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zoopy's trading journal

  • #1
  • First Post: Edited Oct 2, 2008 1:32pm Feb 11, 2008 6:33pm | Edited Oct 2, 2008 1:32pm
Just a note for those reading my journal. Even though I am a Jacko turtle, the trades I place do NOT reflect the exact entries that the group takes. I'm simply using this journal to document my process + progress as a trader. Any trades mentioned/taken in this journal are for my purposes only. If one decides to follow, do so at your own risk.


INDEX

 Trendline / support / resistance info / round numbers observation (post#3, 9 /page 1)
Round numbers / PA / PA pdf (post#19,24 /page 2)
Controlling losses / time observation (post#36, 41 / page 3)
Overtrading + Volatility (post#46 / page 4)
The "squeeze" effect (post#79 / page 6)
Trendline observation (post#107 / page 8)
Why trade the eurusd? (post#128 / page 9)
All in / Scale in / Pyramiding in (post#204 / page 14)
Advice from Jacko (post#287 / page 20)
Fundamentals (post#366 / page 25)
Round number example / 15 min rule revisited (post#423,434,435 / page 29)

WAVE TRADING
Learning the rhythm of waves (post#478,479,480 / page 32)
Trader vs hunter analogy (post#506 / page 34)
Why line charts? / A deeper look at waves (post#604, 613 / page 41)
KISS - How I trade the waves (post#678 / page 46)
How chart colours affect a trader's decision (post#728 / page 49)
An alternative to determining the trend (post#882 / page 59)
Spotting a possible reversal (post#920 / page 62)
Using round numbers to gauge levels of strength (post#927 / page 62)
SeekingLight's "story of the dog" (post#955 / page 64)
Compounding + bouncing off profit (post#974 / page 65)
Example of stop placements (post#1054 / page 71)
The reasoning behind wave trading. The mechanics (post#1103 / page 74)
Aggressive retracements (post#1133 / page 76)
Tsunami wave analogy (post#1163 / page 78)
Advice from a former pit trader (post#1222 / page 82)
Information manipulation (post#1230 / page 82)
Explanation of why I don't add to a position (post#1285-1287 / page 86)
How to apply waves to Jacko's method (post#1343 / page 90)
Examples of how waves can be used (post#1462 / page 98)
Things which helped to take my trading to the next level (post#1471 / page 99)
My money/trade management plan (post#1478 / page 99)
Phantom of the Pits pdf (post#1519 / page 102)

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World clocks for Firefox + Yahoo widgets (post#1399, 1400 / page 94)
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  • #2
  • Edited Feb 12, 2008 4:37pm Feb 11, 2008 7:03pm | Edited Feb 12, 2008 4:37pm
I have structured my trading based mostly on Jacko’s methodology (there will be other things that I leave out since that is restricted to Jacko’s private forum). Price action will also be factored into my decision making but for now I’m trying to focus on a little at a time instead of tackling everything at once.

3 BASIC TRADING TOOLS
1. trendlines
2. 50.0% fib retracement
3. support / resistance levels / price pivot zones

ALTERNATIVE TOOLS
1. round numbers eg. 1.4400
2. Jacko's Anti-Hedge strategy

TIMEFRAMES
1. Weekly charts are used for overall trend direction
2. Daily charts will be used to enter into trades

CURRENCY PAIRS
For now, I will only be focusing on the eur/usd pair.


DETERMINING THE TREND
The weekly trend will be determined using trendlines. Since I'm learning to be a trend trader, I will only place trades going with the trend.

ENTERING INTO TRADES
When entering into trades, you must combine atleast 1 trading tool with a round number.

LOSING TRADES
When a loss has occurred, apply Jacko's Anti-Hedge strategy.

PROFIT TAKING
Profit taking should be of no concern since the 50 pip trailing stop will take care of this decision for you.


I am trying to keep my methodology as simple as possible but will elaborate on the "why" and "how" I do things especially when it comes to thought process and ideas. I will also be borrowing information from "Jacko's Forex House of Pleasure and Pain " just to make things easier for me to find and digest so I don't clutter up his thread. I am also aware that I do not have money management listed which I regard as highly important. The reason for this is because it's still a work in progress and will also differ from trader to trader.

Below are links where you can find more indepth information on either Jacko's methodology or the James16 price action setups that will be discussed throughout this journal. I will also use this post to add other links that I find of interest scattered throughout this website just so that I have them as reference all in one spot.

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

http://www.forexfactory.com/showthre...hlight=james16
  • #3
  • Feb 11, 2008 7:30pm Feb 11, 2008 7:30pm
Before I get into the explanation of my charts, I want to share some information that Jacko posted in his thread which he picked up from yet another site. I consider this very valuable information so I'm going to mention it now in the early stages so that it's easier to find as my journal evolves.

1. The steeper the line the shorter it lasts, keep your stops tight if it moves away quickly. Keep your stops just above (resistance) or below (support).

2. The price will always move back towards the support or resistance to test it, if there’s been a sizeable move, wait for the consolidation to bring it back to the line, then trade.

3. You need at least three touches (or points in a line) to confirm that it is a support or resistance level. Two is not enough. If the price action moves away fast from the line connected by these points it’s probably the dying gasp, but don’t trade until you hit that line again.

4. A good way to choose an entry is to look for an established line and follow it up with sell orders a few pips below (support) or buy orders above the line (resistance) in the opposite direction.

5. If a “trend” is older and you're not sure if it's going to break or not, wait till you're on the line and then straddle it, that way you can get into an older move. I wouldn’t recommend this though; rather wait for a change in direction. Once you’re into the rhythm you’ll almost always have an open position.

6. If you’re not sure phase in your trades, add to your position every ten or twenty pips.

7. Breaks off support and resistance are generally confirmed by big bars or a big bar, so if you see one on a line you know the “trend” has probably changed.

8. Price does not like support or resistance levels. It mostly tests them and then moves away quickly. You’ll rarely find much price action in the vicinity of the line. If price is hanging around a support or resistance level, it’s likely to break in the opposite direction.

9. If the market is moving up you only trade the support line, if down you only trade the resistance line.


  • #4
  • Feb 11, 2008 7:34pm Feb 11, 2008 7:34pm
I have posted a weekly chart of the eurusd pair. I have also indicated 3 touches of the trendline which to me acts as a very strong support. We are still clearly in an uptrend. This is the chart / timeframe that I will refer to and will only trade in that direction.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd_weekly1.gif Size: 15 KB
  • #5
  • Feb 11, 2008 7:55pm Feb 11, 2008 7:55pm
This is the daily chart that I'm using. I have also indicated a 50.0% fib retracement on the last move down including a PPZ (price pivot zone) at 1.4300. Also included is an alternative trendline that has developed although keep in mind there are only currently 2 touches (for it to be a confirmed level of support, we need atleast 3 touches).
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurusd_daily1.gif Size: 13 KB
Click to Enlarge Name: eurusd_daily1b.gif Size: 12 KB
  • #6
  • Feb 11, 2008 8:02pm Feb 11, 2008 8:02pm
Here is a daily chart of how I am going about determining general areas of support / resistance levels. I use a daily line chart and draw a line across to the general area peaks or valleys hit. Once I have marked those areas, I switch BACK to the bar chart and fine tune it based on the bars (price may shift here and there but it's the general area I'm interested in).
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurusd_dailyppz_line.gif Size: 9 KB
Click to Enlarge Name: eurusd_dailyppz_bar.gif Size: 12 KB
  • #7
  • Feb 11, 2008 8:22pm Feb 11, 2008 8:22pm
I am currently a buyer at 1.4500 with a sl at 1.4450.

reasons
1. On post#5 we are currently at the trendline after price made 3 touches.
2. We are at a nice round number 1.4500.
3. We have an IB (inside bar) indicating indecision in that area and it did break to the upside.

Things that I am keeping an eye on. On the recent drop down, price did break through the trendline. We are in a ranging market and if the market does drop, I will be focusing on the areas around 1.4400-1.4300. 1.4400 will be watched because of the "alternative" trendline pointed out in post #5 and 1.4300 because we have support in that area.

I also have an AH trade at 1.4600 from the 1.4650 trade I took last week. Hopefully this fallen soldier doesn't fall again otherwise I'll have to get him some new armour lol.
  • #8
  • Feb 11, 2008 10:15pm Feb 11, 2008 10:15pm
This isn't a trade I'm taking since I only trade the eurusd pair but what I see on this chart is interesting. As of late I have been using the line chart to better identify the peaks and valleys so that I can recognize the support and resistance levels. Since eurgbp is in an upward trend, I'm curious to see whether it will drop to the 7200 level or even the 7000 level. Another interesting observation is that both of those levels are at round numbers.
Attached Image (click to enlarge)
Click to Enlarge Name: eurgbp_daily.gif Size: 9 KB
  • #9
  • Feb 11, 2008 10:35pm Feb 11, 2008 10:35pm
This is more of an observation as to how price moves around the round numbers area.

If price was moving down and was approaching a round number for example 1.4200, I would watch to see how "aggressively" price moves. If I notice it shoot up and is near a support level/trendline/50.0%fib retracement, more often than not I notice price will move to the next round number, in this case 1.4300. However... if it makes a gradual move and starts sailing across the 1.4200 level down to say 1.4180...70...60 more often than not it goes down to the next round number, in this case 1.4100.

Again, the above is just an observation I have noticed in the past few months and probably has to do with orders waiting to be triggered at those round numbers. Definitely very interesting and helps me to understand why those particular numbers play such an important role in Jacko's methodology.

Another thing that I'm curious about (maybe someone could shed some light on this or comment on) is the importance of the larger round numbers. For example, we're currently at 1.4500, but how much of an importance does 1.5000 play or 1.4000? I remember watching the usdcad a while back and when that broke the 0.9500 level and then dropped almost straight down to 0.9000 then shot back up.

Actually what's interesting after I posted this... I looked at my eurgbp chart. That's a prime example. Look at how price went from the 7000 level to 7500. Anyways just food for thought and throwing ideas out there
  • #10
  • Feb 12, 2008 1:16am Feb 12, 2008 1:16am
Hi Zoopy,

Im looking forward to following your journal. Ive been reading the public threads for both Jacko and James16 and trying to implement their ideas. I just sent an email to Jacko to join his group. Did you also join the James16 private forum? Could you give your feedback on both private groups?

Thank you
  • #11
  • Feb 12, 2008 6:31am Feb 12, 2008 6:31am
Quoting araouf
Hi Zoopy,

Im looking forward to following your journal. Ive been reading the public threads for both Jacko and James16 and trying to implement their ideas. I just sent an email to Jacko to join his group. Did you also join the James16 private forum? Could you give your feedback on both private groups?

Thank you
Hi Araouf

I am currently only a member of Jacko's group not the James16 one. However, I do plan on joining in the near future. I know of a few traders who are in the James16 private group as well and they're very happy so no complaints there. As for Jacko's group, I'm so glad that I joined because now I can pick up my learning pace. If I have any questions or doubt with the way I'm trading, I can always contact Jacko and he'll help me out 1-on-1. His private blog also helps a great deal because he shows us his views of the market and if conditions are changing, how he handles it

Hope this helps.
  • #12
  • Edited Feb 13, 2008 6:54am Feb 12, 2008 7:28am | Edited Feb 13, 2008 6:54am
Quoting zoopy
I am currently a buyer at 1.4500 with a sl at 1.4450.

reasons
1. On post#5 we are currently at the trendline after price made 3 touches.
2. We are at a nice round number 1.4500.
3. We have an IB (inside bar) indicating indecision in that area and it did break to the upside.

Things that I am keeping an eye on. On the recent drop down, price did break through the trendline. We are in a ranging market and if the market does drop, I will be focusing on the areas around 1.4400-1.4300. 1.4400 will be watched because of the "alternative" trendline pointed out in post #5 and 1.4300 because we have support in that area.

I also have an AH trade at 1.4600 from the 1.4650 trade I took last week. Hopefully this fallen soldier doesn't fall again otherwise I'll have to get him some new armour lol.
Just a follow up on this trade. My stops are now at breakeven (I have to manually do this since Oanda doesn't have a trailing stop). My AH is still waiting to be triggered at 1.4600.

update
9:09 am est: stops moved to 1.4535 +35
9:29 am est: stops moved to 1.4550 +50

*AH triggered at 1.4600

11:30 am est: all stops moved to 1.4560... going to be interesting to see how well 1.4600 holds up.

result
trade stopped out at 1.4560 (+60 pips)
AH lost again (-40)
total +20
  • #13
  • Feb 12, 2008 8:40am Feb 12, 2008 8:40am
Great work!
Never say never.
  • #14
  • Feb 12, 2008 8:53am Feb 12, 2008 8:53am
Quoting razldazl
Great work!
Hi Raz

Thanks for helping me start this journal. I think it's a good idea especially when the market is moving so slowly. It helps to collect my thoughts before taking the next step PLUS... I tend not to be trigger-happy because I know others are watching, waiting patiently for me to lose a trade lol
  • #15
  • Feb 12, 2008 9:15am Feb 12, 2008 9:15am
This is another observation of mine that I have noticed in the past. It has more to do with "gut" feel but also tends to be right quite often.

When you notice the market make "extreme moves" over a period, more often than not it will start to go sideways OR it will pull back and retrace. I took a screenshot of the eurgbp as an example since the market hasn't played out yet.

Included on my chart is a grey box where I think price may move towards as the market possibly starts to go sideways. The 50.0% fib retracement was added in case price retraces back instead. This is not a trade I'm in but purely for observational purposes.
Attached Image (click to enlarge)
Click to Enlarge Name: eurgbp_weekly.gif Size: 14 KB
  • #16
  • Feb 12, 2008 10:48am Feb 12, 2008 10:48am
Quoting zoopy
This is more of an observation as to how price moves around the round numbers area.

If price was moving down and was approaching a round number for example 1.4200, I would watch to see how "aggressively" price moves. If I notice it shoot up and is near a support level/trendline/50.0%fib retracement, more often than not I notice price will move to the next round number, in this case 1.4300. However... if it makes a gradual move and starts sailing across the 1.4200 level down to say 1.4180...70...60 more often than not it goes down to the next round number, in this case 1.4100.

Again, the above is just an observation I have noticed in the past few months and probably has to do with orders waiting to be triggered at those round numbers. Definitely very interesting and helps me to understand why those particular numbers play such an important role in Jacko's methodology.

Another thing that I'm curious about (maybe someone could shed some light on this or comment on) is the importance of the larger round numbers. For example, we're currently at 1.4500, but how much of an importance does 1.5000 play or 1.4000? I remember watching the usdcad a while back and when that broke the 0.9500 level and then dropped almost straight down to 0.9000 then shot back up.

Actually what's interesting after I posted this... I looked at my eurgbp chart. That's a prime example. Look at how price went from the 7000 level to 7500. Anyways just food for thought and throwing ideas out there
Just to review this because the eurusd is "behaving" a particular way around the 1.4600 level. What I noticed was that as price approached 1.4600, there wasn't really any spikes down telling me that this move up is pretty solid (Of course I could be wrong but that's ok no worries). If price sails gradually across without much of a drop, we could see 1.4700.
  • #17
  • Feb 12, 2008 1:40pm Feb 12, 2008 1:40pm
Quoting zoopy
Just to review this because the eurusd is "behaving" a particular way around the 1.4600 level. What I noticed was that as price approached 1.4600, there wasn't really any spikes down telling me that this move up is pretty solid (Of course I could be wrong but that's ok no worries). If price sails gradually across without much of a drop, we could see 1.4700.
Thanks for starting this journal zoopy, I'm a newb who doesn't have the $ yet to join Jacko or J16..... hopefully I can glean some ideas from you! Best of luck, I'll be following your progress.

P.S. Although I just discovered this journal today, it turns out I'm in nearly identical trades as you are: at 1.4500 and AH at 1.4610.... let's see how we do
  • #18
  • Feb 12, 2008 1:45pm Feb 12, 2008 1:45pm
Quoting niner49
Thanks for starting this journal zoopy, I'm a newb who doesn't have the $ yet to join Jacko or J16..... hopefully I can glean some ideas from you! Best of luck, I'll be following your progress.

P.S. Although I just discovered this journal today, it turns out I'm in nearly identical trades as you are: at 1.4500 and AH at 1.4610.... let's see how we do
Thanks niner.

I only just started my journal lastnight but as you can tell, I've been busy posting lol. I like showing charts, must have something to do with me being more of a visual/artsy person :

Good luck with your trades
  • #19
  • Feb 12, 2008 1:55pm Feb 12, 2008 1:55pm
Quoting zoopy
This is more of an observation as to how price moves around the round numbers area.

If price was moving down and was approaching a round number for example 1.4200, I would watch to see how "aggressively" price moves. If I notice it shoot up and is near a support level/trendline/50.0%fib retracement, more often than not I notice price will move to the next round number, in this case 1.4300. However... if it makes a gradual move and starts sailing across the 1.4200 level down to say 1.4180...70...60 more often than not it goes down to the next round number, in this case 1.4100.

Again, the above is just an observation I have noticed in the past few months and probably has to do with orders waiting to be triggered at those round numbers. Definitely very interesting and helps me to understand why those particular numbers play such an important role in Jacko's methodology.

Another thing that I'm curious about (maybe someone could shed some light on this or comment on) is the importance of the larger round numbers. For example, we're currently at 1.4500, but how much of an importance does 1.5000 play or 1.4000? I remember watching the usdcad a while back and when that broke the 0.9500 level and then dropped almost straight down to 0.9000 then shot back up.

Actually what's interesting after I posted this... I looked at my eurgbp chart. That's a prime example. Look at how price went from the 7000 level to 7500. Anyways just food for thought and throwing ideas out there
I wanted to revisit this post again but this time using a chart to "illustrate" what exactly I look for when price approaches a round number that may be of interest to me. Again, this is just for observational purposes using the usdcad 1 hour chart.

When price approached the 1.0500 level, notice the very aggressive way price behaved. We have a nice looking pinbar but also notice where price landed up. The next round number 1.0600
Attached Image (click to enlarge)
Click to Enlarge Name: usdcad_1hour.gif Size: 13 KB
  • #20
  • Edited Feb 13, 2008 6:58am Feb 12, 2008 7:08pm | Edited Feb 13, 2008 6:58am
Quoting zoopy
Just to review this because the eurusd is "behaving" a particular way around the 1.4600 level. What I noticed was that as price approached 1.4600, there wasn't really any spikes down telling me that this move up is pretty solid (Of course I could be wrong but that's ok no worries). If price sails gradually across without much of a drop, we could see 1.4700.
Well... this was an interesting day lol. Just when you think the euro may go up, it starts sailing downwards again. I have included a chart showing how price moved along the 1.4600 level. Again... I don't see any aggressive spike downwards and price still seems "clumped up" around the 1.4600 level generally speaking. If it continues drifting downwards and breaks 1.4550, we could be seeing 1.4500 again.

update
I think my fallen soldiers ate their Wheaties this morning or something because that was damn close. For some reason my trade wasn't knocked out at 1.4560 which is where my stops were at (not that I'm complaining lol). That means I escaped death by half a pip?

7:55am
Wokeup to find this trade knocked out. I was ambushed while I was asleep haha.
+60 pips for the trade
-40 pips for AH
+20 total
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd_1hour.gif Size: 11 KB
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