forexben's eurusd jacko style journal

Hi, i thought i'd start a journal because i think it is a good way to 'keep my trading honest.' If other people are watching your trades you will be more likely to be disciplined. I want to concentrate on a 'Jacko Style' trading approach, focusing on the EUR/USD, following the current trend, buying or selling on retacements, counter trend trading if the conditions are very favourable and using the anti-hedging strategy as a money management/risk control measure.

I want to incorporate fundamental and technical analysis into my trading for the blog. The fundamental analysis will look at whether or not the Euro or USD is in a position of strength or weakness. I will also be looking at any other fundamental factors that need to be factored into the trade at any given time.

From a technical perspective, i will looking at round numbers, fib lines (predominately 50% fib) and trend lines to look for entries. I will be taking a top down approach, starting with the monthly charts and moving all the way down to the hourly chart to fine tune entry.

Feel free to add any comments, thoughts or criticism. In fact, any input from other traders would be greatly appreciated. I will set up my current charts and list any current relevant fundamental issues, then begin looking for trades and commenting on my trades after the weekend.

Here is a link to Wayne 'Jacko' Jackson's trading strategy

http://www.forexfactory.com/showthread.php?t=27286

Currently, the EURUSD has begun a down trend. This is fairly significant as the pair has been trending upwards since 2002.

As everyone is aware, its been a crazy time economically of late and it looks like the current state of affairs will continue for quite some time. Its common knowledge the FED has been propping up the USD. However, i think a very simplistic way to look at fundamental analysis would to think along the lines of strong economy = growing/postive GDP = higher consumer disposable income = higher inflation = higher interest rates = increased value of a currency.

Since both the US and European economies are facing imminent recessions, predicting where the EURUSD will move becomes a lot more complex! With that in mind, i think the current climate makes fundamental analysis extremely important when looking not only entries and exits for trades, but more importantly determining WHEN to trade. Based on this, I will be looking to make 2 to 3 trades a week on average.

Here is the EURUSD monthly chart. It shows that we now have a down trend

weeky chart with with corresponding fib levels

Here is my 4 hourly chart. Here we can see areas of confluence around the 1.2650 level. I'm looking to go short at 1.2700. I'll be setting a 100 pip trailing stop loss after the trade goes 20 pips in profit. The initial stop loss will be 100 pips at 1.2800.

The anti-hedging strategy will come into play if price stops me out at 1.2800, then goes all the way up to 1.2850. On the return down to 1.2800, my fallen soldier will be resurrected.

Entered at 1.2750, stopped out at 1.2850. market went up to 1.2900 so my falled soldier has was resurrected back where i was stopped out at 1.2850. Looking for price to level out at around 1.2650.

Stopped out again. Oh well, will look for another trade later after Thanks giving.

1.2760 also has nice confluence with the swing low on November 21st.

Hi Ben,
Sorry, I have just seen your log. I am still a novice myself, but I feel compelled to comment:

The Dollar is now mostly moving the opposite way to the S&P500, because when people get nervous they buy US Government paper (they call that a 'flight to quality' for some reason).

I don't see your confluence at 2650, just that you have drawn a couple of short term Fibs centred around 1.2625.

For confluence dont you need at least one longer term Fib?
Also isn't it very brave to enter in the middle of such congestion?

For chapter and verse on confluence, if you have not already been reading it, I suggest you look at the James16 Chart thread: http://www.forexfactory.com/showthread.php?t=2331
You don't need to read all of it (1054 pages currently) just look for the posts by James16, mbqb11, raczekfx, jarroo and bundyraider amongst others.

Ian