The information was extracted from jacko's Trading Blog
MESSAGE FROM JACKO 29
Welcome to the first Message for 2008.
As stated in my Message 26:
"I am starting to look for entry points for long positions for another run up to 1.5000
Also, I have a wounded A-H soldier at 1.4500 from my last trade. I also think that he will be reactivated in a shorter time period than most of you expect".
I had a nice little bonus just after Christmas with my fallen soldier from 1.4500 jumping back into action for a 163 pip profit. (After buying at 1.4500 the market went to 1.4713 before retracing exactly 50 pips at 1.4663 setting off our trailing stops for a 163 pip profit).
Since most of you were on this trade (and yes, I received and read all your happy emails), this was a nice way to end our year.
Lets take a quick moment to recap our trades since the group was formed:
Our first trade was on November 11, 2007
Trade 1 See Message 6
Buy 4644
Sell 4638
Loss 6 pips
Trade 2 See Message 8 & 9
Buy 4638 (A-H trade from previous trade)
Sell 4675
Profit 37 pips
Trade 3 Message 10 & 11
Buy 4625
Sell 4595
Loss 30 pips
After a very slow start in November due to my being excessively concerned about the group NOT having any initial losses, we missed two excellent trading opportunities which would have been very profitable.
After much discussion between Mark and myself, I finally decided in late November to just trade my normal
method and not be so overly concerned about trading so conservatively.
Trade 4 Message 17
Buy 4732
Sell 4808
Profit 76 pips
Trade 5 Message 19
Buy 4650
Sell 4657
Profit 7 pips
Trade 6 Message 21
Buy 4550
Sell 4609
Profit 59 pips
Buy 4595 (A-H from trade 3)
Sell 4609
Profit 14 pips
Trade 7 Message 22
Buy 4650
Sell 4700
Profit 50 pips
Trade 8 Message 23
Sell 4700 (Counter-trend trade)
Buy 4704
Loss 4 pips (That will teach me to go against the trend...LOL)
Trade 9 Message 25
Buy 4550
Sell 4503
Loss 47 pips (Ouch...a record loss)
Trade 10 Message 29
Buy 4500 (A-H from trade 9)
Sell 4663
Profit 163 pips
Total Profit 319 pips over a period of 47 days.
Given that we started very slowly, I am reasonably happy. However, I think that we can improve on that result in 2008.
Also, it should be kept in mind that I am a medium term trend trader, so I do not trade frequently....but I do trade in large volumes so each of those pips are worth a lot of money to me.
Not bad work for just looking at the market a couple of times a day and clicking a few keys on a computer.
As I said, I hope to ramp up our trading results in 2008 to my usual hit rate as I become more comfortable with the fact that others are looking at my trading. This has made me a little bit too cautious in my own trading since the group started but I am starting to get into the swing of it now. Also, my personal issues have had an effect on my trading in the last month.
So...welcome to 2008.....lets get down to business on Monday January 7 2008.
MESSAGE FROM JACKO 30
It is 6.25am NY time Monday January 7 and the market is at 1.4683.
It is the start of a new year and I hope that 2008 is as successful as the last couple of years. It is certainly an auspicious year as 8 is considered the most lucky number in Asian (especially Chinese) culture.
OK, Lets get down to business.
As of this year all fallen soldiers have raised themselves up and covered themselves in glory (except maybe Trade 3 who lost 30 pips but valiantly recovered 14 pips in Trade 6 to minimise our loss to only 16 pips).
Therefore we start with a clean slate with no soldiers left to pick up in 2008.
Surprisingly, my first trade for 2008 is going to be a CounterTrend Trade.
As you will recall, the criteria for this strategy are:
1.There is an Exhaustion spike (See spike to 1.4824 at 9am on Jan 4)
2.The break of the shorter time frame trend line (preferably 4 hourly) rounded down to nearest 50 or 00 (with x contracts) Start at 1.4396 bottom of bar on Dec 27 at around 1am NY time. Also touch 1.4698 bottom of bar on Jan 4 around 7am NY time. Trend line pierced at 1.4731 on Jan 6 at around 9pm. Round down to nearest 50 or 00 = 1.4700. CounterTrend strategy says to sell at 1.4700
3. The break of the longer time frame trend line (preferably 8 hourly) rounded down to nearest 50 or 00 (with 2x contracts)
4. Trailing Stop Loss is 50 pips
5. There is no A-H in effect Please note. There is no safety net of the A-H strategy with this trade.
I have missed the initial break (and bounce back up to 1.4730 for a bounce off the trend line on the underside), but am still thinking that there is more downside to come in the short term.
The market is now at 1.4670. I am hoping for one last bounce to around 1.4700.
I have just placed a sell order at 1.4700 with a 50 pip Trailing Stop Loss. (Some of you may wish to wait for it to go above 4700 and see if you can get a better sell price)
Please note. There is no safety net of the A-H strategy with this trade. (So if you wish to stand aside from this trade and wait for a buy trade, there will be plenty of buy trades in the future).
I will also probably be trading a little more actively in the future.
Jacko.
PS If you haven't read Message 29 (below), you may wish to now.
I am looking forward to another successful year. I just love Forex
MESSAGE FROM JACKO 31
It is 1.25 am NY time Wednesday January 9 and the market is at 1.4725.
(PLEASE NOTE: I set this time as soon as I am ready to send my SMS text messages to you).
The market is winding itself up for a big move at the London opening. The range is getting smaller and smaller which often indicates a large and fast breakout. I am leaning slightly to a break on the upside.
Now because the range is getting smaller and smaller, the chance of a move to 4750 (prior to the breakout) is not high. (If it hits 4750 it will probably mean that I am wwwrong and will continue straight through it to higher levels during the break-out)
Similarly, the chance of a move to 4700 (prior to the breakout) is not high. (If it hits 4700 it will probably mean that I am wwwrong and will continue straight through it to lower levels during the break-out)
Therefore I have placed a stop buy order at 1.4750 and a stop sell order at 1.4700.
1. Inaugural Trade for 2008
Well my inaugural trade for 2008 was not a great success. However, even though it was a loss for me of 17 pips, most of the group did well by selling at a higher price than me. Many of you took my advice that "Some of you may wish to wait for it to go above 4700 and see if you can get a better sell price". Because I am telegraphing my trades in advance, my entry points can't be as fine tuned as yours. (in reality I may fine tune my trades on entry, but for record keeping here my posted numbers will be used)
Remember the rule in relation to any upcoming trade: YOUR thought process should be: "I am looking to sell at, say, 1.4700. However... I will be patient to see if I can get it at a higher price. Anything higher 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 sell at 1.4700...at best an even higher price...."
Many sold at 1.4715 to 1.4725 so their losses were either minimal or you were marginally profitable...they are starting to learn patience and emotional control and "buying at a discount" or, in this case, "selling at a premium."
EVERYONE can easily do the same. And it is important that everyone start to learn to make those decisions on your own. (One day I will be dead and gone...and unfortunately won't be around to give you exact entry points).
2. The next trade
Below is a copy of an email from one of the group (with my response in red)
I'm following advice and made good pips, especially on the AH trade over Xmas, but if I'm honest I don't know where to go next.
You now put everything out of your mind,start afresh and look at the charts for the next trade: what is the major trend? Has there been a pullback ? Is the pullback stalling? Is it near a round number/ trend line/ 50% Fib number? IF SO, THEN HIT IT !!!! If you are wrong, the A-H will get you out of trouble.
I feel I'm lacking more information or just not seeing something.
No, you are probably more scared to pull the trigger because you are uncertain about your trading abilities (that is why you are looking for more information... to give you more "certainty"). You need to learn to pull the trigger more often.
Attached is an interesting and valid article from FF
http://forexfactory.com/news.php?do=news&id=63933
3. The 50 pip Trailing Stop Loss
In regards to the 50 pip, I have started to see a lot more 50 pips (exactly) reversals. If I was paranoid, I would say that they (the brokers and everyone else in the market world-wide) were out to get me. (Who is that man standing outside my house?????)
I think that it is just that a 50 pip trailing stop is simply being used by more and more people...so it is becoming self perpetuating.
However, as Mark tells me repeatedly, I made 319 pips over 47 days with very little effort or stress AND we
made this mostly by taking long positions during a correction. (Mark is an ex-broker and knows that
corrections are the most difficult trading conditions for a trend trader)
However, it is starting to become so prevalent in the last couple of months that it is annoying me. I was thinking
about this issue over the Christmas break and have been thinking of increasing my Trailing Stop Loss to 60 pips
and reducing my A-H gap (at which point the A-H trade would be placed) to 40 pips. However we want to
review some back data a bit more before we make that decision.
4. Anti -Hedge trades
Another question that was emailed to me was:
My question is that do we consider that we are buying near a resistance or with an A-H we just put an order and not consider price action.
An A_H trade is an automatic trade that over-rides everything else. It is set up as soon as possible AFTER it hits 50 pips from the hit Trailing Stop Loss and is placed as a Good Till Cancelled (GTC) order
Another question was;
Why can't the A-H be used on a CounterTrend Trade
Counter trends are much smaller trading ranges than the main trend....so the chance of being whipsawed is higher, the chance of big (extended) profits is lower, the chance of losses is much higher. On the positive side, counter trends (or corrections) usually run faster, so you can make money quicker
5. Charts on the Blog
As you know, I am a techno-moron, so one of the group has assisted with placing daily, 8hourly, 4hourly and 1hourly charts with relevant trend lines and Fibs in a closed thread at FF. See here
http://www.forexfactory.com/showthread.php?t=63931
Until I learn how to resize charts to fit this Blog, this is an easy way to understand my entry points
6. Times of alerts
Finally, I couldnt resist putting this emailed question in here (the traders name will remain anonymous)
I was wondering how can I react to your sms messages since they come in the middle of the night and no matter what ringer tone I set it up with I just don't wake up. I tried several loud ringing tones but I sleep thru it, just to wake up in the morning and see all the missed action.
Stick it on vibrate and put it under your girlfriends ass !!...then get her to wake you up
I was wondering if you can give me heads up via earlier email or earlier SMS notifications, so at least I know what to expect?
It is because I am looking at the London open.
I understand that not everyone is from USA, there lots of people from Europe, so it probably works for them very well.
It is because I am looking at the London open!!! It is NOT because I am favouring the Europeans in the group!!
Good Trading to all
Jacko
MESSAGE FROM JACKO 32
It is 10.45 am NY time Wednesday January 9 and the market is at 1.4667.
The original two orders tended to act as a fixed 50 pip stops for each other. We can now cancel the stop buy at 1.4750 and place a 50 pip trailing stop on our sell at 1.4700.
At this time the market has bottomed at 1.4660, so TSL stop should be adjusted to 1.4710 (giving us a maximum possible loss of around 10 pips). But market is looking weak. Hopefully we will make some money again today.
Jacko
PS the email from the member of the group about the alert was real !!!!
MESSAGE FROM JACKO 33
It is 11.50 am NY time Thursday January 10 and the market is at 1.4740.
(Please note: No SMS has been sent for this message as it is not time critical)
Our sell on the Break-Out trade was closed out by the Trailing Stop Loss at 1.4688 (that is, the 1.4638 low plus 50 pips) resulting in a (very poor) 12 pip profit.
While we made a profit, on this last trade we simply gave too much back to the market as a proportion of the total market move. (I am coming to the realisation that the market is changing. The Eur/USD is starting to become slightly more volatile and the daily range is becoming slightly larger).
This means that we need to determine a new strategy or modify our current strategy to counter-act the changing market conditions. Two options are being considered:
1. As stated in Message 31, I have been thinking of increasing my Trailing Stop Loss to 60 pips and reducing my A-H gap (at which point the A-H trade would be placed) to 40 pips. After considerable thought, I believe that while it has some merit in some trades, this is NOT the best strategy.
2. I think that a better solution is to take the fight to the market and become a little bit more active in our trading to maximise our returns. (Mrs Jacko is NOT going to be happy!...She likes being retired and having her stress free life of leisure!!!)
The method I am thinking is one of keeping the 50 pip TSL (for security) but when the market bounces off a strong resistance points, we collapse the TSL and just close the position. We can then get back in IF, or when, the market bounces off the resistance level. (However, this also opens us up to the possibility that the market
MAY just shoot straight through the resistance and we lose some pips). However, after last nights trade and the marginal changes to the Eur/USD market resulting in more moves of exactly 50 pips over the last couple of months, I think that we can make more money from a more active approach.
On this note, ( and in the "woulda, coulda, shoulda" basket), I was responding to some emails from a couple of group members yesterday and happened to mention that closing the position at the strong resistance of 4650 and getting back in after the bounce would be a good idea. (If I had done that, I would have captured 50 pips versus only 12 that we ended up with...thats an increase of 317% in our returns on just that one trade....And that is definitely worth modifying our method to a more active approach for the present time).
However, it should be remembered that the 50 pip TSL is still an absolute imperative on ALL trades, to ensure that all trades have a maximum potential loss of 50 pips or less.
This modification is NOT the same as setting price targets for the trades,using resistance points as targets.
In this regard, I will probably be sending more SMS alerts in future, especially when we are in a trade, in order to try to close the trades at better price points. Again, if you are too busy, or it is not possible, for you to close the trade, then the 50 pip TSL will close it out.
I think that this is a reasonable solution to the problem of giving too much of a trade back to the market. Time and future trades will show if I am correct.
Jacko
MESSAGE FROM JACKO 34
It is 10.10 am NY time Monday January 14 and the market is at 1.4880.
Today is the start of a new week. I am still firmly of the belief that this market will see 1.5000 + in the near future.
It is therefore time to again start taking long positions in order to profit from that belief. Having said that, I don't wish to pay too much, so I am looking to buy at a discount.
At the moment , the price is around the 1.4880 mark after a very strong push in the latter stages of Asia and the early European trades. (Unfortunately nobody put a vibrating cell phone under Mrs Jacko, so I missed it...PLUS I am always a bit leery of the moves out of Europe on a Monday....which are the very early hours of a Monday morning in NY. Unless I am already in a trade from the previous week, I don't usually buy before NY opens on a Monday).
I am looking for a partial retracement of some of this morning's big move in Asia and London to buy some Euros.
The movement up has shown some considerable strength so I am assuming that any retracement will not be very deep. I have taken the 50% fib of the move today which is 4846 (from 1.4776 to the high of 1.4914), plus the round number of 1.4850.
I have a buy order in at 1.4850.
Remember the rule in relation to any upcoming trade: YOUR thought process should be: "I am looking to buy at, say, 1.4850. 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 1.4850...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 !!!!)"".
It should be remembered that the 50 pip TSL is still an absolute imperative on ALL trades, to ensure that all trades have a maximum potential loss of 50 pips or less.
However, when the market bounces off a strong resistance point, we will collapse the TSL and just close the position. We can then get back in IF, or when, the market bounces off the resistance level and get in at a better level again for the next push back towards the resistance level. . While this also opens us up to the possibility that the market MAY just shoot straight through the resistance and we lose some pips, I think it can be managed to optimise our profits.
Finally, should I be wrong on the exact entry point and am stopped out, the A-H strategy acts as a safety net that will ensure that, in the near future, I get any or all my losses back and that trade will continue to make me profits.
EMAILS
1. Below is a copy of an email sent to me (my reponse is in red)
Given that your success is based around the trend, and your view that the EURO/US will continue to go up, why bother with the risk of these counter trades? Just seems to me the risk reward is not there.
I am in agreement with you. At the present time, I would much rather trade only from the long side. However, I also realise that my usual trading tempo is slower than some of the group would like. So, while I have the opportunity, I have increased my trading frequency to include the CounterTrend to allow those who wish to take Counter Trend trades to use my positioning for them to use as a basis of placing their own trades.
Also as I have said quite often, I enjoy trading. I don't find it stressful. I consider that I can make some small additional profits from trading the short side of the street, but the trades are made on a very selective basis.
HOWEVER, I never feel as comfortable with CounterTrend trading as opposed to trading with the Trend. And I don't expect to make many CounterTrend trades in the present market.
Also, and more importantly, each member of the group has the opportunity to select my trades that suit their own, personal trading style
2. This is another email sent to me (again my responses are in red)
I took the short from 1.4700 and was stopped out at + 11 Excellent (My data must be slightly different that yours as you got 12 pips). I have decided to only trade at half size on counter trend trades. Good idea I was a little naughty as I decided not to cancel the stop buy order at 1.4750 and was again stopped out at +15.Excellent
I was toying with the idea to just take the 50+ pips when they were on the table in both cases but decided to let them run. (coulda, shoulda woulda...sometimes it will work, other times it won't .....stop beating yourself up about it...put it aside and move on ) So, +26 pips for the week. Excellent
This can be a frustrating business to say the least. Hmmm...26 pips x (say) $10 per pip = $260 .....for tapping
on a computer...NOT digging ditches in the hot sun....= easy money. Now the aim is to get from a trading size
of $10 per pip to $100 per pip asap. Then move to $200 per pip etc.... I will leave you to do the Maths..
Jacko
MESSAGE FROM JACKO 35
It is 9.45 am NY time Tuesday January 15 and the market is at 1.4907.
Our buy order was triggered at 1.4850.
1. Hopefully, you are learning patience and you got in at a better price. (Hopefully, you are maturing as a trader...You did NOT get overly excited. You did NOT panic. You were NOT greedy. You acted calmly and rationally...And hopefully you got in lower that 1.4850).
2. You have placed a trailing stop loss of 50 pips so that you have already locked in a guaranteed profit.
3. The market has risen some 70+ pips past our entry.
NOW !!!!... It is your decision...(I want you to learn!!) ...so what are you going to do ??? Now explain your own rationale to yourself as to why you have made that decision and see if it makes sense to you.
Do you take the money and run with a guaranteed 50 + pips? Or stay in and hope for a break of 4921 and then get out ? Or just let the 50 pip TSL take you out in the future?
Each of you guys and girls have to make a your own decision.
In the spirit of my new strategy of collapsing the TSL when the market bounces off a strong resistance point (1.5000), I am getting out at 1.4990 or letting the 50 pip TSL take me out...whichever comes up first.
Jacko
No comments:
Post a Comment