MESSAGE FROM JACKO 512

It is 3.00am NY time Friday December 18 and the market is at 1.4385

As stated yesterday, my sense of frustration and impatience with this market was very high. I can see what it was doing (dropping) , I can see my missed entry point (1.4900), I can see that I was rational in not chasing the market, I can see where I think it will pullback to (1.4700+), and I can see that it is going to take days to get there.
So it is with some sense of pleasure that I am watching the market (hopefully) start to climb off its low at 1.4304 and head up to an area where it will be in the sell zone.
I get the feeling that we are going to have an active Christmas period as the market reacts to critical news (like the recent downgrading of Greece's credit rating...and the impact on the rest of the EU community) in the thin markets.

Edit 8.00am NY time Market is at 1.4340 The state of play is that we know that the trend has changed. The market has made its first move down (to 1.4300) since the break of the Daily Support/Resistance line at 1.4900. We are now waiting for a significant pullback from that drop, so that we can place some long term Sells.

Edit 12.05pm NY time Market is at 1.4281 The pullback I have been waiting on is seriously overdue.

Edit 7.00pm NY time Market is closed. The market has fallen very quickly since it broke the 1.4900 Support line just 10 trading days ago. I expect that the next 10 trading days will see some serious pullback on that fall. I will be watching the market over the Christmas period to capitalize on any pull back and establish some long term shorts for the 2010 year. I believe that the trend has now changed and that we will see a sustained long term increase in the USD ( a fall in the Euro) over the next 12 months. I also think that a target of 1.2500 is highly possible for 2010.
Given the huge volatility impact caused by the Great Financial Crisis over the last 15 months, we have traded reasonably well this year. (The recent failure to get set with a sell at the target of 1.4900.... which we missed by just 10 pips...was a very sad miss. However, it is only 10 days worth of missed trading opportunity and the market will recover some of that drop very soon). I believe that this strengthening of the USD is in its very early stages and that 2010 will be an excellent year.


MESSAGE FROM JACKO 511

It is 3.00am NY time Thursday December 17 and the market is at 1.4400

After staying up all night in the hope that the FOMC announcement would give a nice bump up in the Euro, so that we could sell it, I have woken to find that the major move happened in our local Asian trading time zone. This is easily the quietest period of the day for the Euro so it is obviously serious Asian (China??!!) buying of USDs. There has been a quick move down in the Euro on the strengthening USD.
Looking on the bright side, the only thing worse than not being in the market.... is being in the market the wrong way. (Anyone in US or European timezones with overnight long positions have all just been stopped out, I would think)
I am concerned that we may be seeing a repeat of the strong USD buying that occurred at from 08/08/2008. (It was the start of the Beijing Games). It is worth going back and having a read of the blog from that time!!
The risk of loss from jumping in at this time is waaaay too high. I want a significant pullback. This is the type of market action where everyone starts to say that this drop in the market will go forever....Then it snaps back!!!

Edit 8.00am NY time Market is at 1.4355. On the basis of the depth of this drop in the market I am looking to reduce my target sell price from the 1.4900 area to maybe as low as the 1.4700 area, but will be watching the price action between now and when it moves back up.
As I said some days ago, the trend has certainly changed, so it is now just a case of getting in at a position that has minimal risk of loss attached to it. Once we are in the market, we can then start to compound our positions using the markets money. The main rule isDo not lose money.

Edit 12.10pm NY time Market is at 1.4310 As much as I want to jump into the feeding frenzy of buying the USD and taking a short term short on the Euro, I have decided to stay on the sidelines.

Edit 7.00pm NY time Market is at 1.4341 My sense of frustration and impatience with this market very high. I can see what it is doing, I can see my missed entry point (1.4900), I can see that I was rational in not chasing the market, I can see where I think it will pullback to (1.4700+), and I can see that it is going to take days to get there.
Having said that, with the benefit of perfect hindsight, it is easy to see that a better course of action would have been to throw caution to the wind and, as soon as the Daily Support/Resistance line was broken at 1.4900, to just sell it and keep on selling. (Some of you did).
But that is the advantage of hindsight..it over-rides and negates the emotions and thinking that you had at the time when the action was done.





MESSAGE FROM JACKO 510

It is 3.00am NY time Wednesday December 16 and the market is at 1.4520

As stated yesterday,I am now looking for a sizable pullback so that I can establish some long term short positions. One of the advantagesof trading the Daily charts is that they are more predictable. Thedisadvantage is that if you miss a trade entry, you have to wait a while to get the next opportunity. (I missed my sell trade entry of 1.4900 by only 10 pips when the market went to 1.4890 on Dec 7...a very sad miss !!!).
I never like to "chase" a trade if I miss it, I prefer to get the next trade set-up instead. So I am now waiting for a decent sized pullback to get the next wave down.

Looking at the Daily chart, you can see that it is extremely rare for the market to have a 500 pip move without a subsequent 200+ pip retracement move. Patience is required. But it will be well worth it. We are in the very early stages of a new bear market for the Euro (or more correctly, a new Bull market for the USD)

Edit 8.00am NY time Market is at 1.4565 The market has started to move back up after hitting a low of 1.4503. We may have seen the start of the retracement of the move from 1.5000 to 1.4500.

Edit12.10pm NY time Market is at 1.4570 The market has been choppy today with no real direction, but the price action looks biased to the up side.

Edit 7.00pm NY time Market is at 1.4525. The market had its usual quick fluctuation up and down with the FOMC announcement but then settled back to where it was prior to the announcement. The market has basically flatlined since then. The market is still stubbornly stuck in the mid to low 1.4500 area.

Emails (see Message 507)



MESSAGE FROM JACKO 509

It is 3.00am NY time Tuesday December 15 and the market is at 1.4614

The market has remained flat since the start of the week but is showing some weakness heading into the London open.
The market position has not changed from Message 506. That is, I am certain that the trend has changed. I am looking forward to getting set in some serious long term short positions over the next couple of weeks. If you look at 20001, 2002, 2004 and 2006 you will see that the December/January period is a time of major reversals. I think that 2009 will join that list.
I have seen a lot of similarities with this current market, and how it is behaving, to the turn in 2006. Those of you who have read the history of my trading will know that the turn of the market in 2006 was the start of my massive growth in Forex. 
I really think that this current market turn will be a repeat of the same. 
BUT, one thing that the forex market does with great consistancy is to move up and down in the range. I can also see the market moving back once or twice (to around 1.4900-1.4950) to shake out the weaker players. Then it will progressively drop lower and lower but before it does, there will be some good opportunities ahead to get some big short positions established.
If you look at a Daily chart, it is easy to see that 1.4900 is a very likely target for the market to move towards.
Also, if you look at the weekly chart, you can see the potential of this move down (sub 1.3000??). Now that we are back trading on the Dailies those are the moves I want. And compounding up the lot sizes as we go.
I believe that the USD has started its fight back. The US economy has been ground down since mid February and is starting to show faint signs of recovery. And as I have said before, the US economy is still the most powerful economic engine in the world.
I am still a SELLER at 1.4900. 

Edit 8.00am NY time Market is at 1.4535 The market has moved lower in London trading. Not being in the market at the moment is annoying, but the risk of selling without waiting for a pullback is taking an unreasonable risk. The market almost always has pullbacks. I don't think that this one will be different.

Edit 12.10pm NY time Market is at 1.4514. I am watching for a pullback of any decent size to sell into this market.

Edit 7.00pm NY time Market is at 1.4542 A disappointing day today. I am now looking for a sizable pullback so that I can establish some long term short positions. One of the advantages of the Daily charts is that they are more predictable. The disadvantage is that if you miss a trade entry, you have to wait a while to get the next opportunity. (I missed my sell trade entry of 1.4900 by only 10 pips when the market went to 1.4890 on Dec 7...a very sad miss !!!).
I never like to "chase" a trade if I miss it, I prefer to get the next set up instead. So I am now waiting for a decent sized pullback to get the next wave down


MESSAGE FROM JACKO 508

It is 3.00am NY time Monday December 14 and the market is at 1.4675

The market position has not changed from Message 506. I am still a SELLER at 1.4900
I am about to go into a meeting. I will be back for the US session 

Edit 9.00am NY time Market is at 1.4640 Apologies for the delay. As stated last week, I am (51%) certain that the trend has changed. I am looking forward to getting set in some serious long term short positions over the next couple of weeks. I can also see the market moving back once or twice to shake out the weaker players. Then it will progressively drop lower and lower but before it does, there will be some good opportunities ahead to get some big short positions established. But I am just waiting for a suitable pullback to higher levels to establish some short positions

Edit 12.05pm NY time Market is at 1.4645. I am feeling very confident about the market in the next couple of months. I am seeing a lot of similarities with this current market, and how it is behaving, to the turn in 2006. Those of you who have read the history of my trading will know that the turn of the market in 2006 was the start of my massive growth in Forex. I really think that this current market turn will be a repeat of the same. 
I am waiting for a pullback up to around the 1.4900 area (the 50% fib from 1.5140 to 1.4586).

Edit 7.00pm NY time Market is at 1.4654. The market was very dull in afternoon trading today with minimal movement




MESSAGE FROM JACKO 507

It is 3.00am NY time Friday December 11 and the market is at 1.4725

The market position has not changed from Message 506. I am still a SELLER at 1.4900

Edit 8.00am NY time Market is at 1.4766 The market has been as high as 1.4775 so we have see the expected gradual move back up in the direction towards 1.4900. I am still a seller at 1.4900.

For the adventurous traders: You should be in at 1.4700 (as per yesterday's recommendation) If you are not in by now, it is too late.The market at the current level does not warrant the risk of going long at the current level

Edit 12.10pm NY time Market at 1.4610 Market is weaker than I expected. This wil need a review of entry target next week.


Edit 4.00pm NY time Market is closed. I seriously underestimated the move down in the morning session today. The market is now a bear market. After looking at the Daily (and Weekly) chart I can see that there is a long way for this to move down over the next 12 (?) months but I now have to wait for a pullback to get into a position. I will be taking short positions aggressively from now on.


IMPORTANT: On a personal note, I usually do not trade over the period leading up to Christmas and New Year. However I believe that this period will be an important and critical time in the change of trend for the market. So I intend to continue to trade and post the blog during that time.
However, a major time commitment is the time spent on answering emails. Mrs Jackson has asked (demanded !!) that I compromise by agreeing to not answer any emails over that period so that we can have at least some time to ourselves.
My staff (except one part time admin staff) have been given their vacation time during this period.
So as of the close of business today, I will be continuing to post my trades and send the SMSes and update the blog, but I will not be answering emails until after the Christmas and New Year period. I will answer emails again from January 4, 2010.




MESSAGE FROM JACKO 506

It is 3.00am NY time Thursday December 10 and the market is at 1.4710

As discussed a couple of days ago, I am (51%) certain that the trend has changed. I am looking forward to getting set in some serious long term short positions over the next couple of weeks. If you look at 20001, 2002, 2004 and 2006 you will see that the December/January period is a time of major reversals. I think that 2009 will join that list.
I have seen a lot of similarities with this current market, and how it is behaving, to the turn in 2006. Those of you who have read the history of my trading will know that the turn of the market in 2006 was the start of my massive growth in Forex. I really think that this current market turn will be a repeat of the same. 
BUT, one thing that the forex market does with great consistancy is to move up and down in the range. I can also see the market moving back once or twice (to around 1.4900-1.4950) to shake out the weaker players. Then it will progressively drop lower and lower but before it does, there will be some good opportunities ahead to get some big short positions established.
If you look at a Daily chart, it is easy to see that 1.4900 is a very likely target for the market to move towards.
Also, if you look at the weekly chart, you can see the potential of this move down (sub 1.3000??). Now that we are back trading on the Dailies those are the moves I want. And compounding up the lot sizes as we go.
I believe that the USD has started its fight back. The US economy has been ground down since mid February and is starting to show faint signs of recovery. And as I have said before, the US economy is still the most powerful economic engine in the world.

For the adventurous traders: I believe that the market is sitting close to its short term bottom at the 1.4700 mark. The market may drop below it so wait until it has turned and is heading back up so as not to catch a falling knife. As outlined above, I think the market will try to climb up towards the 1.4900 mark, so there is a "risky" 200 pips on offer. Its not for me, but if you are adventurous, the probabilities of going long (to 1.4900) is much better than going short at the current levels. (Save the shorts until the market is at better prices).

Edit 8.00am NY time. Market is at 1.4732. The market has dropped to as low as 1.4685 and has now risen to its current price. There are no US news events today.
I am still a seller at 1.4900

Edit 12.10pm NY time Market is at 1.4717 A slow day on the market so far in the US session. Maybe the afternoon session will show some decent activity

Edit 7.00pm NY time Market is at 1.4730. A very slow day on the US markets today. However, everything written above (especially for theadventurous traders) still applies.




MESSAGE FROM JACKO 505

It is 3.00am NY time Wednesday December 9 and the market

Wayne has a migraine and is currently sleeping. He will be back tomorrow

Mark

Edit 6.15pm NY time I am back!! After a near 16 hour solid sleep (with the weirdest dreams !!!) I am back and feeling much better. The market has done little in my absence so I don't feel as though I have missed any real action. I will be back for the London open tomorrow

MESSAGE FROM JACKO 504 

It is 3.00am NY time Tuesday December 8 and the market is at 1.4810 

The market got to within 10 pips of my target with a high of 1.4890.... I am leaving my Sell order there for the moment as I think we may get another bite from our fish. I am still a Seller at 1.4900

Edit 8.00am NY time Market is at 1.4790 The market has moved away marginally from my Sell order, but one thing that the forex market does with great consistancy is to move up and down in the range. And if you look at a Daily chart, it is easy to see that 1.4900 is a very likely target the market to move towards.
Again there is no real news events in the US today, so the market has no drivers of price this morning.
I am still a Seller at 1.4900

Edit 12.05pm NY time Market is at 1.4736 I have returned from a dinner function hoping that the market had moved up and maybe triggered my sell, so I was disappointed to see that it had fallen a little further. I was hoping to snare the 1.4900 fish today. As discussed on previous occasions, the market often turns around in the US afternoon session. 
I think ( only 51% certain) that the trend has changed. I am looking forward to getting set in some long term short positions over the next couple of weeks. If you look at 20001, 2002, 2004
and 2006 you will see that the December/January period is a time of major reversals. I think that 2009 will join that list.
But as I have said above, I can see the market moving back once or twice before it does, so there are some good opportunities ahead to get some big short positions established. (If you look at the weekly chart, you can see the potential of this move down). Now that we are back trading on the Dailies those are the moves I want.

Edit 7.30pm NY time Market is at 1.4705 The previous trade opportunity when I wanted to sell at 1.4900 but the market only went to 1.4890 is now looking a sad miss. I missed that entry by only 10 pips.

Emails

Email 1
I read an article earlier this week and would like to know what your thoughts are on the matter. It noted that there seems to be a trend lately where the London session is having more influence on the Eur/Usd movement; that the NY market seems to follow the London lead. (This has been the case for 5 market days in a row -- possible more scattered.) Hmmm Yes, but the US news has far more impact than any Euro news
It went on to mention on the fact that 'everyone' is selling the dollar and getting away from it looking for a stronger currency. Not any more ......
I'd guess we're a good distance away from the dollar not being the world currency, but there is a lot of chatter on the streets. Also, I've read that the trading volume of the London Forex Market is nearly double now what's traded during the NY session. Not sure about that source. I think that is is getting close because of the reduction in the size of US hedge funds that got killed in the GFC. 

Email 2
The market has taken a fall but I think that it will go up more. What do you think? I believe that the trend may have changed. ......I have been leery of the Euro Bull since early November when the higher highs were only marginally higher each time. I think that the trend has changed (but only 51% certain) and I am looking forward to getting set in some long term short positions over the next couple of weeks. Having said that I fully expect that there will be opportunities to get back into this market at 1.5000 again in the next 2-3 weeks. This will not be a precipitous drop all the way down. This market will come back but I would be surprised to see it break its previous highs

Email 3
i was wondering about the outcome of NF employment. The result of -11k vs forcasted -119k showed a suprising difference. Now i would think that good news for the dollar would actually weaken the dollar because that is how it's been since the financial crisis and the safe heaven search. How do you know that this sentiment has changed or how should one understand it :) No, the market fundamentals are now coming back to reality...That the US economy is still the best economic engine in the world and that lower job loses means that it is picking up strength
did you expected this to happen ? when news is good the dollar rises ?From now on, I think so... 



MESSAGE FROM JACKO 503

It is 3.00am NY time Monday December 7 and the market is at 1.4873

The USD has finally shown some strength on the back of Fridays NFP numbers. The Support line on Friday at 1.4870 was broken when the market dropped as low as 1.4821. This break was a (convincing?) 50 pip break of the line. (It barely made the set 50 pip limit) The market has been moving back up to that line (now at 1.4900 approx) in the last 10 hours since the markets re-opened

I have my charts open to 300 periods of the Daily time frame.
The Resistance line. At the present time there is no descending Resistance line of interest. In regards to horizontal Resistance lines, the Resistance is now at the previous high of 1.5144.
The Support line is found by linking up the lowest points on the Daily chart starting from 1.2460 (March 3) and 1.2886 (April21) and and 1.4628 (Nov 26) we can see that the old rising Support line is today at around 1.4900 (rounded up slightly).
The 50% Fib line between 1.4626 (Nov 2) and the new high of 1.5144(Nov 24) was at 1.4885. That 50% Fib has already been broken when the market fell to 1.4828 on Nov 26) , so we then looked further back to the previous low of 1.4480 (Oct 1) and the latest high of 1.5144 (Nov 24) to calculate the next 50% Fib target ...which was 1.4812.. The market fell on Friday to 1.4821 which was close enough.

In light of the above we have two conflicting signals. The primary one is that it has broken the Daily trend line by 50 pips (...barely). The second, and conflicting signal, is that it has bounced off the 50% Fib line.
I am looking to see which signal proves to be the stronger. (My guess is to the short side as a Trend line break trumps a 50% fib line bounce).
The news calendar is remarkably clear of major US news events until the US Trade Balance numbers on Thursday Dec 10.
I am more interested in watching how the US market treats this market today, rather than London. I think New York will give us a better indication of the medium term direction.

Edit 8.00am NY time Market is at 1.4798 The trend line did trump the 50% fib line when the market dropped to 1.4757 breaking the 50% fib line. The market has now clearly broken the Daily trend line. This market will bounce back up and confirm the drop with a touch of the old Support line at 1.4900 which will now act as Resistance. I will be a Seller at 1.4900 (or higher, if I can get it)

Edit12.10pm NY time Market is at 1.4812 The US`market has been surprisingly quiet. I was expecting a much more active market after Fridays move and the London earlier session. Maybe the afternoon session will pick up the pace.

Edit 12.50pm NY time Market has moved up quickly on Ben Bernankes speech in Washington. Still ongoing...
I am a Seller at 1.4900 

Edit 7.00pm NY time The market got to within 10 pips of my target with a high of 1.4890.... I am leaving it there for the moment as I think we may get another bite from our fish.

Emails
I am a little slow on the emails from Friday...Mrs Jackson caught me on the computer on the weekend and went ballistic ...so I will catch up the emails in the next 24 hours

MESSAGE FROM JACKO 502

It is 3.00am NY time Friday December 4 and the market is at 1.5085

The market has continued to move aimlessly around with no real direction. It has spent most of this week moving within plus or minus 50 pips from the infamous 1.5095 mark (where I was stopped out on he last trade). I have been looking for a sense of direction from the market but at the moment there is none.
Today, we have the major news events of the US Non Farm Payrolls (NFP) and US Unemployment Rate at 8.30am NY time. The NFP is one of the biggest market movers on the calendar. The FOMC announcement is the other major market mover.
Unless you have a very large cushion of profit, it is always recommended that you stay out of the market during NFP because of the big swings, and the huge increases in spreads, which combine to just rip up all the Stop losses. It is when the brokers make some serious money at the expense of traders.

Will be back at 8.45am NY time after the NFP announcement

Edit 8.45pm NY time Market is at 1.4990 The NFP has come in at -11K vs the expected -120K and has caused the USD to strengthen. The market has dropped to 1.4990. This will change market sentiment in the short term and cause the market to fall further next week.

The adventurous traders. I would NOT be closing the shorts from 1.5070 or higher at these levels... this will go lower

Edit 12.10pm NY time Market is at 1.4889 Market has dropped to the Support line. As I don't want to be holding a position over the weekend, I will be a taking a position very early next week.


Emails

Email 1
Given the daily bar increment against the support line, is 1,4850 now not too low for a long entry as this falls below the support line? Yes, the rising Support line increases in value each day... The market has moved up past 1.4850
So what would the new entry level be or how would you calculate it?
OK.. How to draw a Support Line and determine todays Support line price
The simplest way is to go to the free charts at DailyFX.com or Netdania.com (they are the same)
Pull up the EUR/USD chart
1. To get 300 Days of data:
Click on Time Scale.....Set it to Daily
Click on View
Click on Periods.......Set it to 300 bars
You now have 300 days worth of Daily bars

2. To draw the lines:
Click on Lines
Click on Add lines
Click on Freehand
Click on the low point of 1.2460 on march 3 and draw the line touching all the low points ending with 1.4828 on Nov 26

3. To get a magnified chart:
Now click on Zoom
Click on Zoom IN
Highlight the last (approx) 50 bars and you will see a magnified copy of the last (approx) 50 days with the 300 bar Daily Support line clearly seen

4. To get the Support line price
Drop a line down from todays price bar down to the Support line and read the value off the right hand price axis....
You will have the rising Support line price for today.

The Resistance line is drawn in similar manner






MESSAGE FROM JACKO 501

It is 3.00am NY time Thursday December 3 and the market is at 1.5115

The market has now gyrated 60 pips below the 1.5095 level and now is 30 pips above it, so there is not a lot of movement in the range around that level since Tuesday morning NY time.

I am still on the sidelines, looking for an opportunity to get a reasonable risk trade.
My preference is to wait until it gets back to the Support line but IF I see an opportunity before that, then I will be interested in trading it.
At the moment the market is trading at 1.5115 which it has traded at on today, yesterday and the day before that. It has been at this 1.5115 mark each day for three consecutive days. This market is not showing a great deal of strong direction in the last three days.

Edit 8.00am NY time Market is at 1.5125. The market has moved very little so far today. The earlier ECB announcement that interest rates would remain at 1.00% had almost no impact on the market. The other news events today are the US Unemployment Claim numbers at 8.30am and the US ISM Non -Manufacturing PMI numbers at 10.00am. I am still looking for a trade opportunity.

Edit 12.30pm NY time Market is at 1.5078 After rapid spikes down and up at 8.36am caused by a speech by Mr Geithner, and also another by the ECB's Mr Trichet, the market has been slowly moving down this morning. I am on the sidelines at the moment.

Edit 7.00pm NY time Market is at 1.5062 This market is aimlessly looking for a direction at the present time. I too am looking to see which way it will head. A frustrating market at the present time.




MESSAGE FROM JACKO 500

(Can you believe that !!!!! ...500 days of Blog entries )


It is 3.00am NY time Wednesday December 2 and the market is at 1.5086

The safest trade is to wait out the market until it moves back to the Support line at 1.4850 and buy on the pullback.

But I am a trader and I am feeling adventurous and I believe the probabilities in the next 24 hours are shifting to the sell side. The market has stayed in the region of where I was stopped out (1.5095). I am seriously tempted to get back into this market. I am waiting to make sure that it is not a revenge trade. It believe that this market may correct back to the 1.4850 Support line again very soon.
(NOTE : Please read emails below)

For the adventurous traders: I still believe that a Sell at the level of 1.5070 or higher is a better probability trade than a buy at those levels

Edit 8.00am NY time Market is at 1.5084 I have decided to stay on the sidelines for a while longer while I watch the market. It is still trading in the area of where I was stopped out on my last trade (1.5095). The US ADP Non Farm Employment Change news is released at 8.15am today and it is always a market mover.

Edit 12.10pm NY time Market is at 1.5053 The market has dropped marginally on rumours that a large US bank has more undisclosed losses. But otherwise a tame morning of trading

Edit 7.00pmNY time Market is at 1.5076 The market has moved down as low as 1.5031, and has now just bounced back up to 1.5076. This is too high a level for me to be a buyer, so I have two options: firstly, to stay on the sidelines until the market gets back to the Support line OR secondly, to take the "riskier" trade of selling down to the Support line.
I am currently waiting on the sidelines BUT IF I see an interesting possibility to sell down, I may take it...because I am a trader.



Emails

Email 1
You have had two losses in a row. Yes, thanks for telling me that.
As I have said before, I am not a signal service. ...My trades and trade notifications are not a recommendation. They are simply to allow you to see when and what I am trading and why.

But keep in mind, I have NEVER had a negative Quarter. I have never even come close to having a negative Quarter. And I fully expect this Quarter to be another positive Quarter.

What were your reasons for taking a trade that was not in the Up direction of the Trend? In this last trade, I was very specific when I said: "It is a more risky trade so feel free not to take it" The reasons I took that more risky trade was
(i) driven by my annoyance at missing the buy entry last Friday,
(ii) my keen desire to trade, and
(iii) most importantly, my expectation that the market would stay within the trading range of the Support line (1.4825) and the upper area where it had been ranging at 1.5000.

Email 2
Why didn't you wait until it had dropped back to the Support line again ? I had been on the sidelines for an extended period as I waited for the market only to see it rapidly drop and bounce back up 30 minutes before London opened as I was working on the blog. (To say I was annoyed at missing that trade is an understatement !!!!!)
I therefore had two options: firstly to wait until it again dropped to the Support line again OR secondly, trade the range of 1.4825 to 1.5000. I decided to trade the range based on the expectation that the 1.5000 area of resistance would be strong enough to hold. (That was where I was wrong!!)
You have to remember that I am first and foremost a TRADER! I will sometimes take a trade that is beyond the parameters of Trend Trading if I think that the situation justifies it.
But I will always forewarn each of you by stating that it is a more risky trade, and give the reasons why I am trading it.






MESSAGE FROM JACKO 499

It is 3.00am NY time Tuesday December 1 and the market is at 1.5024

My current Short trade from 1.4995 is still in play. It has a fixed 100 pips Stop Loss set at 1.5095 and my initial target price is at the rising Support line at 1.4850. I am letting the trade play itself out

Edit 8.00am NY time Market is at 1.5064 The market has been sitting in a 100 pip range (from 1.4980 -1.5080) all week. The major news events for the day are the US ISM Manuufacturing PMI and the US Pending Home Sales at 10.00am today. I am continuing to let my trade play itself out.

For adventurous traders: If you are not already in a trade, I would be a Seller at these high 1.5070 levels

Edit 12.10pm NY time Market is at 1.5106 My trade was stopped out at 1.5095 earler today as the market continued it move up. I will now wait for the correction back to the Support line for the next trade entry.

Edit 7.00pm NY time Market is at 1.5090. In reviewing the last trade, a number of issues stand out. One is that I was looking to trade the range rather than the trend and secondly I used 1.5000 as the considered high of the range. Both assumptions were incorrect. But as always, the damage was limited to a maximum of 2% of capital, so the damage is easily repaired. I am looking to recoup those losses in the next trade.

MESSAGE FROM JACKO 498

It is 3.00am NY time Monday November 30 and the market 1.5061

My trade from yesterday did not have the best of entry points. It was driven by my annoyance at missing the buy entry last Friday, my keen desire to trade, and my expectation that the market would stay within the trading range of the Support line (1.4825) and the upper area where it had been ranging at 1.5000 (therefore the Sell at 1.4995).
As outlined, it was a more risky trade. However, I decided to take the risk. I am now letting the trade play itself out.

Edit 8.00am NY time Market is at 1.5028 My trade is still playing itself out.
As an entry point, my Sell at 1.4995 was a shocker.!!! It was terrible !!! Even Mrs Jackson says she could have done better than that.... LOL
The only justification is that, at the time, I thought 1.5000 was going to be a much stronger Resistance area than it was. However, the trade is still alive and playing itself out.

I have my charts open to 300 periods of the Daily time frame.
The Resistance line. At the present time there is no descending Resistance line of interest. In regards to horizontal Resistance lines, the Resistance is now at the previous high of 1.5144. At the present time, that Resistance is of little use to us as the 100 pip fixed Stop Loss at 1.5095 has more relevance in the current trade. (If the market goes up, the Stop Loss will close the trade)
The Support line is found by linking up the lowest points on the Daily chart starting from 1.2460 (March 3) and 1.2886 (April21) and and the new low of 1.4628 (Nov 26) we can see that the rising Support line is today at 1.4835 (and rounded to1.4850).
The 50% Fib line between 1.4626 (Nov 2) and the new high of 1.5144(Nov 24) is now at 1.4885. This 50% Fib has already been broken when the market fell to 1.4828, so we can now look further back to the previous low of 1.4480 (Oct 1) and the latest high of 1.5144 (Nov 24) to calculate the next 50% Fib target ...which is 1.4812

In light of the above, my initial target price for the current trade is the Support line at 1.4850.

Edit 12.10pm NY time Market is at 1.4986 My trade has finally moved into profit. I am letting the trade play itself out.

Edit 7.00pm NY time Market is at 1.5032.. I am continuing to let this trade play itself out


MESSAGE FROM JACKO 497 (Special Sunday post)

It is 5.30pm NY time Sunday November 29 and the market 1.5011

It is very early (6.30m HK time). The market is very thin as only Sydney is trading. Tokyo starts in 30 minutes and Hong Kong an hour later. The USD has dropped back on news that the United Arab Emirates' central bank eased liquidity for lenders and said it "stands behind" the country's local and foreign banks as they face losses from Dubai World's possible default.

I will be back in an hour after I have looked into all the news about this Dubai issue. But I am keen to trade this down to the Support line.

Edit 7.00pm NY time The market is at 1.5000 I am a Seller at 1.5000 or higher with a 100 pip fixed SL... Aaah , Hong Kong has just dropped it down.

Edit 7.45pm NY time. I have just sold at 1.4995. I decided that 1.5000 might act as a barrier. And 1.4995 was close enough



MESSAGE FROM JACKO 497

It is 3.00am NY time Friday November 27 and the market 1.4860

After rising to as high as 1.5144 the market has fallen quickly and sharply due to the very thin markets and the "flight to safety of the USD" on news that Dubai World, the largest Corporate entity in Dubai, has asked for a "standstill" on its debts until May 30 at the earliest.. (Standard & Poor's estimated Dubai World could be responsible for as much as 50% of Dubai's total government- and corporate-debt load of some $80 billion to $90 billion).

The fact that the Dubai Government hasn't completely guaranteed Dubai World is a worry.
The fact that the UAE (of which Dubai is a member state) hasn't guaranteed the debts is a bigger worry
It looks as though the Great Financial Crisis is starting to show cracks in other places again.....

On the other side, the market is quickly moving down to my rising Support line at 1.4800 (and is today at 1.4825). However, most US bankers and dealers will again be away today for an extended Thanksgiving break, so the market will be very thin with very limited liquidity. This Dubai issue will continue over the weekend. So be wary of having any open positions over the weekend. I will be opening a trade on Sunday evening NY time after the Dubai issue is clearer.


Edit 3.01am NY time Market has actually just bounced off the Support line at 1.4827 and is moving back up...But this will go lower... This Dubai issue is a serious issue that is concerning the Arab states and they will flee to the USD

Edit 8.00am NY time Ouch. Earlier today the market moved down so quickly to hit the Support line and then bounced up so quickly that I was caught unawares. I was actually writing the blog entry leading up to 3.00am as the market was dropping like a rock and was not watching the screen. (When I started drafting the blog the market was at 1.4920) It hit 1.4827 and bounced back up to 1.4860 while I was drafting the blog and had the computer on the blog page. That will teach me to be down at the coffee shop below the office and only have the one laptop with me.Ouch.

Edit 12.10pm NY time Market is at 1.4968 I am still annoyed that the market dropped so quickly to my Support line and bounced while I was drafting the blog and I missed it. I am annoyed with myself that I didn't already have the order in place to buy at my Support line. Lesson learned... Start re-using pending orders.


Edit 7.00pm NY time Market is closed. The market is back sitting in the range area between 1.4800 and 1.5000 that it has been in since Oct 12. I am really annoyed that the market made its major move in the 30 minutes before London opened and I was caught with my pants down by drafting the blog without checking the charts.
The implications of the Dubai World "standstill" on their debt has yet to be fully recognised by the larger Banking traders who were all on Thanksgiving Holiday. If Dubai defaults, which I think it will, it will be the largest sovereign default since Argentina in 2002. That gives us a very good opportunity. It will cause a further flow back to USD.
I will be placing a trade on Sunday. I would prefer to wait until the market drops back to the Support line to buy BUT I am keen to make up for the missed opportunity yesterday.

I see an opportunity to sell this market at 1.5000 (or higher) and ride it down. It is a more risky trade so feel free not to take it if you wish to be more safe. I will send SMSes on Sunday evening after the market has opened and again as I execute the trade




MESSAGE FROM JACKO 496

It is 3.00am NY time Thursday November 26 and the market 1.5091

The US market will be closed today for Thanksgiving Day, so there will be low liquidity and possible high volatility. Even though I am frustrated with the market and very keen to trade, I won't be trading today.

To each of you and your families, Mrs Jackson and I wish you all:

Happy Thanksgiving Day

In this industry we have many reasons to give Thanks for everything that has been given to us.

Firstly, I give Thanks for finding this extraordinary forex trading business where there is incredible flexibility in establishing, running and financing the business.
Given the huge leverage in this business, anyone can enter the industry and establish a trade... and commence their their subsequent business.
Also, while running the business, if I see an opportunity I can be involved within 30 seconds. More importantly, if I am in a trade and I feel that I have made a mmmmmistake I can be out of that transaction within 30 seconds. (try doing that with any other business!!)
Also, the leverage and compounding allows extraordinary growth and profits. In just two short years I managed to escalate from 2 standard contracts (with one broker) to 200 standard contracts (over 4 brokers) in a normal transaction,... and with the Fund I am now trading even bigger numbers.

Secondly, I give Thanks for a market that trends so regularly that opportunities are around every corner. Even though I have missed an opportunity or two in the last two or three years, I can remain confident because I know that there are plenty more opportunities to come.

Thirdly, I give Thanks for the fact that I can conduct my business from anywhere in the world with just my laptop and an international cell phone.

Fourthly, I give Thanks for being able to "think out" the Anti-Hedge strategy which turned my initial losers into winners and escalated my win rate

Fifthly, I give Thanks for having some excellent resources (in the form of books about earlier successful traders) which have been a beacon in those times when I have been sitting on the sidelines, wanting to rush in. Those resources have all emphasized the waiting as a precondition for becoming a winner.

Sixthly, I give Thanks to each of you for being part of this new tribe of traders that have decided to join with me in this lifelong business of trading. Also, some of you have also been more aggressive in your trading than me and I have been happy to read that many of you have made excellent profits, We have all embarked on a journey that, God willing, will allow us to have a simple yet profitable business for the rest of our lives. (For any of you who think that retirement is good, let me tell you something .... playing golf every day is boring ...and the people who do play golf every day are even more boring!!!!) I am old...and getting older...but I still get an adrenalin buzz from a successful trade

Seventhly, I give thanks for Forex Factory, without which I would never have met any of you. In my communications with each of you to date, you have ALL shown that you want to be serious and committed traders, and are willing to learn. Some of you will always be more aggressive in your willingness to take positions and some of you will be more safety-conscious. There is no right or wrong way, as long as your profits are maximized AND any losses are minimized. I think that a number of you are potentially better traders than me. If I can just help show you how I trade, I hope that many of you will use my experience and style and modify it to suit your own personalities. You can then go on to have as rewarding a time as I have had in this business. I, personally, am enjoying the group dynamics and hope that the group goes on for years as we all get to know each other and start to share our trading experiences in the near future.

Happy Thankgiving Day

MESSAGE FROM JACKO 495

It is 3.00am NY time Wednesday November 25 and the market 1.5001

The market has remained in the upper area of the tight range it has been in for some time. I am still taking the less risky trading approach of waitig for this market to fall to the Support line at 1.4800. I am prepared to wait until it does so.

The adventurous traders: The market has tentatively cracked the 1.5000 (only as far as the high 1.5007). As stated yesterday in the 7.00 pm Edit, there is no need to race to get into a trade...maybe wait until better direction just before the London open.

Emails

Email 1
I've read every single post you made on FF and on your blog, but it seems that I can't remember exactly, what did you say (and if did you said it explicitly) about leaving your buy/sell orders open before the news and managing an open trade during the news. If I am in a trade, and I have a sizable cushion of profit, I will often play with the markets money in order to increase my gains. I will usually set a target price 100 pips above my current position ....

Most times, if I am only in a small profit I will close it because the brokers play the wider spreads, high velocity ranging that takes out stops both top and bottom,and all the other games they play

And I never try to just trade the news.

Also remember this from the FF site ( Post number 7):
In my opinion, You have NO chance trying to trade the news (buy or sell as soon as the news is released)...the dealers will ALWAYS be in front of you. (you need a broker too that won't play unfair tricks during those high volatility times, those tricks include freezing the platform, some will widen the spread way too much, others will get you filled way to far from the price you wanted to).
Whichever broker you trade with, you are trading through their platform. Consequently, their brokers will therefore have an advantage over you. To think otherwise is naive.
They are taking the other side of the trade (which they must in "trading the news" because they don't have time to spread their risk), and they will fight tooth and nail not to give away a business advantage to any trader. That's why they are doing all the things (plus much more) outlined above.
Its like poker, if you look around the room and can't see the patsy, then YOU are the patsy. The faster / shorter time frames that you try to play in this business the more you are at a disadvantage.
Retail traders trading the news are like fish swimming with hungry sharks in blood-filled water.

Email 2
On a side note, I read the "Forex mentor" thread on FF today. I should never have gone back onto the Forum...there are some guys who just want to earn a "scalp" by arguing with me....I can't believe that I fell for it and got sucked into an argument... I didn't read through much of it actually, just your posts to get the gist of it...and here's what you should tell them: it is quite rare for a system to be able to withstand high leverage. Most systems, even ones with an edge, will fail when risk is above 20%/trade (learned this from Larry Williams). Yes,, that is only 5 losing trades in a row at 20% each and the account is busted
Now, I spreadsheeted all your trades (since the fund started), and an account would not have ever dipped into the starting equity at all even with an insane 45% risk/trade. While it is true that trading with such a high risk produces a very choppy equity curve (the account would be sitting at 457% return with a high of 4847% at its highest), the fact that the equity curve never dipped into the starting equity is a miracle.
With a more conservative risk factor of 30%/trade, the account would be just shy of 2000%, with an equity high of 3160%.
To put this into perspective, a $100,000 account would be at $1.9 million today. Now since no trader would trade with that kind of risk, we'll try 5%/trade. Good, For a little while there I was having a heart attack at what I thought you were going to try to do....but the 5% makes me feel better!!!
5% yields a very pretty equity curve, steadily increasing, almost like a bank account collecting interest. Except, instead of being up 0.25% after a year (or so), we are up 138% to date. Now, what kind of fund does that? Hmmm... I agree. That is what Mark keeps telling me... ( And he keeps hammering into me that we did it with the Great Financial Crisis starting on the exact same day that the Fund started (08/08/2008…the launch of the Beijing Olympics).
Still , I am used to the much higher returns from 2006 and 2007, so my target returns are a little higher than what we have achieved this last year

Email 3
is it accurate to say that knowing economics/fundamentals matters much more when trading stocks than when trading forex? Hmmm...no I see economics/fundamentals as more applicable to Forex............... Accounting and Financial skills in analyzing Balance Sheets and Profit and LossStatements is better for stocks



MESSAGE FROM JACKO 494

It is 3.00am NY time Tuesday November 24 and the market 1.4905

The market is starting to look weaker and my target of the 1.4800 Support line will be hit soon.

The adventurous traders: All of the adventurous traders should be in at much higher than 1.4950 OR if you have caught it on the way back down, you would have sold at 1.4950 today. Either way, you are all in a good short term trade. Some of you may want to pull your SL down to Break Even.

Edit 8.00am NY time Market is at 1.4980 The market has been run back up as high as 1.4984. This market has been spending its vacation at the 1.4850 Hotel and it has overstayed its welcome. It has been in this vicinity for most of the last 30 trading days since Oct 12.
The market will be choppy today because the news events are spread out. At 8.30am (Preliminary GDP numbers), then 10.00am (CB Consumer confidence) and then later at 2.00pm (FOMC minutes)

The adventurous traders. Most of you would have been stopped out at Break Even on the quick spike up an hour ago. I would not be entering this market again just at the present time. It is a 50/50 bet that you could fade the market (and go short) or whether the longs are building a beach-head to attack the 1.5000 level at the release of the GDP numbers.
And I don't know the answer...... so I would stay out until I had evidence of one direction or the other.

Edit 12.15pm NY time Market is at 1.4946 The market was again stopped short of the 1.5000 barrier with a high of only 1.4988. I am still leaning towards the market falling to my Support line at 1.4800 soon.

Edit 7.00pm NY time Market is at 1.4966. Market is still in this upper area of the tight range it has been in for some time. However, the 1.5000 resistance area is holding. I am still leaning towards this market falling to 1.4800. I am prepared to wait until it does so.

The adventurous traders: I would again attempt to trade the Range and be a seller at above 1.4950 (preferably as close to 1.5000 as possible). There is no need to race to get into a sell trade...maybe wait until better direction just before the London open. (I have a suspicion that the market will use the upcoming Thanksgiving Day break to "run" this market...and I believe they may take it down...A good potential trade to consider over the next 24 hours may be to take a short trade down from the upper areas (1.4970-1.4980) of this Range that the market has been in. It is I would consider a 100 pip SL with a Target Price of the Support line at 1.4800

Emails

Email 1
just an observation . beside being agressive and trade the EU in smaller time frame( like agressive traders are doing with EU ) . i found trading daily with the same method u have teach us with other pairs give very good results even better than EU sometimes . only need to be sure of the trend . like AU . NU . UJ . Oh yes, the method works on anything that trends...I personally just like to only focus on one thing at a time..That is all.
If I was trading the other currencies, I would have to either cut back on my EUR/USD trade sizes OR increase my trading risk over two or more currencies. Now the AUD is paired with the USD, so I would have two currencies, the AUD and the EUR both paired against the USD. So if the USD does something unusual BOTH the AUD and EUR will be impacted...
If that is the case, I would have been just as easy by simply having doubled my risk exposure to the EUR/USD
the only thing for sure is to be sure of the daily trend . for example AU has been in up trend for a while and taking it long at the trend line 300 period on daily ,if u look at the chart all trades since a few weeks now has been winners . Yes, but you are using the benefit of 20/20 hindsight on the choice of the AUD......and also the AUD is not as leveraged to the USD as the EUR, so your actual USD profits would have been less


Email 2
My question is so far the euro seems to have failed to go below the 4820 - 4800 level 3 times over the past 2 weeks. Does it mean the bull market is still strongly in place and that the probability of it reaching the 4750 support decreases considerably now? No...when someone is banging loudly on the door repeatedly, you let them in. When price is banging on the 1.4850 door repeatedly, the market normally lets them in
With the asian session taking out stops in the 4950 levels, do you think that europe will follow suit and continue more buying? I am not sure, but I think that the 1.5000 level is a hard egg to break at the moment

Email 3
You have being saying that there has being lots of talk of it not breaking the 1.5000 mark, I have being thinking- dangerous I know, LOL LOL that after watching this market for 9 months
that usually the opposite happens and fast, would you agree or is it wishfull thinking. It is forex,,, anything is possible but the rumour is very widespread and now getting very loud.. Best to be safe than sorry. (It may also now be becoming self fulfilling that it won't break 1.5000 )



MESSAGE FROM JACKO 493

It is 3.00am NY time Monday November 23 and the market is at 1.4957

The market has bounced off the 1.4850 area again today in early Asian trading. This 50% fib resistance area of 1.4850 has certainly shown some extraordinary resilience over the last week. At the same time, the moves UP from each bounce were progressively lower highs at 1.5015 (Nov16) , 1.4989 (Nov 18) , 1.4935 (Nov 19) and 1.4932 (Nov 20).

The trading position is similar to last week. I have my charts open to 300 periods of the Daily time frame.
The Resistance line. At the present time there is no descending Resistance line of interest. In regards to horizontal Resistance lines, the Resistance is still at the previous high of 1.5062
The Support line is found by linking up the lowest points on the Daily chart starting from 1.2460 (March 3) and 1.2886 (April21) and 1.4626 (Nov 2) we can see that the rising Support line is today at 1.4800. As can be seen we are quite some distance from the Support line, but as can be seen from last weeks action late in the week, the market can come down to that area reasonably quickly and often.
The 50% Fib line between 1.4626 (Nov 2) and 1.5048(Nov 10) is still at 1.4850

Until the market returns to the Support line, I am on the sidelines.

The adventurous traders may wish to consider trading both up and down the tight range between 1.4850 to 1.4950 and use tight hard stops.

Edit 8.00am NY time Good morning America. The market is at 1.4974. There is no news events out of the States until 10.00am (with Existing Home Sales) but ECB President Mr Trichet is speaking in Madrid as I type. Nothing major coming out just yet.

The adventurous traders: The market has not traded at 1.4950 since the above post, so you should either, (1) not be in the trade yet or (2) you should have sold at much higher that 1.4950

Edit 12.15pm NY time Market is at 1.4983 The market has remained higher in the morning session after peaking at just under 1.5000 on the Home Sales news. There has been only minor movement since that time.

Edit 7.00pm NY time Market is at 1.4955. I am still on the sidelines waiting for the market to get to my 1.4800 Support line

The adventurous traders... The market has been above 1.4950 since my 3.00am post. You should have either sold at higher than 1.4950 OR you are still waiting for it to touch 1.4950 and trigger your Sell orders.

Emails

Email 1
Like you I had seen 1.5062 as the top (R) and there have been plenty ot moves up but not broken since high 23/10? Yes
I have marked up asecending support line as outlined by you and i dont get exactly 1.475 but i presume you are just going to the close round number or 50, hence 1.4750. yes
Assuming I have got the fib right my discount (or first entry point is around 1.4840 to go long) if price dosent look like it will get to 1.4750. Correct
Is low at 2 Oct more relevant as this would bring 50% fib closer to 1.4750. The 50% fibs are best viewed as progressive targets...when the first one has been hit, then move back in time(from right side of the chart to the left side of the chart and pick up the next 50% Fib line...which in this case is the Oct 2 low to the Oct 26 High)
While waiting for the bottom SL to be tested I have traded C/T selling yesterday at 17.22 GMT /1.4973 when it failed to make its highs on approach to 1.50 again and produced Lower Highs. a good adventurous trade….
I used a 50 pip TSL as overnight here for safety and came out with over 100 pips. It may have more in it yet but im pleased with 100 pips Excellent

Email 2
i had a small counter trade yestarday from 1,4985( 50pips fixed SL) , which i have closed today just over 1,4900( to soon as usuall, but as it was counter trade i decided not to be too greedy on that ) so my day started nicelly, excellent..some of the adventurous traders are doing very well... they have the advantage of being able to trade quicker than me and getting a couple of "smash and grab" trades by not being too greedy. I target trades with a minimum of 100+ potential pips.

Email 3
When you pull up any currency pair and draw in horizontal lines at levels that have acted as both support and resistance over time you can usually see reactions at these levels into the future. Do you ever consider these levels in your normal trading? Yes I "consider" them... but they are statistically"weak"...1.4850 has worked well this week...But the falling Resistance line and the rising Support line are much clearer and much stronger
I guess what I am asking is should I pay any attention to horizontal support/resistance lines at all when they are not mentioned as part of the original Jacko method, particularly ones like the 1.5000, which is about as round as you can get? Oh...the horizontal lines are there, but their statistical reliability is less than 50% ..Plus the lines are not as well respected...have a look at 1.4850 this week...it was acting as a horizontal S&R line but it was very blurry. The market was dancing all around it

Email 4
I was watching Bloomberg on TV late last night - and they had a currency'expert' from JPMorgan I think it was.. Was he old enough to shave ??? Some of those guys look 16...LOL
He said that the expectation was for the dollar to be in for a 'major correction' soon.? Yes...highly possible
To what level would a correction be rather than retracement - A correction and a retracement are the same thing to me
and in your experience does this happen in short time frame such as hours or days..or would it be more likely to be over weeks. weeks
With your comments about the dollar not breaching the 15000 level due to a'wall'..is it likely that the only way from now is a downward trendwith the correction in mind? The UP trend since April (almost 150 trading days ) is still in place so I will be watching when it gets to the Support line with the intention of going long (with the trend)... but if it breaks the Daily Support line convincingly (more than 50 pips), I will quickly turn it into a Sell

Email 5
At what point would you consider the trend has changed to the downside? A convincing 50+ pip break of the Daily Support line
I don't see anything in the fundamentals suggesting a major shift (strengthening of the dollar. You won't see the fundamental reason till AFTER the major shift has happened...the fundamentals lag the technical because most chartists are projecting expectation into the equation. Also the fundamentals are not as easy to see as clearly as a line on a chart
What's your thoughts? Do you think others are seeing this formation and selling as a result of this technical formation or for fundamental reasons, that's if this does pan out as a reversal? I think it is both....But the biggest drivers to me are that NO other country wants a weak USD, (Every other country in the world relies on the strong USD for their economic wellbeing)… and also that the US is still the most powerful economic engine in the world...It has seized up lately, but will kick back into life at some point...and I think that that point is very close

Email 6
we've been waiting patiently for a very long time indeed, and price is approaching the support trendline. Do you think it's worth waiting so long just to wait to see what price does at trendlines? Yes, because I want to get one position...then compound up on that position and then let them ride.....
Not to be judgemental, just genuinely curious, do you think longer term trendlines such as this daily TL offer such superior trading opportunities that make it worth waiting, for several days, for price to reach them? Yes, because the option to trade shorter term (along with the other more adventurous traders) is always available to you ..... I am not a signal service... I will only signal you about MY trades...and I am not going to be hustled into trading the shorter term timeframes again. I have been there and done that..and had the financial scars to prove it...LOL






MESSAGE FROM JACKO 492

It is 3.00am NY time Friday November 20 and the market is at 1.4916

Today is looking like a repeat of yesterday. The market has moved down from todays earlier high of 1.4934 but is still some distance from the Support line. This market is sitting midway in the range that has been in play since November 7. The market has also bounced off the 1.4850 area a number of times now.
I am on the sides waiting for a Buy at the Support line but as I said yesterday in an email from the day before, if you want to be adventurous, then sell it from 1.4950 with a 100 pip SL (or if you want less risk...sell it at just under 1.5000 at the previous high of 1.4990...IF it gets there).

Edit 8.00am NY time Market is at 1.4827. The market WAS a repeat of yesterday with a quick drop during London trading. We may even see a repeat of the yesterday's NY session where all the London move down was erased by the US session. I would not be surprised to see this market head back to 1.4900 today. The market is still progressively edging down towards the 1.4750 Support line but we may see one more move back up today.

Edit 12.10pm NY time Market is at 1.4870 The market did repeat itself today with the US`session again erasing the move down in London trading. The market has been as high as 1,4874. This market will soon be down to our Support line in trading early next week.

Edit 7.00pm NY time The market is closed. A very frustrating and unproductive week this week. The market has resolutely refused to come down to the Support line but has been bouncing off the 50% Fib line. (I could have taken those trades but I am in risk-minimisation mode this week.
I have also been distracted on the personal side by having to ferry my neighbour back and forth between the hospital and helping her with her daily affairs. (I am still trying to catch up on lost sleep from hanging around a hospital ward all night). I will have a long sleep over the weekend and be bright eyed on Monday.



MESSAGE FROM JACKO 491

It is 3.00am NY time Thursday November 19 and the market is at 1.4879

The market has moved down but is still some distance from the Support line. This market is sitting midway in the range that has been in play since November 7, but is looking weak at the London open.

Edit 8.00am NY time The market is at 1.4857 The market has moved down to the 1.4850 area. The market is getting closer to my Support line at 1.4750. I will be watching closely today in the hope that we will get a trade. We have been very patient and deserve it.

Edit 12.05pm NY time The market is at 1.4903 The market has been bouncing of the 50% Fib from 1.4626 (Nov 3) and 1.5048 (Nov 11) at 1.4850. But the lows are lower and the highs are lower. The lower lows and the lower highs usually mean that the market is losing strength .... and should fall back to the Support line later. We will be trading soon.

Edit 7.15pm NY time The market is at 1.4924 The market has bouncedup off that 50% fib level again. I will be watching to see if it does not go higher than the previuos days highs of 1.4990 and 1.5015. That will be strong confirmation that it will head down to my Support line

Emails

Email 1
With regards to the latest message 488, you mentioned that you cannot recall why you use 300 periods to analyse your chart since you have been using then for more than 20 years so in the beginning of your futures trading are you using the same methodology back then too... Single Support & Resistance, 50% Fib & round numbers? Like everyone, I looked for the Holy Grail indicators that no-one else knew about and tried different strategies but I gradually got rid of everything else over time
If so how did your trading evolved back then to your present methodology. If so what caused the paradigm shift in your trading method? Do you have a mentor/coach during your trading career to guide you in your trading career or someone you admire who you seek for assistance during your younger days? Hmm.. Because I have been trading so long, I have picked up bits from lots of traders and brokers and gradually realised that there is NO Holy Grail and NO secrets...Just trade the way that the majority of big winner traders trade...They use very basic TA tools because they work. They work because the majority of power traders use them and therefore they become self fulfilling.

Email 2
Thank you for helping your neighbour out. I felt good about it too I would like to say that I was a white knight in shining armour and she was a beautiful young fair maiden.
Unfortunately I am not and she is not.
I am picking her up tomorrow night

Email 3
Are you still bullish on that trendline ? At some point it feels like it's gaining power to push through it once it gets to the there. I know you anticipate the price action at the trendline i am just curious about how you think about the situation now. what makes your view to change etc ? My charts are saying that the bull trend is still in play as long as the Daily Support is not broken..
PS. about the rumors. You said you usually ignore them but this time things might be different. Do you mean that you consider joining the publicly shouted shorts at around 5000? I am hearing a HUGE amount of (unsubstantiated and unsourced) chatter about a WALL of Resistance above 1.5000... If you want to be adventurous, then sell it from 1.4950 with a 100 pip SL. It is bouncing up all the time so there will be more opportunities in the next couple of days

Email 4
I am just wondering why you chose not to buy in at the 50%fib last night(NY morning)? Seemed good to me, price broke the line by +20pips and then went back up. I have been a little distracted this week. When I took my neighbour to the hospital I stayed with her and was awake all night.... I am still trying to sort out some issues at home for her and also trying to catch up on all my lost sleep

Email 5
I really appreciate your help in all this and I got a feeling that the one year mentoring process is not going to be enough because of the current economic climate that doesn't allow me to apply your strategies and understandings as much as I would. What do you think? The experience of trading through the GFC will benefit you enormously, because you have seen the extremes of the market. Reading the ForexFactory , I am watching new traders who have just started coming into the forex markets who "missed" the GFC .
They have no idea just how much that impacted the market.
We traded through it so we know. ..and we will remember it .. and that will save us from being hurt by any later upheavals
It is not every year that we have a Great Financial Crisis. However this is a journey that you have embarked on that you will continue for the rest of your life. It is the best business on the Planet, with no age limit and no one to tell you what to do.
Enjoy it, you will look back in a couple of years and really appreciate what a powerful turning point it (trading Forex) was and what you have done.



MESSAGE FROM JACKO 490

It is 3.00am NY time Wednesday November 18 and the market is at 1.4898

The market has continued to progressively moved back up from the 1.4808 to its current price. As stated yesterday, we have received chatter from three sets of brokers now, each saying that they believe that the 1.5000 Resistance area is going to hold.
We are also not getting any sensible response about where this rumour is coming from. Someone is pushing this story hard.
I also saw it today on DailyFX from Jamie Seattle and John Kicklighter. (I normally ignore this type of gossip, but it is getting a strong run from the brokers at the present time....and it seems to be coming from everywhere)
Edit Both stories on DailyFX have now been removed

Edit 8.00am NY time Market is at 1.4964. The market has moved straight back up to the familiar tight 1.4970 trading range area where it has been for the last week or more.
I am sticking to my strategy that this is still a bull market until proven otherwise (by the convincing break of the Daily Support line) and waiting for the market to move to the Support line for a buy.

Edit 12.10pm NY time Market is at 1.4983 The market has moved as high as 1.4990. Given the chatter from brokers over the last 24 hours, it will be interesting to see how vulnerable the 1.5000 area is to this bull market.

Edit 7.00pm NY time Market is at 1.4955 This market is seriously in love with this familiar tight 1.4970 trading range area where it has been for the last week or more. It was stuck in this range again in the US afternoon session. The US session had a total range today of 71 pips... and the afternoon session had a range of 27 pips...Woo hoo.

Emails

Email 1
what is the descending Resistance Line, Rising Support line and Horizontal resistance line?
The descending Resistance line is when you connect all the highest points on the chart to show a descending Resistance line
The rising Support line is when you connect all the lowest points on the chart to show a rising Support line
A Horizontal Resistance line is where there has been a number of congestion points at the same price level at various times over the 300 periods

Email 2
The past few days of trading/waiting is really wearing me out. This waiting game takes more out of me than sitting there with a floating profit. I'm going to …. develop an indicator that tells us when price will stall like this. This way I can time my vacations. Now you know what it is like to be a sailor when they are "becalmed" with no wind.... But beware of the storm coming






MESSAGE FROM JACKO 489

It is 3.00am NY time Tuesday November 17 and the market is at 1.4964

This market is still glued to this narrow and tight trading range around the 1.4970 area at the present time. With the exception of quick moves which are then immediately cancelled out as the market moves back to this tight range, there has been no decent trade opportunity on the Daily chart for a number of days.
Earlier today, I even looked back at the 4H chart in the hope of maybe seeing a trade opportunity. But this tight range has not even produced an opportunity on the 4H charts lately.

Just for fun, I was talking to a member of the group and we even looked at the 5 minute chart over 400 bars and the market has been stuck such a tight range and I could not even see one real opportunity even as wild scalper!!!
(Note If your platform won't show 400 bars, go to either Dailyfx.com charts or Netdania.com charts...they can go up to 1000 bars)

So we wait.....

Edit 9.45am NY time Market at 1.4873 Apologies for the delay. A minor emergency with my neighbour having a bad accident in her apartment and I have taken her to hospital. I will not be trading today. I am at the hospital and will stay with her.
I think I look a little silly with my laptop in a hospital....

Edit 7.15pm NY time Market is at 1.4886 The market has dropped to as low as 1.4808 during the US session. We have had a lot of chatter from the brokers today that they think that we may be past the highs for the Euro and that the market is turning. (I think that they were perhaps trying to generate some business, but....???)
PS My neighbour is now on the road to recovery and will be discharged from hospital in the next day or two





MESSAGE FROM JACKO 488

It is 3.00am NY time Monday November 16 and the market is at 1.4989

The market moved has continued to move higher in Asian trading today than where it closed on Friday. The worse than expected US Consumer Confidence number hammered the USD as the fear of the increasing unemployment spreads throughout the USA. Those numbers put a rocket under the Euro which has continued today in Asia.
The market is now back in that narrow 1.4970- 1.5010 trading range where it spent most of last week.

I have my charts open to 300 periods of the Daily time frame.
The Resistance line. At the present time there is no descending Resistance line of interest. In regards to horizontal Resistance lines, the Resistance is at the previous high of 1.5062
The Support line is found by linking up the lowest points on the Daily chart starting from 1.2460 (March 3) and 1.2886 (April21) and 1.4626 (Nov 2) we can see that the rising Support line is today at 1.4750. As can be seen we are quite some distance from the Support line.

Until the market returns to the Support line, I am on the sidelines.

The adventurous traders may wish to consider a Counter Trend sell down from the Resistance line area of 1.5062

Edit 8.00am NY time Market is at 1.4973 I feel a sense of deja vu. The market is back in that narrow trading range that it was in for the most of last week. Being in that location makes it more difficult to trade because it is in no-mans land as far as a guide as to which direction it will go. Hopefully this week it will do as it is supposed to do and go all the way to the Support line so we can get a good trade triggered.

Edit 12.10pm NY time Market is at 1.4970 After a minor reaction to the US Core Retail Sales number the market has moved straight back to the tight trading range again. A frustrating market at the present time.

Edit 7.00pm NY time Market is 1.4980 After a lightning fast drop in the Euro to 1.4880 after Mr Bernanke stated that he was committed to a strong USD, the market has hauled itself straight back to the narrow trading range again. (Obviously traders have a problem believing the sincerety in Mr Bernanke's statements). This market is glued to this narrow and tight trading range at the present time.


Emails

Email 1
What is your rationale for using a 300-period 4H/1D chart before drawing any trendlines, S/Rs and Fibs? Why not 250 or 350 periods? The 300 bars is just a standard that I have always used...I can't even remember the rationale for it anymore but I used it in trading futures for 20+ years... I think that it was because all my brokers used to use it when I traded futures on a medium term and and it was just over a year of Daily data, so it gave a good perspective

Email 2

Sometimes the price "jumps", it moves very rapidly, sometimes this move is of 10 pips and sometimes it's of 50. But it does so at no particular "hot" spot like a resistance/support. No..it is usually when it is moving BETWEEN the Support and Resistance lines because everyone is working out that it is heading there

Is this the action of a big order by a hedge fund/bank, either just making a currency exchange (often the case with a big bank) or trying to move the market for stop hunting etc? Could these strong, fast moves at random points be originated anywhere but by big players like the ones i've mentioned? I think you will find that as the market moves from a Support line upwards, everyone starts to realize that it will go firstly to the 50% line, and then (in 60% of cases) onwards to the Resistance line...so as everyone starts to realize this , the market starts to move quicker

MESSAGE FROM JACKO 487

It is 3.00am NY time Friday November 13 and the market is at 1.48747

Today is a Black Friday ( Friday 13th) which some consider an "unlucky" day. I am not superstitious but ........ LOL
As I projected yesterday, the market has finally broken down out of the tight trading range from early this week.
The market has been as low as 1.4821 which is close enough to the 50% Fib line at 1.4837 (from 1.4626 to 1.5048).
There has been an upward move in Asian trading but this market should continue to progressively work its way back down towards the Support line at 1.4700 over the next 24 hours.
The news items for today are the US Trade Balance numbers at 8.30am NY time, and also the Consumer Sentiment numbers at 9.55am NY time.
The market has moved almost 60% of the distance from its high of 1.5048 to the Support line at 1.4700. The market is now looking tired and is heading down to the Support line area. The speed of the drop yesterday and the limp rebound in Asian trading would indicate that it has further movement downwards to go. I am still very hopeful that the 1.4700 Support line is the target and we will get there very soon.

The adventurous traders may see the 1.4900 area as a potential opportunity to sell this market down to the Support area.

Edit 8.00am NY time Market is at 1.4865 The market has bounced up and reached a high of 1.4902 and is now moving back down. The target of the 1.4700 Support line still stands and I expect that we may get there later today.

Edit 12.25pm NY time Market is at 1.4914 After touching 1.4902 earlier in the day, the market dropped to 1.4824. Then the much worse than expected US Consumer Confidence numbers were announced and the market immediately started to move back up. That is the second time the market has bounced at the 50% fib level. The market may move as high as 1.4950 before resuming its downswing.

Edit 7.30pm NY time Market is closed. The market moved as high as 1.4937. The worse than expected US Consumer Confidence number hammered the USD. The 40% risk of a winning trade based on the bounce of the 50% Fib was not high enough to justify a trade on this occasion. We will need to re-appraise this market on Monday

MESSAGE FROM JACKO 486

It is 3.00am NY time Thursday November 12 and the market is at 1.4970

This market is still stuck in the trading zone where it has been for most of the week. Today we see the US Unemployment Claims which should add a bit of life to this otherwise very lackluster market. As we get close to the London open, the market is taking a bit of a dive but it is still well within the tight trading range that it has been in for most of the week.
I am hoping that the market will move lower to get closer to the Support line but it is hanging up in this trading zone at the present time. The tight trading range is not throwing up many trade opportunities, even for the adventurous trader.
But I expect that this tight trading range has a very limited life left in it. I think we will see a move (hopefully down to the Support line area) in the next 48 hours.
It is unusual for the market to stay in a tight range for any prolonged period. Either the market can go up or it can go down. It has had a number of attempts at moving up and has not been able to break the 1.5062 Resistance, so it is more probable that it will fall back towards the Support line and attempt to gain some more strength.

Edit 7.45am NY time Market is at 1.4913 The market has finally broken down out of the tight trading range from early this week. This market should progressively work its way down towards the Support line at 1.4700 over the next 24-48 hours. There may be an upward reaction from the change of sessions (from London to US) and also from the US Unemployment Claims numbers at 8.30am NY time, but the market is now looking tired and is heading down to the Support line area.
The adventurous traders may see this as an opportunity to sell this market down to the Support area. (If not already in, I would suggest that you wait for the reaction upwards from the US Unemployment Claims news)

Edit 12.10pm NY time Market is at 1.4864 The market has continued to move down and is still heading towards the 1.4700 Support line. However, after such a strong move down, we may see a small retracement upwards in the afternoon session. But the market is definitely moving towards the Support line

Emails

Email 1
When i look at the chart at any time frame i see many support and resistance levels how do u pick up one which is mostly effective and price will turn direction. There are always S&R levels on each chart.... The best solution is to make a decision..
The first thing you need to do is decide what time frame YOU are most comfortable trading.
You need to choose ONE time period (4H or Daily)
Then you need to set your charts to 300 bars/candles.
Then you need to place ONE Resistance line linking up all the highest points.
Then you need to place ONE Support line linking up all the lowest points.
Then you need to plot ONE 50% Fib line (working from Right to Left, using the last Highest point and the last lowest point)
When you have done that, you need to remember that the market will move between Resistance and Support levels.
The market also likes to target the 50% fib line on the way through from Support to Resistance OR from Resistance to Support
IF. AND ONLY IF, the Support line is NOT sloping upwards OR the Resistance line is NOT sloping downwards, then we need to look at horizontal Support or Resistance lines which are drawn from previous highs or lows or obvious congestion points over the 300 bars

Email 2
Ive been looking at the Euro closely this weekand as you mentioned it has been struggling to get past the 5000 level. Considering that it has been only ranging around 60-70pips week so far, would there be a higher probability for the pair to move lowerback to the 4700 support line. Yes, if the market doesn't keep going in the trend direction, the traders get disappointed and then take it back to the Support line where it can start building from strength again
Does it also mean thatwhen there has been a ranging market the probability of an explosive price movement in either direction becomes higher as well? Yes, definitely...the market players all get frustrated and when it starts to move they all jump in

Email 3
Now i am interest about your thoughts on the upcoming long trade. If the market is going to go down now, then it will be a lower high on the daily chart. Yes
How do you feel about that ? Will that make the long trade riskier more than you would like ? No, because the Support and Resistance line is the strongest TA tool in the box
Another thing that confuses me a bit is the trendlines. When we had the last long we connected the bars on march 3 and april 21. And now we link again those lows and adding nov 2 low and have a nice trendline without any possible break of it like we saw the last time. Did we connect the lines last time correctly yes, given the charts as they were, that was a validly drawn line ....It just didn't work that time
or should we had drawn the line like we have done right now just without the nov 2 low (just the lows of march 3 and april 21). That is only being considered because the last line didn't hold and was broken...So we moved to the next possible trend line option .. Remember , it is never 100% infallible. We are always playing a probability game with the benefit of only trading the high probability set ups.
Like any business, there are always multiple business options available. The key is to go with the highest probability options, but also understanding that you will never get it 100% correct


MESSAGE FROM JACKO 485

It is 3.00am NY time Wednesday November 11 and the market is at 1.5006

This week has been an unusually quiet week so far. We have had two days of no US news events and today is a Bank Holiday in the US for Veterans Day. Canadian markets are also closed. However.... sometimes.... the market takes advantage of these thin Bank Holiday markets to make a significant move.
The markets have been trading in a very narrow range for the last 48 hours and I would not be surprised to see a fast break in the next 6-12 hours. As to whether it will be to the upside or downside, these moves are usually in the direction of the trend. However, you need to be very cautious with these moves and be prepared to move in and out of them quickly if it moves against you.
Trading today, especially in the very thinly traded US session times, is only for the very adventurous traders.

Edit 8.00am NY time Market is at 1.5035 As expected, the market has moved up in the thin trading today. (The market was actually at 1.4975 when I started writing the above blog entry, and by the time I was finished typing it had moved up 31 pips)
As London starts to wind down for the day, and we get into the holiday US session, the market will become more volatile....
Those of you who are in a trade, you need to be very cautious and be prepared to move out of them quickly if it moves against you.

Edit 12.15pm NY time Market is at 1.4964 The trading in the US session has erased all of the move from the London session and we are back in the trading zone that we have been in for most of the week. More importantly, the market only rose as high as 1.5048 and did not break the previous high of 1.5062 (Oct 25). Over the next few days we may see the fall back to the Support line from here.

Edit 7.00pm NY time Market is at 1.4980 This market is back and stuck in the trading zone where it has been for most of the week. The Sydney and Tokyo markets are doing nothing at the moment. Since there was no firm direction from the US session, those two markets are maintaining the status quo and remaining in the current trading zone. Hong Kong is about to open but I expect the market to be quiet until London opens tomorrow at 3.00am NY time. Tomorrow morning we see the US Unemployment Claims which should add a bit of life to this otherwise very lackluster market.
I was hoping that the market may have moved lower to get closer to the Support line but it is hanging up in this trading zone at the present time. The tight trading range is not throwing up many trade opportunities, even for the adventurous traders


MESSAGE FROM JACKO 484

It is 3.00am NY time Tuesday November 10 and the market is at 1.4965

The market has been basically locked in a 40 pip range (from 1.4970 to 1.5010) for the last 43 hours. There was a lightning fast move down to 1.4050 and back up again in minutes after an announcement by the Fitch rating agency that the UK economy might lose its AAA rating sent shock waves through the GBP and then the Euro, but otherwise it has been not been an exciting or tradeable day... yet.

While the market does nothing, I am on the sidelines awaiting the next pull back to the Support line

Edit 8.00am NY time Market is at 1.4974 This market looks as though we may have a retracement today. It appears that the 1.5000 resistance area is putting up a good show of resistance. I am not interested in any Counter Trend trades at the present time. I will wait until we get back to the Support level.
I want to spend most of my time IN a good trade, rather than just looking for entries.

Edit 12.10pm NY time Market is at 1.4950 The market is really struggling with this 1.5000 resistance area. After rising to as high as 1.5005, it has again fallen back and a retracement lower is looking very probable.

Edit 7.00pm NY time Market is at 1.4985. Today has been another day of the market trading in a tight range. This was caused primarily by the lack of any US news events again today. The market has been in a 60 pip range (1.4950 - 1.5010) most of the week. When the market is in such a tight range for a couple of days, it is easy to get frustrated and open a trade just for the "action". It is better not to do that. While the market is doing nothing, it is best to be on the sidelines waiting for the next pull back to the Support line

Emails

Email 1
Why are you so sure that the market will go back to the Support line? Trading rules tend to be self fulfilling. When the market is too far from the Support line, major players stop buying.... and wait.
Some of the more aggressive traders consider that when the market is a large distance from the Support line, it is"out of line" with where the market should be and that it is a good reason to actually Sell the market. Therefore the market falls back to the Support line.
Once the market starts to fall, it is reasonably obvious where the market will go to (the Support line). That is why the moves between Support and Resistance lines are reasonably quick. Like most of the trading rules they are self perpetuating.

Email 2

I was sent this useful site by one of the members. It is a timezone converter for forex traders.
http://forex.timezoneconverter.com/index.cgi?timezone=Hongkong;
You may want to put it in your favourites


MESSAGE FROM JACKO 483

It is 3.00am NY time Monday November 9 and the market is at 1.4963

The market has moved up early this week in the Australian / Asian session. Normally this session focusses on the AUD and Yen pairs.

I have my charts open to 300 periods of the Daily time frame.
The Resistance line. At the present time there is no descending Resistance line of interest. In regards to horizontal Resistance lines, the Resistance is at the previous high of 1.5062
The Support line is found by linking up the lowest points on the Daily chart starting from 1.2460 (March 3) and 1.2886 (April21) and 1.4626 (Nov 2) we can see that the rising Support line is today at 1.4700. As can be seen we are quite some distance from the Support line.
However, as we saw only two weeks ago when the price moved from 1.5052 to 1.4691 in three days, a 350 pip move down can happen quicker than most traders expect to happen.

Until the market returns to the Support line, I am on the sidelines.

Edit 8.00am NY time Market is at 1.4995 Market has moved to the Round number Resistance of 1.5000. The market is currently too far above the Support line for me to enter as a buyer at these high levels and I am not interested in Counter Trend sell trades at this time.

Edit 12.10pm NY time Market is at 1.4995 The market has been restricted to a narrow range around the 1.5000 area all morning, reflecting the lack of any US news events earlier today.

Edit 7.00pm NY time Market is at 1.5006 The US session today was one of the quietest sessions I have seen for a long time. Yesterdays Australian/Asian session was the prime mover, then the London session was quiet and the US session was almost dead with only a 35 pip range (and most of the trading session was within a 20 pip range).

Emails (Most relate to the last trade)

Email 1
The last trade we had a support line that becomes broken , we sell the next rally when the price comes back to the line to confirm..... and then the price keeps on keeping on until we're stopped out. Was this an anomaly ? Yes, the market usually (greater than 75%) follows the rules...this is one of those occassions when it didn't. It is never 100%
Or have the rules changed? No, the rules rarely change,..even over the very long term (The expression, "this time things are different" is rarely correct)
I still like working with the daily charts better. It seems like the trendlines are stronger or more established (despite getting stopped out!). Yes, this was just one of the 25% those times when it didn't follow the "usual" pattern.

Email 2
i still dont understand how to enter a trade accurately. Wait for it to get to a Support line, then either go long if it bounces up OR short if it breaks down through it. Wait for "confirmation" touch after the break
Also I was looking at our latest trade. My bias was to go long at the 1.4700. I saw the break down to 1.4626 as an indicator that the 1.4750 Support line was convincingly broken. But the rules also say to wait for the move back up for the "confirmation" touch This usually (75% of the time) happens when the market is breaking down. The market did move back to the 1.4750…And I was expecting that it would the drop . However, this move was one of the 25% of the times when it didn't play by the rules

Email 3
About the last trade. Do you think we should have waited a little bit longer for shorting? It had dropped 120+ pips through the 1.4750 Support line which dated back as far as April this year with multiple touches. The rules say that when it moves back up for a "confirmation" touch, you hit the SELL button. This was one of those cases where it did not follow the trading rules....

Email 4
u have said the trend is broken when the price broke 1.4750 and since u have outlined before that we still have a support at 1.4600 and after this no more support until 1.2650 . why u didn't wait to see the break of 1.4600 before u consider the trend broken ? I saw the break of the Support at 1.4750 as being the critical break (in hindsight, I was wrong). It was broken by 120+ pips to 1.4626 so I was just waiting for the move back to 1.4750 for the "confirmation" touch as the point to Sell... I considered that waiting for the 1.4600 break would mean a missed opportunity to sell down from 1.4750 to that 1.4600 level.

Email 5
I'd also like to ask about fundamentals. My understanding is the value of the dollar should rise on negative news and fall on positive news. Is this correct? It is the opposite. Good news means that the country is in better shape, therefore the currency should be stronger as investors are attracted to the country. Having said that, we are in a time of huge economic stress and there is currently the "flight to safety" factor, so that when there is bad news, the money flows into the USD (making it stronger) because they perceive it as the best currency in times of economic crisis
How do you treat fundamentals and what role do they play in your decision making? Background knowledge only. It allows me to understand the context of WHY a currency is moving in a particular direction
Do you take into account any medium/longterm expectations of the US/World economy? Only vaguely.... for example, I have in the back of my mind that the USA is still the most powerful economic engine in the world and will soon come back into force, causing the USD to increase



MESSAGE FROM JACKO 482

It is 3.00am NY time Friday November 6 and the market is at 1.4868

I am waiting or the market to move down to a more acceptable and risk free area near a Support line. The market is sitting resolutely 1.4875 area for the last 32 hours and refusing to budge.

Today is the infamous Non Farm Payroll (NFP) day. The NFP and the FOMC statements are the biggest market movers on the Forex calendar.

Edit 8.00am NY time Market is at 1.4871. The countdown for the Non Farm Payroll (NFP) has started. The news is released at 8.30am NY time and the impact is instant. Spreads widen, the market gaps up or down, slippage occurs, and Stops get taken out with ease by the volatility in both directions. The brokers love this type of chaos to eat up novice traders accounts. To those who try to trade the NFP news release before the announcement...you have been warned.

Edit12.15pm NY time Market is at 1.4850. The NFP excitement is over and the market is back at 1.4850. The market is looking as though the 12.00pm turnaround outlined yesterday is in place again. I am watching it with interest.
Edit 8.00pm NY time Market is closed The Friday afternoon session was its usual dead trading session with a trading range of only 10 pips.
Have a nice weekend. The markets are closed, you can't trade, so spend some quality time with family and friends without any thoughts about Forex. That's one of the benefits of being a trader...You get every weekend off.

Emails
I am still catching up on the emails fromthis week because of the End of Quarter for the Fund. I will answer the rest over the weekend

Email 1
Thank you for the new hours of posting your comments....they hit the really "key" times. Thanks. They actually work better for me in HK too.
What I am appreciating the most is your laying out in great detail the S/R lines and the reasoning behind the trades. That is what I benefit the most from. Thank you...thank you....thank you!!! I am getting more comprehensive in my reasonings ..It is a great benefit to me as well
I love how you let us know where you believe it is headed and why. I am one who also likes to trade both ways....when there is enough possible action to make it worthwhile. Truly amazing how often you hit it. I am learning....just wish it were faster! You get more patient as you get older and richer...The downside is that you get older… and can't remember what you wanted to do with the money....LOL.

Email 2
Do you think that we will over the next year see these currencies back to pre GFC levels? 1.6000 ??? Possible but I hope not. the bull has run too far without a break so the UP side is limited.....I want a nice long, long short that I can ride for 12-18 months down to 1.3000 or lower

Email 3
even though your timing on the last trade was off, it would appear to me that your decision was still sound just more of a timing issue. Could we be seeing a flush out of the remaining bulls in the upper resistance area before we see the substantial drop or correction? I don't know...when you look at the new Support line it doesn't touch ANY recent bottoms of the bars since April..so the old Support line was definitely broken, but the bulls kicked back on

Email 4
I am sure after all you find that trading from the daily time frame suit you the most. However, I am still struggling to figure out which timeframe suit me the most.In your early days, you must have gone through this before you realize that you best suit trading of the daily time frame. Do you start of by trading in the lower time frame? Trying to scalp few pips here and there? Intraday trade? What is the breakthrough along the process that make you discover you are going with the higher time frame? You will be tempted to trade the shorter term time frames because you will be excited and you will be keen for "action". But after a while you will realise that the "longer the time, the stronger the line", so you will start leaning more to the longer time frames. And then you will realise that you want to do this for the rest of your life, so you move to the longer time frame again to allow a sustainable lifestyle where you are not glued to the terminal..and then you will have a great business and a great lifestyle


MESSAGE FROM JACKO 481

It is 3.00am NY time Thursday November 5 and the market is at 1.4818

I was wwwwrong in my last trade. It appears as though I may have called the death of the bull trend prematurely. Therefore there will be no Anti-Hedge trade for this trade.The market has been as high as 1.4908.
However, we protected ourselves and minimized our loss by using a Stop Loss and only risking 2% of trading capital. This trade highlights the absolute importance of both of those mechanisms in trading.

As you know, my personal account and the Fund tracks the exact trades as outlined here in the blog. I am NOT a signal service. I am not just sending out signals. The trades here in the blog and the SMS notifications are MY trades.
In this respect, the Summary to investors in the Fund might allow you to put the blogs trading notifications into perspective.

Message to Investors ...... November 4
The Fund earned 234 pips over the three months of Aug to Oct for an annualized rate of 18.6% for the Quarter. The Quarter included a very unimpressive period from September to mid October where I saw a correlation between moving to smaller time frames to trade more frequently (due to some mild pressure from some of the more active traders) and a deterioration in the quality of my trades.
As soon as I became aware of it, I took immediate steps to rectify the situation. Fortunately, we caught the drift to the shorter term and Counter Trend trading of those six weeks in reasonably quick time, and we have seen an immediate positive impact on our trading.

The Aug-Oct quarter is the first Quarter of the second year of the Fund.
Last year, from the commencement of trading on 8/28/2008, we accumulated 1727 pips over 337 days for a net 37.49% annualized return. We achieved it with maximum safety since we have never had more than a 2% capital risk on any trade and we achieved that figure in the midst of, potentially, the greatest financial crisis since the Great Depression.

I consider that our results for the Fund last year was only barely acceptable. Even though we did so much better than any other asset class, I personally, am still disappointed with my results last year. The near 40% annual return was significantly less than my previous years results.

But we are coming out of the Financial Crisis and the markets are returning to conditions as they were before the great Financial Crisis. And in the Sept to mid Oct period we were drifting towards a wrong trading style which has now been corrected.
So now we are back to my 2005 - 2007 trading style where I made sizable returns. Therefore, I am comfortable in the knowledge that, excluding another major Financial Crisis, we will have a much better year this year than the last year.

Edit 8.00am NY time Market is at 1.4870 After yesterdays unpleasant little surprise of being stopped out of my trade, I have gone back to the charts. That's the thing I really like about this business.... If you make a mistake, the market has no memory. You simply start again, and try to do better next time.
My new Support line incorporates the new low of1.4626 set on Tuesday. By linking up all the lows on the daily chart, starting from 1.2460 on Mar 3 and touching 1.2886 on April 21 and 1.4626 on Nov 3, we can see that the Support line today is currently at 1.4650.
The market is currently some 220 pips above that level, so I need to wait until it gets closer to my Support line before I consider taking a trade.
To do anything else, is too risky and has a poor probability of success. And as we saw again last week, this market moves to Support and Resistance lines much quicker than most traders expect.

Edit 12.15pm NY time Market is at 1.4850 The market has moved down almost 70 pips from it high of 1.4919, but it has to move much closer to the Support line to be an attractive trade opportunity

Edit 7.00pm NY time Market is at 1.4876 The market has been slow in the afternoon session. It has moved a total of only 31 pips (1.4850 -1.4881) since the last post 7 hours ago.
For those more adventurous shorter term traders, the pattern of a price reversal at 12.00pm NY time in the US session is becoming very prevalent and very distinct. It has done it again today. It is just something to consider....

Emails

Email 1
I see that the CRB index (commodities) aligns in the opposite way of the euro dollar frame Am i right? Only sometimes...It is NOT a LEADING indicator for the EUR/USD (in other words, it does not LEAD the action of the EUR/USD). There is NO index or commodity that has been statistically proven to be a leading indicator for the EUR/USD...everything I need is on the EUR/USD chart



MESSAGE FROM JACKO 480

It is 3.00am NY time Wednesday November 4 and the market is at 1.4743

My orders to SELL at 1.4725 were filled yesterday afternoon (apologies for my incorrect reading of the 24 hour time in yesterday's entry) The market has moved up marginally past my entry point but is still under the Support turned Resistance line at 1.4750.

Today is a big day for news events. At 8.15am we have the ADP Non Farm Employment Change, then at 10.00am we have the ISM Non Manufacturing PMI and at 2.15pm we have the big FOMC Statement. It should be a volatile day. (Those of you who wish to trade very safely may wish to close some positions for a profit ...it will trade below 1.4725 at some time before the FOMC announcement.....before the news to reduce your risk and then get back in after the dust has settled).

Edit 8.00am NY time Market is at 1.4748 After some gyrations and Stop Loss hunting over the 1.4750 Daily Support line area up to 1.4777, the market is starting to head back the Support line in preparation for the ADP Non Farm Employment news release.
I am still comfortable with my 1.4725 Short trade. If the market gets down to the 1.4600 area, I will be looking to close his trade and Sell it again later when it bounces.

Edit 12.10pm NY time Market is at 1.4837 The market has moved up on worse than expected ADP Non Farm Employment numbers and has stopped me out. A surprising and disappointing result, but occasionally these types of trades happen. Move on to the next trade opportunity.

Edit 4.00pm NY time Market is at 1.4863. I was wwwwrong in my last trade. It appears as though I may have called the death of the bull trend prematurely. Therefore there will be no Anti-Hedge trade for this trade
The market has been as high as 1.4908. However, we protected ourselves and minimized our loss by using a Stop Loss and only risking 2% of trading capital. This trade highlights the absolute importance of both of those mechanisms in trading

Emails
We have almost completed all our Client Account procedures and Auditors sign off for the Quarterly accounts for the Fund so I should be back into the emails tomorrow. I apologise for the delay with the emails