It is 4.00am NY time Friday March 19 and the market is at 1.3614.
I am now waiting for a retracement back up to the Resistance line area so that I can SELL into this downtrend again. To sell at the current levels is too risky. And to buy at the current levels is counter trend trading.
Edit 8.00am NY time Market is at 1.3566 The market has been heading down to my original target of 1.3520 (from my SELLS at 1.3700 and 1.3800). However, the potential for a retracement soon is very high, so I am now waiting for a retracement back up to the Resistance line area (of 1.3700-1.3750) so that I can SELL into this downtrend again.
This move down is being caused by the strong rumors of Greece (and other PIIGS) calling in the IMF. The next big story in this saga is that the the IMF will NOT be able to fix the problem. The IMF traditionally devalues a country's currency by up to 50% to make the country's exporters ultra-competitive. However, the IMF cannot devalue the Greek's Euro currency..... The only way the IMF can make it work is to take Greece out of the European Union, put it back onto Drachmas, and devalue the Drachma. Whichever way you look at it, Greece may be the first to leave the EU and start the domino effect leading to a break-up of the EU over the next 5 years. The Euro is going to go to 1.1000 by the end of this year
Edit 12.05pm NY time Market is at 1.3528 The market has bounced off the 1.3500 of Support. It is galling to see the market behave as expected and know that we were right about where it was going, but also to see our trade kicked out earlier because of a false break of a trend line. Aaah, the pleasure and pain of trading......
Edit 7.00pm NY time Market is closed. I am in a black mood. I can't believe that my trade was kicked out by 17 pips because of the false break of the trend line and then went on to be a sizable winner. I am in a black mood. Even the cat is hiding at the moment. I now have to wait for a retracement back up to the Resistance line area so that I can SELL into this downtrend again. I am in a black mood.
Emails
Email 1
We are always told to trade with the trend and that the 'trend is your friend'. I agree with this statement. And doesn't this statement mean by inference that trend trades are more valuable than counter trend trades? Yes
But does the above mean that I should ignore all counter-trend moves? I have stopped trading them...I was trading them because I was getting continual pressure from some group members to trade more often. But that has now finished. No more counter trends until I am firmly back on track with my trend trading
So by taking all my trades , I am not missing out on any trades (saying darn I just missed that and so on and as long as I catch most of the trend I should be ahead of the game? Yes...that is what I have just come to the painful realization of too.... My countertrend trades were less successful and they were putting me on the wrong side of a trade when I should have simply waited and taken the trend trade
Email 2
You seem sure that the EUR is going down this year yes.. I think that 1.1000 will be hit before the end of this year
but you have set your take profit for the current trade at 1.3520, Yes, a short term correction should bounce up from there
I agree that this is a support level but i am wondering why you are not planning to hold the trade longer in line with what you think will happen? No, take the profits out and get back in at a higher level for more "short" profits
or why you wouldn't take 1/2 your profit at 1.3520 and leave the rest to run with the stoploss at breakeven? The market always retraces sufficiently to allow multiple entry points at almost all price levels... There would be multiple opportunities to get in at 1.3520 or higher even if it moves lower in the short term
MESSAGE FROM JACKO 563
It is 4.00am NY time Thursday March 18 and the market is at 1.3650.
One of the most frustrating and annoying aspects of being a trader is watching a good strategy trade being stopped out by a small margin, and then watching the market turn and head in the original direction back to the entry price and beyond into the profit zone. It has just happened to us..... again. Yesterday, we were taken out by the "noise" of the market.
We have experienced this problem before. During the huge volatility of the GFC, we found that the first solution to the volatility of the market was to be much more selective and " bargain harder" on our entry points. That is, take the entry point and add an extra amount of pips for it to qualify as a trade.
The second strategy was to widen our Stop Losses, to minimize being taken out by the "noise."
The third strategy was to reduce our time frames from Daily to 4H to be more proactive to the market.
We have been doing an in-depth analysis of the volatility of the market since I started trading back in late 2005. It is best seen by setting the Average Trading Range in to one day. You can then see the average trading range per day for each day . If you compare the one day ATR for 2006, 2007 and 2008 (until August when the GFC started) and compare it to 2009 and 2010, you can see that the ATR is still significantly above where it was before the GFC. That is to say, that the "noise" of the market is still significantly higher than when I first started trading. We are looking at the various option to combat this.
I am getting increasingly annoyed by having my trades taken out by no more than 20 pips and then having the market turn and go substantially into profits.
The results of the last six months are telling me that my trade directions are correct but that I am not being "hard" enough on my entry points and/or the "noise" is knocking them out.
The Daily Resistance line from 1.5140 (Dec 2, 2009) and 1.4579 (Jan 12. 2010) and 1.3796 (March 11) is today at the 1.3750 area We are now looking for a suitable entry position to Sell the market.
I am considering a SELL at 1.3750, but I am watching to see the price action today.
We are still getting a lot of chatter through the back channels (Mark's friends in Investment banks and brokerage houses) that the big Hedge Funds are still targeting the Euro and building big short positions. Also Greece will be calling in the International Monetary Fund (IMF) on the Easter weekend to do "the dirty work" on the Greek economy, so the politicians can stay clean and blame all the problems on the IMF.
Edit 12.05pm NY time Market is at 1.3595 As the market moves towards my original target price of 1.3520, my annoyance at being Stopped out grows.....
Edit 7.00pm NY time Market is at 1.3605 I am now waiting for a retracement back up to the Resistance line area so that I can SELL into this downtrend again. To sell at the current levels is too risky. And to buy at the current levels is counter trend trading.
On the fundamental side, it now appears that Greece is not going to be the only country calling in the IMF to force through all the necessary economic changes. Italy and two other countries are now openly talking about it too. We may have the situation in 6 months time where the IMF will be in control of the economic affairs of half of Europe.
Emails
I am currently 48 hours behind on my email responses. This is due to Mark and I spending time working on the research on ATR on my results (plus the incredibly frustrating ongoing issues caused the SMS text message providers). Please be patient.
MESSAGE FROM JACKO 562
My SELL at 1.3700 trade from Friday was stopped out one hour ago at 3.00am NY time. In doing so, the candle finally broke the Daily Resistance line from 1.5140 (Dec 2, 2009) and 1.4579 (Jan 12. 2010) and 1.3796 (March 11) and has remained above the line. (Note: My charts are all set to NY time)
I am watching now to see if it remains above the line or if it is a false breakout. I will be back for the US session.
Edit 8.00am NY time Market is at 1.3775 The market may be a false breakout. The market has stayed below its peak of 1.3817 from earlier today.
Assuming that it is still in downtrend, it has not gone high enough to set off an Anti-Hedge trade. It needs to hit 1.3850 to trigger the A-H order at 1.3800.
I will be watching the price action for the next 24 hours to determine whether the downtrend has been convincingly broken or whether we are seeing a false breakout.
Edit 12.05pm NY time Market is at 1.3750 Hmmm... I am still watching the price action to determine whether the downtrend has been convincingly broken or whether we are seeing a false breakout.
Edit 7.00pm NY time Market is at 1.3735 The market has moved back down under the Resistance line, but it is still too early to say that the breakout up to 1.3817 was a false breakout (though I believe that it is...).
We are currently in a dilemma. On the technical side, the Daily chart is showing a breakout to the upside. It has broken above the Daily Resistance line. The question is whether it is a false breakout.
On the fundamental side, we are getting a lot of chatter through the back channels (Mark's friends in Investment banks and brokerage houses) that the big Hedge Funds are still targeting the Euro and building big short positions.
This turn of trend is the most difficult place to be. We are possibly there at the moment. I want to get more clarity on the situation before the next trade.
UPDATE ON TEXT MESSAGING SERVICE
We have received the following message from our primary text messaging service. It says that
(It) has managed to reactivate a significant number of our customers on the US shared short code program and we continue to make progress each day.
Customers that have been affected by the US service disruption and have not yet been reactivated on the US shared short code program will receive specific communication on our program very shortly.
We remain unable to prioritise personal requests for reactivation and thank you for your patience.
We are also finalizing details with a new, second text SMS messaging service and are waiting for them to acknowledge receipt of the TT funds. We then need to copy and transfer our SMS cell phone numbers to their system. Hopefully, we will never get caught out again by this problem with our SMS message service providers.
MESSAGE FROM JACKO 561
My SELL at 1.3700 trade from Friday is continuing to play itself out. (Anyone who missed out on getting in on Friday, had another opportunity at 2.10am NY time today)
My Stop Loss is 1.3800.
My initial target price is just above 1.3500 at 1.3520. It is in the area of the lows set on March 3, 4, 8 and 9 and just above the big round number of 1.3500. I have set my Target Price at 1.3520.
I have placed my pending orders to close my trades at 1.3520.
Edit 8.00am NY time Market is at 1.3715. The market has moved up on the German ZEW Economic Sentiment numbers in European trading. The market is moving around the 1.3700 number (plus and minus), but has been gravitating lower over this week.
The US Building Permits numbers are released at 8.30am. But the FOMC announcement is the big news event today at 2.15pm NY time today.
Edit 12.10pm NY time Market is at 1.3763. The market has moved up in early US`trade. I am letting my trade play itself out.
Edit 7.00pm NY time Market is at 1.3765 Since the start of the week, the market has moved between a high of 1.3783 and a low of 1.3640 ( a range of only 143 pips).
Our 1.3700 trade has been in profit as much as 60 pips (nice...but not enough to have warranted closing the trade) and in loss as much as 83 pips (disturbing ...but not enough to panic about).
I am continuing to let the trade play itself out.
MESSAGE FROM JACKO 560
(NOTE: Please note that the US had the Daylight Savings Time shift yesterday and that US clocks were moved forward 1 hour today).
There are talks today where the 16 countries in the Euro zone are considering lending Greece around 25B Euros. However, the problem has not gone away.
And lending Greece the funds will simply increase the "moral hazard." Greece would have little incentive to fix their economy and simply looking for further bailouts further down the time line. In addition, every other PIIGS country will do the same.
Also, here would have to be a competition for the most ludicrous statement from a politician. The leading contender would be former European Commission President and Italian Prime Minister Romano Prodi when he said " For Greece, the problem is completely over... and I don't see any other case now in Europe". (Where did the problem go????...LOL)
The second contender is Greek Prime Minister George Papandreou who said "We are not asking for a bailout. We are not asking for financial help from anyone" (Why did he visit the USA yesterday???? Why is there a meeting in Europe today?????...LOL).
This problem has NOT gone away.... The Euro is in serious trouble. And the Hedge Funds know it......
As outlined yesterday in the Special Weekend Posting, I have maintained my 1.3700 trade from Friday but have put the Stop Loss at 1.3900. This has increased my exposure to 4% for this trade. AND.......I could be wwwwrong
Edit 8.00am NY time Market is at 1.3725. My SELL at 1.3700 trade from Friday is continuing to play itself out.
Edit 12.05pm NY time Market is at 1.3644. My SELL at 1.3700 trade from Friday is continuing to play itself out. I have moved my Stop Loss back down to 1.3800.
My initial target price is just above 1.3500 at 1.3520. It is in the area of the lows set on March 3, 4, 8 and 9 and just above the big round number of 1.3500.
I have placed my pending orders to close my trades at 1.3520.
I am now just waiting for either my Stop Loss or Target Price to be hit...
Edit 7.00pm NY time Market is at 1.3670. My SELL trade at 1.3700 is playing itself out.
I have moved my Stop Loss back down to 1.3800 (which has lowered my capital risk back down to 2%).
And I have set my Target Price at 1.3520.
Now we wait......
And another contender for the most ludicrous quote from a politician after their meeting:
EUROGROUP CHAIRMAN JEAN-CLAUDE JUNCKER
"We insisted that in every other meeting we should examine the situation of individual members of the euro area. We discussed the 2020 agenda." (Greece is burning and M Juncker is discussing agendas for a meeting 10 years from now....LOL)
"We also discussed technical modalities of the plan (for Greece) which would be put into effect if the need was to be felt, that is to say if markets do not understand the reality and the depth of the austerity plans and stabilisation programme committed by Greece."
"Firstly, this is not a mechanism that is necessary today. We indicated that the examination of the technical modalities is a work of anticipation but there is no reason to anticipate implementation. So I won't go into the technical details." (I am an educated and experienced trader with English as my native language.... And I can not understand what this French woman is saying!!!!....LOL)
Emails
Email 1
Hi I was wondering if the SMS (text) issue was resolved with the US members?
We are still waiting for our primary provider to fix up their problem which they say they will have fixed this week. But we have started the process of setting up another account with another provider. We have completed all the paperwork and have TTed the funds to them.
Email 2
Bizarre behaviour by European Govts this week. They are beating each other down to announce the demonisation of evil speculators. Yes, the politicians need to blame someone else for all the problems that they have caused One by one they call for a EMF/IMF bank. Yes, because the politicians want to pass the problem for taking all the horrible decisions on interest rates and budget cuts on to someone else (the EMF/IMF bank)... so they can blame them for all the problems that they have caused But I do not think it will ever happen. It would need a new European treaty and the last Lisbon treaty was tortuous to pass. Living in Europe the public is buying the lets burn the speculators at the stakes like witches line from politicians. I guess this is weighing in the EURO this week. Yes, it will have a big impact
Email 3
If the market goes to 1.37, you enter the market short.If it goes up to 1.38 your S/L and limit order annihilate each other and you end up with a 1.37 open position and a 200 pips S/L. Is that what you have in mind? (just trying to understand). It does look a little confusing, I know, but they were two distinct and separate trades in my mind One was a more speculative trade than the other was the conventional trade. Also it is a tradeoff..get in earlier at the lower sell price...OR hold out for the higher sell price and possibly miss out
Email 4
I have come to realise with your help in the last year that that you can trade around virtually any day job so long as you trade with the longer time frames. Yes, of course.....I try to trade around my "retirement " lifestyle... For me its all about perspective and to get the right balance in my life and not just the financial returns. Yes, it is a skill that can be used for the rest of your life......whenever YOU want to use it
(See also the Special Weekend Posting due to Greek bail-out news below)
MESSAGE FROM JACKO 559
(A Special Weekend Posting due to Greek bail-out news)
It is 4.00pm NY time Sunday March 14 and the market is closed.
On Saturday, it was announced that the Euro zone is considering lending Greece around 25B Euros. This is despite the fact that they are not legally and constitutionally able to offer "bail-outs" to member countries.
As a result, we may see some serious fluctuations at the opening of the market. Because I do not want my trades to be subject to those fluctuations and I want to have more control over my trades, I am removing my Stop Losses and will close the trades out manually AFTER the initial movements.
I will be posting again at 8.00pm NY time today
PS Please note that the US had the Daylight Savings Time shift today and that US clocks were moved forward 1 hour today.
Edit 8.00pm NY time Market is at 1.3774 The Asian market has taken the rumor of the Greek bailout rather calmly. The European Government heads are making a decision in Europe on Monday (Europe time). We may see more movement then. I am moving my Stop Loss back into place, but at 1.3900
As some of you pointed out, that would have been the same effect as the two trades combined from last week. (I will discuss that more in the blog later.... In my Monday blog)
MESSAGE FROM JACKO 558
It is 3.00am NY time Friday March 12 and the market is at 1.3700
My speculative "top of the Range" trade at 1.3700 was finally triggered at 1.15am NY time. The order has been in place for a couple of days now and has been waiting to be activated. It has a 100 pip Stop Loss and I have a target of near the bottom of the Range just above 1.3500.
Edit 8.00am NY time Market is at 1.3768. My more risky and speculative trade at 1.3700 has suffered a near- death experience but is still alive and breathing.
The more conservative standard Daily Resistance line Trade at 1.3800 has not yet been activated. I am letting the trades play themselves out.
Edit 12.10pm NY time Market is at 1.3756. My more risky and speculative trade at 1.3700 has recovered more as the US session has progressed.
The more conservative standard Daily Resistance line Trade at 1.3800 has not yet been activated. I am letting the trades play themselves out.
Edit 3.15pm NY time Market at 1.3756. I have decided to hold the current trade 1.3700 SELL trade over the weekend. But I have canceled the second standard Daily Resistance line Trade at 1.3800
We are still having problems with our SMS provider for the US members. Our provider is slowly putting all their customers back on the networks but because we are probably one of their smallest clients, we are at the back of the queue. Unfortunately, my ranting and raving is not going to solve anything or get them to do something any quicker. Their Statement to us yesterday was:
"The reactivation process, for our shared short code customers, is taking longer than what we would like, because we are required to audit customer account adherence to our terms and conditions and accepted industry guidelines, before we're able to restore services.
If your service is not restored by the end of the week, then we will contact you with more details of our reactivation process for the remaining US shared short code customers still affected, so that your service can be restored.
We are unable to assist with prioritizing requests for reactivation, so please be patient while we focus our attention on reactivating our US customers that are still affected."
We are investigating alternate suppliers so that we never get affected like this again
Emails
Email 1
If you don't mind, I have a few more questions for you...Ok
1. Do you change your Stop Loss according to the order? Hmmm...not really From initially following the thread at Forex Factory, I have come to understand that you have a 50pip SL, Yes and that you were using a 100 pip SL for your longer term trades Yes...this was because the Great Financial Crisis exploded the volatility by 400% ...we were seeing 400 pip ranges for the day compared to the usual 80 pips a day...so our Stop Losses were to small and were being whipsawed by the volatility ...so we became much more selective on our trades and moved to 100 pip Stop Losses.
However, as the thread progressed, it seemed as though this was changed to 100 as a standard. The past couple of trade notifications you have sent have been accompanied by a 100 pip stop loss. We are trying to pull our Stop Lss size back to 50 pips but the Greek issue has caused volatility to spike up again
2. What percentage of your trades require the whole 100 pip ISL? Can I anti hedge with 50 and still be ok? Yes, but the smaller the Stop Loss, the bigger the risk of being stopped out prematurely
3. If I am unable to take a trade that is recommended by you straight away, how much grace do you believe can be allowed? I.e. if the market has already moved (say) 40 pips in favour of the trade, is it too late to jump in? What would you consider a reasonable amount of 'grace'? 25 pips.... But I usually give lots of warning about my trades so they can always be made into pending orders
4. What is your main source of Fundamental Information? Quality English speaking Financial Newspaper editorials...Financial Times London, Business Times Singapore, South China Morning Post Hong Kong
5. I understand that you are not really an 'overnight success' in Forex. I do not come from a economics or finance background, and so I ask, what have been the most influential factors in your ongoing success? LOL...Old age and patience...Plus I have been trading property, stocks and futures for 30+ years What books should I read, what concepts should I understand in order to make more logical sense of the market? For instance, you state that Euro will sink to 1.1 by the end of the year, but how do you know this? The Euro is in BIG trouble....And the Hedge Fund dogs are chasing it Is that something that is able to be taught? Yes. Once you understand that the Euro is in serious trouble, You just need to zoom out the longer term charts and you will see that 1.1000 is being conservative. I said that it will hit 1.1000 by the end of this year. I think we will see parity very soon after
6. How certain are you of the trades? (How long is a piece of string?) LOL Yes Having a very limited account, and wanting to maximise my return, how best would you consider continuing? Should I stick to 2-5%, or would you consider your setups to be of such high quality that a higher percentage could be invested? Whats the rush...You are learning a skill that you will use for the rest of your life... If you go in too high a risk, you risk losing your funds and then you have a big hill to get back to where you are...It is always easier to trade with the markets money
7. Do you know the stats on how often the PA will bounce/go through a round number? No, unfortunately I don't..I tend to use the Round numbers as a final "support mechanism" for the trade based on S&R lines or the 50% fib You have given the figures on S&R, Fibs and Trend Lines, but are there probability statistics on how often the price will bounce or go through a round number? No
Once again, I thank you for your patience with my questions. No problem...It is interesting to see your mind working through the questions
Email 2
I would like to hear your opinion on how the Commodity Futures Trading Commissions' plans to reduce leverage to 10:1 will affect Forex trading. It will send everyone into overseas accounts (most likely London)
My knee-jerk feelings are as follows: I don't see it affecting my trading other than making me hold more capital in my trading account or reducing my trade size if I can't. Yes It may cut down on the artificial volatility caused by traders playing a currency in off hours trading. Maybe And, it may help limit Hedge Funds like Soros in their attempts to destroy economies. Nooooo..there will always be markets somewhere that will be structured for them It may keep some beginning traders out of the market and it may affect the spread offerred by brokers because of reduced trading. Nooo...it will still be the same..just in a different location (London, Frankfurt, Zurich, Hong Kong Singapore) Why do I still have the feeling that This ain't good? It isn't. It means that the US has lost control of its oversight and regulation roles
MESSAGE FROM JACKO 557
It is 3.00am NY time Thursday March 11 and the market is at 1.3630
The market has been very quiet in Asian trading , but the market is edging up to my target SELL target prices. I will be in a meeting for a couple of hours and will be back for the US session. My orders are in place waiting to be activated.
I currently have two pending SELL orders.
The first is the speculative "top of the Range" trade at 1.3700
The second is the standard Daily Resistance line Trade at 1.3800.
Both trades have a 100 pip fixed Stop Loss
The fundamental issues supporting my thinking is that
firstly, the GFC itself is far from over. It has merely transformed from a banking crisis to a sovereign debt crisis. Transferring massive losses from the banking sector to the public balance sheet re-capitalized the banks, but created a more serious problem with excessive public sector borrowing. Many national leaders continue to ignore the basic rule: you can't borrow your way out of a financial crisis
secondly, George Soros and the Hedge Funds have not gone away. They have not unwound their short Euro positions and are continuing to add pressure on the weakest links of the European PIIGS. They have tasted blood and will not stop until they have won. George's massive victory over the Bank of England has emboldened all the other Hedge Funds
and thirdly the bond vigilantes are hammering at the PIIGS bond markets, sending their bonds down, their borrowing costs up, and weakening their currency which increases the size of their debts.
Edit 8.00am NY time Market is at 1.3660 The market has continued to creep up marginally. My two pending SELL orders are still in place waiting to be activated. After 3 days of no News events, we have the US Trade Balance and US Unemployment Claims at 8.30a NY time
Edit 12.10pm NY time Market is at 1.3670 The market has continued to creep up marginally. My two pending SELL orders are still in place waiting to be activated.
Edit 7.30pm NY time Market is at 1.3678. Apologies for the delay in posting but I had a dental appointment. (And yes, I still have all my own teeth...LOL)
The market is still creeping up very slowly....
My two pending SELL orders are still in place waiting to be activated.
MESSAGE FROM JACKO 556
It is 3.00am NY time Wednesday March 10 and the market is at 1.3558
The market is sitting in the middle of the 1.3500-1.3700 range that it has been in for some weeks.
My SELL at 1.3800 orders are still in place. I am waiting until it moves to the longer term , stronger Daily Resistance line at 1.3800.
However, I am also prepared to consider a more adventurous "top of the Range" trade. If the market gets back up to the higher end of the Range again soon, I may even take a speculative Range trade by SELLING at 1.3700 with a set target of just above 1.3500 to close the trade
Edit 8.00am NY time Market is at 1.3612. London has moved the market up marginally. The US session may take it up further to my speculative Range trade target at 1.3700.
Edit 12.15pm NY time Market is at 1.3634 The market has continued to move up in the US morning session. I have decided to take the speculative top of the Range trade. I have just placed an order to sell at 1.3700. (SMSes will be sent out in the next 5 minutes)
Edit 7.00pm NY time Market is at 1.3642 The market is edging up to my target SELL target prices.
I currently have two pending orders.
The first is the speculative "top of the Range" trade at 1.3700
The second is the standard Daily Resistance line Trade at 1.3800.
Emails
Email 1
Maybe a naïve question: if George Soros and his hedge fund colleagues succeed in trashing several Eurozone economies and send the euro tumbling to parity against the USD, doesn't that just make US exports less competitive, thereby slowing down or even reversing the current fragile recovery and throwing more Americans out of work? Yes, but by that time George and his friends will be counting all their profits
And if so, will the net effect then be that the damaged US economy will appear to investors as a much bigger risk than the EZ, yes so all the funds will then migrate back to the euro, yes, and George and his friends will be buying euros while they trash the US in the media and we end up more or less where we started, except that multiple economies will have been trashed, the recent economic bailout packages essentially will have been a waste of time (not to mention taxpayers' money), and Soros and his buddies will have pocketed enormous profits? Yep !!!!
Another naïve question: do regulators turn a blind eye to such blatant collusion among major investment groups? What can they do? George and the Hedge Funds operate from countries all around the world and base their Hedge Funds in obscure tax havens
Third naive question: will Soros and his buddies be at risk of having their offices torched by angry mobs of unemployed Americans? No... they will see him as a great capitalist that applied the torch to slack governments and incompetent politicians
Email 2
I'm a bit confused with the SMS I just received and am trying to implement.
If the market was at 1.3666 and is currently at 1.3627, which means it's gone down, why would you place a SELL order at 1.3800 which is 134 pips in the opposite direction? I like to give long lead times so that everyone has plenty of time.
Shouldn't we have bought and got out at 1.3800? Nooo ....that would be countertrend trade
Or does it mean that if the resistance line (1.3800) is reached that it'll take a big dive from there? You got it !!!!! Lets just trade the high strength longer term Resistance line trade.
Am I missing something really simple here? :-) No...You got it right with your last question
Email 3
I don't share your view that hedge funds have the power to dump the Euro. Ok
First, the GFC has caused a lot of HFs to blow off. There is a lot of liquid cash sitting in HFs Second, their overall capital is about $1b which is a lot but only a few of these HF trade currencies.Yes but they have the massive leverage on their side. George Soros had $10 Billion worth of leverage against the Bank of England on his own Fund (and don't forget that George was an unknown HF operator at that time...he was not famous at all) ... Then all his friends joined in...And then they got into the Media about how weak the UK economy was and how the Bank of England needed to devalue immediately...and then… it was all over for the UK government
Third, I don't think it is accurate to say that the Euro is the DeutcheMark. It isn't. Of course Germany is the strongest economy in Europe so what they do or say has a huge impact on the Euro. Yes
But the size of the market using this currency and the overall economic power behind it is much bigger than Germany alone. I don't want to subjectively introduce some nationalist pride here, but France is also part of the Euro zone, and it is also a large economy. Yes, Germany and France are the dominant ones
The main problem is the fact that Europe just does not know how to make a common decision about a crisis. It would have been easy to say 'ok, let us big Euro-zone economies lend Greece the money they need at a higher rate than the one we can get from the market with our AAA grades, but much lower than what Greece has to ask for its own bonds now'. It would have helped Greece, cost nothing to big economies tax payers and reassured the market on the solidarity and solidity of the Euro-zone immediately. Good argument...except the German people would not accept that... They would boot the Government out at the next election for buying dodgy bonds off a country that has now admitted that they lied and falsified their books in a BIG way to get into the Euro Zone. The same applies for Germany lending Greece any money.... And that is really what is weak in Europe. Politics does not follow economy properly... It is hinted that Greece could default without intervention from the rest of Europe and that is troublesome. I am of the opinion that if Greece defaults they should be forced out f the Euro Zone. Countries are entering the Euro Zone all the time...so let Greece fix their economy and then ask to re-enter
It would be like the Fed saying that it won't bail out California, should it default. That would cause real turmoil, wouldn't it? Yes
Having said that, and without any necessity of a manipulation by HFs, I believe that the Euro will reach 1 dollar or nearly, before it bounces back. Yes
More from a natural ebb and flow swing following the 1.6 top than from manipulation. Hmmm.... it will only get there if everyone thinks that the Euro zone is in trouble...And it is. And Germany and France combined cannot, and will not, hold up all the rest of Europe..Because their people won't allow it...The German eople and the French people will boot out any Govt who risks "their" money to help out the PIIGS
This is only my own opinion, of course. Ditto...but a good discussion
MESSAGE FROM JACKO 555
It is 3.00am NY time Tuesday March 9 and the market is at 1.3624
My SELL at 1.3800 orders are still in place. I am waiting until it moves to the longer term , stronger Daily Resistance line at 1.3800.
In hindsight a SELL at the shorter term Resistance line at 1.3700 would have been a good trade. However, the market only touched 1.3703 before Mondays London open, so you would have needed to be ready to trade late in the Asian Monday session (which I don't... I start my week with London open on Mondays). Our European and US members were all asleep.
Also, because the market had been consolidating and staying in that area, it was a more risky trade (the longer the market stays around a Support or Resistance line, the higher the probability of it breaking through it).
Edit 8.00am NY time Market is at 1.3565 Hmmmm.... the market has been moving down. I am keen to get a trade on but I do NOT want to chase this market at the moment. The lack of any News events today means that the market has no real stimulus to react.
Edit 12.05pm NY time Market is at 1.3581 The decision NOT to chase the market was a good one.... it only went 28 pips lower before reversing.
The market has been in consolidation and is staying within the Range that it has been in since February 16...almost four weeks. A break down will occur soon.
Some good emails were received today... I will post them tomorrow
Edit 7.00pm NY time Market is at 1.3606 The market has gradually drifted up in US afternoon session. The market is sitting in the middle of the 1.3500-1.3700 range that it has been in for some weeks.
If the market gets back up to the higher end of the Range again soon, I may even take a speculative Range trade by SELLING at 1.3700 with a set target of just above 1.3500
Emails
Email 1
I was wandering when in your trading was the major turning point (aha moments)
in your trading career that you finally made consistent profits? Hmmm. ...Virtually straight away..
On a different I had an aha moment yesterday and that after going through all my trades for the last 3 years i have found that all my counter trend trades were just not profitable with a 70% loss rate with my losers being greater than my winners. (Why couldnt i have figured this out sooner?! lol) The same question i asked myself over Christmas. I was too busy seeing the trees for the forest. Plus I easily succumb to pressure to trade more.
One truth with counter trades ive found is that it is more riskier, stressful and more highly
unpredictable and furthermore it leads to the worst killer of traders --- Overtrading. Yes
But why do most people still try to trade counter trades? (human nature to be right? ego?) Yes. Also a tendency to want to go against the crowd and prove that being a maverick is something that will make us a specially talented trader. Part of our culture is that the most successful people "go against the crowd" to be successful, whereas in trading, that is not the case.
On the other hand my trend trades were 70% profitable and with my winners being exceeding bigger than my losers. Is this is what you have been teaching me and now i totally understand. I did a bit more research and the best traders in the world like Ed Seykota and Michael Marcus and Bruce Kovner and the turtle traders were all trend traders. Yes
So the trend really is your friend (until it bends!) Yes, and that is usually shown by the break of the Daily trend line on a 300 day Daily chart. Look at the broken Daily Support line from March 3 2009 through to Nov 2 2009 which broke down on Dec 2, 2009. That was the sign that the uptrend was broken and was the big hint that the uptrend was over and that we should go short only from that point.
The big issue is that after nine solid months of being a bull, it is difficult sometimes to completely change and go in the opposite direction.
The other issue is that we were all also still shell-shocked by the huge volatility caused by the Great financial Crisis, so the confidence level of any decision to completely change from bull to bear was not as high.
With 20/20 hindsight it is easy to see now because we can see the historical results of the change in trend, but when you are in the middle of it all, it is more difficult
Your insights on this thought will be appreciated. I have been guilty of the same error that you have been making. I think the tendency for overtrading is what leads us to take the countertrend trades. We often feel guilty of "not working" when we are waiting for a trade. It is the Western way of always trying to "look busy" for fear of being seen as a slacker.
MESSAGE FROM JACKO 554
It is 3.00am NY time Monday March 8 and the market is at 1.3698
IMPORTANT NOTICE: If you are in the US, our internet based SMS provider is having problems with some rogue US customers that have caused the US telephone companies to stop SMSes from these internet based providers. We have been told that the problem is being rectified but it is starting to get annoying at how long it is taking for them to clear their database of the rogue customers and fix the problem
It originally affected ALL the US carriers but they are still cleaning up the problem with Sprint Nextel & Boost. We have asked them to do a check of our database, which is quite small compared to some of their other customers and they will be doing that as soon as possible
EDIT 8.15am NY time I have just sent the SMSes for the trade outlined below in the 8.00am Edit, and have just checked the SMS logs...It appears that they are still having problems with their US carriers (not just Sprint Nextel & Boost)
I have my charts open to 300 periods of the Daily time frame.
The Resistance line is found by linking up the highest points on the daily chart starting from 1.5140 (Dec 2) and 1.4579 (Jan 12) , with the resistance line today at approx 1.3800.
However, I am also looking at the more aggressive, shorter term Resistance line from 1.4579 (Jan 13) and 1.3733 (March 3 ) which is currently at around 1.3690 (1.3700 rounded up).
The Support line is of no real value at the present time since there is no upward sloping Support lines of value in any proximity.
The 50% fib line The most relevant 50% fib line is the target retracement number of 1.4000 which is the 50% fib from 1.4580 (Jan 12) to 1.3444 (Feb 17)
I am not as keen to trade on the shorter term Resistance line this week. The market has been Ranging sideways for the month as the market consolidates and digests the fall from 1.5140 and the lesser fall from 1.4578.
I will be watching the action today regarding price action at the shorter term Resistance level (1.3700) for a possible SELL trade today. But if the market breaks much above the 1.3700 mark, then it is heading to the longer term Daily Resistance line at 1.3800 (which has been my favored trend line all this time).
I am inclined to leave the shorter term trade alone until it moves to the longer term , stronger Daily Resistance line at 1.3800.
There are very few News events this week, with the first serious ones being the US Trade Balance and US Unemployment Claims at 8.30am NY time on Thursday (4 days away).
Edit 8.00am NY time Market is at 1.3666 The market has fallen marginally but I expect the market to "wander around" due to the lack of News events early in the week.
However, I have just placed my orders to SELL at 1.3800. (SMSes will be sent out within 5 minutes)
My rationale is that the Daily Resistance line is a long and strong one.
Also, the Hedge Funds of George Soros and friends have not gone away... they will be still accumulating short positions over time and steadily increasing the pressure....
Edit 12.05pm NY time Market is at 1.3610 The market has bounced down off the shorter term Resistance line at 1.3700. I wait until it moves to the longer term , stronger Daily Resistance line at 1.3800.
Edit 7.00pm NY time Market is at 1.3614. In hindsight a SELL at the shorter term Resistance line at 1.3700 would have been a good trade. However, because the market had been consolidating and staying in that area, it was a more risky trade (because when the market stays around a Support or Resistance line, the probability of it breaking through it increases significantly).
I will wait until it moves to the longer term , stronger Daily Resistance line at 1.3800.
I have just realized that, because I was back in the United States in early February, I did not publish the Fund's last Quarterly Report to Investors for November 1, 2009 to January 31, 2010.
The previous Quarterly Reports can be viewed in early November 2008, February 2009, May, 2009, Aug 2009, and November 2009. (As you will recall, I have now closed the blog to non-Investors because there was a naive individual in the group who gave the User ID and Password out to others).
However, the Report to investors is set out below:
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Message to investors.... February 3
Below is a copy of the updated performance of your funds in the Jackson Fortress Asset Management Fund for our second year to date.
As you will recall, the Fund was established on August 8, 2008 and commenced trading on August 28, 2008.
In our first year (shortened to 337 days by our August 28 commencement date) , we accumulated 1727 pips over 337 days for a 37.49% annualized return. We achieved that return with maximum safety since we have never had more than 2% capital risk on any trade.
We are now half way through our second year of trading and we have earned 334 pips over the 184 days from Aug 1 to Jan 31 for an annualized return of 13.4%. This result is certainly less than I am used to and was caused primarily by an unimpressive period in November.
I also decided to slow my trading right down in December. I was starting to feel very fatigued from the cumulative effects of the 18 month long Great Financial Crisis and basically took a 3 week break from trading. I simply kept a watching brief for any potential trading opportunities.
January saw the turnaround with a 140 pip profit for the month. However, that was overshadowed by the excellent trading opportunity that I fluffed midway through the month when I closed out two Sells trades early due to my excessive caution (the final residual effect of the GFC). This resulted in a missed opportunity to collect another 900+ pips. However it demonstrated how easily it is to accumulate large numbers of pips on the longer time frames.
I am very optimistic about 2010. My strategy for 2010 is to keep longer trades and will be looking to add to the positions to compound up some profits. This was my strategy in 2006 and 2007 which resulted in some spectacular profits.
I am keen to get back into compounding my trades. (adding to open trade positions) It would have been financially irresponsible, to use the compounding strategy in the last 18 months because of the extreme volatility caused by the GFC and its after-effects. However, 2010 is looking like a completely different animal compared to the GFC horror year of 2009. The market is feeling very similar to the 2006 year when the trend changed and I had an exceptionally good year. We are still in the very early stages of the change in trend.
On a personal note, the break over Christmas and the New Year was a major turning point for me. (I needed a break after the last 18 months of the effects of the GFC). I am much more relaxed after the break and the market is again feeling very familiar to me. The uncertainty of the GFC is gone and I am becoming much, much more confident that my trading decisions in the next 12 months will be more profitable for the Fund, the trading group and myself
Wayne Jackson
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MESSAGE FROM JACKO 553
It is 3.00am NY time Friday March 5 and the market is at 1.3585
The market is sitting in the middle of its range this week. My order to SELL at 1.3750 is looking stranded and lonely. It was placed at 7.00pm NY time Wednesday but the market only rose as high as 1.3712. So I was short on my target by 38 pips... and have not been triggered.
However I am keeping it there for the present time. I will cancel it at the end of today today if it is not triggered.
Today is the infamous Non Farm Payroll (NFP) Day. This (and the FOMC Statements) are the two biggest movers on the Forex Calendar. It is not unusual to see movements of 150 pips in either direction after the announcements.
Today is also the day the German Chancellor (Mrs Angela Merkel) meets the Greek Prime Minister (Mr George Papandreou) to deliver the news that Germany will not bail out Greece.
Edit 8.00am NY time Market is at 1.3580. The market is subdued going into the time before the NFP announcement.
Edit 12.05pm NY time Market is at 1.3600 I have just canceled my open order to SELL at 1.3750
Emails
Email 1
...If you think that the Euro will get to 1.3750, why are you not buying the Euro? It would be a counter trend trade. I am done with taking counter trend trades for the foreseeable future. In the past 12 months I have been taking trades because I am constantly being asked to trade more. Sometimes the countertrend trade has left me on the wrong side of where I wanted to be regarding opening a trade that was with the trend. SoI have toughened up on my stance on this issue over the last month or two and I am only trading with the trend until such time as I feel ready to change.
MESSAGE FROM JACKO 552
It is 3.00am NY time Thursday March 4 and the market is at 1.3644
I am still keen to SELL into this market. My order to SELL at 1.3750 was placed at 7.00pm NY time yesterday but the market only rose as high as 1.3712 so I have not been triggered... yet.
The conflicting forces in the resolution of the Greek situation will ensure that there will be enough volatility to move this market through the range of the Daily Resistance line (around 1.3850 or less) and the previous low (around 1.3450) over the next few days and next week.
Edit 8.00am NY time Market is at 1.3685 My SELL at 1.3750 order is waiting to be triggered. The market has been edging up in London trading.
There is some strong News events at 8.30am today. There is an ECB Interest Statement Press Conference (where they will discuss why they left the ECB interest rate unchanged at 1.00%) and there is the US Unemployment Claims numbers.
Edit 12.10pm NY time Market is at 1.3570 The market has weakened in US trading, so my order is still waiting to be triggered.
Edit 7.00pm NY time Market is at 1.3578. The Market has had its usual sleep in the US afternoon session where the market barely moves and is awaiting the usual little kick off in the Asian session at 7.00pm NY time as Hong Kong kicks in.
My SELL at 1.3750 order is waiting to be triggered.
NOTE Our internet based SMS provider is still sorting out their problems with the US Sprint Nextel & Boost networks. It appears that some rogue operators had hijacked their SMS provider system for ALL of their US networks. The connectivity to the US members has now been restored, except for Sprint Nextel & Boost. They advise us that they are working to resolve the problem. (We are a tiny client, but they have been very good with keeping us informed)
Emails
Email 1
Why are the hedge fund managers wanting to push down the EUR? How do you know this? Germany is trying to keep the value of Greek bonds high.... because if they fall to "junk bond" status (or worse, Greece defaults and refuses to pay for its bonds) .....then the Euro will drop sharply. Perhaps so sharply that the Economic Union is forced to break up because Greece would be kicked out, followed by Portugal, Ireland, Italy, and Spain (as they default from the domino effect)
So it is a fight as to whether Germany can stop Greece from defaulting VS the hedge funds driving the value of the bonds down so low that Greece does default (and the Euro drops).
Also, how do you know that the USD will keep gaining strength until the end of the year? Because I believe that the hedge Funds will win...same as George Soros beat the British govt in 1992 and forced the massive devaluation of the Pound. (In 1992 George was able to beat the Bank of England with just $10 Billion....How much is the combined power of Hedge Funds some 18 years later???? The Greeks have said that a $30 Billion bail out will save them...I think not !!!!)
Until 1992, hedge funds did not believe they could take on a "big " currency and win... George Soros' win in 1992 has now opened the gates for almost ANY suspect currency to be trashed. (In the late 1990's they took on Thailand and caused the Asian Financial meltdown as the domino effect trashed most of the Asian currencies. The financial contagion was only stopped when Hong Kong, supported by China, increased the value of the HK dollar which destroyed a couple of highly geared Hedge Funds that were trying to trash the HK dollar ). But the effects of the Asian meltdown took the Asian economies 10 years to get back to the same level as 1997
Once George showed Hedge Funds that taking on a "big" currency could be done, then taking on the Euro in 2010 is no great stretch (Remember that the Euro is primarily the old DeutscheMark accompanied by a whole heap of weaker currencies now...so the Hedge Funds are really only taking on the Germans, just as George Soros took on the British)
Email 2
German Chancellor Angela Merkel is meeting with Greek Prime Minister George Papandreou on Friday in Berlin and I believe there will be positive spin on the meeting but the reality remains that Germany can not, and will not, bail out the Greeks.
The Euro is in serious trouble...... Does anyone believe that the Greek govt can turn this huge problem around quickly? I don't think so.
The only other option available to Greece is to call in the International Monetary Fund (IMF) and our Asian members who were old enough in 1997 to see what happened can tell you what happens when the IMF are brought in...They brutalize the country so badly that it takes 10 years to get back to where they were before the IMF came in
MESSAGE FROM JACKO 551
It is 3.00am NY time Wednesday March 3 and the market is at 1.3621
My SELL at 1.3650 trade is currently marginally in profit. It currently has a 100 pip fixed Stop Loss. However I am concerned about any potential announcement coming out of Europe for any form of bailout for Greece. So I am moving my Stop Loss to Break Even at 1.3650.
NOTE: We have just received the notification from our SMS provider. It states that there has been a glitch in their system and that they have now "restored connectivity to our US customers on dedicated short codes, to all carriers except Sprint Nextel & Boost. The connectivity status of customers on shared US shortcodes remains unchanged" So if you have not received the SMSes today it may be for the above reason.
EDIT We have had them check how many of our US members were affected and it appears that only about 5 or 6 members from the US are on the Sprint Nextel & Boost networks.
Edit 4.25am NY time Market is at 1.3650 We have just been Stopped out at BE. But I am still looking to get back into the market again very soon.
Edit 8.00am NY time Market is at 1.3623 The market is swinging around the 1.3650 area. Our safety-first approach on the earlier trade has prevented any loss but it has also taken us out of the trade. I am still looking to get back into the market again very soon. We have the ADP Non Farm Payroll today at 8.15am which will give us some detail on US job creation and the health of the US economy.
Edit 12.05pm NY time Market is at 1.3721 Hmmm...the market has moved above the more aggressive, shorter term Resistance line from 1.4579 (Jan 13) and 1.3682 (Feb 26) and may be heading towards my more favored longer term Resistance line in daily chart starting from 1.5140 (Dec 2) and 1.4579 (Jan 12) , with the resistance line today at approx 1.3860.
Edit 7.00pm NY time Market is at 1.3700 I am again keen to SELL into this market. I believe that this market may try to get to the 1.3860 Resistance level, but I am not 100% sure that it will reach it. I do want to establish some SELL positions now so I have just placed an order to SELL at 1.3750 with a 100 pip fixed Stop Loss. The SMSes will be sent out in the next 5 minutes.
Again, Europe is currently closed so there is no likelihood of any announcements out of Europe for 7 hours, so we have a safety buffer from any German announcements.
NOTE Our internet based SMS provider is still sorting out their problems with the US Sprint Nextel & Boost networks. It apears that some rogue operators have hijacked their provider system. We have had them check how many of our US members were affected and it appears that only about 5 or 6 members from the US are on those networks
MESSAGE FROM JACKO 550
It is 3.00am NY time Tuesday March 2 and the market is at 1.3525
I am keen to trade on the shorter term Resistance line again today. I will be watching the action today regarding price action at the Resistance level (1.3650) for a possible SELL trade again today. I would prefer to place pending orders but the risk of Germany's Mrs Merkel making an announcement that Germany will support Greece (and, by implication, all of the PIIGS) is still there.
Even though I believe that the risk of that is very low, I don't want to be in the position where she makes a statement, my order gets picked up in the rush, and then followed very quickly by being stopped out. Because IF she steps in to support Greece, we will see a 250+ pip move upwards.
Edit 8.00am NY time Market is at 1.3564 The market has seen a new low at 1.3435 but has moved back up quickly in London trading. I am looking for the US to follow through with this move up to my target area of 1.3650.
Edit 12.05pm NY time Market is at 1.3569 The market is getting more volatile as the European issue gets closer to its resolution. I am still looking for the US to follow through with this move up to my target area of 1.3650.
Edit 7.00pm NY time Market is at 1.3621 The market is getting closer to my target of 1.3650. I have just placed an order SELL at 1.3650 with a 100 pip fixed Stop Loss. The SMSes will be sent out in the next 5 minutes
Edit 7.45pm NY time Market is at 1.3645 I have just SOLD at 1.3650. Europe is currently closed so there is no likelihood of any announcements out of Europe for 7 hours, so we have a safety buffer from any German announcements
Emails
Email 1
I've been trying to read up about the bonds that Greece are expected to launch this week as it seems that if Germany and/or France decide to buy these to help ease the debt then the EUR could be in for a fairly large rebound upwards. Yes.. that is the BIG, BIG danger. However, I think that Germany's Mrs Merkel does not want to do it and I think she knows that the huge hedge Funds can beat her
By the fact that you are currently looking to sell the EUR (if it retraces back to the resistance line) are you deciding that this risk of Germany bailing out Greece is worth betting against ? Yes I presume if that happened then the price would move way more than your 100 pip stop.Yes, I agree We would lose that trade but I would jump in again as soon as the market had stopped moving up. Also I would have an Anti Hedge trade at where I was stopped out . Germany cannot hold off the hedge funds if they all get together. Also, Mrs Merkel would lose favor with the Germans who do not see a reason to bail out another country with German taxpayers money
Of course, the Greeks could fail to sell their bonds which would result in any SELL trade making large gains so do you view this as a more likely outcome ? Yes
I did see this comment from Angela Merkel today
http://news.smh.com.au/breaking-news-world/no-german-rescue-plan-for-debtridden-greece-20100301-pbj7.html
Personally, I think waiting to see what happens before entering the market is likely to be even more risky so I'd like to get in early but I'm struggling to determine just what kind of odds we are looking at. The Germans are angry that over the weekend some Euro Zone bureaucrats were sending out the message that Germany was going to bail out Greece in an effort to box the Germans into the corner. The Germans were really annoyed by that. I can't see any major form of bailout from Germany
MESSAGE FROM JACKO 549
It is 3.00am NY time Monday March 1 and the market is at 1.3624
I have my charts open to 300 periods of the Daily time frame.
The Resistance line is found by linking up the highest points on the daily chart starting from 1.5140 (Dec 2) and 1.4579 (Jan 12) , with the resistance line today at approx 1.3870.
However, I am also looking at the more aggressive, shorter term Resistance line from 1.4579 (Jan 13) and 1.3682 (Feb 26) which is currently at around 1.3650.
The Support line is of no real value at the present time since there is no upward sloping Support lines of value in any proximity.
The 50% fib line The most relevant 50% fib line is the target retracement number of 1.4000 which is the 50% fib from 1.4580 (Jan 12) to 1.3444 (Feb 17)
I am keen to trade on the shorter term Resistance line. I will be watching the action today regarding price action at the Resistance level (1.3650) for a possible SELL trade today. But if the market breaks above the 1.3650 mark, then it is heading to the longer term Daily Resistance line at 1.3870 (which has been my favored trend line all this time).
The big danger is that Germany will make a announcement today to formally support Greece by buying its bonds. So far, they have said that they are prepared to guarantee the bonds but not to actually buy them . Any announcement from Germany has the potential to quickly push the Euro up.
However, the long term trend is still down and the hedge funds are smelling blood. (George Soros has admitted that he has had meetings with other sizable Fund managers about the poor state of the individual European government finances, with the intention of selling the Euro down).
The big advantage that George Soros and his band of other Fund Managers have is that they are not taking on the whole of the Euro zone... They only need to break German support for the rescue of Greece (or any of the other PIIGS), and it is all over.
As I said last week, it appears that this attack on the Euro is far stronger than expected and the bond vigilantes are targeting the PIIGS (Portugal, Ireland, Italy, Greece and Spain) in bigger and bigger numbers now. This is reminiscent of George Soros' attack on the GBP some years ago (which became an attacking frenzy as more hedge funds joined in) before the UK Govt capitulated on the currency.
I think that we are about to see history repeat itself on a bigger scale of the Euro.
Edit 8.00am NY time Market is at 1.3510 I was caught out being too slow and unprepared with my SMSes today. I was watching the market when it poked its head up to 1.3650 and decided that it was worth the trade. By the time I had the SMSes prepared and ready to send, it had dropped back sub 1.3650 so I waited..... and waited... for it to get back to 1.3650.
The target price was correct... the SMS preparation and execution was terrible. (I should have just placed limit SELL orders earlier today at the Resistance line at 1.3650 and sent the SMSes at 3.00am NY time...).
PS The drop at 6.30am NY time was caused by the news that "Prudential Plc, Britain's biggest insurer, agreed buy American International Group Inc.'s Asian operations for $35.5 billion in cash and stock" (Bloombergs) ... This meant that Prudential will buy USD's (sell GBP's) to pay for the transaction. This caused a big rise in USD and sent the GBP (and by association, the Euro) down.
Edit 12.05pm NY time Market is at 1.3514 The market has dropped in the London and US morning session, especially on the Prudential purchase of AIG news. But as we are moving into the US afternoon session, I think we may see a minor correction back up towards the Resistance line again. Those of you who were awake and read the frst post in today's Message and sold this market may want to lock in some profits and sell again at the higher levels
Edit 7.00pm NY time Market is at 1.3560 The market has moved back up again towards the Resistance line. The market is very wary of an announcement out of Germany regarding Greece. They know that any strong statement will send the Euro up 250+ pips.
I still believe that the Hedge Funds will win this fight. I am looking again at the 1.3650 Resistance line as a SELL spot.
Monday, February 1, 2010
MESSAGES FROM JACKO (February 2010)
It is 3.00am NY time Friday February 26 and the market is at 1.3565
The market has been moving upwards in Asian trading. This move up is slowly getting it closer to my initial longer term Resistance target of 1.4000, but I am also getting a keen desire to take a trade on the shorter term Resistance line from 1.4579 (Jan 13) and 1.3788 (Feb 16) which was at around 1.3700 at the start of the week.
However, the gradient or slope of the shorter term Resistance line is quite steep and as the week has progressed the line has fallen lower. I am keen to trade on the shorter term Resistance line from 1.4579 (Jan 13) and 1.3788 (Feb 16)and 1.3692 (Feb 23) which is today at around 1.3625. I will be watching the action today regarding price action at the Resistance level in preparation for a trade on Monday. (I don't like entering trades on a Friday...they tend to leave you stranded over the weekend with a position. Most brokerages and Investment Banks demand that all positions be closed for the weekend. It is a good rule.)
Edit 8.00am NY time Market is at 1.3578 The market has risen as high as 1.3627 and bounced off the Resistance line at 1.3625 and has fallen back some. The US Preliminary GDP numbers at 8.30am may cause some volatility as will the US Existing Home Sales at 10.00am. As stated above, I will be watching the action today regarding price action at the Resistance level in preparation for a trade on Monday.
Hmmm.... Where did my 12.10pm NY time post go? Looks like it didn't upload.
Edit 5.30pm NY time Market is closed. The market has broken through the 1.3625 Resistance line (Stop Loss hunting????) and then moved back to settle there for the US afternoon session. I will be looking forward to trading on Monday. Enjoy your weekend.
MESSAGE FROM JACKO 547-1
It is 3.00am NY time Thursday February 25 and the market is at 1.3482
The market has taken a dive in Asian trading. Interestingly, the market was at this exact same level last Friday (see Message 544) when the market was at 1.3480.
I stated then that I was "starting to despair that this market will never retrace again... but then commonsense prevails..." and that the market would soon retrace.
Well..... The market then proceeded to retrace to the shorter term Resistance line from 1.4579 (Jan 13) and 1.3788 (Feb 16) which was then at around 1.3700.
As you know, I was holding out for a retracement to the stronger, longer term Daily resistance line at 1.4000 (and the 50% Fib number of 1.4000), but it was not to be.
It appears that this attack on the Euro is far stronger than expected and the bond vigilantes are targeting the PIIGS (Portugal, Ireland, Italy, Greece and Spain) in bigger and bigger numbers now. This is reminiscent of George Soros' attack on the GBP some years ago (which became an attacking frenzy as more hedge funds joined in) before the UK Govt capitulated on the currency
We may now see a retracement back up again towards that 1.3700 area, but a Buy trade up to that level is not a trade I would recommend in these circumstances.
I intend to be on to the next retracement much quicker now because this attack on the Euro (and the PIIGS) is getting very serious.
Edit 7.00am NY time (A little earlier today) Market is at 1.3494. The main news for today will be the US Unemployment Claims and the US Core Durable Goods Orders at 8.30am. However, they are being overshadowed by the increasingly dire issues coming out of Europe. It is likely that there will be a technical correction on the Daily charts similar to the move in late December/early January, prior to the next leg down.
Edit 12.05pm NY time Market is at 1.3478 The market is moving into a very interesting area. I believe that in the next couple of months we will see extraordinary opportunities to get some big pip trades. I think that, just as we saw George Soros and his band of hedge funds take on the GBP (and win), I think that the hedge funds and bond vigilantes are working in tandem to take on the Euro.
Edit 6.30pm NY time (A little earlier today) Market is at 1.3537. The market has moved back up in to the range where it has settled a large number of times over the last two weeks. This move up is slowly getting it closer to my initial target of 1.4000, but I am also getting a keen desire to take a trade on the shorter term Resistance line from 1.4579 (Jan 13) and 1.3788 (Feb 16) at around 1.3700
Emails
Email 1
I now feel more comfortable with your trading now that you are prepared to wait for a retrace/correction on the daily chart. Although it is very frustrating to wait on the sidelines. I know, I've been waiting for a month since I got stopped out from a short trade only 3 (!) pips from the absolute top of the recent retrace.It is one of the frustrations of trading...watching a market move when you are not in it...but you have to have your rules.
I remember Warren Buffett being absolutely crucified by commentators when he stood aside during the whole Dot.com boom because he said he could not understand the valuations. They said that he was too old and didn't understand the New Market. Those commentators were remarkably silent when the Dot.com boom crashed and burned….and everyone lost all their money...except ole Warren Buffett...LOL
