Mickey Wrote a VERY LONG post [Trading Edge]

I just read Mickeys longest post today. That was some read and took a while. My usual time allocated to a forum post is 1-2 minutes at best. This took 10. :)

Link to the post here [members only]

I had to stop and think. Well one thing is clear Mike can write. He is the writer among us for sure. That award goes to him. The pen of trading.

There are many things he talked/wrote about. It was a long post and I do recommend reading it. However, my conclusion is this.

Mickey keeps searching for new indicators and strategies or so it appears to be the case. But perhaps he's still stuck to one or 2 methods that he trades. But in this post I could finally understand why he keeps adding removing indicators. He just plays around with it. And I think there is nothing wrong with it besides waste of time. Time is precious.

There is a question of a trading edge. How do you get one?
Random combinations adding and removing indicators is not the way to find your edge. An edge would be formed only when you do an extensive back-testing of a trading method. And yes that might, at some stage involve adding removing indicators. But what is the purpose of this exercise?

 e.g. AIMS method focuses on the core idea that the market has a structure. Its not a structure that is similar to an engineers blueprint of a skyscraper or an amazing bridge.  The human designs mostly have boxes, correct angles, straight lines, perfect spheres and such, but nature has a more "chaotic" design. The science of chaos has now revealed to us that what might appears to be very random, which we often confuse with noise, actually has an underlying structure. And a structure has rules. Though Chaos has "chaotic rules". So rules mean "constant and rigid" in the normal geometry and mathematics. Here the sum of all three angles of a triangle is always equal to 180 degrees. Unfortunately this applies only to us mere mortals on earth. In space, e.g. the sum might be greater or less than 180. Its Chaos.

[Designers has started using AI for creating the most robust most efficient structural designs for buildings and cars etc. And what amazes me is that the AI designs surprisingly  look quite similar to the structures we see in nature. e.g. the design of a chassis of a modern 3D printed car might look exactly like the structure of the bone. Efficient design means one that is the strongest, lightest yet uses the least amount of material to build. Nature seems to be very good at that]

anyway back to earth and trading.

Here is an interesting opinion of mine: don't laugh. ok.
Almost all indicators at the bottom are useless. YYes, they are, unless you have one that has other meanings to it. One that is more than just the red and green bars or cross over of two lines.  e.g. eWave is the only indicator that I would use because its not merely a signal generator or confirmation of a signal. Lets first learn about the AO a littel but. or AIMS Wave Indicator. 

History of The Awesome Oscillator 
Before AO got its fame, there was another indicator that did nearly the same as the AO but it was much more complex. It actually really highlighted something very important in the market. But you need REAL market data for that. You needed the most important data that futures and shares market need. VOLUME. It was the Bill Williams indicator he named THE MFI. (market facilitation index). It did volume analysis. But Bill found that you can do the same analysis with less effort plus count waves using AO. So MFI was dropped. [Just like that, we can actually drop the gator for AIMS box. With box you can literally kill to birds with one stone.]


The AO or the more advance form of AO i.e. AIMS wave or even better Snorms eWave [or even better Snorms eWH] is our mechanism to highlight the wave structure or shall I say, smooth out the edges of the chart and give us a different smoother picture of the underlying structure of the market.

It unveils the "underlying" wave. Everything in the universe is Energy, and energy follows the path of least resistance. And that path of least resistance is set out by an Underlying usually unseen "structure". 

In human geometry its straight lines and perfect spheres, in nature, its not that. Its wiggly jiggly dingle chops.

It mostly appears to be very random chaotic patterns. The branch of a tree just grows this way or that way. Water flows in random fashion. But Nature has an underlying usually unseen structure that governs the behaviour of most things.

Take of example the the riverbed that governs how the water at the surface will behave. Think about a rive in the mountains, how violent and energetic it is now think about the wide slow moving calm and relaxing river in the plains. Its all to do with the underlying structure. the Riverbed in this case is the underlying structure.

So what is the structure of the market?. The river is made of trillions of molecules of water. And the river bed is made of rocks in the mountain and soil and mud in the plains.

What is the market made of? Millions of orders? correct. Who create those orders? Humans or human created machines? Correct. What goes through a machines mind? Exactly what the human coded into it. Where did that code come from? The Human mind indeed. So does it make sense to assume that the structure of the market is based on the structure of the human mind/brain? = Elliott Wave analysis.

So back to AO.

Price might go from 1000 to 1500 in a month a week or a day. it does not matter to AO. AO literally takes the price change out of equation and focuses on the momentum of price. And Elliott wave analysis is really the analysis of momentum of waves.

AO has uniformity to it. In a way its stuck to a ZL and thus it stays uniformly where it is most of the time. That makes the Elliott wave count effortless and far more effective than the elaborate and tedious work of an Elliotticion. (whew). Thanks but no thanks Robert Prechter. We have AO, the 10 Seconds to Elliott Wave mechanism.

Enough about AO, I hear. I know.

So why do we use AO, well the above might be some short intro to it. It gives us an edge. But how do you calculate an edge? that is the question. And you do that by systematically testing the idea. If you sit down today, put the setup 1 or the Hunt template on. Start from the 1st of Jan 2016 or even the 17, and start to look for Setup 1, apply the entry rules, apply the trade management rules, in short your trading plan, in simulation you will find out what is your edge.

But back testing is hypothetical data and the past is never the indication of the future. The future might be completely different. Well then forward test it.

How to forward test the idea. You will take 100 trades. Record its outcomes and then run some simple analysis on it e.g. how many were winners, how many were BE and how many hit the SL. You can then apply this to a dozen more charts on the same time frame. These would be your individual test and finally you can put the data of lets say 10 pairs and find the results. It will give you a huge insight to your method. And perhaps help increase your "confidence" in what you're doing. In fact, this act should be an AIMS Ritual, rather a TRADER's Baptism if I may say so.

hope this useless post is not as useless as I think it is...

peace

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I am What I am

Today I Quote something from one of my beloved writers. Though I don't necessarily agree with everything he believes in, he is truly an inspiration. Not among us anymore. May his "soul" rest in peace. (if there is one)

Work at being content with who you are ... say

"I am what I am "


You don't have to apologise to anyone for what you are, who you are you. You are who/what you are. You have the right to be who you are.. The morality that you 're concerned with is whether somebody else being hurt by you being who you are. 

NFP Live Trade [Members Only]




sorry, this video is password protected if you are member of skype group you should know the password. :)

What does the purple predict




What does the purple predict from AIMS Stress Free Trading on Vimeo.

btw: Snorm of For-exe.com  (do we read it as Forexey? LOL)  has created this fantastic and very useful indicator that can help you label your waves on your chart. Very handy indeed.

e.g. look at this USDCAD Weekly chart. The purple predicted something 6 months in advance.


FREE WEBINAR RECORDING [LIMITED TIME ONLY]


Webinar - The Beginning of Time from AIMS Stress Free Trading on Vimeo.

Recorded over 6 years ago. Introduction to AIMS Stress Free Trading Method.
Today we have refined this method and years of teaching have "taught" me a lot.
We trade Setup 1 now and our success rate is now over 66%. This video is the foundation of
AIMS Stress Free Trading

This video was NEVER shared outside our Members Only Forum. This is the FIRST time. 

Note: the video was available only for a limited time which ended on the 4th of April 17. 

Do You Understand Your Method?

Simple vs Complex 


The more complex a trading system the more chances of finding ways to break rules. That is because complex systems usually have a larger number of rules. And often, the rules themselves are quite difficult to understand. So, complex systems or methods generate more "rules"  in quantity and the more rules you generate the more complex the process. Its a cycle. 

Simplify Simplify Simplify 

as once said by the great Albert Einstein. Because as long as you don't find a process "being simple" it is probably because, (assuming the method is relatively simple) you don't yet understand it. So, assuming you understand the method ,and perceive it as simple, chances are that it actually is simple and not just simple for you alone.

Hence simplification is our main objective. Not over simplification but just enough that fits our mental capabilities. Over simplification could be a result of generalisation and that may lead to fallacies.

The Simplest Method

The simplest of technical analysis is looking at the price without many additional indicators. It is performed by "simply" looking at the peaks and troughs of the price. You'd want to find its "obvious" trend direction and perhaps a little information about the "momentum" of the trend. One can find its momentum using a simple oscillator. (eWave or AIMS Wave e.g.). You can use a moving average for trend or even Elliott Wave analysis using our 10s to Elliott Wave Technique.

A Simple Trading Method

However looking at the price itself is more important. It leads to a form of analysis that is "logical" and makes sense. e.g. The most popular and very interesting way of analysis the market is looking at "supply and demand" zones or Support and resistance areas. Here you see price comes to a certain zone of price levels and it keeps bouncing off it.

If done correctly it is often a solid evidence that there is something there. That certain types or orders (whether buy or sell) sort of balance out at those levels and the opposing orders exceeds ... If we agree that prices usually trend upwards when the buyers "create a force" in that direction that outweighs the selling "forces" then that means that at any given time if prices trend upwards then the "balance" of forces is shifted towards the up side and vice versa.

So when the price reach those price levels/ a zone of price levels, where it gets stuck. We can infer that perhaps the "supply and demand" forces balance out at those levels. Now this is solid information and it can be used. e.g. if your system generates a buy signal and it happens to be just under a zone of resistance, creating a metaphorical ceiling" then it would be logical to filter that signal and wait and see whether price actually breaks past that "barrier".

Another form of trading is to simply look for patterns created by a set of indicators. Both are great but your success, longer time consistent success, would depend on your, repeat YOUR ability to remain disciplined. You can only find it easier to be disciplined, on and only, if you fully understand the method. If you fully understand the method, you understand your edge. You know the probabilities of your method. As such it would be ok to say, that you believe in your method. And why shouldn't you because you have done your back testing, and you know that the data suggest that you have a positive edge.

The Key

The key to success is discipline. And if you are disciplined and the analysis process is not too complex the chances of success increase.

AIMS The Hunt method, is the nectar of 7 years of trading experience on live accounts and interactions with several hundreds of people/traders.  The simpler the method , the slower the method, the more chances of creating "successful" traders. Period.

How to Make things Simpler and Easier

There is no need to make things more difficult than it really needs to be.

"Complex things are simple when you break them down." .......... Josh Kaufman
This is explained in more detail inside our forum. Its a method taught by Michael Douglas in his book Trading in the Zone. We adapted that concept and call it The T20 Principle. We simplify a trading method and start from there. More on this inside.... 

Do I need to worry about Leverage or Margin?

Well, before we talk about leverage or margin and whether to use margin or not.

Let me address a rather more v.important aspect to this concept of trading, all of course, in my humble opinion.

None of the traders are ready for trading. That is why there are protections. I would consider myself lucky that I can find brokers who'd allow me trade a demo account with nearly the same prices and executions (executions really does not matter on the higher time frame though a pip above or below my po or SL is no issue there) Again, I'd like to stress on the fact that LEARNING TO TRADE CORRECTLY is a necessary requirement  before you decide to  trade a live account. Going for live account without first completing for instance 5 batches of T20 principle  would be, in my humble opinion, a very stupid and reckless thing to do. You'd rather give me your money.  :p

Trading is a skill that requires a lot of practice. Its a VERY lucrative skill but it requires practice. You must first make sure you have the following things.
1. A Trading Strategy which gives you an edge [aims methods have this covered]
2. Acquire an in depth understanding of the above.
3. Gain practical experience in the above.
4. Demo trade the strategy and maintain a discipline score for each trade and batch of 20 trades. Do at least 5 batches ( 5T20's)and maintain an average of 70% discipline score with none of the T20 batches less than 50% score (if a batch has less than 50% score, you might want to scratch that and repeat it).

This is a rough guide to How to become a Disciplined Trader. 

I'd like to suggest that in order to become a profitable trader you have to follow at least 2 steps.
1. Learn to Trade using a demo account.
2. Learn to trade using a live account.

Not so difficult to understand is it? Just two steps. Now, by demo I don't mean that you open a trade here and there and close it haphazardly. The idea is to recreate an experience and environment that is similar to the actual but without the RISK of losing money.  This would give you that "stress free state of mind" the one that is "Risk Free".

If you have not yet been able to keep at least a demo account and remained "disciplined" you cannot move forward. We see many players doing net Practice and they look fantastic but they fail miserably when it comes to "matches". [cricket analogy] 

Because during practice we lacked an important ingredient. FEAR/RISK. However to trade demo without Risk or FEAR factor is EXACTLY the purpose of Demo Trading. You want to perfect your skill so that it becomes "second nature". So, to become the best at what you do, you don't have to play as many matches as possible rather you practice as many hours as possible before you go for a match. So that you don't have to "think" what to do next during the live event, rather you KNOW exactly what to do without "thinking". Its your instinct.

[Are you telling me demo is waste of your time? then you don't believe in or does not understand the concept of Practice. And Yes, you have to write one beautiful Trading Plan, before you can trade, Else every trade will be classed as Zero Discipline Score] 

I'm trying to help the members who connect with me through Skype, and the hunt section of the forum, to become profitable by first becoming disciplined traders. In a way i'm selling the idea but the intent is purely to help. 

cheers and hope this helps a little...

ps: i don't care what leverage is there, its irrelevant until you have learned to trade correctly, you must first learn to trade. Just as I don't care how expensive is Formula 1 car, first I need to acquire the skill to be considered for driving one. And I don't have that skill so Formula 1 racing car is "of no value to me". Fun to watch though, those who can. 

Good Calls Today - AIMS The Hunt Skype Group

Today we had a few signals on different pairs. We shared it in our Skype Group and some of us enjoyed the profits/trades. First up is USD/JPY where we had a Hunt Buy Signal.

USD/JPY Hunt - The PC Cherry Signal. 

It was rather a simple setup. I saw it, shared it in Skype group. Everyone knows how to trade a certain signal. But some times you make a little adjustment in terms of target/take point area. In this case I only wanted to target the high of the box for slightly under 2R (3%) trade.

#USD/JPY Buy Signal. Nice 3% profit.  
The fun part is that I saw the signal at 2pm UK time, had the orders in, then went for a late lunch, picked children form school and when I returned around 4pm it had already hit its take profit level. #LetTheMoneyWork4U   Let the money work for you, don't work too hard. The best form of trading is when you can simply leave your chart because you have a plan that has 3 possible outcomes.

AIMS Trading Plan teaches you this technique of trade management. We always have 3 possible outcomes out of a trade. Each of the outcome has a 33% chance of happening. 33% losing trades (we call them rents) 33% winning trades and 33% break-even trades (I call them winning as you've made back your potential loss)

EUR/USD AIMS The Hunt Sell Signal 

Next up is the euro dollar pair where we had a sell signal. It was a bit iffy but after some deliberation I took it as there were signs it might go down. The signal was there to take. Its a Free Trade (where we have already banked profits and stop loss is at entry level so no risk there)

EUR/USD Sell Signal. No fuss sell signal simply set your orders and walk away. 


You can see that our charts have remained nearly the same in the past 7 years of trading. Thats when I started this blog, back in 2010. And still trading the same system? One would wonder why? ... IT WORKS...


CAD/JPY Buy Signal - AIMS The Hunt - Cherry Signal 

Here is another open trade where we are long using A Cherry Buy signal. Its a simple process, you  get a signal, you apply your filter rules. Most of the entry rules are coded into these indicators so you need not do that analysis. Its already encoded.

A good trade where we have taken half at 1R and letting it hit its take profit level. We'll see tomorrow.

Have a good night ...

CAD/JPY H4 Buy Signal - AIMS The Hunt - Cherry Buy Signal