MESSAGES FROM JACKO (November 2008) 232 - 249

MESSAGE FROM JACKO 249

It is 9.00am NY time Friday November 28 and the market is at 1.2750

The market will be thin again today due to US brokers being away for Thanksgiving. As stated in Message 247, the thin markets are a very volatile proposition. Days like Thanksgiving holidays are notorious for wild swings.... so be careful holding any positions over the period unless you are watching it closely. I will be spending some real quality time with my Mom and family and then get back into trading next week.

Note: I have received a couple of emails saying that they can't get into the Managed Fund's blog. When following the link to the
http://jacksonfortress.blogspot.com , you need to close down any other gmail account that you have open, otherwise you will get a message saying that you don't have access.

Then just use:
User ID jacksonfortressaccess
P/W jacksonfortress

MESSAGE FROM JACKO 248

It is 12.02am NY time Thursday November 27 and the market is at ....don't worry because you shouldn't be trading today...give your family and loved ones a big HUG instead. Happy Thanksgiving Day

MESSAGE FROM JACKO 247

It is 9.00am NY time Wednesday November 26 and the market is at 1.2960

Thanksgiving Day is almost upon us. In this industry we have many reasons to give Thanks for everything that has been given to us.

Firstly, I give Thanks for finding this extraordinary business where there is incredible flexibility in establishing, running and financing the business.Given the huge leverage in this business, anyone can enter the industry and establish a trade... and their subsequent business.
Also, while running the business, if I see an opportunity I can be involved within 30 seconds. More importantly, if I am in a trade and I feel that I have made a mmmmmistake I can be out of that transaction within 30 seconds. (try doing that with any other business!!)
Also, the leverage and compounding allows extraordinary growth and profits. In just two short years I managed to escalate from 2 standard contracts (with one broker) to 200 standard contracts (over 4 brokers) in a normal transaction,... and with the Fund I am now trading even bigger numbers.

Secondly, I give Thanks for a market that trends so regularly that opportunities are around every corner. Even though I have missed an opportunity or two in the last two or three years, I can remain confident because I know that there are plenty more opportunities to come.

Thirdly, I give Thanks for the fact that I can conduct my business from anywhere in the world with just my laptop and an international cell phone.

Fourthly, I give Thanks for being able to "think out" the Anti‐Hedge strategy which turned my initial losers into winners and escalated my win rate

Fifthly, I give Thanks for having some excellent resources (in the form of books about earlier successful traders) which have been a beacon in those times when I have been sitting on the sidelines, wanting to rush in. Those resources have all emphasized the waiting as a precondition for becoming a winner.

Sixthly, I give Thanks to each of you for being part of this new tribe of traders that have decided to join with me in this lifelong business of trading. Also, some of you have also been more aggressive in your trading than me and I have been happy to read that many of you have made excellent profits, We have all embarked on a journey that, God willing, will allow us to have a simple yet profitable business for the rest of our lives. (For any of you who think that retirement is good, let me tell you something .... playing golf every day is boring ...and the people who do play golf every day are even more boring!!!! I am old...and getting older...but I still get an adrenalin buzz from a successful trade
 
Seventhly, I give thanks for Forex Factory, without which I would never have met any of you. In my communications with each of you to date, you have ALL shown that you want to be serious and committed traders, and are willing to learn. Some of you will always be more aggressive in your willingness to take positions and some of you will be more safety‐conscious. There is no right or wrong way, as long as your profits are maximized AND any losses are minimized. I think that a number of you are potentially better traders than me. If I can just help show you how I trade, I hope that many of you will use my experience and style and modify it to suit your own personalities. You can then go on to have as rewarding a time as I have had in this business. I, personally, am enjoying the group dynamics and hope that the group goes on for years as we all get to know each other and start to share our trading experiences in the near future.

Happy Thankgiving Day


I have arrived in the US after a long and tiring/dull flight and am trying to get my body into the new time zone
The market will be thin today due to brokers taking off early for Thanksgiving. That is not to say that it won't be volatile.
Days like Thanksgiving day are notorious for wild swings....I don't expect tomorrow to be any different so be careful holding any positions over the period unless you are watching it closely

MESSAGE FROM JACKO 246

It is 1.00am NY time Monday November 24 and the market is at 1.2630

The market is continuing to move up towards the 1.2700‐1.2750 mark. I am staying out of this market until I can see the top of this move up. I have to make a decision whether I want to be in this market ... for only the next 24 hours..... because we are flying back to Florida to spend Thanksgiving with the family. (An 18 hour trip PLUS 2 hours at the airport before departure...Gee, I am lucky...LOL ...And a 21 hour trip on the way back.)

The market will be thin this Thanksgiving week, especially the last three days of the week, leaving the B Team traders (if there are any left) at the brokerages to play their games.
That is not to say that it won't be volatile....there is so much going on at the moment. These two Reuters headlines also don't inspire a great deal of confidence.
White House says unaware of any Citigroup rescue talks (Reuters. Sun Nov 23, 2008 4:56pm EST)
Citigroup gets $306 bln rescue from US government (Reuters. Mon Nov 24, 2008 12:38am EST)
So in the space of less than 8 hours $306 Billion of taxpayers money has been put on the line for a company, (and don't forget that they have already received another $25 Billion bailout earlier).
And apparently the President didn't even know about it....
Then we have the impending implosion (or bailout) of GM followed by Chrysler and Ford. It certainly cannot be said that the markets are dull at the moment.

Edit 4.30am NY time I am on a flight out of HK at 11.30pm NY time tonight and I don't want to get stranded having to close any positions due to time pressure. I am clearing up a small backlog of emails so I will not be taking any trades today. I will post the next Message from the States. I am looking forward to seeing my Mom.

Emails

Email 1
We've had some pretty significant drops and the VIX is spiking again. I originally thought the bottom for the Dow would be between 7000 and 7400. Now based on what we are saw with the VIX today reaching 80, but not it's all time high 10/27/08 of 89, I'm wondering what's next. Do you still believe that 1.2100 is the bottom for E/U? I think we will see 1.2150....this is going to get worse...Citigroup down 50% in three days trading last week !!! More to come ....I think US govt will have to effectively nationalise it....its too big to pump loans in...they have already said that ANOTHER $25 Billion (on top of the first $25 Billion loan) won't save it (I was wrong...the US govt has lent them another $308 Billion!!!! unbelievable!!) What do you think about the European economies right now. Their economies don't appear to be as bad as the US and changing their stance on interest rates could quickly help shorten the recession that may experience. With the US deficits spiraling out of control, do you think the E/U bull run will begin again before the end of the year or after the inaugaration of the new President? I think the start of the new year will maybe see the turnaround

Email 2
I am still following the many different‐colored‐squiggles on my 30min 5min and 1min charts. I've always been successful at whatever I've put my hand too and I have this stubborn streak in me that wants to be successful on 30m 5min and 1 min charts. It is just noise at those levels I'm not there yet. I experience sporadic success and then.......give the profits back again. Your blog is so calm and sensible. You dont have any of the frantic "quick buy the market its going up....double‐quick‐reverse‐now‐hurry‐up‐cos‐now‐its‐going‐down.....ohh %$#@, missed it, should have stayed long" stuff :‐) I think you said somewhere that most beginners fail because they make it all too hard and try to trade every minor wiggle in the charts. I KNOW you are saying that to me......but my stubbornness still thinks I'm clever enough to figure it out.
Mark tells me that he has NEVER seen a short term scalper last more than 12 months (trading full time) ...!!!

Email 3
I'm enjoying the blog. I want to thank you for the great job you are doing on JacksonFortress. Thanks
15 wins, 2 losses and 1 breakeven for 1000+ pips. A couple of the wins were a bit howdy doody, 10 pip, 2 pips ..but I am reasonably happy with it

NOTE We are quite proud of our little boutique Fund. If you wish to look at it's progress and results to date, go here:
http://jacksonfortress.blogspot.com/
User ID jacksonfortressaccess
P/W jacksonfortress



MESSAGE FROM JACKO 245

It is 2.05am NY time Friday November 21 and the market is at 1.2518
The market is dead at the moment. I am still waiting for any move up to the 1.2700 mark for another sell. However, I am staying out of this market until I can see the top of this move up.The Dow has taken another hit of 10% down in two days of trading....this is going to get a lot worse before it gets better

Edit 8.05 am NY time Market is moving up to my target area of 1.2750. It may even go higher.... I am staying out of this market until I can see the top of this move up. However, it is Friday night (9.05pm here in HK and Mrs Jacko is taking me out for dinner so I won't be trading tonight (US Friday morning).
Back on Monday

Emails

Email 1

please I have questions about your Jackson Fortress Managed Fund. And about your trading and some private matters. Ok
I love your blog and your trading. I would like to learn everything you can. I am forex trader and I am very young and I trade 3 years and this year is very profitable for me. I like your trading style and this is what I want to do. Last 3 months I made some good trades on based your trading style. I hope that once I understand all your trading style and will trade only under your style. OK
Why do you want so develop your Fund? It is an interest to me. It is really being driven by Mark who wants to build a boutique Funds Management business. What is the reason for . Because you will not have free time because big business is big time work. I learnt a long time ago that delegation of responsibility to talented staff is the key to all successful business
What is your goal(plan). A small boutique fund to allow members of the group to get experience and add to their resume. Also excellent performance for the investors Do you want billion dollars Fund? Oh no. Not even slightly interested. Mark has a queue of investors keen to join but I don't want it all to become unwieldy and out of control. I know that Mark could easily get another $5 million+ into the Fund within 48 hours...but the fact that I know that we can grow whenever we want is enough for me at the moment.
What Job is for the two traders from your first group? What they will do? They are two traders with exceptional results. We are currently discussing all their trades and seeing how we can use them to improve our trading. They are doing the same with me. We are all learning strategies from each other. They are on a retainer from me...but it is not a lot...LOL. They earn more from their trading
What benefit will be for us(members) develop of the Fund? The profits from the large outside investors (that is, Marks group of investor friends) is being used to allow us to have better opportunities for the members of the group...for example the 30% pa guarantee on the Fund to members of the group, potential employment opportunities, the new website and hopefully some stellar trading advice that each of the members can benefit from. Also a bigger range of trading styles that have been proven to be profitable in the past (If any trader thinks he can bluff Mark, then they are wrong...LOL) Yes I know I have guaranted 7.5% per quartal. This is very good. Thank you very much.
Thanks

Will you be still my mentor and you will still have your blog? Yes. I enjoy the blog immensely. Sometimes I start to get worried if I haven't answered the emails within 24 hours...but then Mrs Jacko makes me a coffee and leaves me to just get down to answering them Or development of the Fund destroy our blog? Definitely not. The group is more important to me than the Fund. The Fund is just trading money. The blog is the development of traders with potential... hopefully into fulltime traders so that they can enjoy the great lifestyle that trading offers to anyone who is serious and committed to having an extraordinary business. As I have said over and over, this is the best business on the planet (EDIT: Please note: I am not trying to sell you anything...you are already a member!!)
The new business website with many more features wil be only for Fund matters? No it is a multi purpose website that will pull everything into one website. The website is primarily and mainly for the the group. There will be a small secured area for the Fund. The Fund will have its own entry for the investors.

Email 2
The first thing I wanted to ask is, you mentioned that you will be bringing in two new traders from your first group to trade for the fund.
Does that mean you will have less control over the actual trades, NOOOO !!! I am a control freak when it comes with dealing with anyones money. I am responsible for the good guardianship of the money that has been entrusted to my business. My name is on the business and so I am responsible. or will you be checking each trade offered by those other trades to see if it's a good one (like you do with Geoff)? Yes. However we will be updating their records of how their trades resulted (because they are actual trades by them) and as I get more confident, I will publish more of their trades

MESSAGE FROM JACKO 244

It is 1.00am NY time Thursday November 20 and the market is at 1.2496

Update below

Yesterdays trade was closed at 1.2510 for a 265 pip profit. The trade yesterday was partly an "opportunistic" trade. While I had earlier stated that I was a seller at 1.2750 in Message 242, I was pleasantly surprised at being given the opportunity to sell from a higher level.
I have had a couple of emails about not receiving the SMS (please see Email 1 below)
I have also had a couple of emails asking why I closed out at 1.2510 instead of leaving the usual 100 pip TSL in place.
Market had moved to low of 1.2472 and was moving up slowly. I had a feeling that it might move back to the 1.2600's in Asian or London trade so decided to take our money and run, rather than let the 100 pip TSL ride .
I had also been thinking of reducing the TSL to 50 pips but saw that it would have been roughly the same...1.2522... take out price as our buy back at 1.2510. (I also wanted to have a relaxing breakfast so I closed it at 1.2510...LOL)
I am now waiting for the market to move back up to 1.2700 for another potential sell position.
Edit 11.55am NY time Market at 1.2527. Watching the grass growing on my lawn is competing with the excitement of trading this market today..
Geoff has a sell order in at 1.2450 on the break of 1.2471 (from yesterday). It is a marginal trade so I am not SMSing everyone about it....If you are adventurous, then keep it in mind

Emails

Email 1
Jacko, I never received the alert. Firstly, I want to apologise for not getting all the SMSes out in time for yesterdays trades. As you know, I am a techno‐moron and have only very recently heard about this new fangled system of sending SMS text messages from a computer. (I have the sneaky suspicion that Mark knew about it but has never wanted to tell me about it...he says that I spend 90% of my time on emails for next to no money...he just doesn't understand how much "intellectual and emotional" enjoyment I get from talking to each of you)
Anyway, I have been using my trusty Nokia N70 to send the SMSes (you know, the special music edition Nokia...but I just can't find where to put the record/CD in).
The problem with the Nokia is that it sends SMSes sequentially which means that by the time I
1. place all my trades
2. type the reasons for the trade on the blog,
3. then type a SMS text message (I am v‐e‐r‐y s‐l‐o‐w at drafting text messages) and
4. send the SMSes to each of you plus Marks investors in the Fund,
it takes about 30 minutes.... At least I am not sending them individually like I did in the early days of the group, before someone told me about "Groups" in my phone. I am currently investigating which company to use for the computerised SMS messages. One thing that I am most concerned about is the confidentiality of your details. I note that most of these companies are also internet marketers and I dont ever want any company to use your details to spam their own "marketing campaigns" to you.
Please remember that the blog was never intended to be a "business." It started out as (and still is) a very small project (just under 50 members in total), but it was the establishment of the Fund (and especially Marks investors) that has made us become much bigger, much quicker than I expected. (Mark has a queue of his big investors wanting into the Fund...). The two groups will actually benefit the most because the profits from the Fund is financing all the improvements.
PLUS the first group is barely one year old.... our first member joined on October 16....and the second group is even younger, it is still in nappies...LOL

Email 2
I've been trying to work out how to see what you are seeing.
On 13th Novemeber the trendline had 3 touches on 30th Oct, 5th November and 10th November and you were saying that you were waiting for prices to get back to 1.2800 which was above the trendline. Low and behold later that day it pierces the trendline by over 100 pips for 1.2856. It then touches the new trendline on the 14th, nearly 17th (my birthday) and the 18th at about 1.2700 when you said you were a seller at 1.2750. As I had to go out for the day and it had been bouncing off the new trendline I thought that I'd put a sell limit order in at 1.2650. LOL I should have believed that even though your 1.2750 was again above the new trendline that you'd be right. Had I set my sell limit for 1.2750 I'd have got most of your trade and not been stopped out.

I note that the high of yesterday pierced the new trendline by about 150 points and you are now looking for an entry point of 1.2700 which is about 100 points above it. Should we expect price to now touch this new line 2 or 3 more times and then look for a price that's about 100 points higher again?? Hopefully yes Does this strategy hold true until the trend either reverses or breaks out past the low of 1.2329? I think the issue that you are missing is the incredible increase in volatility that is blowing all trendlines. However the core strategy is still to trade the trend lines.... but give yourself about 100‐150 volatility buffer to grab those volatile extremes (and to prevent being taken out of your trades by them). It means that you will trade less but you will win more often.
Really enjoying being part of this group, thanks for all the time and effort it's very much appreciated!! Thanks

MESSAGE FROM JACKO 243

SPECIAL EDIT

Edit 9.30PM NY time The market has hit a low of 1.2472 and is now in the 1,2512 area....I think Asian trade may take it back up. I
have closed my positions at 1.2510. That is good enough for me and the Fund

It is 9.40am NY time Wednesday November 19 and the market is at 1.2792

I have just walked in. The market has just given us an early Christmas present. The market has moved up on "technical" reasons. As far as we are aware, there has been no news to provoke such an advance. This market may drop quite quickly when it makes its reaction move.

I am a seller at 1.2800. Damn...missed it

Sold at 1.2775

Edit 10.00am NY time Sorry...was so busy placing all our trades, and trying all the time to find out if there was any real reason behind the jump to cause us a risk, I didn't have time to get the SMSes drafted and out in time.
As stated yesterday I was a seller at around the 1.2750 mark and the gift of another 25 pips was too tempting too miss. We still haven't heard any rational reason for the rise. We are prepared to risk a 100 pip fixed SL on this trade

Edit 12.00pm NY time Been barraged with emails...I can't believe its been two hours since I last did the blog ... I have now moved the stop to a 100 pip TSL... This looks like a very profitable trade...

Edit 12.15am NY time As part of the development of the Jackson Fortress Managed Fund, I made a serious financial commitment and started to move things to a much more professional basis, with the establishment of a separate office, employment of Admin staff to look after all the paperwork issues, and two traders from our first group and, very soon, longer "trading" hours to give us a full market coverage, 24 hour business for the benefit of each of our members, as well as the Fund.
A brand new business website with many more features (which will replace the blog) is also currently in the works which I think each of the members will appreciate.
I am also investigating a computer based SMS system that will sit on my computer that will allow me to do instant SMSes to you which will be faster and easier than using my mobile phone. (I am now becoming an accomplished typist on a computer....but my texting skills are still woeful).
Please be patient.....remember, I am supposed to be "retired"

Edit 9.30pm NY time The market has hit a low of 1.2472 and is now in the 1,2512 area....I think Asian trade may take it back up. I have closed my positions at 1.2510. That is good enough for me and the Fund

Emails

Email 1

Thanks for the gift on that crazy spike. I was watching the market before work. Walked away from my computer, and when I came back I saw the spike. After a quick look at the technical supports I decided to go in very light. I didn't want to go in heavy before looking for the fundamental reasons. I then jumped over to the blog to see if you had anything on it. Low and behold you were in and confident, so I still had an opportunity to get in at the bargain prices. It was now at 1.2810. I went all in with my regular trade. Good work Then jumped over to the fundamentals, CPI down, gives FED room to lower rates without worrying about inflation. No other news to drive such a spike. LUCKY I just happened to be around to catch the action. Luckier that I had your wisdom to bolster my confidence at the buying point. Right now it sits at 1.2695. This could turn out to be a really big one:0) YES

MESSAGE FROM JACKO 242

It is 3.10am NY time Tuesday November 18 and the market is at 1.2626

Yesterdays trade was a break even trade. I sold at 1.2700. After it moved 40 pips in profit I moved the SL to breakeven. Market moved down to 1.2621 (not enough to trigger the 100 pip TSL) before moving back up to close at break even. (Rule number 1: Do not lose money)
Even though I didn't have a loss trade, I was prepared to use the A‐H strategy to get back in at 1.2700 IF it went 50 pips past my stop point of 1.2700. It only went 41 pips higher so I didn't take the trade.
The market seems to be showing some support at the 1.2600 mark but I expect it to break very soon

Edit 7.30am NY time Market at 1.2630. The support at 1.2600 is still holding and may still rise further. But this market will move towards 1.2130 in the medium term. I am NOT a buyer against this downtrend so I am looking for another sell position. But I am NOT a seller at these levels at the moment. (too much potential for a quick and steep rise to rip up the sellers). Watching from the sidelines at the moment but keen to get in and make some dollars.

Edit 7.40am NY time Market at 1.2662 Just looking at trend line on 4h chart that drops from 1.4866 (on Sept 22), 1.2855 (on Nov 14) and 1.2798 (on Nov 15)..... the current market rise could be killed off at 1.2750 again.

Edit 11.50am NY time Market still at 1.2665 Market seems to want to move up. I will probably be a seller around the 1.2750 mark but want to see how it gets there and what it does when it gets there. It may be a stronger push up than I want.

but want to see how it gets there and what it does when it gets there. It may be a stronger push up than I want.

Emails

Email 1
In your message 241 regarding email 2, you said :....I have noticed something unusual since the start of this whole move down in
August which is that there is a lot more action in the Asian time zone ....If I was a sceptic I would say that China is playing a role in this huge strength of the USD and doing it in the Asian time period. However I am having trouble finding evidence of it in any Balance of Payment, TIC Reports, Net Foreign Purchases of Securites etc
If I could add to that, I would think there are a lot of US‐based funds/banks/trusts/ADPs etc liquidating their positions and repatriate cash back into the US to cover redemptions or other investment losses just so they can keep the company liquid. Many of them have done deals with Asian‐based banks over the years in many markets. So if they're invested in HK equities, they can't get out until the exchange opens. So this could explain, at least partly, the activities in Asian trading.
I was at Goldman last week and they're looking at three‐quarters of hedge funds going bust. Scary number. If our group of intelligent and informed traders can't figure out why there are increased activities, I bet the majority of the other market participants don't know why either. Sometime in the near future the reason will become clear and then everyone will say: oh this is why it's happened. But in the mean time, keep ourselves informed and take advantage of the volatility is what's important, yes?

Email 2
Hi Waine,really a good and safe trade yesterday at 1.27, the high side of thislittle range, sometimes it seems you have a crystal ball. If I did I would not sit down...LOL
Now it's 5.40 a.m. NY time, and the market, as you told, is finding support at 1.26. What about a sell at the breaking of the low 1.2575 (say 1.2560)? No, not yet..I would rather sell from higher up What does Geoff think? No he didn't like it either

MESSAGE FROM JACKO 241

It is 3.00am NY time Monday November 17 and the market is at 1.2592

As expected (see Fridays message), the market hit the 1.2800 mark (it actually went as high as 1.2855). Those of you who jumped in were braver than me.... (actually, it was a reasonably safe investment) ...... but you did well...

The market has hit a low of 1.2510 earlier today and is now rising.

I am now looking for a position to sell... The closure of the gap at 1.2700 would be nice.

I am a seller at 1.2700. I am buying on the basis that gaps are very often closed (much, much higher than 50% of the time....more like 90%). Also, I think the closure of the gap PLUS the round number barrier may be enough to kill off the rise of the market. (Please note: A safer way to take this trade is to let it rise through the 1.2700 mark and see where it goes. Then place the order as it falls back through the 1.2700 price)

Edit 5.00am NY time I have sold at 1.2700. I am now waiting for it to hit 1.2660 so that I can move Stop Loss to breakeven

Edit 5.15am NY time Market dropped to 1.2658. Stop moved to break even at 1.2700. ((If it goes up past 1.2700 by 50 pips...up to 1.2750... I will be looking to sell it again at 1.2700 on the way down later in an A‐H style trade...even though there will be no loss on the first trade)

Edit 7.00am NY time Market at 1.2637. My stop at break even wasn't hit so I am still in at 1.2700. (If it hits 1.2600 I will change my
SL to a 100 pip TSL)

Edit 11.20am NY time Market has just bounced up to 1.2700 to stop me out at Break Even. (If it goes up past 1.2700 by 50 pips...up to 1.2750... I will be looking to sell it again at 1.2700 on the way down later in an A‐H style trade...even though there was no loss on the first trade)

Edit 7.00pm NY time Market moved up to 1.2741 just missing my A‐H trigger, and is now back to 1.2650

Emails

Email 1 I've noticed that in the last few months there has been a lot more action during the Asian session. I have noticed the same thing since the start of this whole move down in August....If I was a sceptic I would say that China is playing a role in this huge strength of the USD and doing it in the Asian time period. However I am having trouble finding evidence of it in any Balance of Payment, TIC Reports, Net Foreign Purchases of Securites etc I used to like the market action when I was in Cape Town (GMT+2) as I would get up in the morning after a good night's sleep, while the market was quiet during the Asian session, and be in time for the London open when things started to happen. Then go out to the gym or whatever and be back in time for the NY open and any US economic announcements. Then in the evening things would quiet down again.
That seems to have changed since about mid August. Yes, I have seen the same Do you know why? Not yet

Email 2
According to the Fed, they did not intervene the the forex makets in the 3rd quarter, which means the huge plunge right around the opening of the Beijing Olympics back in Aug. was not their doing. Surely the fed cannot lie, can they?

Quote:
http://www.newyorkfed.org/newsevents/news/markets/2008/fx081113.html
The U.S. monetary authorities did not intervene in the foreign exchange markets during the July—September quarter, the Federal Reserve Bank of New York said today in its quarterly report to the U.S. Congress. I have noticed something unusual since the start of this whole move down in August which is that there is a lot more action in the Asian time zone ....If I was a sceptic I would say that China is playing a role in this huge strength of the USD and doing it in the Asian time period. However I am having trouble finding evidence of it in any Balance of Payment, TIC Reports, Net Foreign Purchases of Securites etc

MESSAGE FROM JACKO 240

It is 1.20am NY time Friday November 14 and the market is at 1.2744

One of the best things about being "retired" from normal businesses and having friends that are similarly "unemployed" is that I can all stay up talking and drinking until silly hours of the morning and not care about having to work the next day.
One of the worst things about being "retired" from normal businesses and having friends that are similarly "unemployed" is that THEY can all stay up talking and drinking until silly hours of the morning and not care about having to work the next day.

After a late night (continuing into early morning with guests who didn't want to leave!!), I finally fell into bed at around 3.00am local time which is 2pm NY time (when market was just under 1.2250). Although Mark rang me twice, I missed all the action as the market rose to my target area of around 1.2800. (If you had sold at 1.2800 you would be in profit). However, market is still floating around the 1.2740 area so I am not that concerned.

As discussed in Email 3 yesterday, I considered that the market would rise up to the Resistance level of around 1.2800. Having reached that area quicker than I expected, I think that the Market is factoring some major news from the G20 Meeting this weekend. I myself am sceptical....I think that they will puff it all up in terms of "intenational co‐operation", "concerted action", "unanimous agreements", yada, yada, yada... The fact is, the financial genie is out of the bottle and wreaking havoc...and they don't have a clue how to get it back under control. They have spent literally Trillions and Trillions of Dollars, Euros, Pounds and Yen without getting under control. They are driving interest rates to zero all around the world (even though it has NOT worked for Japan in the last ten years).

The big concern to me is that Bernanke is spending Trillions of Dollars (and encouraging every other country to do the same) to prevent deflation. As most of you know, his moniker of "Helicopter Ben" came about from a speech he made back in 2002 where he said that deflation is such a bad thing that he would print money and throw it from helicopters to prevent deflation. His rationale was that the Great Depression could have been prevented IF the banks had printed enough money. (by the way, that is less than 80 years ago...not that long when you think about it!)
The question that has never been raised is: What if Ben's "theory" is wrong??? And his theory of printing all this money does NOT work?? What is Plan B??
The question he has never answered is, given this huge infusion of money, how do you prevent runaway inflation, or worse, hyperinflation like Germany in the 1920's. (by the way, that is less than 90 years ago...not that long when you think about it!)

Anyway, back to trading.....
Given the amount of spin that will be generated over the weekend and the amount of desperate hope by the big market players, there will be extreme volatility...just look at the farce of Wall St lately.... Dow down 10% in two days, up almost 7% in one day....how can the value of the top 30 companies in the USA be considered to fluctuate in value like that??
Even though I liked 1.2800 as a sell position, I am happier to stand aside until after the G20 Meeting and the accompanying volatility is over and the market resumes its downward trajectory

Emails

Email 1 ( A very considered email)

Something many people are not talking about is deflation. It seems that deflation, if it takes hold, could even be worse than the inflation risk and be a direct cause of high unemployment due to massive fall of demand... employer's would be forced to layoff from lack of income. Yes, but the amount of money being thrown around seems to make deflation unlikely compared to stagflation (high inflation...which is already creeping up quickly, PLUS high unemployment which is also increasing )
Seems odd that with the trillions being printed deflation could even be a risk, but it can and we are already seeing it in certain areas. Some deflation could be good to allow prices/interest rates to find their right place however the real scary thing is that the current Fed Board will try everything possible to not allow deflation to take place. People think that the Fed is out of ammo once interest rates get close to zero, however Bernanke sees things much differently!

In a speech in 2002, he saw the chance of deflation being "extremely low" because of the main reason that the Fed can do many things to fight deflation even with interest rates ~ zero. I think it's the speech that he got the Helicopter Ben nickname, he talks directly about the technology of the printing press, here is a link to that speech:
http://www.federalreserve.gov/boardDocs/speeches/2002/20021121/default.htm.
I think it is very insightful to see his thinking on the subject, he even brings up the idea of manipulating foreign exchange values. It really shows that they are not even close to being out of "tools" even when rates are near zero, we are seeing these policies now in real time.

real time.
So the scary thing is that it seems that in some ways this is new territory, if there is a deflation risk they will try to flood the market with dollars to stimulate demand. But what if it does not work? What if they can't stimulate demand even after pouring many trillions of dollars into the market? Demand will be created because no‐one will want to hold on to increasingly worthless dollars.They will want to get rid of the cash for tangible things This is where I don't know of a historical example. Germany in pre World War II ...it led to hyperinflation and the rise of the Hitlers Nazi Party Ben's whole thesis is that the great depression largely could have been avoided if they would have found creative ways to pump enough dollars into the system to not allow the demand to drop. Other's have an exact opposite view, this is an awful experiment.

That is a scary combo, and one can already say it appears that Ben's thesis is at least partly in error, even with the discount window wide open demand is still falling and the banks are just hoarding the cash. Yes The big question is how far will they go and how many dollars will they pour into the market, even if it's not working, before they allow a correction to take place. Yes, because somehow I can't see Bernanke admitting he may be wwwwrong !!

Email 2 (We have some very intelligent members in our group)
Paulson came up with his revised TARP plan. Here's how it will work, according to CNBC: "According to economists, the Treasury would simply go out and buy some of these consumer‐debt securities whenever the price fell far enough to push the yield up to a certain level, say 9 percent. If investors knew that the government would enter the market... that would encourage them to buy up the debt as well....The market for such securities would unfreeze..."

Now doesn't it work like a price control? Yes A price ceiling on the price of credit? Yes Economics 101 tells me this is going to create a shortage in the supply of credit when there is already very limited supply, and the gap is going to be filled with Treasury's money. yes I don't have the exact number off the top of my head but I think the consumer debt market is anywhere from $5 to $7 trillion dollars. Where are they going to find money to fund this kind of operation? The printing press...the Fed has a policy of "printing" their way out of this crisis....I think that they are flirting with hyperinflation

Email 3
What are your thoughts on Thursday's trading? It seems like everthing is trading with the DJIA. DJIA trades higher, oil and euro follow... Also, looks like eurusd put in a double bottom on the daily. It held pretty strong yesterday when the dollar was killing the gbp as well as a few others. It still hasn't really broken the down trend, but another strong day or two should do it. Noooo,....I don't think so...we will see break of 1.2300 soon... possibly late next week after everyone realises the G20 does NOT have an answer to the crisis... (continually printing and throwing money at the crisis isn't working and won't work)

MESSAGE FROM JACKO 239

It is 1.05am NY time Thursday November 13 and the market is at 1.2474

Well I missed a bullet yesterday. As stated in yesterday's Message, I was not feeling so confident about this trade of Geoffs . It didn't feel as weak to me as I would like. I am staying out until it gets back (hopefully) to the the higher levels (around 1.2800) where I think that it a better price to sell.
I felt for Geoff on that trade, as I think he was a touch unlucky, but it is one of the hazards of a breakout system that sometimes the market just pips out under the break and then moves back up. However, I can assure you that Geoffs trading record is exemplary and his returns in the last eight months are exceptional.

Edit 9.00am NY time Market is at 1.2500. Market has been sticking to the 1.2500 (plus or minus 100 pips) in the last 24 hours. I think that this market is showing weakness at the present time.

Edit 9.30pm NY time After a late night (continuing into early morning with guests who didn't want to leave!!), I finally fell into bed at around 3.00am local time which is 2pm NY time (when market was just under 1.2250).
Although Mark rang me twice, I missed all the action as the market rose to my target area of around 1.2800. (If you had sold at 1.2800 you would be in profit). However, market is still floating around the 1.2740 area so I am not that concerned.

Emails

Email 1
I'm going to sell on a break of 1.25, I think that is where the real support is at. That low yesterday was made during the lowest volume hours 5‐7 pm est, and it was a very quick spike. The 1.25 area has held twice today already. Geoff has already placed his orders for the sell at 1.2470 but it (the down push) just doesn't seem strong enough for me ...he may be right, but I am more selective than him
What do you think? Geoff can have it on his own

Email 2 (a follow up to the Email 1)
Thanks for the quick reply. Can you explain "(the down push) just doesn't seem strong enough for me ..." Was there something about the trading today that made you feel there was not going to be another leg down today. Or was it just instinct from having watched the pair trade for so long that you know it so well. The market was dropping down towards the area but recoiling quickly back up each time…It just didn't seem as though it had the willpower or strength to break the resistance strongly enough. As I said earlier, I am more selective in my trades (and prefer to use the benefits of this business: liquidity, leverage and rapid compounding) to increase my returns
I did take the break of 1.25 earlier today and got slapped in the head by Mr. Market. LOL…I like that expression

Email 3
Why are you looking at the 1.2800 level to sell Because there is a trendline on the 4H chart (from the high of 1.4866 on Sept 22 and touching a number of high points on the way down) that is showing resistance at around the round number of 1.2800 and why don't you buy at the present price if you think it will go up. because the current trend is down

MESSAGE FROM JACKO 238

It is 12.35am NY time Wednesday November 12 and the market is at 1.2550
We had another win yesterday. We sold at 1.2650. Market dropped to a low of 1.2475. Our TSL was adjusted to 1.2575. Market rose up to close us out at 1.2575 for a 75 pip profit.
Easy money for very little effort in less than 12 hours. (I liked it so much...I might even do it again...and again...and again..until I die!!)

Some of you bought back at lower prices than me to make larger profits......Congratulations (gnash, gnash of teeth...LOL)
I  am looking for new entry point for another sell point....will probably wait for US session...

Edit 8.55am NY time Market is at 1.2542 Young Geoff is has placed a sell trade at 1.2470 (on the break of yesterdays 1.2475 low)
I am not feeling so confident about this trade. It doesn't feel as weak to me as I would like. I am staying out until it gets back (hopefully) to the the higher levels (around 1.2800) where I think that it a better price to sell

MESSAGE FROM JACKO 237

It is 2.30am NY time Tuesday November 11 and the market is at 1.2736
In one of the most disturbing articles I have seen for many years is this article on Bloombergs yesterday about how the Fed has veiled the identity of recipients of $2 TRILLION in loans.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aatlky_cH.tY&refer=worldwide

"Nov. 10 (Bloomberg) ‐‐ The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral. Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

This is starting to reveal the real depth of the financial crisis looming in front of us.

The Euro has continued to vacillate in a narrow band but it is starting to look weaker in the near term.

Geoff is looking at a sell at the break of 1.2650 on the 4H chart on Nov 6 at 8.00pm. I am joining him.

I have just placed my order to Sell at 1.2650 with a 100 pip TSL. Also, if it goes 40 pips in profit, I will be moving the stop to Break even.

Edit 7.15am NY time My order is still in place. I am sorely tempted to move the sell to 1.2700 (because I believe the direction is correct and I like to sell at a high price) but will stay with the current order.

Edit 11.00am NY time Order at 1.2650 was triggered. Price was moved to break even at 1.2610 after market dropped 40 pips in profit.
Market at 1.2550. 100 pip TSL now in place.
As stated in yesterdays Message, a big move will happen today.

Edit 4.30pm NY time Currently 130 pips in profit. Market has tried to shake us out but the 100 pip TSL has not been hit.

Edit 10.30pm NY time Market dropped to a low of 1.2475. Our TSL was adjusted to 1.2575. Market rose up to close us out at 1.2575 for a 75 pip profit.

Emails

Email 1
I guess I need help in figuring out how one could manage their FX buy & sells without being near the computer......I work for the man still ......I will try to give you an example.. OK
If I were to place a buy order for the Euro and have a 100 pip SL and need to move the SL to beak even once the market goes my direction say +50 pips how could I preprogram that in with out sitting in front of the monitor?......So I thought that maybe I need to place a 50 pip SL and have a Trailing SL of 50 pips...I found that most of the time that would not work because the market floats back and forth between 50 and 100 pips but with no consistency.....and I would get stopped out at or near breakeven when the market went + 100 plus pips Yes, a 50 pip SL is too small in these volatile conditions
 
Then I thought that maybe If I could place a buy (or sell) order with a 100 pip SL and go for a 75 to 100 pip profit........ Hmmm good lateral thinking...As long as you are right much more often than you are wrong, it will work
I hope that I have not lost you. No, not at all ............ What you are asking me, in essence, is "how do I conduct one business while working for another business?" ...I think perhaps the solution is to only trade outside the times that you are currently working

Email 2

I hope you had a great weekend. I was with my girlfriend in her home ‐town and make some healthy walks and trips. Good work...the advantage of Forex trading is that you have the weekend off
What do you think about Eur/Usd that is getting into a tighter range?There is Higher Lows but Lower Highs too on 4H charts. Yes, it is starting to tighten up...a big move is coming soon
Do you believe that the market will hit 1.600 again in 12 months? Why do you think it? I don't know at the moment, there is sooo much going on that we don't know about...see todays blog about the hidden $2 TRILLION loans
What do you think about Obama? I hope he is a BIG improvement on GWBush !!!!!!
My opinion is that Obama is going to have a good position because he takes Economics over the ground and every single improvement even a little one will be attributed to the good. I think he has a difficult job in front of him

MESSAGE FROM JACKO 236

It is 3.00am NY time Monday November 10 and the market is at 1.2810

The record high volatility in currencies and stocks looks like persisting for some time yet. The fear that the credit crisis would cause a collapse of the worlds financial system is receding. However, the really ugly labor figures released last week are now showing the damage the financial crisis has caused to the wider economy. It showed that the US unemployment rate is likely to rise significantly above the 6.5% registered last week, its highest reading since March 1994.
As discussed previously, stagflation is when inflation takes off (which it will because of the Trillions of $$ and Euros etc being pumped into the economy) but it is joined by high unemployment (which usually holds inflation down). Having experienced stagflation in the 1970s and early 1980's it is an awful thing. There was high unemployment but interest rates went through the roof. That meant that cash holdings were rapidly devalued, high interest costs on mortgages made property unattractive and stock dividends couldn't match inflation rates. Everyone lost…except the banks…the 1980's were when massive bank deregulation started… and for which we are now paying the price.
Back to trading...I am looking for a new trade. Market is getting into a tighter range. I think a big move will happen in this week

Emails

Email 1
You've said that "Thats why I use Trailing Stop Losses...takes the anxiety out . Also stops me getting the "woulda, shoulda and couldas" later" Believe it or not, I was stupid enough to go and try putting my stop losses manually based on the "price action"… All I got was really bad cases of couldas, wouldas and shouldas! I can't believe I was sucked into thinking that I could .optimize. my trading. I've also read somewhere that "when you are successful, don't try to change what makes you successful!" Damn, I wish I could just learn all this stuff without actually learing it by paying money for it! It also reminds me of what Jesse Livermore said: "A man has to have experience and he has to pay for it". Anyway, thanks again for all the wisdom you share with us. The main purpose of establishing the two groups was to help traders from making the same COSTLY mistakes that I have made over the years.

MESSAGE FROM JACKO 235

It is 1.00am NY time Friday November 7 and the market is at 1.2727

Today is day for the Non Farm Payroll figure to be released at 8.30am NY time. On the basis that they are talking figures as high as 350,000 with a consensus of a huge 200,000 increase in non‐farm unemployment, then I would recommend that you be very careful in having any trades open at that time.

Also see here
http://www.forexfactory.com/showpost.php?p=1425775&postcount=7

I will be watching from the sidelines for all the fireworks

Edit 8.50 am NY time Well, that was a fizzer ! It has barely moved 100pips.
Interestingly, the revision on last month was 284K (up from 159K). With an error rate that high, you have to wonder what value these figures have to traders (284/159 equals a 78.6% error!!... And this is a regular occurrence with the NFP. The (non‐Government) ADP figures are even worse. They are notorious for being appallingly inaccurate.

Emails

Email 1

After watching the VIX fall to lower levels and the credit crunch panic starting to abait I was wondering if you feel we are returning to a situation where fundamentals will start to dictate the direction of the EUR/USD or do we still have a bit to go. I think that there is more to go...A situation as serious as we have just had doesn't go away in three months...the aftershocks are still coming out..especially Credit Card debts
I ask this as I see a wedge forming on the 4H chart and if we see a breakout to the up side would you consider the bull run to have resumed? Yes, but there may even be a false break out I supppose if we see a breakout to the down side then we may see a test of the 1.2130 area. I think that is more likely As always your thoughts are appreciated I think we will see another test of the lows. In the last two days we have seen the Dow fall 10% ... thats 10% in two days !!...and it is not at a speculative top, it is at sub 10,000 level....There is much worse news to come out Another strategy is to trade the range within the wedge

Email 2
During the course of the position, you may see the market defining another pattern that is starting to counter the direction of your trade, which may result in a breakeven. In such a case, would you close the trade, or insist on seeing the trade to the end? I prefer to let a trade play itself out...Again, it is part due to the fact that I have see the effect of the "woulda shoulda couldas" on traders...I also have a policy of not interfering with a trade once it is in play..the emotions are too variable

Email 3
Today I've placed two trades based on fundamental expectations related to interest rates for Euro and British pound. As for Eur‐Usd and GBP‐USD I was wondering should I place order at higher level or to go for break trough lower level. Since price was closer to daily support one I have decided to go (at that moment) with safe approach, break trough given level shown below (I won't bother you with British pound): As you can see from attached chart my order was triggered after announcement. And shortly after my order was closed for loss. The volatility took you out
Now the price is where it was supposed to be at 1.2685 well below my entry point. The volatility took you out
Could you explain to me, with your experience, what happened today with price action? After the announcement the market fell , which is the logical result of a rate cut. But then it rose because some traders obviously thought that the rate cuts would be good for the economy...But then common sense prevailed and the Euro went back down again based on interest rate differentials with the US
I'm not that angry with loss I suffered, but with the fact that my orders would be successful if there was no whipsaw. Hmmm, that is what makes trading difficult in volatile times. The required amount of stop loss not to be whipsawed out becomes too large, and too small a stop loss gets killed by the volatility. And the option of no stop loss is soooo dangerous that it is not even worth discussing

Email 4
I was watching the market when I saw your blog, you were a seller at 1.3000. But it moved so quickly up i decided to wait a little, while making a few pips on the way up. when it stabilised a little at 1.3075, i decided to go short at 1.3055. it then moved down 40 pips and a bit more so i placed my SL at breakeven, with a TSL of 100pips. Then i promised myself not to touch it, let it unfold. So i got out of the house, left it overnight as well. Result, stopped out at 1.2930, +125 pips. I'm happy with the result, but the fact to give back 100pips, pinches me a little. But heah, i did it, i didn't touch it until it unfold completely.
Excellent trading !!! I can't trade like that for the group...there isn't enough time to get all the information out in a timely manner.
And most of the group are not at their computers when my SMSes are sent so I have to take a longer range target approach. However, you are now trading like some of the better traders from the group. They use my blog as a guideline but fine tune their entries.
(They don't slavishly follow me as a signal service but as a resource to make better decisions)
Again, excellent trading


MESSAGE FROM JACKO 235

It is 1.00am NY time Thursday November 6 and the market is at 1.2870

I am still smarting from the fact that my 1.3000 trade was killed only 15 lousy pips past my 1.3100 Stop Loss after moving from as far away as the low 1.2800's when I placed the trade at 11pm NY time on November 4. So close...but no cigar!
It is even more galling when the market turned and dropped straight back down and would now be 130 pips in profit. Aaauugghh!!
Anyway, today is another day and the market has no memory. As I advise others, "remember, you did what you thought was right at the time, based on the best information available to you...so don't beat yourself up. Take it on the chin and put it behind you..Tomorrow is another day and another opportunity"

Emails

Email 1 (This one is really ironic)
I was wondering whether you considered increasing the TSL even further? When you look at something like ATR (14) of the daily, it's over triple of what it was last year. No. I can't afford the risk of a higher (than 100pips) on the Trailing Stop Loss. A better strategy is simply to be much more selective and wait for better bargains.

Email 2
Do you watch your trade or do you use a parent (pending?) contingent trade or can you set it and forget it? I set and forget...(but I am still drawn to watching the trade unfold) The big lesson is not to make a decision in the heat of the trade....When to get in isn,t as much of a problem as to when to get out. Since trading with you I've been watching the trade and to say the least it causes anxiety. Thats why I use Trailing Stop Losses...takes the anxiety out . Also stops me getting the "woulda, shoulda and couldas" later I.m winning so it could be worse. Winning is much better than losing....LOL

Email 3
The best thing we are learning in our short time with you is PATIENCE. It comes from old age...LOL
Only entering those trades in which we have a high degree of confidence and passing on everything else. Yes, especially in these volatile times..I feel that I have been trading the wild GBP/YEN lately instead of the more stable EUR/USD I do wonder if the Traders you are bringing in will be trading other pairs as well? I personally like the EURUSD, GBPUSD, USDJPY, USDCHFand GBPJPY. No, I focus only on EUR/USD and I want to only stay with that pair

We missed the entry on your trade yesterday but managed to pick up 70pips on Geoff's trade ‐ we exited when it was consolidating rather than waiting for the TS to take us out. Good work...because of the time period between seeing a consolidation, placing my trades and the Funds trades, writing it on the blog, writing the SMS message and sending the SMS message, you can be more flexible and nimble than me)

Email 4
In the book, "Lessons from the Greatest stock traders..." he talks about Livermore and his pyramid method of increasing his profits.
You recall, he'd buy stocks hitting new highs as they pass thru certain resistance areas (which we do) and pyramid additional buys on increases in price. Is there a place for the pyramiding part ‐ buying more ‐‐ in your methodology? I looked at that early in my trading...I prefer to go in heavy so that I can get the earlier part of the trade movement. I will occasionally go in again on a trade with another 100 contracts (I go in with 200 contracts), but it is rare If not, how do you compound profits? Simple...grow from 5 contracts to 10 contracts to 20 contracts etc to 200 contracts over time

mail 5
I see on the blog it says you were a seller at 1300 at 11pm NY time.I never got the sms saying this. I only recieved an sms less than 1 hr ago from writing this email saying you were a seller at 1300. Do u think their is something wrong with getting sms's to my mobile?
No I sent the SMSes then stopped them because it also included a message about Geoffs trade which was quickly outdated by the time I was sending it. I then sent another one with just the 1.3000 trade out much later The other ones have come through fine. I should probably not short it anymore I guess as the market is 160 points away from your entry. What a bummer! No, I got my ass kicked...by a lousy 15 pips beyond my Stop Loss..Bummer…LOL!

Email 6
(I have been sent more copies about the story of the "Amero" that is supposed to replce the USD in early next year)
If this story were true, you would see massive selling of USD...I am not seeing it. Besides, the US (and all economies) can get out of debt by just having a bout of high inflation. All debts are devalued. We had it back in the 1970"s called stagflation 3 years at 15% inflation cuts the nominal value of all debt in half...Ask your parents (or maybe your Grandparents...LOL) about the 1970's

MESSAGE FROM JACKO 234

It is 2.00am NY time Wednesday November 5 and the market is at 1.2890

Geoff trade yesterday (at 11.00pm) was a small win. He sold at 1.2900. As market fell to 1.2860 he moved stop to break even. As the market fell to the low of 1.2792, he moved his TSL to 1.2892 locking in an 8 pip gain. Market then moved up and closed him out at 1.2892.

Edit 2.15am NY time Am in a coffee shop and just watching this market going down again. The 1.2900 area is a good sell area today

Edit 8.55am NY time My sell order is sitting there at 1.3000 waiting to be filled.
I am a seller at 1.3000

Edit 10.30am NY time I have just been spanked by the ISM Non‐Manufacturing PMI Report which came in much worse than expected.
This kicked the volatility in the USD into overdrive and I have just taken a hit of 100 pips when the TSL was hit.

Emails

Email 1
Did you know the (ISM Non‐Manufacturing PMI ) report was coming out and thought it would be a better result or did you accidently miss this report when entering the trade? The Report does not usually have anywhere the amount of impact it had today. The market is being whipped by any report and is magnified by the increased volatility

Email 2
I would also ask why you don't post a take profit number or at least a reasonable approximation. Targeting a take profit number is assuming that you know where the market will go...As much as I hate giving the (maximum) 100 pips of the TSL back to the market, I have found that , over time, the TSL is effective. It also has the benefit of reducing the "woulda, shoulda and couldas" which mess with a traders head after a while.

Email 3
I have had a number of traders send me the video of the "Amero" currency conspiracy. If this (conspiracy theory ) were true, you would see massive selling of USD...I am not seeing it.
Besides, the US (and all economies) can get out of debt by just having a bout of high inflation. All debts are devalued. We had it back in the 1970"s called stagflation3 years at 15% inflation cuts the nominal value of all debt in half...Ask your parents (or maybe your Grandparents...LOL) about the 1970's

MESSAGE FROM JACKO 233

It is 2.30am NY time Tuesday November 4 and the market is at 1.2641

Update below

My short trade at 1.2800 was closed by the 100 pip TSL. The market bottomed at 1.2525. and my TSL closed out the trade at 1.2625 for a nice 175 pip profit in less than 24 hours. Easy money!
Geoff's 1.2650 shorts were closed at breakeven. (I think he was a touch unlucky....his strategy and direction was correct but his caution and risk minimisation strategy was a bit too tight. Still, he remembered the rule: he did not lose money!! He lives to trade again.)
The Fund is off to an excellent start for the Quarter.
Looking for another position to trade

Edit 11.00pm NY time Market has been moving up to the 4H trend line (touching tops at Sept 22 , 24 and 26 and Oct 29) where the target was around 1.3100 for today. (I didn't want to trade it because I would rather wait and sell in the direction of the downtrend since Aug).
Market has gone as high as 1.3047. (400 pips in 18 hours...yowza!! This volatility is wild at the moment) I am looking for a sell if the market moves to 1.3000
I am a seller at 1.3000

Geoff is also trading the short side. For those of you who are willing to trade a shorter time frame, he is looking at a break below the 1.2910 low in the last 4 hours and has a sell at 1.2900
Geoff is a seller at 1.2900

Both trades have 100 pip TSL but when it goes into profit by 40 pips we go to breakeven

Edit 11.15am NY time Unbelievable...as soon as I hit the SMS text messages the ass starting falling out of the market big time. In less than 10 minutes its dropped 70 pips !! I have stopped the SMS messages to the rest of you. Hmmm, maybe I will send them in case it bounces back up to 1.2900

Edit 11.45am NY time. One minute the market was at 1.2950 I was happy with what I had written on the blog and the SMS message. I was thinking that I had plenty of time to send the SMSes, then I saw the market sinking like a rock towards the 1.2900 mark. I apologise for the delay

Emails

Email 1
I've been reading Reminiscences of a Stock Operator recently, and after he makes the point that you should decide whether it is a Bull or Bear market and trade accordingly, he also says 'If you're not sure why it is moving the way it is ‐‐stay out!'‐‐‐I was wondering whether you felt confident of why the Euro is falling at the rate it is? The US fed has dropped its rates...now it is everyone else's turn (and Trichet was quite vocal saying that he will aggressively attack rates)

Email 2
While I was learning and trading this new system/strategy, I dropped down to mini contracts at $1/pip instead of the standard contract at $10/pip which I normally trade and a remarkable thing happened – I had no pressure on me, no anxiety, no panic, no sweating and no emotions while I traded. The pressure to make huge pips on a single trade disappeared. I just felt like being "In the Zone" or on automatic pilot. Aaaah you have found it...the Zone where you relax and trade Also, the $ value of my account no longer seemed important, in fact, the only time I look at my account value is during my weekly reconciliation of trades. My trading has now degenerated to just making pips instead of money, all emphasis on "must make money" has flown out the window! Of course, confidence in the system/strategy helped a lot also. My win rate is 89% and I am working on cutting my losing trades earlier on the basis if I'm not in profit after 3 bars, then I'm out. It may kill a few potential profit trades in the bud but capital preservation comes
first – and, I can always re‐enter. exactly
Anyway, the point in this email is not to "show off" but to ask your advice on broker management and loading up on contracts (leveraging my account). Apart from having confidence in myself and the system/strategy, are there any other ways to maintain trading "In the Zone" once I start stepping up the number of contracts and therefore $/pip value? I intend to do it on a gradual basis so that the next level of $/pip is not a big jump and to stay at that level until I feel I am back "In the Zone". Then when I am comfortable, move up to the next level etc. Thats the way to do it...nice and easy I know you trade 200 contracts split between 4 brokers (50 contracts each) and you do this because of risk and competition. I would just like to use 1 broker so what would your recommendation be for the maximum number of contracts with 1 broker since I have, up to now, no problems at all with them? Then stay with them ....until you have a problem how do you protect yourself against the broker going bankrupt or worse still, running off with the money? I use 4 of the largest......it doesn't kill the risk but minimises it
Is it worth using a tax accountant specializing in trading do you think? Yes What is the best way to deal with this? Finding one is the issue...look for a tax accountant that is a trader himself
Since you are a US Citizen, I assume you are still paying US taxes but does your residence in Hong Kong reduce this and if so, how? I'm sure they have a tax sharing agreement with the US so that you are not double taxed. This also being the case, does that mean you have to trade through US brokers (so they can report to the IRS etc)? Are there any loop holes? LOL...ask the tax accountant ...then come back and compare notes

Email 3
I have been hearing stories like this for about a year now. (It was a video about the "Amero" being used to get this crisis out of the way...)
I think that the US will just cause huge inflation (15%pa) to make all debt easier to service. They did it back in the 1970's. It was called stagflation. We willl see it again VERY soon.

Email 4
Funded my account with another $500 yesterday as I went short at 1.2360 with one mini as I heard the eu would cut rates. Trade went against me but i thought it would come back but it hasn't and the euro is flying. I set my sl way way above NOOO!!!!! 100 pips TSL is usually enough to tell you if you are wrong because I thought it would come back down again. Big mistake again. I'm still in the trade and will just watch it over the next hour or so and then take the loss. I can't believe I have done it again. LOL...reminds me of the day some 15+ years ago when I dropped $150K in a day on some futures
contracts because I was an idiot...That is probably worth $500K nowadays. I learnt my lesson from that trade

Email 5
I was reviewing the blog and you indicated that you will be using additional traders to assist you. My question is, due to my own paranoia and due to my complete trust of your judgment, will you be personally reviewing each trade sent out so that it makes sense to you and is sound in your judgment? Yes and we will be nominating which trader is making the recommendation and why

Email 6
1. You move your TSL manually ... with an initial 100 pip TSL now, you manually move the stop to breakeven after 40 pips. Do you wait for the bar (on whichever time frame you are using to monitor your trade) to actually close at the pre‐determined price level(s) (or better) No, I don't look at the bars OR can price just trade through the specific price target(s) before manually moving the TSL? yes
 
2. In Email 223, you went back to Oct 2000 to see the low. How far back should I go to see the low or high? Depends on what you are trying to achieve...I looked back to OCT 2000 to give me an idea of where the market may be going in the long run Who is Geoff? Geoff is one of the traders in the group who had excellent results over the period that he has been trading. We have his trade statements. We have asked him to join us Who is Mark? Mark is an ex‐broker who has worked at the biggest brokerages and was a senior manager of large groups of traders. He know everyone worth knowing...and they know him. He now works with me

MESSAGE FROM JACKO 232

It is 3.45am NY time Monday November 3 and the market is at 1.2805

The market is looking as though a resumption of the downtrend is likely. We will see rate announcements by the ECB, BoE and Australian Central Bank in the coming days. It is expected that they will all drop their rates. As a result, I would expect that those currencies may fall in the immediate future
I am really,really, really busy with the End of Quarter for the Managed Fund today so I will probably sit on the sidelines

Edit 8.35am NY time I am a seller at 1.2800. I believe that this market is heading down and 1.2800 is sufficiently high enough to make the trade.
Also Geoff is a seller at 1.2650 on the break of 1.2665 on the 4H chart from Oct 31
Both have 100 pip Trailing Stop Losses but when the trade has 40 pips profit the Stop Loss is set to breakeven.

Edit 8.55am NY time The market took off downwards too quickly to get the message out in time. By the time I placed my own orders, wrote the blog and the SMS text the ass had fallen out of it...Now at 1.2770 and rising ..you may get another chance.

Edit 9.50am NY time Market at 1.2786 Coming all the way back up. I am sending out the message again to get set at 1.2800... My first order's Stop Loss is at break even so I can't lose on that trade but this 1.2800 looks good "sell" area

Edit 11.20am NY time... I had forgotten the new time in the US started. Have revised all the times on todays blog. Market has just dropped to 1.2700 so my 100 pip TSL is now in place...I am off to bed. (A guaranteed winning trade now). The Fund has had a great starting trade for the new Quarter My eyes are burning from all the emails and End of Quarter computerwork

Edit 8.55pm NY time Market at 1.2590. My shorts at 1.2800's are well in the positive. Geoff's 1.2650's were closed at breakeven. (I think he was a touch unlucky....his strategy and direction was correct but his caution and risk minimisation strategy was a bit too tight. Still, he remembered the rule: he did not lose money!! He lives to trade again.) The Managed Fund is off to a flying start this quarter.

Emails
I am starting to work through the backlog...please be patient ...I have had a flu that has given me headaches .... I am off to the optometrists to get my spectacles prescription checked and updated.
I have been answering emails again as from today. Please be assured that I answer every email...and in the time order that they are received. However, I have been really busy with our re‐organisation and the Managed Fund's End of Quarter paperwork.