(1) trade, 1-.002 = .998

This trade was a mistake in calculation.  The movement from 1.10865 down to 1.10836 is .00029. that's 2.9 pips, not 29 pips.  My stop loss was set for approximately 30 pips.  Because of that, I divided by 300.

Calculation: .02(105,000)/(10*30) = lot size = 2100/300 = 7 lots.

This mistake was a good one considering I lost the trade.  Anyway, I also switched shifts this week, so my schedule is out of whack. I went to make a trade last night around 2300, and realized that the markets were already closed.  Therefore, 3 trades to come next week.

My running interest rate is (the current)*(this week's return) = 1.04*.998 = 3.79%. If I started with 100,000 it would be 103,790 at this point.

P^1.0379 = P^(r^7)
r = 1.0379^(1/7) = 1.005 = .5% per trade, if they were all made consecutively.

If I make 2% a week, that's 1.02^(1/2) = .99% a trade if made one after the other.

If I make 1% a trade for 4 wks, that's 8 trades, 1.01^8 = 8.2%

2% a week for 4 weeks, 1.02^4 = 8.2%

Let's go to 52 weeks!  1% a trade for 52 weeks: 1.01^104 = 281% if trades are consecutive!

2% a week for 52 weeks: 1.02^52 = 280%.

Therefore, averaging 2% a week should work out just fine :)

The strategy for next week is the same as this prior week. Trades will be made at market openings.  Here's the market clock (PST) image I'm using. I really want a physical clock just like this, but this is just as good. Ultimately, I'll know it by heart:

So, I'm entering at 1500-1600 for USDJPY, 2300 and 0530 for EURUSD and GBPUSD. I'm sticking to those because of their potential for volatility.

And here are the most important events coming:

1. US New Home Sales - Monday 0700
2. US Core Durable Goods Orders - Tuesday 0530
3. US CB Consumer Confidence Index - Tuesday 0700
4. US Pending Home Sales - Wed 0700
5. US EIA Crude Oil Stocks Change - Wed 0730
6. US Fed Interest Rate Decision - Wed 1100
7. US FOMC Press Conference - Wed 1130
8. UK  - Bank of England (BoE) Interest Rate Decision - Thur 0400
9. UK -  BoE Governor Carney Speech - Thur 0430
10. USD GDP - Thur 0530
11. JPY Retail Sales - Thus 1550
12. EUR GDP - Thur 2230
13. EUR GDP - European Union GDP Fri 0200 

From my reading, I hear both sides, "Avoid trading the news," and "Anticipate the movement."  Basically, it's the old fundamental vs. technical analyzes arguments.  I'm in the camp of mixing the two, hence my strategy in trading based on anticipated volatility (from technical analysis).  Still, it's important to know what big news is coming.

The bold ones are ones that could effect me this week.  So Tuesday and Thursday can be some interesting days.  We'll see what happens, yes?

+2 Trades

Before going into my successful trades, the book, Accounts Demystified (2008) was completed today. It's one of the better books of late that will stay on the shelf for future reference.  It defined a corporation differently, and brought perspective into shaping balance sheets, P&L statements, analyzing corporate statements, and even discussed ways that corporations design statements for their benefit. By the end, it was clear that these tools were needed.  It's one thing to go "by the book," and have integrity. It's another thing to understand the purpose of the rules and procedures in place.

Unlike the analogy of someone sitting at a stop sign when there are no cars in sight in any direction, it isn't an issue of "doing what's right when no one's looking."  It's not an issue of integrity, patriotism, etc.  A better analogy is advertising.  Well-designed Financial statements can be your biggest marketing tool to investors, and therefore can lead to expansion of your business.  More so than the ideals of the company, the mission statement, etc., when the numbers look good, people want to buy in.  If I'm selling something, the least knowledgeable person about that product is the worst off.  Some people can watch infomercials and spot what products will fail after a week's use, and others fall victim to the new, shiny toys, and watch their investments depreciate to $0.  Similarly, you have to be able to break down a company's finances with a few glances at their statements, knowing the tricks of the trade, what should be further analyzed, etc.  Simply put, great book.

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Two trades, entered before the market openings on Monday.  For GBPUSD, it was around 0400, for USDJPY it was around 1400.  Actually, times are on the snap shot, so a little before that.  

So this week's average was 5.5/2 = 2.75%.  Obviously, this is a new demo account. I recently got a new phone, couldn't find the login info for the other demo account, and started over. Results will be the same though. At the end of the year, a starting balance will be chosen, say $10k, and each percentage week to week (52 total) will be applied to the balance consecutively. Matter of fact, let's start that now:

Week 1: 2.5%
Week 2: (1.2%) - Negative percentages in parentheses
Week 3: 2.75%

x^[1.025*(1-.012)*1.0275]= x^[1.025*.988*1.0275]= x^1.04

Therefore, so far I've made 4% profit on any starting investment.  For $10k, that's $400 bucks profit.  Still, I'm choosing my position sizes based on risking 2%/trade or less for my SL.  The TP is set first, based on what kind of movement I'm deciding on.  For example, "GPBUSD going up 20 pips." That's my TP. SP would be 20/(2 to 2.7) = 7.4 to 10 pips.  Position size is then (.02)(100,000)/(74 to 100) = 20 to 27 lots.  Wow, I've never had a position that large... As you can see in the snapshot, 14.50 is my highest so far. That's with closing before the TP is reached. Babies crawl until they're tired of being on their knees!

(4) Trades

In the negative this past week. 4 trades were done on GBPUSD and USDCHF. They were conducted around 4am PST. Trading around 2300 PST has proven more profitable because of the time difference. The negative trades were also due to the volatility at those hours before the close on Friday.  Trading earlier in the week will prove my strategy in the next couple of days.

No forex news was reviewed, and the trades were for around 20 pips.  I utilized the buy stop strategy. Because of the volatility, having set up buy stops in both directions (buy/sell), I was unable to close one after the other was processed. The market was so volatile (or my range so small), that all the deals were processed and market fluctuated in both directions bringing me negative all around.  Lessons learned the hard way.  I'll review these more today, as well as spend a few minutes seeing what news may be coming out in the next two days.

As far as books go, Accounts Demystified is a great book, written by an English guy, referencing pounds the whole way through. Still, the understanding of American accounting is explained also. Therefore, it's a unique perspective I'm glad to have stumbled upon.  It's not a very long book, so the plan is to finish it this coming week.  That is all for now.

$100,000 paper money

Seems appropriate that the last account was unaccessible. Regardless of the balance, the percentages matter most.

  

The GBPUSD trade started to drop off. I expect movement within 1-3 hours on these trades before they level off or reverse direction. It was a safe play.

The USDCHF trade was done with no monitoring after it was placed. It hit the TP, and that's the best case scenario.  So, the $5488 profit is 5% per 2 trades, or 2.5% per trade.  I'll take that. Week 1, check.

Going into next week, I'll be using the same strategies, and actually get into the books. I have yet to start them.

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FOCUS:

I was planning on pursuing an IT certification because I had taken some classes in the subject a couple of years ago.  Are you a trader?  Yes, but in case I was looking for some position in the future, it would be a nice resumee builder.  

No sir, that's the wrong line of thinking.  For one, I have a career in place right now, and I have areas of development already in place to help move forward in that endeavor.  That is PLAN B! I'm working to develop my business, my PLAN A.

So, forget the CompTIA+ cert. There have been hours spent pursuing completion of courses and training that I thought or was told would be beneficial.  The takeaways from all these courses were the same:

1. I can learn anything I want.
2. Anything learned will mostly be lost if months go by without accessing the information.
3. I can make time for anything I put my mind to
4. It's easy for me to acquire knowledge, the change would be to develop skills in applying it.

With that, my approach to trading must be adjusted.  The goal of 44 books is to satisfy and conclude the routine I've developed through academia of reading and study.  The marginal adjustment is building more action items of application and practice into my daily routine. Ultimately replacing the time spent reading specific books with reading or listening ANYTHING else.   This starts with the 2 trades a week.  We'll see where it leads.

2020 Plan of Action

Alright, With the conclusion of 39 or 44 books, there is a push to wrap this up.  The remaining books will be,

1. (Long Term) Accounts Demystified (2008)
2. (Wall Street) Risks, Decisions, and Management in Financial Markets (2005)
3. A First Course in Corporate Finance (2006)
4. (Swing) Trading Systems and Methods (2013)
5. (Trading Bull) Mastering Market Timing (2012)

That was difficult to narrow down. To recap, this is a conclusion to a self-constructed fundamental curriculum for trading of forex.  These books should be completed by the end of June.

At the same time, I will be placing 2 trades/week all year long. For my current MT5 account, my profit is -$750, with a balance of $4126.  This is after 3 months of trading this account (the other started around July) with a total of 26 trades, 8/26 gaining a profit.

All other goals are into the B and C priority categories.  They are still important, yet they are more contingent on where I am, what work demands, etc.  Many circumstances can keep me from:

1. Writing book on Linear Algebra
2. Running a half marathon
3. Taking another grad level class
4. Memorizing Fundamentals of International Banks and Exchanges

... In that order.  

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I'll take a brief moment and reflect. I ran 398 miles since July of 2019, on my way to a half marathon in February. I have decreased consumption of things bad for my body; through my mouth, eyes, and ears.  My goal is to continue that decrease and become the best me I can be.  It has been difficult to fight off the urges perfectly, and I'm encouraged by the progress made so far.

Family and home life are also improving.  I'm working on increasing my dreams, positivity, and actions toward my goals.  The B and C priorities take a back seat to goals I have with family, including but not limited to, 

1. Increased smiles and happiness in the home
2. Maintaining healthy diet
3. Supporting wife's business 
4. Building complementary curricula for daughter
5. Maintaining long distance relationships with family members

Alright, I hope these words inspire.  Off to a jog...

Corporate Finance

Finishing up the latest text, Corporate Finance by DeMarzo (2014), a lot's to be taken away.  This is book 38/44.  Familiar terms of present value, internal rate of return, real options, etc. were comforting in the context of corporate structure. More exciting were the interviews done with different employees of major companies and firms.

Directors of Finance, Chief Financial Officers, money managers, Professor of the International Financial System, Treasurers, VPs, Directors of Corporate Development and Strategic Planning, CEOs, and the host of institutions they represent fill the pages with insight into how financial discussions develop in those circles. I was surprised at the simplicity of the questions. "Describe how you manage Stanford's $16.5 billion endowment."

Now, the answers to these questions speak to the relevance of the topics discussed in the chapters.  For me, the sea of terms and ideas exist as a detailed picture in my mind. The picture has life, vegetation, the sea aforementioned, the sun and sky are visible, and there I sit admiring it all. The realization, however, is that this picture is a virtual one, a human construction, indeed the antithesis of nature.  The picture isn't refreshing. To take a deep breath, hear the birds around me, and take in the wonder of nature. That is the desire in my studies, to learn and appreciate more.

Corporate Finance allows me to see the importance of having partners with a routing in the international financial system.  Similar to having watched many foreign language films, I can recognize the language now. It's a little easier to hear one who speaks the language of finance fluently.    The question is who among them will be useful to me and ultimately the world in the future?

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I'll include another book I recently finished, Real Leadership by Dean Williams. So, that's 39/44.  By the way, there are plenty of books I read concurrently that don't make the list (i.e. historical, motivational, scientific). This one, though, gave me a lot to move forward with.  I was impressed with the language, the breath of research and anecdotes, and the general perspective of the author.

It relates to my pursuit as a trader as well as my goals going forward.  Dean Williams traveled across the world, consulting different leaders who faced a broad range of problems.  He analyzed their responses to situations, and compared them to leaders of the past.  Most importantly, through all his research and development, his desire to assist humanity shined through every critique and analysis he offered. It is unbelievably inspiring to learn about social and political systems extensively, through the eyes of one who loves humanity.  This precursor is often lost in the literature on trading or anything financial for that matter.

The passion for people to be happy and better their situation and their communities still  lives in me.  Hearing the desire in words on a page is like hearing my mom's voice in a crowd.  The book was nourishment, feeding that passion, and provided a blueprint for creating the perspective, bending the narrative, and taking the reins of one's life.  In all areas of study and development, that is the goal for the days ahead.  He talked about 6 challenges leaders face. I memorized them as "McDonald's CAT" (MCDCAT): 

1. Maintenance
2. Crisis
3. Development
4. Creative
5. Activist
6. Transition

He also spoke on "counterfeit" leadership, which I found to be very bold and even controversial to some. I completely subscribe to the ideas he offered, although I know some who wouldn't make that distinction because of the bureaucractic/political backlash they'd receive within their own organizations.  Basically, there are plenty of leaders (and parents) that believe in their style of leadership.

I offered this analogy to my cousin.  There are those who work off the model of "shepherd and sheep" and others subscribe to "partnerships".  The difference being in the former, people see themselves as either the one leading or the one following. Likewise, they put others into the categories as well.  If you see yourself as a sheep, you say, "Hey, you're suppose to be leading me! What's your problem? Tell me what to do! Clear a path for me to get this done! Help me out!"  And if you see yourself as a shepherd, "Hey, get back! I'm the leader! Follow me!  Shh!! Accept what I'm telling you!  You must understand, I'm called for this. Stay in your place!"

For the partnership, regardless of your position, you say, "Hey, I have an idea.  What do you think?  Let's move forward this way. Let's stop here for a minute.  I don't like that idea.  What about this?"

This is a generalization by far, and often the perspectives overlap in many situations.  The point is seeing leadership as a position with different responsibilities rather than something that gives you more power and control over people. Likewise, recognizing your power in ANY position you carry.  The CAT, forklift, or crane operator has a skillset that can literally destroy buildings, but they are trained to use the power wisely.  Likewise, traditional "leaders" must be trained in the same way.  The responsibility to maintain the corporate culture should be stressed bottom to top and top to bottom.  

D. W. gave me an appreciation for the human capacity to shape our corporations with the right mindset, and revived my belief that will indeed improve and continue reforming older, more outdated political and social systems.

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I'll save my goals for the next blog entry.