MESSAGE FROM JACKO 19

S A T U R D A Y , N O V EMB E R  1 0 , 2 0 0 7

MESSAGE FROM JACKO 19

It is 1pm NY time Sunday December 2 and the market is closed at 1.4623
Well, as outlined in the previous message we managed to make a 76 pip profit from our last trade.
I then decided to sit out the impending retracement and left a stop buy order in at 1.4650 which was duly hit in
the closing hours of trading.

It was a bit quicker than I expected and normally I would not buy that late on a Friday afternoon, but due to unforeseen circumstances we have entered the trade. (After some extensive traveling, I was catching up on
some serious sleep, and my wife had turned of all of our phones so that I would not be disturbed).

I would hope that those of you who were at your computers would have continued to use the following advice:
In relation to any upcoming trade: YOUR thought process should be: "I am looking to buy at, say, 1.4650.
However... I will be patient to see if I can get it at a lower price. Anything lower increases my chances of not
getting stopped out and increases my profit. I will NOT get overly excited. I will NOT panic. I will NOT be
greedy. I will think calmly and rationally. At the worst, I will buy at 1.4650...at best an even lower price....
because this market is a bull market and WILL go higher. (This market has NOT reached its final peak!!!!)"

Some of you have written to say that you find this the most difficult issue to implement.
A sample question is below, with my responses in red
1.if the price goes lower, past say 1.4750 and you wait to enter at a bargain price, when do you actually place
an order? The first thing you have to learn and accept is that you will rarely ever pick the exact bottom...so
don't stress about it...You are just "fine Tuning" your entry
2. do you do it when the price reverses and starts to move up again? Yes
3. are there any price action patterns you watch for? A quick spike...it is an exhaustion spike
4. what time frame do you use then? hourly? It doesn't really matter, you will see the spike straight away...an
exhaustion spike is very obvious after you have seen a couple of them. (Have a serious look at the exhaustion
spike of Nov 22
5. if you are not on your computer, do you just place a pending (stop, limit) order and catch the falling knife?
Yes. I often get asked by my wife that if I know a price that I want to get in at, why do I need to watch the
market? Its a question I don't really have an answer for (except for the point of fine-tuning). You then have to
balance lifestyle versus being chained to a computer 24/7
6. could you teach me more on this subject Sure, just email your questions so that i can focus in on what you
need

In this case, because the market is currently lower than 1.4650, my stop buy at 1.4650 is not the optimal
position to have bought. So hopefully, some of you have a better price position than me.

I consider either the market will consolidate around this area and rise, or I may lose a soldier temporarily.

It has broken the four hour trend line (from Oct 22) and is currently sitting on the 8 hour trend line (from
Sept 4).

So there are two possible scenarios:
Firstly it will decisively break the 8 hour trend line and continue down...at which point I will lose 50 pips
maximum or

Secondly, it will stabilize and move back up... at which time my 50 pip trailing SL will take me out at some
point (hopefully in a profit)

Given the speed of the drop and the fact that the Asian market rarely makes significant reactionary move
on the Eur/USD (they are too focused on the USD/ JPY) I am currently of the opinion that this correction
may have further to run, so I am pessimistic about the outcome of this trade (as I am with all open
trades)...I I trade on the basis that the worst can and will happen, and any positive result is a bonus

In addition, I also consider that, given the dramatic rise in the Euro in the last three months, we may see a
significant pullback to 1.4500 (50% of the rise from Oct 8 to Nov 22....a nice round number ...and a 8hr
trend line from Oct 8 and Oct 22) over the next month or two before it resumes its upward trend.

Should the market break the 8 hour trend line, then this market is in correction phase. (Correction are the
worst times for trend traders because they are usually out of the market and there are short sharp drops which
everyone else "thinks" that they would have caught. So they transfer this outrageous optimism into $$$ that
they "woulda , shoulda , coulda" have made). However , I think there may be an opportunity or two for a
counter- trend strategy trade.

Finally, I was sent a succinct summary of how I trade, that I thought was interesting, along with a question.

Hi Jacko,
Compared to the average trader, it seems to me that you:
- trade only one pair where most of us trade many
- stay out of the market as much as you are in it
- look for places where the chance of losing money is minimised andhopefully the trend can sweep you to
profit.
- have an obscenely simple approach to trading that works because of theaggressive money management.
If I'm wrrr wrrr wrr....not right, then I welcome your comments.
Correct on all the above

Question: Do you think you could trade as well if you tried trading two or more pairs? (Are you trading 1 pair,
because that is what helps make you successful, or are you trading 1 pair because you already are so
successfulthat you don't want/need to spend time looking at other pairs?). Why trade more than the Eur/USD
pair? If you look at all the other pairs on a long term basis (eg GBP/USD, USD/CHF AUD/USD) and super
impose them over a Eur/USD they are basically exact replicas, so why trade two sets or more sets ???

Jacko