Hi folks!!
After some months i've decided to open a trading journal...i'm not a trading guru, i'm not a professional trader, and i'm not teaching nothing with this journal... the purpose is only to track my trading days, I'm sure that a public journal can help me...not with technical skills but with psicological skills...it can help me to be picky and disciplinated.
English is not my native language...so I apologize for mistakes in what I will write here..
CHART TYPE:
I will use here only Renko chart type. I'm fascinated by this kind of price rapresentation, i've started to use it last summer, i've tried to understand all factors beside this chart type, trying to find an edge.
Renko has advantages and disadvantages, this is the reason because learning to trade Renko requires many hours of watching price movements...
Renko can spot trends very well, and can spot short time reversal very well, it's only price based, it has no timeframe.
The disadvantage is that Renko is a little lagging, because you see a new brick only once the price has done the move, and it has a "built-in" poor risk/reward ratio.
For example: in an upmove, it will take 10pips to make a new up brick, but it will take -20pip to make a new down brick.
STATISTICAL PROBABILITY:
I've spent some hour to test statistical probability over few months and over different pairs, my results say that everytime a reversal occurs, we have a 68% probability to make a new brick in the same direction.
So...if we take all signals...we will be right 68% of the times, and this in a pure mechanical way.
Obviously this is not enough!!!
68% x 10 (pips gain) = 680 and 32% x 20 (pips loss) = 640, considering spread and slippage we will have a return near to 0 or a loss...
I've tryied a lot of indicators trying to push up these numbers, my conclusion is that there is no indy that can mechanically improve the probabilities.
I've reached an 85% hit rate on some pair using some moving average filters, but doing a severe optimization, that differs for every pair. I don't like optimizations because they work well in the past...but not in the future...
So..the only way to improve the numbers..is using our trading skills.
For example, taking trades only in the direction of the immediate trend, trying to follow the price movement flow, the momentum of the move, and using supports, resistances, trendlines and breakout technics.
With common sense, discipline and patience the probability can improve to a 85/90% hit rate.
THE GOAL:
My goal is very very very modest: average 10 net pips every day (just 1 10pips Renko brick), avoiding GREED.
I will trade ONLY during London and NY session.
This method is technically really simple, but i've found that greed took me in troubles in the last months with this trading style.
If i will not see good PA or if i will not be mentally calm...some day i will not trade.
THE PLAN:
This is my plan, i will start with a 10.000$ demo account and i'll try to make 10 pips a day using 1 mini lot for every 1.000$ of capital, so i will start using 1 standard lot (10 mini lots).
When and IF my capital will reach 11.000$ I will use 1.1 lots
When and IF my capital will reach 12.000$ I will use 1.2 lots
And so on...
If i will grow my capital...I will found a real account, and I will start with great caution, testing the waters, because in real trading we have to deal with the broker...with the trade fills, slippage, requotes...etc...
Every day i'm testing new ideas using Renko, so it can be that i will add new ideas to this journal.
Will I hit my goal??
Or will I miserably fail??
I don't know... anyway this plan is worth a try!!
After some months i've decided to open a trading journal...i'm not a trading guru, i'm not a professional trader, and i'm not teaching nothing with this journal... the purpose is only to track my trading days, I'm sure that a public journal can help me...not with technical skills but with psicological skills...it can help me to be picky and disciplinated.
English is not my native language...so I apologize for mistakes in what I will write here..
CHART TYPE:
I will use here only Renko chart type. I'm fascinated by this kind of price rapresentation, i've started to use it last summer, i've tried to understand all factors beside this chart type, trying to find an edge.
Renko has advantages and disadvantages, this is the reason because learning to trade Renko requires many hours of watching price movements...
Renko can spot trends very well, and can spot short time reversal very well, it's only price based, it has no timeframe.
The disadvantage is that Renko is a little lagging, because you see a new brick only once the price has done the move, and it has a "built-in" poor risk/reward ratio.
For example: in an upmove, it will take 10pips to make a new up brick, but it will take -20pip to make a new down brick.
STATISTICAL PROBABILITY:
I've spent some hour to test statistical probability over few months and over different pairs, my results say that everytime a reversal occurs, we have a 68% probability to make a new brick in the same direction.
So...if we take all signals...we will be right 68% of the times, and this in a pure mechanical way.
Obviously this is not enough!!!
68% x 10 (pips gain) = 680 and 32% x 20 (pips loss) = 640, considering spread and slippage we will have a return near to 0 or a loss...
I've tryied a lot of indicators trying to push up these numbers, my conclusion is that there is no indy that can mechanically improve the probabilities.
I've reached an 85% hit rate on some pair using some moving average filters, but doing a severe optimization, that differs for every pair. I don't like optimizations because they work well in the past...but not in the future...
So..the only way to improve the numbers..is using our trading skills.
For example, taking trades only in the direction of the immediate trend, trying to follow the price movement flow, the momentum of the move, and using supports, resistances, trendlines and breakout technics.
With common sense, discipline and patience the probability can improve to a 85/90% hit rate.
THE GOAL:
My goal is very very very modest: average 10 net pips every day (just 1 10pips Renko brick), avoiding GREED.
I will trade ONLY during London and NY session.
This method is technically really simple, but i've found that greed took me in troubles in the last months with this trading style.
If i will not see good PA or if i will not be mentally calm...some day i will not trade.
THE PLAN:
This is my plan, i will start with a 10.000$ demo account and i'll try to make 10 pips a day using 1 mini lot for every 1.000$ of capital, so i will start using 1 standard lot (10 mini lots).
When and IF my capital will reach 11.000$ I will use 1.1 lots
When and IF my capital will reach 12.000$ I will use 1.2 lots
And so on...
If i will grow my capital...I will found a real account, and I will start with great caution, testing the waters, because in real trading we have to deal with the broker...with the trade fills, slippage, requotes...etc...
Every day i'm testing new ideas using Renko, so it can be that i will add new ideas to this journal.
Will I hit my goal??
Or will I miserably fail??
I don't know... anyway this plan is worth a try!!
Market is like a puzzle, YOU have to fit the pieces!!
