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wormboy Mar 6, 2009 3:30pm | Post# 1

The term wormhole was coined by the American theoretical physicist Nicholas Ryan Ballard in 1957. However, the idea of wormholes had already been theorized in 1921 by the German mathematician Hermann Weyl in connection with his analysis of mass in terms of electromagnetic field energy.
This analysis forces one to consider situations...where there is a net flux of lines of force through what topologists would call a handle of the multiply-connected space and what physicists might perhaps be excused for more vividly terming a ‘wormhole’.

Truth being told I have absolutely no idea what the above means, I just thought since it sounds clever it would be cool to have it up there to start a thread

Okay, the idea of having this thread up is not solely because I want to keep a track record of my trades. I have my fxreport to do that for me. Mainly it's because I am partly disappointed with what had become of some of the public threads. Too many wild punting & baseless trade calls aren't the best environment to learn, analyse & exchange views. There are many sound traders here in the factory that can offer great insights and I will see to it that I get them to participate. Okay enough of that.
I welcome any trader, to post in this thread. This is a public private thread if you will. Any trader with any interest in any currency pair is more than welcomed here. Trade calls are welcomed providing their assisted with charts or at least some comments as to why that particular trade was or about to be made. No punting or wild trade calls please.
Now I am new in this factory but I've been trading live for quite a while now. Been through the ups & downs of trading, seen the ugly side of it, been battered into submission & survived. That's the most important thing in this business if you ask me. Survival. I only have two words for new traders, psychology & money management. These two aspect of trading for me, involves 90% of the works, 10% to the technicals. That's it, I'm not going to explain into details as to why I said that, you can read about that in the rookie discussion area or you can blow up a few accounts to understand where I'm coming from.
Down to business.
Personally, I trade the British Pound. The cable (GBP/USD) & the dragon (GBP/JPY) are my bread and butter. Occasionally I trade the EUR/JPY, which is like my supplementary pair. But I welcome any trade calls and discussions on all the majors and crosses. And my trades are 80% technical & 20% fundamental. So traders with vast fundies knowledge are always welcomed here. I personally have so much to learn from you guys. And I trade off larger timeframes, namely hourly, 4 hourly & daily charts. But scalpers & traders who pick their trades off lower charts are always welcomed.
Okay, I guess that's that. Welcome to the wormhole, enjoy your stay and good luck

wormboy Mar 6, 2009 3:31pm | Post# 2

I will start by posting charts and trade calls which I had for the last 2 weeks up here just to get things started. I will start with a post explaining as to why my bias towards cable remains bearish till today.

This is the link to the original posts from the previous thread.
http://www.forexfactory.com/showthread.php?t=154363

wormboy Mar 6, 2009 3:39pm | Post# 3

Selling gap & major resistance (posted Feb27 09)
 
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Okay. The selling gap was the first warning of the selling pressure building up. Notice how there were obvious bearish engulfing patterns forming with the dark cloud cover and the doji. This gap had since been filled but the selloff has yet to be fullfilled.
The second indication is the major resistance level built around the 4500 - 4600 level. For the past two weeks this resistance level had been tested numerous times but failed to breakout.
The third reason is the head & shoulder formation. Although since this chart was taken, the formation has somewhat had a deformed look to it, it still could play out once the neckline is broken.
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wormboy Mar 6, 2009 3:41pm | Post# 4

Dark cloud cover- 6hr chart (posted Feb27 09)
 
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Okay, personally this formation qualifies as a dark cloud cover to me, but it remains subjective to other's view on it as it does not look to convincing. Nonetheless this formation had somehow played a part in my short bias.
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wormboy Mar 6, 2009 3:43pm | Post# 5

The daily chart (posted Feb27 09)
 
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The daily. Ultimately.
Okay 3 days ago the daily candle close was a shooting star. This indicates subsiding number of buyers. To top it off, the shooting star bounced exactly off my sma which acts as a moving support/resistance. The doji beside the shooting star the day after had already indicated that buyers and sellers were evenly matched at the time and the daily fall the day after supports the speculated further fall as by this time sellers had overcome buyers.
I do use bollinger band to double confirm my positioning and at this point the candles are already formed below the middle band
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wormboy Mar 6, 2009 3:45pm | Post# 6

Fundies (posted Feb27 09)
 
I am not much of a fundemantalists but with the dow falling further & further coupled with endless stream of bad data, risk aversion springs to mind. And we already know for now risk aversion means stronger dollar. I'm not so sure though how long this rule will remain valid.
One news in particular that came out of Britain yesterday further supports sterling's speculated further fall. This news I quote from gammase1's post

0901 GMT [Dow Jones] GBP/USD slipped below 1.42 overnight, and does not appear to be in a position to draw strength from a bank-led bounce in equities on the back of the RBS results, says Kenneth Broux at Lloyds Banking Group. Adds Bank of England governor Mervyn King tops the agenda Thursday, and his comments to the Treasury Select Committee could be market moving for sterling and gilts as the markets look for comments about quantitative easing and clues ahead of next week's monetary policy committee meeting. GBP/USD edges up to 1.4249. (MEX)

These are the few reasons as to why I think the sterling will fall hard. But how or what is keeping it afloat at the moment is beyond me.
This had been building for two weeks & it would probably end soon. I can still be wrong, but I really hope not.
Cheers.

wormboy Mar 6, 2009 3:47pm | Post# 7

Breakout confirmed. (posted Feb28 09)
 
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Guess I'll have to break my own rules of not placing any trades before Tuesday. I have added 0.4 to my current position and taking this one over the weekend after all.
Took short@4309 sl@4655 while 4065 being the first target to amend the sl to +ve.
Reason being after the breakout from the triangle, price went back up and the last candle tested & closed failing to break past the formation & the sma. This is a good enough reason for me to place a trade.
Okay, happy weekend everyone.
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wormboy Mar 6, 2009 3:51pm | Post# 8

My daily (posted Feb28 09)
 
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Thanks for the heads up AJ. But I have considered the position I took based on the daily. From my daily the triangle breakout was yesterday. I do not have my daily candle creeping back in it tho, so I took it. No worries tho, should the trade turn against me the 300 pips sl should give me ample time to get out & reposition. (this was a reply to a question posted by a fellow trader prior to the trade I made with the 4hourly chart earlier)
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wormboy Mar 6, 2009 3:56pm | Post# 9

The dragon approach (posted Mar3rd 09)
 
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Dragon's downmove as you can see from the 4hrly chart is facing rejection at critical levels. It's being stopped smack on my sma which as I said acts as a moving support/resistance, which coincidentally is the 23.6 fibs level ( 23rd January low - 26th February high ).
By looking at the daily, you could see the doubletop formation and where the resistance level is which halted dragon's flight. The hanging man two days ago was the first warning of direction change. At the moment however we are in some sort of predicament Two things could happen.
1. Price close below the trendline [4hr & daily] - all hell breaks loose. Kaaaaaaaamehameha!
2. We get squeezed in that wedge for a few days before a breakout, either to the upside or downside. Which means we might just consolidate for a few days [daily].

Traders who are not yet in positions I think should consider these scenarios before making an entry. I am personally holding short from 139.25 with stop already moved to 138.5. Should I get stopped out, I will wait, weigh all the options & scenarios that had just been mentioned before positioning myself for another entry. Just remember this is a highly volatile pair which has just lost all its correlation with dow jones, cable & usd/yen, & at the moment the ccis on the daily and the 4hrly are pointing at two opposite directions, never a good sign when that happens. Basically it has a mind of its own really So, please be careful, the dragon is a badass pair to trade. Not for the weak of hearts lol. Anyway good luck.
Cheers
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wormboy Mar 6, 2009 4:02pm | Post# 10

Cable update (posted Mar4th 09)
 
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Looks like we're still headed for collision course. I believe a breach of 3900 level will push her down for good.
Atm 3 of my remaining short positions are still valid.

1. short@4309 sl@4200
2. short@4210 sl@4200
3. short@4151 sl@4140

All 3 remaining position's stops will be amended once price reach 3920.
Good luck everyone.
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wormboy Mar 6, 2009 4:04pm | Post# 11

Dragon Approach (posted March 4th 09)
 
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In regards to post #107 I have attached a daily chart supporting the analysis.
There is still no clear breakout with 141.7 level providing major resistance.
We might see a rejection at that level, or we might get a rejection even after a piercing, when we hit the top channel. Either way I expect a pullback.
If rejected at the 141.7 level, I suppose the pullback would mean we will still consolidate between 136.xx area - 140.xx area before a breakout.
If rejected at the top side of the channel, I still expect a pullback before a bullish continuation can be confirmed or a false breakout. Either way, we shall wait & see.
Good luck.
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wormboy Mar 6, 2009 4:07pm | Post# 12

Cable update (posted March 5th 09)
 
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My bearish bias remains intact. Cable is still trading in this channel and it will be interesting to see if the current candle formation which is a shooting star forming at the top of the channel remains the same at the close, which is 2 hours away. Very close to the 4150 level in my opinion offers superb short positioning with a good risk reward. This however, is only my own personal opinion. Good luck guys.
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wormboy Mar 6, 2009 4:09pm | Post# 13

Cable stoploss question (posted March 5th 09)
 
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I have received pm asking me as to why I need the price to move to 3920 before I amend my remaining position stops & why I keep saying cable needs to close below 3900 before falling further.
I think the chart is self explanatory
Hope that helps. Cheers.
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wormboy Mar 6, 2009 4:12pm | Post# 14

Cable update (posted March 5th 09)
 
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Okay. My 4hr price on cable had closed within the channel. At the moment my bearish bias remains unchanged ( what else is new ey )
I mentioned before, I'm not much of a fundamentalist, but with boe announcement due tomorrow, today's bullish scenario might just be the case of pricing in. This had happen many times before in the past. We shall see how this pans out the day after tomorrow, if today's move is indeed the turn or it's just the big boys trying draw us out from our shells before dropping it like it's hot!
For now, my chart shows down. I will not think or trade otherwise.
I will leave my remaining 3 open positions for cable to work.

Good luck guys.
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wormboy Mar 6, 2009 4:14pm | Post# 15

Dragon Approach (posted March 5th 09)
 
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It seems dragon has again found the 141.7 level tough to break. It failed yesterday & we are still with no clear direction as to where this might go.
My daily cci had retreated from +100, that usually indicates bullish movement losing momentum. But it's not trading below 0.0, so I will not put my money on bears taking over just yet. Today should be an interesting, many bulls will lose their pants if it decides to turn the opposite direction. Careful holding on to those long positions, keep them tight.
I am personally still staying out & I will not make any attempt to trade this beast before tomorrow at the earliest. The reasons for me staying out is obvious, we are still in this wedge. No man's land for me. And news don't spook me out with the way I trade but with the ecb & boe announcing their rate decisions and unemployment claims data all coming out around the same time today, I have another very solid reason to stay out.
However, I wish anyone trading today the very best of luck. You'll need it.
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sofia101 Mar 6, 2009 4:15pm | Post# 16

Ok I think now I find my home here in the forum ,congratulations in starting your own tread .Starting on Monday I will try to post my observations ,Sofia

wormboy Mar 6, 2009 4:17pm | Post# 17

Cable update (posted March 5th 09)
 
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Cable had since failed to breakout longside & seems like the bullish move yesterday was the case of pricing in as mentioned yesterday. Nothing new really, this had been done many times before in the past.
I will be looking for a fresh entry for short once my 4hrly candle closes withing the channel. Should offer good risk reward.
Anyway, we shall wait for a confirmation before pulling the trigger. Nothing is certain in this business. Good luck
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wormboy Mar 6, 2009 4:20pm | Post# 18

Cable update (posted March 6th 09)
 
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The 4hrly closed within the channel. I took the position with 0.4
short@4116 sl@4385
No tp. sl will be amended periodically. First sl amendment target 4000.
Good luck
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wormboy Mar 6, 2009 4:22pm | Post# 19

Stoploss question (posted March 6th 09)
 
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hello howard.

Regarding the stop. 4350 - 4600 levels had been key support & resistance level. I took 4385 as that was the previous high before the price went through my sma. Other than that, these wide stops I've been using acts as a safety measure for myself. Should the trade turns against me or a change of trend, it allows me time to reevaluate my position. Should the trade work in my way, if you follow the trades I've been making, a move between 100 -150 I would have already amended my sl to +ve.
Hope that helps. I am off to bed. Gnite & good luck.
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wormboy Mar 6, 2009 4:24pm | Post# 20

Dragon Approach (posted March 6th 09)
 
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As expected, dragon is still trapped in the wedge & we are still waiting for confirmation of a direction. Buyers were rejected hard at the 141.7 level yesterday as they were knocked hard back down over 300 pips. I was wrong about us being able to get in for a trade when I said we should get a direction within a couple of days. That was 2 days ago! Lol. So again, no trade for this pair & with today being Friday, I think we can put the guesswork to bed for the time being.
This is solely my opinion. Trade at your own risk.
Good luck.
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wormboy Mar 6, 2009 4:26pm | Post# 21

Cable update (posted March 6th 09)
 
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I have pulled the plug from the last trade call I made for cable. Reason is obvious, price is choppy and the last 8hour candle failed to close within the channel. My 4hrly cci is creeping up into the +100 level, early signs of what would usually be a surge up. Cut my losses & closed out @4135, bearing a -19 red. Sitting on my hands for the time being & will wait for London before deciding. Good luck.
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wormboy Mar 6, 2009 4:27pm | Post# 22

Cable update (posted today)
 
Timely exit, system worked like a charm . Cable should climb further after a pullback. We'll wait this one out and weigh our option before making an entry again. Cable will have to break clear past 4265 before we consider long. Failure of breakout, we'll consider our short options. Good luck.

wormboy Mar 6, 2009 4:28pm | Post# 23

Cable update (posted March 6th 09)
 
For those interested to short cable. I have took a small short position @4215 sl@4350.
Took the position based on the 3 black crows formation presented on the hourly & the 4hrly shooting star formation. Higly risky trade but worth a shot nonetheless.
Will post the chart later. Good luck.

wormboy Mar 6, 2009 4:30pm | Post# 24

Cable update (posted March 6th 09)
 
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This is the chart for post #179 explaining the small position I took earlier.
I did mentioned earlier that 4265 level need to be properly breached before long position should be considered. That level had offered a respectable resistance before & coincidentally the bearish 3 black crows formed after met with the resistance. I had also placed the wide stop loss for a reason. It is placed well beyond the triangle forming on the 3rd February (low) & 9th February (high). Draw a trendline and you will see it. Should cable move up breaching the resistance & the triangle, I will go long. Unless that happens, atm my bias remains short. We'll see what the nfp data has in store for us.
Good luck everyone.
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wormboy Mar 6, 2009 4:32pm | Post# 25

Cable update (posted March 7th 09)
 
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Not huge. MONSTER.
Anyway, I'll need her to break this channel and the support @4150 I have on the other chart (post #188) before adding up. That will probably be next hour. But I have no problems waiting.
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wormboy Mar 6, 2009 4:34pm | Post# 26

Fundies posted by Galation (March7th 09)
 
I think this report from the Action Forex tells it very well - http://www.actionforex.com/fundament...2009030681118/

The British pound depreciated vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.4075 level and was capped around the $1.4305 level. Data released in the U.K. today saw February producer price inflation rise +0.1% m/m and 3.1% y/y, the lowest annual increase since September 2007. Also, PPI input prices were up 0.6% m/m, defying expectations...
Source : http://www.forexfactory.com/showthre...154363&page=14

wormboy Mar 6, 2009 4:36pm | Post# 27

Fundies posted by Galation (posted March 7th 09)
 
After that terrible US data came out, the cable has still fallen over all in the day. There aren't too many good fundermental reasons to buy the cable. There is a lot of downwards pressure on it. I would not be surprised to see new lows soon.

We shall see, we shall see. I'm holding a short on the cable at the moment, along with a short on the G/J. They are long term positions so yes, I will hold over the weekend.

I still have a firm Bearish sentiment towards the GBP/USD and the EUR/USD, short and medium term.
source : http://www.forexfactory.com/showthre...154363&page=14

wormboy Mar 6, 2009 4:38pm | Post# 28

Cable Update
 
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Welp, I have added another small position to my trade. Wouldn't want to spoil this week's gains
First short @4215 stop had been amended, albeit a small move.
Second short taken @4113.
1. short @4215 sl@4200
2. short @4113 sl@4300

The reason I have the second position taken is that it had already closed well below 4150 resistance which is the horizontal line I have on the hourly chart. The hourly up ascending channel had already been broken and she is moving within my 4hrly descending channel. So, no reason for me to hold back. I will look to amend my stops when price closes at 4000 level. If she doesn't I will tighten my stops before ny session closes and carry her over the weekend.
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wormboy Mar 6, 2009 4:39pm | Post# 29

sofia! thank you for your support! looking forward to your views and analysis

wormboy Mar 6, 2009 4:52pm | Post# 30

Well this week has ended, but fortunately I'm still in I have decided to carry both of my entries into the coming week with my stops amended.
Previously this was the entry & sl
1. short @4215 sl@4200
2. short @4113 sl@4300

Now they're amended to
1.short @4215 sl@4120
2.short @4113 sl@4150

Now I have no problems carrying trades over the weekend if the situation fits.
And this seems like a fitting situation.
I'm signing off now, it's 5:51 am right now for me. I badly need some sleep.
So see you guys next week & enjoy your weekend! I know I will

OrionsWay Mar 6, 2009 5:50pm | Post# 31

Well this week has ended, but fortunately I'm still in I have decided to carry both of my entries into the coming week with my stops amended.
Previously this was the entry & sl
1. short @4215 sl@4200
2. short @4113 sl@4300

Now they're amended to
1.short @4215 sl@4120
2.short @4113 sl@4150

Now I have no problems carrying trades over the weekend if the situation fits.
And this seems like a fitting situation.
I'm signing off now, it's 5:51 am right now for me. I badly need some sleep.
So see you guys next week & enjoy your weekend! I know...

Nice trades in for a ride WB, thanks for the invite, gladly hang my hat here as we spiral through the wormhole destination UNKNOWN. catch u Sunday/monday

Inzider Mar 6, 2009 6:09pm | Post# 32

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Hi worm!

Following your idea about a "serious" thread, ill start posting some analysis to keep record on those and put them public.
---------------
OK! Here a quick view on daily starting from harmonic view and pitchfork.

Price often test S&R.... making those kind of 5 points pattern XABCD.

Starting from 0/100 then correction of 38.2 then 78.6 next target is minimum 11.4% = reverse of 88.6 = 1.3671.
The close of today under 1.4100 wasen't good enough yet to get under 1.4068 but help to beleive that 1.3671 will come sooner then later.

Pure pattern: http://www.harmonictrader.com/batbullre.jpg

IN PLAY:
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Galation Mar 6, 2009 6:35pm | Post# 33

Commitment of Traders
 
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Commitment of Traders, Just released for past week of trading. If you don't know the COT report, it basically shows the contracts that a set number of traders have commited to.

The COT report is a great way to measure market sentiment, which ultimitely drives the market.

EURO - 10,324 more short contracts that the previous week, which was already bearish. Sentiment - Bearish.

Eurodollars (USD) - Still quite a few more long contracts than short contracts. There was a similar number of reductions in long and short contracts.
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Galation Mar 6, 2009 6:37pm | Post# 34

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GBP - Overall, still many more short contracts than long contracts, however, over 3 times as many longs placed in the past week than short orders. Maybe a consolidation week for the GBP. There is still significantly more traders holding shorts for this currency, suggesting a continued weak outlook.

JPY - Absolutely hammered from last week. There are a lot of shorts added, however, still significantly more long contracts than shorts held. Sentiment towards the JPY is down at the moment, but the fact that the COT traders haven't been dumping their longs suggests they expect the JPY to remain relatively strong.

In this financial crisis, the USD, JPY and CHF have been the safe havens for risk aversion.

Time for a good rest at the weekend, and to plan the week ahead on Sunday eve.
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opie999 Mar 6, 2009 7:52pm | Post# 35

Hey, WormDude!!

Congrats on starting your journal. Looks like a great start!

koorb Mar 7, 2009 12:06am | Post# 36

New Thread
 
Hey Wormboy:

Congrats on your new thread.

Thanks for the invite to your new thread. I have hung out in the cable thread just watching all of the gunslinging going on over there. Nice to see a thread with what will hopefully be good analysis from a a variety of different traders. I am a newbie to the forex markets and still trying to find my trading style.

Originally was a indicator trader on the lower TF. Just didn't work for me. I was just glued to the monitor. Have now been looking to to the 1Hr, 4HR and daily charts.

I would describe my style (strategy) as that of trading S/R areas, TL along with corresponding fibs. My charts are very simple in nature. No indicators really. Just horizontal and diagonal lines.

Seems to be working for me. I have learned to expand my SL somewhat based on the higher TF's. This scenario tends to keep me in the trades and not get stopped out only to see the trend go the direction I had anticipated.

I may also do some day scalping if market presents itself.

Hope to be able to add something to your thread.

Koorb

wormboy Mar 7, 2009 4:01am | Post# 37

A little insight.
 
Well, this is a typically uneventful Saturday for me. I had two great weekends in phuket & singapore last week. This week here I'm just lazing around at home with nothing to do.
So, I've decided to take the time to explain a bit on how my trade works.
I have no killer trading system. It's basically just plain charts that you'll find aplenty around the factory. Same old same old. Some of you are already aware that I utilize wide stops. I trade very defensively. That is my holy grail.
Now I had been slated & most recently been ridiculed for using wide stops. Well, I trade off the larger timeframes & the use of tight stops are near impossible for me.
The most recent was the trade call I made on cable two days back (refer to post #18) I had placed a 269 points mark for my stop. Well, there were valid reasons as to why I pulled that mark out. Well technically if you refer to post #24 you will find the answer. Two strong resistance level stand in the way before my stop could be triggered. Psychologically a 300 points mark is near impossible to be triggered immediately. It buys me time to re evaluate my position should the trade turn the other way. And post #21 proved it as I decided to call off the trade and took a measly 19 pips loss. (btw, the 269 points stop wouldn't have been triggered anyway if it let that trade run, as cable failed to break the 4265 resistance level & closed below 4100 as we close yesterday).
And finally, the other reason I am not afraid to use wide stops is the way I work around my equity. Yes, money management. I only make trades between 0.1 to 1.0 full lot. Nothing more. At the moment I can pull a full lot trade with a 400 points stop yet I will only be risking a total of 1.5% of my total equity. So do the math. Don't get me wrong, I do get losing trades from time to time, but I've managed to make timely exit with these wide stops. I'd be a complete fool to let my trade turn and ram straight into my wide stops if the bad trade had been identified prior to. My point is, I know my risk tolerance & I'm pretty sure most of the sound traders know theirs. For the handful who are still clueless, you need to work that part out & worry about the technical side of trading after. This is something not anyone here in the factory can help you with, they can only offer advise on the matter as far as it goes. There are some really good articles on money management & trading psychology in the rookie discussion for reference.
Remember, one needs luck to win but it takes skills to lose. You can only guess how much the trade can lead to profit, but you can be assured of how much losses you are able to take from a trade.
I hope I've cleared the air regarding the matter.

Cheers.

wormboy Mar 7, 2009 4:17am | Post# 38

Thanks for the support.
 
Inzider, not too serious I hope! You know I'm full of it
sofia, orion, koorb, galation, amertrini thanks again for the support. Keep them coming. I hope to see some of the other gurus here sharing their views and analysis in the near future.
And opie, great to have you here my friend. We have the skulls here, now all we need is bones
Guess I am off for now, grab some food, wait a couple of hours and I'm off to the club. Parrrrrrrrrtyyyyyy
Have a wonderful weekend everyone! Ta!

stewrigh Mar 7, 2009 5:45am | Post# 39

Hey WB,
Thanks for the invite - looking forward to everyones analysis and hope to contribute.

GL

belekas Mar 7, 2009 6:19am | Post# 40

Glad to hear you opened a trading journal. If time permits i will drop time to time and maybe post a chart or two. Lots of good trading opportunities comeing so lots of focus, patience and discipline is required.

Safe trading and cheers!


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