MESSAGE FROM JACKO 70
It is 5.30am NY time Tuesday March 18 and the market is at 1.5770
Live updates below
I am back !! After an excellent holiday, I am feeling great. Mrs Jacko would not let me anywhere near a computer. We spent the majority of our time at a place called Kakadu National Park in Australia which is about 20,000 square kilometers (or about half the size of Switzerland). Absolutely magnificent wilderness...and not a computer access line anywhere...Mrs Jacko was very pleased.
While we were away, Mark did three excellent trades. In at 1.5300 and TSL'd out at 1.5550. In again at 1.5650
and again TSL'd out at 1.5800. In again at 1.5750 and still in.
He followed the strategy:
1. What to do.... Buy in the direction of the trend
2. where and how to get in.....buy on dips (preferably on the way back up)
3. where and how to get out....use 100 pip TSL
4. what then.....bank profits
As discussed in previous blog messages , especially Message 64, we are witnessing the demise of the USD as
the world's foremost currency.
The collapse of Bear Stearns is not the last of the shakeout. If Bear Stearns is really worth only $2 per share, then how much are Lehmans and Merrill Lynch really worth?
From a trading point, I am still very much a bull on the Euro (surprise, surprise !!)
As long as you follow the rules outlined above, you will make profits....Do NOT try to second guess this market...and do NOT go short on this market...It has much further to go yet.
I am also still of the opinion that you can buy "at will" in this market, (though I am not as strong as was two weeks ago). The percentage odds of a winning trade by going long (and not being stopped out for a loss) is still attractively high.
The question that is still hanging in the air is "what will turn this market around???" I believe that there are a
number of issues:
1. The military exit from Iraq
2. The departure of GW Bush as President
3. The Fed taking a stand against Wall St. (The lowering of interest rates was demanded by Wall St for their own self serving interests and instead has now rendered the Fed defenceless against inflation)
3. The closure and/or sale of a few more investment banks (Lehmans is a certainty to go, Merrill Lynch will be absorbed also)
4. The criminal conviction of a number of the heads of the above Wall St firms for fraud. (The rest of the world wants to see "someone" punished for this mess. These guys took the obscene gains for the good times, now they have to pay for what they surely knew were fraudulent practices).
However, it will be a considerable time before we see the end of this bull market.
Edit 8.00am NY time Market has moved up again. Currently at 1.5810. This has become almost like shooting fish in a barrel. There may be some resistance at 1.6000 but unless the Fed intervenes in the currency markets (which I would seriously doubt) then this market will continue to go progressively upwards in the medium term
Edit 10.20am NY time Market has peaked at 5831 (so TSL has been moved to 5731...maximum possible loss is only 19 pips). Market has moved down to 5763 but is now moving up again. Currently at 5783. Am off to bed...hopefully will see a nice move up while I am asleep...(I think that they call that "Passive Income streams")
Emails
1. ....your method and demo trading gave me a healthy dose of confidence, that I definitely would not have, if I'd never found the "Please and Pain" thread. By the way, just recently I've noticed, that your thread is 7th largest on FF by the number of views!! That's impressive! I wonder, you never worried, that your method could stop working, if so many people (professionals and "amateurs") would be able to see it? No I am not worried because most people will still try to play with it and add more tech Analysis and lines and bars and indicators
and everything else until it is unrecognisable Or were you confident, that your method won't stop working, because it's also based on human psychology (round numbers) and humany psychology is a pretty constant thing.
I am confident that the method works...I am NOT confident that traders won't feel the need to " continually adjust and modify" a perfectly good method
2. Hi Jacko
Sounds like you had a great holiday! The Kakadu really is in the wilderness! Definitely no internet there! Meet any crocodiles? Yes, but my wife made it into a handbag....LOL
Well I missed you - your blog has become so much part of my trading life that its not the same without your comments to look forward to. Thanks
I have not done as well as some but so far this month I have about 500 pips. Slap on your bottom... you need to do better...LOL
It is still a problem to buy at discount/in dips as it seems I was waiting for larger dips that did not eventuate.Always a possibility that you can be caught out this way
Despite your saying it was possible to buy "at will" I keep looking for pullbacks as to me that seems a very important part of your method and if I can be disciplined enough to wait for these dips I will have overcome my problem of chasing price and overtrading.This current market is NOT usual...buy "at will" is a rare occurrence...it won't last much longer But in this market I missed a few really good trades.C'est la vie, n'est
pas! Mais oui !!
I am amazed at how differently I look at charts now compared to a few months ago. All price action and trends – can't get any simpler! Nope, it really is simple...not rocket science
Anyway I am glad you are back and that you had a great holiday.Thanks
3. I am looking at Mark's trades as you listed - wow!! He has certainly learned well. In that spirit, I was trying to work out why he took themI get the first one - perfect 50% retrace of the last major move (and where I got stopped out when the Feds pumped in all that money!)
The second entry I'm not so sure on - he had been stopped out on a shallow dip - did not even get to a 32% retracement. I am assuming he is using the 'shooting fish in a barrel' and when he saw it was taking off again, got in? He had closed a previous position with a profit and was hoping to get back in lower. When he realised that it wasn't coming back, he bought. He actually was kicking himself because he was going to buy at 5600 but it was too fast for him. (And he thought that it would come back some more later) It would have been exactly
the high his last trade had reached b/4 the retrace.
His last trade also follows the 50% retrace - it came down further after he was stopped out, and had wicks around the 50% mark, so he picked it up at the next 50 mark up, which is 1.5750. Round numbers...because the Euro was basically in uncharted waters, and in the absence of no other strong technical analysis numbers, the round numbers became much more important
4. So looking back at Mark's trades, I need to get in at lower dips (actually the round numbers) yes...because the Euro was basically in uncharted waters, and in the absence of no other strong technical analysis numbers, the round numbers became much more important
MESSAGE FROM JACKO 71
It is 1.50am NY time Wednesday March 19 and the market is at 1.5695
Live Update below
Marks third and last trade was stopped out at 1.5731 for a 19 pip loss. The market has fallen to a low of 1.5612 so our A-H requirement of a 50 pip fall past our stop has been activated. The fallen soldier is now set to rise again at 1.5731. (Hopefully, like the vast majority of our fallen soldiers, this one will also cover himself in glory and lead us to the promised/profit land).
I was also tempted to place an order at 1.5631, simply because it was 100 pips below where the A-H was placed and, in this market, the odds were good.
A-H Order placed to buy at 1.5731
As a side note I have sent an email to the Fed asking if there are any other brokerages for sale for 1-2 cents in the dollar, AND with a $30 billion US Government guarantee against any bad debts, I am a definite buyer!!!! It just goes to show that if you scare the pants off the Fed with a BS doomsday scenario, they will give in to everything and anything. The guys at JPMorgans who negotiated that deal must be screaming with laughter at how they deluded and suckered the Fed and ripped off the US taxpayer yet again. It is just another step by the
Fed towards losing all credibility.
Edit 9.45am NY time The A-H trade was indeed picked up at 1.5731. The market then moved as high as 1.5785. The TSL on the A-H trade was moved to 1.5685. The market then dropped to 1.5667 stopping me out at 1.5685 for a 49 pip loss. I am now out of the market
Edit 10.10am NY time The end result of Mark's three trades was +150 pips, +150 pips and -68 pips for a total of 232 pips for about a week. (Mark says that it was going much better when I was away...LOL...maybe I should go away again and leave him to make me more money!!)
Emails
1. In regards to my trading - I have not banked the pips you or others have due to my own stupidity, fear, and greed. LOL...why don't you tell me how you really feel.. .LOL Instead of entering a trade and letting it play out, I would close early(fear), then enter at the wrong time(greed-chasing), just not exercising the patience I needed(as you have instructed) At least you know what you need to do to fix your problems
But I am changing! If I just do as you say and leave it alone ...Surprise! it works! am up 270 pips in last week Excellent
Today's reaction to the Fed move will enable me to put the A-H strategy to use.
Could you enlighten me as to why such a big move down after an interest rate cut? Isn't that opposite of what normally happens (rate down = currency down)? They were expecting 100 point cut. (Buy on the rumour, sell on the fact)
2. Read your lastest post about Mark getting in at 1.5300, out 1.5550, in 1.5650 out 1.5800
I curious how come it all close at round numbers. Was the closing done intentionally and not using trailing stop?
Mark uses the manual trailing stop but is a little lazy..if it is one or two pips away from a round number he will just use those round numbers
I got in at 1.5310 out 1.5551 and my last long at 1.5150 (which I entered before your vacation) closed at 1.5362 two days later. I used 100pips trailing stop for both :) Thanks for teaching me.Two good trades
3. Was thinking through about your (earlier) statement (some time ago) on using half size and 100pips SL instead of full lots at 50pips. Would like to clarify.
Say I'm trading 4% (say $4K of $100K) risk of capital with 50pips normal time. Therefore now I would use 2% of capital ($2K of $100K) and spread that over 100pips stop? My lot size would be 8 lots for the former and 2 lots for the latter? No
Or do you just trade half of 8 lots which is 4 lots at 100pips stop which is still 4% of capital? Yes
Will be back for NY trading. Have been replying to too many emails and Mrs Jacko is getting antsy. She thinks the shops will sell out of everything before she gets there. Am working through a weeks worth of accumulated emails. Bear with me if I haven't answered your email yet
MESSAGE FROM JACKO 72
It is 1.50am NY time Thursday March 20 and the market is at 1.5589
I am standing aside from the market at the moment....there is a temporary technical correction happening. Will maybe wait until after Easter break to re-enter...but keep watching the blog. If you are thinking of taking a trade, just remember that the B teams (skeleton staff forced to work when all the real traders have a holiday) at the brokerages like to play games in the thin and volatile market conditions of market holidays.
Emails
I have had some great emails while I was away. I am still working my way through them.
1. These two emails are from a member of the group who is my vintage and lives in Hawaii but who thinks he is the worlds worst trader.
First email: Since joining your House of Pain and Pleasure my account has grown from -20% to over +10%. Much better Hey, seen that way, maybe I'm not your worst student. ..... I've been way too timid the past couple trades so maybe I'm over-reacting. But the set up was really nice I thought and my understanding of the fundamentals said chance 'um. I traded the plan. I like my chances. We'll see where it goes. Hope it goes well...I am just about to read your next email...I haven't looked at it yet to see how you went
Second email: Locked in average 241 pips of profit with the market now at 1.5630. YEEESSSSS !!!!!!!
Wow! My equity has gone up 25% so far in one trade. EXCELLENT !!!!!!!
My wife is even starting to show interest. A man with money is a very sexy looking man (or so Anna Nicole Smith says!!!)
2. Question: From what points (High/Low) and on what time frame should I draw my fibs to get the general 50% retracement area? This is dependant upon YOUR desired trading timeframe. It is a decision that you need to make depending on how often you want to trade. Personally two to three trades a week is my style...more two than three
From my understanding we are to view a 50-100pip drop as a dip/retracement and possible buying entry. (keeping in mind the round numbers) Yes...a possible entry We are to look at the previous high (weekly, monthly,daily?) to determine the 50-100pips No, those are too
long a time frame for only 50 - 100 pips, especially in current volatility. More like 4hrs to daily
3. Now my question.......say you set a buy limit for 1.50 (hypothetically), it goes to 1.5001 then starts to move up. When you wake up you see the market is at 1.5050. Do you buy, despite the price move? or do you accept that you may miss some profits? Which, in your opinion makes more sense? it really is a judgement call on each situation...most cases I will let it go (and gnash my teeth). However, keep in mind that we always remember the ones that got away, and conveniently forget those situations when we would have lost
4. I'm sure you've touched on this before but do you ever adjust the trailing stop to break say after 80+ pips above entry? I know we don't have a crystal ball and have no idea how the market will unravel and therefore is probably a fruitless exercise in trying to second guess what the market will do but just interested in your thoughts? Would specific market action cause you close a position before your trailing stop?
You may find, like I did, that applying discretion tends to get you out of a good trade too early. Also, using discretion can lead to really bad cases of woulda, coulda, shoulda scenarios which are emotionally damaging over time. In this case, you gave back some pips, but in another case, you may have closed out too early. It is a balancing act...but I prefer the less emotional fixed rule
MESSAGE FROM JACKO 73
It is 4.15am NY time Tuesday March 25 and the market is at 1.5547
Live update below
I am having a real bad case of the "woulda, coulda and shoulda's" at the moment.
At about 10.00pm NY time on Sunday March 23 (which was 10.00am Monday local Hong Kong time) the market was at low 1.5400's I said to Mrs Jacko, "this market will bounce at 1.5350." She said, "Jacko, let everyone enjoy their Easter, without you hassling them with your trades".
It was a purely intuitive call and it was really just a throw away line, but was one that I felt pretty strong about. As outlined previously, we sometimes play a game of saying where the market is (if we haven't been looking at a screen for a couple of hours) where I think it will go.
Having watched an excellent opportunity go past I am seriously kicking myself. (I am too scared to even try to blame Mrs Jacko...and I can't even yell at Mark because he is having a break). AAAaaahhh sh*t !!!!!!!!
I am now having to wait for a potential retracement. I am looking to buy at around 1.5450. And it is possibly a revenge buy, so I may adjust my order later.
Edit 10.25am NY time Market at around 1.5600. I am really annoyed with myself. I am so tempted to chase this market and to buy but I know that it is a "revenge" buy...and they always end in tears.
So I am walking away from this trade. Unless the market falls by 100 pips, I will not be a buyer. I am going for a walk....and maybe go out and kick the cat. (Only joking, I love my cat...).
I am sooo annoyed !!
Emails
Email 1 Jacko, I placed a buy limit at 1.5550 before I went to bed for the night. As sometimes happens when you are nearly 50, I need a bathroom break in the middle of the night. LOL...you too ???? So, I decided to have a glance at the computer and saw that I had just been exicuted. But, I also noted how forcefully the market was moving. I didn't like the trade as much. One click and I am out. With a very, very small profit. Now it looks as if I may be on the sidelines until 1.5150 (50% fib on the daily). My piont is that with most businesses it would
take forever to change a $100,000 decision. Yes, exactly ...some of the younger traders don't realise that Not Forex. Just point and click. I love this business. So do I...So do I By the way, I am up about 100% in my account since trading with you and the group. Excellent work ! If I can do this anyone can. Thanks to you.
Email 2 Great to have you back - blog is in fine fettle as ever. Reading your comments, you said: "I am standing aside from the market at the moment....there is a temporary technical correction happening. Will maybe wait until after Easter break to re-enter..."
Now then... here's the thing. How did you know that it was a technical correction and better to stand aside, rather than see the price at 1.5589 and think that's a bargain. Just experience I think....the market has moved substantiaaly upwards almost without respite...all good things come to an end...even if only temporarily You were right of course, but interested to know the thinking. I left a wounded soldier up there in the 600s who I hope to see again soon. You will !!!!!
Also, what's the most amount of fallen soldiers you've had standing? Two Presumably there comes a time when you would say no more trading till they have been picked up (to limit your exposure). Yes...two fallen soldiers means they were too close together (overtrading) or I the correction is deeper than I thought
Email 3
Hi Wayne...........A small number of the first group have now become professional traders, trading on their own and doing very well. Two have also been invited to join one of the brokers that I deal with as junior prop traders...
what does the above mean? and what do i have to do to enter the competition or get an invite! Nooooo ! In late February I had a very boozy night with the head of brokerage company and he asked me if I had any traders who may be interested in trading for his company. I emailed three of the group who were young, lived in the States and were competent traders. They are currently negotiating I think. (I have just put them into contact with each other...I don't wish to be involved any further...the brokerage wants to see their trading statements, whereas I have no interest in seeing that at all. If it works out for both sets of parties, I will be delighted. My understanding is that two have accepted)
MESSAGE FROM JACKO 74
It is 1.10am NY time Wednesday March 26 and the market is at 1.5628 (snarl, gnash, gnash)
I am still in a black funk about not messaging you about the "buy at 1.5350"
Edit 9.41am NY time. The market is now at 1.5727 !!!....and I am now absolutely FURIOUS !! The black funk has just got 100 degrees of darker black !!!!!
That cat had better not come anywhere near me at the moment !!!!
I am just waiting for any one of my brokers to make one of their regular courtesy calls and ask me how I am going.... I will give them a real short synopsis of how I am feeling !!!!!
Even Mrs Jacko won't come into the room !!!
Edit 11.45 am NY time Market at 1.5750. I am definitely starting to understand how Warren Buffett felt during the dotcom craze (when he didn't invest, even though it was rising every month, because he said that he didn't understand what was going on). He refused to chase a trading opportunity even though everyone said "Don't worry...just get onto it"
I am sooo tempted to just jump into this market, but all my previous bad experiences when I did do that are now screaming at me not to do it. In hindsight, it may turn out to be the wwwrong decision but I am not going to take the risk.
However, as is always the case, you should feel free to trade the way that YOU want to trade.
I still have my order in at 1.5450.
I am working slowly through your emails ( Mrs Jacko says that I am in such a snot that maybe I should hold off for a day or two so as not to be inadvertantly rude). However, there are some excellent questions being asked. Am going out with Mrs Jacko to get me out of my black haze...back at early US trade
Emails
Email 1
Before this correction I had a long at 1.5600 at was stopped out at 1.5547 As market moved down more than 50 pips I immediately put up my AH at 1.5547. correct
As you know, market moved down more than 200pips to low of 1.5341 YES...BUT DON"T REMIND ME (Gnash, gnash !!!)
I wondered since the correction was so great, should I have put my AH lower than 1.5547? No, I prefer to keep it there
I understand that there may be opportunity for a long trade when the situation presents itself and I should keep my long trade different from my AH trade Yes, definitely yes but you can also open a second trade as long as the second trade is sufficiently far away from the A-H but just wanted to seek your view. Or maybe just put the AH where its supposed to be and don't think about it?Yes, correct
A spike happened this morning (asia time). Before that price seems to be ranging and I told myself to be
patience and not enter the market, though it tempting to jump in. I remind myself I'm a trend trader and only
looks for trend.
Jacko, how do I know if it starts trending again? that is where you need to use your discretion and your money management. We can be fairly certain (we are NEVER 100% sure) that the upward trend of the Euro will continue. So, if it has had a pullback, then your probability of a good entry point has risen significantly. However, you need to learn NOT to put entries too close together (overtrading !). Even though the A-H will get you out of trouble, you also don't want to accumulate a whole lot of dead soldiers. So we wait for a pullback and then buy.
If we are wrong we wait for the pullback to go much deeper before placing another buy order.
If we are wrong twice...we stop trading...either we wait for the market to turn back into the trend and allow our A-H's to work OR we make a decision that the trend has changed (knowing that 99% of the time, that that decision will be the wrong decision...trends go on for years)
What do you look at and at what point do you confirm its a trend and time is right to look for trade? The long
and medium term trend is always obvious. We sometimes just get distracted by the"noise" of the short
term market and the hype of the media
Email 2
in the recent move up in the euro where there wasn't a significant pull back but rather shallow dips, do you use technicals to enter (ie. break of the upper trendline or a simple breakout of a range)? I look for technicals, but we are new territory, so they have limited value at the moment
Based on your answer below, it seems like technicals are applied more on longer time frames but when the market has a considerable build up of momentum (as the euro has done before the correction last week), it's more of a visual thing where knowing the "rhythm of price" becomes important for entering and if you're wrong you always have the AH to recover a lost trade. Is this right? "knowing the "rhythm of price" becomes important for entering and if you're wrong you always have the AH to recover a lost trade" is an excellent way to describe it. As I said above, we are new territory, so the technicals have limited value at the moment
Email 3
Wayne: I've spent hundreds of hours since our group began last November trying to correct old habits. Brother are they tough!!!
I kept having some success by following your entries....and then....I'd see that I was up by 50 to 100 pips and I'd get out being so proud of myself for keeping the profit...only to see the market take off again. Of course I would try to chase it and end up losing 30 to 50% of what I had just banked. Uugh....so frustrating. LOL..been there...done that...learnt not to do it !!
I kept noticing that where I bought many times was the correct place to buy but if it went down more than 15 pips....I was just jumping out of the market afraid to lose any more money ( you know cut your losses and let your winners run). Then I just sat there and watched it go up and me not in it. Happens easily if you are watching the screens too closely
To get beyond this I got serious with my demo account and w/o the fear involved just pulled the trigger. Sure enough I could take a $50,000 account to $90,000 in about a month to a month and a half. It's much easier without the "fear factor" of having real money on the line
Then I got real serious on Price Action....and did that help. Also, would look at the charts every time you gave us an entry point and studied the PA.
I wasn't losing money...in fact my live accounts were up about 20%....but oh, had I missed some major moves.
So I was determined to follow your advice....stay in the trade and let the TSL do it's thing (easier said then done for me).
Then came earlier today at around 1:40pm EDT...I had an excellent entry point of 153.78 and then couldn't stand the drop down to 154.07 and got out. Kicked myself at least 15 times for doing so.
Ah...but then FINALLY I did not chase....waited paitently for the retrace....missed the first one because of appointments....but when I saw the 30 pip drop between 9:00 and 9:15 pm I jumped on it like a "duck on a june bug" when it started to go back up and got in for 1.5419. Only a 12 pip gap between 1.5407 and 1.5419, so that was good. Almost back where you got out
With the PA I knew it was good for a 100 pip move. At least 6 times I have wanted to take my profits and because of PA it was clear to me when the down move was going to happen (Yes...I love it). BUT I DID NOT GET OUT!!!!....it is 1:30 am and it has come off the highs by 42 pips....but I am in this till my 65 pip (have been using this since you encouraged us to expand our TSL and reduce our contracts) TSL is hit. Good work !!!
Finally....I am doing this right! It felt great to see it....act on it....stay with it....and RELAX! Excellent...this is what I am trying to do with each member of the group...just help them get relaxed and comfortable with trading . And the profits will come.
Thank you for your patience and willingness to share your expertise. I am one year from retirement and determined this will provide enough extra funds to make retirement much more fun. I am a 66 year old minister who feels like I'm 36 and most people think I'm between 50 and 55. I love challenges and feel like this is one of the toughest out there. But my attitude is....if 95% of all Forex traders lose money....think of how much money there is out there that's available!!!
Email 4
Well, my first email to you was going to ask your feedback on what to look for in my next entry. However, I had a fallen soldier at 1.5508 that was just picked up on this breakout so I am in the market with a 100 pip trailing stop. OK. No more trades until that A-H trade is settled and completed...otherwise you have too much money at risk (assuming that you are using 2% per trade)
Prior to that the entry I was looking for was 1.5150 which was a 50% fib level drawn from 1.4440 on 2/7 to 1.5904 on 3/16. Do you think it's still possible we will see that in the near future? Yes, I think it may be possible Or is there no slowing this train.? I think that with the EXTREME measures that the Fed is undertaking (bailing out JPMorgan by taking $30 Billion of Bear Stearns debt onto the government shoulders and effectively making the taxpayer wear the potential losses) will have a temporary effect of strengthening the USD in the
short term. But the underlying problems have not gone away, so I think that we may revisit 1.5150 sometime in the medium future, but I still think that the long term will see the USD at higher than 1.6000
Email 5
In my opinion to become good trader one need to have a good grasp about currency big picture. I always confusing about currency big pictures. Is there any idea : what really moves currency trend in most of the time. It is Central Bank or SWF or BIG LION or it's expectations or something else. Any idea greatly appreciated.It is a combination of all those things, but the Central Banks have the most impact. The SWF's just want to quietly invest their funds for a better than average return. Expectations have a more slow moving impact on the market
Email 6
I'm enjoying a long, relaxing Easter weekend here in the Uk after some interesting weeks with the markets. I just wanted to say thank you for the effort that you put into your posts and email responses on your blog - it is most definately having a positive affect on my trading.
Thanks for your kind words. I am actually in a black funk at the moment...I am so annoyed with myself for not messaging each member about the 1.5350 entry. Am trying to put it behind me, but I am soo annoyed with myself
MESSAGE FROM JACKO 75
It is 1.10am NY time Thurssday March 27 and the market is at 1.5795
I am now out of my black haze. Thankfully Mark was back on the air after a break and has boosted my confidence. Mark gave up a very large six figure income (plus a huge amount of stress and worry) as a broker to work with me and trade this method with his own money. He proceeded to give me both barrels over the phone.
He said that I am still the most consistently profitable trader he has ever seen. (Jacko, so you missed a three day trade ! So what ? You did not lose any money!)
He said that the trading method is still the most successful he has ever seen. (Jacko, so you missed a three day trade ! So what ? You did not lose any money!)
He said that I am really disappointed for the group that I didn't alert them to an excellent trade. (Jacko, so they missed a three day trade ! So what ? They did not lose any money!)
I would like to say that I have a phenomonal team working with me (Mark is the objective, cynical ex-broker that has seen every trading method used and doesn't put up with any BS, Newbie is the aggressive trader who keeps pushing me to trade more and Mrs Jacko loves me and spends as much money as she can).
Also you guys (and lovely ladies) in the two groups are giving us wider insights into how I trade and how we can better improve my trading.
I, personally, also get immense satisfaction from the group. It has been really interesting...NOT ONE member of the group has suggested that we should be "shorting" this market. The desire in the group to stand in front of a train has totally disappeared. (This is a good thing!!)
Nearly every one of you has said that they have slowed down the frantic trading and taken a more patient (and less stressed approach) to their trading. (This is also a good thing!!)
And some of you are getting superior results to me (gnash, gnash, gnashing of teeth...This is also a good thing !!!... but don't stretch the friendship !!...LOL). However I had to caution one trader yesterday, she had tripled her account in less than one month...(I think that she is using more than 2% risk factor !!!).
So I am looking to get back into this market. Will be back later
Emails
Email 1
Jacko,
Personally, I never cry about the deals I didn't do. I cry about the ones I did and wish I hadn't. Excellent advice...thank you, I needed that
Email 2
I just got through reading (Message) no.74 and I think I know how you feel because I changed my order from 1.5350 to 1.5300 even though the 50% fib was 1.5340. Damn! Tell me about it !!!
Anyway here is an update since 7 March. I was interested to see how the trading would go for me without your daily blog while you were in Oz. I put on trades at 1.5551 and 1.5555 in my big account (BA)and small account (SA) so I could experiment with the TSL as I explained in my last email. I eventually adjusted the first TSL after the huge runup and got stopped out for +259 and +248. This is good. So was feeling pretty good especially because initially the trades went into the red and I was not stressed. This is even better. (IMPORTANT: I don't want to be seen as a signal service. I want to help traders become confident and competent traders, using sound trading strategies)
The next three trades were failures;
Big acc at 1.57 got stopped out for -15 and am still waiting for a fill at 1.5685
Small acc at 1.5675 stopped out for -100. The fallen soldier got picked up at 1.5575 and got stopped at +32 using a 50 pip TSL. Net -68.
Big acc at 1.5650 stopped out for -100. The fallen soldier got picked up at 1.5550 and got stopped at +59 using a 50 pip TSL. Net -41.
.........I would still be in the market had I used a 100 pip TSL for the 2 fallen soldiers and not 50. Yes, that
is correct (market now at 1.5800)
What do you think? You would still be in the market had you used a 100 pip TSL for the two fallen soldiers...enough said !!
Also, these 2 losses have been reduced but not recovered. Do we enter again? No, the soldiers have done their job of recouping as much as they could If so do we use the original stopped price?
With price hanging around 1.5600 it's going to be interesting to see where it goes after the news at 12:30 and 14:00 GMT. Unfortunately, it went up again....AND I am really dark about that !!!!
Thank you for what you do for your groups. Thank you
Email 3
Good to have you back! I have the feeling that I probably don't write you as much as some of the other traders in your group, rest assured that I'm keeping a close eye on your blog and on my own trading behavior. Since joining your group at the end of Feb., my account has grown 20% (but numbers don't really tell the whole story, does it, all depends on the leverage you are using), but more importantly, I am becoming more patient. This is a good thing
Your timing is usually impeccable, I must say, the experience factor definitely comes into play here. I was looking at the chart last night and noticed the euro going up rather quickly, but held back since I've learned that chasing a trade doesn't work. Exactly, but I am feeling rather "stranded" at the moment, watching this runaway market Waiting for dips before buying is much more profitable. Most of the time , yes, but this current market is amazing...it really hates the USD...the dips are minimal
The last time euro had a large ascend was back in August-November of '07, where it pretty much went straight up for about 1500 pips, then it went into consolidation for 3 months. The latest breakout from 1.44 to 1.59 is also about 1500 pips, albeit in much less time. So, another consolidation ahead or this is just a minor correction? From your blog it looks like you believe the latter. It boggles my mind how quickly how quickly the dollar has sunk, but the little voice in my head says when everyone is jumping on the doomsday theory (read any financial headline in any newspaper), then we've probably hit the bottom or just about to. Normally I would agree with you but the currency markets (especially the major pairs) are like ocean liners...they take forever to change direction.
Email 4
I know this may sound odd, but it's reassuring to see that even the master himself gets a little upset at missing a trade. Oh yes, I do !! The worst thing is that I knew that the skeleton B team usually play with the market during the holiday periods, but around 1.4350 was reasonably apparent as to being the most that they could take it down...my biggest mistake is that I didn't send the SMS text message
I have kicked myself more than thrice because I have missed a trade by either a few pips or just being too late to put the order in. One lesson I have learned from yourself and my mistakes is not to chase the trade. Yes Go out and take the cat for a pampering. You'll feel better when you get back Thanks
Email 5
I'm finding it very difficult to read this market.It is so strong, that it is causing me a few problems too
I guess I just keep working at it. Yes, unlike any other business, the market is so anonymous that it has no memory. And tomorrow is another day
Email 6
I really enjoy the group. Things are going well for me and I'd like to personally thank you for that. Most of my questions have been asked by others, so i appreciate you putting your responses on the blog. However one questions that i do have is on fundementals. What materials would your recommend reading to stay in touch with what's going on with the EUR and USD? Quality financial newspapers (especially from the Europe (UK) and Asia (HK/Singapore)....they give a more balanced world view of what is really happening)....... The quality, financial papers have some excellent analyses of what is happening. I like to know the facts, but I laso like intelligent analyses of the situation.
MESSAGE FROM JACKO 76
It is 2.10 am NY time Friday March 28 and the market is at 1.5788
Live updates below
I want to preface todays message with the warning that I am not a signal service and that I am not necessarily
recommending that you trade the way that I do.
The purpose of the blog is to show you what and how I trade.
The reason for the above notes is that I intend to take a Counter Trend trade at this point. It is a very dangerous trade, but one that I feel justifies a risk.
I believe that the market is still a long term bull market for the Euro. However, I believe that possibly the market may !! correct for the next couple of weeks.
I therefore have two options:
1. stand aside and wait for the correction to finish before re-entering at a lower price or
2. Take a well reasoned trade on the probability of making some profits on the downside.
Now as I have said, this strategy has significant possibilities of being wwwrong...and there is no real insurance policy of the A-H strategy, however, it is a trade that I am personally prepared to take. I will be selling at the current levels 1.5788 (give or take a couple of pips.... anything above 1.5750 is acceptable) with a 100 pip stop loss.
I repeat: I am not a signal service and that I am not necessarily recommending that you trade the way that I do.
The purpose of the blog is to show you what and how I trade. This trade is what I will be doing.
The rationale will be explained at a later time. I don't want to get into a long winded rationale and then have it all look silly if the trade goes against me. I will outline all the reasons later.
I have just sold 200 contracts at 1.5785 at 2.25 am NY time A 100 pip SL is in place
Please don't flood me with emails re this trade or its rationale...I have to go out and finalise some details on a property purchase now...but I will explain all my reasons when when I return (probably during the early US session).
Edit 9.55 pm NY time I am back. My trade is still in play. The market has gone up to 1.5838 which is past where I bought at this afternoon but is now retracing. My 100 pip Stop Loss is still in place.
The rationales for taking a Counter Trend trade are that:
TECHNICALS
1. there was a spike (albeit a`weaker one than I would have liked) on March 17 when it spiked to 1.5901.
2. There was a break of the 4 hourly and the 8 hourly trend line (drawn from the lows of Feb 20, Feb 26 and March 11). The break occurred on March 20
3. The market dropped to just below the infamous and notorious 1.5350 and then headed back up to very weakly pierce the underside of the trend line before retreating below it.
4. It has then moved sidewards on the underside of that trendline.
5. Also, the 1.5857 high on March 27 was less than the previous high of 1.5901
FUNDAMENTALS
I believe that the market will correct for maybe a couple of weeks. I believe that, unless there is some extremely dramatic news, we will slowly drift down.
I don't believe that the bull market is over yet. But given the drama over Bear Stearns last week and the fact that it was on the front page of every newspaper, I believe that the rapid rise this week was an over-reaction. and the market was overcooked
As stated above I therefore had two options:
1. stand aside and wait for the correction to finish before re-entering at a lower price or
2. Take a well reasoned trade on the probability of making some profits on the downside.
The 100 pip stop loss is still in place. I did not have the opportunity (or desire) to change it to a Trailing Stop Loss. (It would have come to within 2 pips of a Trailing Stop Loss...close, very close).
But this is a trade that I am prepared to give a full 100 pip breathing space. If I am wwwrong, then I will take it on the chin.
But I am feeling quite confident about this trade (even though it is different and it goes against the normal method that I trade). I never really felt comfortable with most of the earlier Counter Trend situations, but the viability of the method was proven by Newbietrader in his trading. The thing that most motivated me to use it this time was the near hysteria in the media and the seemingly over-reaction of the market in the last couple of days. (The fact that not one of the traders in the group (even Newbie) hadn't mentioned going "short" also made me think it was maybe time to consider it...LOL)
But I could be wwwwrong !!!!
Edit 10.55am NY time I am feeling surprisingly relaxed about this trade. Am off to bed. Will see what awaits me in the morning.
Emails
Email 1
Now, for the life of me, unless I had a crystal ball, I would never have bought, or even thought of buying at 1.5350 so how did you come up with it? It was a purely intuitive call. The market had been pushed down and around 1.5400 I thought that it had just gone down far enough, given that the USD was in serious trouble (and therefore should not have been at that level) BUT that there would be another push of the extremities by the skeleton B team. Sorry that I can't be more definitive than that...it was just something that I have seen before. The market action during holiday periods are really interesting...they are becoming of huge interest to me. In the last two years I have noticed that holiday periods are precursors to major market moves
........
On Fib retracements, I understood that a strong trending market would rarely come down to 50% and more often than not, would only test the 21.6% and 38.2% levels. Why do you only consider the 50% retracement and not the others? The others do not have a strong enough statistical effectiveness to reliably place a trade based on those numbers
Email 2
Wayne, Can you forsee a situation in the near future when you'll revert back to your 50 pip trailing loss or do you think the higher the market goes, the more frantic and volatile the trading ranges will be? The volatility will reduce again, but it may take a while...the volatility is caused by the trauma to the USD caused by the sub prime (and other financial rorts). When the USD reaches equilibrium again with all the world currencies, the volatility will reduce. The Million dollar question is: What is the Euro price level at which equilibrium will occur??
Email 3
even though I have never heard your voice, I "hear" your voice saying –" there's always another trade", definitely, when I feel bad about missing a big move. I think you are succeeding in instilling this idea. When I step back and look at it from a creative perspective – I think the way a successful person thinks, allows them to be successful in more than one area often. You have been successful in business, and successful in trading. I think your "bigger picture" perspective is one of the reasons I wanted to work with you in the first place. The "bigger picture" is necessary because this is something that I decided I wanted to do for the rest of my life. I have found something (trading) that I can do for as long as my mind remains competent (hopefully another 50+ years). As I get older and the body changes from the magnificent Adonis body that I have now (LOL), there will eventually be a number of things that I will not be able to do...but trading is not one of those things. I have never seen it as work. Like most traders, it is a passion. It is mentally stimulating and is something that I enjoy and want to do until the day I die.
AND I must say I don't feel like I'm so anxious about taking trades. I am getting the mentality that fewer profitable trades are much better than lots of trades with more losers. Oh yes...losing money regularly is bad for your confidence
Email 4
Hi Wayne,Yep, I missed the 5350 entry as well as I thought it was going lower. Between a number of reasons (my birthday HAPPY BIRTHDAY this week being one of them) I just haven't found a good entry point. Yesterday it was really pissing me off because in hindsight 5350 was showing strong signs for entry and my bias for a better entry kept me from being objective. We both know that biases kill you in this business and it's a constant battle. However, this morning I woke up and thought to myself, "You haven't lost a dime this week. Sure I haven't made a dime, but my number one goal is capital preservation. My account is very healthy for the year and I'm very happy about that. So, why the hell are you pissed at yourself?" After that I was fine. Then I read your blog and nodded sagely to myself. It's all about perspective and we're free to chose the one we want. So now I'm looking for an entry. What's past is past. Bring on the future. I agree 110%
Email 5
This email is to make you feel proud of what you have achieved. I got in at 5424 and got stopped out today at 8.00 am UK time on my 100 pip TSL at 5759 making 335 pips. If it wasn't for you and me joining the group I would have been in and out of the market on every turn like a yo-yo, making a loss. You have managed to turn me around by investing your time in teaching a strategy that consistently works, above all you have helped me to be much calmer and relaxed when trading. Thank you very much. Thank you for your very kind words
MESSAGE FROM JACKO 77
It is 3.00am NY time Monday March 31 and the market is at 1.5780
My trade is still in play. (I sold at 1.5785 in a Counter Trend Trade). My 100 pip Stop Loss is still in place.
I am still feeling comfortable with my Counter Trend trade decision. I will let it play itself out.
Update below
Emails
Email 1
Regarding the counter trend trade...what is the rationale...just kidding. I woke up around midnight (or 3am NY) to see your blog update. Checked the market and didn't feel comfortable at that price (I think around 5780's). Back to sleep and then up again at 4am (7am NY) to see price had moved up above 5800. I was more comfortable at this level as my 100 pip stop would go above the all time high. Good thinking I watched for a few and when it seemed to level out I got in at 1.5813. Of course not two seconds later it jumped like 25 pips! Its just noise...and sometimes something like that would cause a trader to panic and then NOT put on the trade Oh well, I'm happy with where I entered. I was waiting for a correction and feel good about this trade. I
have a couple questions:
1. I have not moved my stop. I want to see a more decisive move down before doing so. Yes, so do I. That is why I am also prepared to give this trade a bigger "breathing space by not using a TSL at this point. At what point will you move your stop Assuming that the trade goes in my favor...and that is still an unknown...but if it does, I will wait until the trade is about 100 pips in my favor, then move my stop. and will you begin to trail it? Yes
2. Will you let the trailing stop take you out of the trade Yes or do you have a level you are targeting? No
Email 2
I wonder if you have any thoughts on how or at what level to get back in to the long side on the Euro? By now you will have seen that I believe that the market may...may...attempt to correct from these levels.
I have still got a pending order at 15450, but (to me at least) it doesn't seem that likely to get down that far for some time. I have been thinking about possibly 15600, but I can't find any convincing 50% Fib levels high enough
to use.Are you still thinking it will soon be down to 15450? I think that it may be possible....let's see where the correction takes us...we will have a clearer picture AFTER we see evidence of the correction (I may be wwwrong??!!)
Email 3
I have been trying to get better at reading the EUR/USD market so I can have better entries. Lately, I have been tempted to buy on smaller dips since it seems that it isn't retracing much. In most cases, I have NOT placed the trades because I am looking for an area of prior support, 50% Fib, etc., but it never gets there and it just keeps going up. Many times, I continue to move my limit order up, but it still never hits it and it just keeps going up. I also have not placed the trades because I thought I would be deviating from the method if I did. Am I thinking correctly? Yes you are thinking correctly. Just be aware that this market is not trading in its usual pattern...the volatility is much more extreme and it has pushed up hard and fast. There will be a correction
very soon. (I am hoping for today...but I could be wwwrong) I want to make sure I follow the method and don't overtrade, which was a lot of my problem in the past (as well as chasing the trade after it took off). Yes, chasing a market is easily done...and most times when you do, you should have either not traded it or faded it.
Also, thanks so much for all of your help. Your trading method has helped me tremendously.
Email 4
I am still trying to get away from the shoulda, woulda, coulda syndrome. We all have that syndrome...it's the
perfectionist that lives in all of us
Edit 9.24am NY time The market is very quiet...building up to a breakout very soon...in the meantime, it is as boring as watching my toenails grow (which I am doing) ... I am thinking of chasing Mrs Jacko round the apartment..But can someone remind me what I am supposed to do when I catch her???...LOL
Edit 10.33am NY time The market has finally made its move and unfortunately it went against my position. The odour that you can smell is the smell of my burnt fingers on the CT trade. No more trades for me today.
MESSAGE FROM JACKO 78
It is 10.35pm NY time Monday March 31 and the market is back at 1.5774 after spiking to 1.5895 (AAAuugggghh !!!...LOL)
As stated in the update in the Message below, I was stopped out at the 100 pip loss. One or two of the group were rather alarmed at the size of the dollar loss....Let me assure you that I am still hugely in profit from the two and a half years that I have been trading Forex. It is a very minor blip.
As a person who has been in business for most of my life, it is very normal for me to grow my businesses quickly, and the leverage and rapid compounding in this business sets it apart from any other business I have ever seen. I have been trading at these volumes for about 8 or 9 months now, so I am very comfortable with them.
One of the group wrote that "a loss is sometimes the cost of taking a risk". So true !!
So, I have taken the loss on the chin, now lets move on to the next trade.
PS Did you see that 4 hour spike??....That was the one I was looking for last Friday....LOL
Emails
Email 1
first of all, thank you for spending time on the group(s), it has helped me a lotfollowing the posts on your blog and I am amazed by the succes :)But I must admit one thing : I have not put on 1 single live trade yet! I have been busy downsizing my previous business, so now as 1. of AprilI can trade Jacko style fulltime, can't wait!. But I have 1 major challenge, which is, I am soooooo afraid of loosing! I have a rather big accont avaliable (1 mill usd), but somehowI have a barrier which makes me postpone my first live trade. And on the other hand, the marketkeeps going up and up, making me even more afraid to take the wrong first step.It is crazy, bcs I know your system rocks and everbody else is making tons of money, butI guess I need a succesfull few initial trades and I am in the game "with the markets money"Maybe you have some input on this mental barrier I have
on jumping on the train? Very simple..put your mill USD in the bank and trade with $10,000 only...and not a dollar more!!!!!! Use 5% risk to make it interesting for you (it is a bigger percentage than usual so it will "feel" risky). Work on the basis that the $10K has gone on legal costs and govt taxes etc for establishing your business.
Thank's in advance, and give Mrs. Jacko a warm hug, tell her I am sorry for stealing your time :) Thanks. I
always give her lots of hugs.....I can't remember what else to do...LOL, LOL
Email 2
I was not tempted to follow your counter trend trade - you have convinced me that trend following is the preferred method of trading (lower risk and potentially greater reward). For this I will be forever grateful.
That's fine...thats why I put that big warning on the blog about it. I wanted to trade the CT Trade BUT I didn't really want anyone else to blindly take that much of a risk. Also, I want everyone to be able to see ALL my trades, not just selected trades
Email 3
I have chosen to follow your counter trend trade. OK I am using profits from previous trades and my reasoning for taking the trade also makes me comfortable with taking the risk. Good strategy The most important thing I think, is that I am no longer emotionally invested in my position. My primary way of making money is still to follow the trend, and knowing and accepting that gives me the perspective to be able to take this type of trade.Yes exactly I don't know if I've explained myself correctly haha. No, that is very clear I have chosen to only use a half position on this trade because thats all I'm willing to invest counter-trend. Good decision
Email 4
I am still trying to get away from the shoulda, woulda, coulda syndrome.) This is funny thing to read,but do you know how to overcome that,i`m tryin my best but in many occasions i doubt myself and then regret ..? Old age helps...you tend to forget things much quicker....LOL
Seriously though, it is a matter of accepting that we will NOT be right 100% of the time in trading
Email 5
Look at it Wayne!! look at that 4 hr spike!! I think you were right, but our stoploss was to small. No .....100 pips is my absolute limit
If you are not chasing it, I need you to help ME not chase it. I sooooooo wanna........ Noooooooo !! It is time to step back and coolly have another look at it........THEN chase the bastard and choke the life out of it...LOL
Email 6
Too bad it went agains us. :( ......
Anyway, as I said, too bad it's a loss for both of us , but I'm not disappointed for taking the trade.Neither am I...It was a trade I was more than prepared to take..a loss is sometimes the cost of taking a risk As you said, you have to make decisions and you can't wait forever for confirmations. In business, you make a decision based on what you know at the timeHave a great day and we'll get some pips soon enough ;) Still hugely in profits from this Forex trading
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