First of all, I love seeing you all taking advantage of this market chaos and social distancing and the 50% discount off the Backtesting Mastery course. I believe without a shadow of a doubt that the Backtesting Mastery course is the best course for any trader, new or experienced, to get to the level of consistent profitability. It's a simple methodology that not many people understand how to implement.
The questions I'm already getting from traders is fantastic! Proud of you all!
On to the real business of figuring this market out.
Yesterday I was talking to a trader who was asking me if I thought the FBO setup on the daily ES chart was a valid trade. He correctly noted that it was an FBO and not a FVBO, the distinction is important.
Using 1% risk (which is way too high to be using in this market in my opinion) you would need to have a $200k USD account to purchase one E-MICRO, not the E-MINI. You would need a $2 million dollar account to do it with an E-mini....
Hope you are well during this crazy time.
The "Thunderdomer's" are continuing their very intensive work of spending hours per day manually backtesting the Bear Volatile and Bear Quiet market regimes.
We had Grant do a monster backtest of the $SPX from 1962 to today, of only the bear regimes, either determined by SQN or by an obvious price action flip. As your skills develop as a trader, by doing these massive backtests you can rely less upon the SQN, a lagging indicator, and more on price action. This is represented in Grants manual backtest as you'll see he entered some markets while not in bear volatile or bear quiet regimes.
I have to say, I could feel Grants frustration through this backtest. He mentioned to me numerous times how hard of a time he was having trading bear regimes on a daily basis.
Over nearly 60 years of trading this returned 15.77%, who wants that sort of return beside people who refresh ZeroHedge all day long?
Literally you miss out on...
The FVBO has been doing quite well against some US Dollar FX pairs this past week, I pointed them out on Twitter. Let's have a look at USDJPY
Earlier in the week I was talking about the VBO setup, being the first breakout of the channel. I have totally cut out this strategy from my main trading and have improved to the new VBO 2.0 (vbo +, or whatever we decide to name it!).
The new VBO would not take that first breakout and instead wait for the FVBO, which we saw play out nicely on Monday and Tuesday, hitting our profit target with little pause. Where VBO 2.0 comes in would be a pause and a reversal higher...we did not get that.
Additionally the Bear Quiet/Neutral regime that USDJPY currently is in, doesn't work very well with VBO2 but it is incredibly powerful trading the FVBO.
If you are utterly confused by now, sorry. I am putting together the full VBO2 and FVBO strategy videos and some backtests. Stay tuned there.
Next we had the USDCHF which is...
When I decided to do the Trading Thunderdome in July I knew we had a huge demand for traders that were looking forward to joining. I was surprised to find out that there were so many traders who were ready to pay the steep fee to join, but weren't ready to go yet. That is, they still had a lot of work to do to benefit and contribute before being able to join the Thunderdome.
Rather than take their money and run them through it anyway. I started thinking of how I could help more people get to a place in their trading that they would be in a position to benefit from the Thunderdome.
To all who signed up and paid for the Thunderdome, my apologies, we will be postponing the Thunderdome. I will be giving you a refund.
Now we need to focus on making traders better, before the Thunderdome. I have some ways that I am looking at making that happen, in a way that is affordable and effective.
Ok on to markets....
This morning at about 4am I rolled out of bed (we have a 2 month old son so my wife and I work in shifts), did my meditation/breathing, then took the baby monitor from my wife, pulled an espresso, grabbed my laptop and got to checking out the happenings overnight.
In the Pollinate Trading Lab, our private slack group (that is just freaking amazing) RogerDodger (his screen name) asked
If you don't have images enabled he asked "Is there a resource where I can learn about SQN and the rules for using it with FVBO?"
Depending on when you joined the email list, you likely have a list of emails from me explaining it. I will be putting that together into a book and making a resource to members of the lab once I finish editing and organizing.
Until then, let's talk about it here.
First let's talk about Market Regimes. Categorizing the market, any market, by a regime type is similar to having a calendar. A calendar is useful to match seasons with location, for example if I...
If you aren't a part of the Pollinate Trading Lab you are missing out! We have a great bunch of traders in there now sharing backtests, setups, knowledge, code (for those of you who are interested in using AI and algo's), we even have a shared Google Drive of all our resources available for members.
This is not a signal service, don't join if you want someone to tell you to buy $F stock at X price or short $FB or whatever.
Rather if you want to have access to a bunch of real traders who are talking about the various setups they are seeing and what they are looking at doing in the markets that day, this is the place to be. We have traders from hedge funds, prop traders, family office traders and professional traders who have been trading for years (decades).
You don't need to have completed a...
I've been quiet for about a week now in your inbox and on Twitter, mostly because we nailed that selloff dead on! And there's nothing I love more than forgetting to do a big ol' victory lap!
Most importantly I hope we got people out of too much long exposure and maybe some of you more fast money types nailed the short.
One of our amazing Pollinate Lab community members Abhay coded up the FVBO for Tradingview. It's just the first version and yeah, we have some improving to do on it, just like any good project does. Continuous Improvement is a cornerstone of my belief system, especially in product development!
I'm back in action this week so hopefully we'll have some good trading as we get positioned for Q42020 setups.
Here's the code:
// This source code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © monikabhay
There is some formatting issue from the earlier email I sent with the FVBO code in it. You can either troubleshoot that yourself or follow me on Tradingview and leave a comment on the strategy and I will give you access to it.
I've been sending a bunch of emails this past week for Black Friday and Cyber Monday, yes we have a 50% discount and yes I'm going to pitch it....again!
But first let me provide you some value!
I wanted to share the work that two traders in the Trading Lab and alumni of the Systems Mastery course have collaborated on.
The reason I teach the FVBO strategy is because it is a very high win rate strategy. That's easy. But one of the other reasons I teach it is that it teaches people how to trade mean reversion strategies.
Mean reversions are breakouts that FAIL.
This happens about 80% of the time, so markets actually breakout only 20% of the time. But most traders are always trading breakouts, which is a big reason why so many traders fail.
It's very difficult to be wrong 80% of the time. That's 8 failed breakouts, by the time you get to trade number 9 you are fatigued, discouraged, lost a bunch of money and it's hard to stay optimistic.
On the other...
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