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zoopy's trading journal

  • #621
  • May 7, 2008 1:06am May 7, 2008 1:06am
yep, market moving down. I did not take the trade as something did not feel right to me. Since following Jacko and following just one currency I'm starting to get gut feelings that I never had before. I would say those gut feelings have a fairly high accuracy % , and I never try to trade against them. For now I just use them as a guide not to take trades, would be nice to incorporate them to take trades .
For today I will not be looking to go long before we hit atleast 1.5550 .
This staying on the sidelines is a difficult task, as the longer you wait the stronger the need to take trades gets, and then you start to look and convince yourself of buying opportunities.

ECB cutting rates? I'm not aware of this... ?
  • #622
  • May 7, 2008 7:26am May 7, 2008 7:26am
Quoting kaunasny
yep, market moving down. I did not take the trade as something did not feel right to me. Since following Jacko and following just one currency I'm starting to get gut feelings that I never had before. I would say those gut feelings have a fairly high accuracy % , and I never try to trade against them. For now I just use them as a guide not to take trades, would be nice to incorporate them to take trades .
For today I will not be looking to go long before we hit atleast 1.5550 .
This staying on the sidelines is a difficult task, as the longer you wait the stronger the need to take trades gets, and then you start to look and convince yourself of buying opportunities.

ECB cutting rates? I'm not aware of this... ?
yes, If crude was sitting at 110 or lower they wouldn't blink and cut by .25 tomorrow, especially after today's french numbers. After that yesterday's pin, off Res, it was no brainer to get at least 100+ps on the short side. hope no one got burnt going long at round number...
  • #623
  • May 7, 2008 8:05am May 7, 2008 8:05am
Quoting raczekfx
yes, If crude was sitting at 110 or lower they wouldn't blink and cut by .25 tomorrow, especially after today's french numbers. After that yesterday's pin, off Res, it was no brainer to get at least 100+ps on the short side. hope no one got burnt going long at round number...
I couldn't agree more. As soon as I saw that 4HR pin it confirmed more downside to come.

According to Jacko's method there is really no reason to go long at this point, we haven't even started seeing higher highs and higher lows on the 4HR, not to mention the fact that the daily is screaming further downside.
  • #624
  • May 7, 2008 8:17am May 7, 2008 8:17am
true, I just got fooled by 4 hour strong candles, we didnt have any for a while. Thought last 4 hour candle in last 2 hours droped forming a pin. That's when I became carefull and decided to wait and see.
  • #625
  • May 7, 2008 4:01pm May 7, 2008 4:01pm
Quoting raczekfx;
you had much better probability after pullback to 5450 early in the morning.
when oil reverses its course and ecb cuts on thursday, we can easily be looking at pullback to 5350 and beyond...
.
Thanks Raczek. Appreciate the input.
And after reading later posts by yourself about the 4hr pin and Mike and James on the J16 thread I realise that there wasn;t much chance of a long there....
BUT in saying that it never retraced and started up again so I'd like to think I'd never have got long anyway! Mmmmmm. Hindsight, how wonderful.
Enter Signature
  • #626
  • May 7, 2008 4:08pm May 7, 2008 4:08pm
  •  MPP
  • Joined Jun 2007 | Status: Be yourself, everyone else is taken | 2,734 Posts
Quoting cologg
Thanks Raczek. Appreciate the input.
And after reading later posts by yourself about the 4hr pin and Mike and James on the J16 thread I realise that there wasn;t much chance of a long there....
BUT in saying that it never retraced and started up again so I'd like to think I'd never have got long anyway! Mmmmmm. Hindsight, how wonderful.
it's not hindsight, it's a learning curve and your on it. the important thing is that you recognise how the trade went and why.

best of pips

MPP
  • #627
  • May 11, 2008 7:56am May 11, 2008 7:56am
Quoting Khornate8
Hey Zoopy,

it appears our friend Bernanke is abiout to speak in a couple of hours time (Weird time as it will be 8.30pm New York time). Anyway the market in the last few hours has made gains therefore i believe he has worked again. I lost where we were up to in the tally??? Was it around 9 out of 10.

On another note you have successfully screwed with my mind. Right when I had brought my thinking around to stay away from everything not Jacko and had your Journal was a nice place to trove for friendly discussion re the same you go on to start posting all this wave stuff that has some real merit and is obviously well thought out and thought provoking. I am purposefully not reading too much into your recent posts as I know it will convince me to look deeper and that will drag me away from giving Jacko's method a real unbiased go.

Keep up the good work and look forward to some good light reading on waves....

Cheers,

K8

Hey Khornate

I wasn't around when Bernanke spoke. Looks like the market went up so that makes it 9 of 10!

Just as a note for you and others who may be reading my journal, the wave analysis or "exercise" as I like to call it is a basic understanding of how the market moves. It explains further why Jacko's method works but also may help in determining entries and when there may be a possible reversal.

If anyone noticed, when a wave collapses, the waves going down tend to be longer in length, the same for when a wave breaks to the upside. If we were trading the euro long term and buying, we'll have an edge because of this which is also why there is a higher probability of the AH working.

Another thing to also point out. If we were to buy the euro (or any other market) when it was trending up, you would be able to place your stops at the bottom of the dip/valley and get away with it because there's a bias to the upside. Remember, when the market makes waves going up, the lows become higher. IF you are stopped out, that's a warning sign that the market may be reversing.

To add to the above explanation, Jacko may say to buy "dips". What constitutes a dip? Well... to me that means a reasonable drop but the waves also have to break to the upside first. Looking at the euro (keep in mind I was away this past week), there isn't a significant wave that broke to the upside so I still see more downward movement. For me to even consider a long trade, the market has to go beyond 1.5550 THEN drop and when it starts to move up that's when I'll buy.
  • #628
  • May 11, 2008 8:10am May 11, 2008 8:10am
Quoting MPP
Not realy in keeping with Zoopy's trading style though is it, i know what your saying and i see it too, but in keeping to the theme, i believe we are mid wave and price needs to break either 1.5630 (buy at 15650) or 1.5360 (sell at 1.5350).

don't trade this as i'm still trying to pick this method up
Not sure where the market was when you posted this but I think I have a general idea based on what I'm seeing.

You were right when you said to buy at 1.5630 (keep in mind this is more of an aggressive approach - if possible, it's better to buy after it dips down first since your stops are smaller and can be placed at the bottom of the dip).

With regards to selling, since the waves have been collapsing, I would be more inclined to sell when it pulls back (as long as price doesn't break the peak of the previous wave). For example... notice on the euro 4 hour, price went up to 1.5523 then down to 1.5467. I may have sold at this point but my stops would have been at 1.5630.

Based on what I have seen (I still need to look into this further so take it for what it's worth), it may make more sense to trade the initial break of the wave but after that trade the pullbacks instead. The main reason why I don't like trading the breaks is because it requires me to have larger stops.

Not sure if the above makes sense?
  • #629
  • May 11, 2008 8:14am May 11, 2008 8:14am
Quoting cologg
Hi all,
Maybe the below is something to keep an eye on?
Possibly re-entry around 1.5500?
Cologg

Looking at my charts, I don't see that as a "significant" wave to consider. Try this instead. Take your line chart and zoom out to max. OR... zoom out a little and step back from your monitor then analyze the waves from a distance. The waves that "pop out" are the ones that are of significance and those are the ones you should be considering.
  • #630
  • May 11, 2008 8:24am May 11, 2008 8:24am
Quoting kaunasny
Attachment

I wonder how much luck I will have with posting the image.
Concerning zoopys wave method, I was backtesting it for some a while. I find it difficult to use it by it self alone. I get too many whipsaws. So I feel that this wave method need something more to it. Ofcourse it is a good way to tell when a reversal is happening or had happened. Combining this with some S/R's we might filter some of those whipsaws.

Anyway, going back to zoopys method if we look at H4 chart we broke the wave, headed up a little, now we would need a retrace to 1.5500 for an entry. Taking on consideration recent price action this could be a valid point to take the trade. Unless ofcourse I'm not getting something and ofcourse if we look at higher time graphs we don't see this.

Well lets see how this goes.

Looking at it again buying at 1.5500 feels a little agresive as it still feels as the trend is down. Looking to buy after it had reached 1.5650 might be the better bet.
Kaunasny

I think you may be experiencing the "squeeze" effect I spoke about in my journal a while back. I've attached the link to that post. This is the reason why I mentioned it and you've just given a good example for this because I can see it based on the chart you provided. See if the link below helps.

http://www.forexfactory.com/showpost...1&postcount=79

Judging from what you posted, "...if we look at H4 chart we broke the wave, headed up a little...", the break wasn't significant enough. Again, I can't really comment too much on this since I wasn't at my charts when that happened. You want to look for a complete break and for price to close. If price breaks just barely and closes, wait for another 4 hours. It's all about patience and you need to see the waves develop which does take time.

Hope this helps.
  • #631
  • May 11, 2008 8:34am May 11, 2008 8:34am
Quoting MPP
here's another take on it, will be interesting to see Zoopy's reply to this one.

so i have used a 50% fib setup to show approximatly what i think we are looking for, this can be seen without the fib but it help to demonstrate my point.

As yet we have not broken the wave in either direction, we have bounce of the bottom for a small retrace and then will break through for the short.
MPP

You have just given a good example of why Jacko's method works at the 50.0% fib retracement which also ties in with the AH and the concept behind that.

Notice if we were to short at the 50.0% there's a good chance price will head down (as long as it doesn't break the top of the wave - your 100.0% line). If it does break the wave to the upside then look for a possible reversal and waves heading higher. That's when you'll either buy on the initial break or wait for the dips then buy.

Something I feel I should add because it seems as if you may be missing something but not sure. Chances are if you are then others are too. When the first wave collapses, this is your "signal" to trade waves going down. By this I mean to wait for pullbacks and then shorting the market as you have shown in your chart. However... I would wait for the market to turn down more before shorting it.

Let me know if the above makes sense. If not, I'll post more charts to illustrate it.
  • #632
  • May 11, 2008 8:46am May 11, 2008 8:46am
Wanted to post this chart in particular (the same applies to gbpjpy, eurjpy). Last week the 4 hour wave collapsed for this pair. You can also see it visually on the daily.

Since the 4 hour wave has collapsed, this now sends me into "sell" mode only. I won't be considering any longs until a wave breaks to the upside. Having said that, I will wait for a pullback (provided it happens) in the orange box area and when price looks like it's starting to turn down, I would short it.

When price makes a wave going down, I will wait for a pullback again and short it. I'll keep doing this until a wave eventually breaks to the upside.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpchf_4hour_collapse.gif Size: 10 KB
  • #633
  • May 11, 2008 9:59am May 11, 2008 9:59am
Here's what I'm currently seeing as far as waves go for the euro.

On the daily chart, I have pointed out a possible wave which collapsed. I do realize this is slightly different from the one I pointed out a week ago (post#611). This wave is highlighted because it's a bigger structure and personally I find it more defined (the bigger and more defined a wave is, the bigger the effect = higher probability). Having said that... we may be entering into a reversal phase where we'll start to notice larger waves moving down in the weeks to come. We'll have to wait and see what happens.

As far as the 4 hour goes, we haven't had a wave break to the upside yet. Meaning we're still in "sell" mode. Where would I short the euro? Anywhere between where it is now and the white horizontal line. I should also point out that I don't pick tops/bottoms but instead wait for price to turn around first THEN short. A 4 hour or 8 hour wait won't kill me, I rather have all the odds stacked in my favour before throwing money at the market.

Where do I expect the euro to fall? I have no idea nor do I care since I trade what the market dishes out. I let the market dictate where it needs to go and I follow since the market is ALWAYS right.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurusd_daily_collapse.gif Size: 10 KB
Click to Enlarge Name: eurusd_4hour_pullback.gif Size: 10 KB
  • #634
  • May 11, 2008 7:19pm May 11, 2008 7:19pm
Wasn't going to post this until later but figured now is an appropriate time since the euro seems to be creeping up slowly. It's possible it may have bottomed out so I'm going to lay out three possible scenarios.

IF the euro has bottomed out and we move higher, we'll probably run into one of the two scenarios listed below.
Scenario 1
The euro may break the previous wave to the upside without a retracement. Often times there is one but I have noticed other times it broke and never looked back so I figured I'd add that in just in case.

Scenario 2
This is more likely the possible scenario should the move up break the previous wave. First there will be a break, then a pullback/dip before resuming up. This is also my favourite setup because stops are tighter plus there is no rush in getting into the market since I'll be waiting for a well developed valley/dip to form.


IF the euro starts to turn around gently and creates a peak that you can start to see visually from a distance, we'll probably run into scenario 3.
Scenario 3
Price will start to turn south below the previous peak's high. When it does this, this may be a sign that we have yet to drop further. This also sets up a higher probability that we'll break the previous wave's valley/dip.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurusd_4hour_up2.gif Size: 10 KB
Click to Enlarge Name: eurusd_4hour_up1.gif Size: 10 KB
Click to Enlarge Name: eurusd_4hour_down.gif Size: 10 KB
  • #635
  • May 11, 2008 7:33pm May 11, 2008 7:33pm
Quoting zoopy
Decided to post this chart in particular because I find it interesting. It's one of those charts where you ask yourself "what do I do when...?"

Three wave structures... what to do. Pretty much just wait until it breaks out. There was a slight piercing to the downside but not too convincing for me. Based on what I'm seeing though and if I had to pick a side, I'd be bias to the downside because of that "suggestion" the current wave may have started to collapse. What I'd be watching in this case if I was to short would be to make sure price doesn't go above the previous wave's high (around 0.9433). If it does then we're obviously wrong.
I wanted to do a follow up on this post in particular because we had an unusual case where we pretty much had three waves all clumped together.

What ended up happening was the one wave which "suggested" a possible move down broke to the upside. After breaking up, it then dipped down, created a valley/dip and started moving up higher. What's happening here is very similar to what may happen with the euro (see post#634 scenario 2).

I'll be keeping an eye on this pair because I'm very curious now whether we'll be breaking the previous peak. This will be the most likely outcome but as mentioned before, the market decides not me
Attached Image (click to enlarge)
Click to Enlarge Name: aud_4hour_waves.gif Size: 12 KB
  • #636
  • May 11, 2008 9:52pm May 11, 2008 9:52pm
This has been brought up a few times in my journal with regards to knowing when to enter and what to look for.

I have attached a line chart of the eurusd 4 hour because it's now beginning to exhibit characteristics of a move down. When I see the line start to "bend" the way I have it in my chart, I wait for momentum to pick up before entering. My stops I would place at the top of the current peak which is why I'm prepared to wait because I want to make sure that we are indeed forming a peak and not a spike/whipsaw. The more "developed/defined" the current peak is, especially when seen from a distance, the more likely the odds will be stacked in my favour.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd_4hour_drop.gif Size: 9 KB
  • #637
  • May 11, 2008 11:03pm May 11, 2008 11:03pm
Here's a follow up to the euro peak formation. As I mentioned in a previous post, if you aren't sure whether there is a peak, make sure to do the following:

1. Make sure your charts are square in dimension. Rectangular charts will distort information and you get what I call the "squeeze" effect (also see post#79)

2. Zoom out a little so that you see a few well defined waves (don't just concentrate on the current one - sometimes a bigger picture is necessary). Once you have done this, stand at a distance from your screen and squint your eye a little. If you're able to identify the wave by doing this, that's the one you'll use as reference.

3. An alternative is to zoom out completely on the 4 hour until you can't zoom out anymore. If you're able to tell that it's a wave after doing this, then you definitely have the right peak/valley.

Using the above helps in distinguishing which waves to use and which I consider noise. Whether you use the wave analysis as a separate method to trade with entirely or just as a tool is up to you. I will however stress again that knowing the basics is very important.


Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurusd_4hour_peak.gif Size: 9 KB
Click to Enlarge Name: eurusd_4hour_peak2.gif Size: 10 KB
  • #638
  • May 12, 2008 2:59am May 12, 2008 2:59am
  •  MPP
  • Joined Jun 2007 | Status: Be yourself, everyone else is taken | 2,734 Posts
Quoting zoopy
MPP

You have just given a good example of why Jacko's method works at the 50.0% fib retracement which also ties in with the AH and the concept behind that.

Notice if we were to short at the 50.0% there's a good chance price will head down (as long as it doesn't break the top of the wave - your 100.0% line). If it does break the wave to the upside then look for a possible reversal and waves heading higher. That's when you'll either buy on the initial break or wait for the dips then buy.

Something I feel I should add because it seems as if you may be missing something but not sure. Chances are if you are then others are too. When the first wave collapses, this is your "signal" to trade waves going down. By this I mean to wait for pullbacks and then shorting the market as you have shown in your chart. However... I would wait for the market to turn down more before shorting it.

Let me know if the above makes sense. If not, I'll post more charts to illustrate it.
hi Zoopy
welcome back, i am begining to see this, unfortunately, i still see some of the waves differently, but i'm getting there. so you kep posting i'll keep reading and dropping in the odd chart to see if i'm getting it right.

thanks again for sharing your views and ideas

regards

MPP
  • #639
  • May 12, 2008 8:19am May 12, 2008 8:19am
Quoting MPP
hi Zoopy
welcome back, i am begining to see this, unfortunately, i still see some of the waves differently, but i'm getting there. so you kep posting i'll keep reading and dropping in the odd chart to see if i'm getting it right.

thanks again for sharing your views and ideas

regards

MPP
Thanks MPP

Initially, recognizing the waves may take some time because it's a different approach to the usual candle/bar chart. What I found hard at first was not looking at candles and bars at all. When you do that, you're forced to find an alternative which is why I said to treat this more as an exercise.
  • #640
  • May 12, 2008 8:26am May 12, 2008 8:26am
Zoopy
for me it would be interesting if you showed us your trades as you take them...if you are taking any and you know showed when you get in what your stop is etc, I need to see it happening to get it I think hehe, take care, Raz
Never say never.
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