Reconnection

The purpose of this thread is to record the trades I will be taking according to one of my two current strategies: The Reconnection.

This Strategy is based upon a series of facts about the market:

- Price looks to balance 100% of the times
- No matter how aggressive a trend gets, it will not last forever

Why counter trend trading?

I like trends and I wish I could have the time to stay there watching all the consolidation process until is the right moment to enter.

Because of the hard analysis that it takes, many retail traders decide to jump into scalping to profit from one single pair. That is fine to me also, however I find the probabilities of success higher with counter trend trading (CTT).

The major advantage of CTT for me is that I don't have to watch the market. After years of experience I know when the market corrects itself.

Contrary to other types of market events, CTT cannot be fractalized. Only because it works, it does not mean that it can be translated into a smaller dimension. CTT requires forex sessions, each day counts and then the opening of the Europe session also becomes important.

This quality make these trades to be infrequent. But this is not the end of the world since there are multiple currencies in the Forex market: USD, EUR, GBP, JPY, CAD, CHF, NZD and AUD. When one of them is in an active trend the opportunities for their multiple crosses begin to appear.

Almost every single week there are trades to take. They always come in group: all the NZD crosses for example. And all those currency pairs need to balance. The only ingredient missing is the position of price within the short term cycle to take it there and produce the reconnection.

This strategy has been included into a broker portfolio so any trader can benefit from it. If there is anyone interested please send me a PM for details.

Today, and to my good luck during the NY session, I had a perfect entry on the Reconnection trade going down in the EURNZD so I decided to scalp the move to enter again later on the scalping scale. That perfect entry gave 27 pips during the scalp that lasted less than 2 hours. Now is time to wait until when it will stop going up. All my trades are biased within the Reconnection move so I never trade against. I simply know the move against is still there happening but I don't do anything.



This is something I wish I could do more often, but London is not the session I am able to be in front of my charts so I have to be content with entering in the valid zone and setting the TP.

Every system should let the trader know when is time to analyze a particular pair and if possible provide extra information on the quality of a trade.

That is how the Reconnection was born. I recognized that there were good trades if only I would had been patient to wait for them. When I was trading only one pair and staring at the charts I constantly believed I had a good trade, only to see the market following its way against. As a result that made me a break even trader. My trades were good but not in the good place, but since they were good at least I could exit in break even.

So I coded the patience aspect of my trading. I would require a dashboard being gray most of the time and only turning semaphore lights when a particular pair had self analyzed to be in the golden zone to enter a trade.



One day I plan to code the Entry aspect because now is still manual and still requieres a lot of patience. The problem with human patience versus programmed patience is the subjective part. As a human is very easy to pull the trigger "thinking" the move is already there. Anyway I still believe having the human part is important, otherwise the signals become more and more reduced.

This is the reason why one needs to average down the entry, because as a minimum there will always be 2 entries for the same trade: the original entry plus the perfect one. The original allows us to commit into a trade while the perfect entry allows to adjust the levels and wait for profit. Sometimes the original entry was 12 pips early, but now being two entries the "against" distance is only 6 pips.

From my experience one is only able to see the full development of a trade within a micro scale if you have already put money into that move.

Many times the original entry happens to be perfect, and I will simply know it and place the 2 entries at the same level.

The reconnection in the EURNZD took place so I am out. It happened with a news event in the NZD so I close them manually 6 pips before the hit. I know news, and sometimes when the target is close price tends to go back to the starting point even further, that's why I closed. This time it went to target and even 20 pips further. That's ok.



Once is reconnected, based on my experience, it always consolidates, and from there it might resume the original trend or produce El Giro.

This news is placing the market in very interesting spot for El Giro in 2 pairs: NZDUSD and NZDCHF.

Correctión: only in the NZDUSD - After requesting the historical data for the NZDCHF the reading is different.

Today was a profitable day but nothing spectacular:



- The EURJPY trade I entered 30 hours ago ended up being so slow that the reconnection was going to be with the reconnection line catching up with price instead of the usual price movement moving to connect with this line. The RL always comes closer to price, but the more time the reconnection takes, the less pips to be made.
- In order to avoid the swap in all the positions I decided to close everything. The decision was made because 1) The overall trades were in the green and 2) the reconnection levels were getting close. Maybe giving another 12 hours but I felt it was better this way.
- Today's journey was compromised by an early trade in the CADJPY which did not correspond to the reconnection in the first place but it then become a valid reconnection trade.
- And a final reason is because the day, due to CAD events, has ended up with multiple possible reconnection trades which I want to analyze with more calm and a fresh mind.

I had some bad experience with one of the two strategies: el Giro. Due to the continued trend in the NZD/USD and the early positions placed, there was no actual Giro (turn) happening.

I have discontinued the strategy for now and keep myself focus on what I am able to handle better: very OB/OS markets where I can determine the best time to make a counter trend trade that will reconnect with the mean.

So I have only one strategy ATM: The Reconnection.

Today has been a very good day where the market has hit those extreme levels. This means multiple chances of reconnection and profit.

The strategy so far is working very good consistently since the end of november, around 9-10 weeks, with a 55% growth.

Each week there are new trades.

Right now The Reconnection is free to place new fresh orders, and I see the USDCAD can provide that new opportunity as well as the GBPUSD, plus all the GBP and CAD related pairs.

Some of the accumulated experience:

- Even though the strategy is counting the number of bars where price is at a determined extreme without hitting the center (being 100 the golden opportunity), the market can always go an extra 30 pips north/south before reconnecting
- Short term turning points should be respected as possible to avoid trades exiting break even
- At less the opportunity is amazing it's best not to place a trade during the NY session since the market will slow down
- 90% of the times the market will not travel straight to the center line from the daily open, it will almost always continue the trend an extra number of pips before retracing back
- The best time to enter is at the London Open, most retracements occur during that period of time

Today I am seeing how the GBP is giving me multiple opportunities but without being able to take one single of them.

I have learned that is not simply a matter of being "in the zone". The turning cycle has to be there as well.

Very seldom happens that price hits the zone and immediately retraces, but today that was the case. It bothers me because there were a lot of pips to be made: 140+ in the GBPNZD going down and 60+ pips in the EURGBP going up. However more often than not the market respects both the sessions and the cycles.

Only because today was a hit and go will not change the trading plan. I am trying to be more professional with the entries since the strategy has been included in a broker portfolio.



Okay, so the image in question (in a naked chart) shows:

1) Price being at the valid counter trend zone
2) The more likely place where the cycles would turn at the Europe open session
3) The more likely position where the balance will be when the market reconnects

Number 2 and 3 did not happen this time, it immediately retraced without completing the cycle. Not the common behavior but it happens sometimes. I personally prefer to stay away to avoid 30/40 minus pips (in the case of the GN even twice that number) and to avoid unnecessary swaps.

Highly satisfied by todays results.

If anyone can go and check the previous hour AUDUSD, AUDJPY and NZDJPY they will see the three entries were perfect as well as the take profit.

The account has made 4 trades today, one last night and 3 now, for a total of 2.7% growth of the account. Being the minimum goal 10% per month, the result could not be any better, since practically in one hour the week result was achieved. But this can only be made with precision entries because they void the need of entering for the second time, plus with the other benefit of being able to set B/E right from the start.

AUDJPY, NZDJPY y AUDUSD are now reconnected. The pursuit of a new perfect entry kept me away from entering again. For some reason the market has not stayed at the extreme levels waiting for the natural movement of cycles this week.

The pairs that could still give opportunities ending today or at the beginning of the next week are the GBP pairs, all of them, however when they first hit the extreme today was a hit and retrace. The cycles are still running with the trend so we will see if they will finally return to an opportunity spot or not.

The equity/balance remains intact at the end of the week, providing the strategy with the strength that it has. However I must admit I had a couple of entries in the GBPJPY that I took too early.

My very short term cycles (those who perfect the entry) were indeed giving the entry. The problem was that I did not respect the intraday cycles, I simply was confident that price was at the OS zone (very OZ). But the cycles took the market for 200 pips down (it was 100 pips down when I entered, so it was only half way).

I could have exited in profit despite of this, but I decided to do a B/E exit as a reminder that it's also a matter not to lose and to stay alert and more focus.

This thread was created in the Journals section because the purpose is to keep track of my trades. That's why I am the only follower even when my account is nearly doubled now.

I was discussing with a good friend of mine why I was so relax when my account had a little DD of 100 USD and the USDJPY was in such a heavy intraday down today.

The thing is that when price has to go up and connect back with the balance it will simply happen. If the cycles are respected and the entries are good, then there will be profit.

And if the market decides to take a spike, then what? No problem, you don't trade big lots. My trades today kept me at a margin of nearly 3,000%. Provided my Margin Call is 200%, I am super relax.

I do set a SL but is at a distance that allows me to react in case I need to place any other trade, this time, at an even better price. But the objective, nonetheless, remains the same.

What people don't see, is that these spikes that the market can take from time to time, are also tradable counter trading. The spike happens, but after some 30-45 minutes of madness, the smallest cycles catch up with price again and a new possibility of renewing the counter trade arises. And when all this happens the balance stays at the same neighborhood than it was, so the space to reconnect continues there, and even better now.

The key is to trade with good margin, that's all, and no fear. If the discipline to respect the cycles is in place, then CTT should not be dangerous, but instead very rewarding.

Today trades:



Approx 3% growth, 6% this week.

After 3 days of not being connected with the balance and sliding down the bottom of the extreme, the USDJPY is finally reconnected.

Funny thing is I was there when the final retracement started to produce but I wanted a super perfect entry that never came. Weekly result was excellent already so I had decided to take only perfect entry, the result was no trade.

Today I will share the main component of this system: the Valid Zones where to enter and the Exit.

I could share the second part, the one that actually makes the entry, but I feel comfortable keeping that to myself.

The valid zones by themselves are winning zones. Taking them correctly they secure one thing: to exit at B/E as a minimum.

There is one major difference in the term Break Even in the traditional trading versus the one made counter trend trading.

When CTT, a trend can be so strong that could take the market further beyond. As a general rule, it's my obligation to establish a Stop Loss from the very beginning, a % of the account, generally 2.5%. This SL is never considered in the traditional terms of Risk to Reward ratio, because it's there only in case of emergency. It doesn't work in the traditional way of % of wins vs % of losses. This is one thing that only Counter Trend traders understand.

A winner trade makes from 0.6 to 1.2% of the equity. Since the losing trade never happens, or happens very rarely, it would take some 3 successful trades to recover.

I am willing to take the 2.5% risk every time, with a maximum of 10% exposure (4 simultaneous trades or 3 trades risking 3.3% each).

Ok, so getting back, a B/E when counter trend trading means: getting back to the entry level after being negatively immersed in a strong trend, provided the reconnection level is still there.

What makes the exit is the reconnection level, so being in negative means nothing if the distance of pips given by the SL risk lets the trade to breath good enough. Plus, the SL distance is already planned in advance. I want 2 things: that the first entry can exit at least at B/E, and that a 2nd trade can profit, and all this happening within the original SL level.

Well, I believe I mentioned the philosophy of the risk management rather than my original plan to present a chart, but it was important.

I entered a trade last night in the CHF/USD for 35 pips. The pair has been so flat today without reconnecting that I just exit, practically with 3 pips in favor. The maximum my trade was in profit was 15 pips but the whole day it was up and down between my entry and a 10 pips profit, everytime expecting to continue.

Alghough the connection is still not there, price is no longer at my extreme preference since it moved flat and there might or might not be an extra cycle.

And now is connected. It always connects when the cycles are ready. The only problem is that it was so slow that those cycles had created an image of creating a new up before the down.

Now the opportunity is closed, completely over. Very likely no trades for the reminder of this week.

By the way the connection was 25 pips, so not a big distance either.

My hope is that after the connection immediately resumes the trend and hits more extreme levels.

There are 28 pairs coming from the crosses of the most important currencies: AUD, CAD, CHF, EUR, GBP, JPY, NZD and USD.

In alphabetic order:

AUDCAD
AUDCHF
AUDJPY
AUDNZD
AUDUSD
CADCHF
CADJPY
CHFJPY
EURAUD
EURCAD
EURCHF
EURGBP
EURJPY
EURNZD
EURUSD
GBPAUD
GBPCAD
GBPCHF
GBPJPY
GBPNZD
GBPUSD
NZDCAD
NZDCHF
NZDJPY
NZDUSD
USDCAD
USDCHF
USDJPY

With so many options, there is no need to chase or follow one single pair in particular.

A dashboard to view them all at once when they are in the trading zones that you want is of upmost importance.

A trade can go a little bit in the negative once you are in a trade, but not for so long, and with the guarantee to exit at zero as a minimum always there. This is the peace of mind that professional TTC gives.

It's time to do something important with this account, a new month is starting.

The last trades have been B/E or with little profit so the curve is now in a plateau.

The reasons:

- Good zone but early entries
- Early exits not allowing for the full completion of the trade

The second reason is ok up to certain point, but the first one is unacceptable.

The last two persons who have contacted me regarding my trading received a very kind and a general idea of what I do, however they did not have the courtesy of replying back. This is how people behave. If they do not receive a set of indicators and all the secrets of my system I guess my reply is not good enough and they prefer to be impolite.

If you are reading this and are one of those persons please do not even bother in contacting me.

I have a very professional trading going on here, which requires a hard work of analysis and risk management, and my goal is to record this trading publicly so I can improve what I do privately. I trade an important account where many people are copying exactly what I do. This is the only reason why you could contact me. Other than that, I do not provide secrets of any system.

100% !!!

The day of the 100% growth of the account finally came!!

My goal of doubling the account in 1 year kept short by 7 months!

This is a big incentive to continue working for the next goal.