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