Hi all,
In the words of Agent Smith - I'd like to share a revelation that I've had during my time here.
This is really just something to think about over Christmas. It might not be that popular, but I think it will make sense to a few folks out there. So thanks for your taking the time to read this, I hope at least one person clicks.
I have tried and tried and tried and tried at this game. I've had some success, I've made some tremendous errors. I've spent a long time, years, being extremely frustrated. The odds are favorable that you feel this way too.
I've looked at so many approaches, tried to get my psychology right, tried to be careful, or less careful, or more careful, or whatever. Bollinger bands, volume, statistics, fundamentals, magic indicators, complicated systems, trendlines, price action, on and on and on.
Yes, I've jumped around a lot. But some of things I've tried, if I'd stuck with them, I'd now probably be homeless, and dead.
I've wasted a chunk of my life on this that I will never get back. I think I felt like I had to, the pain has to be paid to win, if I can just figure this out.....gnnnnn....
Things only started to dawn on me when I just couldn't take it anymore, actually when I refused to spend any more time starting at charts and systems, stopped relying on others to give me answers, and started to THINK. Away from the screen. That's when I started to SEE.
You should try it.
So, as advertised, something to think about over Christmas.
Round Numbers
Oh, wow, round numbers, yeah, what a revelation. Gee, no one ever though of that before....... And this is where you stop reading - on to the next thing, with that sense of frustrated urgency like the devil himself is chasing you through WalMart.
Please gimme a sec-
MT4 is currently open on my desktop, as always. I can see the spot price for Euros - it says it will cost me 1.09063 Federal Reserve Notes to buy a Draghicoin. I've been to Europe, some parts are nice, some parts are cold, some places could probably do with a scrub, and some of it is French. I don't ever remember paying 1.09063 for anything, anywhere. Imagine paying for a sandwich to 5 decimal places. Who the hell talks about currencies to 5 decimal places - apart from us fools and our best buddies the Evil Scheming Banksters?
And this is the point. This isn't just about why round numbers work, it's about taking a step back. Taking a deep breath. Starting over, but in a totally different direction. We've got some time off before the new year to reflect, so why not?
OK, so, round numbers work, because everyone else uses them.
Forget the banks and the traders for a second - think about a Chief Finance Officer in a company. A European company, say, in August 2014. His company is holding millions in cash. The Euro is dropping, some of Greece is on fire, and it's his call to think about the best play for his company. His ass is on the line, but he'll get a pat on the head for doing a good job too.
The Euro has hit the skids, plunging from 1.40 down to 1.34 in around four months. Our CFO is worried. He's swapped out some of the cash holdings for USD, but he's watching the company buying power being wiped out. "If this hits 1.32, I'm shifting 60% of our cash into USD." he thinks. It would have been a smart move too, but even a guy with that much responsibility is watching a 200 point move without reacting (yet). The world outside of your screen thinks and works in round numbers, not in a bazillion decimal places.
Compare this to what we are trying to do. You've had a good day if you've made 100 points. But what does that actually mean? A move of 100 points is 0.01 cent in Euros, for example. For our CFO, it might be more evidence that it's time to act, but really, it's nothing. 0.01 cent move. Wow, stop the press.
So there we are, worrying about 25 point stop-losses, 50 point targets (2:1, that's one of those rules someone said Thou shalt obey. I hate rules, especially other people's). But it's nothing. I have no doubt that there are a few folk that do well in this microscopic universe of 5 decimal places - the rest of the world doesn't give two squirts though.
Have a look at a Weekly Euro chart vs. the madness of the 15 minute chart. 'Hey this trendline stuff looks ok, yeah, I can finally see how I'd make some cash now. Apart from that spike, well, that doesn't happen often. Oh, there it is again. And there. Oh, a stop sweep. Hmm... maybe this system isn't that perfect, maybe I can find something better'.
Meanwhile the Euro is dropping steadily and clearly across daily and weekly charts.. 1.35, 1.30, 1,20 (omg), 1.10..... I spent most of that drop trying to figure out how to make money in the Forex market. Duh. I actually shorted from 1.4000 on the nose and took 50 pips profit. I was so proud. Duh.
So, I don't know about you, but I just got a little sick of crazy random movement all over the place on low timeframes. I got sick (almost actually physically ill) of the stress and worry and screentime. My god, sooooo much screentime. It's not something that will be coming with me into 2016, that's for damn sure.
So look. I'm not telling you how to do anything in particular (though there is some chart porn coming up - everyone loves chart porn). But I'm strongly suggesting that if you're in the same place I was in until very recently, you shake things up. You look at a chart, then you walk away and think how YOU would make money off that mess on your screen. Screw how anyone else does it - half that stuff is designed to make you lose anyway. Screw conventional thinking. How are YOU going to solve YOUR problem in YOUR OWN way. You may just surprise yourself. You're not stupid - you're certainly smart enough to want to make your own living instead of being a sheep. THINK, damn you.
I thought about big banks and hedge funds when I took a step back. Yep, there are daytrading prop shops and dealers and FX desks around who will roll just enough capital into the market and ping the stops and steal all of the longs (those scumbags) at a very specific point. But the big guys just whack their cash in, really. They might try and get a good price, sure, but they aren't going to wait 3 hours for an EMA crossover. So maybe a lot of the small timeframe stuff is noise and dirty tricks, maybe someone out there can make sense of it, but it isn't me. I want to trade like a big boy bankster, whack my cash in and come back and get paid. That ain't working, that's the way you do it.
Two problems with that though:
Capital.
Fundamentals.
I'm not an economist and I don't have millions (billions, trillions) to throw about. I do have one thing though. I have quite a few $0.01s in my account. With a $1000 account I'd have 100000 of them. So hey, that's a start, it's what I've got - that or nothing. I also have an internet connection, so whilst I'm not an economist I can read the main stories that everyone gets, everyone understands.
Two things kicked off the massive bull market at the start of the 1980s in the US - computers, and tax breaks. Everyone understands those, so everyone acts.
Gun to your head, 30 seconds - why is the Euro dropping, go!
"Er.... Er... Greece... er, riots....um, interest rates? Er.... Spain... um.. ECB said they want a weaker Euro?"
Correct. Well done, you live another day.
So fundamentals aren't that difficult, especially the big stories. Read Reuters once a day. Meh.
So maybe I'll have to sit through some draw down, if I want trade like a hedge fund, but I can use buttons instead of billions. It will have to do. Yeah, I know - you'll never be rich doing that. But just for the love of god - make some money - any money, pathetic money, anything, anything is better than losing breaking even, winning a bit, giving it back... or just losing and losing.
So I suck it up, I stop trying to put the Corvette trade on, and just make some money, any money, in a calm, relaxed and less risky way. Just to prove to myself it can be done. In compound earnings we trust and, well, I'll just have to do it slowly or not at all, if this fiat currency circus can hold together for long enough for me to get mine....
So - pocket full of pennies - check
Euro fundamental outlook - no one knows wtf, so sideways (wow, maybe I am an economist after all)
Now what to do with this stupid Euro.
Here is the Weekly EUR/USD. I included the drop just to remind myself what an idiot I am.
Point A - Some sort of resistance thingy going on here.
Point B - More people wanted to buy than sell here.
Point C - Let's see if this resistance holds and get a trade on.
Time frame isn't that important here, I want to get in at around 1.15, seems to be bouncing between 1.15 and 1.05 ish. A trendline break in confluence with resistance at the top will do it. Maybe an MA or an engulfing candle or some crap - some way to see the turn and have a bit of confidence.
I'm gonna put a big ass stop on this, maybe 130 or so pips. But lets call it $50 instead. Great. Lets see if it hits the bottom, I can always cut out at $25 loss if I want, it's good to have some choices and time to think.
Point D - Hey, look at that pin bar, probably time to bail out for around $200 or so.
Well, that took two weeks to come off. And it wasn't a lot of money - certainly not going to be rich doing that. But, I sat at home, on my PC, by myself, and created some cash. SOME money, any money, whilst I pissed about with various systems and things and schemed on how to make $100 a second from the Forex market, I made some money in the background, slowly, and without getting a headache, and without being the victim of a lot of dirty tricks and news swings and panics and stuff.. #winning.
Like I said - just something to think about over Christmas. And swing by the 'equity millipede' thread, one of the best on here - I finally get what that guy was saying.
Have a good one. Peace to all, don't let the b*stards get you down.
In the words of Agent Smith - I'd like to share a revelation that I've had during my time here.
This is really just something to think about over Christmas. It might not be that popular, but I think it will make sense to a few folks out there. So thanks for your taking the time to read this, I hope at least one person clicks.
I have tried and tried and tried and tried at this game. I've had some success, I've made some tremendous errors. I've spent a long time, years, being extremely frustrated. The odds are favorable that you feel this way too.
I've looked at so many approaches, tried to get my psychology right, tried to be careful, or less careful, or more careful, or whatever. Bollinger bands, volume, statistics, fundamentals, magic indicators, complicated systems, trendlines, price action, on and on and on.
Yes, I've jumped around a lot. But some of things I've tried, if I'd stuck with them, I'd now probably be homeless, and dead.
I've wasted a chunk of my life on this that I will never get back. I think I felt like I had to, the pain has to be paid to win, if I can just figure this out.....gnnnnn....
Things only started to dawn on me when I just couldn't take it anymore, actually when I refused to spend any more time starting at charts and systems, stopped relying on others to give me answers, and started to THINK. Away from the screen. That's when I started to SEE.
You should try it.
So, as advertised, something to think about over Christmas.
Round Numbers
Oh, wow, round numbers, yeah, what a revelation. Gee, no one ever though of that before....... And this is where you stop reading - on to the next thing, with that sense of frustrated urgency like the devil himself is chasing you through WalMart.
Please gimme a sec-
MT4 is currently open on my desktop, as always. I can see the spot price for Euros - it says it will cost me 1.09063 Federal Reserve Notes to buy a Draghicoin. I've been to Europe, some parts are nice, some parts are cold, some places could probably do with a scrub, and some of it is French. I don't ever remember paying 1.09063 for anything, anywhere. Imagine paying for a sandwich to 5 decimal places. Who the hell talks about currencies to 5 decimal places - apart from us fools and our best buddies the Evil Scheming Banksters?
And this is the point. This isn't just about why round numbers work, it's about taking a step back. Taking a deep breath. Starting over, but in a totally different direction. We've got some time off before the new year to reflect, so why not?
OK, so, round numbers work, because everyone else uses them.
Forget the banks and the traders for a second - think about a Chief Finance Officer in a company. A European company, say, in August 2014. His company is holding millions in cash. The Euro is dropping, some of Greece is on fire, and it's his call to think about the best play for his company. His ass is on the line, but he'll get a pat on the head for doing a good job too.
The Euro has hit the skids, plunging from 1.40 down to 1.34 in around four months. Our CFO is worried. He's swapped out some of the cash holdings for USD, but he's watching the company buying power being wiped out. "If this hits 1.32, I'm shifting 60% of our cash into USD." he thinks. It would have been a smart move too, but even a guy with that much responsibility is watching a 200 point move without reacting (yet). The world outside of your screen thinks and works in round numbers, not in a bazillion decimal places.
Compare this to what we are trying to do. You've had a good day if you've made 100 points. But what does that actually mean? A move of 100 points is 0.01 cent in Euros, for example. For our CFO, it might be more evidence that it's time to act, but really, it's nothing. 0.01 cent move. Wow, stop the press.
So there we are, worrying about 25 point stop-losses, 50 point targets (2:1, that's one of those rules someone said Thou shalt obey. I hate rules, especially other people's). But it's nothing. I have no doubt that there are a few folk that do well in this microscopic universe of 5 decimal places - the rest of the world doesn't give two squirts though.
Have a look at a Weekly Euro chart vs. the madness of the 15 minute chart. 'Hey this trendline stuff looks ok, yeah, I can finally see how I'd make some cash now. Apart from that spike, well, that doesn't happen often. Oh, there it is again. And there. Oh, a stop sweep. Hmm... maybe this system isn't that perfect, maybe I can find something better'.
Meanwhile the Euro is dropping steadily and clearly across daily and weekly charts.. 1.35, 1.30, 1,20 (omg), 1.10..... I spent most of that drop trying to figure out how to make money in the Forex market. Duh. I actually shorted from 1.4000 on the nose and took 50 pips profit. I was so proud. Duh.
So, I don't know about you, but I just got a little sick of crazy random movement all over the place on low timeframes. I got sick (almost actually physically ill) of the stress and worry and screentime. My god, sooooo much screentime. It's not something that will be coming with me into 2016, that's for damn sure.
So look. I'm not telling you how to do anything in particular (though there is some chart porn coming up - everyone loves chart porn). But I'm strongly suggesting that if you're in the same place I was in until very recently, you shake things up. You look at a chart, then you walk away and think how YOU would make money off that mess on your screen. Screw how anyone else does it - half that stuff is designed to make you lose anyway. Screw conventional thinking. How are YOU going to solve YOUR problem in YOUR OWN way. You may just surprise yourself. You're not stupid - you're certainly smart enough to want to make your own living instead of being a sheep. THINK, damn you.
I thought about big banks and hedge funds when I took a step back. Yep, there are daytrading prop shops and dealers and FX desks around who will roll just enough capital into the market and ping the stops and steal all of the longs (those scumbags) at a very specific point. But the big guys just whack their cash in, really. They might try and get a good price, sure, but they aren't going to wait 3 hours for an EMA crossover. So maybe a lot of the small timeframe stuff is noise and dirty tricks, maybe someone out there can make sense of it, but it isn't me. I want to trade like a big boy bankster, whack my cash in and come back and get paid. That ain't working, that's the way you do it.
Two problems with that though:
Capital.
Fundamentals.
I'm not an economist and I don't have millions (billions, trillions) to throw about. I do have one thing though. I have quite a few $0.01s in my account. With a $1000 account I'd have 100000 of them. So hey, that's a start, it's what I've got - that or nothing. I also have an internet connection, so whilst I'm not an economist I can read the main stories that everyone gets, everyone understands.
Two things kicked off the massive bull market at the start of the 1980s in the US - computers, and tax breaks. Everyone understands those, so everyone acts.
Gun to your head, 30 seconds - why is the Euro dropping, go!
"Er.... Er... Greece... er, riots....um, interest rates? Er.... Spain... um.. ECB said they want a weaker Euro?"
Correct. Well done, you live another day.
So fundamentals aren't that difficult, especially the big stories. Read Reuters once a day. Meh.
So maybe I'll have to sit through some draw down, if I want trade like a hedge fund, but I can use buttons instead of billions. It will have to do. Yeah, I know - you'll never be rich doing that. But just for the love of god - make some money - any money, pathetic money, anything, anything is better than losing breaking even, winning a bit, giving it back... or just losing and losing.
So I suck it up, I stop trying to put the Corvette trade on, and just make some money, any money, in a calm, relaxed and less risky way. Just to prove to myself it can be done. In compound earnings we trust and, well, I'll just have to do it slowly or not at all, if this fiat currency circus can hold together for long enough for me to get mine....
So - pocket full of pennies - check
Euro fundamental outlook - no one knows wtf, so sideways (wow, maybe I am an economist after all)
Now what to do with this stupid Euro.
Here is the Weekly EUR/USD. I included the drop just to remind myself what an idiot I am.
Point A - Some sort of resistance thingy going on here.
Point B - More people wanted to buy than sell here.
Point C - Let's see if this resistance holds and get a trade on.
Time frame isn't that important here, I want to get in at around 1.15, seems to be bouncing between 1.15 and 1.05 ish. A trendline break in confluence with resistance at the top will do it. Maybe an MA or an engulfing candle or some crap - some way to see the turn and have a bit of confidence.
I'm gonna put a big ass stop on this, maybe 130 or so pips. But lets call it $50 instead. Great. Lets see if it hits the bottom, I can always cut out at $25 loss if I want, it's good to have some choices and time to think.
Point D - Hey, look at that pin bar, probably time to bail out for around $200 or so.
Well, that took two weeks to come off. And it wasn't a lot of money - certainly not going to be rich doing that. But, I sat at home, on my PC, by myself, and created some cash. SOME money, any money, whilst I pissed about with various systems and things and schemed on how to make $100 a second from the Forex market, I made some money in the background, slowly, and without getting a headache, and without being the victim of a lot of dirty tricks and news swings and panics and stuff.. #winning.
Like I said - just something to think about over Christmas. And swing by the 'equity millipede' thread, one of the best on here - I finally get what that guy was saying.
Have a good one. Peace to all, don't let the b*stards get you down.
"Risk comes from not knowing what you're doing." - Warren Buffett
