MY Journal-phil13

trade 4 in this money management demo trade....

held this one overnight and through some red news.

Thanks so much.

When you start off your attacking numbers are 1 8 5 in a particular direction - yet in rescue the numbers become 1 21 34 and not 1 34 21 - why the difference are you not adding a big number in quite late in a run at a more risky time?

Alex

Hi Alex

no problem, not trading that demo today as not feeling 100%.

Many factors must be taken into consideration when doing this type of management and it must be adjusted to the oncoming known and unknown risks, so my logic behind that part of the trade at that time was I only faced an unknown risk such as an unscheduled news announcement being released, these catch the market by surprise and will often move the price quickly and a long way initially in one direction, I already had the short trade going so if it whipped back it was likely going to be triggered by an unknown fast moving event, in this situation it is best to recover and re-group to assess the new conditions, 21 was first there to stop the bleeding mainly, the 34 was to hopefully do a quick reverse recovery in case of this, when news was due (known risk), I lowered the skews as market will often have priced in what they expect and the move will often not be as great, this left me lower skews on the table to adjust too if the price whipped both ways, the goal here is managing the money to create its own profit by simple adjustments in line with the now risks as you should do in any business, I start off with 1,8,5 as I am hoping to catch a small trending run but the direction is not a concern as I am trying to explain my money management in an easy to understand way that is why i am using the ATR value (N) to try to catch a first more than average move.

Of course in my live stuff I play one pair against another mostly using this type of management and my market sense not the fixed values I am showing, but that is so difficult to show and explain, so I am using this demo and doing it in the same pair. On the example above you could use the triangles in the charts below.

regards

Phil.

AOW....

29. The skillful tactician may be likened to the shuai-jan. Now the shuai-jan
is a snake that is found in the ChUng mountains. Strike at its head, and
you will be attacked by its tail; strike at its tail, and you will be attacked
by its head; strike at its middle, and you will be attacked by head and tail
both.

Hope you're feeling better my friend

Alex

Hi Alex

thanks my friend

feeling a bit better today but will not trade just yet.

regards

Phil.

trade 5 in the money management trade demo.

this is the last one of these i am doing, i hope anyone who has been following this understands what i have tried to show with this.

the aim is to generate a profit not rinse every pip out of something with this. little and often is the key to managing money, the account is now just under 0.9% in profit over these 5 trades with an average of only a few hours per trade, below the trade is the demo account details so all can see apart from testing the new account was working ok with the first 2 trades these are the only trades i have taken with this account.

this is just one tool of many we as traders need to understand and learn how to use to our own advantage.

Thanks so much - just back from few days in Portugal - get what this is telling us re MM. Very good way to demo and learn about pure MM - but not blindly follow.

Thanks so much for all your good work - hope you are feelin better.

Alex

Hi Alex

hope you had a good time away, was a bit concerned you may be ill so is good to hear you were enjoying yourself.

happy you understand what i am try show that i do, understanding how money can be used as a tool really helped my trading to progress.

i am ok now thanks, had to stop my medication for a load more tests for two weeks, that is why i was not feeling so well, but it is all done now so all is good again thanks.

regards

Phil.

been thinking about what/where this journal should or should not go, as i said i was going to conclude it with the post i am preparing on capitalisation, but i think i will try to cover some other market problems that a lot of people seem to have trouble dealing with, i know from experience this is mainly due to the wealth of utter rubbish that is out there and bounded about as ways to 'read/trade' the market/price and many many over complicated ways of doing a simple job like deciding what the current trend MAY be, i will be covering the ways i do this and showing a very easy way to quickly assess a trend from a daily and hourly chart, i will use that demo account (above) to show how i trade the legs of the hourly/M15 with the use of the daily trend.

P.S anyone know if fti is ok, it has been a long time since he last logged in and starting to be a bit concerned about him now.

I use also the current d1 wave.

I am also worried re FTI - he appears to have disappeared - but no way of getting in touch with him.

Alex

CAPITALISATION.



Most people’s biggest problem….. TRADING CAPITAL… and wages/profit return.

We all have to earn our money through hard work, do not be fooled by anyone….. the only people that make money work in mint, there are no short cuts.

Here is a reality check about trading that I believe most do not even consider….

So, let us just say you can achieve 50% a year, the reality is that is a huge return to achieve constantly over very long periods of time and not an easy task at all, so we have managed to get 10k together to trade with which again in this game is nothing and will be very hard to make a wage off, year 1 you will end with 15k, can you live on 5k?? no! I think not, reality is you will need to spend years building your trading capital, so now you cannot release any of the profit to do this, year 2 you end with 22.50K (7.5k profit), year 3 you end with 33.75k (11.25K profit), year 4 you will end with about 50.67K (16.87K profit), now you have made a very low wage but you still cannot release any money, year 5 you will end with about 75.31k (25.31k profit), now you have an average wage but again you cannot touch any money if you want more than just an average wage and you are now 5 years in without earning a penny, the average wage job (25k) would be about 75k ahead overall at this point and in wage/profit terms you would be about 100k down (you have the 75.31k minus your 10k start but cannot spend it while mr average has earned 125k) , year 6 you will end with about 112.65k (37.65k profit), year 7 you will end up with about 173.97k (61.32k profit), so now that is an ‘ok ‘ wage but nothing worth all the years of effort so far and you would still be about 109k in wage/profit terms down on the guy who has the average job at 25k/year who is still slightly ahead in overall capital earned (mr average wage has earned about 175K in the 7 years so far and you are still down a little at about 164k overall but you need your working capital while he has been free to spend all his money), year 8 you will end with about 250k (77k profit), getting better and overall you have beaten the average wage now in overall terms, year 9 you will end with about 325k (125k profit), now you are making a good wage but you still cannot touch any money and our average wage guy is still 100k ahead in wage/profit terms, mr average has earned 225k by now, so at this point if you say I have my working capital for trading so at the end of the next year you will have broken even with mr average wage in wage/profit terms you will both have earned 250k in 10 years with the difference being you have built a working capital business of about 325k…… or if you continue then in year 10 you will end up with about 487k (162k profit), year 11 comes and you end up with about 930k (243k profit), a very good wage and working business capital now but mr average wage guy has earned more at 275k in wage/profit terms and been able to live his life all these past 11 years while you are just now getting near to a breakeven point after building your business trading capital to provide a very good wage/profit which mr average wage does not have, year 12 onwards blows mr average wage away and you have finally beaten the system on both fronts…… the reason I have shown this is try to make people see you will not become millionaires overnight doing this, it is a hard and long road to tread and this does not even take into account the time it will take you to learn how to get to earning 50% consistently, that could even take another decade or may never happen for many, anyone can put a very low amounts of money in a number of accounts and show the one that made 1000’s% return over a few hundred lucky trades, in reality you only need two accounts with trades placed in opposite directions on the same pair and then just to wait for some time for it to move, do not be fooled or lured in by these people who either do it for devious reasons or to make themselves feel good by rubbing their ego, this is I found the part of trading that holds you back at first because you try to understand how they are so good and getting these returns. Even me quoting 50% consistent returns above is beyond most people’s ability with an account of more than a few hundred £/$/ect in it, there is gambling and there is trading. Capital and its money management is a very important tool to understand in trading.

here is a U/J trade in that demo i said i would do to show how i spot/get clues to direction without over complicating things.

i most often use the first way i have shown, but if you are having trouble which we all do now and again do not be afraid of using the second way i have shown, fti has often posted charts with a single average (M5 with 12ma), the market is not always easy to read and these can help confirm/add to the clues what you think you may be seeing, do not use them for signals just to help with direction, that is all they are meant for.









continued in post below....

the trade itself. (from post above)

Great explanations of what you are doing... thank you so much for all your time and effort.

Do you always defend your main trend ie last impulse or do you sometimes switch ideas inside the PB for example due to strong momentum bar turning up? I cannot decide if it is better to always stick in that direction or change if momentum turns up the other way... the trouble is I have seen momentum turn up other way and it fails and seen it succeed.

Alex

Hi Alex

no problem at all my friend.

when the move ends it will often create a big momentum bar that engulfs the last 2/3 or more bars at the bottom (low, but that may not be the absolute bottom/top, stop runs etc) on the lower trading frame (M15) or maybe 3 bars will be gaining in length for each (there are others formations) but i think in term of buyers/sellers strength not what the mainstream teaches about candles, this will mean it has hit a big order and likely the price will reverse (some way or a long way??), at this point my view changes to neutral and i watch for the order to be filled and jumped on by others, the other side (bull/bear) will likely have another go (creating a double top/bottom or new high/low on the right side) and will be over-run quickly, then i will either flip/counter trade, the decision is made by my surroundings (terrain), as in what news is due where we are in the current move on the higher frames etc, the key is the money management of the now situation, price will very often have a second go the top/bottom so you will likely be able to counter trade the reverse, remove some of the original trade when booking the trade for an overall profit and then recover (often with profit) the rest of the original trade, all is in the risks ahead and its adjustment to it, never over trading or getting greedy is a great mindset to use as i have found profit come when everything is right and ready without forcing our own opinion onto our trade.

it is hard to get your head around and difficult to trade like this at first as you trading against yourself and creating a cognitive dissolution within your brain, so practice is the key in demo until confident, the MM needs to be blended with the action to form the spiral effect i have show in the MM posts above. as said it is like stop losses with benefits when correctly applied.

regards

Phil.

Thanks my friend.

Alex

Hi Alex

here is a live example...

regards

Phil.

and here is U/J now with my current view.