USDJPY Prediction

To SpeedoTrader

Please refer to my view on fundamentals or news in previous post. I rarely read financial news unless I have to come up with a story to my credit committee for transaction approval requests.

Stop reading news or listening to rumors or trying to find “big players” will be the first steps to successful trading.

Thank you for your response.

In regard to April 6 vs April 13, though 06 is the highest point reached, the differentiation is that 06 signals the end to the bullish retrace in a larger bearish trend, and 13 signals the begining, or confirmation, of the reversing & complimentary to the larger trend to bearish? And this segment of the larger trend should complete its move around the 30th of Sept.?

Excuse my lame questions. I know nothing of Gann's theory. You are walking us through this trade in real time, day by day, and sharing your methodology. This is so different from an explaination of a completed chart. I'm learning. Exactly what, I couldn't say. As each new facet of the forex reveals itself, the more interesting it becomes.

I look forward to watching this trade unfold.

Thank you.

Petero

On 6th April 2009, price is ahead of time, just like what happened last Friday, it does not signal the end of the bullish trend, price is less important than time. 13th April 2009 is the end of bullish trend (actually 14th April 2009 is but in this case it came 1 day earlier) and this date is pre-determined on 20th March 2009 even before the start of the bullish trend. The bearish movement started on 14th April 2009 and ended on 28th April 2009.

I recommend you do some serious study into Gann, not just buying a book explains how Gann works like theory of Gann in 30 mins, trust me I have read almost all the Gann literatures so far and non of them knew how it works. Why? Because none of them can predict the markets.

The following books should be helpful :-

All books written by William Gann himself
The Patterns of Gann – Granville Cooley
Synergetics - Buckminster Fuller
The Holographic Universe - Michael Talbot

It is a long and lonely journey, but like Gann quoted the Bible: Seek and ye shall find, knock and it shall be opened unto you. The most important thing you need for that journey is hope, and belief in knowing it works. So this is exactly what I am trying to show you here, it works, the market can be predicted, with remarkable accuracy. Now, do you call that the holy grail? Does it matter what you call it?

I will walk you through this coming bullish trend and this will be the last prediction I will give. Like I said, I am not here to give money away, but to show you what can be done and hopefully direct you in the right path towards trading and knowing the universe and yourself.

Now, something about logic. When I first started my uni degree courses, there is a compulsory course called logic. I was taught lots of logical deduction methods and later on in the course a programming language called prolog, which is based entirely on logical deductions to programme artificial intelligence.

There is a very interesting bit about the course, with the IF statement. I am sure you all know how that works, IF A THEN B, how to interpret this? If A happened, B will happen. When you prove that, you have fact, not hope or fear but fact.

Now, is it right to say IF B THEN A in this case? No. Because you only proved one way but no the other way round. You can only make the statement IF B THEN A when you have proved both ways, it is only after that you can say, IF AND ONLY IF A THEN B. This implied IF A THEN B and IF B THEN A.

So you can see what’s important here is the 1 to 1 mapping, we can only predict the effects say B if we know A and only A is the cause of the effects.

Ok back to reality, now look at any financial reports you have in hand or find on the internet, do you see any one of them give you a 1 to 1 mapping? Share price of company A dropped because factors B,C and D, but also could be E, the upcoming event F could also have an impact on this. So what are you trying to tell me? Nothing. Too many causes, none is certain, surely no logic in there, nothing.

Same thing goes to indicators or technical analysis. Average this average that, sometimes it works, X% time it is profitable and makes Y% of money. Again, nothing is certain, too many causes, none is the true cause. And I heard people complaining about the lack of volume information in FX, as if with that information they could solve the problem. You should be thankful for the lack of volume information because you have 1 less distraction.

To sum up, if you have a system that works X% of the time, you have nothing. Don’t kid yourself with probabilities or long-term expectations, there is no such thing as probabilities as there is no chance in nature, everything is in perfect order, time and price, space-time continuum. You just need to look for the orders of the highest type and stop using probabilities to cover ignorance.

Because I do not believe in probabilities, I failed to understand the term risk-reward ratio, which seems to be a concept most people use to convince themselves taking a trade.

Short position was closed at 23:30 London time at 90.90 with a market order. This concludes the trade of USDJPY bearish trend and results in a profit of 92.65 - 90.90 = 175 pips, in 7 calendar days or 5 trading days, with only 1 trade.

New orders are placed consequently :-

Stop-buy entry order at 91.27 with an if-done order of stop-loss at 88.70. Now wait for the fish to take the bait.

Hi

Why do you only trade this currency pair ?

bro,
me myself like to trade this pair also.........how do u interpret the chart? sell again when it go down?

Hi communist,

wao great post.found alot of discussion, usually ppl using moving average and price action. but urs one quite special.

anfieldkop88,

Why should I trade other pairs? Afterall they are all the same, just the prices are labelled differently and vibrate at various frequencies. I couldn't be bothered to trade other pairs, or other products.

askce,

You are on the wrong path. Gann is not about drawing lines here and there, if you do not find the correct cause you have nothing.

I do not know how to interpret your drawings, sorry.

If you follow my advice, your stop-buy order should be executed at 91.27 at 8:30 am London time today, with a stop-loss order placed at 88.70.

This trend I will show you how to paramid or add your winning positions and gradually push up your stop-loss orders.

Price is now at around 91.40, this should put you in a comfortable position to sit patiently on this trade as price is away from your entry cost.

Now let’s talk about destiny and free-will.

If the market can be predicted, which I hope by now you are all fairly convinced, what does that imply? That everything is pre-determined and like the markets we all have our destiny? That free-will do not play a part in our lives as everything was written long time ago? Sorry I do not have the wisdom to explain this, well not yet as I have just scratched the surface of the works of W. Gann, Buckminster Fuller, John Keely and Walter Russell.

Again let’s look at this from a trading perspective. Let’s say rite now it is just you and me. You have a empty box, and you are trying to sell it to me, at GBP 30. Maybe I am really stupid, or we are good friends, or you are really a good talker with persuasive power, I decided to buy it. A trade is made in this case. If there is a screen somewhere registering all the trading activities, it will display at 13:44 London time, a box trade is made, price is 30. Can the same activity be predicted? I guess not, because of free-will. You are free to decide whatever price you want to sell, and I am free to decide at which price I will buy. This is completely subjective, I don’t think there is anyway to predict events like this, without getting into subjects related to the superstitious aspect of astrology or palm reading or whatever.

Now, what is the difference between the above scenario and say the FX markets? I think it is quite obvious that in FX we have a huge pool of people exchanging currencies or their view of currencies, therefore individual free-will plays a less if not negligible part. It is the COLLECTIVE HUMAN BEHAVIOUR that matters in this case. Surely you can trade against the trend, surely you can do whatever you want, surely if you have enough money you can cause a movement up or down, for a while, but eventually the collective human behaviour will prevail and anything go against it will be crushed.

This reminds me of a scene I saw on tv when I was young. A group of hundreds of fish swimming in deep sea, then suddenly they all turned left or right, as if they are one living creature instead of individual entities. Don’t you think we the markets participants are just like the group of fish swimming in the sea? That we turn at the same TIME for some reason? What is the explanation of these? String theory. That we are all connected and our brains emit some sort of wave that coordinate the collective human behaviour. Anyone laughing? What if I tell you that voice can be transmitted via radio waves say 300 years ago? Would you laugh? Ofcos you would, as you cannot see, hear or feel the waves. Thus it does not exist rite? You see this is the problem, we have only 5 senses and we only admit the things which are tangible to us, our perception of the world is limited by our senses. Now what would you say when you have the radio, something that helps to translate the intangible radio wave into something you can sense, the sound wave? You say oh that works.

So, in this sense, the FX market is the best media to conduct the experiment on collective human behaviour, as it is liquid, fair and large enough to make individual behaviour negligible. I will go into market manipulation on China’s A shares in the future, then you can see that any sensible “big player” will not pick the battle at FX to drive the market price, due to the huge stress and costs to operate such a huge market.

Hi communist,

I am really impressed by your article. before I check your article I already bought usdjpy at 90.89 because of dailyfx.com Joel recommendation and the price hit the bollinger bands for day and week. And also the price form lower low after 91.74. all these signals convince me to buy usdjpy. But after reading your article, I am really excited of new knowledge. Today I just read some article of Gann. Do you know where can get all the books for free? I think your IQ is really high. Really want to learn something for you. I do have met some FX guru who turned 1kusd to 1Milusd using some strategy without any moving average . he tapped the time and just using fractal and calculator. I am wondering what strategy he is using. Anyway really need to thanks you for your info and I do really hope learn more things from you.

Hi, Communist.

First of all, you have brought up excellent ideas that I have never thought of. Thanks a lot for your knowledge.

currently I am 20+ age. I have a bachelor degree of electrical engineering.

I have read a lot of materials about Gann studies after reading your post.

I have found my way to calculate the time, price and range factors.
However, I couldn't get the approximate date. Sometime I got the date right and sometime no. If the date is +-2days is still ok. But I got the answer +- 10days. The impact is huge.

I know it is something to do with the function I use.
Could you possibly tell me what is the function you use to calculate the time?

my function is :

to calculate the number of day to reach next uptrend peak:

number of day, x = (ratio_of_previous_next_down)*(range_last_up) / (range_last_down)*(days_taken_for_last_down)

Hope you could give me some guidance.

yehhuei,

There are plenty of Gann's books available on the internet, if you just google you should be able to find them.

I used a link which has all the books but it doesn't work anymore.

Gratitude,

My advice is to stop reading a lot of materials about Gann, but read a lot of materials by Gann. If you read and study books written by Gann maybe in 5-10 years you will realise something, maybe earlier, maybe never.

Sorry I do not understand your formula. This is not how it works.

Hi Communist

Can Gann be used for fundamental news trading?

you hit to the pip, nice one

Hi Communist,

thx alot . I do search Gann article using google but there are a lot of incomplete info . Too complex for me . currently studying Murrey Math. Really found that if you really catch the price telling you what is the current investor's fear and greed, you can earn a lot.lol

Very interesting reading, Thanks for all your posts.