 10 pip SL and just walk away

Next day simply rinse and repeat.

Obviously only try this on demo as past performance is no guarantee of
future winnings and there is always a high risk of losing money in Forex trading.
I only cite this system to illustrate how simple and untechnical trading can be.

but given that successful trading really is that simple why do 99.6%
just not make it?

We might be able to answer that with a series of questions

Am I still looking for that 'special' indicator, or Black Box system?
Am I still 'tweaking' my system? or trying different combinations of indicators?
- viewing them potentially like a 'combination lock' or an open sesame to unlock
the door to untold wealth?

Ostensibly there is nothing wrong with any of these things but the underlying
issue is usually that we are still trying to avoid losing

and the underlying issue to that underlying issue is that we need a sense of certainty
where none exists and this inner conflict remains unresolved for at least 98% of
traders with only 0.4% really breaking through this psychological barrier

and btw many have deluded themselves into thinking they are free of the need for certainty
when they really haven't. It is so deeply entrenched in our psyche, and our unconscious mind
has been designed to protect us from dangerous and unknown situations, it wants us to play
safe, to stay well within the known parameters - not to take dangerous risks

Fear of risk and the overriding need for certainty is a very big part of being
a human, - it is not something that can simply be shrugged off because you
read something in a book.

Ancient Buddhist monks allegedly could control the resonance of their minds
so that after years of practice they could actually walk through solid matter such as
a stone wall.

I don't imagine practicing walking through stone walls was an entirely pain free
procedure. It would seem somewhat contrary to nature, ( for cranium think
easter egg and you will get an idea of what I mean.)

So likewise as unnatural is to simply drop the need for certainty in life.
If it was easy to do this most traders would eventually be winners which
is a contradiction in terms. as we said at the outset we need the losers to
pay our winnings.

We have some world class traders on this site, literally, and I have learnt so
much from all of them but to my mind there are two that are set apart in the
context of this discussion at least, - Ray and Immy.

They may or may not be the best technical traders ( they probably are ) but
that doesn't really matter, what I believe really sets them apart is the manner in which
they 'attack' the market with aplomb, - they are totally fearless! and we are not
talking demo accounts here! on the contrary, some quite sizeable trades.

When they see the opportunity they are in! no hesitation. and add-on where
angels fear to tread ( or trade )

It is precisely just such a mentality that places them squarely in the 0.4% bracket

Whilst euphoria is a very real danger as the chemicals it releases into
the bloodstream can turn you into a reckless 'junky' nevertheless
fear is the really big factor

If fear ( specifically fear of losing ) is in any way an issue with us we remain
in the 99.6% camp and will continue to be shackled there until we
break out of that fear. I'm sorry to sound so dogmatic but I am 100%
certain of this.

There is only one way to really succeed in trading and that is by having
the absolute certainty that you will come out ahead in the long term,
regardless of any short term drawdowns.

So there is absolutely no fear, not even the slightest hint of stress
over placing any individual trade.

So to illustrate:- imagine a casino manager sobbing at the bar because a few
punters had a spectacular winning night and the casino made a small loss.

That scenario will never, never happen!

Yes a casino can take a very small dip on occasion but the manager expects that, and he
knows its good for trade - it's good publicity when punters win big, it encourages
others to gamble, and they themselves are emboldened to return as loyal customers

I remember the story of the cashier in a UK bookmakers - one punter had devised
a horse racing system that just kept winning! He kept coming into the shop and
kept winning time after time. The cashier approached the manager and asked if perhaps
he should refuse to take this punter's bets. - and actually that does happen
sometimes.

but this manager was a seasoned Pro

He told the cashier to keep on taking the punters bets and to just let the numbers
play out.

and sure enough the punter started placing bigger and bigger bets but with
the result that in the end the system stopped winning and the bookmaker
ended up profiting from him.

The manager, like all casino managers, had implicit faith in 'the edge', and rightly
so, it is the ONLY certainty

If we are as confident in our edge as a casino manager is in his we will
do very, very well trading Forex regardless of how many fail so we
should not be discouraged by the above statistic

Most losing traders are not stupid, some in fact are brilliant analysts, but have simply not
developed the correct mindset or more to the point have not come to understand
how critically important this to to success in trading.

If you replay your last thought it may be revealing

If the repeated admonition to focus on mind and not indicators and systems - is
shall we say - a bit boring - as it was for me for years, then we may
find any progress we may seem to make is somehow always short lived.

I had a colleague many years ago who told me a story which was hard to
believe but I did believe him

and indeed it was his experience that first got me interested in trading

He told me how that he and a friend had devised a system for trading the DOW
that just kept winning every week! He had my attention!

But he told me that they had paper traded for a full six months and never once had
a losing week!

Only then did they go in with the really big money.

and the first week they lost!

and the second - and the third

just loser after loser!

He couldn't understand it. He probably would have liked to
have blamed the broker but he knew that wasn't the problem.

So after losing a fortune he was forced to give up.

I was enthralled at the prospect of a system that could win week after
week and felt that perhaps it just needed a little tweaking and perhaps
could be resurrected.

but I lost contact with this colleague.

Actually that was in 1998 and in all these years I often would think about
this colleague and his 'foolproof' system - that something like it
must exist somewhere out there

( a concept that I later came to learn is called 'The Holy Grail' )

But it is only since I have been regularly involved with this forum since
March of this year and subsequently the Skype group that 'the penny
dropped' - and later reading of Mark Douglas and Bill Williams really
clinched it for me - I now know why my colleague failed even though
he probably never will himself. He sabotaged his own trades!

As soon as he was risking big money the fear kicked in and distorted
his perception, as Grant rightly says, entry is the easy part, its all
about exit. Very true of course but where you exit is not so cut and dried.

For a tight rope walker 500 metres above the ground it's all about exit!

Not really, actually it's all about fear! In the case of a tight rope walker
fear can make a highly significant difference to his exit strategy!!

He can have no fear!

Is our situation as traders really so different?

So the Fast track way to joining that 0.4% group is by doing what you are
already doing - closely associating yourself with those who are already
part of the winning elite or are fast approaching that level of stress free,
unconscious competent trading.

Model Success!

as Immy recently said of Grant, his disciplined success is
infectious! It is! and the same can be said of many others, in their
progressive journals, in their Skyperoom participation

I recently had occasion to visit other forums after a break of some months,
and everyone seems generally very cooperative and helpful, everyone working
toward the common 'good' by customized coding each others new indicators etc,
- as I said earlier most of these guys are far from stupid!

but truly, they are leading each other down a blind alley!

One quote says it all, not verbatim but something to the effect,-

'' thanks for the indicator, it's brilliant! I'm already using about a dozen
but there's always room for one more! ''

When I read that it did take me aback. I hadn't realized just how far
I've come over the last nine months.

So thanks to Immy and the guys who together have created the
ideal learning environment for traders. This forum is on a very
different level to the others. The others are all trying but are
scattered and all missing the critically essential element outlined
above

I know some here have become a little disheartened when the results
haven't been forthcoming but it's worth persisting. it does eventually click.

That said, I'm not trading today, over tiredness, nothing looks quite right.
I trade momentum but mainly I trade enthusiasm which today is abundantly
absent.

but I post my above observations as they are so important that I
want to share them to more deeply internalize them, and with
the hope that some at least might glean something from it

The story so far.....

November 1st - 8th +1.5% DS 0
November 9th -19th T20 DS 20/20 26%
November 20th - 30th T20 DS 20/20 33%

From December 1st T20
1) -1% DS 1
2) +1.5% DS 1

[MagicMurph]

thanks Mickey ,.... i really enjoyed the read and also your own personal message. And boy .. what a month for you ... well done .. Murph

[wiseambitions]

I often wonder why it is so easy for 99.5% of people to fail in this. The reason is quite simple. Losses suffered exceed profits taken.
Buying at the top, and acting on impulse are big factors, but it's inbuilt into our human psyche to delude ourselves that if a trade is going the wrong way it will return to glory if we hold tight. But it doesn't always work like that.
It's also inbuilt in us that if we lose a trade we are liable to act in revenge. Not just martingale it but really try and take a big position. It's also for me a dangerous few moments after suffering a stop loss. Should I re-enter? Same or opposite direction?
I added a new line into my signature thingy below to suggest if we are feeling lucky and want to have a punt, we better watch out, Sod's law invariably means the market knows what we're thinking, and of course takes it the other way.
I get frequent emails from another trader who has lost many thousands saying he is ready to start again (for the n'th time) because he now understands what he has got to do to crack this. And he will say the same again next year.
For me, I just find less is more, and if I trade for 1% or even less risk per trade I make more % return on capital a day than if I trade at 2%. I can't explain it, but it does come back to the simple observation I keep mentioning, which is to say that if you could compound by 1% 250 times, (taking quite a few hits in the process all the same), you would get more than 10 fold return. And that merely means if we grow 1% a day we will multiply an account by 11 or 12 in a year. Compare that with most investment funds where the managers would go into rapture if they made 12% in a year.
So let us be content with steady sustainable growth from conservative targets. Let us even welcome a few losses, because as with many things in this life suffering must precede the glory.

PS I am also appalled by brokers who not only allow silly leverage (like 400:1) but those who will not stop out unprotected trades until margin is down to 20%........... just seems their way of getting traders' money.
And there's one with an advert the picture of an owl (meant to be a wise bird), saying "It's the weekend and you're not trading?" Why would anyone want to trade in such a "market" when the OTC market is closed and the broker in question makes his own errrr market, and incorporates a whacking great bid-offer spread as well? Actually that's to do with options, although I know for a fact that IG are now running a forex and shares trading system on Sunday.

[Seabreeze]

Hi Mickey

Great post as usual. I always enjoy your words of wisdom

John

[kiravon]

Exciting Times!


Trade 3 EU M5/M30 + News -1%, +7% = +6%


From December 1st T20
1) -1% DS 1
2) +1.5% DS 1
3) -1%, +7%, =+6% DS 0

Comments
My EU PO has just been triggered on M5

Why 9 pips below AIMS level?

Good question

First there was the Arrow ie cross of 4/5 which in conjunction with
the cross of 50 line on QQE ADV is very powerful.

Then we had the break of AIMS

But the Lower prior AIMS level was also yesterday's Swing Low as you
can see in the M30 chart which acted as Support

and more significantly that Support level yesterday was the lowest
EU had been since April 2003!!!!!

So I treat yesterday's Support with the greatest of respect and allow
a few extra pips to make sure we have seriously broken it.

Even then it will likely retest plus we have EU Minimum Bid News
in 30 mins so things are hotting up!

There is a possible 230 pips up for grabs which for me would be a 30%
gain to my account in one trade! I've been there before! Ray's post
above is worth serious thought. Less is definitely more.

As I type we are having a serious retest of yesterdays Low.

This could turn out to be a very nice trade. At least I'm happy
with my analysis

Something tells me the very bearish movement so far is that
the big players are not expecting good news for the Euro

But thats not carved in stone
------------------

a few minutes later after News:-

So just to prove the point that there is NO Certainty! ...

All the above came to nought! I was stopped out for -1% with
a powerful upsurge

So immediately I applied Immy's News Strategy, went in at the Pullback
and jumped out at the next big move up before it could come down
again ( Ok thats not exactly Immy's Strategy )

But in the end I lost -1% and gained +7% so up +6%

Well pleased! plus a Discipline Score of ZERO, it was all acting on impulse!

But there is now such Momentum to the Upside!!! I smell more money to be made!!!!

So listen to what Ray has to say

I'm switching off now - I've made +6% and there is no reason to give it all back

3.jpg

3b.jpg

[kiravon]

From December 1st T20

1) -1% DS 1
2) +1.5% DS 1
3) -1%, +7%, =+6% DS 0
4) BE DS 1
5) BE DS 1
6) -0.5% DS 1
7) -1% DS 1
8) BE DS 1
8) -1% DS 1

+4% DS 7/8

99.6% fail, that is such a staggering statistic. That means that
every time you place a trade that doesn't actually lose money
this is a massive accomplishment! and if you have acquired
the skill of doing this regularly I think it might be true to say
you are a Pro trader! in the context of the 99.6% norm

Michael and Grant set a brilliant example of protecting their accounts
with Break evens as soon as it's appropriate and I strongly sense
their influence among some of the newer guys who are clocking
BE's up quite nicely too, and coming out well ahead as a result.

( Now replace each of their BE's with -1% and see what a difference
that makes to their bottom line )

We have only a limited control over our winners but we have far more
control over where to place our Stops. Yes, the trade needs room to breath
but if price has doubled the distance to initial Stop we can by all means
bring Stop up to BE or thereabouts. and yes the market will frequently
reverse and take us out of the trade, and without our BE in place would so
often proceed to our initial Stop and beyond losing us our full initial risk,
- usually 1%

It's just prudent financial management

It's more than that. I remember recently I had a T20 with I believe 18 losers!
Now that's bad by anyone's standards. but it happens

and I can't honestly feel too bad about it because although I think I might
have made a few bad decisions my money management was pretty
much on the ball because the T20 ended up winning! Modestly winning
it's true but I didn't lose despite losing 18/20 trades!!

and my current T20 seems to be heading in that direction but that's OK
My last two T20's have been phenomenal and I even remarked that
at some point there will be losing runs

So here is how I see it

If I often have moderately losing T20's even losing 18/20 trades
but the T20 itself more or less Breaks Even that will be fine.
Some T20's, however few, will win +5% to +33% so a handful of
Break even T20's won't hurt me

I've said this before but it's worth repeating, A half full glass
isn't half empty unless you choose to think like a loser, it
actually is half full, this isn't hype it's actual fact.

So every trade I place that doesn't lose is a victory, and if
most of my trades avoid losing it's no accident, there is
skill involved, quite a lot of skill. and I think that should be
acknowledged and celebrated

When I check Grant and Michael's results I don't pay
much attention to overall profit but rather to their very
small and relatively stress free number of rents.

But if all the BE's were losers I'm not so sure they
would be quite so profitable.

So prudent trade management is absolutely essential
for profits and equally important for stress free trading

Trading with stress is the biggest recipe for disaster, if
losers cause stress they will beget further losers and
the vicious cycle will continue to spiral out of control
until the account is all but blown

So it really is all about damage limitations, really
keeping a tight control of risk at all times

So the only time we really lose is when we actually really do lose,
to me BE's and wins are equal accomplishments

sometimes I have a +7% win in one trade that quite frankly
had a large element of luck - the price just kept up the
momentum! I can't really take any credit for that

But a BE trade where price suddenly reverses 100 pips
but I had anticipated that possibility by moving my Stop
to Break Even - now that is a professionally managed trade!

I want to somehow acknowledge this to really reinforce the habit.

Like at infant school getting those Gold stars for a job well done.

So I may colour code all successful trades, they being all the ones
that incurred no rent

[Seabreeze]

Hi Michael

Another fabulous piece of writing from yourself.

Have a wonderful weekend

[kiravon]

Snakes and Ladders!

No this isn't a name for a new system, it's the name of that old
board game where at the throw of a dice you might be able to climb
a ladder but you might also hit a snake and slide back down in
defeat.

And that just about sums trading up.

It is not a simple matter of ascending to greater and greater heights
there are snakes! - there are lots of snakes

and that is simply the reality of the situation.

I'm sure everyone is very excited by the revised AIMS strategy which
unless I have completely misread something yields a 66% strike rate
and 2R!

Personally I have never heard of results like that before, well I have,
but only from charlatans that have probably never placed a trade in their life

So this is truly remarkable and because of it's simplicity is not likely
to suddenly stop working, all the while there are impulsive waves
that retrace this should continue to be profitable. It's usually
the more complicated systems that mysteriously go off the boil.

so congratulations to all who have been involved in putting this
together.

Nevertheless you will all incur losses 34% of the time on average
which of course is phenomenally good but inevitable nonetheless.

In the end it is simply all about maths or more precisely the manipulation
of maths. The idea is that you win more than you lose

Ok you probably already figured that one out.

but having really big wins is not in any way difficult.

Not giving it back is the really hard part.

So in the end it really is all about trade management
and psychology

so you might even say it's about having a 'trade management
psychology'

Over the last few days I've had a +6% winning day and today
a +10% winning day.

That's the good news

but I've had a few rents too, and some could have been avoided.
but I'm still getting them.

So for me to survive as a pro trader I need implicit faith that my
losses will always be minimal and that there will always be the
big winning days that should keep me coming out ahead at the
end of most months, if not every month

-------------
Trade 10 +7% +3% - +10% DS 1
Simple break of AIMS and add on after the retest, trailing momentum

7.jpg

1) -1% DS 1
2) +1.5% DS 1
3) -1%, +7%, =+6% DS 0
4) BE DS 1
5) BE DS 1
6) -0.5% DS 1
7) -1% DS 1
8) BE DS 1
9) -1% DS 1
10) +7%, +3% = +10% DS 1
11) +2%, +2%, +1.5% =+4.5% DS 1

+18.5%, 63% rent free trades, DS 10/11