Wednesday, October 17, 2018

Short Update Oct 17 2018

CAD currency according to sentiment is going strong. Some oil deficit news can strengthen the currency. The pair is the previous strong economic data currency NZD. Next step is to identify the pivot location which is already touch R61 and not yet hit the weekly pivot. The trade decision is to short NZDCAD the target is weekly pivot.

Friday, October 12, 2018

Quick Update

Busy with old trading method which is I am not proud of. Now after the party is over I am back to the drawing board.

I have been neglected the harmonic pattern for a while because I think it is more suitable with long term and diversified instrument like stocks. My next project will be converting local stock market into harmonic pattern analyzer which is challenging for me.

Meanwhile for forex market I am looking for sentiment analysis. I think to be in touch with market sentiment is very important. Combining it with Pivot Trading will become a quite prospective method.

Keep ditching and looking for new method and it is almost 6 months on and off demo account and surprisingly all the demo is profitable, whatever method I use. Now the one I am looking for is the most logical way of trading which is market sentiment.

I subscribe the news feed to keep updated with market condition and so far the analysis is very good. Italian crisis, Trade War, Brexit, everything is very important. For example last news about Brexit which is near deadline and there is no sign of a deal. Market already rally last week in the hope of the end of Brexit solution and then come possibility of extended time of the deal, also there is a threat of cabinet walk out if no deal happened. This is not good and I should short Sterling. Next step is to find strong currency which is happened to Yen. Trade War and US stock market tank is a good sign of safe haven currency. Then we should short the GBPJPY.

Before that I short EURAUD with the Italy Crisis and AUD already very oversold and also have the Pivot Point Gap. Should use EURJPY but anything works is fine.

Final word, I will keep honing the skills reading market sentiment and I will update with the progress later.

Friday, August 10, 2018

Harmonic Pattern Re-Update System

The search for most suitable system sometimes is very complex and time consuming. I still have the mentality faith to avoid trading breakdown is to trade multiple pairs. Sadly the Harmonic Pattern become less and less important. The only reason it is still using is to avoid the over trade.

I know experience with conventional indicator to mapping price movement:
1. Harmonic Pattern
2. Moving Average
3. Pivot Point
4. Multi Time Frame Stochastic
5. Longer Time Frame TDI
6. Multi Time Frame RSI and ADX
7. ADR
8. London open Breakout
9. Fibonacci
10. Heikin Ashi
11. Trend reversal EA that I used for filtering the pattern

These are the steps to analyze the trades:
1. Run the Harmonic Scanner during London Market open
2. Check incoming economic event
3. Filter the best pattern with EA trend reversal
4. Wait for the signal to emerge from crossover
5. Enter the trade when it happened
6. Insert SL and TP based on Moving Average and Pivot Point
7. Watch the trade for a potential to averaging up
8. Wait the price to hit the target or just leave it

Other ideas is trade the No Pattern pairs for Follow The Trend Strategy. The trade is based on waiting the price to pullback then enter. Without Harmonic Pattern emerge maybe the resume trend has bigger chance.

Next trading idea is to compare correlated pairs to measure the strength and weakness with stochastic. This is important to follow the trend strategy.

So far the system has good result. I manage to return the losses from last trading session. The London Open Trading is a very great idea that I want to focus more on this.

Monday, August 6, 2018

What is Missing? Winning Streak and Losing Streak Illusion

Why the losing streak happened severely after the winning streak happen? Simple answer is : Because there is a winning streak before.

Let me explain what happened in my experience.

My winning streak occurred when Harmonic Pattern give signal for reversal mostly at one single pairs against other. Let's say AUDJPY, GBPAUD, AUDUSD, and AUDCAD.
After all filtering and everyhting, I trade 3 pairs against AUD because the system said so.
What happened next that all the trades are profitable. Everything is great and everybody happy.

Then few days later, another similar thing happened. This time CAD against other pairs. With the confidence after recent wins? I trade with the same setup, same technique. And what happened next is predictable. All pairs against CAD is busted. The previous winner was wiped out by current losers.

This is why winning streak and losing streak is illusion.

I cannot avoid the losing scenario if I took the winning scenario before. It is impossible to cherry pick which trade is good or not. If you enjoy the winning, you must suffer from the next losing. It is no other way around.

However there is one way to avoid this.

Don't take the winning streak at the first place...
And you will not get the losing streak next time.

At my previous posts before, I talked about how important to keep our trader's mind state stable and calm. This winning and losing streak for sure is not helping. So from what I learned the winning streak should not happen at the first place. I should take only one pair with the best probability and therefore there is only single winning. Then at second trade I also only trade one pair and then there is only one loser. This probably will give the same result with the old strategy. But once again think about the state of mind after experience it. Personally I won't feel comfortable after five winning in a row followed by five losing in a row. It may affect my judgement and calm trading. Too fear for the next setup or revenge trading. Neither will have good outcome.

In conclusion, Harmonic Pattern is still a good tools for me. But next time I will use it more carefully and hopefully I can trade comfortably again.  

Thursday, August 2, 2018

Missing Something Important

Today I am not synchronized with the market. All pattern stopped out and it wasn't a good thing. Harmonic can be bad at trending days. All pivots has been violated and no retrace whatsoever. It is obvious that follow the trend and wait for pullback has better winning ratio than blatantly trading the Harmonic Pattern.

I need to find a solution to analyze currency strength. Today is the day that all trades gone wrong. Every pivot point is a losing trade and that is very frustrating. I think one essential thing that very important is how to use the Moving Average. The further price distance with Moving Average, more likely price will reverse and the closer price to Moving Average more likely price will resume the trend.

Next idea is to use different strategy that I have been observed for quite some time. The pullback trading which is the opposite of Harmonic Trading.

Most important thing is how to detect trending market early. One idea comes from currency strength and analyzing MA strength from all pairs.

Weakness of Harmonic Pattern is when it gives signal to short the strongest pair. Worse it give multiple pairs trigger. The powerful pair will wipe out all other currency without retrace.

Good thing is I am not yet in full trading mode. Experience this situation early is very important for a better trade.

Tuesday, July 31, 2018

Treat Indicator Creatively

Strange how most of the time I entered the trade and it immediately become profitable. I used TDI-RT indicator that usually triggered by crossover. But it is very much too simple. Trading is not that simple. I used TDI as exhaustion indicator and looked for other divergences. 

From time to time we treat indicator like a holy grail. Use it blatantly without thinking. If it do this then we buy. If it crossover we sell, and so on. There is no such thing. I give you example with TDI above. Crossover at the top of the band, is good indication for a sell. But what happen next, price is continue to go up which is normal at the trending market. Lazy traders will think the indicator is a failure but actually we need to see it with different way. So many times if TDI crosses at the extreme area, price will give a push a little bit more before reversal. Like what happen above. So next time if we see setup like this, we can wait for last push before entering. And then the second crossover is working. We also need to check other indicator for confirmation like RSI, ADR and ADX.

Most of the time spend from trading is not the trade itself. It is to observe the price structure and watch like an eagle at critical zone. Trading is a waiting and patience game. In two weeks, I almost hit 10 percent profit which is over target. I only trade with 0.1 lot and the result is incredible. The P/L curve is up smooth. There is some manageable losses. Some trades reverse back after being stopped out. It is all normal. More than 2 months training and the trades are more precise and higher win ratio. Everything is good so far. Never ending learning in trading to achieve a greater full life.

Friday, July 27, 2018

Preemptive Reaction, Ready for The Worst..

I am not a psychologist or psychiatric. But probably this post may help your trading result.
Trading like other thing in life, we must prepare for the worst. In any cases, we must have our self conscious mind always ON. Trader's weakness is boredom. No Action when market is in sleep mode. Our habit to have activity while working is not applicable in Swing Trading. The most consuming time for Swing Trading is not analyzing, scanning, reading news, finding pattern, new trading ideas, or other trading related stuff. The most time spending is waiting.... be of the hardest challenge for Trader.

While waiting the trading signal, we must keep our subconscious mind ready. Before the trade happened we must ready for the worst. What will happen if after waiting for hours even days and the trade is a losing trade? What will you do? That must be answered before you take the trades. Sometimes trader after a waiting game their mind will be weakened. When the trade goes the opposite way, we are not prepared, then our emotion will take over the action. This is most traders will experienced. Not preparing for the worst.