Trend Following Experiment - EURUSD | Forex Factory

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Trend Following Experiment - EURUSD

  • #1
  • First Post: Edited 9:33pm May 6, 2007 6:59pm | Edited 9:33pm
this thread is inspired by Jacko's Forex House of Pleasure and Pain http://www.forexfactory.com/showthre...t=27286&page=1

basically I'll be trading live using Jacko's method described in the above thread. I must say that I don't yet fully understand Jacko's method. I hope practicing can gain me more understanding.

only 2 pairs, GBPUSD and EURUSD, will be traded for real with micro lots. when there are no trades, I'll practice and papertrade other pairs.

mostly I'll be posting charts with commentary to do the following:
1. determine longterm trend on weekly;
2. looking for counter-trend moves on weekly, daily, 4hr and (1hr?);
3. waiting for entry opportunity on daily, 4hr and (1hr?);

I've been trading for a while and so far purely losses, no profit. I'm doing this to gain a better understaning of Jacko's method and to keep a record of my tradings for later analysis.

this is not a system discussion thread, I won't answer questions about the system I use in this thread, if you really want to know, send me an email, and I'll give you the specifications.

please only post when you have an opinion, no need to introduce yourself.
  • #2
  • May 6, 2007 7:40pm May 6, 2007 7:40pm
weekly trend is up,
Attached Image (click to enlarge)
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  • #3
  • May 6, 2007 7:55pm May 6, 2007 7:55pm
should have bought last friday when price touched trendline and slow ma, now I've the following options:
1. wait for a retracement, or
2. look for entry on 4hr, or
3. buy now;
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD_daily.jpg Size: 39 KB
  • #4
  • May 6, 2007 8:07pm May 6, 2007 8:07pm
reason to buy:
1. price has closed above a minor trend line for 3 bars in a row;
2. fast ma has crossed above slow ma;

reason not to buy:
1. price @ 50% fib line from the last leg down;
2. price still within tunnel;
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD_4hr.jpg Size: 41 KB
  • #5
  • May 6, 2007 8:18pm May 6, 2007 8:18pm
reason to buy:
1. price have closed above a minor trendline for more than 3 bars in a row;
1. price above tunnel;
2. ma cross to the upside;
3. price closed above 50% fib from the last leg down;
reason not to buy:
1. gap opening ...

I'm going to wait for a retracement back to the tunnel or slow ma before entering.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD_1hr.jpg Size: 38 KB
  • #6
  • May 6, 2007 8:25pm May 6, 2007 8:25pm
buylimit @ 1.3590 for 5 micro lots, SL @ 1.3540;
  • #7
  • May 7, 2007 12:11am May 7, 2007 12:11am
noticed a double top @ 1.3611 on 4hr chart, if price breaks above this level, it'll not only be a fib line breakout, but also brings it out of the tunnel. since both weekly and daily trends are up, I want to be long if it does this.

stop buy @ 1.3620, 50 points SL
  • #8
  • May 7, 2007 2:48am May 7, 2007 2:48am
ok, this is a bit embarrssing, but I've realised that I'm probably over-analyzing, so I'm changing my strategy now.

I had another look at the charts, and what do I see? both weekly and daily trends are up according to my rules, and MAs have crossed to the upside on 4hr chart, so what am I waiting for?

buy market @ 1.3608, 50 points SL;

I don't care which way market is going to go now, if I'm stopped out, I'll use anti-hedging to get back in, as long as the trend is still up.

let's see what happens with this trade.
  • #9
  • May 7, 2007 6:01am May 7, 2007 6:01am
50 points trailing stop from 1.3534 is in place ...
  • #10
  • May 7, 2007 6:28am May 7, 2007 6:28am
Quoting iPlayGames
ok, this is a bit embarrssing, but I've realised that I'm probably over-analyzing, so I'm changing my strategy now.

I had another look at the charts, and what do I see? both weekly and daily trends are up according to my rules, and MAs have crossed to the upside on 4hr chart, so what am I waiting for?

buy market @ 1.3608, 50 points SL;

I don't care which way market is going to go now, if I'm stopped out, I'll use anti-hedging to get back in, as long as the trend is still up.

let's see what happens with this trade.

ok, this is a bit embarrssing, but I've realised that I'm probably over-analyzing
Definitely.........

so I'm changing my strategy now.
Good idea...

I had another look at the charts, and what do I see? both weekly and daily trends are up.
Thats a good start....

so what am I waiting for?
I have no idea....be brave, be confident...now go and do the business...place the trade

buy market @ 1.3608, 50 points SL
3608...Thats close enough to a round number for me...

I don't care which way market is going to go now
Thats exactly the mental approach you need...you have studied your market...you have made a decision...and you have placed your trade...and you have put a limit on the amount you are prepared to lose if you are wwwwwwrong.

if I'm stopped out, I'll use anti-hedging to get back in, as long as the trend is still up.
Don't sweat...It works brilliantly...it will get you out of any problems

let's see what happens with this trade
I will too...but remember it is just one trade.

.
  • #11
  • May 7, 2007 5:24pm May 7, 2007 5:24pm
Thank You! Jacko!! I'm so happy to see you here!!

to an inexperienced student, there is nothing more reassuring than to hear confirming words from the master himself. this one trade may not work out, but at least I know now that I am on the right track, I'll keep exploring.

looking forward to seeing you again!
  • #12
  • Edited 8:14pm May 7, 2007 5:28pm | Edited 8:14pm
both weekly and daily trends are still up, ma fast is still above ma slow, price is at slow ma right now and has been supported by it for a while. I'm buying more.

buy market @ 1.3598, 5 micro lots, 50 points SL.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD_4hr.jpg Size: 59 KB
  • #13
  • May 8, 2007 2:58am May 8, 2007 2:58am
1st EUR position stopped out @ 1.3571, p/l ($18.5)
2nd EUR position stopped out @ 1.357, p/l ($14.0)

alarm set @ 1.3521;
  • #14
  • May 8, 2007 3:49am May 8, 2007 3:49am
price reached trendline, buy market @ 1.3568;

50% line @ 1.3543, buylimit set @ 1.3543;

50% line @ 1.3500, buylimit set @ 1.3500;
  • #15
  • May 8, 2007 7:06pm May 8, 2007 7:06pm
3rd EUR position stopped out @ 1.3518 ($25);

alarm set @ 1.3468;

price has dropped more than 50 pips below the SL of the 1st and 2nd EUR positions;

buystop @ 1.3571, 10 micros lots, 50 points SL;
  • #16
  • May 8, 2007 7:24pm May 8, 2007 7:24pm
have had a string of losses in the last two days.

re-read Jacko's posts, and was reminded that he only had 1 or 2 trading opportunities each week. I had 3 already in the last 2 days, have I been overtrading?

decided to stop using trend lines and fib lines on 4hr chart, there are too many of them, using them for entry will probably lead to overtrading. I'll keep monitoring 50% fib lines and trend lines on weekly and daily charts, and round numbers as well.
  • #17
  • May 8, 2007 8:10pm May 8, 2007 8:10pm
I want to share to everyone about my thought on EU ...

Price currently running = 1.3545

1. Weekly Chart, i think after a bullish trend, the price will pull back to 1.3352 ...

2. Daily Chart, the price will test the resistance 1.3575, if it can't break the resistance, then the price will continue to down trend ...

3. 4H Charts, same like daily chart, price will pull back and test the resistance 1.3575. hope the price will bounce and down trend continues ...
Attached Images
  • #18
  • May 8, 2007 10:48pm May 8, 2007 10:48pm
hello MizZu X7, nice to meet you too. http://www.forexfactory.com/images/icons/icon7.gif

thanks for your analysis, you seem very systematic and thorough.

to me, both the weekly trend and daily trend are still up, I took a position already and got stopped out, this showed that my position was wrong, more corrections are probably on the way.

price dropped more than 50 points from where I was out, so I'm waiting to get back in on the trend when it comes back to that level.

I'm also monitoring round numbers and 50% fib lines on both daily and weekly charts, if price ever drops near them, I'll consider more trades. though I'm not sure how I should approach these special levels. shall I place buylimit orders right at them well in advance? or I should wait for them to be violated and then place buystop orders a few pips above them? I'm really inexperienced in this kind of trade.

there are also trend lines to be looking out for. I've even less experience trading with these lines. I don't know how to approach them correctly. or is there any correct way at all? maybe I should just buy whenever price approaches one. if I'm stopped out, then I'm wrong, no big deal, I'll get back in with Jacko's anti-hedging. I've began to see the importance of money management now. obviously you need a lot of money to use this anti-hedging method. I hope I didn't misunderstand it and abuse it...
  • #19
  • May 8, 2007 11:05pm May 8, 2007 11:05pm
Quoting iPlayGames
hello MizZu X7, nice to meet you too. http://www.forexfactory.com/images/icons/icon7.gif

thanks for your analysis, you seem very systematic and thorough.

to me, both the weekly trend and daily trend are still up, I took a position already and got stopped out, this showed that my position was wrong, more corrections are probably on the way.

price dropped more than 50 points from where I was out, so I'm waiting to get back in on the trend when it comes back to that level.

I'm also monitoring round numbers and 50% fib lines on both daily and weekly charts, if price ever drops near them, I'll consider more trades. though I'm not sure how I should approach these special levels. shall I place buylimit orders right at them well in advance? or I should wait for them to be violated and then place buystop orders a few pips above them? I'm really inexperienced in this kind of trade.

there are also trend lines to be looking out for. I've even less experience trading with these lines. I don't know how to approach them correctly. or is there any correct way at all? maybe I should just buy whenever price approaches one. if I'm stopped out, then I'm wrong, no big deal, I'll get back in with Jacko's anti-hedging. I've began to see the importance of money management now. obviously you need a lot of money to use this anti-hedging method. I hope I didn't misunderstand it and abuse it...
So do i, i'm just a newbie here. Maybe u'r right, but i saw on daily charts that the price has break down the support at 1.6418. so i'll stick to the trend that i see ... just wait some pullback, but today the price still going down...

so i only can do is waiting just like a sniper
btw good luck to your trading iPlayGames ...
  • #20
  • May 9, 2007 3:43am May 9, 2007 3:43am
this is my current understanding of Jacko's trend following method.

when you have an opinion about the market, you should act upon it. put a position on, let the market tell you right or wrong. how else are you going to find out?

don't panic if your position turns out to be a loss, maybe the momentum is currenlty against you. but as long as you are right about the trend, you'll get your losses back, using Jacko's anti-hedging mehtod.

while waiting for anti-hedging to happen, look out for more trading opportunities. trendlines, round numbers, 50% fib lines, etc. all can be used for entry. my understanding is, if you trade small enough, you won't have to worry about overtrading.

when your position is profitable, use a trailing stop to tail it. if you are right about the trend, you probably have market momentum on your side as well. give it enough space to manoeuvre, let it take you to wherever it pleases.
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