Wednesday 2nd of September

Let’s get started with my daily watchlist! Really liking how September is shaping up!

Also finished backtesting a strategy (a mix match between everything I’ve learnt before hand) as well as reviewing 2019 script backtested data with a mate – so all in all – a good start to the month!

Daily watch!


NZD/USD

I rather like it, the zone was rather clear and obvious in July 2019, so I’m assuming a fair amount of people will be eying it up too, which is always a good thing, the more institutions are looking to short, the better, well as long as people are still hitting our offers 🙂

NZD/USD is a rather strange one tho, since we had 3 zones yesterday, we broke one yesterday that’s why I’m not showing it, but we may keep heading higher to go and reach the last one before the reversal

However if there’s a script entry or a clear 3rd rejection I’ll be taking it

https://www.tradingview.com/x/LaLaJJoi/


GBP/JPY

GBP/JPY, a potential short once it reaches the zone, there’s no weekly stack, however, there’s a nice monthly imbalance so I’ll definitely be looking for it

The selling zone is a counter zone, the only drawback is that it’s rather far from the zone it broke to the downside but… Will definitely be worth keeping an eye on it!

https://www.tradingview.com/x/erR49VOD/

And that’s it for me watch wise (for today that is, AU was also rather interesting, could’ve presented an entry yesterday but it was a maybe, not something I want to risk capital on)

Book wise…

I’ve finished Walden and The duty of Civil Disobedience by Henry Thoreau

I’ll leave you with one of my favourite quotes from the book

“Public opinion is a weak tyrant compared with our own private opinion. What a man thinks of himself, that it is which determines, or rather indicates, his fate.’

Henry Thoreau

Tweet wise…. Here’s my favourite of the day

Something worth keeping in mind

It’s not the quantity of people you know that will change your world, but your friends.

However, those few friends may come from wherever

Tuesday 1st of September 2020

Happy new month all! Let’s start it the proper way and talk about our watchlist. I didn’t post a watch list yesterday since I was out trying to run (I managed!!) a half marathon, so didn’t have much time left that morning

Let’s hope this month gives us loads of opportunities to make some decent returns!


AUD/USD

I’m rather liking this zone I’ll be the first to admit, yesterday the price didn’t reach high enough to have a clear higher timeframe stack, however we now have it, the price reached the monthly imbalance

The zone is rather nice, it’s not the strongest but it remains a clear one, however I do not want the price to move a lot further, I’m fine if the price breaks the imbalance zone since the selling zone is always a bit bigger but…

https://www.tradingview.com/x/pYK9U0YQ/


NZD/USD

I rather like it, the zone was rather clear and obvious in July 2019, so I’m assuming a fair amount of people will be eying it up too, which is always a good thing, the more institutions are looking to short, the better, well as long as people are still hitting our offers 🙂

NZD/USD is a rather strange one tho, since we had 3 zones yesterday, we broke one yesterday that’s why I’m not showing it, but we may keep heading higher to go and reach the last one before the reversal

https://www.tradingview.com/x/3dYbIcTW/


GBP/JPY

And the third but not last, GBP/JPY, I’ll be eying it up for a potential short once it reaches the zone, there’s no weekly stack, however, there’s a nice monthly imbalance so I’ll definitely be looking for it

The selling zone is a counter zone, the only drawback is that it’s rather far from the zone it broke to the downside but… Will definitely be worth keeping an eye on it!

https://www.tradingview.com/x/erR49VOD/

And that’s it for me watch wise (for today that is)

Book wise…

I’m still enjoying Walden and The duty of Civil Disobedience by Henry Thoreau

It’s definitely less of a page turner the more you move into it, the idea is fantastic, it makes me want to live simply and build my own house next to a pond, but at the same time… I’d miss trading 🙂

Tweet wise…. Here’s my favorite of the day

The key point being, “In the end” both Robert Greene and Ryan Holiday know they can make easy money marketing a shitty product, but it wouldn’t make them win – in the end.

Make sure whatever you do has the end in mind!

Friday 28th of August 2020

Let’s get started with my watchlist for this week! Looks like next week could be really promising so fingers crossed!

GBP/USD

We are finally getting closer to the zone I’ve been waiting on for the entire week! Yaa 🙂 Okay, I’m not emotionally involved, just happy markets are moving again, I missed this!

The zone I have starts around 1.33

https://www.tradingview.com/x/Knt7kBpf/


AUD/JPY

Now that we’ve clearly broken the zone that was keeping the price within a range, we have a clear zone below the 76 level, so I’ll be eying it up.

However it’s not for today, it will take time to come back down, it’ll be for next week, that’s all good!

https://www.tradingview.com/x/RR1Ea3mt/


EUR/NZD

We are currently seeing EN break through a trendline so will be keeping an eye on it, if it comes back up we have a pretty zone to short it from.

Let’s hope institutions push the price back higher so we can get an entry before the real drop comes in

The zone I have drawn in is around 1.81

https://www.tradingview.com/x/m8qrUnpc/


NZD/CHF

It’s basically the opposite to the previous chart, so similar reasoning, it just broke a trend line so will be keeping an eye out on a potential long for next week!

The zone is around 0.595

https://www.tradingview.com/x/vOaPwvfe/

Book wise…

I’m still enjoying Walden and The duty of Civil Disobedience by Henry Thoreau

Tweet wise…. Here’s my favorite of the day

I’m really starting to enjoy exercising nearly on a daily basis, used to do it for the looks, never managed to keep doing it for longer than a month or two. Been three months that I do it purely for the feeling I get during and afterwards… Hope to keep it up

Thursday 27th of August 2020

My daily watchlist is like this:

AUD/USD

It’s on watch, definitely not for today, but I’ll keep an eye on it, I’d be keen for a long around the 70.00 level, I’ve got a nice counterzone there so will be definitely keeping an eye out for it.

However, once it breaks this current trendline / phase line it may create an imbalance at this level which would make it an interesting short if it has a higher timeframe stack (just checked, it has one)

If you looked at my AUD/USD chart yesterday, you would’ve noticed the zone I had draw around the 70.00 level was a lot bigger, it is smaller today since I adjusted the zone to the higher time frame stack which made it smaller

https://www.tradingview.com/x/p3ZvM35Q/


EUR/AUD

I’m still liking this pair, it’s been on watch for the entire week I’ll admit, sadly, EUR/AUD is move sideways so there hasn’t been much change

Let’s hope we’ll get to short it before it gets to the lower zone where we’ll be looking for a long, otherwise it’s life and there’s nothing we can do, we’ll just have to wait

https://www.tradingview.com/x/bwRVS19L/


GBP/AUD

I’m still keen for a short on GBP/AUD, we’ll see how that goes, it’s the same s EUR/AUD, however we could argue that it’s currently forming a correction to push one more leg higher before breaking down so I’m happy as it is

I’ll be interested in both long and shorts so I’ll take whichever comes first, the price action will decide for me

https://www.tradingview.com/x/Gp7Iun7j/


EUR/NZD

Yaaaaa one new pair on my watchlist! Exciting no?! I thought so!

Here I’ll be looking for a short around 1.81, it has a monthly stack, I’m liking our current weekly candle, however that means if we close like this, we’ll have to wait for next week to be able to take a shot at a short on this pair.

But that’s trading, just sitting on your hands waiting for the right moment

https://www.tradingview.com/x/YwGyBEWH/


NZD/CHF

OH MY JOLY GOD, yet another pair on watch what am I doing, I’m too kind 🙂

Actually this is a pair I barely ever trade but was mentioned by one of my mentors @newcapitalfx so I thought I should check it out and it was indeed a good one so I’m adding it to my own watchlist.

That’s the benefit of having a community!

https://www.tradingview.com/x/65d2tO9O/

Book wise…

I’m still enjoying Walden and The duty of Civil Disobedience by Henry Thoreau

Tweet wise…. Here’s my favorite of the day

Wednesday 26th of August

Let’s keep sharing the daily watchlist when it comes to my FX trading…

A rather boring week, no movement whatsoever in the pairs I was keen on sadly… That being said, rather happy since I was really struggling yesterday without my coffee

My watchlist sadly hasn’t really evolved so if I may, I’ll just copy paste yesterdays watch (sshhh don’t tell anyone) and yes I actually even copy pasted this… Sorry but…


However, before I do that, I’ll add AUD/USD

It’s on watch, definitely not for today, but I’ll keep an eye on it, I’d be keen for a long around the 70.00 level, I’ve got a nice counterzone there so will be definitely keeping an eye out for it.

Before you ask whenever I care about the fundamental move of a more bearish USD, I’ll just say, I don’t trade fundamentals, I keep them in mind, especially for longer term positions, however most of my trades are closed within a week, so aside from big news I don’t except much movement

https://www.tradingview.com/x/FfupT6B4/


EUR/AUD:

I am observing a counter zone at 1.666 to 1.676 that could be quite interesting so my alert is set there.

There’s also a rather clear weekly stack so I’ll be keen on it once the price reaches that zone

https://www.tradingview.com/x/OApkSUis/


GBP/AUD

Rather similar to EUR/AUD it’s a clear counterzone

The zone I’m looking at is 1.851 up to 1.866, once the price gets there I’ll be looking for a nice little short, it also has a weekly stack

https://www.tradingview.com/x/tGdZznSn/


GBP/USD

I’m also interested in GBP/USD for a short coming from a zone that was created due to a trend line break (so taking the best value). The zone I’m looking at goes from 1.333 up to 1.342 (or maybe even up to 1.351)

There’s also a clear weekly stack so rather keen, looking forward to it reaching that zone

https://www.tradingview.com/x/MtdAhWbj/


NZD/CAD

Liking this potential zone, we’ll see what happens once the zone is reached

The zone I have drawn goes from 0.855 on to 0.848

https://www.tradingview.com/x/fdYYcKaX/

Book wise…

I’m still enjoying Walden and The duty of Civil Disobedience by Henry Thoreau

I’m not sure if it will give me a lot of quotes, however I am rather enjoying the fact it makes you reflect

So instead, I’ll leave you from a different book (A Guide to the good life by W Irvine)


One way to avert this anger is to think about how we would feel if the incident had happened to someone else
instead. If we were at someone’s house and his servant broke a cup, we would be unlikely to get angry; indeed,
we might try to calm our host by saying “It’s just a cup; these things happen.” Engaging in projective
visualization, Epictetus believes, will make us appreciate the relative insignificance of the bad things that happen
to us and will therefore prevent them from disrupting our tranquility.

A guide to the good life

Tuesday 25th of August 2020

Sorry I’m rather slow today, already been around 40hours without coffee… This detox was definitely needed based on how I’m feeling

My watchlist sadly hasn’t really evolved so if I may, I’ll just copy paste yesterdays watch (sshhh don’t tell anyone)


However, before I do that, I’ll add AUD/USD

It’s on watch, definitely not for today, but I’ll keep an eye on it, I’d be keen for a long around the 70.00 level, I’ve got a nice counterzone there so will be definitely keeping an eye out for it.

Before you ask whenever I care about the fundamental move of a more bearish USD, I’ll just say, I don’t trade fundamentals, I keep them in mind, especially for longer term positions, however most of my trades are closed within a week, so aside from big news I don’t except much movement

https://www.tradingview.com/x/FfupT6B4/


EUR/AUD:

I am observing a counter zone at 1.666 to 1.676 that could be quite interesting so my alert is set there.

There’s also a rather clear weekly stack so I’ll be keen on it once the price reaches that zone

https://www.tradingview.com/x/OApkSUis/


GBP/AUD

Rather similar to EUR/AUD it’s a clear counterzone

The zone I’m looking at is 1.851 up to 1.866, once the price gets there I’ll be looking for a nice little short, it also has a weekly stack

https://www.tradingview.com/x/tGdZznSn/


GBP/USD

I’m also interested in GBP/USD for a short coming from a zone that was created due to a trend line break (so taking the best value). The zone I’m looking at goes from 1.333 up to 1.342 (or maybe even up to 1.351)

There’s also a clear weekly stack so rather keen, looking forward to it reaching that zone

https://www.tradingview.com/x/MtdAhWbj/


NZD/CAD

Liking this potential zone, we’ll see what happens once the zone is reached

The zone I have drawn goes from 0.855 on to 0.848

https://www.tradingview.com/x/fdYYcKaX/

Book wise…

I’ve just started Walden and The duty of Civil Disobedience by Henry Thoreau

I haven’t yet finished it (it’s only been two days I’m sorry I’m not Ryan Holiday) but finding it rather lovely

Really makes you wonder why we don’t live in that manner, especially in times where there’s so much negativity around us

Have you read it? What’s your favorite part?

Monday 24th of August 2020

Hope you had an amazing weekend guys!

Let’s dive straight in, I’m sorry but there’s more or less nothing on watch for today, I’m still eying up the same pairs as I was on Friday

EUR/AUD:

I am observing a counter zone at 1.666 to 1.676 that could be quite interesting so my alert is set there.

There’s also a rather clear weekly stack so I’ll be keen on it once the price reaches that zone

https://www.tradingview.com/x/OApkSUis/


GBP/AUD

Rather similar to EUR/AUD it’s a clear counterzone

The zone I’m looking at is 1.851 up to 1.866, once the price gets there I’ll be looking for a nice little short, it also has a weekly stack

https://www.tradingview.com/x/tGdZznSn/


GBP/USD

I’m also interested in GBP/USD for a short coming from a zone that was created due to a trend line break (so taking the best value). The zone I’m looking at goes from 1.333 up to 1.342 (or maybe even up to 1.351)

There’s also a clear weekly stack so rather keen, looking forward to it reaching that zone

https://www.tradingview.com/x/MtdAhWbj/


NZD/CAD

Liking this potential zone, we’ll see what happens once the zone is reached

The zone I have drawn goes from 0.855 on to 0.848

https://www.tradingview.com/x/fdYYcKaX/

Book wise…

I’ve finished reading The Prince (By Machiavelli)

I’ve just started Walden and The duty of Civil Disobedience by Henry Thoreau

Really enjoyed the Prince so I’d highly recommend it

Instead of doing a recap, figured I’d share the three key lessons it brought out for me

1- don’t hire mercenaries, what they build enables you to go fast but you’ll loose it (land) quickly once they leave you, they aren’t fighting for you, they are fighting only for money (freelancers) i.e. it’s better to have a team than have freelancers

2- don’t invite a powerful person close to you, don’t offer to Spain if you’re France to split Italy if they have no presence there, it will just create a potential enemy on that side too — help weaker players because they’ll be grateful and can’t fight you, helping players of your size makes them more dangerous (i.e. be careful who you help in business they could eat you)

3- while dealing with people you have two choices, be nice and hope they’ll come to your side because of it or really really hurt badly them so they can’t avenge themselves even if they want to in the future (i.e. if someone starts a conflict with you, best way to finish it is making sure the other guy can’t stand afterwards)

Friday 21st August 2020

Let’s get started with my daily watchlist

I probably should’ve waited for a more interesting day to start sharing my daily watch but whatever 🙂

EUR/AUD:

I am observing a counter zone at 1.666 to 1.676 that could be quite interesting so my alert is set there.

There’s also a rather clear weekly stack so I’ll be keen on it once the price reaches that zone

https://www.tradingview.com/x/MjwO8O00/


GBP/AUD

Rather similar to EUR/AUD that’s why I’m not going to follow the alphabetical order (by the way, why is there an order? It’s just letters, are we saying that M is better than N? anyway…)

The zone I’m looking at is 1.851 up to 1.866, once the price gets there I’ll be looking for a nice little short, it also has a weekly stack

https://www.tradingview.com/x/o1PHX3DW/


GBP/USD

I’m also interested in GBP/USD for a short coming from a zone that was created due to a trend line break (so taking the best value). The zone I’m looking at goes from 1.333 up to 1.342 (or maybe even up to 1.351)

There’s also a clear weekly stack so rather keen, looking forward to it reaching that zone

https://www.tradingview.com/x/pe5kUEDb/


NZD/CAD

Liking this potential zone, we’ll see what happens once the zone is reached, it may be a little weaker than the previous three but figured I should probably mention it anyway

The zone I have drawn goes from 0.855 don to 0.848

https://www.tradingview.com/x/LeVfs27f/

Book wise…

I’m currently reading The Prince (By Machiavelli)

It’s rather good if I may say so! It may be targeted to the 16th century and for princes, but there’s so many similarities in life both personal and business that I think it is great.

I’m about half way through the book and he shows the drawback of using mercenaries to gain control of territories, that example can be used in business these days about hiring agencies to do your marketing etc… It may be useful in the short term but it sets you up for your failure in the longer term

If an injury has to be done to a man it should be so severe that his vengeance need not be feared.

Machiavelli

Have a good one and see you on Monday!

Dealing with my biggest drawdown (trading)

Fuck it, I guess I should admit to it…

My last 8 trades in a row were either a break-even or a loss

Can you imagine that?

8…

It hurts to just mention it, my ego took a serious beating…

But wait, instead of running away from losses let’s dive into them

Let’s put some music on (I like Worakls) on and talk about them, since I can’t out run them

This made me (re)backtest my strategy for 2020

I had recently adjusted it based of new knowledge and new testing.

The refinement I just mentioned took place without me backtesting the new trading plan, instead I truly believed they were worthwhile tweaks and additions so I just blindly added them to my plan.

It made my trading more mechanical, fuck yeah, that’s what I’m about!

So I just went through all the backtesting and applied those refinements, this lead to this:


In 2020:

42 positions up from 33

A strike rate (including BE) of 42.86% and only 28.55% of winning instead of 66.65% (including BE) and 54.44% of winning

An average return of 0.33% it used to be 1.31%

A total return of 14% instead of 43%

Eh fuck. Why did I adjust my plan

What the FUCK happened?????

That’s a good question..

II tweaked my trading strategy based on what I thought, on a logical basis would work better than what I used to do. And since it was only slight refinements I didn’t dive deep enough in my backtesting to make sure it was good changes.

So that made me deal with a 28% strike rate (of winning trades) instead of 55% which was the result of my previous plan

I tried to improve my plan, but instead I made it a hell of a lot worse.

It hurts, I thought everything I had done was good, smart and the right choice, well, it may have been in past years, but in 2020 it wasn’t the case…

Anyway, that’s the story about how that losing strike happened.

Even with a 28% winning rate the probability of having 8 trades in a row that aren’t winners is of 7.22%

Which is actually quite high knowing how many trades we shall take over our life time.

Let’s do an exercise to know the probability of having trades going “bad”

It’ll be fun I swear! The most important part is to know the probability of your winning trades (only winning trades, don’t include your break-even in this strike rate for this exercise)

So what is the probability you’ve got?

P= __%

So for me, according to my older plan, that P is equal to 55%

Now let’s do a tiny winy bit of maths (I recommend using http://www.wolframalpha.com if you don’t love maths and don’t have a calculator next to you :D, that’s how I passed my maths exams at uni!)

To get the probability of having X losses OR breakeven in a row we’re going to do:

(1-P)^X

Eheh, never thought I’d be talking maths on my own blog, what happened to me…

So for me that is (1-0.55)^X

Let’s have a look at the probability of having 5 losses OR breakeven in a row

(1-0.55)^5=1.85%

Okay that’s already WAY MORE REASONABLE!!! So in that case, with my previous strike rate, the probability of having 5 losses in a row is only of 1.85%

Over a lifetime of trading you’ll definitely take more than 100 trades, well at least I will that’s for sure so the probability of having 5 losses in a row within the next 5 years is actually pretty high…

Okay so that’s good to know I guess? I mean I understand the maths behind the probability of having a drawdown, I didn’t fail Math 202 at uni Max… I know you did!! Is there anything else you can talk about?

ABSOLUTELY!!! Well maybe 🙂

Use a deck of cards to represent probabilities

Oooohhhhh, finally a useful idea Max you were kinda wasting my time up to now..

adityachinchure on IG took this photo

(I really should say, thank you so much for reading this far, it means the world to me <3)

Okay so now unto the exercise I started talking about..

So with my 55% winning rate how can I represent that?

Well I’ll be lazy and say that it represents half the deck of cards because it makes life easier

So every single black card within the deck is a winning trade that represents 50% of the cards

I also had 11% chance of my trade being breakeven

In that case I’ll take 6 cards and turn them to breakeven trades

The RED 1, 2, 3, will represent breakeven trades to represent around 10%

The RED 4, 5, 6, 7, 8, 9, 10, J, Q, K will represent losing trades (20) out of the 56 card deck to represent 35%

So I delt myself 5 cards (avoid dealing more than 5 cards since with cards the cards that are already present influence the probability of what’s coming afterwards when it’s not the case in trading)

Pretty cards eh

So here’s the result:

8R = L

2B = W

2R= BE

10R= L

3B= W

That’s perfectly normal distribution for me, I have no issue with it I wouldn’t be surprised if it happened in real live trading to me. Just another day at the office.

This morning before having the courage to write this blog post I did the same exercise, I had 7 red cards in a row (I delt myself 3 hands of 5) the probability of having a R card that is always (more or less) the same.

But that surprise this morning made me realize, even with a 55% winning rate, the possibility of having 7 losses or BE in a row was there and I saw it in the cards.

That kinda sucks I’ll admit, but there’s nothing we can do about it

So I’m going to be dealing myself cards every single day from now on to represent the probability of having a negative streak of trades.

That being said, I’m also going to revert back to my previous trading plan and ignore all the changes I had applied to it because well… Yep it ain’t working.

Thank you for reading this post, I hope it was helpful!!

You don’t really trade the market

Everyone thinks that we trade the market we’re invested in, would that be FX, commodities, stocks etc etc

But is that the case? I mean a market is a market, it’s nothing at all.

It’s not as if you go to a counter and ask for two dozens oysters and some nice smelly cheese, that’s something we can eat and enjoy.

No, we only trade our beliefs.

Currencies are only worth X because of the belief/trust we have that they are worth that much, because someone told us it was the case.

Trading is only a matter of showing our belief that a currency is going to become more valuable / trustworthy for others

Don’t focus on trying to understand how a market moves, it’s only the sum of all the beliefs of the participants.

Instead, try to understand how you come to believe something, and how others change their minds.

If you’re able to understand a change in the mind of the other traders/investors before it takes place you’ll be well off.

You don’t really trade the market. You trade your beliefs about the market. 

~ Van Tharp