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Holy cow, I was just taking my pills and I'm already so fixated that I was applying the "delusional method" to the pills and almost took one big white pill (EUR) and two smaller red pills (GBP). Then I realized I wouldn't be shorting them and I woke up. Then I proceded to taking just one melatonin and one propecia, which is actually the most expensive one, so I should never treat it like a GBP contract.
 
Ok, I'll take my understanding one step further.

I was in the bath tub and just like Archimedes I understood some things.

I now finally agree that if the future is liquid enough I should trade the EUR/GBP future. Thanks for making me understand that. It just took me two days.

Now my point remains that it's good to monitor euro's and pound's relationship to the dollar.

But the point I now wish to make, but that I have to test, is this:

when these two currencies have reversals (almost always together) vs the dollar, they also have reversals vs each other.

Now my next step is to find out where the hell this future is traded, which symbol and so on, because I want to find out if I can actually look at it and trade it directly, as you both suggested. By the way it's really great to reason out loud in the company of you generous and intelligent people. Thanks.

I was reminded earlier, with my fixating on things and all, how a couple of times, in this past year, a dear friend of mine told me he read in a magazine that geniuses were somehow autistic because they focused incessantly on things until they became good at them. And he added - thinking of my many fixations (especially the one for trading) - that I shared some form of autism with geniuses. Great compliment. Oh yes. Because he wasn't making fun of me.

I think I am very much like travis in my avatar picture. Focusing and aiming all the time.
 
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Well the name-calling seemed a bit unnecessary, glad that you've edited it out now.

I think I've made all of my points, they're still there and I stand by them. There's no sense in me repeating it all and cluttering up your journal. I haven't said half the things you think I have though!
 
I know. I was just joking. I am sorry if I offended anyone. I thought that it was British humour to insult people in a joking way. Now that I apologized and even edited it the joke is not funny anymore. Maybe you got offended the moment I edited it out. Otherwise, had I left it, you would have thought "it has to be a joke". It's my sense of humour: I insult people. I would never insult you if I didn't consider you my friend. Now you should be worried... if I am not insulting you, it means I am being careful and weighing my words, like with strangers. Anyone who hasn't been insulted should be slightly offended.
 
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It's alright. Was more surprised than offended.

No one ever said this can't work, so you won't be proving anyone wrong. Some of the newer ideas that involve all 3 currencies (rather than just the gap) sound pretty interesting.
 
Well, here we are, about to go to bed. Melatonin is starting to kick in and taking effect. Today I made 250 from trading discretionary with the (former) delusional method, and I lost 300 with the systems. I said "former" because by now it's clear to me that I need to trade the EUR and GBP since the RP is RIP. Plus I believe that the USD has to be monitored because when there's a reversal there, there's a quick reversal on the euro vs pound, that will bring me money, whereas if there's no reversal, then I may still lose nothing, so overall it seems like it's less "delusional" than I thought and this is because I've finally understood what I am talking about (also thanks to the great inputs by WB and Gladiator).

I make money with discretionary and sometimes still lose it with systems, because I still cannot trade all the systems I have. Those things, overall, are closing every week profitably ever since I started measuring them, except for 2 weeks.

In order to be able to take advantage of all of them, I'll need about 30k. If I ever get to it. But I think if I can get to 20k, I'll pretty much take off. Until then, while I am between 10k and 20k, I'll be like the Wright brothers early airplanes:
 

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Another last thought, which is also a very good...

SUMMARY OF THE "DELUSIONAL" EUR + GBP SYSTEM

I've said that when you have a reversal on EUR and GBP (euro and pound vs dollar), I believe you also have a reversal on the EUR/GBP rate, which is not a given, but I believe that. Such reversal obviously will decrease the distance between the two (euro and pound). So say the pound rose 1%. That will decrease. Say in my futures EUR and GBP the ticks divergence was 40 ticks. That will decrease.

Now I believe that this only works if there is a strong divergence, in other words a strong trend in the EUR/GBP future, because otherwise you just won't know in which direction it will reverse.

So, my belief, backed by some money made, is that if you bet on this divergence being reduced in proximity of a reversal in the EUR and GBP (a reversal in either one of them is enough), this will happen, as long as the divergence is more than average. Let's say that it will happen several times a day, but on some days it won't ever happen. This is my theory.

On top of this, the method is particularly good for me, because it keeps me busy with many positions open (3 at least), without making me risk too much. I think this overall is the reason why I'll make money with it, for the first time in my 12 year long discretionary trading career.
 
Got answers to the questions above. No liquidity at all on the EUR/GBP future. No point in doing it.

I just started yet another statistical arbitrage EUR & GBP trade. There was a spread between them of 24 ticks, and the EUR looked like it was at a bottom. Breaking even after a few minutes.
 
RPZ9 isn't very liquid, no...
I think it does about 200 contracts per day (I'd have to check that) but that could be used to your advantage in some ways...
Overall though; its preferable (as its a system) for you to have liquidity to get in and out of positions no bother... And therefore maybe afterall
EUR/GBP futures isn't the best way to go - cash perhaps ?

Sorry if i'm speaking in a really 'smug' tone; i'm particularly proud of myself at the moment.

Right now we are trading @ 331 volume on december contract (To be precise)
 
Congratulations on your successful trading, today or whenever it happened, that made you proud. I think a good enough reason to trade my new system is that it keeps me very busy trading without making me lose any money. It's good enough for me. Actually so far I've made money for two days in a row, with the "LONG 1 EUR - SHORT 2 GBP" method.

The rules, that have evolved a bit over time, are basically that:

1) I don't accept a spread (between EUR and GBP) of less than 20 ticks,
2) that I don't enter unless I see an impending reversal on one of them, and
3) that I don't exit unless I make a profit of at least 80 dollars.
 

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travis said:
Congratulations on your successful trading, today or whenever it happened, that made you proud. I think a good enough reason to trade my new system is that it keeps me very busy trading without making me lose any money. It's good enough for me. Actually so far I've made money for two days in a row, with the "LONG 1 EUR - SHORT 2 GBP" method.
Click to expand...
Thats good Travis;
I haven't been trading today due to non-farm payroll pre-market... It didn't behave how i expected it to and therefore it creates an uncertain/lack of confidence situation in the days trading, so i just avoided trading today...

Msn if you fancy?
 
Yes, sure but for very short because today I have two guests at home and before they come I have to empty all the urine-filled milk bottles in my room.

 
END OF ALL DELUSIONAL SYSTEM EXPERIMENTING

See attachment to find out how I experienced first hand the fact that they can diverge even more. From diverging 24 ticks to diverging 50 ticks. I am officially done with experimenting with this system: I will stick to my systems, and not even create any more for a while. Today I am going to lose, as usual, more than I've made in all previous trades. And it happens every single time I trade discretionary, no matter what method I use.
 

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i don't think you can judge results of a system from one day; After all, flipping a 50/50 coin to long and short and closing @ days end could produce a win or a loss on any particular day :)
 
That's your strength right there, and quite uncommon, because at such a young age you're balanced enough to keep in your mind a statistical account of a long series of trades without letting losses affect you. That's why so many people cannot trade discretionary and you can instead.

Personally, I am done with this system. It did not seem very reasonable to begin with, and now that I've found out how much money it can lose (in line with all my discretionary trading: more losses in one day than gains in a whole week), I am discarding it altogether. It is true that with this quick discarding of things that don't work once, I would have discarded already all my profitable systems and would be left with nothing now, but I avoided this problem via backtesting and forward testing: it clearly shows me how one loss is followed by a win, and then I don't discard the system. You've got this statistical approach built-in in your own mind. I don't, because emotions get in the way: today's loss bothers me so much that it makes me throw away the system.

On the other hand, that's also conversely my strength: being quick at discarding things that don't seem to work came in handy in building dozens of systems. Testing, setting aside what worked, discarding what didn't... so on... endlessly.

----

Today I bought my laptop. First step towards quitting my job. I'll be able to travel and connect to a server to start my systems, taking just 30 minutes per day. I'll also be able to use it for power outages as its battery lasts much longer than the UPS for my desktop.

----

After today's loss on the delusional system, even worse if I consider that I've spent trading money to buy the laptop, I can sum this week up by saying that I'm down 1000 dollars compared to a week ago. Not good. But no disasters. Yet another positive week for my systems as a group. Not half as good as the previous good.

----

Why am I discarding systems so quickly and easily, you might ask. Well, because there's no digging required. The gold as far as systems is right under the stone. You lift it, and see if the system produces gold. If it doesn't, you move on to other stones and lift them. There's so many stones and so much gold, that you would just waste time by digging and digging into the same spot: there's great abundance of profitable systems. You should just go through new ones one concept per week. Spending longer means wasting your time.
 
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DAMN DELUSIONAL ******* SYSTEM...!

Yesterday my friends left, I got a little drunk, and it made me forget what had happened, but this morning I woke up after 11 AM and I realized how bad this delusional ******* system could actually behave, as it ultimately made me lose close to 400 dollars in just one delusional trade.

I have to hand it to you, and you, for warning me from the start: you were 100% right in everything you said:

1) I wasn't doing anything magic, nor complicated
2) I was simply operating on a "synthetic" EUR/GBP future position
3) Nothing guaranteed to me that because the EUR and GBP seemed like they were reversing vs the dollar, they were actually going to reverse, and further reverse with respect to one another: yesteday they didn't reverse in either sense, and they kept diverging all the way to 50 ticks.

I am not a genius, I am not autistic, I am nothing. Just like my personality disorder says, on that test page, or somewhere else, I can't find it right now, I go from feelings of great self-esteem to very low self-esteem. Today I am feeling like ****.

I read more, while looking for the feature of the narcissist, and I found this that might explain more about me, and it is slightly related to what I was saying about going from one extreme to the other (which also reminds me of borderline, yet I am not that for sure):

The narcissist – wittingly or not – utilises people to buttress his self-image and to regulate his sense of self-worth. As long and in as much as they are instrumental in achieving these goals, he holds them in high regard, they are valuable to him. He sees them only through this lens. This is a result of his inability to love others: he lacks empathy, he thinks utility, and, thus, he reduces others to mere instruments.

If they cease to "function", if, no matter how inadvertently, they cause him to doubt his illusory, half-baked, self-esteem – they are subjected to a reign of terror. The narcissist then proceeds to hurt these "insubordinates". He belittles and humiliates them. He displays aggression and violence in myriad forms. His behaviour metamorphoses, kaleidoscopically, from over-valuing (idealising) the useful person – to a severe devaluation of same. The narcissist abhors, almost physiologically, people judged by him to be "useless".

These rapid alterations between absolute overvaluation (idealisation) to complete devaluation make long-term interpersonal relationships with the narcissist all but impossible.
Click to expand...

And now, back to work: implementing the last 5 systems, and then I'll be done. Hopefully the markets will have mercy and let me rise again to enough cash to believe in my dream again. Or rather believe in my "plan".
 
Hoagy Carmichael
Mitchell Parish
Stardust

And now the purple dusk of twilight time
Steals across the meadows of my heart
High up in the sky the little stars climb
Always reminding me that we're apart

You wandered down the lane and far away
Leaving me a song that will not die
Love is now the stardust of yesterday
The music of the years gone by

Nat King Cole

Sometimes I wonder why I spend
The lonely night dreaming of a song
The melody haunts my reverie
And I am once again with you
When our love was new
And each kiss an inspiration
But that was long ago
Now my consolation
Is in the stardust of a song

Beside a garden wall
When stars are bright
You are in my arms
The nightingale tells his fairy tale
A paradise where roses bloom
Though I dream in vain
In my heart it will remain
My stardust melody
The memory of love's refrain

Chet Atkins
Stanley Jordan
 
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