Training Journal

This journal is to record my analysis, strategy and logic for entering trades.
I adopt a Global-Macro approach to trading. In short, I search for opportunities such as mispricings and potential speculative trades with asymmetric risk rewards.

WARNING

Everything I post here are my OPINIONS. Not trade recommendations!
Posts about trades are DELAYED.
I strongly discourage attempts to copy my trades.
Lastly, I AM NOT RESPONSIBLE FOR YOUR LOSSES!
(Although you can always thank me for your wins )



Edit:
22/07/2018
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After a few months of successfully "discovering my style". I have decided that IF I perform well in 2018, to set up a new thread to promote my trading ideology.
The reason for it is multi-fold.
First and foremost is to give back to the retail trading community, it pains me to see retail traders falling into the vicious cycle of chasing quick profits. Such get-rich-quick mentality attitude to trading is simply unsustainable. Hopefully I could influence the culture to become that which is sustainable.
Secondly, i hope to attract like minded individuals and expand my network. Like the saying goes "two minds are better than one". Hopefully with my new found network could debate ideas and generate great trades for everyone.
Lastly, it is to build up my "trading resume". Although I do admit it is highly unlikely to be discovered, especially given my not so amazing performance. But if there is a chance to be discovered I definitely wouldn't want to miss it!

26/04/2018
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My trading style has "evolved" yet again. Not drastic, but there are minor changes to my Trade Decision Process. Here is my updated trading methodology.

Trade Decision Process
1. Identify Fundamental Opportunity
Draw links from news, use your logic to create a narrative.

2. Create Trade Plan
Really understand what you are trading. What are the key factors affecting it? Does evidence support/disprove your narrative? What are the risks to the trade? Where do you expect to get in/out? What are the current market sentiment? The key is to really be know and understand the product you are trading deeply. I can not stress this enough!

3. Document all possible risks
Political, economical, natural etc. List and run through the scenarios, identify the downside risk. How much conviction do you have in this trade idea? What/where are your margin-of-safety?
If unattractive, do not trade.

4. Time the Entry
The only time I use technicals. Don't overcomplicate things here. A simple break of support/resistence or MA crossover is all I need to signal an entry.

5. Track and Manage the Trade
Is price movement justifying my forecast? Any fundamental shift if trend? Do I stay in the trade or do I get out?

I must state again the importance of knowing what you are trading. You would not buy a car without doing your homework. Neither should you enter a trade without doing your research. Research is key!


3/03/2018
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Some more nuggets which I feel is useful for all traders to know:

- Trading is NOT a consistent activity - Don't expect to be gaining X% every day, week, month or year.
- NOBODY can predict the future - understand that every trade is essentially a gamble. Your analysis can only suggest the likelihood of success. But you can be wrong!
- Be critical of everything - Unfortunately in this industry, there is alot of conflict of interest. And people will do anything for money. Be critical of everything you see, hear, read or learn. Because it is a real possibility that someone out there will attempt to leak false info to sucker traders of their money.

These are just some nuggets that I feel help me survive and improve my trading so far. And I feel that it will benefit the typical retail trader too.


23/01/2018
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After months of trading, I have updated my trading philosophy and decision making processes based on my experiences. Here is my updated trading philosophy.

- Fail to Plan, Plan to Fail - Never enter a trade without due diligence.
- If you are wrong, get out of the trade ASAP. Do not hope for a recovery.
- Ride your winners but know when to take profits.
- Always know your downside risks, always be prepared for the worst case scenario.
- DO NOT OVERLEVERAGE, ensure you are able to handle the drawdowns!
- Risk management and capital preservation is number 1 priority. Substainable gains is second by a long stretch.
- Learn to stay on the sidelines if there are no opportunities. Keep that "Dry Powder" for golden opportunities

There are not much changes to my Trade Decision Process, although I tend to rely much lesser on technical analysis now.
The main lessons learnt over these months is all about risk and hope. I can't stress enough the importance of taking a loss when you are wrong, instead of hoping for a rebound in prices.

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30/12/2017
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Throughout my journal, there should be a noticable change in the way I present my trade ideas. Including the types of consideration, sources of my information, type of analysis, and the presentation of my trade ideas.
A common theme is that my trade ideas are all expected to take place over a long period. And most run contrary to the current market trend.

__________________

Initial post:

Note to Self:

Trade Decision Process
1. Identify Fundamental Opportunity - Draw links from news, Logic
2. Create Trade Plan - Expected reactions, Expected TP and SL, Momentum, Swaps
3. Document all possible risks - political, economical, natural etc. List and run through the scenarios, identify the downside risk
4. Time the Entry - Technicals
5. Track and Manage the Trade - Is price movement justifying my forecast? Any fundamental shift if trend? Stay in the trade or get out?

Update:
I would like to add an additional step after drawing up a trade plan. That would be to critic the plan and come up with all the ways the plan might fail. A "counter-plan" i will call it. Thereafter I will compare my original plan with the counter-plan to see whether the trade is still worth executing. This review process will help keep me out of poorly planned trades.
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News Analysis Considerations
- Immediate, Short (<5 days), Medium (5 days ~ 3 Month) and Long Term (>3 Months) Impact of News
- Divergence/Opportunity between time impact of news
- Context of News/Statistics
- Expectations before the news

Nuggets to self
- Market tend to overreact to news. Especially when its bad
- Be fearful when others are greedy, and greedy when others are fearful
- Buy the rumours, sell the facts
- Fail to Plan, Plan to Fail
- It is better to miss a winning trade than to catch a losing one
- Don't put all your eggs in one basket - Diversify!
- 80% Fundamental, 20% Technical
- Bulls go up the stairs, bears jump out the window
- Don't worry about the short-term fluctuations, focus on the main trend - Sit Tight!
- Only risk what you are willing to lose
- Cut your losers when you are proven wrong, not when the losses start to hurt
- You must be willing to lose all your profits in order to catch a big move
- You win some, you lose some. One trade dont determine success.
- Take a break from trading after a loss - Trust me, it helps!
- Revenge trade is suicide - DONT DO IT
- Losing trades are lessons, not failues
- NEVER ever place a trade when you are not thinking right
- Hope kills - Don't hope! Have contingencies!
- To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself - Prevent the loss of your capital and wait for the market to provide you with a trading opportunity

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Edit:
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Throughout my journal, there should be a noticable change in the way I present my trade ideas. Including the types of consideration, sources of my information, type of analysis, and the presentation of my trade ideas.
A common theme is that my trade ideas are all expected to take place over a long period. And most run contrary to the current market trend.

25/05/2017
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Gbp
- Economic indicators suggests a slowing inflation
- First quarter gdp of 0.2% is lower than expected. If it continues this way, currency should fall in the mid term.
- Manchester incident and raising of security level to critical should cause the pound to fall in the short term. But should recover in the middle term unless any such incident happens again
- Election on 8 June is a big question mark. Unsure what the reactions will be as T. May is expected to win
- Brexit should cause gbp to fall in the very long run as businesses such as banks seek to relocate their hq elsewhere in europe and EU are looking to impose heavy penalty for their withdrawal. Although Britain did say they will walk away from negotiations if they fail to come to consensus. The relocation of businesses should be enough to tank the gbp.

Fundamentally seems like a mid-long term shorting opportunity
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Zar
- Talks of ousting of Zuma pushed Zar up, but care must be taken as it is just rumours. Short term definitely an bull move. However the mid-long term impact of this is mixed. And care must be taken as this is just talk. If Zuma were to remain in position, Zar could fall back down.
- High interest rate provides carry opportunity

___________________________________


Weekly charts shows gbp/zar resuming the bear move after retracement
Daily chart comfirms this with what looks like a heads and shoulders formation building

Plan
Limit order set at the base of the neck which is 16.5 on my charts
Ill be weary if price goes above 18.4. Any fundamental news to comfirm a change in trend and I will close out at a loss

Looking to diversify short gbp position with other currencies. Usd not stable right now. Jpy may be affected by oil prices. Considering Chf for short-mid term as swaps will eat into gains/add to losses

Update 26/5/2017
Apparently investors are disappointed in the depth of the oil cut, thus oil prices fell back down. Invalidating my hypothesis of Jpy being affected by oil
Limit Order triggered

26/05/2017
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Jpy
- Core CPI raises for 4th straight months, signaling the economy picking up. Gdp growth still in positive but nothing special here. According to news source, inflation rate is still nowhere near 2%. If inflation momentum continues, Jpy should rise albeit I doubt it will be by much
- Apart from that, Japan is known for their competitive devaluation of the yen. I view that in the long run, growth of the yen wont be high. Possible even putting it in range
- Oil prices which have a slight correlation with Jpy as Japan are heavy importer of oil, are being sold on the dissapointment that cuts are not as deep as expected. Relieving worries that Jpy could fall
- Negative swap is the main concern

Overall, Jpy looks like a possible cross to diversify the shorting of gbp. Except for negative swap. My forecast is that Jpy will hold steady for the mid term.

Weekly charts shows a downtrend since 2015. But a recovery/retracement after sept 2017.
Daily Charts shows a lower high forming. Limit entry will be placed below swing low which is 143.3 on my charts. Looking to hold this pair as long as gains > negative swaps.
As charts are giving slightly mixed signals, any news when price is over 149 and I will close out at a loss.

Update 26/05/2017
Limit entry triggered today
Im slightly over 50 pips in profit. Might consider moving SL to BE and let my profits run. Probably once price reaches under 142

26/05/2017
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Usd
- Sluggish economic data for the past 2 quarter, below expectations
- Trump administration hasn't really done anything substantial so far. Its been all talks. My view is that this is treading on thin ice.
- Interest rate hike 2 or 3 times is still yet to be comfirmed. Announcement either way may cause large short term swings
- White house drama causing dollar to fall. I feel its only noise. But it has the potential to send dollar crashing if realised

Update
Gdp better than expected, revised to 1.2% from 0.7%. Causing a spike in usd. I suspect it is an overreaction. May revert back in the short term

However, economic data still isnt conclusive on a direction. Until further news to cement a bias in Usd. I will opt to stay on the sides
Until further news to cement a bias in Usd. I will opt to stay on the sides

28/05/2017
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- UK Polls shows Conservative leading by 14%. If the margin gets too close during the oncoming week, I might close out my gbp positions
- UK lowers security from critical to severe
- No special news from G7 summit which has much impact on FX markets


Key Events 29/05/2017 ~ 02/06/2017

Gbp
Manufacturing PMI, Thursday 01/06/2017. Expected drop to 56.5 from 57.3
Construction PMI, Friday 02/06/2017. Expected drop to 52.7 from 53.1

A drop in both readings will strengthen my belief that gbp is getting weaker


Usd
Personal Income & Personal Spending, Tuesday 30/05/2017. Both are expected to rise to 0.4%.
CB Consumer Confidence. Expected drop to 120.1 from 120.3
Pending Home Sales, Wednesday 31/05/2017. Expected to rise to 0.7% from -0.8%
FMOC Kaplan speaks
Chicago PMI. Expected drop to 57 from 58.3
Unemployment Claims, Thursday 01/06/2017. Expected rise to 239k from 234k
Manufacturing PMI. Expected 54.7 from 54.8
Crude Oil Inventories. No forecast
Non-Farm Payroll***, Friday 02/06/2017. Expected 186k from 211k
Unemployment Rate. Expected to remain at 4.4%
Trade Balance. Expected -45.5B from -43.7B
Average Hourly Earnings. Expected drop to 0.2% from 0.3%

Alot of news for Usd this week. Will be tracking them to try and identify a bias in the Usd. Furthermore, Trump news will definitely cause volatility.

Update 29/05/2017
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Usd
Just had a sudden thought regarding the interest rate hike in june. According to news. It is currently being priced at 60-70% chance of a hike. The third hike seems unlikely however. I figured that it would be a high probability trade to short the usd before the june rate hike announcement. As traders might sell the news if the hike does happen. Or usd will see a spike down if the hike doesnt happen. This should be a quick "scalp" thou.

Over the weekend, Zuma's party (ANC) debates motion to remove him. I doubt it will have much positive impact on the Zar as talk have yet to materialize, but it raises the probability for Zuma to be ousted and for Zar to appreciate.

Update 29/05/2017
Zar rises on announcement that ANC committee decided not to hold a no confidence vote against Zuma. Increasing his chances of survival. This coupled with gbp recovering slightly from the drop last week means my position is in the red. I hold the view that these are noise movements. Mid-Long run view is still bearish for gbp/zar

29/0502017
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Price hit below 142.15 before bouncing back up. I'd expect price not to move much after asian session as UK and US are on holidays today
Reminder to move SL to BE after price reaches under 142

Update 29/05/2017
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Gbp made up several losses so far today. However it is in my view that this is part of the volatility. Still maintaining my bear bias

Update 30/05/2017
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UK polls shows conservative lead cut to 5%. No major reaction from price yet. Ill observe London and US session to make my decision

30/05/2017
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News of Greece possibly not paying bailout caused a down spike in Eur. I took an impulse short on eurjpy at 123.881. Buying the rumour, selling the facts. Set TP at 123.5 as i deem this to be a short lived move. Will be watching price closely to exit once i see that the downward momentum is lost and upward momentum is growing

Update 30/05/2017
TP triggered while i was away from the screen

30/05/2017
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Based off my hypothesis of the usd in post 5. Coupled with white house mess. I am looking to short usd if economic data comes out weak.

Possible currencies to pair are safeheaven currencies jpy, chf.

Considering Zar due to my optimism about them
Gold/silver is also on my consideration list

Update
US data met expectations, signaling that poor data in q1 relected a transitionary period. Consumer confidence dips slightly below expectation. But the dip is small compared to past gains. Thats all news release for today. Im increasingly building a bullish bias for usd. Lets see what other economic data says...

31/05/2017
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I observe a huge divergence regarding oil news and price.
OPEC cut oil production but the market is selling oil.
I suspect this is a strong overreaction. Possible buying opportunity here. Shall observe for awhile longer before entering

The polls are scaring gbp investors, which is good news to me. Ill most likely TP before election results as price will most likely bouce back up if T.May wins

Update
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Just as I said it, gbp jumped back up. The only thing I can link it with is to the better-then-expected money supply.

Danm, Germany said they will work with UK after brexit. This will definitly relief pressure on UK's economy as well as act as a motivator for other countries to follow suit.
I view this as changing the fundamental trend of gbp. I am going to observe till the end of this week and probably look to exit with minimal losses

Update 2
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Exited all my positions after the rally in gbp, take whatever losses now rather than let them snowball

31/05/2017
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Zar getting weaker. Possibly still due to Zuma's survival... Watching gbpzar very closely. I am still sticking to my plan of SL after 18.4
Jpy pair still in profit

Update
US Chicago PMI and Pending Home Sales came in worse than expected. Placing doubts on my slightly bullish sentiment. This is one tough currency!

02/06/2017
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US data for the week is mixed.
NFP fell short causing selloff in the usd even thou unemployment was better than expected. I suspect this selloff to be short lived. But the overall readings in may gave me a bearish view on the usd. I will be shorting the dollar untill interest rate decision on 14 June. My bet is that there might not be a rate hike. Even if there was, I foresee huge profit taking thus driving the dollar lower.
I will be pairing usd against nzd as their economy is quite stable in my view. Possibly adding additional position on the jpy crosses or other currencies which I deem fundamentally stable

Nzd/Usd
Short-term bullish view
Betting on nz economy remaining consistent while us to continue to produce more bad economic data and a possible no hike in june 14. As well as news of a no 3rd hike
Trumps impeachment still at the back of my mind supporting this trade

Entered through market order at 0.7136 as it looks like it had broken resistance
Will move SL to BE once price reaches over 0.724
TP target 0.735 as the pair looks like it is in a long-term range
SL is any fundamentally bad news and price below 0.7

02/06/2017
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gbpusd
I did a scalp by fading the NFP
This move was based on the logic that market tend to overreact on bad news
I admit it was a very risky move but it was just such a tempting opportunity when the trade idea came into my head and I was willing to risk that amount
i chose gbpusd as gbp is fundamentally very weak and i see it as the prime pair to retrace. And i was proven right
It all happened so fast that I forgot to take note of the prices
I entered through market order when I saw a pinbar-like candle forming
Initially had my TP right before the swing low with some allowance but manually closed out as the long wick in that candle made my scared
Could have gained 12ish pips but ended up with 5 pips. Ohwells... I guess some profit is better than no profit

Learning points from this trade:
- DO NOT TRADE WITH EMOTIONS, I let my emotions tell me to exit early
- Always have a trade plan, I did well in that aspect

Overall I felt it was an okay trade. I had a plan but i did not stick to it

02/06/2017
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Brent crude oil still going down to 49ish
I shall wait for signs of bear movement ending and a bull movement starting before entering.
Favourable entry will be at 48 but this is discretionary
Fundamentally I feel that oil price is underpriced even with the increased outputs by US
Looking for long-term retracement to fair price, around 54 - 56 zone
SL will be below 46 and any fundamental bad news

Have been looking through my past trades to try and learn from them. Right now looking back, I probably shouldnt have exited those trades based on a single news. The pound has the potential to fall further lower and the bull move was probably just retracement.
These trades re-emphasized that I must not let my emotions rule my head. In this case, it is the fear of losing profits and substaining loss. I must be willing to give up my profits if i want to stay in the trade.

Gbpzar currently slightly above 16.5 while gbpjpy roughly at 142.3. I would still be in the green had i stayed in the trade.

Update 04/06/2017
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Latest londen attack unfolding. I am watching very closely. My condolences go out to the victims.

However, i cannot ignore the economic and political reprecussions that will accompany this attack. Will investors flock away from uk? My opinion is that there will be a temporary selloff of the gbp. Which will recover in a week. Political parties of both sides may also talk about security policies. Which might affect the election. I expect a bear gap for gbp when market opens. And I might short the pound if there is a lack of bear action when market opens. On the assumption that price will catch up to the news

05/06/2017
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This week is the deciding week for gbp. Ill be on the lookout for opportunities after the 8 june election. My view now is very bearish on gbp. Especially with the spate of terror attacks grappling UK. Which i view as a strong deterent to investors.

For usd, the key event will be comey's testimony on thursday. Depending on the implications and markets reaction, I will decide on what to do with my nzdusd position.
Other than that, I am not too concerned with the economic datas coming out of the US this week. I expect mixed readings. Overall, I do not expect any major bullish usd news this week. Possibly even more bearish news.

The one reading i will be watching is us crude oil inventory. This will give me a clue on whether oil prices will rise/fall in th long run.
Some analyst expect prices to reach $45, which I find quite impossible. But since they are the expert and its not just one or two analyst suggesting that number. I will be toggling my limit entry to 46.5 as a precautionary measure.
There are talks that OPEC may have another round of cuts. But whether it is enough to raise prices is a big question mark to me.

Update

Brent Crude Oil
Saudi, Egypt, UAE and Bahrain cut diplomatic ties with Qatar sending oil prices up.
As I am unsure of the long-term implications of this, my confidence of a bullish rebound have been hampered. I will temporary hold out on taking a position in brent crude until I have a clearer understanding

06/06/2017
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I have been observing that brent crude oil keep bouncing off slightly below $49. I suspect this might be institutions building a long position at this level. I could be wrong thou.

08/06/2017
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Brent Crude
After the unexpected US crude oil inventories, brent crude falls to sub 47.5 before recovering to around 48. Im hoping for prices to drop further to 46 or even 45. I may go long from there