Mickey's Journal

[kiravon]

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[kiravon]

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[kiravon]

I just want to upload my screenshots before I delete them
as usual!

This isn't a new system, neither is it a competition
with any other existing AIMS strategy. Its simply
something I've found very helpful to maximize
the profitability of trading Break of AIMs plus
Ewaves cross of zero and Ewaves retracements.

Thats perfectly ok in itself, but by coincidence
concocted my own independent strategy, not
connected to AIMS, until I found that Entry signals
were appearing at same time!

But this new approach helps to avoid false setups
and converasely both Ewaves and AIMS box breaks
helps avoid false signals on my strategy

so they work perfectly together

It is highly unlikely to make a lot of sense to anyone else
but if it triggers some ideas all well and good.

Basically like Primo above, I only trade away from EMA 50
- similar principle to trading away from Purple but
I find EMA 50 more relevant.

Rules as follows;-

Only ever trade away from EMA 50
Three candles closing under/over EMA 50 before direction confirmed.
EMA 8 must have dipped under/over EMA 50
EMA 8 must then cross over/under and clearly diverge from EMA 50
Price must have dipped under/over EMA 8
Price must then cross over/under EMA 8
RSI 3 must cross 80/20 with volume
There must be a confluent break of AIMS

So basically I'm looking to trade break of AIMS at cross of Zero or
change colour after retracement.

Absolutely nothing original about that

but I keep an eye on RSI 3 and need to see decisive cross of 80/20
with line not bending over or going flat!

Also watching volume, this is a bit more subjective, but a break of
AIMS with low volume is not ideal and usually Ewaves will not
look good.

but sometimes Ewaves will give the OK when one or other of the above will
show weakness

and the converse sometimes happens too - Ewaves can sound the warning
by staying the wrong colour when RSI gives the all clear

Most of the time they are confluent

but when you have a break of AIMS with a fresh cross of Ewaves PLUS RSI 3
is breaking through 80/20 with no bending of signal line, and with increasing
or high volume - the trade always seems to win!

But there is some subjectivity involved, so I'm not recommending this
approach to anyone. It probably isn't necessary, but I actually find
it very helpful to have this added confluence

When everything lines up I am very confident!

In the screenshot there are 12 breaks of AIMS but only four meet all
criteria and would have won

But all these indicators are only a means to an end.

If we don't really need an indicator its best not to have it clutter up
the screen.

I can'y imagine ever having a final template although I should do

[kiravon]

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[kiravon]

I think this screenshot demonstrates how waiting
for volume to increase really makes a difference!

[kiravon]

1. The first and most important rule is - in bull markets, one is supposed to be long. This
may sound obvious, but how many of us have sold the first rally in every bull market,
saying that the market has moved too far, too fast. I have before, and I suspect I'll do it
again at some point in the future. Thus, we've not enjoyed the profits that should have
accrued to us for our initial bullish outlook, but have actually lost money while being
short. In a bull market, one can only be long or on the sidelines. Remember, not
having a position is a position.
2. Buy that which is showing strength - sell that which is showing weakness. The public
continues to buy when prices have fallen. The professional buys because prices have
rallied. This difference may not sound logical, but buying strength works. The rule of
survival is not to “buy low, sell high”, but to “buy higher and sell higher”. Furthermore,
when comparing various stocks within a group, buy only the strongest and sell the
weakest.
3. When putting on a trade, enter it as if it has the potential to be the biggest trade of
the year. Don't enter a trade until it has been well thought out, a campaign has been
devised for adding to the trade, and contingency plans set for exiting the trade.
4. On minor corrections against the major trend, add to trades. In bull markets, add to
the trade on minor corrections back into support levels. In bear markets, add on
corrections into resistance. Use the 33-50% corrections level of the previous
movement or the proper moving average as a first point in which to add.
5. Be patient. If a trade is missed, wait for a correction to occur before putting the trade
on.
6. Be patient. Once a trade is put on, allow it time to develop and give it time to create
the profits you expected.
7. Be patient. The old adage that “you never go broke taking a profit” is maybe the most
worthless piece of advice ever given. Taking small profits is the surest way to ultimate
loss I can think of, for small profits are never allowed to develop into enormous
profits. The real money in trading is made from the one, two or three large trades that
develop each year. You must develop the ability to patiently stay with winning trades
to allow them to develop into that sort of trade.

8. Be patient. Once a trade is put on, give it time to work; give it time to insulate itself
from random noise; give it time for others to see the merit of what you saw earlier
than they.
9. Be impatient. As always, small loses and quick losses are the best losses. It is not the
loss of money that is important. Rather, it is the mental capital that is used up when
you sit with a losing trade that is important.
10. Never, ever under any condition, add to a losing trade, or “average” into a position. If
you are buying, then each new buy price must be higher than the previous buy price.
If you are selling, then each new selling price must be lower. This rule is to be
adhered to without question.
11. Do more of what is working for you, and less of what's not. Each day, look at the
various positions you are holding, and try to add to the trade that has the most profit
while subtracting from that trade that is either unprofitable or is showing the smallest
profit. This is the basis of the old adage, “let your profits run.”
12. When sharp losses in equity are experienced, take time off. Close all trades and stop
trading for several days. The mind can play games with itself following sharp, quick
losses. The urge “to get the money back” is extreme, and should not be given in to.
13. When adding to a trade, add only 1/4 to 1/2 as much as currently held. That is, if you
are holding 400 shares of a stock, at the next point at which to add, add no more than
100 or 200 shares. That moves the average price of your holdings less than half of the
distance moved, thus allowing you to sit through 50% corrections without touching
your average price.
14. Think like a guerrilla warrior. We wish to fight on the side of the market that is
winning, not wasting our time and capital on futile efforts to gain fame by buying the
lows or selling the highs of some market movement. Our duty is to earn profits by
fighting alongside the winning forces. If neither side is winning, then we don't need to
fight at all.
15. Markets form their tops in violence; markets form their lows in quiet conditions.
16. The final 10% of the time of a bull run will usually encompass 50% or more of the
price movement. Thus, the first 50% of the price movement will take 90% of the time
and will require the most backing and filling and will be far more difficult to trade than
the last 50%.

[kiravon]

1. In order of importance to me are: (1) the long-term trend, (2) the current chart
pattern, and (3) picking a good spot to buy or sell. Those are the three primary
components of my trading. Way down in very distant fourth place are my fundamental
ideas and, quite likely, on balance, they have cost me money.
2. If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I turn
bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit. Being
bullish and not being long is illogical.
3. If I were buying, my point would be above the market. I try to identify a point at which
I expect the market momentum to be strong in the direction of the trade, so as to
reduce my probable risk.
4. I set protective stops at the same time I enter a trade. I normally move these stops in
to lock in a profit as the trend continues. Sometimes, I take profits when a market gets
wild. This usually doesn’t get me out any better than waiting for my stops to close in,
but it does cut down on the volatility of the portfolio, which helps calm my nerves.
Losing a position is aggravating, whereas losing your nerve is devastating.
5. Before I enter a trade, I set stops at a point at which the chart sours.
6. The markets are the same now as they were five to ten years ago because they keep
changing – just like they did then.
7. Risk is the uncertain possibility of loss. If you could quantify risk exactly, it would no
longer be risk.
8. Speculate with less than 10% of your liquid net worth. Risk less than 1% of your
speculative account on a trade. This tends to keep the fluctuations in the trading
account small, relative to net worth.
9. I usually ignore advice from other traders, especially the ones who believe they are on
to a “sure thing”. The old timers, who talk about “maybe there is a chance of so and
so,” are often right and early.
10. Pyramiding instructions appear on dollar bills. Add smaller and smaller amounts on
the way up. Keep your eye open at the top
11. Trend systems do not intend to pick tops or bottoms. They ride sides.
12. The key to long-term survival and prosperity has a lot to do with the money
management techniques incorporated into the technical system. There are old
traders and there are bold traders, but there are very few old, bold traders.
13. The manager has to decide how much risk to accept, which markets to play, and how
aggressively to increase and decrease the trading base as a function of equity
change. These decisions are quite important—often more important than trade timing.
14. The profitability of trading systems seems to move in cycles. Periods during which
trend-following systems are highly successful will lead to their increased popularity.
As the number of system users increases, and the markets shift from trending to
directionless price action, these systems become unprofitable, and undercapitalized
and inexperienced traders will get shaken out. Longevity is the key to success.
15. Systems don’t need to be changed. The trick is for a trader to develop a system with
which he is compatible.
16. I don’t think traders can follow rules for very long unless they reflect their own trading
style. Eventually, a breaking point is reached and the trader has to quit or change, or
find a new set of rules he can follow. This seems to be part of the process of evolution
and growth of a trader.
17. Trading Systems don’t eliminate whipsaws. They just include them as part of the
process.
18. The trading rules I live by are: (1) Cut losses. (2) Ride winners. (3) Keep bets small. (4)
Follow the rules without question. (5) Know when to break the rules.
19. The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting
losses. If you can follow these three rules, you may have a chance.
20. If you can’t take a small loss, sooner or later you will take the mother of all losses.
21. One alternative is to keep bets small and then to systematically keep reducing risk
during equity draw downs. That way you have a gentle financial and emotional
touchdown.

[kiravon]

1. Watch the market leaders, the stocks that have led the charge upward in a bull
market.
2. They say you never go broke taking profits. No, you don’t. But neither do you grow
rich taking a four-point profit in a bull market.
3. Successful trading is always an emotional battle for the speculator, not an intelligent
battle.
4. Remember that stocks are never too high for you to begin buying or too low to begin
selling.
5. Losing money is the least of my troubles. A loss never troubles me after I take it. I
forget it overnight. But being wrong – not taking the loss – that is what does the
damage to the pocket book and to the soul.
6. When I’m bearish and I sell a stock, each sale must be at a lower level than the
previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I
don’t buy long stocks on a scale down, I buy on a scale up.
7. The game of speculation is the most uniformly fascinating game in the world. But it is
not a game for the stupid, the mentally lazy, the person of inferior emotional balance,
or the get rich-quick adventurer. They will die poor.
8. Successful traders always follow the line of least resistance. Follow the trend. The
trend is your friend.
9. Don’t worry about catching tops or bottoms, that’s fools play. Keep the number of
stocks you own to a controllable number. It’s hard to herd cats, and it’s hard to track a
lot of securities.
10. I believe that having the discipline to follow your rules is essential. Without specific,
clear, and tested rules, speculators do not have any real chance of success.
11. I absolutely believe that price movement patterns are being repeated. They are
recurring patterns that appear over and over, with slight variations. This is because
markets are driven by humans — and human nature never changes.
12. Markets are never wrong, but opinions often are. Remember, the market is designed
to fool most of the people most of the time.
13. After spending many years in Wall Street and after making and losing millions of
dollars I want to tell you this: It never was my thinking that made the big money for
me. It always was my sitting.
14. There are many times when I have been completely in cash, especially when I was
unsure of the direction of the market and waiting for a confirmation of the next move.
15. It is foolhardy to make a second trade, if your first trade shows you a loss. Never
average losses. Let this thought be written indelibly upon your mind.
16. Don’t take action with a trade until the market, itself, confirms your opinion. Being a
little late in a trade is insurance that your opinion is correct. In other words, don’t be
an impatient trader.
17. When you make a trade, “you should have a clear target where to sell if the market
moves against you. And you must obey your rules! Never sustain a loss of more than
10% of your capital. Losses are twice as expensive to make up. I always established a
stop before making a trade.

[baldeagle]

Once again, more thought provoking posts from you. Thanks for exercising my brain!

I just saw a video (you may have also) where the trader went back to the beginning of data collection (1997?) and started trading only engulfing candles on the daily EUR/USD with Forex Tester. Since there wasn't previous data for support/resistance zones he just took every engulfing trade and didn't get out until he was stopped out or had a reverse engulfing trade . He started with $10,000 and after about 10 years had a balance of about $2,000,000. Okay, it was a back tested demo and he didn't make any withdrawals but I think he met almost all the rules you stated above using a very basic strategy. Do you think we can develop the discipline to do simple (?) trades like that with a live account?

Ed

[kiravon]

Hi Baldeagle

No I haven't seem that video, can you post the link please
- that is very encouraging, exactly as trading rule
above states ' Patterns do repeat themselves'

I would think Inside Bars, Bullish or Bearish, would yield
similar results, along with Divergent Candles

These are the only three patterns I currently use -
Engulfing, Inside Bar, Divergent

If you ensure you are moving away from EMA 50,
( or Purple ), and not toward it, you will have spectacular success

and it is extremely mechanical - just enter a few pips
above/below the Signal Bar.- as another rule states -
if you lose a few pips waiting for confirmation it is
simply insurance.

and you can use any TF, confluent with HTF, and any instrument,
meaning there are always plenty of setups

So you don't need to clutch at straws, wait for candle that closes
in the top/bottom 25%

It's gold dust!