MESSAGE FROM JACKO (JUL 2008) 152 - 165

MESSAGE FROM JACKO 165

It is 2.00am NY time Thursday July 31 and the market is at 1.5592.

The market has been ranging between 1.5300 and 1.600 for 5 months now (since early March). We therefore are
facing two options: either the trend has changed and the market will head down OR the market will soon
resume its upward trend and we are now being given an excellent opportunity to buy at near bargain basement
levels.

Many people are now starting to say that the market has peaked and the trend has changed. This is despite the
fact that the upward trend has now continued for 33 months and reached a high of 1.6037 only a very short 16
days ago.
I am rather sceptical that this 33 month bull market (which , in turn is part of a longer 84 month...thats 7
YEARS... bull trend !!!) can be declared dead within 16 days of a record high.

As a result, I think that I will be looking to position myself for a buy very soon.

I think that the NFP will come in lower than expectations of -75K employment change. So I will be waiting till
after the announcement tomorrow. (Just as an aside, this is worth looking at. " The problem with the NFP
report is largely statistical. The sample size prevents readings as accurate as traders may think. In fact, to get
to a 90% confidence level the statistical "error" is increased to + or -430K jobs. That is a very large range and
renders estimates largely meaningless. However, this does not stop traders from worrying about the report and
reacting to it." http://www.forexfactory.com/news.php?do=news&id=98184 )

The Euro bull is not dead.

Edit 9.20am NY time Market has risen to 1.5699 as news reports showed the U.S. economy grew less than
forecast in the second quarter and initial jobless claims rose last week to a five-year high. But rise is looking
flimsy... The NFP tomorrow carries much more weight.

Emails

Email 1

I'm as puzzled as you are about the recent dollar rally. I hate conspiracy theories, especially if they're used to
explain losing trades... but -is it possible this was a US intervention? Possible...they may be hammering the
Euro down on any market weakness Paulson refused to rule it out last month -he even seemed to be
advocating it, and the Fed have been jawboning the price quite a lot recently. Yes Even Bush acknowledged
that he wanted to see a stronger dollar, were his lips moving ???....LOL and that's a massive departure from the
usual stance of tight lips and guarded comments from Bernanke.were his lips moving too ??

Now, if you were going to intervene, wouldn't now be a prime time to do it? yes

And in a related question, how do you ever know if a currency intervention takes place? Or is it only ever
guesswork? an elephant dancing in a room leaves a pile of poop for everyone to see !!


MESSAGE FROM JACKO 164

It is 2.00am NY time Wednesday July 30 and the market is at 1.5570.

I am standing aside from the market for the next 24 hours. I have been surprised by the strength of the US
dollar and want to have a clearer view of the market before jumping back into the fray.

Edit 10.30am NY time Some really interesting emails below

Emails

Email 1

Hi Jacko, what is your rate of return? Ok...thats what I like...a subtle, non-personal question!!! ...LOL
As outlined yesterday in the blog, I am currently around 840 pips in profit over the 8 months since I started with
the group. On an annualised basis I am therefore looking at a return of 1200-1300 pips for the year.
However, I am actually expecting better than that because the first 8 months of the group had some
extraordinary factors which are unlikely to be repeated. They were firstly, the first three months of the group
was unsettling and I took an ultra conservative stance in my trading which slowed my trading right down;
secondly, my little "experiment" with Counter Trend trading shaved 200 pips off my eight monthly results.
These trades were entered into basically because some of the more aggressive traders were asking me to take a CT trade to trade the "short" side. They were trades that I was never really comfortable with and would not
normally have taken; and thirdly, and most importantly, the market had stopped trending and went into two
periods of "ranging" If you pull up a weekly chart you will see that the market went into the first "ranging"
period from early November (when the group was formed) to early February. It then "trended" for only a month
until early March. From early March it has again been "ranging"
In contrast, if you compare the difference in the trending period from early 2006 (when the market was at
1.2000) to November 2007 (when the market went to 1.4900), the market was trending much more consistently.

Having said that, the expected annualised return of 1200 -1300 pips this year will give me an "adequate" return
on my capital. It will certainly be less than I earned last year for the same period when I earned in excess of
2200 pips.

OK, so that is the revenue/return side of the "rate of return" equation.

The second side of the equation is the level of capital required to earn that return. Here the numbers become
slightly more murky because it can be measured a number of ways: firstly is it the bare basic funds required to
service the level of contracts; secondly, is it the bare basic funds required to service the level of contracts
plus an amount to cover maximum potential drawdowns; thirdly, is it the amount left in the brokers accounts or
fourthly, is it the amount in the brokers account plus reserves in any bank accounts to cover any contingencies.

I think that the best answer is to state that I am ecstatically happy with the return on my capital over the past
three years.
In addition I am having enormous fun enjoying my trading (including the emotional ups and downs).
And finally I am really enjoying the experience with the group. Even though the workload of the group far
exceeds the workload of trading (and for far, far, far less money...LOL), I am getting enormous satisfaction
from knowing that most group members have benefitted from the experience of watching my (boring) trading.
Also, the group is a truly fine group of individuals.


Email 2

I have gone through your blog and have some questions.

1. When you say to limit risk to 2% of account, do you mean 2% per trade entry yes or 2% in total if I have more
than 1 trade entry? It would be very rare to have more than 1 trade entry...I don't trade that way
2. Some how related to question 1, do you limit yourself to 1 open trade at all times yes, or do you have
multiple trades open, and if you have multiple trades, at which price level do you decide to pile on subsequent
trades? Usually 150 pips above the first trade, but it doesn't occur very often
3. Your policy of picking up a fallen soldier, do you insist on doing so even after the market has pulled back
significantly (say 200 to 300 pips) and subsequently move up towards the fallen soldier level? Yes If your answer
is yes, then what's the logic behind this strategy? to recover a loss and continue with the momentum to a profit
4. I noticed that your take profit levels are determined by the trailing SL,yes at this moment we are using a 100
pip SL. In your opinion, do you think it is better to set a fixed target of maybe 100 pips, if you don't think it is a
better option, than why not? i prefer to use a 100 pip TSL...it is simply a matter of preference

5. What are your thoughts on stop loss, when you believe that the trend is up for Eur, and it would take a lot
for it to reverse. If it is not likely for the trend to change overnight, unless something catastrophic happens,
what do you think if I were to leave my out of the money trades in while waiting for the trend to pickup again?
The drawdowns are the issue...that is why the A-H was designed....so as to prevent you having to wear the full
drawdown.

Many thanks for your patience and guidance.

Email 3

I would appreciate your insight on the current market situation and your take on the short/long term affect of
the declining oil price. Also, I am curious to hear what you think it will take to brake out of the 1.53-1.60
range? I have been surprised by the strength of the US dollar. I am uncertain as to how to allocate the effects
at the present time. (Oil prices, inflation, employment growth etc). Either something is happening and I am
unaware of it OR it will soon be a magnificent long term buying opportunity.

Emails 4

I guess my question is, whilst I know you cant trade the news, how much do you factor in the fundemental
indicators? I factor in the fundamentals as a background for the technical moves. But i am confused as to the
strength of the US dollar. The US financial system has not had a massive turnaround... so I am watching the
market with interest at the moment


MESSAGE FROM JACKO 163

It is 3.40am NY time Tuesday July 29 and the market is at 1.5750.

Not much to report. My A-H trade is still playing itself out. Patience is the name of the game now

Edit 11.30am NY time The market has corrected hard to 1.5590. The market correction has closed out my A-H
trade at 1.5667. It is really annoying that the last two trades have taken back some of my profits.
I am still some eight hundred+ pips in front over the last 8 months but I never like giving the market back any
money.
But the alternative is to have such tight limits that I would be constantly stopped out and not have the bigger
profit runs.


MESSAGE FROM JACKO 162

It is 1.00am NY time Monday July 28 and the market is at 1.5717.

My A-H trade is still playing itself out. (I bought last week at 1.5713 with a 100 pip TSL). The market has moved
as high as 1.5752 so my TSL has now been adjusted to 1.5652.

The establishment of the Managed Fund is progressing very well. I hope to be able to outline all the details next
Monday. (If you ever want to see a complete waste of space, walk into a room full of bankers and lawyers....All
charging you (by the hour) for their time...and with absolutely NO incentive to get the deal done
quickly.....Unbelievable !! Someone get me a gun..LOL). The good news is that we are very, very close to
completing all the paperwork and details.

The other good news is that Mrs Jacko has dragged me out to go shopping...she says that I enjoy watching her
spend money....LOL ....I love the woman !!


Edit 9.15am NY time Have returned to find market at 1.5762. My TSL has been moved to 1.5663.

Finally have some time to answer some emails

Edit 1.40pm NY time Have finally cleared all the emails and finished reading the final drafts of the Managed
Funds...My eyes are on fire !
Market has been trying to clear the 1.5760 area...and struggling (currently at 1.5757) ...There are two options
available: take the profit now OR stay in for the longer trend. No prize for guessing my preferred option...I am
staying in.

Emails

Email 1

Hi Jacko i have some question to ask you about your strategy :
1)During the AH how much is the stop loss 50 or 100. 100 pips Trailing Stop Loss
2)Do you consider level 100 of fibonacci as an entry level also. no
3) Once you have been kicked out of the market and you place an AH strategy but it has not been triggered,so
may be you decide to enter at a lower level, Yes, but I would rarely place another order unless it has gone
around 150+ pips past the Stop loss then once got in do you also keep the AH order.Most times yes So in this
case you would have two order that the market is going to pick up. yes but they would be 150+ pips apart

Email 2

No question for me but just a comment on the 4th e-mail today on your blog. (That was the one where I said:
This is still the best "business" on the planet. An excellent career for a young person. A salary had never been
a truly reliable safety net. On the other hand, once you have mastered the basic skills of trading, no-one can
ever take away your talents, your experience and your skills. ) I think that sums up the reason as to why I
really want to trade for a living. Yes. Working for someone else is just an illusion of safety. In the last 5 years,
I've almost been made redundant twice (and I'm only 31!!) Wait until you are 40...I am told that a persons
"employability" drops by 80%..and if I want to further myself with my current company, I'll probably have to
relocate to a different location in a few years which I'm not really prepared to do as I don't like my job that
much! LOL

Email 3

I now go into every trade expecting the worst which helps me cope with the losses better. An intelligent
approach...It means that you have considered the potential loss and accepted that you can accept that level of
risk

Email 4
How do you normally set targets? I don't...I let the TSL close the trade...I don't assume that I can tell where
the market is going to top out...It is too difficult

And do you ever use breakeven (after a certain number of pip gains) plus a trailing stop or just a trailing stop?
Just a TSL...However, I will sometimes reduce the TSL from 100 pips to 50 pips if the market has gone for a run
upwards and I want to lock in the extra 50 pips

It always hurts to watch a profit dribbling away. yes, but I have also seen a market dip down in the market
"noise" and then recover in the direction of the underlying trend so it is a question of either letting a trade play
itself out or being stopped out prematurely

MESSAGE FROM JACKO 161

It is 4.40am NY time Friday July 25 and the market is at 1.5699

I have been in a meeting all afternoon.

My A-H soldier has been activated at 1.5713. (My buy order at 1.5713 has been filled) The trade is now
playing itself out. My A-H trade has a 100 pip TSL.

I am going back into meeting

Update 6.50am NY time These bankers and lawyers are sooo exasperating......they love to hear themselves
talk. Market at 1.5747, the A-H is in positive territory

Heading back into meeting.......


Edit 6.30pm NY time The A-H trade is still in play. I have a number of emails from the last two days....I will
reply to them on Monday (If I attempt to do more "work" on this weekend, Mrs Jacko will shoot me)

MESSAGE FROM JACKO 160

It is 1.00am NY time Thursday July 24 and the market is at 1.5695

I am still waiting for 1.5663 (50 pips below my Stop Loss on the last trade) to be hit, so that I can initiate my
A-H buy at 1.5713.

Edit 7.10am NY time The market has moved down past 1.5663 (50 pips below my Stop Loss on the last trade)
to a low of 1.5637, and activating my A-H Trade. I now have a buy order at 1.5713 waiting to be collected when
the market turns and resumes its upward trend.

Emails

Email 1

You are very open about sharing with us the size of your orders and other very personal matters but I have
never seen you name any of your four brokers. Is there a particular reason for it? I don't want to be seen as
recommending any broker...in case anyone thinks that I would be getting a kickback or more favorable
treatment. (Also, I would certainly not want anyone to think that I can see their trading records because I was
recommending traders to deal with a particular broker). I just don't even want the slightest doubt about the
individual members dealings with a broker.
If not I would be grateful if you (or maybe Mark would be so kind?)if you could address the broker situation in
your blog.
As what type of brokers do you feel are best for using your strategy? I am comfortable with each of my
brokerages...I deal with the bigger ones only....I ask for no special treatment..but I advise them that if they try
anything funny, then they can be sure that Mark will be speaking to their CEO within minutes of hanging up
from them with our complaint.
I'd would be very grateful if you could suggest maybe some asian brokers that you found reliable. see
above...just deal with the bigger (and more reputable??) ones

Email 2

Any thoughts on the market -is it time to cut losses? Seems like we are headed south.


I always let a trade play itself out.
Second guessing the market (especially when you are in the heat of the trade) only causes unnecessary mental
duress.
I am a long term trader who wants to trade for the rest of my life. Not get burnt out in 12 months because the
market did my head in.
This approach has served me well and very profitably for almost 3 years now (in Forex) and some 25-30 years in
stocks.


Email 3

Do you think that ("charting thinking", if I may call it that way) has some effect on price movement? The
technicals (charts) are used by a lot of traders. They are indicators of sentiment...but the problem is that they
are indicators of things that have already happened...You have to be ahead of the crowd Will many traders pay
attention to this pattern (I know you don't) If you can see a pattern forming, then it is usually too late to
benefit from it...and secondly, there are thousands of patterns out there so how do you know which pattern to
trade or is everybody just too eager to buy euros and sell dollars at this moment? It comes and goes in waves
(NOT elliott waves), but the Euro is definitely heading up in the medium term (next 12 months)

Email 4

With (my wife) and I now experiencing some success with our trading due in no small way to you, (we can still
do a lot better), our son (26) is taking more notice of what we are doing. This is still the best "business" on the
planet. An excellent career for a young person.
A salary had never been a truly reliable safety net. On the other hand, once you have mastered the basic
skills of trading, no-one can ever take away your talents, your experience and your skills.

I apologise for having been a little slow answering emails in the last 24 hours. It is because I am again deep into
the paperwork and details for the Managed Fund that we are setting up. The amount of paperwork is
horrendous. I have two full days of meetings scheduled today and tomorrow to finalise the details for the Fund
but will try to answer any urgent emails.

MESSAGE FROM JACKO 159

It is 2.00am NY time Wednesday July 23 and the market is at 1.5791

My buy orders were filled yesterday at 1.5800. I am now letting the market play itself out.

*To those of you who shorted the market based on my intuition call,..... Congratulations,... but it is not a
practice that I would recommend (My intuition is not that good !)
*To those of you who bought at a lower price than me, again.... Congratulations
*To those of you who kept their orders at 1.5750,.... Bad luck...missed by 6 pips (plus spread) Edit...You have
now been filled.

On another note, it was much easier now that I have each of you in a "group" folder on my phone...Sooooo
much easier than sending it to each of you individually. (Would everyone stop laughing now...I know I am a
techno moron !)

Edit 9.45am NY time (Market at 1.5745) I am still letting the trade play itself out...but it is not covering itself
in glory at the moment.

Edit 10.50am NY time Well...I got shot in my ass on that trade !!! I was closed out at 1.5713 by my TSL for a
loss of 87 pips...not my best effort !! The A-H trade will have a big job ahead of itself to recoup that loss. I am
now waiting for 1.5663 (50 pips below my Stop Loss) to be hit, so that I can initiate my A-H buy at 1.5713.


Emails

Email 1

On days like today, where the USD is making a strong rally, do you ever make the choice to remove your buy
orders until you get indication that the rally is exhausted? It seemed rather strong today when it shot down to
1.5758. I thought that it would keep going down, but I also knew that it was going to stop at US session
lunchtime...It always does. So I was not too concerned. I didn't think that it would break 1.5750 but I also
didn't think it would go so close...I thought 1.5770 The desk jockeys get ready for lunch and then wonder if
they were a bit "rash" selling it so hard in the morning session, so they trim their enthusiasm and close some of
their trades. (that's why it bounced quickly from 1.5756 back up to 1,5785)

I could fine tune the orders for the group to even less than 50 pip margins but that would require them to be
watching the blog the whole time (or at least when the market is within, say, 20 pips of the target).
It is a bit difficult to fine-tune my orders with four sets of brokers and notify the group and update the blog all
at the same time. However, I will be fine-tuning the trades for the Managed Fund when I start that to maximise
the returns to the Fund. (Despite what Mark says, I can feel myself being sucked back into "working" ....LOL)

MESSAGE FROM JACKO 158

It is 3.00am NY time Tuesday July 22 and the market is at 1.5928

see update below

The market has been ranging between 1.5910 and 1.5930 for the last 10 hours. (I went outside to watch the
grass grow for some excitement !)

As stated yesterday, this market has until 8.30am NY time to demonstrate that my intuition is wwwwrong. After
that I am scrapping the 1.5750 and looking for a new buying opportunity.

Edit 8.30am NY time. (Market at 1.5886 and falling) The market has been stagnant at between 1.5910 and
1.5935 for the last 16 hours. However, the market is falling now in the opening minutes of the US session (I just
trust that intuition sooo much !!!!).

As stated yesterday, I think that we will see the market fall back to the low 1.5800's very soon.

I am back to hoping to get a buy at substantially below where it is now. We may have missed the 1.5750 last
week but I think we will get another chance at a nice bargain (between 1.5750 and 1.5800??) soon.

Edit 9.05am NY time Market at 1.5870 and falling....

I am now moving my buy price from 1.5750 to 1.5800

My buy order at 1.5800 is now in place


Edit 10.00am NY time A couple of traders have emailed me saying they backed my intuition and have been
shorting this market from around the 1.5920 -1.5930 mark. Aggressive, but it is paying off..this time. Be careful
!!

Edit 11.00am NY time. Getting close to the target....Remember, to include your 100 pip Trailing Stop Losses

Edit 11.30am NY time All orders filled... 100 pip Stop Loss in place....Mrs Jacko is calling me to bed...Nothing
else for me to do...Now I just let the market play itself out... (Mark will monitor the Trailing Stop Loss)

Emails

Email 1

I dont know if you changed your mind about the entry at 5750 or 5800, but I think now that a retracement
lower than 5850 could be hard. Possibly I would guess a buy order at 5850 would do well, yes and even a buy
order at 5870 would still be ok, since we would have our stop below the spike down at 5780, therefore making
sure we wont get stopped our and also that we will be pulled in.I think the euro is starting to show strength
now. Looking forward to your ideas. I think I missed my opportunity to buy this movement when I missed the
dip to 1.5782 (the 1.5750 is now looking too conservative/safe). I am waiting for this movement to play itself
out. It is too dangerous/risky to jump in at the present level (Market at 1.5928).
I am now waiting for next pullback/dip to buy in. But I want to see where this movement tops out to give me
my 50% fib number


Email 2

I loved your 'day in the life'. Entertaining! You make 'boring' sound so attractive. I've known for a few years that
I need more boring in my life. LOL...wait until you get old...LOL

I'm in the process of trying to work out a money management strategy which must include finding out how
much money I need to start with, what size contracts I can trade, etc. What I would like to ask you is this:

What is the maximum number of positions/different trades you have open at one time? I trade 200 standard
contracts at a time....If it goes 150 pips in profit , I will sometimes add another 100 contracts. (So I can work
out what contract size I can afford.) I'm assuming that if you're on a winning trade that you 'stock up' on the
way. Yes... but I prefer to be VERY selective in my trades....and when I do enter a trade I hit it hard.
What is the highest number of losing trades that you've had in a row? two or three, then I stop trading and let
the A-H trades work

In the blog I'm reading about 50 SL and 100 SL. What is the rule to know which one to use when? If there is no
rule, should I use 100 for worst case scenario calculations? I use 100 pips TSL since May because of the
increased volitility. However, I am not averse to reducing the TSL to 50 pips after the trade has commenced so
as to lock in a bit extra profits (though it also means that the volitility can close you out too early)

You mention Mark in your mails, I was wondering have you previously given more background on him? Or is there
no other information that is relevant? Mark is an ex-broker who used to work for a broker that I trade with. He
rang me one day to discuss my trading results and he now trades with me. He is a great resource and friend. He
knows everyone worth knowing in this industry. He can be very cynical about the industry, but that is good
because he tempers my enthusiasm for the industry (I think that it is the best business on the planet). I think
Mark is just past the point of ever wanting to talk to clients ever again....LOL
Last question, I know this is not your department, but can you recommend a broker that does MICRO accounts? I
would not have a clue...I suggest a post on Forex Factory would be the best resource for that question

Email 3

I know you have said that the Euro will reach 1.70 and even 2.00 !!! yes However I'm interested to know where
you see the price by the end for 2008 ? Hmmm...1.7000-1.7500 Also what is your feeling if the price breaks

1.6038 mark? Will it move fast and agressively to 1.7000 yes, relatively quickly or do you have some view on
ECB intervention & more rejection at 1.6000 ? I think that the ECB has given up on trying to hold the Euro
down...they want the US to do something !!!! I personally feel that the trend is far from over and that a break
of 1.6075 will be the start of a nice Euro bull run. Oh yes Appreciate your time & efforts to help us become
better traders ! Take care. Thanks


MESSAGE FROM JACKO 157

It is 12.10am NY time Monday July 21 and the market is at 1.5868

The market has had a little run up in early Asian trade. I would think that we will see the market fall back to
the low 1.5800's very soon.
I am considering moving my buy price up from 1.5750 to 1.5800 later today.

I still have my buy order at 1.5750.

Edit 6.05am NY time Market at 1.5880. Grrrr....I am starting to regret being so conservative last week and
moving my buy price from 1.5800 to 1.5750. (We would have missed the first hit at 1.5800... when the market
hit 1.5800 exactly...so we would have missed by the spread, But we would have got in on the spike down to
1.5782)
Oh well.....now we have to look again.

Edit 8.05am NY time Market at 1.5860. I have had a couple of emails regarding staying with the 1.5750 buy
price (see email 4). I have a lingering suspicion that I am still going to get set at 1.5750... I could be
wwwwrong...but I can't shake the feeling (It is my intuition telling me something that I can't see yet...). I will
give that intuition another 24 hours to be correct. If there is no downward movement towards the target, then I
will be adjusting the buy price.

PS Please see Weekly Review in Message 156

Emails

Email 1 (This is an email from a group member in Australia)

I am really interested to know how your day is made up from a FOREX business point of view.

OK Here goes:

A Day in the life of Jacko (A tale of a sad and boring life...)

NOTE: This is prefaced by the fact that there are financial programs (such as Bloombergs Reuters, Channel
News Asia, Fox Business etc etc) on view all around HK especially the business centre so I am constantly "in
touch" with where the market is at all times. (I have just been to your country(Australia) and was amazed at
the lack of internet access and financial data screens).

Also, I am exactly 12 hours in front of NY...so 3am NY is 3pm HK

Up at 9am. Review US afternoon trading and early Asian trading. Update trade orders and answer some emails
(I try to be very careful and precise in what I write on the blog and in my emails ) .
10am Coffee at local coffee shop (to get me started), read papers (business section only) and and then spend
morning out with Mrs Jacko. (My wife, lover and best friend for 30+ years)
Lunchtime:Have lunch with Mrs Jacko at any of our favourite restaurants. After lunch, I then go to my favourite
coffee shop with my laptop and I review any trade positions, do my emails and blog entries. Spend afternoon
with Mrs Jacko.


I monitor the London opening market and will talk to Mark
After dinner, I watch US open and monitor it as most action occurs in the US morning session. Update blog and
answer more emails. I also have some other business matters (other investments) that I monitor (I have a very
boring life...LOL)
Do you pay much attention to the market before Europe open? Not really The Asian session is more focussed on
Yen trades
Do you spend this time researching and reading your papers? Yes I read the South China Post and I am an
internet subscriber to UK Financial Times and Singapore Business Times...and Penthouse (for the
articles...LOL....I am joking!!)
After europe opening, are you in front of the screens very long etc? No, there are screens everywhere in Hong
Kong so I just keep a watching brief
When US opens do you listen in to Bernanke's and Paulson's speeches No...LOL...I would be asleep too quickly.. I watch the prices only...I don't really care what they are saying... ...if their lips are moving they are lying...And
if their lips are not moving then it is a useless press release
.and do you follow the US market til their lunchtime and go to bed before 1am your time about 1am my time
(which is 1pm Ny time)
or do you stay up etc? Only if something dramatic is happening. Most times Mrs Jacko calls me to bed...LOL
However, Mark works different hours to me so if something unusual happens in the US afternoon session, he
calls me

Sorry for all the questions but I am very interested how a full time professional trader spends a typical trading
day as I haven't really found all these answers on all your various threads and blogs. (A very quiet life....but a
great one! Trading is the best business on the planet)

Email 2

I am concentrating on learning your method and becomming pretty comfortable picking my own trades..This
week I was in a little before you at 1.5800..you went in at 1.5750. I can pick good entries but need to prove to
my self that I can be consistant over time.. You will...just don't "gamble" by trying to trade the "noise". (most
time traders know when they are gambling, but most traders do it anyway...and get run over by the Forex
Express!!!!)

Question..you wrote in an email..

However, keep in mind that the focus is that you learn what I am doing and trade that method more
aggressively...

I have elevated my risk to from 2% to 4%..I have no problem with that as long as you are being intelligent in
your trade selections and not gambling on every tick .
can you give any suggestions on how else I could be reasonably more agressive? I am currently averaging only
one trade opportunity a week at the moment. (Look at daily chart...Market has been ranging since March) I
would suggest that you go back over the last couple of weeks action and see if there are any extra trades that
you would have taken and see how they would have panned out...Then start keeping a journal of trades that
you want to take, and see how they pan out. As you grow in confidence you will take maybe one or two trades
extra in a week. I would think that any more than that and you are trading too short a time frame...bordering
on gambling...
I am not sure I want to be more agreesive but would appreciate some ideas to consider? A point to remember:
Mark has been a broker for many years and has been the Manager of very large groups of brokers. If a trader
was successful they quickly identified his account and analysed what he was doing....most times, they would
just talk to the trader and ask them about what method he were trading!!!...(brokers don't like to work too
hard)...

Mark say that he is yet to see a short term trader or scalper successfully survive one year of full time
trading. They either cannot sustain the lifestyle pressure or they blow up their accounts from overtrading. He is
the main reason I slowed down my trading. Initially it was a fun and exciting game, but I also could see that I
could not sustain that lifestyle for the next 30 years.

Email 3

Thanks for signing me up as one of the Jacko Trader. I've spent days (almost days and nights with only very little
sleeps as it was too excited) going through your blog (from Nov07) -every one in details by matching point by
point with the chart. I've also created a trading journal, recorded down every trade. Few points:


a. the total pips to date are about 1200 pips WITHOUT CounterTrend Trades. LOL... I don't like CT trades at the
moment...LOL
b. the changing of TSL from 50 from 100 has generated definitely more pips.Yes, it allows us to ride out the
volitility
c. the withdrawer of CT is definitely a good decision at time. YES !!!!!!
d. the AH strategy has produced about -300 pips on total of 10 AHs being triggered and one hasn't triggered
(9May @1.5384). 7 AHs failed out of 10. Yes, it is a result of the "ranging" market since March

I am very surprised to see that the AH strategy has produced -ve result. However, given that -ve result I am
still 100% positive about the AH strategy as it has been proven inevitably in your threads in FF and DailyFX. Yes,
even though it has cost me a little lately, I am still very committed to it. It has earned me excellent profits last
year and has recouped any losses on too many occasions for me to reject it as a strategy I just want to prompt
this out for your attention and review. Thanks


Email 4

Just wanted to ask you what makes you stick with the 1.5750 buy order. By now it's quite far from the 4h
trendline, and I also pulled a fib from July 7 to July 15 and the 50% mark is at at about 1.5825... Are you
expecting any large dips soon, and if so, why? I have a lingering suspicion that I am going to get set at 1.5750...
I could be wwwwrong...but I can't shake the feeling (It is my intuition telling me something that I can't see
yet...).

MESSAGE FROM JACKO 156

It is Sunday July 20 and the market is closed. The market closed at 1.5838.

I only had the the A-H trade from 1.5918 this week . As stated I would have preferred for this not to have been
activated after such a rapid rise, but the rules are the rules!!
However the value of the Trailing Stop Loss was shown to be effective again. Even though the likelihood of the
trade being a successful trade was smaller than normal because of the rapid run up during the week, my initial
exposure of 100 pips was reduced by 50% to only 50 pips by the "ratchet" effect of the TSL.

Weekly Review.

Not a particularly exciting week this week. From the very start of the week I was looking for a drop to 1.5800
point to get in, but then decided to revise that to a better bargain and safer price of 1.5750. (At the time
many people were saying that if the market broke 1.6019 it was going straight to the moon and that "trading
the breakout was the only way to trade"....as usual, the masses were wrong...it broke out as far as
1.6037...just enough to collect most of the stops...before collapsing in a heap)

Accordingly the market dropped to my original 1.5800 target exactly, but we would have missed it due to the
spread. However it is reassuring that I got the direction right (a fall) and I was reasonably close on our buy
target (only the spread of 1 or 2 pips from the target) .

In hindsight, the decision to move the target to 1.5750 may have been a good decision because firstly, the
market dropped to 1.5800 exactly and we may or may not have got set (probably not) and secondly, we would
have finally got our orders on the spike down to 1.5782 which then went only as high as 1.5886 and we would
still be in at 1.5838 (nice , but not stunningly profitable...LOL) ...and with a fall in the market expected in the
early part of the week.

As I said during the week, currently I would rather miss a trade than be whipped in and out by the volatility. I
am giving myself big safety buffers at the moment but I think that the current circumstances require a "safety
first" strategy.

MESSAGE FROM JACKO 155

It is 1.00am NY time Friday July 18 and the market is at 1.5855

As outlined in the 10.45am edit yesterday, the market had the expected quick plunge down... to 1.5782. This
plunge was just not deep enough to pick up my buy order at 1.5750 (Gnash, gnash of teeth).
However, I think that this 1.5782 may be the low. Today will be the decider on that.
If it doesn't fall below 1.5782 this Euro and US session, then I will be an aggressive buyer next week because the
drop in the Euro will be over.

My buy order at 1.5750 is still in place.

Edit 6.40am NY time The market is hanging around the 1.5850 area (currently 1.5862). The lack of a drive up in
the price during the London market time zone has encouraged me to think that I may get my 1.5750's after
all...Let's see.

Edit 9.40am NY time Market at 1.5833. I am becoming more confident that I will see my 1.5750's being hit later
today. (Or maybe it is just being optimistic...)

Edit 11.10am NY time. Getting more confident... (market is slightly higher at 1.5845...but it is looking
weaker..)

Note: I apologise for having been a little slow answering emails in the last 24 hours. It is because I am deep into
the paperwork and details for the Managed Fund that we are setting up. The amount of paperwork is
horrendous.

Email

Email1

Hi Jacko. This is to tell you that I have been making sensational profits since joining your group. Good I trade
your recommendations but I also have been trading your comments. OK
After reading your posts on DailyFX, ForexFactory and the blog, I realised that you have an uncanny ability to
feel where the market is going to go. Some of your calls have been eerie. Last weeks prediction of 1.5660 was
pip perfect. Sometimes I am just lucky What I have been doing is when you say that the market is likely to go
down, I sell it. When you say that the market is looking bullish, I buy it. Hmmm, OK. I hope that you are using a
very strict and solid Stop Loss policy

I know that you may think that is too aggressive but it has been sensational for my bottom line. Am I doing
anything wrong and is there any advice that you can recommend? LOL....No. (how can I say that you are doing
something wrong if you are piling up the profits??) You are not the only member of the group trading this way.
There are a number of the group who are trading in a similar fashion and making extraordinary profits.
However, keep in mind that the focus is that you learn what I am doing and trade that method more
aggressively, rather than just treating me as a signal service. (otherwise you will make me feel "cheap"....LOL)

Email 2

Hi Jacko, The statement in blue: "If it doesn't fall below 1.5782 this Euro and US session, then I will be an
aggressive buyer next week because the drop in the Euro will be over".

What is it based on? ie. how could I have come to the same conclusion on my own? Have a look at the spike
down to 1.5782 on the 4H chart...often called an exhaustion spike"
Usually means that the down draft is over. However, I also don't like to buy on Fridays. So I will be looking for
the first retracement next week from where it is now to somewhere just above the 1.5782 (probably 1.5800 or a
little more). It will be a much less risky trade than buying now.

Email 3

I was looking at the overall picture on the daily, and noticed that the 50% would be around 5650. Hmmm, I
don't think that it will go that low...the USD has no reason to be that strong Also, a tl running from 4/22
(1.6018) to 6/09 (1.5838) gets us close to 5650. I also noticed on the 3-4hr chart that there is an excellent head
and shoulders pattern formed. The given rule with regards to measuring from the top of the head to the
shoulder to give a breakout target also coincides with 5650. Ok, but as you know, I don't use H+S as a strategy
but if you feel comfortable with that then you have the option of waiting for it. I am happy with 1.5750 and , if
I am wrong, the the A-H will probably put me in a trade around that 1.5650 area. Now, i know that the head &
shoulders part might not appeal to you (although maybe it helps to be aware since so many traders in the world
will be noticing and it becomes self fulfilling) but the the 50% and tl is your bread and butter, and I know you
loooove bargains, and was wondering if this is just too much of a bargain? Too long to wait...and I am not
confident that we will see it go that low..and if it does, then my A-H will get me in

Email 4

Let me ask you. Lets say this is destined to hit.... 1.5760 and then go back up. How do you know when it is
retracing back up? Would you reenter if, say, it was forcefully and quickly pushing back through 1.5800, but
had never touched 1.5750? You have to be careful that you are not "chasing" the trade. Sometimes you just
have to accept that you are wrong and that you missed it.

You then wait for the next pull back and try again


MESSAGE FROM JACKO 154

It is 2.45 am NY time Thursday July 17 and the market is 1.5842.

The market has fallen from price of 1.5912 (at this time yesterday) to a low of 1.5799, so our caution yesterday
was worthwhile.

I believe that it still has more to drop (hopefully, just enough to pick up my buys at 1.5750...then go straight
back up). The rationale is discussed in the emails below:

Edit 6.55am NY time. Market still looks as though it has further to drop. (Market at 1.5851). I am waiting
patiently.

Edit 10.45am NY time. Market bouncing around (currently at 1.5880) but there is hopefully one more quick
drive down

Edit 11.50am NY time Market still bouncing around (currently at 1.5865)

Emails

Email 1

how did you decide to put the trade on at 1.5750 rather than 1.5800, or is it not that critical?

Pull up 4H chart...draw line from 5302 bottom on June 13, touching other lows. = 1.5750 (rounded down for
volatility)

Then look at 50 % fib from 5610 to 6037 = 5820. I was tempted by 1.5800 but wanted to play safe so I gave
myself an even bigger volitility buffer for the 50% fib.

I would rather miss the trade than be whipped in and out by the volatility. I am giving myself big safety
buffers at the moment but I think that the current circumstances require a safety first strategy

Email 2

Regarding this new buy at 5750. If the mid term perspectives are a higher Euro, then if we sum this Fannie Mae
issue, and on top yesterday we reached an all time high record, why that low? Because the US Fed and Treasury
are working flat out to tell everyone that it is not a serious problem....They are being untruthful !!! (No doubt
they justify such untruths to themselves on the basis that they don't want everyone to panic and that it is their
job to calm the market down....but the fact of the matter is that they are telling untruths...And they know it
!!).
So back to your question, why so low? Because the markets are going along with the untruths...until more..and
inevitable, bad news comes out.
Have no doubt, the Freddie and Fannie Show is far from over. Something like that does not go away in a day or
two.

Email 3

Hi Jacko. I am really enjoying and benefiting for your teachings, thanks. Excellent....I also am really enjoying
the group

I am looking at my daily chart and the trendline I have drawn that has touches on 6/13, 7/7, 7/8 and 7/9. It
looks to me like it should touch at 1.5770 if it were to touch tonight. Yes
To make it to 1.5750 it would have to breach the daily trendline. It also looks to me like there is more
horizontal support at 1.5800 than 1.5750.
So I was wondering how you decided on 1.5750 since you were also considering the 1.5800 level? I liked the
5800 but just wanted to put an extra safety buffer in to allow for the increased volitility driving down an extra
50 pips

Also If your daily trendline is similar to mine do you think the breach of the daily trendline would be a bearish
sign? No..this market has no reason to go down

To me the break of 1.6019 was a hugely bullish sign since it was hit 3 months ago (I have studied Bill William's
Fractals (basically just 2 lower highs on each side of the highest high) and when a monthly fractal is broken it is
extremely reliable with the Euro) This is certainly in line with your expectations for a 2.0000 level.
Do you also consider this an extremely significantly BULLISH sign? Hmmm not really. The fact that 6019 was
broken is just another indicator to me that it is still bullish, but it is not an excessively strong indicator to
me...However, I am not in doubt that it will go higher. If someone is a little undecided, then it may have
more impact than for me.

MESSAGE FROM JACKO 153

It is 2.25 am NY time Wednesday July 16 and the market is 1.5912.

The market is hanging around the 1.5900 mark like a bad odour. I am sorely tempted to jump into this market
because I feel it has much further north to go in the near future and don't want to miss out. However, the
caution in me says to wait for a bargain so I am going to wait for the 1.5800. One of the members sent this
little expression: "Patience will be paid in cash......"

Edit 9.50am NY time The market is still hanging around like a bad odour (at 1.5890) but I think we will get
lucky in the next day or so and get set at around our 1.5800 or maybe even 1.5750. Just watching at the
moment but the Euro is looking a bit heavy. I am still keen to get in at sub 1.5800 if possible.

Edit 11.00am NY time Hmmm, this market looks as though it might go deeper than I thought. The volatility
might allow us to get a bargain basement price of 1.5750.

I am a buyer at 1.5750 with a 100 pip TSL

Edit 12.25pm NY time The market has bounced up a fraction to 1.5853 but is still looking a bit heavy...we will
get our 1.5750's within the next 24 hours I think

Emails

Email 1

The reason for this email is just to say THANK YOU again for helping me to see the light after many years of
just getting by.Thank you Over the years I had some success trading FOREX, but just could never figure out how
to reach that next level with my trading skills until I discovered the the House of Pleasure & Pain.

I only wish I had this knowledge 10 years ago as I would still have the Franklins I spent on trying to learn.

Aaah, don't we all wish we knew then what we know now...

At this time I am still following your rules & am having great success doing so. I trade only the EUR/$ & have
made some really nice PIPS over the last several months. Excellent

Email 2

Regarding the AH strategy, since our TSL is adjusted to 100 pipsbecause of market volatility would it be logical
that the AH wouldalso require the price to move against us for 100 pips beforeactivating the AH? No, it makes
too big a gap between the stop loss and the activation of the A-H
By the way, good move on the managed fund. Can't wait to see it launched. It is taking up a lot of our time !!!!


Email 3

So, I always get caught here.If I leave a resting order at .800, sure as sin, It will hit .750. If instead I decide to
just watch it and choose my entry, just as certain, it will TOUCH .800, and then quickly retreat. That is your
emotions talking....I am sure that if you actually wrote your various proposed entries down and checked them
after say, 2 months, you would be at 50% or better

How do you decide entry, Wayne?? You have this planned out, but you cant be using resting orders, or else you
wouldn't say "I think we will get lucky in the next day or so and get set at around our 1.5800 or maybe even
1.5750".... I hadn't placed an order at that time....I wanted to just watch it a bit more. But once the order is
placed I don't need to watch it.

My watching the market has absolutely NO effect on the market...So decide (well in advance) on your buy
price (and TSL size).... Place your orders...and Wait to have your orders filled

Can you tell us a good thing to watch for...or are you just somehow judging the "force" of market movement as
it touches price? just watching the market...watching what it is doing and how quickly it is doing it