This thread is meant to be a public collection of a personal journey, and is open for any kind of discourse. Therefore, the first post will be updated periodically to reflect it. Please note that by opening this journal, I'm trying to focus not on the trade, but on what's happening right now on the market. I'll try to just give commentary, not showing the trade as much as I can.
First, let's start with why.
1. Why do I trade?
Currently, I'm still learning. Ultimately, I want to make a living out of trading.
2. Why trade EURJPY?
I always feel discomfort if I have to let the trade go for hours without monitoring i.e. for sleeping time. Therefore, I conclude that the best match for me is daytrading. For daytrading, a big daily range is a must. Another requirement is that it's reasonably 'easy to read', which means the traders don't like to give big surprise, and hopefully their behaviour in critical moment is somewhat predictable.
The second requirement points to a market which consists of not-the-best-traders. I posit that the best traders prefers major pairs (XUSD, USDX). Therefore I have to search for another market. I found a likely alternative in JPY pairs, as Japan is politically and economocally stable (relative to other nations as of 2017. Brexit means there'll be turmoil in Euro community and England). According to economic data, the top trading partners of Japan are China, US, Australia, England, and Euro (not in order). US is out of the question. There's no CHNJPY pair in my broker. When I compare the spreads and daily range of EURJPY, AUDJPY, and GBPJPY, I found that EURJPY provides the best mix of big daily range and reasonable spread. Indeed, there's Euro element in EURJPY but if we compare it to GBP, the risk is smaller. Meanwhile, the spreads and daily range in AUDJPY just too inferior. Thus the EURJPY.
3. Why do I feel confident to trade?
Because I realize there's nothing to fear. I used to feel fear of getting loss, not profit. But loss is an inherent probable outcome in any business. So why do I have to fear it? If fear is a risk, then all I have to do is to manage it by minimizing the risk as small as possible.
As of how...
4. How do I see the market?
I see the market as (probably the most) primitive means of exchange. It's so simple and direct. One exchange currency A for B, and at one point one exchange it again to hopefully get a profit. From that postulate, one can ask: then what is really exchanged there? What drives the exchange? I further posit that the one being exchanged and the drives are one (package) and the same: fear and greed. That forces us to see the market as the end of human most basic nature, an emotional entity. A change in price simply means that one side (buyer in bullish move, seller in bearish move) is more interested to trade than the other. A stalled movement means that buyer and seller has found a fair value, an equilibrium. What move the market is that for some reason buyer and seller disagree of the previous fair value, and they move to another one. An endless negotiating process.
5. How can I trade the market?
Based on the above perspective of the market, one need a logical framework to define a) the fair value area, b)tracking buyer & seller behaviour in the search of fair value.
My approach to trade the market is to track the waves of buying & selling pressure (the movement), their intensity, and their strength (how far is the movement). Fair value is defined as a level that is retested, or a price formation that is full and stable, with shapes like = (horizontal), > (concentrating at half point), < (fanning out from a focal point), etc in the chart. Because of it's nature as indicating fair value through consensus these area can be viewed as zero point (the origin of trend). Trend is simply the line of least resistance between 2 fair values.
To put it simply, all one has to do are:
1) Find fair value area
2) Ride it once the price has broken free
3) Keep on tracking buying and selling wave until it find another fair value.
*My understanding of market can be tracked to the way of dbPhoenix, Richard Wyckoff, Lance Beggs, Charles Dow, and Peter Steidlmayer, to name a few. I realize that my current approach and understanding is still immature, and I didn't give them justice by writing this article.
Observations
First, let's start with why.
1. Why do I trade?
Currently, I'm still learning. Ultimately, I want to make a living out of trading.
2. Why trade EURJPY?
I always feel discomfort if I have to let the trade go for hours without monitoring i.e. for sleeping time. Therefore, I conclude that the best match for me is daytrading. For daytrading, a big daily range is a must. Another requirement is that it's reasonably 'easy to read', which means the traders don't like to give big surprise, and hopefully their behaviour in critical moment is somewhat predictable.
The second requirement points to a market which consists of not-the-best-traders. I posit that the best traders prefers major pairs (XUSD, USDX). Therefore I have to search for another market. I found a likely alternative in JPY pairs, as Japan is politically and economocally stable (relative to other nations as of 2017. Brexit means there'll be turmoil in Euro community and England). According to economic data, the top trading partners of Japan are China, US, Australia, England, and Euro (not in order). US is out of the question. There's no CHNJPY pair in my broker. When I compare the spreads and daily range of EURJPY, AUDJPY, and GBPJPY, I found that EURJPY provides the best mix of big daily range and reasonable spread. Indeed, there's Euro element in EURJPY but if we compare it to GBP, the risk is smaller. Meanwhile, the spreads and daily range in AUDJPY just too inferior. Thus the EURJPY.
3. Why do I feel confident to trade?
Because I realize there's nothing to fear. I used to feel fear of getting loss, not profit. But loss is an inherent probable outcome in any business. So why do I have to fear it? If fear is a risk, then all I have to do is to manage it by minimizing the risk as small as possible.
As of how...
4. How do I see the market?
I see the market as (probably the most) primitive means of exchange. It's so simple and direct. One exchange currency A for B, and at one point one exchange it again to hopefully get a profit. From that postulate, one can ask: then what is really exchanged there? What drives the exchange? I further posit that the one being exchanged and the drives are one (package) and the same: fear and greed. That forces us to see the market as the end of human most basic nature, an emotional entity. A change in price simply means that one side (buyer in bullish move, seller in bearish move) is more interested to trade than the other. A stalled movement means that buyer and seller has found a fair value, an equilibrium. What move the market is that for some reason buyer and seller disagree of the previous fair value, and they move to another one. An endless negotiating process.
5. How can I trade the market?
Based on the above perspective of the market, one need a logical framework to define a) the fair value area, b)tracking buyer & seller behaviour in the search of fair value.
My approach to trade the market is to track the waves of buying & selling pressure (the movement), their intensity, and their strength (how far is the movement). Fair value is defined as a level that is retested, or a price formation that is full and stable, with shapes like = (horizontal), > (concentrating at half point), < (fanning out from a focal point), etc in the chart. Because of it's nature as indicating fair value through consensus these area can be viewed as zero point (the origin of trend). Trend is simply the line of least resistance between 2 fair values.
To put it simply, all one has to do are:
1) Find fair value area
2) Ride it once the price has broken free
3) Keep on tracking buying and selling wave until it find another fair value.
*My understanding of market can be tracked to the way of dbPhoenix, Richard Wyckoff, Lance Beggs, Charles Dow, and Peter Steidlmayer, to name a few. I realize that my current approach and understanding is still immature, and I didn't give them justice by writing this article.
Observations