Gejordan Weekly Journal

Out at BE on this. When it tried and failed at 1.20 I moved stop to BE in case of the drop we are getting.

When I was an unprofitable trader, this bummed me out. I hated giving back gains and felt like it happened all the time. So after every time something happened, I would change my rules. So next time I would take a profit... and then price would run. I'd change rules again. Or I would think it was going to go up and just let price run against me until I was mentally broken and would close the trade.

BE is a good outcome, small losses are a good outcome. But it takes experience as a profitable trader to understand this. Everybody understands it on face value, but to appreciate it to the core, you have to trade profitably to really get it into your bones. You have to do an exercise like this on demo or with smallest position size to beat the lessons into your head before you lose your rent money and retirement savings.

I just gave back 55 pips and hit BE. I had no choice in what would happen to price, but I have a choice in how I handle this. I can immediately change my rule, I can get mad, I can make other people's life miserable because I just had something miserable happen. I'm going to pick none of these. It was that easy.

This is why I did this exercise and am doing it again to show how to do it. You want to experience the outcomes without blowing accounts so you can ask questions about trading and ultimately be profitable. I will continue testing the idea to follow a breakout. I will continue taking profit at all other times when price gets back to the next swing. I will appreciate that I did not lose a significant part of my account and I am ready to go again.

+ I'm ok with the BE (you may not be, this might be a "-" for you, it's ok, you'll learn)
? Did trying to breakout into a major level - 1.20 - impact this ?

Next thing that can happen in the exercise...

What if you couldn't get in the trade yesterday from the pivot. You may have kept an entry at the pivot or you might have moved up the simple50 entry if you are an active trader.

Here is the example. I took entries at the simple50 and pivot to demonstrate this.


(I'm on a big monitor, trying to shrink charts down, hope this helps)

If you followed along the last 3 months, you already know, I generally pull these entries (with an exception) if price moves a decent amount while I am asleep. But, if you are new and left the entries... not a problem. Treat them the same.

This mainly depends on how often you can look at charts. I was asked to show a more casual way a few months ago when I started the thread back, so I have been making decisions generally at pre-Asia and pre-NY to show you can trade and not be glued to a screen. Either way is fine, again, I'll treat these the same. I'll look to exit if they return to where they came from (1980ish swing). If price keeps going down, then I'll think about the chart picture from post 1253.

I'm going to be away from the computer until late tonight, so going ahead and entering for tomorrow.

We are going to be below the pivot and Simple50 so entering right away.


My exits will be up in the 1970s. Definitely going to remember Aug 19 and see if that scenario plays out again. This means a good exit could be 1935ish back at the simple50, but I'll let it play out because I want to see all the ways things can happen. Will it happen the same, will it drop like a rock, will it skyrocket? Who knows, experiencing it over time will teach me.

I wake up and find that price has pushed down. This is definitely like the action of the 19th. We'll see if it goes back up or crashes down. Not enough data to make any big conclusions at this point.

If I compare it to July or even April/May when price ran, in each instance there was range and then ultimately run to the next place. There were failed breakouts, but when the breakout happened, price action was definitely different from the last two price actions.

+ Drawdown is tough, but I can certainly see the beginnings of taking advantage of ranges and runs.

Now, handling this drawdown... still feel there is a better way.

? Maybe failed breakouts should be shut down at the swing before a new high ?
? Maybe I wait and get them out at BE ?

I'll still follow the rules of the exercise as I continue to figure this out.

(Yes, I know the answers to these questions, and maybe you do, too. But have you ever spent the time dedicated to putting them into your DNA or have you failed to appreciate the lessons because you were too busy jumping from idea to idea, system to system, worrying only about where to enter and put a TP or SL, never really thinking about the chart, etc.)

Need to enter a bit early again, not going to be at charts until quite a bit later. Going to be below the pivot and simple50 so entering straight away per the rules with profit target at 1.19ish swing area.



I think the beauty of this exercise is that you can experience the emotions of drawdown without blowing a large account. If you are trading pennies, you might be drawn down 10% right now, if the account is larger, maybe 1%. The point is, it brings up emotion. Now tie that emotion to what is happening. If price ultimately gets below and stays below our white line, connect the feeling of this with the feeling of being stopped out and create connections to make you serious in not letting this happen in a large account.

Instead of caring only about entering and exiting, you are shifting into caring about position sizing, risk, and seeing the chart. All from this exercise.

+ I am following the rules. Even in drawdown, I am following the rules.
- Drawdown is no fun, it makes you feel like you are missing the big trade down that is causing the drawdown.

This is day 10. If anyone reads this and ever does this exercise, check in with yourself... do you wanna quit yet? Are you cursing yourself that this is a waste of time and look at all these moves your missing that you for sure would have caught if you weren't doing this. It's ok, just be honest, take a breath and soldier on.

Closed between simple50 and pivot. The pivot has an entry already yesterday, so I won't be entering anything new. My TPs look a bit high in the pic, so will move those down to the 1907 area.

Last down swing when we closed between the simple50 and pivot, we pushed down further. With NFP tomorrow, this might be our fate again. So, one way or the other, we will have a new data point for our knowledgebase of what might happen in a move when price closes between the s50 and pivot.



+ Day 11 of sticking with my rules
+ I see how much better trades are as you approach the edges of a channel. I'm carrying 180+ pips of risk on the entries from the top versus an entry around 1800 which would carry 50 pips of risk to the swing. That's significant.
+ I can see a day where I try the breakout and if it fails, I get out at BE like I did and then wait for it to get where I want it or for price to show me something different.
? These entries of the exercise might be showing me that most entries are pointless, good entries in alignment with a chart carry less risk, negative emotion, and are less stressful. More data points needed to confirm.

Rearden made the great observation that the last high and pullback went to the 78% retracement. Imagine waiting on this pullback to get there for a trade versus carrying this risk. It's a big deal to wait for your trade. The retracement attempt this week popped off a quick 50 pips. Think of a week where you wait to Thursday and grab +50 versus being down 200 wishing for it to go up. This exercise makes those emotions real. Over time you will care more about avoiding this feeling instead of worrying about trades you miss.

If the trade works out, we might learn some things about bias and patience. Either way, we are learning about the chart without losing a fortune.

Price behaving similar to Aug 20 and 21. Let's see if price breaks down like it did then as well. Then we'll see if we get stopped out or if price behaves like it did that week and turns.

Emotionally... holding these in drawdown is tough. But, it's a good reason we do it in the smallest position or demo. We want to experience this to burn this way and the better way into our brains.

The trade survived the day. Appears we will start above the pivot and s50 next week, but entries look like they will be about the same. I'll double check on Sunday.

? Closing this way signaled a push last week, maybe we will see this again.
+ Following rules

Welcome Back to day something of the exercise.

Bias: UP Move: UP Swing Stop: Look Out Below

We return with price back below our S50 and Pivot. This calls for an entry. Need to move targets down to last swing from where price came. Not pictured, but will do after this.



Let's think about what's going on. I am locking in a loss. It's ok, I am doing an exercise to learn about the chart. These past couple of weeks are really showing me that all this pain is unnecessary. If a break above fails, get out, avoid this emotion and drawdown. Look how much better it would have been to wait for price to show some improvement and then enter at the bottom of a mini-range. Could have been in a trade from this bottom, with nice profit, possibly part of a trade still running (pictured by highlighted areas). If the action to the left plays out again, we may go all the way back up to the top again. Don't know, but I am learning right now, ego is sitting in a jar beside me on the desk.

This may seem obvious as you stare at me doing the exercise, but to all who visit, think of all the times you were certain something would happen and afraid to shut something down because you were afraid you would miss it. This exercise goes a long way in showing you what nonsense that thinking is and how it breaks accounts no matter the system you use. I learned this lesson doing this exercise and it changes your trading. It takes you from mega losses to small manageable losses that can be recouped easily. This exercise allows me to learn this without busting an account.

I am also starting to recognize some minimal criteria that needs to exist to have a chance at good outcomes when price goes against.

I don't have a large data set yet, less than a month into this exercise, but hopefully the value of this is becoming apparent. It only becomes stronger and stronger the more scenarios you encounter. I will keep doing this and keep hammering it home.

Price is below simple50 and pivot, immediate entry.

Hovering right at the swing location. If it goes below and stays below, I will close this basket of trades having imprinted a very important lesson. The last time price came down, it went back up and made a new high. This time, it may or may not. If it doesn't, it's pretty clear that in both cases closing up top is a smart move and waiting for price to show the way before entering allows for a better chance at profit.

There is no need to be scared to close a trade when you see the action on the chart. There is always another entry. Although I was bailed out last week and a bailout seems slim right now, there were always opportunities and good opportunities. Don't be afraid to miss, don't be afraid to shut something down, wait for your pitch. In both cases, the best pitch in a retracement during an up bias week is waiting for at least a close of price above s50 or pivot or both and entering on retrace.

Price hasn't stopped me yet, and I may get bailed out, but this has been a cheap lesson in how bad trading feels and something I wouldn't want to experience on a full account.

Bias: UP Move: UP Price above s50 and pivot, enter on retrace.

Price held the swing at 1753 and exploded up. Allowed me to close out the last batch. As I put over in Rearden's journal, this last string of trades easily demonstrates a better way to trade a range. It gets cemented because I didn't trade for profit, I traded to learn about the chart. When I did this exercise years ago, it allowed me to put aside profit/loss and learn about the chart in a live environment without blowing an account.



We had 6 trades. The two at the top could have been skipped altogether or closed when price closed below s50 and pivot. From that point, no need to trade until sep. 4th. Why then? We had a hint from the week before when the same type of thing happened. And then a trade from the bottom is always called for because it offers the least risk.

Sorry for delay on these, the router dropped off my desk last night in the middle of writing the last post and just got it fixed. Here is todays. Again, like last week, spread is rough at change of day so I just entered when it died down to represent the entry at the pivot. We are learning so no big deal if you were in or not.

We were still in the vicinity of that last exit, so i went to the next range for my exit.

NOW.... what did I see. Well, it would have been nice to hold that trade from the bottom yesterday. Could have got a bunch more. Dumb money never knows where price will go, but if we are going to bet on catching big moves, from the bottom probably not a bad idea. 50-100 more pips were available on that bottom entry closed yesterday (i'll keep an eye on that)

Also, interesting where price went today. It hit the very point price closed the day the breakout failed and is now coming back. Might this be a sign that we will fail down at the low swing? Or will price push from here? I'll keep an eye on that.

Learning quite a bit about this big range. Tomorrow is Friday, so I will step aside, but I'll look in this weekend and see what price does and revisit my questions.

Wrapping up week 3.

As I look at the chart in post 1269, and the completion of the week in 1272, and think back to the week before... I have some initial assumptions to build on.

* In a wide range, if price travels against your bias, best to wait for signs that price has changed in some way. And then use a retrace for entry to maximize value.
* ... a trade from the edge of the range offers best entry and possibly the best time to stretch a profit.
* If a breakout fails, close it at BE and wait. Otherwise it's likely a gamble.
* This has all occurred while price is in a BIAS week.

? Will this be the same for a narrow range?
? How will this change if next week is a NO BIAS, FOLLOW THE MOVE week?

+ Doing this with pennies or demo instead of full account really allows me to think about the chart and not my account balance.
+ The exercise has been low stress for me because I have done it years ago.
It could certainly be high stress for someone that wants to be fully in the market and feels like they are missing chances to make money.

Back again for more next week.

Bias: UP Move: UP

Price opening below the simple50 and pivot so I will enter when spreads tighten in a bit with a target up around 1900.

Rearden called the play today over in Rearden's Journal... opening one here at the pivot area when spreads come down and would open one down at simple50, but that is where I opened yesterday so no need to add another from there. Target will be the same as yesterday.

Price picked up my entry at the pivot, went to a good place while I slept, and was approaching again when I woke up, so closing out these two trades.



These were fairly straight forward, moved with bias and stayed above the simple50 and pivot. Entries from the challenge of the low swing would have paid well to here. Have an idea that if a trade works from the bottom of a channel, that would seem to be the time to try for a run.

+ Followed rules.
+ Felt at ease

? Post 1272 I noted the 1910 area where we held after the breakout failure on the 1st. Still keeping an eye on this to see if price fails here. It won't take me away from my rules, just curious.

Remain in an up move, within a range. Price below simple50 and pivot. Immediate entry looking to 1900 again.

I have learned from the past few weeks, that price opening below these two, in an up bias and a large range has not been good for entering trades. This will make a good candidate for month 2 adjustment. I will enter here following the rules and if it remains a bad entry, I will look to alter my rules and eliminate this entry during the next month of practice. If the trade works out, I will continue to take the entries and collect more data.

I wake up this morning and price is close to giving me profit. Price closed back below the simpe50 and pivot and experience so far has been that this is possibly a problem. Would it be best to close out a trade like this? I have a small amount at stake and am learning, but we are looking down the barrel of a couple of news events today (FOMC) and I have profit now and uncertainty later.

These are small learning positions, so I'll hold on to it, but what would/should I do with bigger amounts on the line? Seems 20-30 pips might be good in situations like this in the face of news that often produces a coin flip outcome.

Today seemed to further feed the theory that opening below the s50 and pivot, on a news day, with profit pre-news... that profit is probably a gift. I'll keep that in mind. A good chance to avoid this drawdown as well.

We will open again below simple50 and pivot, per rules, I will take an entry. What I'm learning is that this entry is full of opportunity to be bad and could probably be skipped. But, it is near the bottom, so I will see what happens (that chart is posted on Rearden's Journal). Even if one day i skip these and price takes off in my direction, I can just enter the next day. Will continue to gather data.

The theory would be that it would be better to wait for price to hold the bottom and close above the pivot and/or s50... see what happens.

Price went down and danced on my swing. Closed below, but did not stay below, and now is back near entry. Once again all of the drama could have been avoided as I seem to be learning. A really good entry would have been down at that line.



+ Feel Good
+ Feel like I am learning something
- Have to fight the feeling to trade opposite my bias. Feel like I am figuring something out, and missing out. I've read that idiot dude on FF named gejordan talk about the evil trading brain... maybe a thought like this is the seeds of that.