Sydney Kris' Journal

[KrisL]

Nikita and Immy, thanks for the replies! Yeah, the situation definitely took the wind out of my sails. Just when I felt like I was making some progress! But with the space of a few days, some potential new brokers, and the support of the AIMS community, I'm feeling much better.

Immy, I had looked at Pepperstone, but I thought that the numbers were slightly better with IC Markets. I noted that Pepperstone don't provide access to indices or the metals, spreads start from 0.1 pips and commission is $7 per round turn lot. IC Markets' spreads start from 0.0 pips, they do provide access to metals and indices and their commission is also $7 per round turn lot. Obviously you chose Pepperstone for a reason - what made them stand out for you?

[KrisL]

A rent on AU for me on Friday. Normally I would place my stop outside the widest fractal, but for some reason I didn't in this case. Call it trader error - a costly one!

2014_01_31 au rent.png

[KrisL]

And a similar one on GJ. This one was a break even trade.

2014_01_31 gj rent.png

[KrisL]

A winner on the kiwi. Note the pattern that Dave posted in his journal recently - the break of the stepping-against-the-trend AIMS levels during the correction.

2014_01_31 nz.png

[KrisL]

And finally caught a few pips on UJ. I should have been as aggressive on the successful entry as I had been on the first one. Obviously I was a little gun shy by this stage. Finished with a rent and then called it a night.

2014_01_31 uj.png

[immy]

And finally caught a few pips on UJ. I should have been as aggressive on the successful entry as I had been on the first one. Obviously I was a little gun shy by this stage. Finished with a rent and then called it a night.

2014_01_31 uj.png

Its not a bad campaign but two or three things are worth pointing out.
1. If you want to add on, you have to add on in almost all the trades you take, only then you will have statistical advantage.
2. Keep at least 5 pips distance between entry and add on.
3. only the third entry from left to right is the correct entry. and 4th one is good too. If you're not ready for adding on mentally, then perhaps do not add on until you've proven yourself by remaining consistently successful even if only partially showing positive for atleast 3-6 months.

all IMHO

cheers

[KrisL]

Thanks for the feedback Immy! Much appreciated.

I definitely agree with your first point - if you are going to add on, do it consistently! I'm still kicking myself about that, not so much for the missed pips, but because I've been focusing very hard on consistency lately, and I feel like I let myself down. I hope and think that the experience is another step towards ingraining the absolute necessity for consistency in my belief system.

Point number 2 - I hadn't thought much about that, but it does make sense. The add-on is essentially a separate trade if I understand the concept correctly. It can't really be a separate trade if price has moved less than 5 pips can it?!

Point number 3 - My first entry wasn't supposed to be a classic S1 entry, rather it was based on the BDC. I figure if we take BDC trades on higher time frames, and the market is fractal in nature, why not take them on M1 too? In this case, we had a peak of AO against the main trend and price angulation away from the gator, so I took an entry below the BDC. I've been scaling into my BDC trades as per Bill Williams' reverse pyramid method that he details in the second edition of 'Trading Chaos'. I like it, as it gives you a little bit of exposure at the earliest part of the (potential) move, and then builds your exposure as the probability of a successful trade moves in your favour (in this case, I scaled in when I got 3 dark green AO bars, and again when AO crossed the ZL).

Immy (and others) - I would love to hear what you think about these lower time frame BDC trades, and also about Bill Williams' reverse-pyramid style entry technique.

[immy]

Thanks for the feedback Immy! Much appreciated.

I definitely agree with your first point - if you are going to add on, do it consistently! I'm still kicking myself about that, not so much for the missed pips, but because I've been focusing very hard on consistency lately, and I feel like I let myself down. I hope and think that the experience is another step towards ingraining the absolute necessity for consistency in my belief system.

Point number 2 - I hadn't thought much about that, but it does make sense. The add-on is essentially a separate trade if I understand the concept correctly. It can't really be a separate trade if price has moved less than 5 pips can it?!

Point number 3 - My first entry wasn't supposed to be a classic S1 entry, rather it was based on the BDC. I figure if we take BDC trades on higher time frames, and the market is fractal in nature, why not take them on M1 too? In this case, we had a peak of AO against the main trend and price angulation away from the gator, so I took an entry below the BDC. I've been scaling into my BDC trades as per Bill Williams' reverse pyramid method that he details in the second edition of 'Trading Chaos'. I like it, as it gives you a little bit of exposure at the earliest part of the (potential) move, and then builds your exposure as the probability of a successful trade moves in your favour (in this case, I scaled in when I got 3 dark green AO bars, and again when AO crossed the ZL).

Immy (and others) - I would love to hear what you think about these lower time frame BDC trades, and also about Bill Williams' reverse-pyramid style entry technique.

Point 3.
Firstly, we must have enough volatility (IN stocks they would call it volume) before we trade on shorter time frames, and secondly we must have an "affordable" and "reasonable" and "statistically viable" spread for the pair that we decide to trade.

The reason trading BDC is not recommended, by us here, is that it happens too fast and you won't be able to catch most of them unless you're watching each and every m1 candle. The S1 setup is not based on one candle, its based on a "confluence" of events so it allows you time to decide and trade. I recommend trading BDC, and even seed on H1 and Above. (Trust me Grant would not have tried Seed 2 years ago, on m1) (It took time and experience to convince him to even try, I'm sure he'll agree) You may try Seed on m15, which means catching m1 setups without the extreme concentrated screen time or you can stay and trade m1, with extreme concentration for 1-2 hr daily and don't trade at all after wards. I've stayed glued to my screen for 15hrs and trust me it was not worth it. now about pyramiding. If you're ready to risk upto 5% of your account per trade then yes you can try it. But as always you have to start with 1% per entry. Then when you're comfortable start adding one more. and then 3 and 4 and 5. 5 is max. The farther up/down you add on within a wave, your average price will become worse and worse for the "campaign of trades".

more on this later... (sunday warning issued by wife)
psst: or you can be our guinea pig and try the BDC's and Seeds on m1 and tell us how it went for you! I'm sure, as they are proper part of the structure of the market, they will be very successful. and I have to admit, I have from time to time found myself add on' at BDC's on m1 when I'm trying to get into an established trend, clearly visible on m5. I use it only for PC entries. cheers

[KrisL]

Thanks for that Immy. Some great insight there. I would be happy to be the guinea pig for M1 seeds and fruits, but I think I will reduce my position size while I am still learning.

Regarding pyramiding - I definitely don't have the emotional control to risk 5% of my account on a single trade! But I have been scaling in to some trades to the tune of 2.5%. I don't want to over-complicate things, but it seems to me that this method works best for the fruit trades rather than the classic S1/S2 trades.

[KrisL]

Hello everyone. I've been absent from the AIMS forums for about a week, mostly because work has really picked up recently (I work for myself and have to take it as it comes), but also maybe a little because I haven't been trading well and didn't have anything good to report. I know that that's not the point of the forum - we are all here to learn and to help each other. With that in mind, I thought I would share some things that I have learned recently.

I have been blaming my recent lack of success on being too busy and under too much pressure. But today I was looking back through the paper notes that I keep while I am trading and discovered that this was just an excuse. A consistent message emerged from my notes - I had started to believe that I knew what the market was going to do. I know that this is probably the most dangerous attitude a trader could have, but still it somehow crept into my thinking.

The last few months I have been studying Elliot wave fairly intensively, reading anything I can get my hands on and applying the theory on the higher time frame charts regularly. If I do say so myself, I am getting pretty good at it. After a lot of studying, I started seeing some really good results. Until recently.

My recent notes are awash with comments like "price to move up at least 37 pips to give 61.8% of waves 1-3, add on aggressively." I also noticed that I started taking less than perfect setups believing that I knew where price was going. In the past I made an effort to be patient and picky - my trading style changed considerably. In short, on some level that I wasn't even aware of, I was telling myself that I was certain about where the markets were moving.

I must get my mindset back in the direction I was training it before this. That is, nothing is certain in the markets. Elliot wave especially is not certain. Anything can happen, not least of which being an incorrect wave count! Elliot wave is something that gives you an edge (just like AIMS does), nothing more. The movement of the market in each trade is totally unpredictable. BUT by trading the edge consistenly, you can achieve consistent profits over the long term with enough trades. You NEVER know for sure which way the market is heading - but you CAN trade your edge consistently to achieve profits.

I guess the lesson that I wanted to share is two-fold:

1. Never allow yourself to believe that you know what the market is going to do. Maintain a belief in the probabilistic nature of trading your edge.

2. Be aware that this belief can insidiously supplant other more healthy beliefs, without you even being aware of it! The mental side of trading requires constant attention and hard work.

Cheers
Kris