Mickey's Journal

[kiravon]

Apart from my standard AIMS template I have other templates for confluence.

For S1 I use a modified Ewaves which shows divergence and during periods
of very tight congestion it flatlines and the histogram effectively disappears.

Ewaves flatlining is gold dust!

Looking at two set ups - USDCHF and USDJPY on H1 Friday

First USDCHF -

First we note all TFs are beasrish right up to the Weekly, all
are below the 50 EMA

We see three instances of divergence - a very powerful clue as to where price
might be heading!

Aroon and MACD are crossed and MACD is moving down

Then we have a very overbought Stochastics

Finally we get our break of AIMS confluent with a complete cross of QQE ADV buffer
zone with signal line below red.

So far 277 pips and trade is still current

Ewaves 277 pips.PNG

Now USDJPY

The H4 and D1 are bearish and under EMA 50

Firstly we get an extremely overbought Stochastic and then
Ewaves starts to flatline - The histogram disappears - almost.

Then we have a cross of Aroon and MACD to the downside

Finally a decisive cross of QQE ADV buffer zone followed by
a break of AIMS

Exit?
At the first cross up of QQE ADV blue Blue Signal line over red
Aroon is still showing a strong downtrend so ignore it.

But the second time QQE ADV signal crosses up over red we see
that Aroon is also crossing to the upside along with MACD

Also we note FOUR consecutive bars seriously oversold on Stochastics

This is not a coincidence!

Get out for 190 pips!

Unfortunately the market did dip down a bit more before moving up
but we will never get every last penny out of a move

That aside, this trade is a very good example of confluence -
where to enter, where to exit.

Things don't always happen at exactly the same time, patience is
needed.

Also we may get a signal to either enter or exit but if another
indicator contradicts it its usually best to keep your powder dry

An example of this was the first cross of blue over red QQE ADV before exit

It was invalidated by the other indicators

Ordinarily cross of QQE ADV blue over red can be a very serious
exit signal which should never be dismissed lightly.

and with confluence definitely get out very quick!

Ironically, the point of exit was also a reverse break of AIMS to the upside,
one of the original AIMS exit strategies - so just about everything is screaming
to close the trade

Ewaves 190 pips.PNG

[baldeagle]

Wish words and an interesting thought process. I think what we are all shooting for is an understanding of the structure of the market. If one or the other indicator helps us so be it! AIMS can help us see this structure or maybe not if we focus too much on the underlying indicators. I think Immy has helped by relating these two things. AIMS forums (a new structure?) can also help us by seeing how others view structure. Out of many.....d

Ed

[baldeagle]

For some reason my response did not post (Pedro?) until after your recent comments and referred to yesterdays comments. Haven't had a chance to read today's comments yet!
Ed

[kiravon]

.


If no one understands a word I'm saying I wouldn't be surprised.

It underscores the one fundamental truth

That trading is all about psychology and also its very hard to succeed
consistently.

Trading isn't about indicators, although price itself is only an indicator
if you think about it.

Fundamental news is also only an indicator - and not a very reliable one.

I get back to the garish Red and blue arrow indicators. We all wish it was that simple.
But we all know it really isn't.

Even when you have the best of the best indicators you are not necessarily any better off.
After trialing hundreds of systems and indicators I believe I probably do have just about
the best of the best - but that may not be such a big deal

It is very, very subtle!

So subtle that sometimes you think you are imagining things that aren't really there!

and here's the problem -

if your wife has just left you and you've just lost your job - that doesn't alter your perception
of whether a blue or red arrow has just appeared.

Yes you may be so upset you click the buy button instead of sell, that can happen even when
you are not upset.

but you could actually still carry on trading if all you had to do was buy at blue arrow,
sell at red arrow.

Except trading really isn't that simple.

It does require a great deal of clarity of thought.

Only this weekend have I understood to a much greater extent why traders work out or go running
before trading.

Its something I've got to think about seriously.

Clarity is King!

I'm sure that can't be original - its just a bit too profound!

but seriously, clarity is everything.

I have been overworking a bit the last couple of days and I must take a break
but I've learnt so much

Not so much about indicators, but just how subtle the nuances can be

and precisely why, not just major life changes, but even a bad mood can make
trading nigh on impossible

because it isn't a choice between red or blue arrow.

it's multiple choices, and sometimes we get it, and sometimes it gets murky
and we doubt our judgement, if not our sanity.

The two sample set ups above were just two of scores I've analysed. I am convinced
beyond any shadow of a doubt that my commentary on them is sold and real.

But I also know full well that tomorrow or next week I could re read them
and view them as the ramblings of an imaginative but clueless newbie.

and should I start to view the situation in that negative light -

it will show up in my results! just as sure as night follows day.

I could be on the threshold of becoming a trading genius, or I might indeed
be the Forex version of the village idiot.

This is why trading is all about psychology

Total belief that I have an edge, and total belief that I will succeed.

But things like self doubt and self sabotage do get in the way.

So many times I've read traders analysis of their trades and I really
wonder what planet they're on

it's as if they are imagining things that simply aren't there, or reading
so much into the most subtle difference in candlewick size etc.

But professional traders who are consistently profitable do see very
subtle nuances that are simply lost to the rest of us.

Trading actually is a very subtle skillset.

Ok, trading the news isn't always that subtle, but generally speaking.

The last set up I analysed on cable really set all this thought process in motion.

a nice little winner in hindsight ( aren't they all! )

but it was so darn subtle!

The way it would read is as if I'm looking at a nice move and trying to backfit
the most inconsequential series of events ( or non events ) so that I can say -

'See, all you need to become a genius trader is the ability to read the most
subtle, almost invisible clues that various indicators give ( or appear to give )
and then have the genius ability to connect all the dots to read what the
charts are trying to tell us''

All in a rather self congratulatory sort of way.

When absolutely nothing could be further from the truth

I really believe that since I've renewed my enthusiasm for trading after a bad period
that I am really on to something now.

but I am just so used to the emotional peaks and troughs caused by all such 'aha' moments.

One thing to look for in confluence of indicators is to make sure that they are not actually
using the very same data to give a signal as that's hardly confluence.

The indicators I use don't always agree by any means, and when they all do it is often a
very good sign, and all we need is an edge, not an invincible Holy Grail.

So here is my analysis of a set up I didn't actually take on Cable.

It truly makes perfect sense to me. It is not in any way intended to sound like some
real Pro in order to impress. I really have no interest in that, there is no profit in
self delusion.

Yes this one worked out quite well, and even if it had failed I still believe my reasoning
to be very well founded, but possibly only in my mind.

So we have a congested period on Cable as seen by the lack of histogram on Ewaves.

Price will break out, but which way. No one can actually know that

But are there any clues that indicate where the probabilities lie?

Well of course the biggest indication is that I can actually see that the price went up
so already my analysis is hardly unbiased.

During this congested period there were actually two breaks of AIMS and probably
both would have resulted in a nice profit

I am trying to be as candid as possible here

But I want to present my case for why the first break of AIMS was an invalid set up,
despite likely being profitable.

I don't think it would usually have been that profitable, and anyone taking that
trade would basically have been more lucky than anything else.

I see absolutely no reason to have entered at that break of AIMS

Break of AIMS on it's own is largely inconsequential, it's not a basis for an entry.

But if you are eager to trade the set up you are liable to 'delete' or 'distort' the
information in front of you.

It may be overly simplistic but that's actually why most traders fail, they are not
seeing reality, - they are reading the charts through the lens of fear or greed

So with that in mind, let us assume I am keen to take this set up as a valid entry

We have a break of AIMS and more!! we have confluence! The Aroon indicator,
highly acclaimed as a veritable licence to print money, also is giving a very
decisive cross up blue over red..

Subtle.PNG

and it gets better, further confluence of MACD, the signal line has crossed up over
the blue line

A confluence of three indicators! What are we waiting for?

Simply put, things may not be quite as they appear.

The MACD looks rather flat. actually worse than flat. if you expand the Aroon/MACD
to full page you will see the blue line is flat, and whilst the signal line has crossed up,
under closer zoomed in inspection we see it has just started to turn down again.

so when it hits the blue line one of two things are likely to happen, a cross down
through blue, a very bearish sign obviously, or what has been called a repulsion,
where the signal line sort of bounces off rather like a dodgem car at the fair.
That would mean a continuation, except the direction is flat, so in other words
the MACD is telling us absolutely nothing at all! Yes, it did technically cross, but
its flat, and we don't know what the signal line is about to do. so MACD has
to be discounted at this point.

This only leaves us with QQE ADV, ( an RSI derivative )

Again, at first glance the Blue signal line has crossed up over the buffer zone
and is above the red line. So again, just like initially the MACD appeared to
be signalling Bullish but in reality it wasn't telling us anything at all.

Again, a much closer inspection enlarging the window and using the crosshair
tool we see what we thought was a valid break of buffer zone was an optical illusion
- its what we wanted to seee!!! the signal line has only just managed to break the
upper line and briefly moved sideways but at the very point that Aroon is crossing up
through red, QQE ADV is crossing right down through the buffer zone including
crossing down over red which is a very compelling exit on a bullish move, not an
entry signal to go long!!

So in reality QQE ADV and MACD are confluent negatively!

Are you with me so far?

We patiently wait for the set up to form, finally to our delight ( which is an emotion )
we get our break of AIMS, and that is absolutely confirmed by MACD having
crossed up and QQE ADV having just broken through the central buffer zone.

But that wasn't the reality of the situation at all! as we have seen.

It was what we wanted to see.

So not surprisingly straight after that break of AIMS price reversed to the downside
which was basically want these two indicators were telling us was likely to happen.

Aroon got it wrong on that occasion, it isn't infallible and needs filtering which
we simply didn't get this time.

Had we taken the trade we might have had a lucky win as it did reverse again
to the upside but there was no basis for assuming it would do this.

But now look what happens

A second break of AIMS with the Aroon again crossing up over red, but this time
QQE ADV the signal line is decisively crossed up through central buffer at a nice angle
looking set to continue, and MACD signal line has now turned up, after a repulsion
from 'bumper car' hitting of blue line, this time signalling a continuation to the upside.

so the two break of AIMS were really quite different. The first, price immediately
reversed, the second went on splendidly for about 100 pips and here is the truly happy
ending to this interminable yarn - at the peak of the move the QQE ADV crossing down
over red. Yes, only one exit signal but a very powerful one. so we could have got out
leaving almost nothing on the table!

So why would we conveniently have acted on this signal this time when previously
we ignored it when it was variance with the other indicators?

Good question, and there is actually a very good answer too.

If that downward cross had come in isolation early on in the move I would certainly
have stayed with the other two more Bullish indicators

but after such an impulsive 100 pip move, nearly all Bullish blue candles, to see
QQE ADV suddenly reverse down through red spells only sudden death!

Seriously, I would have got out in an instant in that situation, despite Aroon
and MACD seemingly blissfully unaware that anything was amiss.

Again with familiarity, the QQE ADV can get you in and out of trades with
precision timing, but as always, you have to know how to use it, and when
to use it.


But you see what I mean about subtle nuances? just a little bit of bad psychology and
it would have been very easy to have missed all the clues and taken that first break of AIMS

and isn't this unquestionably the most boring post I've ever written?

Forex Trading in many ways is boring. That's why so many opt for Binary options it's exciting.
Its glorified gambling.

I believe all the above is more or less the type of thought process that is essential to even
have a chance of success in this game

There is no quick fix, no red or blue arrows.

Yes, most mentors are great marketeers and also try to keep enthusiasm high - and that's great.

I'm enthusiastic about trading. I'm always creating new templates, always tweaking systems
and I love all that.

But there is a lot of tedious hard work involved to really get it right on a consistent basis.

That's why so few stay the course on these forums, even after paying etc. when they find out
that the superficial, fun approach isn't consistently profitable they move on to find a 'better'
system somewhere else.

Which is also why out of so many hundreds, only a tiny minority start a journal and keep at it.

Its just not a fun thing to do.

Yet it is the single most profitable thing they could do.

[immy]

Hey, these ranks are bit too real aren't they? I think not many will like it. Who wants to end up in British army? Maybe just my childhood dream of being a military office, captain immy.. ha I'd love to fly a jet plane though. (without pressing the red buttons on the lever, ever)

Micky, if you don't like the new ranks please let me know. We'll switch back to previous.

[immy]

I feel that I might have done a huge injustice in my previous post. I completely forgot to mention the very thing that made me want to write a reply. This post is NOT the most boring one Mickey. I read it and wrote about it, criticising some admiring other parts of it and drew a conclusion for myself. Nothing judgemental. I guess what i'm trying to say is that I enjoyed the read. You should write a book

[baldeagle]

I second the book idea. You have a gift for putting your thoughts (and mine) into words. My main discipline problem is Wishing (emotion) for a setup

I tried to duplicate your (H1?) chart on my Oanda platform (Daily Candle, NY Close) Unfortunately my AIMS box was a long straight rectangle one over 27 hours, troubling. No breakout until your second breakout. I guess the bearish engulfing candle would not have formed until after your pending order for the first breakout of the AIMS box was filled? So even price action would have been late. The only thing that I see that is troubling is the small candles that preceded your first breakout. Not much momentum.

Thanks again for your thought provoking posts.

Ed

[immy]

I thought i'll share a post on my blog that i just made. Its inspired from this post. This might seem to be a reply to Mickey's post. But its not a reply. Its an extension of this very long post. http://www.itradeaims.com/2017/05/micke ... -edge.html

[kiravon]

Time certainly is precious and ironically the less time you spend trading the more
money you will make.

and it is also perfectly true that indicators will not make you consistent profits,
and if anyone tells you otherwise and can 'prove' it, I can assure you it is they
themselves who are making the profits through their chart reading ability plus
good money management and good psychology, and although they may have
indicators on their charts they don't really need them, although they may likely
be helpful.

I find playing around with indicators is quite educational, any exposure you have
to the charts is always improving your chart reading ability even though usually
unconsciously.

The last month for me has been quite interesting-

The first week or so I continued to win most trades with just a couple of very modest
rents, then I had some urgent business to deal with which was a priority for the next two
weeks but I decided to continue trading on demo. I lost every single trade!

I wasn't surprised as I was not really taking it seriously and not even slightly focused.

The last few days I have been back to my usual form and not had a losing trade, just
the occasional add on that didn't quite make it.

Add ons has always been one of the hardest things for me but on the USDCAD today
on M5 I noticed that you could have added on at every new break of AIMS, generally
a fast way to the poor house, but more interestingly I noticed that after every
break of AIMS price retraced up, and if you simply placed a Sell PO after every
candle that then subsequently closed red you would have won every single one! - of
course until price did finally reverse.

Now this might not happen every time, but it has given me an idea that I would like
to test. The basic rule is that price is in a definite trend on HTF.

On the screenshot below I'm trading M5 but placed TP, believe it or not, at the only level
of support I could find, which was on the Daily chart. as you can see, you ignore
key areas of support and resistance at your peril!

This was a nice win, 32 pips, a 1:2 RR

You don't need many wins like this to make a very healthy increase to your account each month.

uc.PNG

[kiravon]

Yes 'Semi Fund manager' is good. Better than Sargent Major or whatever I was.

Also the Designation 'Contributor' is a very big improvement on 'Wizard of Words'

There is no real merit in being wordy, but if everyone made some contribution
it would surely be for the common good. You don't need to be an expert, even posting
a modest screenshot of a trade, why you took it, or in hindsight why it did well or
not, as the case may be. Its all a learning experience for everyone.

Especially for some of the more advanced members who sometimes need to be
reminded of even the most basic things.

So all contributions are much appreciated.