CANCER, CHARITIES AND MY AMBITIONS.

Different post than I normally do, recently i was lucky enough to win a piece of artwork from Sarah Fosse (https://sarahfosse.com/). This was via a charity raffle where donations to one of her chosen charities.

So, i donated to Mcmillans Cancer Support, a charity that is very dear to me and my family.

I hate talking about my past as it is quite haunting

I was diagnosed with Stage 4 Burkitts Lymphoma, a particularly aggressive form of cancer that is rare in the UK, and predominantly affects African children.

I was diagnosed 2 days before my eigth birthday, quite the birthday present.

It was a crazy road that lead to my diagnosis

For months previously, I had been struck by agonising pain in my jaw, the kind that I cannot comprehend even to this day, it felt like having ALL my adult teeth pulled out, with no anaesthic, at the same time, constantly 24/7.

The only time i’d sleep was when I was too exhausted from crying to stay awake.

My parents took me back and forth to the doctors for weeks, all of whom failed me. I had instances where I was “diagnosed” as lactose intolerant… A complete failure of the healthcare system in the UK in my opinion.

The day of actual progress came when my mum took me to the dentist who, quite rightly given my symptoms, x-ray’d my jaw.

I can’t quite remember the exchange of words, but it was along the lines of something is seriously not normal here, and I needed urgent medical attention. From memory i think the x-ray showed a lot of tumours but that may be false… My reason for saying this is because shortly after my treatment started, I had a swelling in the side of my jaw that temporarily made me unable to see out of one of my eyes for may 3-4 weeks.

So, I believe my dad ended up scheduling an emergency appointment at a private doctors clinic, didn’t give a shit about the cost, just get it sorted.

I remember going there, being examined briefly, and the doctor confirming that there was indeed something wrong, and immediately had me sent to the Royal Surrey hospital in Guildford, where I was to have further tests ran, blood tests etc to accurately determine what it was that was wrong with me.

Those first few days / weeks were quite difficult on my mum and dad as the doctors couldn’t accurately pinpoint exactly what I had. Like i said, Burkitts lympoma is actually quite rare in the UK, so i guess it wasn’t something they actively search for first.

It’s weird looking back at, because I never really understood what was going on, just that I was being checked over and they’d go from there. My parents on the other hand must’ve been absolutely terrified about what was happening, because when you think about it, who else do you know where their kid has been hospitalized with a mysterious but potentially life threatening problem? Must’ve been hell for them, i’d have gone bald from stress so I have no idea how my dads still got a full head of hair!

Anyway, long story short, the diagnosis came through and this is another memory I will forever have burned into my memory.

I saw the doctor tell my dad, and him come back to my hospital bed, where he knelt down and sobbed into my lap. I had never seen my dad like that, and haven’t experience it since, but it really was a punch to see that.

The following few months in Guildford i dont really remember much of, I have brief moments where I remember nurses, looking out the window etc. Could be a result of the treatment I was recieving at that point, as I know for a fact that it merged a lot of my experience in hospital down to a big blur.

After my time at Guildford, I was transfered to the Royal Marsden where I was to recieve my proper chemotherapy treatment.

I was put on a ward where multiple other kids were, only seperated by a curtain. All of these children were in a bad way, even more so than I was. I ended up making friends with a girl a bit older than me called Emma. My mum still keeps in touch with her mum to this day. Emma suffered from Diamond-Blackfan Anemia, a horrendous condition which unfortunately took her life.

Life is a cruel thing, and spares nobody, so tell your family you love them, because i’m sure you’ll miss being able to one day.

Moving along, I proceeded to have blood transfusions, chemotherapy, and all sorts of bone marrow operations under anasthetic.

Like i said above, it all ended up merging into one, where only largely traumatic experiences are what I remember.

I saw a lot of families come and go on that ward, and it’s horrible to say but a lot of that was not because they survived.

I made friends with a lot of the nurses on the ward, and the receptionist Jenny, who when I had the strength to walk around, would always talk to me. When i got older Jenny still worked there for years, and I would always see here each year for a check up, where she’d tell me how tall I was getting.

Touching back on the topic of this blog, is to bring attention to Mcmillans and the support they can provide families. There was a boy on my ward who’s parents didn’t often come and see him, for whatever reason. I remember one night when the lights had gone out, he screamed fo hours for his parents or something like that, maybe just for some attention, because it seemed to me like he didn’t get nearly enough.

That’s where I was incredibly lucky. My mum left her job and came to stay in the ward with me full time, on a tiny little armchair / bed where she lived for 9 months with me. I can’t begin to imagine how physically and emotionally exhausting that must’ve been, and i’ll be forever thankful for it, because without the support of my family and the hospital I wouldn’t be here.

I lost a lot of weight, i think around 50% of my weight, I was dangerously thin, with zero immune system. I had a hickman line stitched into my chest where it had a direct link to my blood vessels, allowing my treatment and blood transfusions to be administered much more efficiently. There’s still a scar to this day probably the size of a 20p piece.

I know i am discussing my experience heavily, but i feel it is necessary to both A) allow me to portray to you how important I believe donating to charity is, and B) to ensure i stay properly motivated to succeed.

I had all sorts of horrible experiences, needles large enough to tranqulize a horse, nose feeding tubes put in and removed so many times it gave me nose bleeds, fighting doctors off me because I was so exhausted with having blood tests, and much more that i’m sure i’ve blocked out.

The worst one for me was being isolated in a room, where no family could come in, only my mum, who i believe wasn’t allowed out. Not even my dad, for what seemed like forever.

My dads father would come see me periodically, and bring lucozade and chat to us all. My other grandparents would come aswell a lot, they all brought me lego, and other toys to keep my spirits up. Ali my Aunt brought me this Harry Potter lego set, and a Star Wars Millenium Falcon , which kept me occupied while god knows what was going on inside me.

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LEGO Star Wars 7190: Millennium Falcon (Released in 2000): Amazon ...

The care my family gave me was, I believe, the reason I survived. Obviously modern medicine is the huge piece of that puzzle, but without a positive environment and positive people, it’d have been wasted in my eyes. Having such care around me and love from everybody I knew, my school all sent me a little nick nack, that they had made for me, it was so surreal being made such a fuss of. I think that’s why I don’t like being in the spotlight or centre of attention now. I’ve had enough to last a lifetime.

Mum and me were isolated for 2 weeks but it felt like a lifetime, I think we read Charlie and the Chocolate Factory and watched enough old episodes of crocodile hunter to last a lifetime! Seeing family faces staring at you through a window is pretty odd, at 8 you don’t really understand it but looking back on it now I would have a totally different reaction to it, it’s making me well up just trying to imagine.

There was some good laughs in hospital though, believe it or not. One was the toy room where me and dad would make paper airplans and try get them stuck at the top of the room in the ceiling. The lady who ran the play room was a legend, someone who always made you perk up. Other fun things, as weird as it sounds, was being put to sleep for an operation. Although I will never try it, it’s this crazy warmth feeling inside of your entire body. Once they inject whatever the medicine is into you, you feel it go from the point of entry all the way to your finger tips, and this absolute sense of euphoria im unlikely to ever experience again. Good shit.

A lot of time passed, and I began to respond well to treatment, improving each month.

Eventually, I was discharged and allowed to go home, where I would still have to come back for close observations often, but I was allowed to go sleep in my own bed.

I wasn’t quite out of the woods yet, and had some pretty rough times at home. Being sick constantly for no reason, and still being fed by a nose tube was not pleasant at all…

But, thankfully, I am here to tell the tale. Late 2002 i was given the green light that my treatment had been successful. I had to go back for steady observations periodically. These started off like once a month, and eventually tapered off to being once every two years. I was finally signed off fully on 12.05.2015, 13 years down the line.

This isn’t a blog to get sympathy, please don’t, it is a post to encourage every person to donate their money to a cause much bigger than themselves. Donate to what you hold dear to you, but please understand that cancer WILL affect someone you love. Don’t leave it until then to donate, because that is too late.

My real ambition is to accumulate a wealth sizeable enough to buy whatever toys I want, but in doing so I want to equally impact the lives of people adversely affected by cancer, that is my real mission. Making money is cool but you don’t go to sleep with your heart filled thinking you’ve made the world a better place. So that is my real mission, to make enough money to change peoples lives.

Donations to Mcmillan makes an impact no matter what amount you donate. Imagine being a single parent who’s had to leave their job to stay in hospital with their sick and dying child, a night off wouldn’t go unwelcomed would it. £10 here and there means somebodies mum can have a night off in a hotel for once, instead of sleeping on an armchair.

Please follow the link below to donate.

Honour your experiences and make sure you act on them, below is a photo of me during my treatment, and the second is a photo taken today. I hope that changes your mind on donating.

WHY ITS EASY TO SELL SIMPLE COURSES ON SOCIAL MEDIA

Right, time for a rant, get your popcorn bitches.

For those who are new, and are potentially asking “if you know how, why not do it yourself.” the answer to that is i am not a morally detached cunt.

I’ve been around instagrams trading niche for a few years now, and i’ve seen a lot of courses pop up.

As many will know, i was once a member at falcon trading guidance…

Jim Carrey gag puke vomit | Funny people, Gym girls, Jim carrey

Here’s a link for those who need a refresher

https://operationtrader.wordpress.com/2019/06/02/chapter-12-04-2018-08-2018/

Anyway, onto my topic for today.

I’ve recently seen a few new courses pop up, promising to educate people using pure price action, and often times slagging off indicators and technical analysis as a way of undermining competition and reinforcing that they themselves are clearly the superior fucking being put on this earth to educate traders, and every single other piece of information out there is irrelevant.

It’s easy to slag off competition to try and win the prize, human beings are inherently wired to do this.

Cave men, wanting to have first rights on a mate, would (if capable) say the other cave man the women are looking at “has a tiny cock”, and that’s essentially what they’re doing trying to catch your attention, they’ll say all other courses and educators have a tiny cock, and they, clearly have the largest member.

Usually, i stay in my own lane, but I do take offence to this sometimes.

Jack Shwager, Paul Tudor Jones, Martin Schwartz, all quality examples of traders who employ technical analysis, and indicator based trading. Hard to argue with millionaires / billionaires sometimes isnt it, with a £50 Barclays account and a free godaddy website.

The arguement against indicators is one that i particularly find irritating, as I trade with them, and find it quite insulting to be told that i’m essentially a moron and clearly dont know how to trade… I made 3k last month, and I done that with 7 indicators and 4 timeframes…

I would compromise and say that yes, indicators and technical analysis, used incorrectly can fuck you right up, but used correctly, and collaborated well with a methodology of breaking down the market, can yield you a return like you’ve never had before. Please feel free to either email / message me on IG (@timodvs) or visit www.able-trading.com for the closest thing to the holy grail you will get.

The reason that these particular courses sell, like i probably expressed in my falcon blog, is because it appeals to the lazy.

Unfortunately, trading has been tarnished, and brought away from a gentlemans, banking only sector, and thrust into the household to take money from the niave. To be fair, if i owned a brokerage i’d do the same, it’s easy taking money from shmucks.

The same goes for education, that’s why you see adverts for “how this millionaire made £5000 in 6 minutes last night using this simple hack!”…. Drives me up the fucking wall…

Recently, as a result of exposure to the social media side of trading for so long, i’ve began to give up on trying to help those who cannot be helped, and focussed my attention solely towards those who I believe, can actually make it.

Trading takes hard fucking work, countless hours, pain like you’ve never felt both emotionally and physically (I was once sick after losing £1000 on one trade years ago when i only had £3000).

It’s easy to market a course which is “pure price action” or “pure instituional trading knowledge” because it appeals to the niave and lazy.

Imagine a physicist, with a nobel prize and was best mates with Stephen Hawkins, telling you that he could make you a genius in just 5 minutes, capable expressing the complexities of quantum mechanics, with a fucking cheese grater? You’d say shut up mate, brains takes years of education, years of theorising, and a natural ability to comprehend complex subjects.

That is all they are doing when they say “How this broke teenager make $100,000 with no money!”….

Yet because it’s related to money and quick financial gain, we lap it up like fucking morons… They appeal to your natural sense of greed.

Having traded day in day out for the last few months, i’ve grown an even bigger sense of distrust, and skepticism seeing how markets reward the patient and punish the impatient. It’s mental to see happen in front of your eyes.

Stop believing those who are desperate for your money, and start being a bit more skeptical, it will save you more money than you have ever done previously.

Rant over, hopefully that somehow helps someone, shoot me an email if you fancy chatting. Have a good week all, speak soon!

Memes flood social media over rumours of death of Kim Jong un

LEVEL 2

As some may be aware, I have recently decided to take the leap of faith into trading full time.

I recently did a short instagram marking the culmination of my first level of trading being completed.

Like a video game I believe there are levels and chapters to the journey, and realistically there probably is no end.

Below is the post to avoid having to re-write it all.

By no means, does this mean my blog is over, the name shall remain as a salute to my humble beginnings.

MY SITUATION

What it does mean however, is my next chapter is beginning, and I have big, big plans.

I usually try to keep my personal affairs out of these blogs, but I feel the need to mention this for context, and partly as it is very important and almost as if fate played a part.

In early February, whilst working full time in construction, our parent company decided to, in its almightly wisdom, all of a sudden shut our office based out of the south of England, and made the superior decision that as of Monday (we were told the Friday beforehand) that we would be working from Central London…

Now i’m usually a reasonable person, but this was a tremendous fuck you to me, so being young and a bit of a cock I told them to stick their job and quit on the spot.

I’d had a reasonable cash savings piled up for this eventuality, and knew that I wouldn’t struggle finding a job as ive spent years putting myself in a good position.

I went for about 6 interviews, in mid March just as coronavirus was kicking in, and as the lockdown began I found it basically impossible to get a job, which i’d never dealt with before as usually i’m easy to hire.

So as the lockdown began, and virus cases grew exponentially, I decided to essentially have a few months off work and wait for this all to blow over, who knows, I could use my savings and hone my trading even more.

So over the last few months i’ve been learning to day trade with the help of my good mate Richard (Able trading), and on one of our many skype calls he planted the idea that I should fully commit to this full time and trade for a living, which for me was a terrifying thought to begin with.

I’d been constantly saying to myself over the last 7/8 months to be conservative and picky with my trades, being risk averse and building a good track record. I’d passed on sub-par trades to only take the best quality ones possible.

Now this is a perfectly good approach for two reasons, 1) Given sufficient capital you can do this passively and earn a tidy profit on good quality trades, and 2) it teaches you discipline.

My problem was however two-fold.

  1. I’d spent years honing a career, working incredibly hard at what I do. Unfortunately this seems to be my downfall, I go above and beyond to do a quality job, and get no thanks for it. But I never LOVED my job, i was good at it, but never loved it. I have a saying “being good at what you do, and enjoying what you do are two completely different things.” I regularly came home incredibly frustrated with the decisions made by those in positions of power, and thought what the actual fuck is going on, nobody seems to actually want to do a good job and get it done on time…
  2. Additionally at the time I was only trading an account balance of around £9000, risking 1% on A+ setups only, meaning in-frequent trades once or twice a month, even if they were A+ trades, would only yield me £450 a month on 1% risk, with 5% profit. Now this was all for a reason, I wanted to build a steady equity curve of my abilities to trade consistently, that I could then take to a firm that would fund me.

The issue is, as stated above, the tables have turned and i’ve decided to leave construction and being a full time employee behind me. And i am too stubborn to admit to defeat and return with my tail between my legs. I can only move forward from this now.

So, now I need to trade full time to make roughly the same as my net take home salary. That means a shake up of how I go about my business. As I was looking for jobs, and the stock market was crashing, I decided to take out a sizeable loan, to buy 50% of an index, and 50% of shares in shell as they’d equally fallen further than the S&P 500 to around 66% discount. This had always been my intention, as i got into this business around the start of 2017, and learned about investing more so in 2018, it was clear that to build wealth you needed to own the S&P, and as people had been beginning to bang the recession drum, it made perfect sense to hold fire until its discounted (i.e. the current bear market) and buy the dip.

Instead of putting £10,000 in an index though I’ve put that in the trading account bringing my capital up to around £18k, and given I have a flashy car i paid through the nose for, I can sell for around 17k aswell bringing my balance up to around £36k. Additionally, all things being equal, my shell share should appreicate nicely, so I plan to use them as theoretical capital aswell to trade.

The above, coupled with an increase in risk in certain strategies to 2% will nicely yield me around £3k a month, a nice increase on my net take home salary.

So, life update over, i thought I should discuss my current experiences with day trading.

SCALPING

So, my first week in the hot seat saw me go full throttle into my scalping strategy i’d been building for months, scalping 5/6 pips on EURUSD with a raw spread broker. Immediately within the first 2 days I realised a return of 2.5%! Around half of my £500 target. A few hours later, I took a day trade Richard (Able Trading) has been teaching me, and boom another 2.5%! Happy days.

I’d basically hit my target, but why stop there eh? I got up fresh and early the next day, to go conquer the market once again, being on lockdown at the moment I thought this was the prime opportunity. Throughout Wednesday I proceeded to pretty much give back the majority of what I’d made the previous two days scalping, handing back around 3%…. This was due to a mixture of both technical issues (internet cut out right as i was attempting to take my profit) and poor trade placements / management.

I then decided to hold off on a few strategies that I was less confident in, and proceeded to trade just 1 of my chosen scalping strategies from Thursday onwards, as this was the one I have been most confident with.

Thursday rolls around, and I’m now 4 days in with nothing to show for all my hard work watching the screens all day… The market is incredibly indecisive and I end up taking no trades.

Now for Friday, which is where i’m most embarrassed of my trading. 

I set up the one click trading facility on my broker, to instantly buy or sell 1 lot of EURUSD at the market price, so i could take advantage of when i was right, but my strategy hadn’t set up correctly. It’s pretty difficult watching a setup form for hours, enter your ideal entry zone, and it just blast straight through without allowing it to set up correctly and meet your criteria. Your trade thesis was correct, it ends up pushing lower and lower past where your entry was. So, my trade theory was correct! I may aswell just short 1 lot at the market, no stop, no profit target, and ride out the momentum I was meant to be capturing if it had set up correctly.

Well, we all know this is just stupid and exactly how gamblers would attempt the market, you enter and it goes down 2 ticks, you’re up £50, decent, if it just goes down some more i’ll capture back them losses, wait stop being a dick you’re not following your plan, okay i’ll exit when it hits £75.

It goes back against you, down to £0, then -£20, you finally slap yourself and exit the “trade” for ANOTHER loss.

I’d be lying if i said I didn’t do this a few times…

When the dust finally settled for the week, I’d ended up going from 6.8% up for the week, down to 2.5%. A 2.5% return for a week’s work is bloody good still! but when you’ve consciously handed back so much of what you had to the market via errors and emotional trading, it really gets you down… If they’d been excellent trades that i’d taken perfectly, that just didn’t play out I would’ve been annoyed but nowhere near as angry as I was because they are a product of trading. Losses are unavoidable, but losses due to terrible trading certainly are avoidable.

Lastly, lets discuss the emotional drain scalping had on me. Monday & Tuesday I was elated, my first week of trading for a living and I’d smashed all expectations I had! I was the man, I was so confident in my abilities, that I could sense the direction and flow of the market. Wednesday – Friday rolls round and proceeds to kick me in the balls, bringing me crashing back down to Earth. Wednesday to Friday I was a miserable, tired bastard and proceeded to take it out on my family. This is totally unacceptable in my opinion.

The reason i think this was an issue is I was still at that point trading only £8000, so in order to make my weekly salary equivalent of £500ish i’d have to make 6.3% a week just to make my take home salary… So maybe in my mind I needed to take as many trades that were available to give me the best odds of meeting this target. Additionally having this psychological target most likely didnt help.

Scalping is most likely appealing to other people, but personally for me it was far too distressing, and wasn’t worth the emotional input.

DAY TRADING

There is hope though, as over the last two weeks i’ve been day trading with Richard (able trading) and the multi timeframe method i’ve been using is much more suited to myself. I’ve yielded a 7% return so far, which is phenomenal performance in my opinion.

This form of trading is a lot more manageable for me as there are criteria to be met, alignments to be made, and higher timeframe biases to incorporate. I previously did a blog post on why I preferred “setup” trading.

This i believe is exactly what should be taught in any trading forex for beginners books. The clue is in the name as it means you need a clear setup to form for a trade to be valid, and if it doesn’t, move on to the next market and look. Simple, and almost robotic.

I think, this coupled with a large account to trade is the key to supercharging my progress. Instead of taking semi average setups, I can sit on my hands all week and wait for that A* day trade, go bigger on my risk and return more profit safely.

Can’t wait to have my first £1,000.00 trade.

Can’t wait to have my first £10,000.00 trade.

In all seriousness though, trading is not tax exempt and legislation dictates that once you begin using it as your dominant source of income, taxes must be paid. So i plan on forming a ltd business to facilitate this, and study basic accounting to ensure i’m fully clued up.

FUNDING

Finally, to cap off this blog, i’ve been reviewing and thinking about applying for funding programmes offered by various firms / brokers.

FTMO is always the one people talk about, and for a 500 euro punt you can apply to potentially trade a 100,000 dollar account, with a tasty profit split. The issue i currently have with their challenge requirements is you need to return 10% in 30 days to qualify, and seeing as i’ve not done that myself yet, I’m quite hesitant to apply for this quite yet. That’s not to say that i’m not planning on it in the future.

The5ers also offer a lot more of a conservative funding programme, and i believe the timescale to reach this target is 6 months! Similarly priced around $550 for their $52,000 account, this is non-refundable however…

There are pros and cons though, with the5ers you can hold positions overnight / the weekend, whereas FTMO you cant.

There’s evidently a lot of opportunities, and when I have the confidence i’m going to be applying for a lot of different programmes.

FINAL NOTES

I think there is something to be said regarding work ethic within this business. A lot of people think that trading is this passive income stream where you sit at a laptop for 30 minutes and make a living. Now, if longer term trading with a large capital base i’d say that is likely the case. If you had say £1,000,000.00 account you could easily trade a few trades a year and still make a healthy living.

Realistically though you need to take trading seriously. You need to understand that the market is your boss, you aren’t “free” in the sense people think you are, you still have to obey the market times, and take the occasional beatings.

You could be day trading, swing trading or investing, but until you take it seriously, you won’t make it. You can’t expect to be handed everything on a plate and its a piece of piss to implement, you’ve gotta work fucking hard and put in the hours. There isn’t a single profession in the world where this isn’t the case.

Wan’t to be the best? You’ve got to do the things the others aren’t willing to do.

TRADING AREAS OF INTEREST

As i’ve been trading a lot more intraday price action lately, and observing all the way down to minute timeframes, i’ve began to notice a very common theme.

As much as this sounds obvious, I think it may be useful for a lot of other people to hear.

I like to describe myself as a position trader, that may be the wrong description, however in my opinion that is a great way to describe my trading preferences.

My rules are fairly simple, get in, get out, and realise your floating profit.

As i’ve said in other blogs, I find it difficult to “predict the future” with trading, and often found myself in the past giving back a lot of floating profits because i was greedy. I never trailed stops, and often moved my stop loss to breakeven to simulate a “free trade” which doesnt exist because you’ve still gotta pay your broker at the end of the day. A free trade in my books is now a fucking ridiculous idea, if you’re up 2% and arent thinking about trailing your stops your fucked.

Imagine when you actually wanted to trade for a living, and having £1000.00 in floating profit only to see it evaporate in front of you and return back to break even. Take your fucking money and admit you were wrong on your fortune telling capabilities.

So, as I said, i get in, and get out, and i trail my stops when available.

Ultimately we’re all in this game to make money, so my personal view on things now is to take my pound of flesh and get out.

So as stated in my previous blogs, i no longer try to predict the future and i just trade what is currently happening for me, not what i hope is going to happen.

This brings me on to my topic for this blog, it’ll be fairly short and sweet.

Areas of interest for me are areas where other traders will also be noticing.

These include;

  • Swing highs and swing lows
  • Daily pivot levels
  • Main moving averages (50, 20, 5, etc)
  • Fibonacci zones
  • Support and Resistance levels
  • Round numbers
  • Indicator extremes, i.e. RSI extreme readings over 70 / under 30.
  • Trendlines

When i say these are areas of interest, what im implying is that they are ares where a lot of smarter traders will be looking to exit trades / catch the less experienced off guard.

My most recent observation is on the 1min timeframe, around the daily pivot.

Looking at the below chart, it’s hard to say that the daily pivot level is nothing but a magnet for attention. When i look at this its hard not to see that business is being done at this level, trades being entered, exited, price consolidating as trades are exited and entered, all sorts of behaviour.

So my point that i believe will be most helpful for other traders is to avoid trading around these areas, sounds pretty good right?

If i was short and price was heading towards the daily pivot, i’d look to atleast trail my stop to avoid a complete reversal from this, as well as things like the daily 50 ma, if i was day trading it i’d look to exit atleast half my position at the daily 50 as its likely to be similar to the above pivot level and prove to be an area of consolidation and indecision.

If youre day trading, like i said above, get in, and get out and realise some of your floating potential. Day trading by definition is you get in and out within the same day. I used to find myself looking at trades that are over in hindsight going “ah shit if only i’d held it open i’d have made 1000% on that trade”. The reality is, i banked 2% and got flat, it’s too easy to be a hindsight trader.

If you’re looking to swing trade for a further distance, look to try and keep as many of these indecision areas before your stop loss to avoid a loss.

I look at it like stacking timber on a road, if you put one bit on the road it wont stop a moving truck, but a lot of them will definitely slow it down, reducing the likelihood of it causing an accident (hitting your stop loss).

In other news, as of Monday 23rd im beginning to actively day trade as i’m currently out of work. My current live testing results are shown below, safe to say it seems to work pretty nicely! Only problem is i’ve only live tested for 10 days, but my backtesting covers over 100 trades, so in my opinion this is a sufficient sample size for backtesting, and 10 days worth of live testing is a decent barometer of my capabilities.

Will keep everyone posted on progression!

MARKETS & FEAR

Monday 16/03/2020 21:55

I need to stop watching the news and using erroneous statistics to gauge my sentiment.

Ultimately, the news are great harbinger’s of fear, and love to use out of context statistics and headlines to impose a response. Most notably is references to the 1987 Black Monday crash, 19/10/1987 where the Dow slid 22.6%. This is officially the worst single day sell off in the history of the Dow, a barometer of the American economy. Today the WSJ has put out a notification saying today is the second worst sell off in the total existence of the Dow Jones, which is pretty ominous, yet without context hardly gives a lot of helpful insight.

Now, listening to the news is definitely a terrible idea to try gauge an honest and unbiased description of what is really going on.

The sell off over the last few months has been mega, and we are roughly down 30% from all time highs. This sounds awful, yet nobody seems to mention the positives? Positives such as in the entirety of the Dow Jones existence, EVERY bear market has been followed by a bull market which erases all losses seen.

Additionally, when though about rationally, even the 1987 sell off, the WORST in history, was followed by a bull market, so there’s always that.

I don’t know who decided the rules for definining bear markets, but according to wikipedia they are as follows;

A bear market is a general decline in the stock market over a period of time.It includes a transition from high investor optimism to widespread investor fear and pessimism. One generally accepted measure of a bear market is a price decline of 20% or more over at least a two-month period.

A smaller decline of 10 to 20% is considered a correction. Once a market enters correction or bear market territory, it is not considered to have exited that territory until a new high is reached.

From 1926 to 2014, the average bear market lasted 13 months with an average cumulative loss of 30%, while annualized declines for bear markets ranged from −19.7% to −47%

So, seeing as the Dow is already 32% down, i think we’re atleast at the average. The real question is, how low can ya go?

Image result for limbo meme

Well, that’s the million dollar question isn’t it.

My short answer is, I don’t know, and nobody knows. Ray Dalio likes to compare the 1920s end of the longer term debt cycle with now, as they have some similar characteristics. Widening wealth gaps, rising of populism, central bank rates hitting zero, etc etc. Personally, I like to think some things may have changed now, in the almost 100 years since. I could be wrong, but the fact that people have a lot of different morals, values and perspectives on topics means we live in a new world, and therefore economics and politics will have changed.

The fear currently ripping through the market can only be compared to a panic in my opinion, much like 2008, and 1987, 1929, all followed by a bull market. Below is a screenshot of what I believe to be meaningful, high impact events that affected the economy, with the equivalent amount of fear and panic as we are currently experiencing with the virus.

As you can see, the selling eventually came to an end, and the economy eventually recovered.

History does tend to repeat itself especially in given markets, and I believe with the virus currently threatening the world, we will be okay due to the fact that it has such a low death rate. The real threat to the world like i said in my last blog is the threat to the economy, like a train once you put the brakes fully on and bring it to a stop, it takes a lot of energy to get it moving again.

I have a few quotes rattling through my head at the moment, 1 from Martin Schwartz, and another from good old Buffet.

This is an excerpt from one of my favourite books (Pit Bull by Martin Schwartz).

After the market closed down 508 points, I called Zoellner. “So, Bob, whaddya think?” “I don’t know, Marty, but you what i always say, ‘When it gets so bad that you want to puke, you shoud probably double your position.”

And secondly, a classic from Buffet

Be fearful when others are greedy, and greedy when others are fearful.

Personally, i’m shitting myself, but conversely, i’ve been watching the news far too much and it’s been clouding my logical judgement. So, from today I am limiting myself as much as possible.

In a final bit of perspective, what a fucking experience to put in your diary eh? Total world lockdown, this hasn’t been since since World War 2. Something to tell your kids and grandkids isn’t it? Imagine telling your kids that at one point, the general public hoarded toilet roll like it was a precious commodity? Mental!

I think that if the countries are put on lockdown for a few weeks, and people are told to stay at home, it may actually do the world some good. Teach your kids new life skills they’ll never get taught at school, why not start that hobby you’ve always wanted too? Exercise, do something you’ve never done before. But for fuck sake don’t get off the merry go round, life goes on and we are all here for a reason.

Stay safe people, the world will soon return to normal.

COVID CRISIS

So it’s been an interesting few weeks, and the following few weeks / months will be even more interesting to observe.

What originated as a small localised outbreak in Wuhan appears to be spreading, with materialising effects on the economy.

A slowdown in the economy has been threatened a lot over the last few years, with a lot of recession indicators firing off last year stacking the probabilities (when studied against conventional economics) of a recession more so in its favour each time.

An example of the standard indicators for recessions are the US 2/10 year yield curve inversion, central banks reducing the main interest rate closer to 0%, and the sheer fact that bull runs usually last between 5 & 10 years (we’re over that now). Below is an example of said yield curve inversion, and overlaid is a highlight showing when recessions have occurred.

Image result for yield curve inversion recession chart

A topic for discussion another day down the line, is do these same signifiers work in newer economic times, i.e. negative interest rates of central banks, or negative yield bonds issued (Greece recently, absolutely stellar example of a doomed economy). We’ll find out over the next few months as too whether this is the case or not.

I could talk about conventional recession indicators a lot, but the fact that remains is, in my opinion, a recession does not materialise without a “Black Swan” event.

Examples of past events include;

  • Fall of the USSR
  • September 11 2001
  • 2008 Housing Bubble
  • 2011 European Bailouts
  • Brexit

A black swan event is something which is unpredicatable, with wide spread ramifications, and is typically followed by hindsight bias saying it was actually, indeed, predictable and preventable…

Now, in my opinion the outbreak and subsequent impact of the coronavirus is almost a perfect storm, a perfect black swan event.

It’s unpredictable impact on the economy is genuinely almost impossible to calculate, until it is over and we can review in our infinite hindsight wisdom. But the fact remains, that until the virus is either completely cured by vaccine, or case numbers / death counts begin decreasing significantly, we cannot calculate the impact this will have. This I believe is the difficulty faced by many policy makers, politicians, banks and business owners.

I am in no way saying I believe this virus deserves the exaggerated response it is recieveing, we are all still dangerously at risk of dying from other wildly more probable and dangerous threats, such as road traffic collisions, heart disease or diabetes. I personally believe these are the things that should be focussed on as they have reasonably easy remedies, do some exercise, look after yourself and be safe in the car…

Realistically if you wanted to talk about national emergencies, maybe the fact that a large percentage of the population suffers from heart disease, and are obese…

Heart disease alone contributes to 1/4 of the deaths in the UK, and the fact remains that an overwhelming amount of evidence suggests eating more vegetables and just exercising can reduce that figure drastically, but personally i believe it is not in the governments best interest to fix this because the industries that contribute to these deaths (fast food, alchohol, tobaco etc) pay an obscene amount in taxes… I’ll leave that as food for thought and move on. Imagine the media pointing out statistics like 1 person dies every 3 minutes in the UK from heart disease and making an absolute campaign against it…

The more pressing national emergency is the danger to life this causes, not from the virus but the impact on the economy. This impact on the economy is what i’d rather discuss right now.

The main cause of crises, or a main contributor anyway, is a reduction in consumerism.

Think about it, A LOT of countries rely heavily on external input, be it tourism, goods from abroad, medicine supply chains etc. If borders are closed, holidays cancelled, shipments delayed etc it stops people from being able to actually spend their cash, which is needed for a healthy economy to continue. Now, this stunting of the supply chain, coupled with FEAR of actually going outside to spend the money creates, like i said, the perfect storm for a recession. Additionally, banks are less likely to extend credit in times of uncertainty, atleast without government assurances anyway, so this again freezes the ability for business owners to spend.

The reason this cash flow slowdown causes said recessions is it puts the economy at risk (obviously). Airlines go out of business because nobody is travelling, restaurant chains face difficulties as nobody wants to go out and be around other people who could be ill etc etc.

Companies going out of business then means unemployment increases, further compounding the effects of a lack of consumerism, and furthermore making those who still have jobs, less likely to spend, and more likely to save because they fear also losing their jobs and need to prepare themselves and their families.

My personal advise is pretty blunt and straight up, but we’re all likely to get it, much like the flu, and those under certain ages and are healthy or reasonably so will be fine most likely. I personally believe people should all go about their daily lives, BUT avoid going to hospitals where they are then putting those actually in there at risk.

When I was 8, i had to have a substantial amount of chemotherapy for lieukemia, and the way chemo works is it essentially removes any immune system you have, so if somebody had brought an illness onto the ward i was being treated on, i would not be alive.

So don’t be selfish, avoid putting the infirm at risk, stop stocking up on toilet roll because in the apocalypse you are preparing for the last thing you’ll be worried about is having a civilised poo, and go about your daily lives. Please follow the below specified advice for hygiene.

As of today (15.02.20) China has closed its last purpose built hospital for treating the virus, and their total case numbers are levelling off, whether you believe this or not is another thing since China are a stickler for a bit of propaganda / false information… Below is a chart of the total cases according to the following website. https://www.worldometers.info/coronavirus/country/china/

As you can see, once the threat was contained using appropriate measures, total case numbers levelled off. However other countries are yet to see such a levelling off, I believe the lockdowns imposed by Italy, Spain etc should work nicely, and realistically shouldn’t last more than a month or two.

As far as markets go, it’s been a shock to the system as a lot of selling off has occured over the last few weeks, predominantly the main borometer of the world economy (The S&P 500) has seen a pretty hefty 30% sell off. Historically this has been a great buy at such sold off levels as every bear market has been followed up by a bull market. Personally, i will be waiting to see case numbers in countries like Italy and Iran to begin stabilising before being interested in buying.

STRENGTHS, WEAKNESSES & SCALPING

I’ve been thinking to myself over the last few months about myself and my strengths, weaknesses and key interests when it comes to trading.

I believe it’s key, understanding these parts of yourself, in order to shape and mould a game plan which is specifically tailored to yourself. That way you stand the best chances of succeeding over the long run.

The reason I think this is key is because when all is said and done, every person is different, no matter how much you want to emulate another person, your basic habits and opinions will always get the better of you because it’s all you’ve known since birth. My favourite quote for habits is “Good or Bad, Habits always deliver results.”

Now, coming to a conclusion based on that statement can go two ways, positive or negative, i’m not particularly philosophical, so let’s not get too deep, but results are what you make of them. I agree bad habits should be reduced and removed as much as possible, but in my opinion you should try make positives of existing habits as much as possible, as they offer the path of least resistance. Much like swimming with the current rather than against it.

It all also comes down to aspirations, if you join the trading game and want to make money consistently within 6 months you’re delusional. However 5 years is a fair timescale to put on it.

My reason for saying this is it seems to be plastered all over social media, every dickhead and his entrepeneur page posting about how you need a mentor, but giving you no real helpful context. The basic premise of this is a good idea, obviously you want to be successful, so modelling yourself off a mentor / person who IS successfully doing what you want to do makes perfect sense. This is definitely a topic I agree with, however I feel that a caveat should be added, which is you should learn from them as much as you can, but you need to take what you’ve learned and make it your own. Below is an example of the cliche shit online.

Mike Bellafiore of SMB capital attests to this, as well as Richard at Able trading. Rich made a great point to me when we started talking about trading and he began to mentor me, he said that he could show me how to trade, but it doesn’t necessarily mean I will make a success of it.

Mike Bellafiore says something along the lines of make trading your own, take a strategy and make it your own.

These statements are very accurate because when you think about it, everybody is different, and has different approaches to doing things. An example of this is in my line of work in construction, we engineer solutions to problems, and often I can be working alongside another colleague doing very similar work, yet we both can come up with vastly different solutions, both that work but in their own way.

Richard has taught me a great deal about how he approaches the markets, and his way of viewing them, and its with this knowledge i’ve began to develop my own framework, taking bits and pieces and forming my own version of an approach, based off what he has taught me.

For example, I find it difficult to incorporate macro economics into my trading, as in all honesty I do not have time to keep track of it all, given the fact i still work full time, and ultimately in my opinion it’s just a theory anyway much like a technical set up is just a theory of what could play out in the market.

I often find myself with conflicted opinions on macro fundamentals, and I think to myself that this is causing me to miss setups and sometimes take setups when I shouldn’t, because my macro theory was incorrect. Macro theories can have multiple outcomes and scenarios, leading to almost an infinte string of variable outcomes, which seem vague and non linear. Whereas technicals show either a black and white outcome of X or Y, macro can offer multiple variations of X, Y, Z or X1, X2 etc.

So, lets get stuck in. Below i have listed what I can think of, as my core strengths and drawbacks.

Strengths:

  1. I am able to criticise myself to the point most would feel uncomfortable, this stems from my early days at school where people would attempt to bully me, to which I would just agree with them and go along with the shit they were spouting, which by the way is a great strategy as it leaves them with fuck all ammo as they’ve gained no rise from their statements. Being able to criticise when you’ve been a cunt and when you haven’t is absolutely paramount, and being able to objectively say you’ve been a dick is SO important in trading.
  2. I also believe, given the right set up, I can execute a strategy systematically over and over again without shooting myself in the foot. I can happily take 5 consecutive losses, and still show up the next day and execute my strategy.
  3. I have realistic expectations of trading, and do not dream of making outlandish profits (just yet). I understand how the markets can evolve, adapt, and times can change, heralding a new era of market activity which REQUIRES you to adapt. Simply blindly buying off oversold RSI is no longer a sufficient method of going long. It requires a more finessed approach atleast.
  4. I know what technical analysis works for me now, and i have combined the indicators which I’ve both been taught to use, as well as some that I believe make sense to me to use. I believe a mixture of moving averages, channels, RSI, MACD and fibonacci levels, are the most effective indicators in my repetouir and I am happy to proceed with using them and honing my abilities with them.
  5. I am a wildly confident person, in my abilities to both make money, as well as execute my strategy without error. I know that given a sufficient timescale, I can perform impressively, and offer a niche that very few can match, consistency, and the ability to limit losses.
  6. Taking 1% losses almost doesn’t phase me now, as i said above, I know that over a longer time horizon I can make money consistently, and that draw down is expected and inevitable.

Weaknesses:

  1. I am impatient, and always have been. This is something I believe i shouldnt fight, but should infact embrace and make into a positive. I hate not being in the market for prolonged periods of time, often struggling to sit on my hands for weeks. Again, like i’ve just said, I believe this can be moulded into a strength.
  2. I am forgetful, often times only remembering key information when its too late. Therefore an overly complex strategy requiring multiple inputs, and macro co-ordination is a difficult thing for me to implement. A strategy which is simplistic to myself, requiring less subjectivity is key. This is why I wrote my previous blog about trading setups, that I believe is going to be my fortay, looking for setups and scanning multiple markets quickly without spending hours analysing an asset and building a theory.
  3. I am not as knowledgeable as others within this industry, with very little financial education under my belt, which given certain circumstances could put me at a disadvantage. I believe with adequate knowledge of certain correlations, basic fundamental theory and a sufficient method of applying it, this can be an advantage.
  4. I struggle with trend based trading, and often find myself gravitating towards more breakout strategies or reversion to mean strategies. Again, this I believe can be honed into a strength.
  5. I also struggle when i’ve made say 3% profit in one month, I struggle with taking further trades within the month as i’m both A) fearful of erasing that 3% return, as well as B) greedy sometimes and want to make more.

Scalping

I have began experimenting with scalping. This is a taboo subject with a lot of people I know, however give me a chance and I will explain my logic.

Scalping involves skimping 4 or 5 pips out of the market quickly and succinctly. Almost like dipping your toes in and out of a pool. Now, this is pretty difficult on the majority of markets, as spreads / costs of trading often eat into A LOT of the gain to be made on 4 or 5 pips. And realistically, if your profit target is 1:1, having 30% deducted because of the spread, means over time you need a pretty high strike rate just to break even…

Scalping also is almost completely removed from institutional traders who wish to make large cash off small price changes, because of the sizes of trades they wish to trade. Don’t get me wrong, it is surely riddled with algorithmic traders who trade large size, however i’m fairly certain pension funds and mutual funds aren’t actively trading EURUSD on the 1MIN trading 1000 lots to make 5 pips of profit. This removes the possiblity of macro theories and fundamentals influencing the micro trends. Some newer traders are more deluded than others, and believe that trading can be infinitely scaled. Once you reach certain thresholds for trading, opportunities dry up as liquidity inhibits your ability to place trades of adequate size, as well as your insurances provided by a lot of conventional brokers often is far to risky to be placing £1,000,000 in your FXCM account…

Now this narrows the playing field, as nobody cares what is happening under the skin of say the 15MIN timeframe.

Let me introduce you to the idea / theory of fractals. We all understand how what happens on the micro affects the macro. You look at a big bullish engulfing 1HR or 4HR candle, you know inside of that theres more than likely some bullish price action, maybe a long term trend has been underway, alternatively, a large news spike has pushed price up and it has stayed there.

Fractals are structures that comprise of essentially infinite micro structures, which make up the macro structure. Like a snowflake, the small nodes on the ends of snowflakes are what make the overall snowflake LOOK like a snowflake.

Much like a micro bullish trend over the course of an hour, is what MAKES a 1HR bullish engulfing candle look like bullish price action.

I’ve also read up last year about high frequency traders, and how A LOT can happen over the course of a few seconds, so the theory that a lot can happen over the space of 15 minutes is fairly justified.

Below is a link to an example of how fractals work, you can zoom in on what seems like an innocuous part of the structure, and it is actually comprised of multiple micro structures, which make up the larger picture.

http://xaos-project.github.io/XaoSjs/

The point i’m trying to make is that it almost seems like an insignificant 1HR bullish candle, but there is a huge amount of opportunity available over the course of an hour each day, so why not take advantage of this?

Now, I think i know what most people’s reservations would be, so let me try and list them below, and then offer my opinion on each one.

  1. It’s just noise, and tiny fluctuations.

Now, this is true, during certain periods of time, price is often just erratic and illogical. I propose only trading clearly flowing, and orderly assets / markets. My chosen market is EURUSD as it is far less volatile than JPY pairs, and has the highest amount of liquidity of all currencies. From my observations, this issue of erratic and illogical price occurs during the periods of time before and after the London & New York sessions have ended. See below an example. You can see at the bottom this is between 2am and 4am GMT. This would typical coincide with the Sydney & Tokyo sessions, which comprise of a lot less volume when compared with the second screenshot. The first screenshot shows volume present on the euro futures, we can see the highest amount of volume was 430 contracts.

The second screenshot is of the London session, we can see multiple examples of much higher volume, and a more clearer trend forming with this increase in activity. Price flows much nicer, with less spikes and wicky candles.

So, I would argue that trading within the London / New York sessions isn’t just noise, it actually is orderly, and as stated above, a fractal.

2. It’s stressful being at the screen all day, and doesn’t suit the #laptoplifestyle i want.

I would agree, that the idea of watching the 1MIN timeframe for a whole working day, would be painful, and would for some be difficult to keep up. I do however have a counter arguement to that. Trading has been taken on by so many aspirational people because it gives them the potential to make money, so that is the main goal I don’t care what you say, and quote garyvee as much as you want, making money is the only fucking reason to do this. So if there are more opportunities to take a cut of the cheddar, why not do it for an hour each morning? Or on your lunch break?

3. The risk of blowing an account is much higher.

I would agree also with this statement, however surely if you have the ability to blow an account on the 1MIN timeframe, then you have the ability to blow it on the higher timeframes, it’s just going to take you more time on the higher timeframes as the poor way you are trading takes longer to play out.

I believe you absolutely need to already have an existing base performance and consistent strategy you have been using for atleast 1 year before even thinking of going down this route. The mental and emotional strain will be far less painful to yourself if you already know how to manage yourself, and like i’m doing, know your strengths, weaknesses and limitations.

Additionally, my proposal for a means to mange this is to set limits on losses or gains for the week / month, so as you cannot trade for the rest of the agreed upon period of time because either your loss limit or profit limit has been met. For myself, i am still trying to find a happy medium, however I feel 5% profit or loss per month is reasonable to deal with. I will still trade my swing trading strategies on the daily / 4HR to work parrallel to this.

4. Volatility will ruin you

Again, this analagous statement makes sense in principle, however I feel that it hasn’t been given enough thought. A pretty basic understanding of trading would suggest you dont try and trade the 1MIN timeframe when medium to high impact news for either the Eurozone or Untied States is scheduled. I have set myself a minimum 15 minute window either side of such news announcements before thinking about trading again.

Hope you guys enjoyed this blog, please let me know your thoughts!

SETUP TRADING

Thought i’d do a quick-o blog post regarding my thoughts on my journey so far.

I really used to struggle to do top down analysis on markets, to identify a preferred directional bias for the market.

I’d spend HOURS each sunday analysing each currency pair, all the way from the weekly down to the 4hr, noting down as much information as possible to try determine im conforming to the old cliche of ‘the trend is your friend’.

Fuck that idea off

I’d often find that i’d do ALL this prep and then never really use it / profit from it, i’d sometimes be lucky but most of the time i’d fuck it right up…

Over my last few blogs i’ve re-emphasised how i’ve changed over to able trading, and using the able method which as so far provided me a solid 20% steady consistent gain since August 2019.

Honest to god this switch to systematic almost mechanical trading has made such an improvement on my trading.

I used to feel like myself, and trading were pieces of two different puzzles and i could never get them to fit together nicely.

This switch to systematic trading has been a god send for me. I’ve almost memorised now exactly what a quality set up looks like that i could most likely draw it from memory.

This allows me to scan through markets quickly, with a simple question, has price done X recently? If so, onto the next asset to check for a set up.

My evening routine for checking for trades lasts about 15 minutes, on trading view I have all my major and minor currencies listed in different lists. Same with commodities, major stocks, indicies etc.

I’ll start from the top, check AUDUSD, has it done X lately? Yes, cool, next on to EURGBP, has it done X lately? No? okay cool flag that with a red flag as its a daily set up, and i will return to these to scrutinise all flagged items at the end of my checking process.

This simple method has removed my need to over analyse markets to try predict the future when it isn’t even necessary. All i care about is this, have i got a valid set up? No, onto the next. OR, Yes, okay check a few refining factors, plot my entry and then set it and move on.

This simplistic idea is the correct piece of the puzzle that for me personally I needed.

Removing subjectivity and discretion from my trading has been the most beneficial thing I could’ve done, and for that i’m truly grateful.

I don’t need to know what the pound is going to do next month, I just work with the law of large numbers.

I know over a large enough sample size I will remain profitable, and that’s all the complex thinking I need to do. One incorrect trade is just another addition to the sample size. Same as one correct trade.

Rinse repeat.

I don’t care if after i’ve taken my profit that the trade ‘could’ve’ gone further. That’s not part of the strategy.

In, out, no questions asked.

Next play.

Because i work full time and have a life outside of work, being able to avoid over analysing markets has actually helped me a lot, I get more time to spend with my family, friends and other projects I want to focus my time on.

Again, for this I am truly grateful.

Stop trying to predict the future and just focus on what is happening right now.

I will leave you with my favourite scene from the wolf of wall street, particularly 0:30.

Your job is to put money in your pocket, not predict the future, so stop trying to predict the future and start putting money in your pocket, because i bet its the other way round currently.

2020 BEGINS

Evening all, it’s been a while since my last blog post.

I apologise for this, i try to use this blog as a way of documenting my progress as it’s set in stone and dates cannot be changed (so it acts as a way of measuring my development over time), anyway long story short I don’t like hammering out bullshit / dribble for no reason, I try to keep it strictly to content that both reflects my progression, as well as content that may benefit others.

Earlier this month I began with the idea of starting a podcast, as it was potentially an easier way of put my thoughts out there, however i’ve struggled really to talk about topics especially ones that i’d be comfortable putting out there. All i’ve ended up doing so far is ranting about things that frustrate me, but really it’s just made me sound like a miserable bitch…

Anyway, i’ve got that idea ticking over in the back of my mind, still unsure on the whole thing however i’m still keen on the idea.

I might even just fuck the whole idea of keeping it trading orientated and just go full Joe Rogan on it and talk about any old shit, which to be honest i’m kind of more inclined towards.

Myself and my friend tend to have good chats about market related things sometimes, so I may try do podcasts with him instead.

Anyway pressing on, before Christmas I had began to backtest and produce my own daytrading strategy involving the bare bones components of what I had learned with Richard at able trading.

Mainly being bollinger bands & moving averages, i seem to gravitate towards these. They’re a great way of gauging market behaviour.

My favourite quote from a lot of market wizards is to focus on what makes the most sense to YOU and double down on it.

So that’s what i’ve done, taken what makes the most sense to me and began to develop my own intraday strategy focusing on a few particular markets, and scalping essentially small profits each day / other day from the market.

My issue with this is for some reason I can’t seem to figure out where i’m going wrong.

i’ve backtested the strategy and it’s provided a seriously high positive expectancy.

However, big caveat is that i’ve just ran the same data through an excel tester and i’ve got a very dissimilar result (much lower than my expectancy).

So back to the drawing board I go, there’s something there to use, i’ve just gotta figure it out.

I’ve also had a pretty odd thing fall in my lap lately that I hadn’t thought about for YEARS.

Originally, i studied graphic design in sixth form, which I absolutely loved doing, and upon leaving sixth form I wanted to produce my own mini kids book on space because I fucking love space and shit.

But along came being an adult and I had to make a choice between going to University (which wasn’t a possibility as I had shite grades) or going out and getting a job, so this dream got pushed aside and I ended up getting an apprenticeship in engineering.

Fast forward 8 years and i’ve found myself almost full circle, with the opportunity to do this again as i’ve downloaded adobe creative cloud for a reasonable fee each month.

I’ve followed a channel on youtube for years called Kurzgesagt – In a Nutshell, and they do great videos on space in a style very similar to what I had in mind in 2012.

So that’s additionally my side project on the go, which I thoroughly enjoy producing, as i’m such a perfectionist and have an eye for graphical content.

Lastly, i’ve decided to throw myself to the wolves and learn how to count cards in Blackjack… Wish me luck!

Anyway, meandoring rant over, I hope you all have a great 2020, and make sure your trading actually turns a profit!

BACKTESTING.

I think backtesting is a double edged sword, much like a lot of things in life.

There is a lot of varying opinions out there regarding the topic, and ranges from being a complete waste of time, to essential to your trading.

We have all heard the old adage of past performance is not indicative of future results, but personally I think that is a phrase that was coined to A) cover poorly performing individuals, and B) give some self reinforcement to fundamental traders…

If that saying was true then there would be no professional traders anywhere, and prices would be literally random 24 / 7 / 365.

My first experience with the topic of backtesting was when learning through infinite prosperity. They advised that the strategies should not be backtested because what had happened in the past had no bearing on the future… which made fuck all sense seeing as what they were teaching was purely technical trading?

When I was mentored by abletrading, Richard advised that my first steps after learning the strategy should be to backtest the method to A) build confidence in pulling the trigger, and B) prove to myself that I could be net positive over a long period of time.

So that’s exactly what I did, I think I spent over 1 and a half months testing 3 pairs on various timeframes and asset classes, mainly commodities and currencies as they are all i can trade currently with my account size.

The resulting information showed that with the information i’d been provided I could make a net positive return over a large enough sample size, and this was only 3 pairs!

Now this is where I believe a caveat must be thrown in.

Just because you have a proven strategy, doesn’t mean you will be a profitable trader.

You really need to get a firm grasp and understanding of how your mind plays games with you.

Here’s my latest example.

I’ve had a few trades recently on the daily timeframe, and this is where you need to be careful with how you’ve taken in information when backtesting. What you do not realise when backtesting daily / hourly / 15 minute timeframes is how much TIME itself affects your decision making abilities. My example is on AUDJPY 1D TF 27.08.19.

EXAMPLE:

Order set for a retracement on this large bullish candle.

Day 1: Fuck. Not been triggered. do i wait? do i remove my order?

Day 2: Okay cool, now im in.

Day 3: Get in. I’m up 40 pips!

Day 4: Shit, another down day. Is there a trendline holding it down? I’ll hold it over the weekend, i’m happy with the trade analysis and entry.

Day 5: Fuck sake, gapped down monday and hasn’t moved… Is this a sign? Shall i bring my stop up and reduce my risk? No that’s a cuntish move.

Day 6: Get in im up 40 pips again.

Day 7: Buzzing! but wait, it’s not closed above these highs, shit… shall i take profit? im up 0.8%. No, don’t be a cunt, trust your trade analysis.

Day 8: Fuck sake, profit target was missed by 6 pips… Shall i bring my stop up? No don’t be a cunt your profit target is just there its inches away..

Day 9: Fuckiiiin beauty! I’m a trading god.

Now, i’ve embellished these quite a lot, but the point i’m trying to make is that a lot of thoughts go through your head when managing a trade on anything from the lower timeframes to the higher timeframes. No practise can prepare you for the real battle of being live on a trade in the middle of the action.

News coming in left right and centre about a billion different things that can affect global economics.

Watching a bar form throughout an entire day and being able to hold on for days, trusting your judgement and not succumbing to your emotional thoughts is fucking hard work. And i know for a fact this is even harder when you’re trading intradays.

Only live trading of your own money will give you that experience.

Mark Douglas teaches that you should test a strategy to ensure its edge plays out, and to build confidence, nothing more.

Too much of something isnt always a good thing, as I frequently see people touting backtested strategies on social media, yet they’ve failed to mention anywhere whether they’ve actually practised what the preach…

In my case, as a person who felt lost in an ocean of shit and lies, it came as such a fucking breath of fresh air to know that I had found a strategy / approach that appealed to my personality.

All i can say is this, build trust in an educator and simultaneously build trust in yourself.

Although I still have moments of lapsing habits, I now look at each trade as just an opportunity to allow my strategies edge to play out. Nothing more. No hoping for some economical miracle, just rinse and repeat. Almost robotic. I’m here to make a consistent return, not to feed some part of my ego that requires me to feel like im a god.