MESSAGE FROM JACKO 454

It is 1.00am NY time Tuesday September 29 and the market is at 1.4633

The market moved up again to the steeply sloping Resistance line area at 1.4678 and then fell again during the US session. I believe that we may be in the initial stages of a significant retracement down to the Support Line (and possibly beyond). The Resistance line at the present time is at 1.4650. Allowing for some volatility in this market, I could be interested in selling at a "bargain" price of between 1.4650 and 1.4700 sometime today.

Edit 3.00am NY time Market is at 1.4632 I am now just waiting for a good SELL opportunity between 1.4650 and 1.4700 that I think will occur sometime today. No SMSes have been sent yet

Edit 8.00am NY time Market is at 1.4564 I was hoping that London would take us UP so that I can sell this market. The drop in London trading was disappointing but has added further evidence that we have seen the short term top at 1.4843. Another bounce up to the Resistance line area is not out of expectation. We have to wait patiently for our fish to come back into range (of 1.4650).
The alternative was to jump in at a more "risky" level with an increased possibility of a loss.

Also we have again seen today an example of what we were discussing some weeks ago about the change in direction that often occurs in the 30-60 minutes before the start of the new session. In todays case UK traders closed their positions and the early traders in the US session reverse the direction (based on their belief that the UK session has moved the market too far in one direction) .

Edit 12.10pm NY time Market is at 1.4545 The market has done very little so far in the US session, so we continue to wait for a move back up into our SELL area.

Emails

Email 1
Welcome back. It sounds as though you had a great time off. Yes it was great. Not as beautiful as cruises in Europe or the States but definitely more interesting. Asia is a completely different culture from the West. And Vietnam and Cambodia are still very poor countries compared to the rest of Asia, but it is very different and hugely interesting.
I have a couple questions regarding how you find the resistance and support levels on the 4 hrs chart.
Once the trend lines are drawn for the highs, how do you figure out the resistance point? I still do not understand how that is figured out.The Resistance level is found by looking at the horizontal price line that would intersect the Resistance line at the 4H bar (so once the Resistance line has been drawn, the Resistance price is found by looking horizontally across at the price axis). When a Resistance line is downward sloping, the Resistance price will be lower for each consecutive 4H bar
The same thing applies to finding the support level. Will you please explain how you determine the actual level? Same as above ... The Support level is found by looking at the horizontal price line that would intersect the Support line at that 4H bar (so once the Support line has been drawn, the Support price is found by looking horizontally across at the price axis). When a Support line is upward sloping, the Support price will be higher for each consecutive 4H bar

MESSAGE FROM JACKO 453

It is 1.00am NY time Monday September 28 and the market is at 1.4592

I am back after a beautiful week cruising the Mekong River in Vietnam and Cambodia. Not a computer or cell phone all week. I just arrived back in Hong Kong so I have a backlog of work in front of me.

But more importantly, lets get back to trading and making some money. I see the market rose as high as 1.4843 and is now retracing. The question is: Has the market peaked and is this a retracement... OR... has the market trend changed direction on the 4H charts?

I have my charts open to 300 periods of the 4H time frame.
The Resistance line. By linking up the highest points on the 4H chart from 1.4843 (Sept 23) , and 1.4802 ( Sept 24) and 1.4719 (Sept 28) we can see that the Resistance line is currently at around 1.4650.
The Support line By linking up the lowest points on the 4H chart from 1.4045 (Aug 18) and and 1.4177 (Sept 2) and 1.4253 (Sept 4) we can see that the Support line is currently at 1.4400.
The 50% Fib line The nearest 50% fib is from 1.4045 (Aug 18) and 1.4843 (Sept 24) and is at 1.4445.

I am going to watch this a little longer to get my trading into the feel of the market. I may watch the London session to get into synch with it.

Edit 3.00am NY time Market is at 1.4620 It looks like London may take the market up in the first hour or two. I am gradually getting through the backlog of emails and Fund work and watching this market with interest

Edit 8.00am NY time Market is at 1.4645 As expected, London took the market up. It rose as high as 14664. My Resistance line outlined above was a little sloppy. It is a steeply sloping Resistance Line and at 1.00am NY time it was at 1.4700. The Resistance Line at the present time is at 1.4690. I am still getting back into the feel of the market, but it is feeling weak. However, I would expect it to move back up to the Resistance line again and then bounce down.

Edit 12.20pm NY time Market is at 1.4666 Market is still moving up to the Resistance line area. I am getting itchy to trade but want to see what the market is going to do at the resistance area.

MESSAGE FROM JACKO 451

It is 1.00am NY time Thursday September 17 and the market is at 1.4728

The last trade did not turn out the result I would have liked. However, the trade was a full 100 pip loss and resulted in only a 2% loss of trading capital. We move on to the next trade opportunity.

Having said that, the blog was started two years ago in Oct 2007 and I have been posting every day. Mrs Jackson has politely asked me to have a one week vacation without the computer. (She asked me whether I wanted to sleep with her..... or the computer next week. She also said that if I even opened the computer, the bed would freeze over !....Hmmmmm...OK !!). We often travel but always book our flights for the weekends so as not to disrupt my trading. However, this time Mrs J wants a one week No-Computer week .
So I will not be trading or answering any emails next week.

Edit 3.00am NY time Market is at 1.4745. The bullish rise in the Euro since Sept 7 has been very impressive. It must be getting near its overbought climax very soon. I will be waiting for the first significant correction before entering again.


Edit 8.05am NY time Market is at 1.4711 The market has gone 50+ pips past my stop Loss and is now back to the same area as when I was stopped out (If this was in the direction of the Trend I would be all in as an A-H trade). However, it is NOT in the direction of the trend, so I have NOT placed an A-H trade. However, I will be watching this with interest to see how the market moves in the next 24 hours. (I am still looking for ways to improve my trading). I am on the sidelines.

Edit 12.10pm NY time Market is at 1.4740 After dropping as low as 1.4688, the market has bullied its way back up to the 1.4750 area. I am still on the sidelines.

Emails

Email 1
I was wondering whats your opinion in either moving your stops to break even or locking in profits once your in the green. Many times i'm in a winning trade where i'm up 50+ pips only to have it reverse on me and hit my SL instead. so what originally was a profitable trade now became a loss. an example would be the trade you are in now, last night the position you took was well over +50 pips in profit, but now your over -50 pips. I agree but,
Firstly, that would require me to start taking profits at only 50 pips...and I am looking for more than that amount of pips per trade.
Secondly, there have been many successful trades where the market has moved back and forth more and less than my entry point in the initial stages.
Thirdly, I tried the strategy of moving SL to BE very quickly in early this year (January) and the strategy was not successful. We didn't lose pips on most of the trades, but we lost some good opportunities to make profits because we were choking off the trades too quickly

Email 2
I was just wondering about the stop loss on this trade. I see the next resistance is 1.4720 and with the normal 100 pip s.l.our S.L. would be 1.4715. In circs like this do you not increase your stop to put you a bit past resistance . No, I understand your strategy but if it pops 1.4720, there will be a lot of Stops so it will quickly shoot past about 10 -20 pips as the SLs are popped. That would take the SL to 115+ pips which is too much…with NO guarantee that it would be successful

Email 3
You mentioned last year's high of 1.4720 is a backstop, what do you mean by this? When a market is rising, previous highs act as Resistance (as brokers are cautious about buying at a new "higher" level). Now if you look at a weekly chart back to December 2008, you will see that the market rose to as high as 1.4720 and has not been higher since that time...so it acts as a price of Resistance...

Email 4
Would you use an A-H trade on this last trade? An A-H trade is only used for trading with the trend...It is a backstop/ insurance policy for the trend trading. Having said that, the potential for a correction is in the stratosphere level...It must be very close, but I am not prepared to risk it at this point in time...I now want to see a much more defined turning of the market

Email 5
I know we've been expecting the march ever northwards not to have happened, then to to retrace, or the bull to die; but it has not, kicking down fresh trendlines and storming forth with its new highs. Is this just something we've got to live with occasionally? Yes. But usually I am on the right side of the trade
Is the bear dead, or wounded and dangerous? Certainly not dead, but is wounded and VERY dangerous

Email 6
i have 3 years anniversary of married today so i would like to ask you if you have some ideas how to explain to wife that sometimes i need to look at the charts from time to time ( she if very annoyed by that :) Mrs Jackson and I agreed that work stops for the weekend and I only focus on her for those two days...It is one of the best benefits of being a trader...You can stop for the weekends because the markets are closed
i was trying to show her how things are going but when i start talking about swap etc. she falls asleep:) Mrs Jackson specialises in shopping (and the bedroom) and leaves me to specialise in the trading. However, we have an agreement that I will not work on the weekends because they are "her" days

http://www.jacksonfortressmembers.blogspot.com/
jacksonfortressaccess
jacksonfortress

MESSAGE FROM JACKO 450

It is 1.00am NY time Wednesday September 16 and the market is at 1.4670

My short trade at 1.4615 is now playing itself out. I have a 100 pip Fixed Stop Loss. At the present time I can't say that I am dancing in the street about this trade.
In taking this trade I had three choices:
1. Buy in at the current levels ...which I thought was too dangerous given the length of this rise
2. Hold off and do nothing until the market had a significant correction...which I thought might be too long a period or
3. Sell on the basis that the market was showing initial signs of a potential correction and ride the correction down.

Because I am a trader, I decided to take the third option. Now I will see if that was the best option.

Edit 3.00am NY time Market is at 1.4688 I am hanging in this trade by the fingernails. However i have a policy, as often as possible, to let a trade play itself out. We have the 1.4720 high from last year as a minor backstop (though most insto traders would be seeing that as a target). I will let this trade continue to play itself out.

Edit 8.00am NY time Market is at 1.4673. The market has risen to a high of 1.4713 (within 2 pips of my Stop Loss) before falling back. I intend to let the trade play itself out for a while longer.


Edit12.15pm NY time Market at 1.4715 After a rollercoaster day which saw quick swings in price, I have just been stopped out.

Emails

Email 1 (A timely question....LOL)
Can you tell me, how did you deal with the trading stress when you were not experienced? I am more relaxed trading forex than futures (which I traded for many years before forex) because I had learnt that the world doesn't end if I have a loss...I suppose it is just experience as you trade more and more that you realise that losses happen...It is an integral part of this business...
NO-ONE gets it right 100% of the time. It is always disappointing at the time to have a loss (NOBODY likes being wrong!!) but it is the longer term results that count.

MESSAGE FROM JACKO 449

It is 1.00am NY time Tuesday September 15 and the market is at 1.4617

The market is really struggling to get clear of the 1.4600 area. I am currently still on the sidelines but I believe that the bullish cycle which started on September 1 may have peaked. The market is definitely struggling to make higher highs and we will now start to see the initial signs of a correction. If London starts to show weakness, I may be a SELLER at 1.4600 or higher.
I am possibly jumping in a little early, but any correction will be reasonably quick to start and I don't want to give away too many pips by being too slow

Edit 3.00am NY time Market is at 1.4615 As stated above, I believe that a correction is imminent. The market has been struggling to make higher highs and the bulls should be ready to capitulate for a short time very soon. I have the choice of waiting for the market to retrace and then go long. However, I believe that the potential for a retracement is much higher and the reward is to the downside. This is a Counter Trend trade so if you have a low risk profile, I suggest that you wait for the market to retrace and go long with theTrend later. I will be a SELLER between 1.4600 and 1.4620. I will be sending out initial SMSes soon.

Edit 3.15am NY time I have just SOLD at 1.4615. I have a 100 pip Stop Loss. This is a Counter Trend trade. I recommend that you read the posts above.

Edit 8.00am NY time Market is at 1.4602. My short trade at 1.4615 is now playing itself out. I have a 100 pip Fixed Stop Loss and my initial target is the 50% Fib line at 1.4412

Edit 12.10pm NY time Market is at 1.4610 I am continuing to let my short trade at 1.4615 play itself out

MESSAGE FROM JACKO 448

It is 1.00am NY time Monday September 14 and the market is at 1.4546

The market is struggling to get clear of the 1.4600 area.The more adventurous traders stayed with their shorts at 1.4600 and the probabilities have become more favourable to them.
I am currently still on the sidelines. For me, the situation hasn't changed from last week. I am not prepared to risk a short trade against the bullish strength at the present time.
Having said that, I believe that the bullish cycle which started on September 1 may have peaked and we may see a correction.

I have my charts open to 300 periods of the 4H time frame.
The Resistance line. By linking up the highest points on the 4H chart from 1.4444 (Aug 3) , and 1.4634 (Sept 11) we can see that the Resistance line is currently at around 1.4650. There is also another Resistance point which is the previous High of1.4720 on Dec17, 2008
The Support line By linking up the lowest points on the 4H chart from 1.3832 (July 8) and and 1.4048 (Aug 17) we can see that the Support line is currently at 1.4200.
The 50% Fib line The nearest 50% fib is from 1.4191 (Sept 4) and 1.4634 (Sept 11) and is at 1.4412

Edit 3.00am NY time Market is at 1.4545 After dropping to a low of 1.4515, the market has recovered slightly to the current price. We are now starting to see a small series of lower lows on the 4H chart. At the same time, the market has been struggling to stay above the 1.4600 mark. I think that we may see our correction this week. I am now considering whether I wish to sit out and wait for the correction to finish and then take a long position, OR join in with the adventurous traders and ride the correction down.

Edit 8.00am NY time Market is at 1.4567. The market has moved back up again. The market is again back where it was five days ago and it has not traveled very far (only a 131 pip range) in those five days. Also there are no news events today to move the market in any significant way. I will watch this market for a little longer.

Edit 12.10pm NY time Market is at 1.4611 . A very slow and frustrating market at the present time. The market is at too high a level to buy because it is struggling to make new highs and it is overdue for a correction. On the other hand, it has been a strong move up and I am hesitant to sell against such a strong move. It is now just a waiting game to see the next good trading opportunity.

Emails

Email 1
What (if any) is your experience with using multiple entries for a single trade, i.e., to scale into your position as the price gets closer to your optimal buying/selling point? I have never been a fan of scaling in...it is averaging up your buy prices and averages down your selling prices.. If I believe in a position I just hit it....If I don't believe in it, I sit on my hands

MESSAGE FROM JACKO 447

It is 1.00am NY time Friday September 11 and the market is at 1.4612

The situation hasn't changed from yesterday. I am not prepared to risk a short trade against such strength at the present time. I will wait for a significant retracement and then go long. This has been a week to be very cautious. That quick 105 pip drop from1.4608 to 1.4503 yesterday stung a few longs

Edit 3.05am NY time Market is at 1.4602 The market is struggling to get clear of the 1.4600 area. It has been as high as 1.4627. However, some of the more adventurous traders in the group are placing short positions around 1.4600 and are now being filled. The probabilities are favourable to them.

Edit 8.00am NY time Market is at 1.4608 This market is still staying near the 1.4600 area. but the high over the last four hours has been only as high as 1.4615. The more adventurous traders are staying with their shorts. The longer that the market doesn't rise above 1.4615 and/or 1.4627, the probabilities are becoming more favourable to them.
I am currently still on the sidelines.

Edit 12.15pm NY time Market is at 1.4586. The market has continued to stay around the 1.4600 area. The market is due for a correction to this rise and when it does correct, it could go as far south as the old Resistance -turned-Support at the 1.4400 area

Emails

Email 1
What caused the market to jump to such high levels? Combination of :
Increase in Gold price (some people saw that as a move away from USD to Gold, so Gold goes up and USD goes down),
Good European (esp German) factory orders numbers;
Mr Roubini saying that the USD is going to collapse ; and
Mr Greenspan saying that inflation will hit double digits in the US in the next two years

Can you please explain to me how you pick out your probabilities? Just experience and measuring it over the years
I saw you use percentages could you please let me know all of the probabilities you look out for?
75% bounces off S&R lines..... 25% break through
60% bounces off 50% fib line ...40 % break through (therefore 50% Fib lines are not as strong as S&R lines)
50% of the times, the market will come back to the broken Support or Resistance line for confirmation touch

Email 2
through my years of learning, i have never figured out how the interest rates affect the market. So if BoE decides to raise rates, does that make GBP go up or down? If a country increases its interest rates , that means investors with cash deposits earn more..so investors will send money to that country....means that they will buy more of that currency ...means that the price of that currency will be bid up...means that that currency goes up.
what about if they decide not to cut/raise rates? If they decide to cut rates it goes in the opposite...Investors take their money out of that countries banks ...sell the currency (and take it else where) ..so currency will go down
or if they decide to cut rates, is GBP gonna move up or down? If UK interest rates are going up the GBP will go up..If UK is lowering rates...GBP will fall
and how will this impact eur/usd? UK is seen as a proxy for the euro...If UK is going to increase rates, then euro MAY do the same (because UK is a sizable part of European trade).
Having said that, you should keep in mind that forex traders are forward looking....so they have usually been pricing in an interest rate rise/fall outcome for weeks before the actual Rate decision is formally announced..so you will often have a "Buy the rumour and Sell the fact" reaction at the announcement

Email 3
It appears to me that the resistance line on this chart will remain upwards unless we get a series of lower highs. Yes...and we are starting to see some of them coming out out now...But the other ( more favored ) option is to move out to a higher time frame to get a stronger line
But we cannot remain cautious for ever LOL. I assume that if you believe we are in an uptrend then not seeing an upward sloping resistance would make you cautious Yes...no market goes up forever without running out of sellers (as all the novices pile in thinking they have found the Holy Grail) ... then it quickly spikes... and collapses!!!!!! (and the novices are left wondering what big truck had just run over them)

Email 4
We had some easy pips in august, I was increasing the lots in play, and I was more confident. What's happened as next you can imagine.......... Hmmmm...yes !!
I'm not going to tell you the % I was trading, otherwise you'll cancell my name from your group. LOL!!!!!!!! but I played with "casino money" and I lost "only " the august's money :((((((( Not very good,I know Ouch..
I'm reading a William O'Neil's book and he talks about some initial loss as the "tuition to pay to the market" Yes,,.. we all remember our losses far more strongly than our wins.... I can still remember a futures market trade when I burned almost $200K in one day on futures trading some 15 years ago...(Mrs Jackson was NOT pleased,... but hen she told me that she still loved me!!) Nowadays $200K is small potatoes, BUT I still vividly remember that day...LOL
I thought that the bottom was falling out of my world...... Because the world was certainly falling out of my bottom !!!...LOL
I'm reading again your blog and you were increasing your lots in play very fast as well, you went from 2 lots to 20 in short time...... so I wanted to do it also...... Ok...So now you start again and you have learnt something… and you have only "lost" a month in your plan

MESSAGE FROM JACKO 446

It is 1.00am NY time Thursday September 10 and the market is at 1.4575

The market has peaked (to date) at 1.4600. We may be near the top. As stated yesterday, this has been an impressive rally to 1.4600 by the Euro or, more the case, a serious fall in the USD. I am not prepared to risk a short trade against such strength at the present time. I will wait for a significant retracement and then go long.
This has been a week to be very cautious. The first rule is: Do Not Lose Money.

Edit 3.00am NY time Market is at 1.4572 The market has hit a high of 1.4600, then dropped back to 1.4533 and has now struggled to reach 1.4586. I think we may be seeing the start of the correction. However, the Bank of England Interest Rate decision at 7.00am NY time could have a wild-card impact.

Edit 8.00am NY time Market is at 1.4561. The market was starting to show weakness (falling to a low of 1.4519) but as expected the BoE decision bounced it back up. I am still of the opinion that we will see the market retrace back down to the 1.4400 area (near the 1.4380 Resistance -turned-Support line) .....within the next week.

Edit12.10 pm NY time Market is at 1.4571 This market is too high for me to take a long trade. And it is too erratic to take a short position. I intend sitting on the sidelines until the market settles. I don't wish to break the first Rule (see above) . Sometimes it is better to NOT be in a trade.

Emails

Email 1
Regarding the recent breakout from the 4hr 300-period timeframe, I notice when looking at the longer-term timeframe (daily, 1 year) that there seems to be a resistance line running between 1.4340 (3rd June), 1.4450 (3rd August) and 1.4537 (8th Sept) and a support line at 1.3750 (16th june), 1.3835 (8th July) and 1.4044 (17th August). To me, this seems to suggest that we should be looking at a retracement back towards 1.4150 considering we're at the top of this channel. I prefer my Resistance lines to always be downward sloping (pointing to the bottom right hand corner)... when I can't see a downward sloping Resistance line, I get VERY cautious
Are these longer term support and resistance lines elements that you would consider significant and consider trading around? (If you are considering going short) I would be VERY careful of this bull market move. I want to see a drop, then a partial rise, and then the start of another drop, because then I know its going down

Email 2a ( The tale of a trade...from late last week onwards)
So my pending short at 1.4275 got picked up obviously... not doing so well now, but hoping that it won't climb up to my SL @ 4375 before reversing. Dumb trade... i will be curious to see how this pans out...I can see your later emails so I look forward to seeing how you thought this trade through...I just hope that I am about to read that your SL closed you out at only a 2% damage to your account

Email 2B
Still stuck at 4275. Got room still before my stop, but not terribly pleased with being trapped down there. You know, the shittiest thing about taking a dumb trade is that you're all tapped out risk-wise so I couldn't take the trade at 4350 with you... Bummer. LOL...the cost of impatience ! We have all been there !
Now I've just gotta ride this back down to break even hopefully. I sure am glad you're confident this market is going to fall too. Obviously we could be wrong, and I'll bleed a bit on this one, but it serves me right. Learning patience and to control my fear... my gut isn't liking me right now... I still haven't seen any evidence of a stop Loss...??

Email 2c
Well, looks like we were both wrong... After it cut through that daily and H4 trendline, I decided that I was not going to AH it. Then I read your blog and you said the same. It could just be a headfake up to 1.45 before taking a plunge down to the support line, but I'm going to wait to see what happens at 4380 before I do anything. Hmmm... I am now assuming that you don't have a Stop Loss in place. I hope that you have kept this trade to 2% of capital risk

Email 2d
You're funny. Of course I had a stop loss, I'm not a TOTAL dumbass, just partially sometimes. LOL...LOL...Not at all...We all make a loss trades... It happens as sure as the sun rises each morning...
Yeah it was a lame trade, but I absolutely do not trade without a stop. Good...Just checking / reinforcing
Now, granted I bent the rules a bit on this one, I had my stop set for 4375, 100 pips, but was lamenting my entry at 4275, as that 100 pips put me right before the 4380 resistance line, so I bumped it up to 4390. thats not too bad...
Yeah, maybe a little bad, but it was one of those things where I think it was the right thing to do. Exactly
Sure, it hurt me a little more in the end, but I don't really regret it. I told myself, if it pushes through 4380, it's not going to stop, so I don't want to be in it anymore. 4390 was 30 pips past the daily trendline, and I didn't see it stopping if it got that far. Good strategy and good trading... I am proud of you !!!!

Email 2e
I've been thinking about how I handled that trade, and it was piss-poor actually. LOL...LOL..tell me how you really feel about it !!! Don't beat yourself up too much ....you did what you thought was right at the time...
Ultimately, what it came down to was this - I married my position. I was so certain that the market was going to dive that I kept telling myself it would be ok. I did the same...But you have to have a direction in your mind as to which is the correct direction...In this case we were wrong.... It happens
Instead I should have taken the loss like a man, and let the market prove to me it's intentions. Let your winners run and cut short your losers... Harder than I thought actually... Yes...but you had a Stop Loss that was not too large and not tight so as to be stopped out prematurely. And you had a plan for your trade and you stood by it. You did nothing wrong. The market just went against you...It happens

Email 3

When the market breaks your main support or resistance line, whats the percentage it will come back and test it closely and whats the percentage it will keep on its way with no retest? About 50% for each And also for it to turn to an uptrend does it require just a straight break like we saw today or does it require the break, then the retest , and finally the continuation up to be considered an uptrend? It can be both, but it is always safer to wait for the retest

Email 4

Going back to the US economy...I agree on it's dynamicity...however as China is the biggest foreign player in the USD .... doesn't that constitute a big question mark in certain circumstances - given they have a political agenda of their own to follow? From my viewpoint they've got the US by the balls and I'm sure they enjoy giving a little twist every now and then just to remind the administration.. problem is those twists could trigger a stampede effect. Yes, I think that has just happened with the Gold price...I can almost hear the Treasury portfolio guys in Beijing screaming at the Gold Portfolio guys that they are screwing up the value of the total USD Treasury holdings by being too clumsy in their stockpiling of Gold.....
who wouldn't follow if China said it had decided to reduce it's overall holdings in USD...which I believe they've already done even by hoarding up on raw materials....They are hoarding up on raw materials ...But they are still accumulating USD Treasuries at a furious rate as well.. They have been buying through London to attempt to disguise just how much they are still accumulating That is how fast they are starting to take control of the USD

MESSAGE FROM JACKO 445

It is 1.00am NY time Wednesday September 9 and the market is at 1.4485

The situation has not changed much from yesterday.
The market has risen strongly to a high of 1.4535 which is enough to activate an A-H trade at 1.4451 (which is where I was stopped out). However it is a very risky trade. The market will probably retrace to the broken Resistance line at 1.4380 for confirmation of the break. So I would be selling against a new bull trend for a reward of only 70 pips (1.4451-1.4380).
On the other side, the market is too high a level at the moment to buy.
I am still on the sidelines for the present time.

Edit 3.00am NY time. Market is at 1.4485 I am still considering whether I want to risk a trade down to the broken Resistance -turned -Support line (see Email 1 below)

Edit 8.00am NY time Market is at 1.4521 The market has moved marginally higher. I am waiting for a correction (preferably back to the Resistance line at 1.4380) so that I can go long. The market is moving up but a buy at these levels has too much risk of a quick correction.

Edit12.10pm NY time Market is at 1.4565 This has been an impressive rally to 1.4600 by the Euro or, more the case, a serious fall in the USD. I am not prepared to risk a short trade against such strength at the present time. I will wait for a significant retracement and then go long

Emails

Email 1
Since we have now broken the high of Aug 5th would it not be better to assume that the trend is now up and that the potential AH trade be counter trend. Yes, that is why i am a little hesitant to trade it...I would rather wait until it comes back to the Resistance -turned -Suport line at 1.4380 and go long

MESSAGE FROM JACKO 443

It is 1.00am NY time Monday September 7 and the market is at 1.4335

I am still hopeful that my SELL at 1.4350 orders will be triggered.

Edit 3.00am NY time Market is at 1.4339. The US market will be closed on Monday for Labor Day.
I have my charts open to 300 periods of the 4H time frame.
The Resistance line. By linking up the highest points on the 4H chart from 1.4446 (Aug 5) , and 1.4406 (Aug 27) we can see that the Resistance line is currently at around 1.4380.
The Support line By linking up the lowest points on the 4H chart from 1.3832 (July 8) and and 1.4048 (Aug 17) we can see that the Support line is currently at 1.4150.
The 50% Fib line The nearest 50% fib is from 1.4048 (August 17) and 1.4406 (August 27) and is at 1.4225

As can be seen we are getting closer to the Resistance of 1.4380, but I want to make sure that I get this trade as I believe that the market is heading down in the medium term. So my SELL at 1.4350 orders are still in place

Edit 3.13am NY time. I have just SOLD at 1.4350. I have a 100 pip Fixed Stop Loss. (SMSes being sent)

Edit 8.00am NY time Market is at 1.4332 . My shorts at 1.4350 are progressing slowly. The first target is the 50% Fib at 1.4225. When it gets there we will then make a decision to either close them at 1.4225 or hold them for the lower target of the Support line at 1.4150
(Note: Mrs Jackson is taking me out for dinner so I won't be answering any emails until late tonight US time. It should be a slow session today because the US is on Labor Day break. However I will be back at 12.15pm NY time)

Edit12.10pm NY time Market is at 1.4344 The market is doing very little. I am now letting my trade play itself out.

Emails

Email 1
I sincerely appreciate your mentoring. I do not know how you manage to respond to everyone individually and still have time for your blog,trading, the fund … The groups are not that big (the $700 is very effective in keeping non-serious traders out) and the trading is easy...The admin of the Fund and the legal paperwork is the biggest drag
How do you monitor your trades? Do you have intervals at which youhave a look at price activity? Yes, every 2 -3 hours...If it is getting close to a target , I will look a bit more often.. HK is very good for business screens all around the city in the shops etc. Most banks have Bloombergs or Reuters in their front windows
It was unusual of you to set a take profit like you did last week at1.4250. Thought your preference is to let your profit run, except on late Fridays. Were you being cautious in case price reversed again? No, I was just annoyed with myself over how I handled the trade on the Monday, so rather than let it annoy me more, I decided to just get rid of it
I have also noticed that in the past few trades you have not movedyour fixed 100SL to break even…we would have been closed out by yesterday's reversal if we did…so I guess it's good we did not, however, at what times should we move to break even? I am getting very confident that this market is trending down each move so I am not concerned about a trade going against me for a couple of pips. I am more inclined to use the drops as opportunities to get out and then get back in again as it goes retraces
How can I avoid being undecided and having itchy fingers at such times? You can't...It is human nature...It is a balance of greed and fear. But as you become more experienced you will learn to just be reasonable in your profits
Is it wise to exit if I feel I have made some decent profit inrelation to my target for the month? Yes, the key is to rein in the greed,,,because no market goes in the one direction forever without a retracement
In my case it is 7% (about 350pips @ 2% risk, 100SL OR 280 pips @ 2.5% risk OR 235 pips @ 3% risk,100SL). I have moved my risk to 2.5%, 100SL per trade so I can targeta net of 3 AA+ trades per month. It looks easy and achievable withyour method of trading; I pray I can make it slowly, steadily and consistently.You will...and they are good returns
I hope I am not being too naïve with my expectations - 7% monthly and consistently amounts to about 125% per annum when compounded…award winning Yes, and totally achievable. I think the market is starting to stabilise and get back to much better trading conditions than the last 12 months which were horrific for Trend Traders. Have a look at a 300 bar monthly chart and you will see what I mean

MESSAGE FROM JACKO 442

It is 1.00am NY time Friday September 4 and the market is at 1.4260

I was a SELLER at 1.4300 or higher yesterday, and I was hoping for a quick retracement to the 1.4320 -1.4330 area, but it never got there.
I am hoping to get set today, even though it is a Friday and a Non Farm Payroll day. The NonFarm Payroll numbers are one of the top market movers and the anouncement usually causes swings of around 150 pips so we have to be careful.
I am still a SELLER at 1.4300 or Higher so be ready for the SMS

Edit 3.00am NY time Market is at 1.4286 The market is heading back up slowly towards the Resistance area of 1.4350-1.4380. I am not in a rush to jump into this market (it is a Friday and it is a whippy NFP day) but I am keen to grab a short at a high price. I may even take the trade just 10 minutes before the NFP announcement
I "think" that today's NFP may be the catalyst to finally change the market sentiment to a short position...but I could be wwwrrroonng

Edit 7.00am NY time Market is at 1.4266 The market is subdued at the moment because of the impending NFP announcement. It is going to be Fast and Furious at 8.30am NY time (but VERY dangerous for novices..If you are a novice trader, stay out.....There will be plenty more opportunities later when you are more knowledgeable)
My strategy is that I am looking to place a SELL order at 1.4350 which is hopefully an extreme of any initial UP moves from the NFP announcement. I will have a 100 pip Fixed Stop Loss. I may not get filled if it does not react upwards...that is a risk I am prepared to accept. If my order doesn't get filled, then I am not concerned (To place a SELL order lower than 1.4350 has the potential to be quickly spiked out by the sudden move.... I am only interested in being on the extreme top end of the Range)

Edit 8.03am NY time Market is at 1.4260. I have just placed my orders to SELL at 1.4350. They have a 100 pip fixed Stop Loss (SMSes being sent now)

Edit 12.20pm NY time Market is at 1.4309 The market has bottomed out at 1.4190 and is now moving up strongly on very thin volume based on the report that Mr Roubini has predicted that the USD will crash. I am still hopeful that our orders get filled.

Emails

Email 1
I managed to go short yesterday at 1.4340 so currently looking at 75 pips profit. I have a target of 1.4200 which is about 40 or so pips above support. How does that sound to you? We are going into an NFP announcement so you should either cash out now and sit on the sidelines OR risk your profit in the hope of getting a much bigger profit (because I think it is going down). The NFP has the potential to send it 100 pips both up and down from where it is at the time of the announcement

Email 2
Well, you mentioned in your blog that when the market is ranging at the 50% Fib line, it is a good indicator that it will continue its way which is down. Yes the 50% fib line doesn't have the strength of a trend line
What makes the market to continue to go its way when it is ranging at the 50% Fib line? Traders don't believe in the 50% line as much compared to the belief in a Trend line...so it becomes self perpetuating that it is not as strong. But IF it does bounce up off a 50% Fib, you can be reasonable certain it is going back to the Resistance line

Email 3
Gold has broken out rather convincingly to the upside and is looking very strong which tends to indicate possible USD weakness. No...it is China.... In the last 12 months they have stockpiled enough copper and Iron ore and other base minerals to last them for te next 15 years of manufacturing... Now they are moving on to precious metals...They are buying up everything they can to spread their risk on the USD...but China will still maintain the USD strength
There are still several levels of resistance overhead that are yet to be breached, however this upward movement is reason I believe to be cautious about a stronger USD. It could be signalling that there is more upside for the EURUSD. Hmmm...I am not sure
If you have time to provide your thoughts on gold and what might be going on there I would be most grateful. I don't look that much at gold..I prefer to watch what the biggest elephant in the Forex room is doing

MESSAGE FROM JACKO 441

It is 1.00am NY time Thursday September 3 and the market is at 1.4275

The market has moved up from the 50% Fib line and is now moving back up but I am not sure that it will get all the way up to the Resistance line at 1.4380. This bull may not have the strength to get past 1.4350

Edit 3.10am NY time market is at 1.4300 As stated yesterday, I think this market is heading to the Resistance line area. Those adventurous traders who jumped in on the long side yesterday are doing well.

Edit 8.00am NY time Market is at 1.4326 As expected the market has moved up to just under 1.4350 (at 1.4346 high). However, we have two serious news events at 8.30am NY time, an ECB Interest Rate Statement and and the US Unemployment Claims. Individually they are not top market movers, but together they will cause volatility spikes. I suggest staying out until after they are announced but will be looking to go short sometime afterwards today

Edit 8.45am NY time Market is at 1.4304.. I am a SELLER at 1.4300 or Higher . A 100 pip fixed Stop Loss. (SMS just sent) I will SMS again as I actually sell

Edit 10.10am NY time Market is at 1.4264 ..damn..The market has slipped away from me...I was hoping for a quick retracement back to 1.4320- 1.4330 area which never happened. Will wait again for the fish to return

Edit 12.15pm NY time Market is at 1.4267. The market has bottomed at 1.4245 and has moved up marginally. I am off to bed. I will look at this market again in 6 hours when I wake

Edit 6.40pm NY time Market is at 1.4260 The market was too quick and slippery to get that trade earlier today. However, I am still hopeful that we can get another opportunity to sell it today, so I am still a SELLER at 1.4300 or Higher . I will SMS as I execute any trade



Emails

Email 1
I would like to ask you how you read the market sentiment. Market sentiment is built into the price of everything Because sentiment is built into the price of everything, a daily price chart is a clear analysis of what the sentiment has done and is doing... For example, Since March, the Euro has been going up.../ ..the USD is going down...which means that everyone is selling the USD because they didn't like what was happening in the US economy.... However, since early June, you can see that the rate of selling of the USD (buying the Euro) has slowed, because they realised that the US economy had taken the pain and wasn't getting any worse, .....So the rate of selling theUSD slowed down and the market started to go sidewards.
From early August, the market could see that the US had taken all the pain and that the economy is coming out of its slump, so the USD started to strengthen and therefore the Euro has started to fall.
Remember that we are talking about the two biggest economies inthe world, so the change of direction seems very slow, especially for traders (who trade in even 4H time periods) and sometimes we just need to stop and have a look at the bigger picture to get the feel of where the market is really heading

Email 2
I understand why you draw the support line on your chart as you have detailed in your blog. Where I could do with some clarity is why this is the support line that matters to you ? To be a little clearer on what I am asking, why for example on the same 4hr chart would the support line drawn from 17th August - 27th August not feature as part of your TA. It seems to have been holding up pretty well so far ? It is too short a time frame for me...I use 300 4H bars to get the proper perspective.... The Support line you are suggesting is the same as a 300 set of 1H bars It does have some strength...this time,,, But I have found that 1H bars are not strong enough on too many occasions to be statistically safe
Equally with the resistance drawn from 13th August - 27th August. I appreciate there a totally different ways of looking at any chart, but crucially I would like to understand the criteria you use to select the specific trendlines that you use as support and resistance. The longer the times the stronger the lines...I draw my limit at 300 bars on the 4H charts

MESSAGE FROM JACKO 440

It is 1.00am NY time Wednesday September 2 and the market is at 1.4214

I finally closed out 1.4365 short trade from Friday for a 115 pip profit. The market dropped to the 50% line as expected but I was happy to close out of that trade...it had gone over the weekend and I had missed an opportunity to close it yesterday. So I just wanted to close it and clear the decks so we can go again.
In the last two months I have earned 758 pips..not too bad...but Mrs Jackson says I can do better.
The market is now hanging around the 50% Fib line. The fact that it is hanging around is a good indicator that it is going to continue down to the Support line. However, I am in no rush to jump back in just yet. Lets see what London does.

Edit 3.10am NY time Market is at 1.4221. I am seriously hoping that London will take the market up so we can slap it on the head again at 1.4300+ ...LOL... I am looking for an opportunity to SELL but at a much better price than where it is.

Edit 8.00am NY time Market is at 1.4218 The market is continuing to hang around the 50% Fib line of 1.4225. There is the ADP Non Farm Payroll coming out at 8.15am. The ADP version of the NFP is not as accurate or as well respected as Bureau of Labor Statistics NFP released this Friday. However, it is a reason for the market to get all excited over nothing and the brokers to play games with spreads and Stop Losses. So if you are not in a trade at the moment, I would wait until after 9.00am NY time. I am staying out for the present time

Edit 9.45am NY time Market at 1.4212 Market moved only about 30 pips lower after ADP NFP numbers and the 1.4200 area is holding.... I think we may get an opportunity to SELL at a much higher price later.

Edit 12.10pm NY time Market is at 1.4246 The market has moved up to the 1.4250 area. The market is tryng to head back up to the Resistance line so I will wait up there and then SELL it again. I am not sure that it will get all the way up to the Resistance line at 1.4380. This bull is slowly dying and may not have the strength to get past 1.4350

MESSAGE FROM JACKO 439

It is 1.00am NY time Tuesday September 1 and the market is at 1.4350

Because it is a new month I will quckly re-iterate what I said yesterday:

I have my charts open to 300 periods of the 4H time frame.
The Resistance line. By linking up the highest points on the 4H chart from 1.4446 (Aug 5) , and 1.4406 (Aug 27) we can see that the Resistance line is currently at around 1.4380.
The Support line By linking up the lowest points on the 4H chart from 1.3832 (July 8) and and 1.4048 (Aug 17) we can see that the Support line is currently at 1.4150.
The 50% Fib line The nearest 50% fib is from 1.4048 (August 17) and 1.4406 (August 27) and is at 1.4225
From the above, we can see that the initial target on the downside is the 50% Fib at around 1.4225 and the longer term target is the Support line at around 1.4150. But if it bounces UP from the 50% fib, then we know the target is the Resistance line at around 1.4380. (NOTE The Support and Resistance line numbers will change marginally over time due to the slopes of the lines)

Ok,... now yesterday, the market dropped but only as low as 1.4256 (31 pips above the 50%Fib), then bounced UP to near the Resistance line at 1.4367.
Because I was not paying attention, and the market moved quickly, we missed the opportunity to get out at the 1.4260 level.... so we now need to allow the market to go through another drop to close out of this trade and get rid of it.... before it starts to mess with our heads.
So I am allowing the trade to continue to play itself out again. I still have a 100 pip fixed Stop Loss

Edit 3.05am NY time market is at 1.4364 I am now just letting this trade play itself out and waiting for the next down move in the trading cycle

Edit 7.00am NY time Market is at 1.4300 The market (as expected) went up again to the 1.4380 trend line reaching as high as 1.4378. Again, (as expected), the market bulls couldn't hold and it has fallen again. Our long term short at 1.4365 from Friday is looking good again (I apologise for not getting us all out yesterday and then we could have sold again earlier today).
I want to close this trade today.

Edit 8.00am NY time Market is at 1.4310 I want to close this trade today so I am looking to close out just above the 50% Fib line of 1.4225. I have a pending BUY order to close this trade at 1.4250.
(SMS sent at 8.15am NY Time) Now just waiting for order to be filled

Edit 12.10pm NY time Market at 1.4235 My BUY order to close my 1.4365 short trade has been filled. We closed that trade for a 115 pip profit.

Emails

Email 1
I noticed you dont do it personally, but i was wondering why we dont buy from the bounce on the 50% fib line back to the resistance line rather than waiting for the market to go back to the resistance line and then short from there. The 50% Fib is not as strong as a trend line...it is a good target, but not necessarily a strong turning point (not as strong as the TL)

Email 2
I am having a difficulty finding out how the market moves. I know the market moves up and down, but why? market expectations of where people think it should go
Also, why the market ranges? The market is full of traders all using technical analysis...the more basic the TA, the more traders are using it.. The more esoteric, or exotic, the TA, the less numbers of traders are using it . So the most basic (trend lines, round numbers and 50% Fibs) trading styles become self-fulfilling. Market ranges become self -fulfilling when traders realise where the price is heading.

MESSAGE FROM JACKO 438

It is 1.00am NY time Monday August 31 and the market is at 1.4285

My Short trade from 1.4365 is playing itself out nicely. As you will recall, I kept my position open over the weekend, which is very unusual for me, but it is working out nicely. The London market is closed today and I am hoping that we will hit our initial target of 1.4250 in the thin European trading. I am looking at an exit below 1.4250 and then wait for another bounce. Then we will SELL it again.
(As an aside, the Fund easily exceeded 2000 pips profit for the year resulting in better than 40% return using a very conservative 2% capital risk on any one trade...our little baby has packed on some serious weight in the last 12 months..LOL. Now that we are through the worst of the Great Financial Crisis, which was a Trend Trade's nightmare, the next 12 months should be back to my previous rates of return).

I have my charts open to 300 periods of the 4H time frame.
The Resistance line. By linking up the highest points on the 4H chart from 1.4446 (Aug 5) , and 1.4406 (Aug 27) we can see that the Resistance line is currently at around 1.4380.
The Support line By linking up the lowest points on the 4H chart from 1.3832 (July 8) and and 1.4048 (Aug 17) we can see that the Support line is currently at 1.4150.
The 50% Fib line The nearest 50% fib is from 1.4048 (August 17) and 1.4406 (August 27) and is at 1.4225

From the above, we can see that the initial target on the downside is the 50% Fib at around 1.4225 and the longer term target is the Support line at around 1.4150. But if it bounces UP from the 50% fib, then we know the target is the Resistance line at around 1.4380. (NOTE The Support and Resistance line numbers will change marginally over time due to the slopes of the lines)

Edit 3.00am NY time Market is at 1.4267 The market may wander due to lack of direction from London but I am prepared to let this trade play itself a little longer. I am keeen to see if they intend breaking the 50% Fib and take it lower in the next 12 hours

Edit 8.00am NY time Market is at 1.4278 My Short trade from 1.4365 is still playing itself out. The market is looking to go down and I think that it may be trying to head for the Support line

Edit 12.10pm NY time Market is at 1.4353 I have a friend visiting me and we decided to have a drink on the balcony overlooking HK. During that time (just 15 minutes) the market moved some 50 pips (from 1.4290 to 1.4346). Ouch!. ... Anyway, the damage has been done and now I am still letting this trade play itself out now