MESSAGE FROM JACKO 267
It is 1.00am NY time Wednesday December 31 and the market is at 1.4112
A Happy New Year to each of you and your family
I will be back on Jan 5 ready for a BIG new year of trading in 2009
MESSAGE FROM JACKO 266
It is 9.30am NY time Monday December 29 and the market is at 1.4306
I hope that each of you had a Happy Christmas with your family and friends.
The market has been moving up in Asian and then early European trading. It then fell in late European trading. I am taking the time to review some of my past trades and seeing how I could have improved on them, rather than trading in these shallow markets.
MESSAGE FROM JACKO 265
It is 3.15am NY time Tuesday December 23 and the market is at 1.3996
The market is asleep. Apart from dealers and house trading desks, there is hardly any volume. (Mark tells me that most of his broker friends are having liquid lunches and are hammered by 1.30pm ...so they are not trading at all)
If there is any significant change in the activity in the next couple of days, I will SMS you.
I would like to take this opportunity to say Happy Christmas to each of you and to your families from Mrs Jackson and myself.
Emails
Email 1
Hi JackoNice to read on your blog that other traders in your group are making good money. I also like to see the traders in the group making money
My own account has risen by 20% this last month and I did not even capture some of the moves the other traders did. That is still an excellent return on funds
..In your opinion is it better to wait and only bring you stops to breakeven after maybe the market has moves 100 pips in your favour. That is a personal opinion/decision ...if you are watching the market more closely, and trading more, then 40‐50 pips may be sufficient. If you are loooking to trade less, then be selective and use your 100 pips I know its a trade off between risk and reward and your own emotional state as to how much you are willing to risk, but it is very fustrating to be taken out by a move which takes you out to the pips and then heads in your direction. Trading can be frustrating IF YOU LET IT GET TO YOU...Stand back and try to be more dispassionate about it...you will enjoy it much more
Email 2
In regards to this article below, of course no one really knows what will happen, but I'm wondering what your thoughts are on this.
I've read two versions of the Eur/USD ‐‐ one says that the European exporters don't want the Euro to be too strong for their business, and China and the other countries searching the safe haven for the dollar and their investments ‐‐‐ and then there's the other side sighting the U.S. economy, unemployment, housing and the rest of the mess saying that the dollar has no chance right now and we should be looking at 1.50 and beyond. I think that the US is much sicker than Europe....but more importantly, I think that the USD is losing its "sovereignty" due to loss of trust by the rest of the world. This crisis is being blamed squarely on Wall St (and loose US economic policy) by the rest of the world
This article from a UK point of view leans towards more parity for the E/U. Noting the weak German economy and other Euro‐indicators.
Parity ?? I can't see 1 to 1 Eur to USD
It's going to be a wait and see, but what are your thoughts at this point. Do you see our trend turning back Bullish any time soon? I think there will be a further correction back from the recent 1.4700+ high, but then the bull Euro will start again
Having said all that, we are in unchartered waters. The question I would like answered is "What is Plan B if this flooding the economy with cash doesn't work??"
The cutting of interest rates to zero didn't work and flooding the of the economy with cash is starting to look very dubious in its application
I think that we have just seen the greatest theft of all time from the US taxpayer. The banks have received hundreds of billions of dollars which they are refusing to loan out because they are shoring up their own capital adequacy ratios. And the US government is not able to force them to do anything. So the liquidity problem has not been fixed. The banks have got what they want and don't have to do anything they don't want to do. They will continue to abuse the system and have their rorts.
I believe that the Govt should now go into the banks that have received the funds with an Administrator for each bank to find and stop all the outrageous salaries, bonuses and rorts. That would slow the desire of the CEO's and upper management to devise and promote exotic products that are useless/toxic/ risky and will cause a return to basics. I also refuse to believe that a person earning more than a US$1M per year needs a bonus to motivate him to work harder.
And I believe that what they should have done is to cut taxes to zero immediately for anyone earning less than say US $100,000 per year.
That would have an immediate impact on spending and liquidity. It would also improve the serviceability of home loans and slow the
plummeting home prices
Also any business earning less than a certain threshold (say $250,000 profit) should have a zero tax rate. Hell, even GM would qualify for that !!!
A sobering thought: the local corner store earns more profit than GM...LOL.
MESSAGE FROM JACKO 264
It is 4.10am NY time Monday December 22 and the market is at 1.4060
Market has been relatively quiet so far today.
I have been charged with a much more difficult and important task...that of finding "suitable" Christmas presents for Mrs Jackson (senior) and Mrs Jackson...now THAT is attempting to find the Holy Grail....
Edit 9.30am NY time Market very thin today. Mark has been talking to some broker friends and both retail and insto trade orders are low in volume. Seems everyone is closing out for Christmas.
I expect the skeleton staff left at the brokerages (I won't call them the B team anymore) will still play some games with the thin market and cause some additional volatility.
I am keeping a watching brief on the market.
PS This is interesting..... but disgraceful. http://biz.yahoo.com/ap/081222/meltdown_secrets.html?.v=8
http://cosmos.bcst.yahoo.com/up/player/popup/index.php?cl=11203115
Edit 10.05am NY time The Christmas period is usually a very thin market, but that tends to increase volatility (given the volatility we are experiencing in the last 2 months, it does not seem possible that it could get any more extreme..but it is possible). Remember that volatility gives more opportunities...but increases the risk exponentially, because the markets are so erratic and fast.
MESSAGE FROM JACKO 263
It is 1.10am NY time Friday December 19 and the market is at 1.4270
A partial retracement has finally taken place (if you can call a 500+ pip downthrust ...from 1.4700 to 1.4200...in less than 6 hours a "partial" retracement).
Interestingly, I saw that Hong Kong (which is basically separate from China) has just spent $USD 7 Billion in the last 5 days buying USD's to prevent the local currency breaking its trading band on the upside. If Hong Kong is prepared to spend that much to defend its band, then you can bet your life that China and Europe will each spend 100 times that amount to defend their currencies against an aggressive US attempt to drive the USD lower.
The coming Christmas period will be a real battleground for currency markets. Each nation is aiming to have a lower currency than anyone else as a spur to growth. The lower the currency, the more a country's industry can export. The more export industry, the higher the employment. So, now that every country has given up any pretense of maintaining balanced (or positive) budgets, they are now all focused on getting their currency lower.
China has the $Trillion surplus....the US has the printing press.
The real fear for everyone is that if the markets decide that the USD is being prostituted so much (by the printing of Trillions of $$) that it will no longer be THE world currency, then we would see the collapse of the USD. (However, that is extremely unlikely....but then again, in these market conditions , who knows).
Edit 5.45am NY time The "partial" retracement has now extended a little further to a low of 1.3984. More retracement down to come in the short term.
Edit 9.10 am NY time This retracement has now moved to as low as 1.3907. Still more retracement to come in the near future Next week you will see the big Euro and China fightback...
Edit ... Market has bottomed at 1.3824
Emails
Email 1
Yesterday, when I read the charts and found EUR/USD had raised so much. From the hourly candle stick I "feel" it was way too much, and the running presented a bit hesitated. So, I went short this pair. Nooo..do not jump in front of an express train And after no more then 30 minutes, the position closed with loss when SL was triggered.
And that time one though flashed out in my mind: maybe I should not place the SL, NOOOOOO !!!!!!!! maybe the E/U "will" be starting free fall in just a few minutes / hours. Thats a BIG "maybe"
Today, when I switched on my computer and found that E/U had another more than 250 pips up‐running, I felt that I was so fortunately had Short this monster just because it has raised "too much" was simply not a rational reason, and had the SL just was the right thing when the position opened wrongly due to a bad decision. As you said once in your Blog: trade until death but don't die because of trade. I am lucky that I am still alive. A very good lesson learnt...now print this off and place it in front of your trading terminal
Well. the last week was a very good lesson to me: Never trade against the trend, even you "feel" it could be the end. Yes
Email 2
With volatility like this, I would imagine that Geoff's break out approach would be better than the 'pull back' approach. Geoff has had some very good trades. I am impatiently waiting for the new website so that we can put him and another two traders out there for the group. It is too messy on the blog when we are all trading to keep it easy to read. The new website has "components" for each of us. (I am improving things gradually, but it all takes more time than I expect).
Email 3
Question to you is, do you see any intervention from the Chinese to keep the dollar weak, maybe, they are closing enormous numbers of small and medium sized businesses at the moment and it is starting to cause social unrest (China does NOT like social unrest) or do you think there is still heavy money flow from dismantled hedge funds, or do you see risk aversion still playing a roll in keeping the $ strength up. I think risk aversion is dropping...how long are Funds going to continue to invest in T bills at zero %
Email 4
So after all this might be the trend change and not only a short up trend of the downtrend... If you take a look at the monthly chart, I don't think that it is reasonable to say that the violent drop was a"trend" (Go and have a good look at a monthly chart)
I feel frustrated and angry after seeing your message about the missing opportunity diary, but then again is so easy to analyse the market after things happened...Yes, but those figures also disguise the huge intra‐day volatility that could have caused numerous losses and large drawdowns
And also i feel completely lost on how to trade this... (and then envious by hearing you say that there are guys making lots of money in the team, lolol!!!) Wait for the best opportunities
Where I think I was really wrong was on not going long since around 1,30/1,31 Yes, that was an excellent position to go long...
According to everyones charts the only identified resistance level was 1,34) It was very clear where it was heading. But I just started hesitating and looking for more confirmation and retracement, and the opportunity was missed. Since it hit 1,34 and then went up, i guess it's everyones guess on where it's heading!!! There is no technicall way or tools to trade, IMO. Like you said it went up in one/two weeks the same amount that went up in a year in 2006. Yes, it was an extraordinary move I have tried to short on everytime it hitted a new mark (1,36/1,37/1,38) waiting it was THE retracement but was unsucessfull! No...don't stand in front of an express train
I also didnt loose money due to moving to break even after 40pips, so in that perspective im ok. Good..a valuable lesson learnt about stops
But then as it goes up im afraid to go long because the retracemetn could happened anytime now. But the retracement never happens, and u see your trading opportunities vanish! Nooooo...there will be more opportunities this week ...and next week... and every other week
Thank god ive been learning from you and I am patient enough not enter driven by emotions... excelllent ...another good lesson learnt
So I'm guessing that Geoff's breakout system would be the best fit for this uptrend... Is he trading it? U have been silent about him... I have thought of using his system but since he is quiet on the blog I didn't feel confident enough to do it on my own...Geoff is fine...he is trading well...we are waiting for the new website which will have a section for him and two other of our traders
Email 5 (This trader is actually helping a friend who was nearly destroyed by her broker)
Hi man, today was another great day for us, went long at 4330, at 4380 (AH soldier) and 4500 (break of the 4493 high) and all of them closed manually after jobless claims fall at 4630 for a 300+250+130=680pips profit!!! excellent..
Great man, (the friends) account now at U$56.301 wow, from 43.000 it's a 30,93% in one month, I think it is ok. Great work...tell her that she is a lucky woman....I am proud of your work in helping her
Just wanted to share that with you, thanks again man for sharing your knowledge with all of us. Thanks
Email 6
Just wanted to say, or to brag, that I have been riding this move since 1.3000 :) even if the leverage on my account is microscopical compared to yours, it is the first time in my life when I have a profit of 1000+ pips, right now being trailed with a 100 p TSL. I have also set a TP at 4200, so whichever comes first. This has been the best trade I've made so far in my life. Excellent trading ... congratulations on a great trade
MESSAGE FROM JACKO 262
It is 2.00am NY time Thursday December 18 and the market is at 1.4407
This market is extremely volatile. I was looking at the charts and calculating how many times a 100 pip TSL would have been activated in the last 48 hours. I stopped counting at 5 times. A 50 pip TSL in this environment is useless.
As I have said before, the options are: to increase the TSL to say 200 pips(no thanks...not for me), be much more selective in trades (definitely) or stay out until this bizarre market settles down (Hmmm, I prefer to just be more selective).
Some of you have been making huge returns (especially those who have traded only the US session). With runs of 400 pips in each of the last two US trading sessions, the returns have been exceptional.
I am avoiding the European session today. I will be back for the US session
Edit 8.40am NY time I think that the bull trend in the Euro may continue again today, but I will be surprised if it has the same 400 pip rally as the last two trading sessions. This market has truly been extraordinary, but it won't go on like that for too much longer.
The combined effect of the lowering of interest rates to near zero has brought the carry traders (who are looking for a return) back out in force. Also the flooding of the economy with Trillions of dollars of cash has caused a devaluation of the USD value. But the European govts/ECB will soon start a fight back to protect their own industries from the rapid rise in the Euro. If China also gets involved to protect their industries, be prepared for a major currency war. It will be a war between the China which has Trillions of USD and the US which can print as much as it wants.....but like all wars, the little person suffers most.
Having said all that, we need to trade the charts, not the fundamentals
Edit 11.15am NY time The market is retracing from its massively overbought position.
Edit 11.50am NY time Volatility is extreme...the market has just moved 250+ pips (from 1.4478 to 1.4219) in less than 20 minutes...on no news !!!!..
MESSAGE FROM JACKO 261
It is 2.00am NY time Wednesday December 1 and the market is at 1.4066
To say that yesterdays 400 pip market move in the Euro in 90 minutes was an amazing thing to see is an understatement. Remember, this is not pork belly futures we are watching, it is the two biggest currencies in the world. With the exception of the stockmarket Crash in 1987, I haven't seen anything like that type of seismic change in the Euro before.
As stated yesterday, in the last 7 trading days the market has moved from 1.2714 to 1.4149. The last time the market moved from 1.2714
(Nov 2, 2006) to 1.4149 (Sept 26, 2007, it took 49 weeks....thats almost a year!!!
As stated in last Tuesday and Wednesdays Messages, I think that the Euro bull is definitely back. With zero interest on US T Bills, and with the printing presses running flat out to pay for the $8.5 Trillion in commitments already inked by the Fed (plus more planned by Mr Obama), it is now apparent that the USD is heading south. My early assertion that the drop from 1.6037 was a quick, short but very deep correction to the major trend may turn out to be correct. I have never really felt comfortable seeing it as a downtrend...It was way too steep and brutally quick for me.
I am looking for a place to get in. The temptation to jump in now is almost overwhelming.....But then I remember that even on the way down with the fall, there was a 1000+ pip upward correction.
Edit 9.30am NY time I will be watching this market again today... I received this from DailyFx.com : A brief history lesson is in order after today's rally. Since the introduction of the euro, the EURUSD had never rallied more than 5% in one week (most was 4.84% in December 2000). This has changed as the EURUSD rallied just over 5% last week and has rallied exactly 5% to this point already this week. Price spiked through 1.41 today and through the 50% of the drop from 1.6040 in the process. The next level of potential resistance is at 1.4313.
Needless to say, this rally is extended and today's nearly 3% gain is one of the largest % gains in the EURUSD's history. Similar advances (in % terms) have resulted in at least multi‐week tops within 1 to 2 days.
MESSAGE FROM JACKO 260
It is 1.00am NY time Tuesday December 16 and the market is at 1.3722
As predicted in the 12.30 Edit yesterday, the Euro has gone for a run.
However, that has made it more unattractive for me to jump into a buy trade at this point. I feel like I am chasing this trade, so I will wait for a sizable (250+ pips) retracement (which WILL come) and will get back on board then. (See Email 3 below)
Edit 8.00pm NY time Today was easily one of the most extraordinary days I have ever seen in trading. A 400+ pip move in the Euro in 90 mins is just extraordinary. The volatility at the present time is just so extreme, I can't even think of a word to describe it. Just set your charts to weekly and have a look at the last two weeks...just incredible!!
In the last 7 trading days the market has moved from 1.2714 to 1.4149. The last time the market moved from 1.2714 (Nov 2, 2006) to 1.4149 (Sept 26, 2007, it took 49 weeks....thats almost a year!!!
Emails
Email 1
We look forward to seeing how the near future unfolds in this turbulent time. I think we are in for more serious times, but I think we are all very very very fortunate that we have knowledge and experience in an asset class that can make excellent returns at ANY time. Compare that to (falling)property, (falling)stocks and (near zero interest on) Bank bills....And who would want to be a business owner at the moment when everything is getting tighter and tighter??? We are able to sit back and sniper shoot trading opportunities as they come....and there are ALWAYS trading opportunities coming along...so if we miss taking one or two today or this week , it doesn't matter, there will be another opportunity tomorrrow
Reg Jnr and I were talking the other day about how this has to be a great learning curve period especially for a young person who has not seen anything like this before. Interesting though we have been reading some of WD Gann's books and he talks about the same things that caused the great depression "greed and corruption" Seems those words seem to be mentioned a bit these days, [Maybe human beings haven't changed as much as we would like to believe LOL] I haven't read his book but I have read intensively over the years about the Depression era (I can't remember which books stood out) and I think that we are flirting around the edges of such a meltdown. In a year or two we will probably all look back and say, "Well , that was close".
Interestingly, I have also read intensively about the Asian financial meltdown in 1997....(I wasn't living here at that time) .... Now that reads as though it was really bad...but you can't see any real evidence of it now in Asia....Asia has been booming.
So I expect all this current doom and gloom will also pass
Email 2
It comes also to my mind that in some way I have too much information which is contra productive when taking a trading decision...
Sometimes you need to take a "helicopter view" of things, to see the big picture without too much detail, especially if you are trading the medium term
I tried for a while to trade long term but always was unsure if the direction was OK so I often got nervous and quit the trade. Only to see 2/3 hours later that I should have stayed a little bit longer and ... well you know what I want to say. When you are in profit you need to be much more patient. When you go into loss, you need to be ruthlessly impatient I am more than positive that with some help coming from you I will become more confident when trading longer term trends... You will
Email 3
Hi Jacko, what makes you think that this market will retrace over 250+ pips in the near future. Hmmmm, the short answer to this is that the market moves up and down much quicker than you think and much more than you think.
I have recently been looking at my "lost opportunities" diary.
WARNING The following will make you feel as though we have all been very lazy...LOL:
It is five (5) months today since the high of 1.6037 on July 14. It has been 110 trading days. From the day of that 1.6037 high:
1. In the following 42 trading days the Euro fell 2156 pips (from July 14 to Sept 10....from 1.6037 to 1.3881)
2. In the following 7 trading days the Euro rose 1005 pips (from Sept 10 to Sept 21....from 1.3881 to 1.4886)
3. In the following 25 trading days the Euro fell 2558 pips (from Sept 21 to Oct 26....from 1.4886 to 1.2328)
4. In the month of November the market basically did nothing (relatively speaking)
5. In the 8 trading days this month the Euro rose 1188 pips (from Dec 3 to today...from 1.2548 to 1.3736)
Now, don't we all feel a little bit lazy?????
MESSAGE FROM JACKO 260
It is 2.45am NY time Monday December 15 and the market is at 1.3456
I am at Hong Kong Airport. I have finally arrived home after a long and arduous 23 hour combined flying time from Florida. (I also now have my Mom with us now for Christmas...Yeaaah!! We are going to have an Asian Christmas this year)
The Euro showed a bit of strength towards the end of last week, so I expect a reaction back down in the next day or two. However, the overriding move at the present time is weakness in the USD (strength in the Euro), as a result of zero interest rates on T bills. (The huge demand for last weeks $30 Billion in T bills at zero % interest rate is bordering on the ridiculous..The demand was $120 Billion....This is an unsustainable situation...Sooner or later Funds have to start to generate a return for their investors).
The issue of the motor industry will be resolved this week with a bankrupt US Government bailing out a bankrupt motor industry and saddling the next generation with crippling debts that will irreparably damage our great nation for generations. (I read a report just before I left that if you add up all the profits and losses for GM, Ford and Chrysler for the last 15 years, the combined losses are far, far more than the $25Billion bailout...in other words, they haven't been viable profitable entities for the last 15+ years...they have simply been accumulating debt.
What have Wall St and the once great Corporations done to my great nation !!! Their outrageous greed and ethical bankruptcy is absolutely appalling!!! I want to see some of these guys in Jail !!
Edit 6.55am NY time As stated in Message 257 on last Wednesday, when I considered that the market was turning bullish "The market still
has a way to go to touch the Daily trend line (1.6037 on July 14 and 1.4866 on Sept 22 and now at approx 1.3500)
However on the 4H charts, the 4H trend line (1.4866 on Sept 22 annd 1.3080 on Nov 25 and 1.2947 on Nov 28 and 1.2847 on Dec 4) has
been pierced on the up side."
The Euro is now bouncing off the 1.3500 mark... (it has been as high as 1.3499)
As I said in the blog on Wed and Thurs last, I think we have moved into a bull euro phase
However, as stated above, I expect to see a retracement in the next day or two.
10.50am NY time Market has broken through 1.3500 quite strongly, so I think maybe the retracement won't be as strong as I would have
liked. I am now looking to find a retracement that is viable. In the short term, I am looking for a "reverse trailing stop loss".....that is a
100 pip drop from a high, as a potential buy point.
This market has a first target at 1.3881 (Sept 10 low) and the second target is 50% retracement (from 1.6037 to 1.2328) at 1.4182
Edit 12.30pm NY time 1.30am local time and my eyes are hanging out of my head, I have been awake so long...I think the Euro might go
for another run today
Emails
Email 1
First of all thanks to you I'm starting to fall in love with the 4hr time frame. Consider that I've been glued to the 5 min chart for more than 1 year (poor me...) Nooooooo !!!
I've found more comfortable studying my s/r and plan my limit orders around the end of the day (NY close), let's from 7 pm to 9 pm GMT. Do you agree with it, as being the best or at least a good time to restudy the market on a daily basis? Yes
Or would you say that it is not really a big deal and with a 4hr frame we can analyze charts at other time of the day with no such a big difference in the results of our planned trades? After the end of NY trading is a good time because the market goes quiet (or at least it used to) until London opens so you are not distracted by major market moves
MESSAGE FROM JACKO 259
It is 12.50am NY time Friday December 12 and the market is at 1.3330
Geoff has just woken me with a call that he is going short on the break of 1.3300. I had a quick look and have decided to make an opportunistic trade on the basis of his call.
I have a sell order in at 1.3290. It has a fixed 100 pip Stop and if it goes 40 pips in profit, I will go to breakeven.
NOTE An SMS was sent out at 12.50am... If you have NOT received it please email me at waynejackson777@gmail.com . I am now using the new internet system and I think we have sorted all the bugs out, but I want to check
Now I am going back to bed....
Edit 7.15am NY time Summary of (Mark's) action during the Asian / European session : Sold at 1.3290. Market moved to 1.3250. Stop
moved to breakeven of 1.3290. Closed out at breakeven
Edit 8.45am NY time The USD is certainly losing strength in the short term... I was hoping that we would see a fall in the Euro to just
above the 1.3000 mark, but it has only moved as low as 1.3250. It is now back on the upward march. (currently 1.3400) I don't intend
holding anything over the weekend because we are just as likely to hear something like GM going into bankruptcy.
MESSAGE FROM JACKO 258
It is 1.40am NY time Thursday December 11 and the market is at 1.3133
The market has gone on a tear in Asian trading. It now looks that the market has turned bullish in the short term. I am looking for a meaningful retracement to go long.
Edit 6.15am NY time Market is still moving up but.... currently at 1.3166 (only 33 pips up from 4 hours ago). The US session may show a reversal of this rise
Edit 9.15am NY time Market is now at 1.3270. The question is "Do I try to jump on a fast moving train? Or do I look for a more 'measured' entry point?"
It is not for me, but if you do decide to jump aboard, stay very close to your terminals and be ready to close your positions on any significant reversal. I repeat: The US session may show a reversal of this rise
Emails
Email 1
I notice you have stopped using an AH strategy. Hmmm, temporarily...the market volatility is soo severe that I prefer to take only the safest of the safest trades at the moment...and it is paying off as seen by the results of the Jackson Fortress Fund ...not spectacular (approx 60% + on an annualised rate) but much safer...Rule number 1: Do not lose money
This could have recovered the 100 pip loss from 1.3000. I know the market is ranging, but wondered whether you still feel this could be a valid approach? Yes, but safety first is my current motto
Email 2
My question is this: If you see a trade setting up nicely, however it is about to coincide with a news release ( or during slow trading hours), do you still take the trade? Hmmm...I prefer to wait and see what the news is...But, having said that, it depends on how close to the news it is that I want to trade....there are always news announcements, so traders have to be careful that they don't use news as an excuse NOT to take a trade if the set up is right
Email 3
Just a quick question. Say for instance we want to sell at 1.3xxx as is the plan at the moment. If your away from the screen, you would leave the order in, however, if you happen to be in front of the screen and it approaches the target, would you wait and see what happens or just let your order get triggered? I recommend that traders wait to see if it goes above to get a better price. I prefer to do that, but I am also prepared to just place the order and let it play itself out
Would it be correct to assume that if you are watching and it hits the target to let it go for a while and try and short it at a better price if at all possible? Yes Is this how you would approach the situation? As long as it is a better price than my original figure, then take the trade....BUT do not get hypnotised by the chart and then end up not taking the trade
MESSAGE FROM JACKO 257
It is 12.40am NY time Wednesday December 10 and the market is at 1.2942
I am seriously trying to decide if the market is turning bullish.
The market still has a way to go to touch the Daily trend line (1.6037 on July 14 and 1.4866 on Sept 22 and now at approx 1.3500)
However on the 4H charts, the 4H trend line (1.4866 on Sept 22 annd 1.3080 on Nov 25 and 1.2947 on Nov 28 and 1.2847 on Dec 4) has been pierced on the up side.
Todays action will be important for trading decisions over the coming weeks.
Interestingly a note today by Kathy Lien from GFT was sent to me by 2 of the traders regarding the increase in volatility. In it she notes that:
Forex trading ranges have exploded over the past few months. The daily average trading range has doubled for all of the actively tradedcurrency pairs in 2008, with some currency pairs even seeing a 200% rise in their average daily range.
However the big explosion in volatility has actually happened in the past 9 weeks. EUR/GBP, USD/CAD and the AUD/USD have seen thelargest increases to their average daily range, but the range for the EUR/USD and GBP/USD has also increased materially.
More specifically, in 2007, the EUR/USD had an average daily range of 84 pips. Since October, its average daily range has been 267pips, a more than 300 percent rise.
EUR/GBP which use to known as one the range trading currency pairs saw its average daily trading range increase from 36 pips in 2007 to 142 pips since October, a whopping 400 percent rise. Say goodbye to the days of the hiding in low volatility of EUR/GBP because it is currency pair that has seen the largest expansion in volatility.
The effect of this increased volatility is the either Stops have to be much wider OR you need to be much more selective in your trading.Otherwise you will be whipped up and down.
Edit 8.40am NY time Market is at 1.2950. Market has been choppy around the 1.2950 mark (Plus or minus 50pips either side of 1.2950).
This is not a market to rush into at the moment until a clearer direction is established.
Edit 11.30am NY time Market at 1.2995. This is a really interesting market at the moment, especially the tenuous and hesitant breaks of 1.3000.
Edit 7.00pm NY time Market is hanging around the 1.3000 mark like a bad odour...
MESSAGE FROM JACKO 256
It is 3.45am NY time Tuesday December 9 and the market is at 1.2842
Somedays in trading you just feel as if you just hit it too early because you don't want to miss that "special" opportunity. Normally I can resist the temptation and walk away. However, that happened to me yesterday. I was out by 100 pips from the proper target because I didn't (as I have been doing) allow for the extra volatility.
I also have the feeling that I was probably 24 hours too early for the 1.2850 sell trade.
Probably due to an overhang from last Fridays trades, I was too keen to get in and attempt to kick some brokers' butt.
Anyhow, I am again looking for another trade position. I am getting a feeling that the market is holding the USD to between the 1.2500 to 1.3000 range. I will expand on that later today
Edit 8.35am NY time Grrr... the market is currently at 1.2813...I was 24 hours too early. I think the market is going to be choppy for a couple of days
As an aside, I am getting the distinct impression that this market has been manipulated down from the start of the Beijing Games 8/8/08.
The credit crisis was also a factor but the effect of China's surpluses being whittled away by the USD falling to 1.60 Euro (and similar low levels in every other currency) would have caused great concern. Even though China has taken huge losses on their investments in Blackstone Group Funds Management stock price, I would be curious to see if they had a Fund that was available to only the China Govt that speculated in favour of the USD. It would have made enormous profits because China has unlimited (Trillions) dollars to buy more dollars.
In addition, as the USD goes up, the value of the $Trillion USD holding increases.
It has also reduced the costs of their resources that they buy from countries such as Australia, Chile, Brazil etc because those currencies are all lower.
Just a thought!!
Edit 11.35am NY time I think the market is going to be choppy for a couple of days
Emails
MESSAGE FROM JACKO 255
It is 7.15am NY time Monday December 8 and the market is at 1.2870
This week is a new week with new trades. I ended up with approximately 50% of my trades touched and filled and 50% not on last weeks trades. So we made zero pips on some and 150 pips on the remainder.
In hindsight, the decision to close out before the weekend was also the correct decison. We popped them out at 1.2650 and the market rose in late trading on Friday and early trade today. All in all, I am happier today than I was on Friday.
I am looking for a new place to go short again this week. I have awoken to see the price at 1.2870. The market has been ramped up as high as 1.2915 in Asian session.
I think we have been offered another early Christmas opportunity by the market.
As part of the ongoing process of improving things for the group, I am reasonably happy with the new SMS system. It seems to be much quicker than the "queueing" system offered by my little Nokia and is much easier to type a message. Still a few little bugs...but we will fix those over the next couple of days (hopefully)
Edit 7.45am NY time I am a seller at 1.2850. Market at 1.2856
Edit 7.55am NY time I have sold at 1.2850. Sold at 1.2850 on the basis that the market was close to the downsloping 4H trendline at 1.2860 (1.4015 on oct 1, 1.3049 on Nov 25 and 1.3073 on Nov 26)
I have a 100 pips Stop Loss...but if/when it goes 40 pips in profit, I will move Stop Loss to breakeven
Edit 10.45am NY time Market had moved to a low of 1.2841. Therefore TSL was adjusted to 1.2941 . Market has just stopped me out for a 91 pip loss
Emails
Email 1
Jacko, I didn't get the 10.40am SMS message. Only a couple of you were not contacted, and I am guilty for that. When some of you changed your cell phone details, I updated them on my little Nokia but not in my Email contact list. As always happens with computers, I could NOT just upload my Nokia contacts....nooooo, nooooo, no000...I had to use my Email contact list which wasn't as "clean" as my Nokia numbers. I have my Nokia in HK so my staff will update your details as soon as possible.
MESSAGE FROM JACKO 254
It is 8.25am NY time Friday December 5 and the market is at 1.2680
SPECIAL NOTICE: see 10.30am Update below
My sells at 1.2800 were hit and our SL was moved to breakeven when we went 40 pips in profit. We have been having some long discussions with each of our brokers regarding the quick spike up to 1.2799 and 1.2798 (depending on the broker). We have apparently been lost some 50% of our contracts with the other 50% still in play. The market has moved to a low of 1.2663. We have moved our TSL to 1.2763 on the remainder.
"Discussions" are continuing.....
Edit 9.10am NY time Market has moved to a low of 1.2627. The TSL has been moved to 1.2727. To be honest, there is so much bad feeling with our brokers over this trade that I will be happy to close this trade out.
Edit 10.30am NY time. I have decided that I am closing all my trades out at 1.2650. (I want to close the positions before the weekend and put this trade to bed.....besides 150 pips profit is good enough)
I am also testing my new internet based SMS system. It is an out going SMS system only. Please do not try to reply to the SMS. I sent the SMS at 10.40am NY time
If you have not received it, just email me, and I will check your details.
Also I am heading back to HK over the weekend so I will answer any outstanding emails on Monday/ Tuesday.
Edit 11.25am NY time All remaining positions closed at 1.2650. I am going out for a walk.
MESSAGE FROM JACKO 253
It is 1.08am NY time Thursday December 4 and the market is at 1.2686
I have insomnia due to being 12 hours out of time from my normal Hong Kong time.
It is a totally different feel trading during the day. I am used to having lunch then exercising then trading during London open (at 4.00pm HK time).
Also trading the US market is something I do after dinner while Mrs Jackson watches a movie.
Trading during the day seems almost to be a intrusion on our day.
Now I have nothing to do at night except talk to Mom and watch the Mama Mia movie!!!!!!
My Sell at 1.2800 order is still in place The market moved back up to as high as 1.2727 (close...but not close enough) before dropping to its current price of 1.2685. In the current market, a spike of 100 pips is not unusual, so I am still in there, waiting for the fish to bite
Edit 8.45am NY time I am disappointed that I haven't hooked my fish at 1.2800 yet, but I am also surprised that given the drop in interest rates, that the Euro hasn't fallen more. Looking at the 4H chart, it is a bit like a washing machine...a lot of small movements up and down but going nowhere.
Edit 11.05am NY time Market has moved to as high as 1.2740, so my fish is back sniffing around my order price of 1.2800
Edit 12.05pm NY time Order has been hit. Some of you may have held off and sold at a slightly higher price.
The decision to sell was based on a number of technical factors. It is a 50% retracement of 1.3083 to 1.2560. It is also a resistance level... from the low of 1.2803 on Nov 25 (8am NY time).... and again from the low of 1.2819 on Nov 26(at 12pm).The falling trend line from 1.3072 also gives a feeling of extra resistance. It has a fixed 100 pip SL at the moment. I will be moving Stop Loss to break even if and when it moves 40 pips in profit I am now letting the trade play itself out....
Edit 4.00pm NY time Market has gone through 1.2760 (40 pips in profit) so my SL has been moved to breakeven at 1.2800.
MESSAGE FROM JACKO 252
It is 8.40am NY time Wednesday December 3and the market is at 1.2640
As stated last night, my Sell at 1.2800 trade has not been triggered. Market reached only as high as 1.2767. So my fish is still in sight and swimming around. My Sell at 1.2800 order is still in place
Edit 8.00pm NY time The market moved back up to as high as 1.2727 (close...but not close enough) before dropping to its current price of 1.2685. In the current market, a spike of 100 pips is not unusual, so I am still in there, waiting for the fish to bite
Emails
Email 1
I got today's alert "I am a seller at 1.2800" today does this mean you have put a limit sell order for 1.2800 on? Sell on Stop order
Or you are watching it and will make a decision to sell when it reaches 1.2800? No, I had been watching it but I had made arrangements to go out
If indeed you have actually sold at 1.2800 today, where are you trading? noone of my feeds are showing price reaching1.2768 (oanda, IB, interbankfx). No, my trade wasn't triggered...but the fish is still in sight and swimming around
Email 2
I think that the way you trade is really amazing. You do not wait in front of the computer monitoring every pip movement instead you wait for the VERY VERY BEST opportunity to jump in to the market, where mentally in my head I've been tempted to jump in at certain points but hesitated because you weren't even taking interest in entering the market at these levels. It's very puzzling to me (at age 23) and I guess it perhaps has got to do with age (as you've said umpteen times already). Yes, patience is a gift for the elderly...LOL
It is in total conflict with my beliefs (and maybe the way I've been brought up to think of) that success depends on hard work. You've to put in time, effort, and energy to get yourself educated and become knowledgeable in the subject you're dealing with.My education is based on
30+ years of trading experiences in property, stocks, futures and businesses But in my impression, you're taking trading as something very relaxing and with minimal‐effort‐needed. The key benefits of this business are liquidity, leverage and rapid compounding of profits....running around like a madman is counterproductive in this industry..it means you are not thinking about the best of the best
opportunities
I'm still far far far away from your level of course I'm just wondering if that actually means the bulk of the time is spent on analysing the markets, reading financial news and reports ‐ the actual trading just takes maybe 5% of the entire process? Yes Could you perhaps share with us on how do you put aside the amount of time you "set aside" for trading (if you do), I reply to emails from the group in my "free time"...LOL...I am a very slow typist and "to what extent" do you actually think about trading during your free time? I am always thinking about trading... because it is a real "passion" to me. I note that you are in Singapore, so you will understand that (like Hong Kong) it is very easy to keep up to date with the market just by walking around the city and shopping centers...Last time I was in Singapore in a shopping mall called VivoCity, there was even an AsiaNews business channel screen in the window of the cosmetic surgery shop....LOL !! And free internet access and availability in Singapore is probably the best in the world ...certainly up there with Hong Kong and Sth Korea It certainly isn't pleasant doing my leisure shopping on a weekday Oh, I don't like shopping at all...but I love the companionship of being with Mrs J...so I have to have a balance...and in my mind I'm thinking whether I'm going to miss a trade or not! If you are looking at the daily and 4H, there is no reason to miss many trades.... unless you are on long flights across the globe
Email 3
Today at first you decided to watch the market around 1.2800 to try and catch it on the way back down and then decided to place a sell order, was this just because it is not practical to continually watch the market and you just figured if it goes to my target area close to the European or American open then I will watch it but if it doesn't then I am going to go about my life and get the sleep I need?? I was watching it because I had some free time but then I had to take Mom and Mrs J out, so I decided that I wanted it at 1.2800 anyway. I made a decision right at the start of my Forex trading that it would fit around my life (even if it meant that I missed an opportunity or two) .
The reason for that decision is that I want to be able to do this (Forex trading) till the day I die.......but I didn't want it to be the reason that I die.
MESSAGE FROM JACKO 251
It is 3.00am NY time Tuesday December 2 and the market is at 1.2620
Just up to watch Europe open.. An ungodly hour, Market is looking weak
Update below
Edit 3.45am NY time Market at 1.2585. and looking weaker. The shadow of ECB and BoE interest rate drops later this week are are starting to be seen.
Edit 7.15am NY time I am starting to get interested in a sell at around the 1.2800 mark. It is a 50% retracement of 1.3083 to 1.2560. It
is also a resistance level... from the low of 1.2803 on Nov 25 (8am NY time).... and again from the low of 1.2819 on Nov 26(at 12pm).The falling trend line from 1.3072 also gives a feeling of extra resistance.
I will watch to see where it goes when it gets up there, then sell on the way back down.
Edit 11.10am NY time I am a seller at 1.2800, with a 100 pip Trailing Stop Loss.
I will be moving Stop Loss to break even if and when it moves 40 pips in profit
Edit 8.15pm NY time My trade has not been triggered. Market reached only as high as 1.2767. So my fish is still in sight and swimming around
Emails
Email 1
Hope you had a good thanksgiving. I took a short trade on the break of 1.2800 and just got stopped out for roughly 110 pips of profit. An excellent trade Now that I'm out, I like 1.2800 for another short if it gets back there. Yes, every time it sticks its head up just bash it witha hammer
Email 2
Now we all now analysts are normally full of it, but spare a moment to have a look at this
http://www.ft.com/cms/s/0/dd9ce634‐b66b‐11dd‐89dd‐0000779fd18c.html Interesting
Speculation as to currency intervention which would have caused the dollar to strengthen this year. It also points the way to a dollar devaluing if the Chinese allow the Remnibi to appreciate as it was doing. Interesting no? I think that China wants a strong USD so that they can continue to keep selling everything to the US and weaken the US manufacturing industry....I said some time ago that the motor vehicle industry will all be moved to China. The vehicles will be US designed but made in China.
See here http://www.forexfactory.com/showpost.php?p=154880&postcount=1623
China is focusing on the US because they want to weaken a very dangerous and aggressive military power, rather than Europe which is more tolerant and peaceful. In this respect, GWB has been an absolute disaster for the US, because he has woken and provoked the sleeping giant. China is not militarily able to "compete" with the US, but sure is starting to "compete" with the US in the industrial/manufacturing areas and weaken the fundamentals of the US economy. Having said that, Wall St and the big US corporations have inflicted far more damage on the economy
In terms of trading this, I really can't fathom what the Chinese will do next (can anyone?), so my only trading resolution for the new year is to not hold too strong opinions over the long‐term trend and treat major technical breaks as potential changes of the trend. Yes
China has another vested interest in buying USD and keeping the USD strong:
In a report, experts from the Center for Strategic and International Studies and the Peterson Institute for International Economics cited three reasons why China would not rapidly reverse its policy of buying large amounts of dollars to maintain an undervalued exchange rate for its yuan currency
· Any partial sale of their current dollar holdings, or even rumours of that, would drive down the value of China's massive ($2 Trillion) remaining dollar holdings, probably sharply;
· Chinese sales of dollars would drive up the price of whatever currencies they converted into, adversely affecting China's trade competitiveness and drawing protectionist reactions towards Beijing and;
· China would be branded an 'international pariah' if it were to 'dump' its dollars in a 'precipitous manner that generated global financial andeconomic instability'
Email 3
Hi Man, I already closed all positions, ………. wow, to trade 32 open positions at a time had been a great experience...BIG RUSH!!!!!!!!!! :) I love this job!! It is better than sex sometimes LOL (pardon my french) Nah, it is never better than sex....unless you have bad sex !!!...LOL
Email 4
Your holiday gave me a chance to think on my own and use what I learnt from you in the last 1 mth since joining the group. Ok
I put a sell at 1.28, on basis that it was time for a breakout. I thought it would hit a traffic jam at 1.27, so put a take profit there. Good news is that the price did what I expected it to do. Yes Bad news is that the fx broker did not place my order because of slippage!!
Hmmmm...If I was a cynic, I would think that when he saw it go into profit they kept it for their house trade and you missed out I guess the traffic was moving too fast for me to get on board one of the buses at 1.28...What a disappointment! Not much you can do about it except to change your order to a sell on stop order rather than a limit order
FYI : ORDER EXECUTION
• Stop Orders: Stop Orders are activated at the price designated by the client. The next price that is available is where the stop order will be executed. Buy Stop orders are executed at the next available offer price and Sell Stop orders are executed at the next available bid price.
• Limit Orders: Limit Orders are executed at the price designated by the client.
• Market Orders: Market Orders are executed at the best available price. The price that appears in the client's ticket prior to submission is the last price only and does not constitute the actual execution price. Once the submitted order is received it will be executed at the next best available price.
Waiting for you to be back so I can re‐check my trades with yours! Have a look at what your order was...
Email 5
I don't believe I have ever heard you discuss position sizing other than to say that you started with 2 standard lots and now trade many more than that. Do you have a formula for percentage of portfolio or such that you will put on each trade. The rule of thumb I know is to never "risk" more than 3% of your balance on any one trade. As a rule of thumb I recommend the standard 2% rule. However, when the trend is running strong (and because I know and trust my methodology) I am prepared to go to 5% per trade.
Email 6
I just wanted to share with you a disturbing trade I done. Uh Oh...OK
I wanted to go for more like you are trying to drill into my head and I was determined to wait on a retracement from this latest upward move back to the 50% fib of around 1.2750 Ok
As price kept going up, at each resistance I sold. Ultimately I had $3/pip (six $0.50 trades) on a $350 account. Finally the retracement started and it came to the 1.2800 level and I typically would sell here (my bad habit of getting out too soon), but I stayed in the trade trying to go for the full move. I was in profit by $194.20. Excellent
If you look at the statement, you'll see that I had no stop loss NOOOO !!!! ‐ too confident I guess.
Well ‐ as you probably know, the E/U jumped up 200 pips, blowing out the account. It will happen sooner or later if you don't use a stop
This was 'house money' and I accepted the risk of playing with their money to try to get a big move.
What's bad is I normally don't do this and little upset at myself for letting so much profit get away, but I thought I was doing the right thing.
Any advice on woulda, shoulda, coulda? You should have moved to breakeven, then put a Trailing Stop Loss to lock in profits
I'm getting ready to send in my another deposit of $300 to start building the account up again. So I'm back to square one. A cheap lesson....as long as you have learnt from it
NEXT DAY (a second email)
Just wanted to let you know that I used the AH method to recover these losses, so feeling good. Good
This was a temporary costly experiment I performed, but it did help me understand more about trusting your gut. Nothing is perfect and you can't go for broke on every trade. NOOOO!!! Sooner or later one trade will send you broke If the market is only going to give you 10pips profit, that's all you get. Take your money and re‐align for the next trade. Yes, you are learning quickly
MESSAGE FROM JACKO 250
It is 3.00am NY time Monday December 1 and the market is at 1.2700
It is very quiet in the Jackson (senior) household here in Florida. I have just got up out of bed to see what is happening in Asian and pre‐Europe trading. Nothing much, though it is showing a nice move through to 1.2700 at the moment.
I can now remember why the US time zone is "inconvenient" for trading the London open. It is much easier to be finishing a nice lunch (and having gone for a walk) then sit down at 4.00pm Hong Kong time to watch the London open and then have a nice dinner and watch NY open at 9.00pm Hong Kong time.
I am heading back to bed and a warm Mrs Jackson. Back for the US open.
Edit 8.15am NY time As stated in in Message 246, the the 1.2750 mark was a good sell. Normally I would be annoyed that I had missed an opportunity, but the time spent with my family has been far more valuable. I look forward to trading this week.
Edit 11.40am NY time Market is at 1.2618. Not an attractive sell at these prices. Dow is in retreat. We are heading into much more than just a "recession". Property will continue to go down, Stocks will continue to go down, fixed interest is heading to the floor and Gold has lost its lustre...Best thing to be in is....currencies.
Edit 6.45pm NY time Market is at 1.2600. The EUR/USD has been stable. All the action has been in stocks where the Dow has dropped 680 points (7.7%) and the Nasdaq has dropped 9%
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