It is 12.10am NY time Tuesday March 31 and the market is at 1.3245
The market nudged below the resistance of .3150 as far as 1.3112, but has been moving up since. On the 4H chart we are seeing the very early potential for a possible move up (more obvious if you look at the 1H but that is a little noisy to me at that level). However, I will wait for more confirmation of a direction before I jump into the next trade.
Edit 2.40am NY time Asia is not convinced of the strength of the USD and is sending the euro back up
Edit 4.00am NY time London is taking the market back down to retrace the Asian rise
Edit 6.00am NY time London decided to join the Asian party and send it up to as high as 1.3301
Edit 7.45am NY time On the longer term view, I believe that we are still heading in the bearish direction. If you look at the daily charts, you can easily see that the market may retrace upwards in the short term, but only as far as 1.3590, before heading back down. I have two options,
firstly to buy now and have a target price of closing the trade at 1.3550 OR secondly, wait until market gets up to the resistance area of just under 1.3590 and sell it.
At this stage, i am inclined to hold out and sell at the high 1.3500's.
An alternative, and more aggressive stance would be to sell now in the mid to low 1.3300 area, and if it goes against you, then use the A-H strategy
I am slowly gettting through the backlog of emails (I answer them in the order that they arrive so please be patient at the moment)
MESSAGE FROM JACKO 328
It is 1.00am NY time Monday March 30 and the market is at 1.3230
Last Friday was one of those days best forgotten. For the second time in eighteen months I have missed an excellent opportunity to make pips because of a virus/computer malfunction...in this case, it was a problem with the blog and gmail, which took my attention away from the actual trade.
Anyway, I now have (another!!) new computer (an Apple Mac...because they tell me you can't get a virus on it!!) and it was all programmed up over the weekend.
So we start the week in a market that has fallen substantially and is looking weak in Asian trading. But I was very surprised on Friday that NY didn't try to even partially retrace such a substantial fall from European session.I will be sitting on the sidelines for a couple of hours till I can see a clearer direction.
Edit 5.00am NY time Market is moving down slowly but I see resistance at the 1.3150 area. Still on sidelines
Edit 7.10 am NY time Market has been grinding down , but the 1.3150 looks like holding.
Beware of Obama's review at 11.00am today. http://sg.news.yahoo.com/afp/20090330/tts-finance-economy-us-auto-sector-publi-972e412.html
Also, because of the computer problems and work over the weekend I am a long way behind on answering emails. Will get onto that over the next 48 hours
MESSAGE FROM JACKO 327
It is 2.15am NY time Friday March 27 and the market is at 1.3582
I was closed of my trade at BE (+5) at 1.3655 for a minimal 5 pip profit...but no loss. I kinda like this BE (+5) strategy as it minimises losses but we are tinkering with some alternatives which may improve our trading and give us bigger profits. Our win rate at the moment is very high, but we need to squeeze more pips out of these ranging trades.
One option that we are backtesting is that after a trade goes 100 pips in profit, we move to breakeven. However this is effectively the same as setting a 100 pip TSL as soon as it the trade is 100 pips in profit. (It is interesting that after we look at various alternatives, we always come back to the original strategy).
A second, though not as good, is that in this ranging market I look at targets. For example, the obvious target for yesterdays trade was 1.3500....which would have scored us 60 pips. However, the issue that I am concerned about is we may be exiting too quickly and miss the big runs.
However, these are minor tinkering that I am looking at to suit the current trading conditions.I am looking to get back in and sell the market again today.
Edit 3.10am NY time We are heading into the pre-London open. The Resistance line from 1.3735 (March23) and touching 1.3639 (March 26) is now at 1.3610. I am a seller at around 1.3600 but am prepared to be a little flexible in my price.
Edit 5.45am NY time After posting the above post, I was called away on a minor emergency and I have just returned. After London opened, it peaked at 1.3590, which I would certainly have been prepared to take. The market has since made its move and is now at 1.3460. Damn.....
Edit 6.45am NY time My goodness...this is strong...broke through 1.3450 easily and even cracked 1.3400...now back at 1.3417...When I said last Friday that this would be back at 1.3000 within a week, I didn't think it would all happen on the last day !!I would expect a bounce up in NY trading but this is showing that there is still more on the downside.
PS IF ANYONE KNOWS WHAT IT MEANS WHEN I KEEP GETTING THIS MESSAGE FROM GOOGLE EVERYTIME I ATTEMPT TO PUT PUT SOMETHING ON THE BLOG OR EMAIL, PLEASE SEND ME AN EMAIL:THE MESSAGE SAYS ERROR 400 BAD REQUEST YOUR CLIENT HAS ISSUED A MALFORMED OR ILLEGAL REQUEST
Edit 8.31am NY time I am really angry with the computers at the moment for missing out on the the fall from 1.3590. I probably should just walk away for the day and go for a walk but I am determined to get some pips today. I have just bought at 1.3318 with a minimal 30 pip loss. I am going to leave the stop loss in place and just scalp some pips. This is a really RISKY trade. Only for the very brave. (we are still having major issues with the blog and emails...it takes about 10 attempts to get the text to "stick")
MESSAGE FROM JACKO 326
It is 1.50am NY time Thursday March 26 and the market is at 1.3571
I am still in my trade at 1.3640. It has come back up to within 22 pips of my entry price but I am using my temporary profits as my trading capital. I may look at closing this trade at a lower price later in the day, so that I can sell again at a higher price.
Currently I am 70 pips in profit and feeling comfortable in the position. As I have said all week, I think that this market is heading down for a short while.
Edit 3.00am NY time Market is dropping nicely...currently at 1.3560. I am setting a buy order to close my trade at 1.3500.... because I think that it might bounce from there... and then get in again on any bounce up.(I will probably be watching it so I might close a little higher or lower depending on price action)Edit 3.35am NY time Was a bit concerned that London may try to take this up so I took the safety first option and closed at 1.3580 for a 60 pip profit. But definitely keen to get back in (after I see Londons open) and hopefully from a higher price.
Edit 8.00am NY time I am currently in Hong Kong Airport, collecting a nephew of a friend, so I won't be trading until I get back home in an hour. I am happy with my decision to close the previous trade and will be looking at the opportunity to take another trade..
Edit 9.20am NY time Market has moved up and is now sitting at 1.3600. Mr Geithner is due to speak at 10.00am. Normally, this would have little significance, but given his foot and mouth disease (that is, every time he opens his mouth he puts his foot in it), there is likely to be a reaction
Edit 10.15am NY time Now Mr Geithner is saying positive things about the dollar. This may bounce off 1.3500
Edit 12.15pm NY time The market bounced off 1.3520 but only as high as 1.3570...I was hoping for at least 1.3580 so I could get back in at where i got out of the last trade.... The market has been sitting around 1.3550 for two hours.
Edit 1.00pm NY time. I am a SELLER of the Euro at 1.3550 or higher. A hard 100 pip Stop Loss.
Edit 1.10pm NY time I have sold at 1.3560. I have a hard 100 pip stop Loss If it goes 50 pips in profit, the SL will be moved to BE (+5)
Edit 8.00pm NY time I have woken to find that my sell trade at 1.3560 has moved to 50 pips in profit and my Stop Loss has now been moved to BE(+5). It is now a free trade
Emails
Email 1
That was fast. I walked away for just 2 minutes and by the time I got back to the screen after your SMS the move retraced to 1.3580 so I took a pass. Great trade for you, happy for ya.It was fast and furious, I was just lucky that we had our platforms open and ready to trade after the New Home Sales and we were sitting there waiting when it took off... I was due for a break from the bad luck we had in one or two of our last trades where our profits were minimal
Email 2
There is one thing I learned today which is to take your profits and then reenter later as you do. I just let them vanished, that 78 pips * 4 mini contracts, ouch yes, but sometimes it will go the other way where it turns just as you are thinking that all the gains are lost and then goes on to be a good trade...look at my current trade...it has bounced up to within about 22 pips of my entry... but i see it as a good longer term trade and will let my profits be the trading capital
Email 3
We can see a congestion at the 50 % fibs on the H1 and H4. Could we have used that to re-enter the market on the downside ? Yes, the 3550-3600 has been a strong congestion area, and a good place to go short And , even with hindsight, they would not have even been whipped out/stopped out by the spike. I still think this is going down, maybe as far as 1.3000
Email 4
I took the trade this morning, but after checking my charts, I noticed there was a support at 1.3417 on the daily. Is it safer to wait for a break of that support before entering the trade ? I think anywhere in the 1.3550-1.3600 area is good If you are in profit from those areas and it falls to 1.3417, then double up and open a second trade But remember, I am basing all my trades on the basis that this market is going down....I could be wwrong !!!
Email 5
Like you I keep getting stoppped out at BE+5, better than losses though in hindsight if I had used a 100TSL I wouldn't be much better off. It feels like I'm getting lots of nibbles and waiting for a big bite to come along. Still feel that something is going to give in the Eurozone soon, Ooooh Yes... my guess is Ukraine, but it doesn't really matter where when it does happen. Not a matter of IF..more a matter of WHEN.... One will start the ball rolling...then its lights out for the Euro for a while....until everyone accepts the new UN proposal that a new reserve currency using SDR's is a foregone conclusion, then the USD will have a big hit
MESSAGE FROM JACKO 325
It is 2.15am NY time Wednesday March 25 and the market is at 1.3471
I am a little late today. I have been for my 6 monthly check-up. The doctor tells me I am in excellent condition but my blood pressure is just a little bit up. Did I know why.
After proceeding to tell her that
1. Tim Geithner is giving Trillions of dollars of my taxpayers money to the banks, hedge funds and private equity,
2. Two weeks after saying that he was NOT looking at Quantitive Easing, Ben Bernanke announces a major injection of funds into the economy, sending the USD into a massive 800 pip swoon.
3. I have just missed out on 200+ pips because of being taken out by a 3 pip retracement
4. Most of the traders in the group are making more money than me this week
WHY WOULD MY BLOOD PRESSURE BE RAISED ???!!!!!....LOL
Anyways, I am waiting for a correction back up so that I can get back into a good "short" position
Edit 2.35am NY time. I am looking for a sizable retracement back up today in the London session. I will not be surprised to see us hit 1.3550 (maybe even 1.3600) before retracing back down again
Edit 4.35 am NY time I may have been hasty in my decision on the move up in London. I am a SELLER of the Euro at 1.3420 or higher. A hard 100 pip Stop Loss. It is sitting on the ledge of a break down. I haven't sold yet. Will SMS my sell price
Edit 6.00am NY time Previous intention to sell has been put on hold. I will wait for 1.3550- 1.3600. I will be back for NY session
Edit 8.32am NY time Market has moved up due to Core Durable Goods coming in much higher than expected. I am still looking at 1.3550-1.3600 as a possible "short" area
Edit 9.15am NY time Just waiting to see New Home Sales numbers in 45 minutes. I am not usually too concerned about News items in regards to my trades but I think the New Home Sales may be a good indicator of the state of the housing industry which is so important to the economy
Edit 10.05am NY time A massive spike up on Home Sales. Total overreaction. Sold at 1.3640
Edit 10.20am NY time Whoa...that was fast. It was stopped dead in its tracks at 1.3650. Marks laughing and saying it was probably us that stopped it...LOL ...Housing sales and Geithner talking about the new concept of a world currency based on SDR's. (He needs to learn when to speak and when not to speak, old Tim Geithner)
Edit 10.50am NY time Make sure that all trades have Stop Losses. We are moving our to BE now. We think that, if you ignore Geithners gaffes, the news was positive for the USD (more New Home Sales than expected) so Eur should head back down
Edit 11.10am NY time I am going to try and keep these as longer term trades so I will be leaving the SL's at BE for the present time. (As an aside, I think Mr Geithner needs to learn some political skills very quickly...or he will be gone soon)
Email 1
What cause you to pull the trigger at that specific point (1.3640)? I just thought that it was too extreme...They were "at market" orders. (I rarely use them but it was moving too quickly to set up limit orders)...they had 100 pip stops so I could have worn a lot more of a move up if necessary
Email 2
Dow yesterday made +500 points. Do you think that the financial crisis is over and the Bear market in US market is at the end? NO, There were nine such rallies each during the 1929-1932 and 1937-1942 superbear markets. Each lasts about between five and eight days and can lift markets by up to 15%. These short and sharp "dead-cat" bounces are common in bear rallies
Or only for short term? Maybe..It all depends on whether the private equity groups and hedge funds are prepared to take up Geithners offer of cheap finance....If they DON'T then the world is in SERIOUS trouble because there is no Plan B (they are ruling out the obvious solution of bank nationalisation)
MESSAGE FROM JACKO 324
It is 1.00am NY time Tuesday March 24 and the market is at 1.3636
My short trade at 1.3625 is still in play. The market went up as high as 1.3676 so everyone should have been able to get in well above the minimum price of 1.3600. As outlined yesterday and last Friday, I believe that this rally has extended far beyond "fair value" and is now faltering.
As outlined on Friday this is not a trend trade in the direction of the trend. However, a trader should also be pragmatic and /or opportunistic to take advantage of an "unusal" trading opportunity when they arise as long as it doesn't become the main strategy. This was a clear example of one of those times.
When you see an opportunity such as we have been presented with, one should weigh up the probability that, in the light of no further additional news of similar impact, what is the percentage potential of a market increase versus a decline. When you look at the extent of the rise and the short time frame of this latest move, and the fact that there has been minimal retracements, one would have to say that the potential for a 500 pip move upwards is definitely lower than a 500 pip move downwards. That is not to say that the market won't go up...but the probability of a winning trade is moving more to the downside than the upside.
The fact that the market appears to be struggling to maintain any upward momentum encouraged me to take the trade
I am now letting the trade play itself out
Edit 4.30am NY time Market has touched 1.3575 (on its way to a low of 1.3566) so it has gone 50 pips in profit. I have now moved my SL to Break Even (+5) at 1.3620.
Edit 5.45am NY time Mark's "Safety First" strategy has kicked in. Stopped out for a 5 pip profit. Those of you who sold at a better price than me earlier today are still in. I will be looking to get back into this trade as I am 51% confident that the short side is the side to be on at the present time
Edit 6.00am NY time Market went as high as 1.3623 as it took me out. (I can't believe I was taken out by only three pips!!! again) Market is now dropping again...I will definitely be back into this trade. Those of you who sold at a better price than me earlier today are still in. (Gnash, Gnash of teeth)
Edit 7.55am NY time Market has come down as far as 1.3522 as the lead up to NY open is approaching. As discussed previously, NY often reverses a movement from Europe so if you are still in the trade from 1.3630 or higher, you may want to take short term profits and get back higher during NY trade
Edit 8.20 am NY time As expected, NY has taken it back up...now at 1.3563...I will be looking to sell this later today at close to 1.3600 again
Edit 9.20am NY time Market never got up near enough to 1.3600 to trigger a sell order and has now dropped to near 1.3500. I don't want to chase this trade now because it is too close to the big number 1.3500 which should see another kick back up. But another sell order is close. I am now a seller when it bounces up
Edit 11.10am NY time Market has kicked up as high as 1.3583 and then dropped back. I am still waiting for it to go through 1.3600, then turn and I will sell on the way back down
Edit 8.00pm NY time The market rose up only as high as 1.3578 so our target sell price wasn't hit. However, the euro is now moving back up and so we will be looking for another sell area. The euro is breaking down.
Emails
Email 1
1) Is one of the reasons you wanted to enter in at around 1.3650 was because the next resistance was at around 1.3725? Yes, and 1.3650 has been such a strong congestion point
Therefore if the euro wanted to turn at the second resistance instead of the first resistance, you would still be in the trade with your 100 pip stop loss. In other words, once you saw resistance at 1.3725, you didn't want to enter until there was confirmation of another resistance within 100 pips of it. Yes, but when I saw todays trade, I also thought that we might not go back up as far as 1.3650 (I was wrong!!!) so I dd jump in a little early but I am reasonably happy with the trade. I am still a seller even if this first trade gets knocked out at BE (+5)
2) Did you purposely wait until the Tokyo open to enter the trade? No, I had just woken up... and saw that it had hit 1.3650 during my early morning (3.45am my time) so I wanted to get in
3) Was a triple-top on the 1-hour chart near 1.3650 also a reason for you to get in the trade at this price? No, didn't even look at 1H but I knew that it had congested there
MESSAGE FROM JACKO 323
It is 1.15am NY time Monday March 23 and the market is at 1.3665
Today will be a very important day in the history of the US dollar.Later this, morning Tomothy Geithner will outline the details of the administration's long-awaited plan to create a government body called the Public Investment Corp., funded by as much as $100 billion to purchase up to a Trillion dollars worth of troubled assets from the balance sheets of banks.
For the full rant at this plan, see my posts on Forex Factory. (Post # 6785 and 6786). I put my rants on FF and focus here on trading only.
In light of this, there will probably be far too much volatility in the market and any reasonable sized stops in either direction will be taken out.
Although I am leaning towards the "short" side, I intend to stand aside from the market today until it is clearer. The risk of another Stop Loss/slippage move is too high
Edit 7.10am NY time Market is hanging around the 1.3650 mark.. Waiting for Mr Geithner....
Edit 9.15am NY time The market has moved down to fill the gap from the weekend. I am still leaning to the "short" side for this week
Edit 9.50am NY time. The market is definitely breaking to the down side. Looking for dip up/rebound to get back in. Market is bouncing off 1.3500
Edit 11.10am NY time The market is knocking on the door of 1.3550 from below but no-one will let it in. This market wants to get higher, (up to around 1.3650??) before falling again in the next day or two.
Edit 7.55pm NY time I believe that this market is breaking down I have just sold at 1.3625 . A hard 100 pip Stop Loss.
Emails
Email 1
The EURUSD is really at a difficult point now, and I'm finding it hard to decide which way it is going to go. This past week was crazy, I never would have called an 870 pip move at the beginning of the week. Yes i was surprised, but then again most people were because only two weeks ago Bernanke had said that he wasn't looking at Quantitative Easing at all. It was very unusual for Bernanke to say something definitive and then backtrack on it within two weeks...it shows that they are flying on a wire
We are in the vortex of a once in a generation crisis...and each country is making up the rules daily....this is the total cause of the extreme volatility and lack of direction
Email 2
In terms of trade management - have you experimented with scaling out or do you prefer to be all in, all out? I am not a fan of scaling in...I prefer all in/all out
Email 3
Jacko - Have you ever set buy/sell targets within a range versus a specific price? Hmmm..I set the range...then home in on a fixed number 1.2550 was a darn good spot to buy, but based on 4hr fibs 1.2550-1.2650 would have been an acceptable risk based on what we knew at the time. Yes Just curious. I know that some people believe that obvious hard buy/sell limit orders are watched closely by dealing desks. The bigger brokers have computerised models that are focus on where the order flows are congested so that they can run the stops if the circumstances allow it ...but it is not as prevalent as some people think Conspiracy theory? Any truth to that? LOL...Yes, but not every bad trade is the result of a broker targeting traders stops
MESSAGE FROM JACKO 322
It is 1.00am NY time Friday March 20 and the market is at 1.3660
As stated yesterday, I certainly think that huge reaction to Bernankes statements was a gross over-reaction, and I would not be surprised to see us back at 1.3000 within a week
One or two traders have emailed me to say that my present desire to short this market is not a trend trade in the direction of the trend.
Whilst I completely agree with that, a trader can also be pragmatic and /or opportunistic to take advantage of an "unusal" trading opportunity when they arise as long as it doesn't become the main strategy. This was a clear example of one of those times.
We saw a situation where there was an unexpected and explosive (and unsustainable) rise in the markets. We therefore have two options:
one is to now wait until this rise and significant retracement has occurred before again buying into the trend which may take a considerable time (the spike up in mid December took over three months till early March before it retraced all the way back) OR
seeing the opportunity of using one of the key features of this business (to buy or sell at any time) to take advantage of this over-reaction to establish a trade.
Also, one of the advantages that each of you have is that you have the option of taking the trade if you see merit in it or passing on it if it does not fit your risk profile.
When you see an opportunity such as we have been presented with, one should weigh up the probability that, in the light of no further additional news of similar impact, what is the percentage potential of a market increase versus a decline. When you look at the extent of the rise and the short time frame of this latest move, and the fact that there has been minimal retracements, one would have to say that the potential for a 500 pip move upwards is definitely lower than a 500 pip move downwards. That is not to say that the market won't go up...but the probability of a winning trade is moving more to the downside than the upside.
Edit 4.05am NY time I will be watching the London session to see if there is the start of profit taking and the start of the reaction to this rise. Even though it is a Friday, I am still contemplating going short, because I see the probability potential for a sizable downwards reaction as being very high
Edit 7.10am NY time I have been in a quick one hour meeting with Fund Managers and have just come out to see market has dropped....but is coming back up. I am keen to trade this. It is just a matter of what price. I am looking at anything between 1.3600 and 1.3700 hopefully. I will SMS as I am locking in my shorts.
Edit 9.15am NY time Was looking at 1.3650 (or a bit higher) to get in....market has topped at 1.3619.... Not sufficiently high enough to cause me to trade
Edit 11.05am NY time The market has gone as high as 1.3649... Time is running out...I don't want to be in a trade over the weekend
Edit 11.50am NY time I can't believe that it stopped just a couple of pips short (at 1.3649) of my target. I think it may bounce back one more time in the US session today.But this is going down next week and I would not be surprised to see us back at 1.3000 by this time next week
Edit 12.20pm NY time Market has bounced up to 1.3600. I don't like trading Fridays and, along with most professional traders, I certainly don't like trading the Friday afternoon session. I will be an seller on Monday
Emails
Email 1
While I completely agree with being a friend of the trend, I don't know, can we apply the trend to an event such as yesterday? Surely a decision made by the FED, could as easily go against the trend as with the trend. Yes, this could easily have gone the other way if they had said something else (eg if he had said he was going to lift interest rates 0.25%)
Can a massive move caused by a news event really be considered part of the trend, instead of an anomalous spike? I tend to consider these anomalous spikes, because this will totally retrace in time...look at the spike up in mid December...everyone said that it was the new bull...then over the next three months till early March it retraced all the way back
Email 2
I knew there were news coming out, I SHOULDA close all my open trades till the news were over... but I didn't as I thought my S/L would protect me should hell fall apart. That was an unusual event It didn't. Hard (and expensive) lesson learned. I had to spit it out. I feel better now. LOL. Yes, as long as you are using only 2% risk, even a huge slippage is recoverable
I was wondering, how much longer can the fundamentals keep this pump 'n dump operation running? Do you think they can keep the steam running much longer without a nice retrace? No Why is this retrace taking so long? Because this crisis has brought the elephants (the Central Banks of all countries) into the room and they are all dancing hard
Email 3
I am now trading anywhere between 5 and 10 minis on my account. If I traded 2% I could trade 5 times larger. I have no problem pulling the trigger,good and have been in trades larger…Ok I do notice, however, a real reluctance to increase my lot size, even though I know I should. Probably....just to make it worthwhile...the goal is to turn this into a regular income flow
Almost like the old depression era thinking of putting your head in the sand and protecting what u got….Did u have any issues when u started trading significantly larger than u had been previously? No, because I escalated up using the markets profits..and I have a history of building businesses up so I understand the need to invest in the growth of my business
I think it is really a head thing. The thing is that now I am trading S&R with a simple longer MA for trend and am becoming fairly confident on the method….Any thoughts? Instead of trading 5 times larger, why not start at 3 times larger??
Email 4
Who is Mark by the way? Mark is an ex-broker that now works with me He is 20+ years experienced in broking and managing big teams of brokers. We met when he saw me trading in 2006 and 2007 at his brokerage. He knows everyone worth knowing. He has got 6 of our first group of traders positions with different brokers that he knows. Because was able to quickly identify successful traders at the brokerages where he worked, he also has evaluated almost any successful methodology known to traders....and says that long term trending is the only way to trade . He is also not a fan of scalping. He says he has never seen a scalper last more than 12 months as a fulltime trader...the pressure is too high and you tend to overtrade
MESSAGE FROM JACKO 321
It is 1.55am NY time Thursday March 19 and the market is at 1.3453
I have been trying to type todays blog for the last hour..but my burnt and blackened fingers has made it difficult.
Thank God for Stop Losses !!!
I will be back for the London session...
Edit 4.10am NY time The market is at 1.3490 and surprisingly, I am contemplating going short again....Now before you gasp and rush to Hong Kong with those lovely tight white wrap-around coats that they put crazy people in, the technicals may be saying that this move is getting very tired and is due for a respite.
Firstly, it is now very close the the resistance line from 1.6037 (on July 15) and touching 1.4362 (on Dec 29) and now at around 1.3580.
Secondly, it is close to the 50% Fib point from 1.4718 (on Dec 18) and 1.2455 (on March 3) at 1,3587.
And thirdly, this rally has been going for 12 days straight with a explosive climax yesterday.
I certainly think that yesterdays reaction was a gross over-reaction, and I would not be surprised to see us back at 1.3000 within a week
However, at the present time I am on the sidelines... but looking at 1.3500-1.3550 area as a potential sell area.
For those who are skeptical about it falling back soon, have a look at the USD/CHF for the last week..Switzerland just got expensive again for a holiday...LOL
Edit 8.10am NY time Market has moved higher.. That missed buy trade on Monday at 1.2950 (the one we missed by 2 pips when the market dropped to only 1.2952) is looking a nice trade that got away!!
Edit 9.15am NY time I am still on the sidelines..This is too stretched... and without a meaningful retracement... to risk a buy.
Edit 12.35pm NY time I will be staying on the sidelines... However, just a little note to say that when NY traders return from lunch, they often send the markets the other way.
MESSAGE FROM JACKO 320
It is 1.05am NY time Wednesday March 18 and the market is at 1.3033
As stated in the late edit yesterday, the "Safety first" approach of moving the Stop Loss to Break Even is limiting any losses but it is also limiting the profits by closing the trades too early. Now that the volatility is continue to reduce, I may consider opening up the risk marginally to get the longer trend runs and better profits. This will result in longer term trades.
Having said that, I am keen to trade the market at the present time. It is starting to get back to normal trading parameters.
Edit 4.15am NY time The market is slowly trending upwards on the 4H chart. But any retracements in Asian trading today have been minimal. I would think that there will be another opportunity today to buy in at a much lower price than the present price of 1.3010
Edit 8.05am NY time Market is at 1.3028 (where it was at 1.00am earlier this morning when I first posted)..It has been going up and down like a yo-yo. The Fed meets today and looks into their tea-leaves and crystal balls and will come out with a FOMC Statement. Now they can't do much on the interest rates any more...because they are at 0.25% and they can't take it any lower without looking as though they have totally lost control of this situation...so they will talk about a whole lot of other stimuli (which really won't have much effect on the economy either...LOL).
I am looking for an opportunity to buy into this market soon.
Edit 8.40am NY time The market has just broken through the previous high of 1.3093 (Feb 9)...but it is not breaking too far up...The high so far is only 1.3124..
Edit 9.17am NY time. Market has over reacted. I am a very short term SELLER at the current price of 1.3125. A 50 pip hard stop loss. A RISKY trade...I am "fading" the market. This is a trade I am not recommending but I am taking. Remember, I am not a signal service..I am a trader and this is my trade (SMS just sent) I have sold at 1.3125
Edit 1.30pm NY time The market is moving around like a lost sheep. As I am trading against the 4H and Daily trend (something I would definitely not recommend to novice traders), I will be quick to move the SL to BE as soon as it goes 50 pips in profit...that is when/if the market gets to 1.3075, I will be moving the stop Loss to BE
My target price is 1.3050
Edit 8.30pm NY time The market slapped me around today for trying to "outsmart" the market. One of the basic tenets of my strategy is: The trend is the BEST friend you will ever have in the Forex market..... stop thinking that you have to "outsmart" the market.You don't have to..this business is very easy if you leave your brain at the door....just follow the trend = follow the money =going with the flow = barking with the big dogs.
The "good news," (if you can call it that), is that my Stop Loss was at only 50 pips and I was early in the queue. The "bad news" is that slippage cost me an additional 32 pips (average) over all the contracts. Mark has been reviewing them all afternoon.
Emails
Email 1
When you say "fade" the market, does that just mean trying to catch a falling knife? I've seen the term used several places, but never with a clear explanation. "Fading the market" means that you think the market has gone too far in one direction and so you are trading a position on the basis that it will retrace back.
Email 2
Your last trade was not a trend trade. I agree... but occasionally/rarely, the market over-reacts and the "music" of the charts shows a "bum" note. That is an opportunity that occasionally allows a trader to take a speculative trade on the basis of higher probability / lower risk trade.... It is NOT the mainstay of my trading strategy....thats why I had the warning. It is certainly not one that I would encourage any trader to get comfortable with.
MESSAGE FROM JACKO 319
It is 1.05am NY time Tuesday March 17 and the market is at 1.3014
Yesterday was a prime example of the Pleasure and Pain in trading. I had the pleasure of watching the market do everything that I expected.....except I had the pain missing the buy point by only 2 pips.
So we start all over again.....My BUY trade at 1.2950 remains in place.
Edit 3.15am NY time Market has become more volatile in the last two hours... we may be able to buy a little cheaper than 1.2950...I am keeping my order at 1.2950 for the present time .... but if you are at your terminal, I think you will have some chances to buy at better than that price. (around 1.2920, I would think...1.2900 is strong support)
Edit 6.40am NY time Well........ for the last 20+ hours, the market has been moving up and down, up and down, in basically a 60 pip range (1.3020 - 1.2960). Hopefully the NY session will put some life into the market
Edit 8.10am NY time Market has moved down to 1.2965 in expectation of the all the news that is coming out at 8.30am NY time. I am looking to buy at lower than 1.2950...so I may have to be quick on the triggers.
Edit 8.20am NY time Market has come below my target so I was prepared to take the trade. I have just bought at 1.2940. There is news coming out which may be rocky but 1.2940 was enough to make it attractive to buy.
Edit 8.50am NY time The Stop Loss has been moved to break Even (1.2940) earlier than usual as a precaution...
Edit 9.15am NY time Closed out at BE (+5) ...Safety first !!...But will probably be looking to get back into this market again in the next couple of hours...I think that his market has more opportunities today
PS This new internet based SMS text messaging system is sooo much faster and easier (and much less stressful) than the old method
Edit 9.35am NY time I have just been asked "was I trading the news?" The answer is no, the news just happened to coincide with my buy price being reached and then just speeded up the action. IF it had hit 1.2940 six hours ago, I still would have been a buyer.
Edit 11.45am NY time This market is going nowhere at the moment with no real conviction in any direction....looks like the brokers are taking out all the scalpers and short term traders' Stop Losses..It has been plus or minus 30 pips either side of 1.2950 for four hours.
Edit 8.30pm NY time This "Safety first" approach is limiting any losses but it is also limiting the profits by closing the trades too early. Now that the volatility is continue to reduce, I may consider opening up the risk marginally to get the longer trend runs and better profits
Emails
Email 1
I don't follow a lot of chart patterns but on the daily chart this looks like a double bottom. That should result in it climbing to around 1.4780 where it was in 8/08. Is this chart pattern stuff just voodoo or does it only work on small time frames or is 1.4780 likely anytime soon? LOL..It is a bit of voodoo but enough people believe in the voodoo that it sometimes becomes self perpetuating. I don't see 1.4780 very soon at all...especially if one of the Eastern European countries goes into default. I can see the potential to go to 1.3500-1.3600 (the 50% Fib line....another piece of voodoo...lol)
Email 2
Just wanted to tell you that I think it's a good idea to close the trades at BE+5 (second only to closing them with a huge profit, lol...) I'm curious to see how many pips this will get you over say a year. LOL. I kinda like them..I might start making them even bigger
Email 3
You have said that we will likely see the Euro fall, how much and for how long? We are now in a small uptrend (see Daily and 4H) But the big danger is the potential collapse of one Eastern Europe country...then the Euro will move downward hard and fast
Also, how long do you think until we see the volatility settling down to pre-2008 levels? It is coming down now
And as far as I know you only trade EUR/USD, have you tried other pairs and what success did you have? I have traded GBP and AUD. The GBP was too volatile and the AUD was too slow...the Euro is just right
Email 4
may i know if you were starting out in 2005 in FX, and had today's experience, with today's market volatility etc, would you be trading as you are now, or the shorter Time frames as you used to? Initially, I probably would because it was so much fun. But only for 3-6 months maximum
ie. are you more cautious now, because of maybe the Fund, and the dollars at stake with each pip? Yes, and was also counselled by Mark that the intensity of my initial trading couldn't be maintained...so I started to slow down and it made a huge improvement in my "approach" to trading...it has allowed me to sustain my passion and interest in trading without being burned out
MESSAGE FROM JACKO 318
It is 1.35am NY time Monday March 16 and the market is at 1.2896
I am looking forward to a productive and profitable week. The market is coming back to a semblance of stability compared to the unwelcome extremes of volatility we have had in the last months. Now that the volatility is settling down, it is time to ramp up our trading and go for the super-normal profits. The market is doing very little in Asian trade today. Will be back for London trade.
Some excellent emails last week.
Edit 4.00am NY time Market at 1.2946.. Too close to strong 1.3000 resistance to buy it. On the other hand, the Daily, and 4H trend is UP so I don't want to sell it. I think that London might try to take this up around 1.3000 and let NY break the 1.3000 resistance
Edit 6.55am NY time London has taken the lead role and broken the 1.3000 resistance. The Weekly, the Daily, and the 4H trend are all UP. I am looking to buy. I am looking for a retrace/dip back down to 1.3000 to buy.
I am a buyer at 1.3000 or lower. I will be using a hard 100 pip Stop Loss.
As I am hoping to get it a little less than 1.3000, I will send SMS as I buy.
Edit 7.25am NY time Coming back now. Might get it between 1.2950 and 1.3000
Edit 10.15am NY time As expected, the market has come back to 1.3000. Remember, as a risk saving strategy (so we don't get hurt by the "falling knife"), we will be waiting for it to go through 1.3000 and watching where it goes to. THEN we buy on the way back up.
Edit 10.25am NY time Market is sitting on 1.3000. But 1.2950 is the 50% Fib between 1.2832 and 1.3070, so it wouldn't surprise me to see it get closer to 1.2950
Edit 11.00am NY time Waiting for one final drop back below 1.3000
Edit 11.30am NY time I am still not convinced that the drop below 1.3000 has been confirmed enough to be over just yet
Edit 11.50am NY time YES !!!! I knew there was another drop in there...it has just dropped back down.
Edit 12.20pm NY time This market will go lower again later. I am revising my order to a BUY at 1.2950. I have placed my order to buy at 1.2950 and have a 100 pip hard stop Loss in place
Edit 8.00pm NY time My orders at 1.2950 have still not been filled. However, the market has moved extremely slowly, but in the right direction, towards my target, and I expect to be filled in the Asian session. (Also, in hindsight, my earlier decision not to rush in and buy at 1.3000, but to just watch it for an hour or two, was the correct one.)
Edit 9.55pm NY time The market has been as low as 1.2952...Close...but no prize for that. My orders at 1.2950 have still not been filled. So we wait some more.
Emails
Email 1
It seems that you have rules that you follow with your trading but ultimately your using personal discretion. From extending the TSL from 50 to 100, eliminating the fallen soldier strategy, changing to shorter time frames, taking profit early, etc. So its not so much about the rules you set but about the discretion when to change the rules by which your trading. I think that a trader needs to be pragmatic and flexible to adapt to the market conditions. Considering that we have just see the start of the biggest financial meltdown in a generation, I would have been surprised if I hadn't changed some parameters Now there is the problem. Well it does not seem to be a problem for your trading but it is for mine! That discretionary trading is very hard and also creates a lot of "shoulda woulda coulda" because its all too easy to change rules too early or jump from plan to the next prematurely. I agree
Specifically where I am having a problem right now is with taking profits early and not letting the profits run. Its difficult because I really don't like taking profits early. I don't like to try and predict where a good target is, it creates a lot more "shoulda woulda" compared to letting a trailing stop exit the trade and being fine with that. I agree wholeheartedly with you...as the volatility is reducing I can feel my desire to go back to a TSL but I also think that 100 pips may be too big to give away and 50 pips may be too small and we will get whipsawed out prematurely
I am just very resistant to closing trades out solely with discretion or setting targets because it creates a lot more emotional trading which can be tiresome. yes, it is emotionally draining
I would just keep with a trailing stop but when the market is trading within a range, like it is now, trailing stops often fail to lock in profit. Yes, thats the problem !!
February & March thus far have been difficult for me because of this range bound market, so I need to think what to do during these types of markets but I would certainly prefer not taking profit early based on discretion! Do you have any other suggestions or any suggestions in general how to approach this problem??? Reduce the TSL to 50 pips or even less
Is there other simple rules besides a trailing stop that make sense to use to exit a trade during range bound markets? Not that I can think of...
Email 2
One more question. Do you think it was/is really feasible for the government/fed to do nothing and allow these banks and institutions to go bankrupt? No I certainly like the logic that if a bank/institution is insolvent then they need go bankrupt and restructure, and this massive socializing of losses is hard to accept, however do you think there would be some massive disorderly meltdown with severe repercussions if all these banks, insurance companies, governments, etc. were allowed to fail? I think that the Govt should nationalize them, sack the existing top levels of executives, make them totally transparent with ALL their debts and liabilities, guarantee and clean up all the debt, stabilise them and then sell them off to private enterprises in 12 months or less.
Is the risk for an international financial system meltdown too high for them to do nothing? I don't think that the Govt should do nothing. (see above) Perhaps they should also start suing the previous CEO's and Board members for their "performance" bonuses for the last 3 years
They caused this huge bubble in the first place I am not sure what would happen if they just stopped inflating.I certainly like to think the market should be allowed to do what it does best and liquidate bad debt, however this bubble was so huge and interconnected that I am not sure what would happen if there was not government & central bank intervention. There is said to be $50 Trillion in debt floating around...most of it bad debt...so even if they throw $10 Trillion at it, it won't stop what has to happen...... which is the massive deleveraging of all the debt Any thoughts? We are in for hard times...but we are in the best business for these times
Email 3
So I closed that sucker with a 20 pip gain and went for a walk. Always a nice feeling to have made money, be healthy enough to go for a walk and young enough to still be alive to enjoy it all
Email 4
what trend is now in EUR/USD please?A quick summary
Long term (12 months) Euro down (Eastern Europe will have defaulted in a number of countries
Medium term (1-6 months) Euro down ....(earlier if an Eastern European country defaults)
Short term (this month) Euro up...(reaction to the big fall that has occured since Dec 18)..see daily and 4H charts
Very short term (Last Friday only) Euro down Entered short because the market was close to 1.3000 which I saw as major resistance...plus I was keen to trade
MESSAGE FROM JACKO 317
It is 1.15am NY time Friday March 13 and the market is at 1.2900.
It is Black Friday, which is considered unlucky. Well, lets see how it goes today. The good news is that it just got much cheaper to visit Switzerland after the Swiss Franc fell through the floor yesterday...LOL. It fell 400 pips in minutes and stayed there.This had the initial result of sending the Euro into a dive which closed my last trade at break even. (Note A policy that we have implemented for our Fund trades is to make our SL's, Break-even + 5 pips...It is surprising how beneficial this is to the psyche..even when you are wrong, you get a positive result...So I will be implementing that policy here as well.)
The euro then showed strength and jumped up to as high as 1.2944.
The market is getting close to the high for this run.I would also expect that the Swiss Franc is now fast losing its "safe haven" status as a result of its terrible quantum of debt and also the fact that it is giving up its bank secrecy status (I can't believe that they did that!!). It seems logical that this damage to the swiss Franc will soon flow onto the Euro.
The market is now trading at 1.2900. I believe that the potential for downside on the Euro is high. However, this trade will be against the trend which is in an uptrend on the Daily and 4H. (I could wait for the market to fall and then buy into the rise but I want to take advantage of what I perceive is close to a market high).
I also see 1.3000 as a big hurdle for the Euro to break. I am a seller at anything above 1.2900. Just looking for a good entry position higher than 1.2900.
Edit 2.03am NY time I have just sold at 1.2915. A hard 100 pip SL
Edit 3.15am NY time Market has fallen 49 pips (to a low of 1.2866) below my sell trade...not enough to trigger a move to BE.
Edit 8.15am NY time The US market often reverses a move made in Europe, so I am moving my SL to Break Even (+5) as a safety measure....PLUS it IS Friday 13th..and I am trading against the trend. Some of you may want to take profits earlier..
Edit 8.35am NY time I closed out slightly early at 1.2905 for a minimal 10 pip profit. I have been asked whether I will now go long...but it is a Friday and I don't like trading Fridays and 1.3000 looks a strong resistance point.
Edit 8.55am NY time I have decided that my last trade was still the correct direction. I am getting back into the trade. I have just sold at 1.2920. I have a hard 100 pip Stop Loss
Edit 11.30 am NY time The market has now gone 50 pips in profit so I have moved my SL to Break Even (+5) at 1.2915.
Edit 1.25pm NY time Market has come back to 1.2900, but I still think this is going to crack downwards below 1.2870.
If it moves up then I am stopped out at BE+5 (= 1.2915) , so I am risking 15 pips on the basis that I think it will drop more in the next 2 hours.
Edit 2.20pm NY time A close escape...the market just went to 1.2912..but I want to let this trade play itself out. But it gets below 1.2880 in the next hour, I will sell it. I don't want to be holding over the weekend.
Edit 3.45pm NY time Out at BreakEven (+5).
Edit 8.30pm NY time In a day when the market had a total range of less than 100 pips (1,2957- 1.2861= 96 pips), and spent 95% of that time in a tight 50 pip range (from 1.2930 -1.2880=50 pips), we had an enjoyable day and made some money. The very tight range for the day made it a challenge but we came out positive. Next week we will do it again and make some more money.
I have been slower on the emails this last two days. I am alone this weekend so I can clear them without Mrs Jacko nagging me about working on the weekend...
I can feel the market coming back to a semblance of stability compared to the unwelcome extremes of volatility we have had in the last months. As I have said previously, I am keen to make up for that lost time, where I had slowed my trading down and hunkered down to weather the storm. We have still been achieving very good results to date. But now that the volatility is settling down, it is time to ramp up our trading and go for the super-normal profits
Emails
Email 1
I wonder if you have any advice on the following. I had a short entry placed at GBPJPY at 1.3690 this morning. I saw price spike up and hit that point slightly later at work, but my order was never filled. I double checked the actual broker (FXCM) charts when I got home this evening, and even on these, "bid" got up to 136.90 (exactly to there in fact, before turning). I'm fairly sure if this had been a stop on an open position, i'd have been out :). I've raised this with them, and they said they'd investigate. It has hit the price but your order was not filled...it means that there were insufficient buyers to get all the sell orders filled. If your order was placed a day earlier (say) then you would have been first in the queue and would have been filled. (Either that...or your broker has screwed you!!)
Has something like this happened to you before? Yes. Recently I had one go the other way. I had big trades and it went to my stop to the pip but only 50% were filled. The market then dropped back and I was in a good trade again
If so, what is the usual outcome of this? Usually nothing for smalllish traders
Do they simply tend to come back with some arbitrary excuse? Yes
And what happens while they investigate? nothing
While I'd definitely want this positions now, GBPJPY jumps around A LOT, I wouldn't want it if it was back way above 136.90 :P. Let it go. Make a quick formal written complaint, just so they know you have a record. and tell them that if it happens again, you walk...remember, these guys spend lots of money trying to get customers...they don't really want to have you walk
MESSAGE FROM JACKO 316
It is 1.10am NY time Thursday March 12 and the market is at 1.2840.
As discussed yesterday, we may be seeing a bear market bounce. The market has moved down since Dec 18 so we should see a short term bounce.
However, I am inclined to think that the overiding issue at the moment is sovereign risk ...that is, countries going bust in Eastern Europe. If it occurs it will pull Western Europe down (because all the Western European banks lent huge volumes....bigger than their own country's total GDP in some cases.... to Eastern Europe).
I think we will see the Euro going lower, much lower in the medium term.I think we may see sovereign (country) defaults in Eastern Europe very soon...and once one goes, they all go.
I have seen the similar effect of the Asian meltdown in the 90's where Thailand went down and within days, all of Asia went with it. You only need one to default in Eastern Europe and you will see a REAL crisis....and a very low Euro.
Edit 4.15am NY time I missed a good opportunity to sell at 1..2850 earlier today, but I going into a meeting with some Fund Managers and didn't want to be trading blind. (I was also concerned with the strength of the move up on the 4H chart).
Edit 5.05am NY time I missed the downrun (see above), but I have bought the run back up (hopefully). I have just BOUGHT at 1.2760. I am using a 100 pip hard Stop Loss. This is buying into the 4H trend upwards. As stated yesterday, I think we may be seeing the start of a minor breakout to the upside, a bear market bounce, as they call it. It has broken the Daily trend line from 1.4718 (Dec 18 2008) and 1.2991 (Feb 23 2009).
It has broken the trend line for the last 3 days but stayed within it,... but today and yesterday has stayed completely above the line.
Edit 8.00am NY time Market came back to 1.2767 to allow anyone who missed the first entry to get back in. We are now moving back up. It has now gone 50 pips in profit. I am moving Stop Loss to Breakeven at 1.2760. It is now a free trade and I have a temporary profit "cushion'' of 60 pips (the market is 1.2820). Because this is still a ranging market, I will not be using a TSL. I will be nominating later a profit point TP where I will close the trade. I will also SMS it to you
IMPORTANT. Because I am concerned about an announcement coming out at any time from Eastern Europe, ALWAYS have a Stop Loss in place
Edit 8.20am NY time My initial target to take profits is 1.2970 (just under 1.3000)
Edit 9.18am NY time Stopped out at Break Even on a rapid fall in minutes...oh look, the market has bounced straight back up to 1.2795 within two minutes...Oh, Swiss Franc has just collapsed temporarily as Swiss Central Bank Cuts Rate to 0.25% to Battle Recession ...go look at USD /CHF chart now!
Edit 10.00am NY time This will result in a "flight to safety" again. Investors will dump Europe and buy USD. I think that Daily chart may now be reversing.
Edit 11.40am NY time The Euro is stabilizing and actually showing some resilience. I am going to let the dust settle on this before I jump in again.
Emails
Email 1
1.so why do "round number" have anything to do about them It is a psychological issue of traders to aim for round numbers. It is a normal human reaction to want to "round a number up" or "round a number down"
2. how do one use FIB numbers for his advantage? The 50% Fib number is again another psychological isssue of traders...in itself, the 50% Fib is nothing extraordinary....but enough traders know about it, and use it that the market tends to be self -fulfilling. Because most traders know that other traders use it, they make trades on the basis that it will go there...so it does
3. can you show me how I can use TREND LINES in a proper or perhaps rather in the right way? You only need two trend lines on any chart ...one linking the highest points on the charts and one linking the lowest points on the chart...that will show you the strongest trend lines for that time frame. As to which time frame is the one for you to look at the most, you firstly need to determine what time frame YOU want to trade
Email 2
The light bulb has gone on in this traders head. His quote to me "'most people end up failing at this game because they start with a small account and they take less-than-prime setups because they feel the need to make more trades since each trade only nets a small yield. However, in doing so, the losing trades tend to wipe out the gains of the A+ trades, and if they'd just sit on their hands more often they would actually get somewhere'
MESSAGE FROM JACKO 315
It is 2.30am NY time Wednesday March 11 and the market is at 1.2653.
I am a happy chappy today. We picked up 155 pips yesterday and we are in a second trade that has the SL at Break Even and we are sitting on a "temporary" profit cushion of 50 pips (but cushions can easily be ripped away so I am not counting it yet).
The volatility is settling down ...at long last!!!...and I am keen to make up for lost time, where I had slowed my trading down.
As I have said previously, we are still achieving very good results to date. In a time where Funds and investors around the world are being pounded to dust and bankruptcy, we (as shown through our Managed Fund) are trading at better than 30%+ return for the year to date. While this is much, much lower than the returns I have earned over 2006 and 2007, our 30%+ return to date in the 2008/2009 year is much better than the average investment (where the Dow has lost 50%, property has lost approximately 30% and private businesses have become virtually unsaleable).
Now that the volatility is settling down, it is time to ramp up our trading and go for the super-normal profits
I a currently in a short trade from 1.2710 and I am waiting for the market to (hopefully) go as far south as 1.2610 (just above the 1.2600 round number) to close me out. In this ranging market, the round numbers are playing an important role in support and resistance.
Edit 7.00am NY time My short position was closed out at Break Even. I am now waiting for the next opportunity to go "short" again.
Edit 9.35am NY time The market has reached 1.2805 and is falling back, but I don't see it falling back as quickly as yesterday. The Euro has more strength today.
Edit 10.10am NY time A Quick Overview: The market has moved up to 1.2800 again today, but is much stronger today. I think we may be seeing the start of a minor breakout to the upside, a bear market bounce, as they call it. It has broken the Daily trend line from 1.4718 (Dec 18 2008) and 1.2991 (Feb 23 2009). It has broken the trend line for the last 3 days but stayed within it,... but today has stayed completely above the line.
I still maintain that we are in a long term downtrend, but this may be worth just keeping in the back of our minds. Market seems to be holding at 1.2750 at the moment.
Edit 12.20pm NY time The US session is making me dizzy, up and down, up and down, up and down, all for less than 50pips at a time. (I am noddiing my head so much watching this market, that Mrs Jacko thinks I am agreeing with everything she is saying...LOL)
MESSAGE FROM JACKO 314
It is 2.25am NY time Tuesday March 10 and the market is at 1.2658.
As discussed yesterday, I expect to see the market ranging between the 1.2550- 1.2700 mark before a break on the downside later in the week. I was sorely tempted to fire out a "buy" order to each of you just as the US session started yesterday because it was hitting the 1.2755 "bottom of the range" target , but I was wary of sending out a message that was against "trading only with the trend".
I know some of the more "adventurous" traders are reading these messages each day and trading off where I am saying that the market is heading each day, with excellent results. (I congratulate you on your initiative).
I am again currently waiting patiently for a "sell" at close to the 1.2750 area. Remember, as a risk saver, we will be waiting for it to go through 1.2750 and watching where it goes to. THEN we sell on the way back down
Edit 4.25am NY time The market is getting closer to my "sell" zone. It has reached as high as 1.2740 before falling back marginally. Remember, as a risk saver, we will be waiting for it to go through 1.2750 and watching where it goes to. THEN we sell on the way back down
Edit 8.15am NY time The Euro is on its way back through 1.2740, (currently at 1.2735) though it had a quick trip back to 1.2672 to try and shake out the weaker, "scared money" traders. We will definitely break 1.2750.
Edit 9.00am NY time Sent SMS messages first this time, before the blog. The market has risen through 1.2800 which has given a bonus 50 pips higher entry point than my planned 1.2750. I have sold at 1.2805. A 100 pip hard stop is in place
Edit 9.15am NY time It is heading back up. You may get a another chance to get in, maybe even higher than me..???
Edit 9.40am NY time. The market is hanging around 1.2790 like a bad odour...LOL. I am now letting the trade play itself out
Edit 11.50am NY time Market has moved 50 pips in profit so my Stop Loss has been moved to Break Even. This is now a risk free trade.
Edit 9.05pm NY time I have awoken to see that Mark closed all the Fund's and our positions at 1.2650 (for a profit of 155 pips) while I was in the land of zzzz's. He closed them at 3.35pm NY time which is 3.35am HK time.
Edit 9.10am NY time I have noticed that the market has retraced 50% of the fall and I am keen for more pips. I am a seller again at theses levels I am a seller at anything above 1.2710. I have just sold at 1.2710 A 100 pip hard stop Loss. Edit 9.26pm NY time Whoa..that dropped quickly..not a problem it will come back and give you another chance to get in. This will go down tonight NY time
Edit 11.55pm NY time Stop Loss has been moved to Break Even. I have decided to close this trade at 1.2610. In these ranging days it is easier to use a target price. I will be happy with another 100 pips (1.2710 -1.2610= 100 pips). Now just waiting for it to fall to 1.2610
MESSAGE FROM JACKO 313
It is 1.00am NY time Monday March 09 and the market is at 1.2660.
As expected, the market launched itself at the 1.2750-1.2800 on Friday. It raced up on Friday morning to just stick its nose in to the price range by three pips before falling again. As mentioned in the emails in Message 310, some of the more "adventurous" traders were trading on the basis that my 1.2750 would be hit, and they did very well though most closed their trades in the 1.2700-1.2750 area.
This week has very little news out of the US until Thursday (when we have the Retail Sales and Unemployment Claims) so I expect to see the market ranging between the 1.2550- 1.2700 mark before a break on the downside later in the week. Some of you may have already seen the pattern lately that the market ranges between a 150 pip range for most of the early part of the week, with one or two quick extreme spikes, then goes for a run late in the week. I expect the same again this week.
I am looking to sell on the extremes of the range this week so I will be looking for a sell around the 1.2750 mark. I think that the Euro has a limited time up at these levels, and is heading south again in the medium term.
Edit 7.45am NY time The market has fallen from 1.2726 in Asian trade and then followed by the early London trade. It looks as though we are going to have the weakness in the early stages of the week. The market has quickly moved down to the bottom edge of the range of 1.2700 -1.2550. Waiting on the US open to see if there will be a kick-back up
Edit 10.00am NY time Market is at 1.2648 has retraced about 50% of the fall from earlier today after bottoming out at 1.2555. I am getting confident that I will get my 1.2750 sells very soon.
Emails
Email 1
Hey Wayne,On my chart, I see the 1.2670-1.2700 zone as a resistance and then the 1.2900 region as the next major resistance. I checked the 50% retrace and found it to be at around 1.2720. Yes, thats why 1.2750 was my target, but I also wanted to factor in a cushion for the volatility...thats why I was looking between 1.2750 and 1.2800
I drew two down sloping trendlines on the 4H and neither of them are close to 1.2800. How did you get the 1.2800 figure as your sell zone? Are you simply using the high made on Feb 26 as your target or is there something I'm missing? 1.2750 was my target, but I also wanted to factor in a cushion for the volatility...thats why I was looking between 1.2750 and 1.2800. The Feb 26 high was my backstop resistance level
Email 2
Hi Jacko. Looks like I caught the market bang-on. Ahh, excellent
Currently at 1.2500 so I'm up 143 pips. I'm hesitant to run a 100 TSL though since giving up 100 pips in the hopes that I'll catch a big move doesn't seem to be that great of a risk to reward ratio (mind you I've never caught a big move before). If you took all of the 100 pips that you've given up, wouldn't that add up to more than a big move? For example, if you cut your TSL to 75, you'd be saving 25 pips per trade, and yes you might get stopped out of more trades, but you're up 25 pips per trade. Have you done any study to come up with the 100 TSL or was it just a nice round number? I was using 50 pips for the last 3 years , but the volatility increase from August just made a mockery of 50 pips...so I moved it to 100, and even then some members were saying that the volatility had gone up by a factor of 4, so I should move to 400 pips...Err no!!
Also, one other benefit that I think you've missed about forex, at least I haven't seen you say it anywhere, is that it is recession-proof. Who cares what the economy is doing in the rest of the world when you can long and short the stock of countries? You can trade your way to profit through any economic downturn. To me, that's huge. Yes I agree........, and you always have the weekend off!!!! No matter what you want to do, the market is closed over the weekend (or most of it)
Email 3
Wayne, I wanted to ask you if you thought a college education would be helpful in forex. I mean that i find all this to be extremely interesting, and if i could pull off some success under your guidance I am seriously considering going to college for economics degree. A good idea...As you probably know, we have no children but recently my niece came to HK to see us and she asked us the question "should I go to college?" ....and I didn't have an answer. I do know that whatever degree she gets will be useless and out of date the day she gets it, but I also think that the experience of college is worthwhile and the piece of paper is always there on the resume. I also understand that whatever career she gets into, it will probably be only the first of maybe five or more totally different careers she will have. So the answer about going to college to get the degree is a good idea...but don't expect it to be a ticket on the Business Express. The employment rate for MBA's has taken a BIG dive , I have heard
My intention is that it would benefit my trading efforts. Even in these market conditioons i believe alot of money can be made once i get all my ducks in a row. I watch charts daily, read daily, try to keep up on any world news and focus in like laser on this thing called forex trading. An economics (or any other) degree would not be a disadvantage to a trader.
MESSAGE FROM JACKO 312
It is 1.25am NY time Friday March 06 and the market is at 1.2616.
This week has been one of those very dull weeks where the market is going up and down like my pants when I was a young man. The Euro has been confined to the range of 1.2500 to 1.2650 all week. With such a small range, it has been hard to find a trend trade. These small ranging weeks just rip at SL's so we have reserved our ammunition for the stronger trade that will probably present itself early next week
I am still thinking that the market will revisit my sell area of 1.2750-1.2800 by the end of this week. (I would not be surprised to see the NFP send the Euro up today and then have a "gap up" over the weekend). A sell at those levels is a good trade because I consider that the market is definitely heading lower than 1.2500 in the next few weeks.
Edit 4.00am NY time Market has gone for a run up to as high as 1.2725 (currently back at 1.2690) My target of 1.2750-1.2800 is getting closer. Remember, as a risk saver, we will be waiting for it to go through 1.2750 and watching where it goes to. THEN we sell on the way back down
Edit 9.55am NY time The NFP came out at 651K, (close to forecast of 647K ...but still appalling). The market has gone to as high as 1.2753. Now 1.2708. I think we may see it go further up. Careful
MESSAGE FROM JACKO 311
It is 1.15am NY time Thursday March 05 and the market is at 1.2600.
The market is still rising gradually up into my sell area. It is 100 pips higher than where it was this time yesterday and has been as high as 1.2662.
I am still looking to sell into this market on an upward "dip". I am also reasonably certain that the market will revisit my sell area of 1.2750-1.2800 by the end of this week.
Interestingly, the ADP Non farm employment numbers came in yesterday at an appalling minus 697,000 and the market barely reacted...??? (Either the market has started to recognise that the ADP figures are grossly inaccurate ...or they are becoming immune to almost 700,000 Americans being thrown out of work in a month...???!!!).
Edit 4.45am NY time Market is bouncing around but going nowhere at the moment. The ECB Rate Decision may have some impact but it will be very short lived.
Edit 8.10am NY time The ECB has reduced their rate to 1.50% (down from 2.00%) . The market has moved up but only as far as 1.2575 so far. That is not looking strong. I think we will see a fall back through the 1.2550 mark very soon.
Edit 9.40am NY time Damn... the market has gone back to the low 1.2500's again.
I thought it would go higher than just 1.2662 before dropping back. The Euro is having trouble showing ANY strength.
Edit 3.30pm NY time The 1.2500 support is holding...I might still get my 1.2750 sells
Emails
Email 1 (An interesting email from a member !!)
I have lot of free time and I am feel lazy. Don't feel lazy...you are getting closer to achieving what most people can only dream about...the ability to work only a very small number of hours per week and still make a very good income. It is because you have learnt a skill that not many people can do. That is, be a successful trader
Yes I know I am profitable and it is very good. But the market(Eur/Usd)is moving fast and I am missing lot of movement. This is not a business where large activity is required. In fact, in the current environment, the more you trade, the less will be your returns. The huge benefits of this business are the huge leverage available to anyone who wants to trade, the rapid compounding that allows for rapid escalation of trade sizes and the extreme liquidity to get in or out of the market whenever you want.
Email 2
based on your experiences with other group members, do you think trading can be trained or not? Yes. There is no doubt about that. Similarly, I believe anyone (who is really interested in an activity) can be better than average in any area IF they work at it.
For example, golf (which I detest...that is, I have no interest in) is an activity that you get better and better the more you practise and play. As long as your interest level is maintained AND you are willing to practise it as much as possible....you will get better. It is the same for ANY activity.
IF you can maintain the interest AND are prepared to practise, you will get better. That is not to say that you will become the best. I could practise 24 hours a day and I would never be 1% as good as Tiger Woods...but I would be a better golfer than I am now.
I just happen to have always been very interested in the markets, so I have become a better trader than I was.
Firstly, I have never seen trading as work because I am always fascinated by the markets so it is easy for me to maintain the interest. and
Secondly, I am old so I have practised trading longer than some.
And having said that, it has resulted in a fabulous lifestyle that I believe is unmatched.
MESSAGE FROM JACKO 310
It is 1.00am NY time Wednesday March 04 and the market is at 1.2500.
I have been waiting for the market to retrace above 1.2700 for a sell position, but the highest it has reached so far this week is 1.2677. I am not going to chase this market down because the market is so erratic lately that a 300 pip reversal upwards is highly likely (see 4H chart...it is easy to see the potential for a run back up to just under 1.2800).
As I discussed two days ago, caution is paying off for us at the present time. Rather than aiming to shoot the lights out with spectacular performance (but risking substantial losses), we are achieving very solid results (see Message 308) over the time.
I am still looking to sell into this market on an upward "dip". I am also reasonably certain that the market will revisit my sell area of 1.2750-1.2800 by the end of this week.
Edit 9.00am NY time The market is rising s l o w l y (currently 1.2557).
I may see my 1.2750- 1.2800 in the next 24-36 hours??
Emails
Email 1
Jacko, If you think the market is going to 1.2750-1.2800, then why not buy at the low price? Because the trend is clearly down at the present time...and I don't want to trade against the trend in these erratic times. Having said that, some of the more "adventurous" traders in the group are trading the rise from 1.2455 on the basis that I am correct in the market going as high as 1.2750. (But they are monitoring their trades very closely)
MESSAGE FROM JACKO 309
It is 1.20am NY time Tuesday March 03 and the market is at 1.2666.
The market is moving back up against the larger downtrend and is heading hopefully into my sell zone around 1.2800.
I am willing to wait to sell into the downtrend rather than buying on the reaction upwards.
MESSAGE FROM JACKO 308
It is 12.00am NY time Monday March 02 and the market is at 1.2566.
As outlined last week, the market has broken through the 1.2700 without giving any real opportunity to get in at a viable point. Even if we had sold early in the morning on Friday the vicious correction from 1.2603 (at 8.30am NY time) to 1.2736 (at 11.10am NY time) would have hit our Stop Losses and resulted in a breakeven trade or a loss trades. A 133 pip correction in less than 2.5 hours certainly takes out 100 pip TSL's.
Our caution is paying off for us at the moment. In these times, it is REALLY important to be selective in your trades.
We are still achieving very good results to date. In a time where Funds and investors around the world are being pounded to dust and bankruptcy, we (as shown through our Managed Fund) are trading at better than 30%+ return for the year to date. While this is much, much lower than the returns I have earned over 2006 and 2007, our 30%+ return to date in the 2008/2009 year is much better than the average investment (where the Dow has lost 50%, property has lost approximately 30% and private businesses have become virtually unsaleable).
Interestingly, I saw that even Warren Buffetts Berkshire Hathaway's shares have dropped from $148,000 in late 2007 to $78,600 on Friday...a drop of 47%.
Anyway, back to trading. I am again looking for a place to go short in this market. Anything above 1.2700 is interesting, though I am also aware that it could also reach up to just under the infamous 1.2810 (the high on February 26).
Edit 5.15am NY time Market at 1.2601. Market has barely moved in European trading. Maybe the US ISM Manufacturing PMI numbers will cause a move
Edit 7.15am NY time Just a short note to remind each of you that I am banned from answering emails on the weekend by Mrs Jacko...LOL. One of the benefits of trading Forex is that we all get a weekend each week (and the markets are closed) so that we can clear our heads and spend time with the family.
Edit 10.05am NY time Not a significant instant impact of the US ISM Manufacturing PMI numbers. (Market at 1.2620)
It is more noteworthy that the Dow has broken 7000 (currently 6930)
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