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Trading spot fx euro using price action


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Trading spot fx euro using price action

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  #611 (permalink)
 Adamus 
London, UK
 
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My first read of "How We Decide" by Lehrer was great, a real page-turner.

Second time round, trying to glean useful mental strategies out of it to accelerate my learning, it's not so easy. What was exciting first time round is now sketchy and lacking in detail, so I've tried to find out more info from other sources to fill in the gaps.

The first few chapters concern themselves with the "emotional" decision-making apparatus in the mind - the orbito-frontal cortex and the anterior cingulate cortex. You don't actually need to know the names of the lobes of the brain, but I find it helps, even if most people are happy to think of the brain as a big lump of spongey grey stuff.

So deep in the brain at those points you'll find the core of the mental circuitry that wires up the somatic nervous system with the conscious mind, using some unique types of neuron and some interesting chemicals such as dopamine. Emotional decision-making means, given enough experience in the past, your subconscious brain will work stuff out for you and let you know when it sees a good thing coming - e.g. you get happy - or a bad thing - you get worried.

This is primal stuff - it's not just humans that have it, the primates have it too, just not as much - and in fact all animals have it to a certain extent - dogs, big cats, etc. At the end of the day, it helps you figure out stuff that results in either a direct gain, or on the downside associated with bad feelings, a loss. Not just trading - I mean, everything.

It starts off really simply: you put your money down, and then lose it (or maybe win) - this causes feelings of loss (no surprise there) and negativity (or gain and good vibes). When that repeats itself, the brain catches it and starts wiring up your subconscious to watch out for it, giving you those same bad/good feelings whenever anything predictive occurs, conveniently ahead of time so you can avoid it or take full advantage of it.

You can train it by repeatedly going over your work, in my case, my trades as a trader: constantly go over your mistakes and consider what you did. I don't yet know how the feedback from conscious studying of our previous actions effects the subconscious mind. All the dopamine neurons in that brain tissue are constantly rewiring themselves to keep their predictive toolset up-to-date. I guess it just feeds in while you sleep on it, while the brain has a chance to make sense of all the stimuli thrown at it during the day.

The problem is of course you don't necessarily react to predictive feeling in trading, because your decision-making process is flooded by stronger emotions telling you to do the wrong thing. That's my case. A whole year of training myself in price action trading is still getting me nowhere because I've got an elephant standing on the hosepipe. The challenge is to work out how to dissolve and neutralise that elephant - where is it coming from, and why is it still there? Simple questions with hopefully simple answers.

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  #612 (permalink)
 Big Mike 
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Adamus View Post
Never checked my payments to Ninjatrader seriously - you know, it's just one of those payments that comes out of my account regularly. Discovered that I had forgotten about the second license I had leased while I was running my mechanical trading systems on a remote server. I never cancelled it when I shut down the system, and now I see I've been paying for it for over a year since, $180 a quarter down the plug hole.

I also checked the lifetime license - it would have been cheaper from the start but I never thought about it again after making the initial decision. Another $1000 or so down the plug hole.

Just checked Ninjatrader's refunds policy - in brief: no mercy for idiots, no refunds for anyone, thank you.

Guess I'll just cancel the auto-renew paypal subscriptions and wait until their automatic license checking blocks the app, then I'll make my mind up whether to buy or not - i.e. will I need NT7 for another 18 months or not....

Ouch, sorry. But just FYI, there is a discount available for NinjaTrader to Elite Members, check the Elite Access page.

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  #613 (permalink)
 Adamus 
London, UK
 
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Didn't miss the NY Opening today. Tried to limit myself to 45 mins only but it's difficult. I want to keep my grey cells alive where all trading memory is kept. Don't know if it will help but it makes me feel better. Probably picking up some bad habits because I'm just flying blind really, without revising my trading plan. That's in the schedule now though so hopefully it'll all come together before the end of the month.

The S/R indicator is a major time killer and at some point in the near future I will have wasted too much time on it compared to the amount of time I want to save everyday - I can't let it hold me back much longer but I think I've got onto the final straight with it now. There are just so many S/R lines coming out of the 60min chart, I have to figure out a routine to amalgamate the densely packed S/R lines into zones to plot with a rectangle instead of the mass of lines.

Here's the first version

And here's my 45 mins of market watching. I'm focusing at the moment on what the emotions are that come out of the closet when I decide where I would have entered or had my stop. Would have got whipsawed if trading today.

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  #614 (permalink)
 Adamus 
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Ouch, sorry. But just FYI, there is a discount available for NinjaTrader to Elite Members, check the Elite Access page.

Took full advantage of that. Now I've got my lifetime multibroker license at a good discount, including the rolled up months of the lease I'd just paid for, and the futures.io (formerly BMT) discount. Paying the lease for 2 years was money down the toilet but at the time I wasn't ready to commit. Now though with NT8 on the horizon and looking good, I figured it was time to go for it. Plus I just got the money in for the IT project work I'd done for a client last year so I guess it was all well-timed.

Watched the market from 13:30 for two hours but couldn't concentrate fully because I was looking after my youngest so no chart. Plus I'm feeling totally out of touch with my trading plan and I've scheduled work on that to move onto now.

Have a good weekend everybody.

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  #615 (permalink)
 Adamus 
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Didn't trade today (still not trading) in fact, didn't manage to do any analysis that I thought was good enough to write down. Still struggling to get the trading plan together and concentrate on the real core of my plan rather than just the pretty candlesticks.

Looked very interesting though, I just couldn't work out a narrative for what was really going on. It helped when I put the line in at 1.3200 but still difficult.



Started using my S/R indicator instead of placing them by hand. Got a bit of a way to go with the development still but the basics are there.

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  #616 (permalink)
 Adamus 
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Almost got my trading plan into shape - at least, into a good enough shape to convince myself I know what I'm doing. There's still a lot of stuff that I need to put into it. I'll spend an hour or so on a day-by-day basis through March - I've not finished going over my journal here yet and I'm only on page 5 of 16 so far so there's a lot of learning material to come.

It's actually amazing how much I didn't know then when I started.

In fact, in rewriting my trading plan, I realise now how poor it was, despite thinking it was great - I guess I thought is was great mainly because the YTC PAT material is so good. But there are quite a few important points in my trading plan which were contradictory, which I hadn't picked up properly from the material.

For instance, I would look to go either long or short at a set-up just depending on how it panned out. I realise now that I can't do that. I need to have bullish or a bearish bias, or to decide that there is no bias, or to decide that I'm not sure so I should stand aside.

Thinking I could go long or short was also hampering my analysis post-session. I need to clear up set-ups in range-bound markets. There was too much confusion, and worse, I wasn't even aware of it so I just struggled along blindly.

In future one of the questions I'll ask myself is, do I know exactly what I'm doing, and why?

Fortunately for me, most people who read this journal don't realise how stupid this was. Not knowing something condemns you to stupidity - I guess that's where having a mentor would have helped - or even a sceptical fellow trader to look over my session reviews who doesn't worry about saying it like it is. I think maybe people who read other people's journals think it'll probably be perceived as rude to ask what the hell I think I'm doing when I post some crap as a session review.

I guess the problem is, a lot of what I posted was lengthy and not massively interesting, so nobody's going to be inspired to read it unless they're doing me a favour.

As far as project managing myself goes, I just took twice as long as my forecast to get my trading plan in shape. Guess I should double those forecasts. At least it's not as bad as one of those big construction projects for prestige national buildings which always come in 5 times over budget.

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  #617 (permalink)
 SammyD 
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Glad to see you are benefiting from your own journal Adamus. You took the time to post so it should pay dividends. If we do anything for a long period we can always look back and say, "Man was I dumb!" but that's life. If we are decent human beings that self-optimize we will be saying that the rest of our lives. The journal is helpful to me because it shows that this process is not easy and takes me through a day-by-day journey. Thanks.

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 SammyD 
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P.S. I have come up with my own trading style but could always sharpen my PA skills. I'm considering purchasing Al Brooks' video series. The other competitor would be YTC PAT. Any thoughts? I think both are roughly in the same ballpark pricewise. I've heard Brooks' course on video is much clearer than his books and I do get a lot more out of his webinars than I did his Trading Price Action Bar by Bar book.

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  #619 (permalink)
 Adamus 
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SammyD View Post
P.S. I have come up with my own trading style but could always sharpen my PA skills. I'm considering purchasing Al Brooks' video series. The other competitor would be YTC PAT. Any thoughts? I think both are roughly in the same ballpark pricewise. I've heard Brooks' course on video is much clearer than his books and I do get a lot more out of his webinars than I did his Trading Price Action Bar by Bar book.

I haven't seen Al Brooks' videos in fact I didn't know he was selling any. They sound quite attractive purely from the guy's reputation.

YTC PAT is just text - all the videos he's done are free on his website and are all aimed a bit low for you and me. I just watched some YTC videos on candlesticks and they are well done, but elementary.

YTC PAT though is not so elementary but it's also not just price action facts and wisdom - it's a whole course on how to structure your working life as a trader including stuff about money management, goal setting, self-optimization (like you mention), etc.

You don't mention Al Brooks's new books - they are also meant to be much better presented than his first book "Read Price Charts...."

If you need more structure in your life, get YTC PAT for sure. If you want a new take on trapped traders, supply and demand and order flow, also get YTC PAT. You can also get YTC Scalper thrown in for not many more $$$.

If you want encyclopaedia amounts of info on price action, get Brooks (although I'd love to know if he's organised it in an encyclopedia style).

HTH, let me know which you go for.

If you have time, just get both

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  #620 (permalink)
 Adamus 
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Haven't managed to get back into sim trading this week like I was planning - there's still tomorrow - but today while the plumber was here sorting out a bad leak in the kitchen which had leaked undetected for a year, I had the chart on EUR/USD running on my laptop and kept an eye on it.

I was lucky enough to be looking at it at exactly 13:30 as it dropped 30 points in a minute - but I had only a glimpse of a big red bar forging its way south. On the hourly chart with the big spike just before it, it looked so good for a short. Just goes to show how little I can trust my instincts right now.

I'd be seriously interested in finding out who is trading these moves. Where does this volatility come from?

The market's been flat for 3 or 4 days so there's a lot of speculators with itchy fingers I guess. But why do so many get it wrong and go for the break-out below 1.3000?

And why did the market participants who ended up pushing the market up above 1.3100 wait for 2 mins and only manage to get the market rising after 13:32? Who were they and what kind of trading business are they running? Why did they wait?

Great stuff.

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