Pivot Trading Journal

Davit:
Everything pushed to extreme. This feels like Christmas thin liquidity time. Its obvious MM clearing the house
AU hanging multi year low. That huge spike down was last Christmas.
Starting to hate USD Its like Locust eating everything in sight
====

AUDUSD - BRN 0.7000

Today's calendar.


USD
14:30
Advance GDP q/q (Gross Domestic Product)
Annualized change in the inflation-adjusted value of all goods and services produced by the economy.

While this is q/q data, it's reported in an annualized format (quarterly change x4). There are 3 versions of GDP released a month apart – Advance, Preliminary, and Final. The Advance release is the earliest and thus tends to have the most impact.

It's the broadest measure of economic activity and the primary gauge of the economy's health.

EURUSD at S138
USDCAD at R100

Are today's USD GDP news "priced in?" or not?

Really nice post:
You asked in PM how I think about fundamentals. I'll answer here in public so others may benefit.

Anyone who has been trading for minimum few years already knows fundamental news or green data does not necessarily always effect price the way its assumed. You can have example great news on economy on Japan and Yen could topple lower or opposite red news and Yen gets stronger.Lot of factors in forex is based on sentiment.
Sentiment is the lens which focuses on fundamentals. Example we had great sentiment on Euro last few weeks after French Election but fundamentals were changed only little but enough that scaling back bond buying by ECB becomes a near future possibility hence market is buying the Euro on lower bounces gearing up for longer term trajectory of up cycle.
Sentiment can change quickly as well so watching the market daily helps how order flow goes.
Watch Mark Douglas videos because he talks about dynamic traders moving price and this is the heart of trading knowing that despite of fundamentals, sentiment, chart patterns. Dynamic traders can move price at any time any direction as we have witnessed many times in Forex. You must understand concept of probability. Yes DT move price but where do they move price?
Look at Pivots! drop on any chart and observe!

PSYCHO-CYBERNETICS,
A New Way to Get More Living Out of Life
By Maxwell Maltz

How to Use Mental Pictures to Relax
PRACTICE EXERCISE: (To be practiced for at least 30 minutes daily)

Seat yourself comfortably in an easy chair or lie down on your back. Consciously “let go” the various muscle groups as much as possible without making too much of an effort of it. Just consciously pay attention to the various parts of your body and let go a little. You will find that you can always voluntarily relax to a certain degree. You can stop frowning and let your forehead relax. You can ease up a little on the tension in your jaws. You can let your hands, your arms, your shoulders, legs, become a little more relaxed than they are. Spend about five minutes on this and then stop paying any attention to your muscles. This is as far as you are going to try to go by conscious control. From here on you will relax more and more by using your creative mechanism to automatically bring about a relaxed condition. In short, you are going to use “goal pictures,” held in imagination and let your automatic mechanism realize those goals for you.

Mental Picture No. 1
In your mind’s eye see yourself lying stretched out upon the bed. Form a picture of your legs as they would look if made of concrete. See yourself lying there with two very heavy concrete legs. See these very heavy concrete legs sulking far down into the mattress from their sheer weight. Now picture your arms and hands as made of concrete. They also are very heavy and are sinking down int the bed and exerting tremendous pressure against the bed. In your mind’s eye see a friend come into the room and attempt to lift your heavy concrete legs. He takes hold of your feet and attempts to lift them. But they are too heavy for him. He cannot do it. Repeat with arms, neck, etc.

Mental Picture No. 2
Your body is a big marionette doll. Your hands are tied loosely to your wrists by strings. Your forearm is connected loosely by a string to your upper arm. Your upper arm is connected very loosely by a string to your shoulder. Your feet, calves, thighs, are also connected together with a single string. Your neck consists of one very limp string. The strings which control your jaw and hold your lips together have slackened and stretched to such an extent that your chin has dropped down loosely against your chest. All the various strings which connect the various parts of your body are loose and limp and your body is just sprawled loosely across the bed.

Mental Picture No. 3
Your body consists of a series of inflated rubber balloons. Two valves open in your feet, and the air begins to escape from your legs. Your legs begin to collapse and continue until they consist only of deflated rubber tubes, lying flat against the bed. Next a valve is opened in your chest and as the air begins to escape, your entire trunk begins to collapse limply against the bed. Continue with arms, head, and neck.

Mental Picture No. 4
Many people will find this the most relaxing of all. Just go back in memory to some relaxing and pleasant scene from your past. There is always some time in everyone’s life when he felt relaxed, at ease, and at peace with the world. Pick out your own relaxing picture from your past and call up detailed memory images. Yours may be a peaceful scene at a mountain lake where you went fishing.
If so, pay particular attention to the little incidental things in the environment. Remember the quiet ripples on the water. What sounds were present? Did you hear the quiet rustling of the leaves? Maybe you remember sitting perfectly relaxed, and somewhat drowsy before an open fireplace long ago. Did the logs crackle and spark? What other sights and sounds were present? Maybe you choose to remember relaxing in the sun on a beach. How did the sand feel against your body? Could you feel the warm relaxing sun, touching your body, almost as a physical thing? Was there a breeze blowing? Were there gulls on the beach? The more of these incidental details you can remember and picture to yourself, the more successful you will be.

Daily practice will bring these mental pictures, or memories, clearer and clearer. The effect of learning will also be cumulative. Practice will strengthen the tie-in between mental image and physical sensation. You will become more and more proficient in relaxation, and this in itself will be “remembered” in future practice sessions.

Crude oil at WP!

Crude oil is still dropping down.
It's reaching S61.

Oil 257% ADR and max 100S, now 78S.
High possibility of retracement. We'll see next week.

Some thoughts related to Pivots (Part #5):

I just want to know how you calculate it.
Just for clarification it does not calculate from NY close my indicator. I think it calculates from 12am EST like now 5 min ego.
I wished I could put that input in the indicator when I want it to start the day but don't know how and I am not a programmer. Its not the ideal ADR indicator if someone has one that input can be controlled that would be ideal.
What I suggest to do is start the calculation manually from my indicator NY close. Like in the picture
ADR shows 4 from 12am but in actuality its 31 since market opens from 5pm. Its probably easy fix if Voti or someone else simply changes the input to start from 5pm instead of 12am


Agree on smaller positions and why I always insist on it. I think you may have faster trigger hands and this system may not suit your temperament.
This system fits perfectly with someone like Sniperdebt who is a full time trader and exercises great deal of patience. Its hard the patience part.
Anyway my motto is do what works for you. Having said this trading is self discovery. Took me 3.5 yrs to do what I am doing now and trading this way almost 2yrs and still learning and trying to get better..

Generally corrective waves come in 3 ABC
We are in wave 1 notice between ABC there are smaller waves. This confuses lot of traders when trading lower TF


nice easy chart on EW
If any of the conditions don't fit then its not EW
explanation is little confusing but in EW wave 3 is always longest.


I really like Sniperdebt's trades very clean and great execution what this thread is about. If he can do it you can do as well!
He is a full time trader
I created solid framework here rest is executing according to rules. Rest is just probability. Its great having good solid traders on this thread because we can all learn to improve including myself.

I think I talked about limit orders before but I'll say it again.
Limit orders are not part of my system. My system is based on reading PA on key pivots. Limit orders assumes price will do what you expect. While that may work few times it can also not work lot other times. What I am sharing here is high probability system but you are actually lowering my Edge by introducing a variable of your own doing.
I just thought to share this so we are on same page.

I have most of my trades on limit TP since in forex you never know a spike could come in your way and yes I work full time and not there all the time to take TP manually.
Having set TP helps on patience part as well....

Since you here I like to answer your observations
In simply terms my focus is on swings. Yes things can get out of hand and that's why everyone should have cut out point when you say-"Its not working" and I am out.
This is basic and I insist people define their SL whatever it suits them.
Some pairs my SL is 500pips and some just 200pips and all has to do my position size. I may decide to get out way earlier like I did on NU this month. Price did come back to my starting point but could of easily gone another 400pips south....Its managing one's account. Everyone should consider their lot size vs equity size. My motto is trade small prepare for worse and have great attitude to carry on. Its about grinding it out every day week month until end of year then you look at your gains.
I had a great Jan Feb and crappy March however 1Q I am way up. No reason to be ashamed its just market. Trajectory should be focused on quarters. Takes the pressure of being profitable every day. This to me is how institutions trade or big companies operate.. looking at the bigger picture

Some thoughts related to Pivots (Part #5):

It is easier risking lot more on small account then large. 1k account one can risk 30% but not feasible or plain stupid on 10k account and real stupid on 50k
You have to reach a level when you can sleep without worry. When I have to worry about a trade then I know I screwed up both lot size and trade management. Luckily I am passed through that phase long time ego. I know my limits on both my account and psychology.
Not boasting here but consider this.

When I trade I try not taking positions which might become in conflict.
Example I am long on EA and I won't short EC why? Because both are commodity pairs and have high correlations. In fact this is kind of hedging.
I don't know what you got going but throwing this out there in case you missed it.

Sharing how I read PA
H1 candle closed or not?
drop 30min how is this doing?
Drop 15min
STOP don't drop below 15min. It’s just noise scalper territory.

Obviously moves start on lower TF but H1 should guide you. NC H1 is not closed yet but 30 and 15 min showing weakness.
So generally I look for H1 then drop to 30-15min.

EU almost inside the zone


how do you look at a pair that is in the "zone", say approaching S78-S100 and has good price action so you start to take some positions then the week ends and the following week starts and now your position is around the pivot to S38. Do you stop adding if the price action is good or do you base it on the previous week.
Its a great question and has happened to me many times. I just hold if I think fundamentally I have a winning shot. If I think not worth holding I take the loss.
Its pure probabilities. You have to accept that not every trade or batch of trades will work out. This concept is crucial to understand.
This is how casinos make money just 1-2% edge. They know not every game house wins but over 10k games they have solid edge.
To me when you get to your 5th year of trading you start understanding and appreciating probabilities more then being right. I can't be right all the time hence when people keep guessing the future without understanding probability factors are missing out core concept in trading.

if you have not watched Mark Douglas Videos please do. He is truly a master and very articulate explaining probabilities and how price moves.

You can earn some serious money by linking your account to zulutrade. millions of dollars will follow you and everyone will be happy with $$. If you are already on social trading site, I will be keen to allocate part of my funds while I also keep learning here. Regards Skat
I have been offered to manage other people's funds privately and declined. Right now I need to build my equity solely based on my funds. I need to prove myself what I try to accomplish without added extra pressure to generate income for others.
Things change when you trade not your money.

I'm sure you have answered this before so I apologise if I am asking it again but based on your trading style to reach 10% p.m. how much would you generally risk per trade based on your trade balance?
I am conservation by nature so generally I don't risk more then 10% usually below that. Most books recommend 2-3% risk but in my opinion if you know what you are doing you can risk little more like 5%
You have to understand frequency of trades as well. I trade more positions then average position trader.

Some thoughts related to Pivots (Part #5):

Pivots are useless when fundamentals come into it {image}
price rebounds even from lowest pivots or highest. I never thought them as useless and in my opinion its the closest thing to golden goose
Casino knows their edge is only 3% but that's enough to generate millions. Now with pivots will price turn around 61-100 all the time? NO but more often then not! That's the plain simple edge.

Take a look at AU boxes I drew on pivots. Accidental? Don't think so. That's staggering accuracy! Not repainting not bullshiting not overthinking or over-analyzing with 30indicators.
You want EDGE? its obvious!


reduce leverage and trade smaller then what you are used to then spread the orders. You'll find your account will grow without much risk. Key here is position size
Lets take AC for example
If you short at 320 prepare and be comfortable it might go to 420 (rather small chance) and should it get there you should not be nervous or in panic but have more arrows to hit and your overall position should not be more then 5% of your account.
Keep it under 5% risk and you'll be golden
I think biggest success in trading is not about systems but lot size vs account. Most over trade and risk too much hence panic take a loss when price just about to turn.
This is well known by market makers hence every swing basically ends with a spike. Taking out weak shorts or longs.

take a look at spikes
After years of trading I can almost sense what MM are doing. Spike up take stops and get their orders filled then reverse. This is why break out systems are not that profitable because high degree of false spikes.
Pivots provide context and this is when if price is at 61 and spikes to 100 then you should not panic just wait allow the players to reveal their cards.


EC getting back at correction wave
DBLE dipping
Could price go to WP or 38R Yes and just in case it does not I placed 25% of my intended lots now. Hope this clarifies how I trade. I never go all in at once! Ever!
EW AB=CD is typical correction waves.
Actually I am very happy of my decision to get out at 61S and now gives me an opportunity to milk this to max gain.



I think you got several issues
1. Failing to understand what batch trading is. When you take a trade from point A to point B that could be as large as 100pips and should be treated as 1 trade. So tail end DD does not mean anything. You are treating it as 1 trade! So your positions should be small enough to compensate DD and allow time to work in your favor.
2.Trading pairs that you don't understand like UJ one of the most difficult pairs to trade. I seldom trade it
3.Having batch SL as cut out point. Example EC short max DD $250 you get there you get out. If you stay in it and it becomes 1500 loss then you got fundemetal issue of letting losses run wild.
The reason I prefer working with minimum 2yr traders because I am assuming you have some things under control like patience, suppression of impulse trading idea of stop loss idea of position size. I can't teach that if you don't have already worked out.
Take a break from this system and I mean it seriously.

Some thoughts related to Pivots (Part #5):

Another DD trade AC but love this trade has nice potential for harmonic correction



Its not important what I do. My account size could be smaller or larger then yours. Question should be asked how comfortable are you in DD size?
What is your risk tolerance ? 2% 5% 10% account?
Let me put this in perspective
1k account risking 2% is 20dollrars and most feel they can afford risk more since its only 1k account and 5% is only $ 50 so you still think its cheaper then dinner for 2 in decent restaurant so you risk 10% $100
nothing huge deal right?

Well everything changes when your account is 20k. Would you risk 10% 2k on a single trade? Not if you got any common sense. So you reduce position to match account size where you feel comfortable. Its about you not me. I know where I feel comfortable but its irrelevant to you. I may risk more because I know more should you copy me? Not really trade at your comfort risk
In motorcycle racing everyone rides at their levels or crashes. Find yours!

Closed AU at 61R +452pips

This was a trade that was small DD on Friday. What a day or 2makes.Again DD is part of trading its part of how I trade. The main reason why your positions should be spread out (think fish net)and be small. In common traditional trading I should of taken the loss on Friday but did not. I believe in my pivots. Literally 24hr trading hours later +452pips.
Lots of trades just like this and this is why when I am in DD it never discourages me. In fact I am in DD most days.


you need 3 months worth of data for testing purposes. Must have large sample size
Think casino. Casino Edge of 3% is generating good profits because of frequency of bets enough sample size that 3% generates millions. So lets say you go to week 1 at A casino and they show very red numbers because few gamblers got lucky that week however the Edge what makes casino profitable is still there just needs good size data.
This is very important concept in professional trading. We are aiming quarterly gains! Just like any other business and I do treat this as business.

Some thoughts related to Pivots (Part #5):

I deliberately try to avoid talking about trends but for fun Is AU uptrend or downtrend?
If Uptrend then traditional wisdom says buy the dips and if downtrend sell the rallies. Can you guys share your opinion?
This is important. Its important you understand context. Don't be shy we are here to learn from each other


The reason this is important because we trade SWINGS
There are SWINGS in uptrend and on downtrend however its always better to be on right side of weekly trend. Weekly trend is up and overall AU is in range.
Notice blue box I drew? That's a solid rejection candle. Price is making HH


Trend is defined by most trading books is 200MA and how banks define it as well.
Problem is I never trusted any MA's and over years understood stupidity of this concept.
You guy do see that massive losses on this concept right? Pretty lame
Take a look


It is in the middle and has possibility going further down or continue up not every trend reaches bottom or top range some reach mid point.
Emphasis on my system is on Swings and Pivots. and from that perspective I'll be looking to buy specially in light of fundamentals that US economy is showing signs of getting out of steam

Would love to see PA reach WP and possibly build another batch north
Love buying AUD costs me nothing

Some thoughts related to Pivots (Part #5):

If you gonna trade pivots you must un-brain-wash yourself from moving averages or simply focus getting better at what you are doing but together MA's and Pivots don't work.
It took me 4years to get rid of all MA's from my charts and mind. I had one of those hit in the head Ahh moment and never looked back.

Remember anticipate that price may go against you say 50pips
Do you have an exit plan? Are your positions small? Its a probability game. I put in motion my Edge but I am always looking at my risk tolerance hence my positions are always inline with my account. So what I am saying is every trade must have logical criteria and worst case scenario you can always gradually get out never at once!.

which pairs do you avoid?
Pairs that are over 100 ADR specially G crosses exception of EG
I never trade GJ GN GA and similar ones.

when I repetitively post to trade small people just ignore then get into hot waters. Its not system flaw its your flaws.
I said this many times my initial positions are always 25% of my intended lots on every batch of trades and 75% are kept as reserve troops to add later should it be necessary.
EG against me roughly 90pips MY SL on this is 90!!!!420 pips north! that's why I sleep without worry.
Guys get your shit together. I said that EDGE is there but winners are random meaning out of 10 batch of trades 2 will be losers but I don't know in advance which 2 that maybe so I plan ahead for that 2 from get go.
Hope this clarifies

On occasions markets go parabolic taking out all weak shorts or longs. This is designed to take your money so be smart either get your SL tighter or reduce positions and widen the SL
I prefer 2nd option.

You must decide your risk % I can't do that for you but risking more then 5% on single trade or batch of trades is bad idea. You want to risk below 5% ideally 2-3%
Always think backwards from risk management perspective don't think in terms of gains that takes care of itself.
Most rookies count their monies always thinking in profits they are going to make and end up making fatal flaw of over trading then blowing up an account after account and eventually dropping out of industry...
Risk small and you will be surprised how it effects your mind and account growth. You will be lot more relaxed and make better decisions and lot more willing to let time do its thing and trades become profitable. When over trading these things don't play out well. You are more likely to take the loss out of fear and usually just when trades turn around without you in it.

we should get a bounce at 100S on AN
started longs on this 4positions at 635 area. This is one pair even if it drops lower does not bother me I will just add more longs.

Some thoughts related to Trading psychology (Part #5):

The real reason I focus so much on trading psychology because it effects everything. Your self image effects the outcome of trade and how you manage the trade and how you deal with adversary. Psycho cybernetics deals with self image. Every successful person has a positive self image and this is critical. Trading is self discovery. Your demons inside creep up when you least expect. When trade goes bad you remember your wife or friend telling you " you are wasting time trading because nobody makes money on it" and you start getting discouraged and to prove them wrong you start risking more because you want to get out of red and be in green and end up digging deeper hole and your confidence at this point is at zero and most often people just quit and not knowing how close they were to succeed.
When you master yourself things become lot easier and making money becomes a by product of your self image.

DD is normal. I basically always have DD waiting for trade to get in green. Price is a moving thing. If you prefer no DD at all then you got to set tight SL's then issue becomes frequent SL's taken out and you get 10 a week and that would put a dent on your account.
Reduce your lots and spread the entries. That's the key.

Pivots provide a measuring stick sort of.
Price reaches 61-100 levels then even if your earlier entries are in red you got a high probability price turning and get in nice profit. However If you set 1 SL at 61 taken out another at 78 taken out and another at 100 taken out then you are in a hole before price has a chance to get in green.
You follow me?
This is the reason that I can have DD and sleep easily and worry free. Its understanding how price moves!

Yes performance should be judged quarterly just like a business. My March was red. Didn't flinch at all.
Carry on.
Lets put this another way for every crises you solve and live through and grow your account you become incrementally a stronger trader and this is hard to measure.
Mistakes are necessary to achieve our goals. They are corrective inputs for success trajectory.

I seriously recommend you read Psycho-Cybernetics, A New Way to Get More Living Out of Life Maxwell Maltz

Guided missile technology applied to humans

The founder of cybernetics was American mathematician Norbert Wiener, who spent World War Two refining guided missile technology. Maltz thought: why could the technology behind guided missiles of a constant feedback loop in order to maintain direction not be applied to human achievement? He realised the key point about the loop is that it gains an automaticity when the target or goal is very clearly fixed. When you first learn to drive, you have to worry about every car and process every sign ahead of you on the road - the result is that you move slowly and are vulnerable to getting lost. In time, however, driving becomes easy because you know your destination when you sit behind the wheel, and body and mind automatically do what is necessary to reach it.

Cybernetics appeared such a breakthrough to Maltz because its implication was that achievement was a matter of choice. Most important to the dynamic of achieving was the 'what' (the target), rather than the 'how' (the path). The frontal lobes or conscious thinking part of the brain could devise the goal, or create the image of the person you wanted to be, and the subconscious mind would deliver its attainment. The 'set and forget' mechanism of guided missiles would also work for our deepest desires.

Just a teaser. You must believe and work towards success

What I tried to share on this thread is that system any system is not enough one should correspondingly work on his psychology. This is something seriously lacks in system threads.

Rub I will share a little secret decide which pair you like to short and which you like to long.
I have never ever bought NC or AC but always shorted both. Why? I just have way better results shorting these 2 then buying them.
I know you might be scratching your head but trust me it works. Same with UC always shorted but hardly ever longed it. UJ same most 99% shorted hardly ever bought it.
Once you decide on this then things become simple. Price hits 61R-100R then fire your canons and wait and gravity will take care rest.

Some thoughts related to Trading psychology (Part #5):

Most important thing to do is 1st Forgive yourself. You can't make progress if you beat yourself up or lose confidence..
This is very deep. Mental images you create will manifest again if you don't let it go. Mistakes are tools to learn to navigate and we all have done them and I still do them. Difference is I have more experience as to how to deal with them.
I have a greater positive images to propel me to greater heights of success hence my brain just does not get effected as much. I have PDF files on clipboard read it specially
Psycho-Cybernetics, A New Way to Get More Living Out of Life Maxwell Maltz


My motto is trade small prepare for worse and have exit plan.
Reason does not bother me because my positions are small relative to account size which allows me to wait. Sometimes takes time.
At 1 point I had very red positions on EA and took me 5months to turn it green and reloaded again and again and still made good profits from that pair.

The reason I want you guys to watch Mark Douglas because he articulates probabilities real well and sample size. This is crucial to understand feeling confident during uncertainties and having clear goals.

If you use words like panic or worry about positions then your positions too big. Reduce lots until you feel comfortable and allow price to do its thing.
I said this here over and over its a marathon not a sprint race. Build account on consistent manner without typical FF style one week 30% gain another week 50% loss and cycle repeating.
Slow down make it boring. Trading should be boring. If its too exciting then you are too involve emotionally which effects decisions.

The main reason I wanted you guys to watch Mark Douglas is to understand few key principles

The 5 Fundamental Truths of Trading:
1. Anything can happen. (including trade going against you)
2. You don’t need to know what is going to happen next to make money. (means putting the Edge in play and seeing the outcome)
3. There is a random distribution between wins and losses for any given set of
variables that define an edge (self explanatory).
4. An edge is nothing more than an indication of a higher probability of one thing
happening over another. (Pivots 61-100)
5. Every moment in the market is unique (obvious).

Here is my AU trades in minor DD and everything is NORMAL
Its matter of giving a time. TIME is a factor in trading. Am I in panic? Worry? Not at all ! Why? My positions are fraction of my account size!!!
Do I have an EDGE? Yes system says random distributions of winners and losses hence I don't know if this trade is a winner or loser however must give it a time since its already making its way up. Was it hard to place this trade? Nope obvious to me. Was the EDGE clearly defined? How many trades can you execute in a month like this? 10? How many will be winners? Based on my experience 8


their biggest problem is most likely not enough capital. trading microlots and still with fear of adding. so most likely small account, went in most likely also too early
That's poor excuse. You can always reduce positions to match account size.

AU +34pips 10min Time waiting. Anyway wanted to demonstrate how normal DD is.
Keep telling yourself that drawdown is normal until it reaches your cut out point and everyone should have one. Otherwise market fluctuates and you place 20-30pip SL you will go broke taking lots of losses even in a trade that becomes profitable.
Voty just posted recently that 80% of his losses were winners if he gave it a time.

Some thoughts related to Trading psychology (Part #5):

You guys should seriously watch Mark Douglas videos again and read Trading in the Zone.
He is my teacher. I learned to feel comfortable in the markets because of him. Concept of probability never hit me hard until I fully understood what MD was saying. Sample size another big thing. Most idiots want immediate success but market gives and takes hence you need enough sample size to see your edge. This is why I insist minimum 3 months trading pivots before throwing the towel.

I act on my edges without reservation or hesitation.
Mark Douglas

Worth reading
You'll find golden nuggets everywhere from real traders not book authors talking about trading.

Things that I am sharing here taking partial losses position size is nothing new. Its been done by pros for decades. Its refreshing reading from real successful traders.

"It is a common dilemma faced by traders. The market is moving against your position. You are well aware of the dangers of an unconstrained loss. But you also still believe in your position and are worried about throwing in the towel just before the market turns. You are frozen in indecision.
Vidich offers a perspective that provides a solution. “Don’t try to be 100 percent right,” he says. Instead of making an all-or-nothing decision, when Vidich is faced with a losing position, he will often begin by liquidating part of the position. Taking a partial loss is much easier than liquidating the entire position. It allows the trader to act rather than procrastinate. If the position continues to move against Vidich, he will liquidate some more. In this way, a losing position is gradually reduced (and eventually entirely liquidated if it doesn’t turn around), mitigating the damage. The next time you are undecided between liquidating a losing position and gritting your teeth and riding it out, remember that there is a third alternative: partial liquidation.
A common mistake made by traders is that they let their greed influence position sizing beyond their comfort level. Why put on a 5 percent position when you can put on a 10 percent position and double the profits? The problem is that the larger the position, the greater the danger that trading decisions will be driven by fear rather than by judgment and experience. Vidich stresses, “Limit your size in any position so that fear does not become the prevailing instinct guiding your judgment.”

Sounds familiar? Yes have said exact thing here numerous times

Anyway read, have fun, think, hone your skills.
Hedge Fund Market Wizards - Schwager, Jack D.

Mark Douglas on winning and being consistent winner 2 different things and much more. Brilliant interview
Paraphrasing here " execution of system signals requires mental skills"
"odds of successful trades over series of trades random distribution of winners and losses" What I am sharing guys here is real gold and I am saying this without ego. I have not seen this kind of material being shared at FF so repeatedly and hummer probabilities concept. This is the true trading being comfortable with random distribution of winners and losses. Let that sink in being comfortable! Key here is planning for that random loss on every trade!!

Some thoughts related to Fundamentals (Part #5):

funny day up 500 down 800 then up 300 down 400
just waiting while my equity fluctuates
Lets see if that firecracker ass Lowe won't inflame Aussie anymore. What a ass keeps verbally pushing the Aussie up while economy is in shits and unemployment increasing.

I wished you asked me about UJ and I would of discouraged you from long position.
I am afraid this may drop all the way to 105 before another Feds hike

Tokyo stocks tumbled Wednesday morning, with the Nikkei index plunging over 2 percent, dragged down by concerns over implementation of U.S. President Donald Trump's economic policies and North Korea's possible missile launches in the morning.

Generally when Nikkei drops Yen gets stronger and opposite true as well. Trump is destabilization force now and Yen becomes a "safe haven"

I think it’s highly unlikely to increase rate now on soft labor and low inflation. My sentiment is bearish still on AUD
we had EA hit 43 last month and could break 45 this month. Anyway AUD continues to fascinate me.

The RBA has one job, really. To manage inflation. Right now, inflation is amazingly low. Too low, really, for comfort.
The consumer price index went below zero in one three-month period last year, which was somewhat of a shock. This next graph shows the annual pace of change, and it has fallen well below the two-to-three per cent range the RBA aims at.
This is a clear sign rates shouldn’t go up. Raising rates is what you do when inflation gets too high. (The reason: higher rates should lead to more saving and less spending, in turn causing businesses to not put up prices. They should also lead to less borrowing which should also lead to less spending, also causing businesses to not put up prices.)
So long as inflation is limp and low, rate rises are going to be very tricky for the RBA. That is why inflation is going to be the number one thing to watch in 2017.
One in five Aussies would be under housing stress if interest rates go up just 0.5 per cent.

AUDUSD approaching again to 100
I'll suggest wait. Pivots can't hold when facing strong fundamental release like NFP
Should it drop another 100pips then you will be in golden position to build strong positions.

"Anything can happen" Mark Douglas

What we see today on UJ is why I always insist small lots and spread your entries Obviously traditional SL's on bull side got hit badly..
and it was the point from MM perspective taking your money
People always say trading is hard. Its hard when you don't know how to overcome SL's placements and correctly allocating lot size VS account size.

Yes crude price directly effects CAD and that's why its called commodity pair. Last year high 14683 caused by severe drop of crude at 26.55
It does not matter what % GDP crude is in Canadian economy what matters that market correlates it with oil. This has been my experience of literately thousands of trades I made on CAD over the years.
worth reading and please see the chart as well oil and cad
http://www.investopedia.com/articles...dollar-cad.asp

The high positive correlation between the Canadian/US dollar exchange rate and oil prices is due, in large part, to the large portion of the nations total foreign exchange earnings that is garnered through crude oil sales. Crude oil is the largest single contributor of foreign exchange to Canada

Just something I like to share
During Asia session Yen NZD AUD are majority of the moves that's because lot of traders that's all they have access to hence why Euro pairs including CAD don't move much.
So just because you don't see much moves on EC for example now does not mean it will stay that way once London kicks in.

This seems obvious but lot of traders are not aware. They take positions on None Asia pairs during Asia then get totally opposite reaction once London opens.
Basically best trading Euro pairs once London opens.

Some thoughts related to Fundamentals (Part #5):

What we witnessed on the Euro last 3days shows the wisdom of Mark Douglas
Dynamic traders moving price! Not oscillators trend lines or ANY candles! Nope Guys with lots of funds driving this up.
LOve MD and he seriously made me a real trader. I can just sit back and watch it unfold knowing my Edge over SERIES of trades. That's it.

Please note every swing trend basically ends with a spike!

It is just me but its better selling the Euro none USD
The reason is USD weakness may continue however the Euro crosses may gain on the Euro. So I am not touching EU but selling EG and EC
This way if Euro gains on USD but losses on the crosses I am all good.

Expecting lot of volatility on Weds. Could BOC surprise the market by increasing the rate? Even holding at .5% is positive for the CAD
Feds may start their usual bullish hike rhetoric we'll see.
I am anticipating correction on EU as much as 200pips by end of the month but I am not shorting the EU because already selling EG EC EA so my plate of Euro is full.


You asked in PM how I think about fundamentals. I'll answer here in public so others may benefit.

Anyone who has been trading for minimum few years already knows fundamental news or green data does not necessarily always effect price the way its assumed. You can have example great news on economy on Japan and Yen could topple lower or opposite red news and Yen gets stronger. Lot of factors in forex is based on sentiment.
Sentiment is the lens which focuses on fundamentals. Example we had great sentiment on Euro last few weeks after French Election but fundamentals were changed only little but enough that scaling back bond buying by ECB becomes a near future possibility hence market is buying the Euro on lower bounces gearing up for longer term trajectory of up cycle.
Sentiment can change quickly as well so watching the market daily helps how order flow goes.
Watch Mark Douglas videos because he talks about dynamic traders moving price and this is the heart of trading knowing that despite of fundamentals, sentiment, chart patterns. Dynamic traders can move price at any time any direction as we have witnessed many times in Forex. You must understand concept of probability. Yes DT move price but where do they move price?
Look at Pivots! drop on any chart and observe!

Having written above next week with NFP EU may drop even below 110 and I think longer term trajectory is UP above 115 once ECB announces scaling back bond buying which is going to happen since no bank can print money endlessly.
Anyway this is my longer term plan buying the EU for that eventual ending of bond buying. We already know most things in Forex gets priced in before the event so we should be ready.

I anticipate with NFP week Euro may get sold heavily since other pairs already got discounted much lower.1.49 is possible next week and EG may start declining cycles
To be honest I truly believe in Mark Douglas and I firmly believe in probability theory so it does not matter what I believe or think market will do its thing and I will adjust to it.
If I have to cut losses I will no big deal and carry on and if trades work in my direction then I'll try to maximize most revenue.
I stopped worried about the markets long ago.

NC is still fat pig and still great to short and hold. This is a set up not often happens and when it does I hummer hard.

Just an observation that trading small lots safeguards you on market manipulations. Market is played by dynamic traders to take your money. You ever wonder why after you take the loss price magically declines? Well every trend swing basically most cases end with spike that is after clearing all stops.
By trading small you basically outsmart them and that's the key surviving in an environment that is determent to your existence.
Point is to survive and thrive!

Idea to me is to trade like a bank. What do Banks have? Lot more equity so by reducing your lots you are increasing your equity in terms of margin and DD hence when previously you bailed out say at -50pips now you can comfortably have -300pip SL hence increase your winning rate and coupled with pivots as road map it allows fast equity gain because your losses are minimized and your edge maximized.

NZD spike was caused by modest gain on dairy
Should settle down
Prices in the latest Global Dairy Trade (GDT) auction, the 11th sale of calendar 2017, rose 0.6% following a 3.2% gain previously.

EG can be stuborn. I held it after Brexit spike for 3months I think. I don't think it will take that long to reach 85. Italian Election and Greece issues will weaken the Euro.
ECB desperately wants weak Euro to continue stimulating the economy hence bond buying but recent numbers are not very good and its attributed to rising Euro and if it continues to rise ECB may take action.
Anyway I am not worried. Looking at the chart this looks like correction cycles going down after peak of yesterday

Keep in mind that I firmly believe in managing trades if I think EG reached a level that I don't feel comfortable I will cut 25% of positions.
To me trading is a probability game. Wins some and lose some and moving on.

My advise is watch Mark Douglas videos and looks like you are a new to trading. Not going to manage your trades.

It takes no skill to have a winning trade unless you consider a pressing a mouse a skill. What you need firmly to understand is probability and edge.
Real skill is when you can repeat certain patterns and generate revenue in consistent manner over series of trades!

Do you often use Market sentiment to filter your decision in your system?
yes example leading up to Feds this week weds should be bullish for USD up to that decision on rates.
So I won't sell USD!! Example I wont buy NU AU EU or GU but likely to sell specially NU
You can call it sentiment but I prefer it being on right side with fundamentals and that changes week to week

Calendar for this week.


Tue
CNY
Manufacturing PMI
NZD
ANZ Business Confidence
CAD
GDP m/m
BOC Gov Poloz Speaks
USD
CB Consumer Confidence

Wed
NZD
Employment Change q/q
Unemployment Rate
USD
ISM Manufacturing PMI
FOMC Statement
Federal Funds Rate
FOMC Press Conference
CAD
BOC Gov Poloz Speaks

Thu
CNY
Caixin Manufacturing PMI

Fri
AUD
Building Approvals m/m
USD
Average Hourly Earnings m/m
Non-Farm Employment Change
Unemployment Rate