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  • #841
  • May 21, 2008 9:39am May 21, 2008 9:39am
Yes I am already starting to get it, and now I can recognise that all good traders subconciously see those waves, I see them make decisions that most of the time agree with the waves, for example when a profesional trader says, for example.. " ok this down move is over " and when you check your wave analysis you see that the wave collapsed sending the market into other direction.
I think these wave analysis is very important and very helpfull. It's just that it needs alot of extra addons like money management, positon sizing and so on for it to be a trading method.
As you said, every trader trades differently and its up to them to choose those extras that they feel comfortable with.
  • #842
  • May 21, 2008 9:41am May 21, 2008 9:41am
Thought I would post this chart up because I remember posting information on how I sometimes spot "traps" based on the bars and how they retrace.

Here is a classic example on the daily chart. This could be a HUGE trap. Notice how price goes up but... where's the retracement down first? Going to be interesting to see where this one lands up.
Attached Image (click to enlarge)
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  • #843
  • May 21, 2008 9:48am May 21, 2008 9:48am
Quoting kaunasny
Yes I am already starting to get it, and now I can recognise that all good traders subconciously see those waves, I see them make decisions that most of the time agree with the waves, for example when a profesional trader says, for example.. " ok this down move is over " and when you check your wave analysis you see that the wave collapsed sending the market into other direction.
I think these wave analysis is very important and very helpfull. It's just that it needs alot of extra addons like money management, positon sizing and so on for it to be a trading method.
As you said, every trader trades differently and its up to them to choose those extras that they feel comfortable with.
Yes, definitely agree. I'm just putting the wave material out there to remind myself of the basics. We can "jazz" things up as much as we want after, but don't do it unless you understand the basics.
  • #844
  • May 21, 2008 10:06am May 21, 2008 10:06am
Here's another chart of oil (1 hour). Again... same thing. Where's the retracement? The reason why I consider these high probability traps is because more often than not a price bar retraces first before continuing. If you look at all bars to the left, you'll notice that there was some sort of retracement FIRST before a move in the intended direction. We not only don't have that now on the 1 hour but on the daily too. Keep in mind the 15 min rule that I have as well. We haven't even reached 15 min yet and price has already shot straight up lol.
Attached Image (click to enlarge)
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  • #845
  • May 21, 2008 10:10am May 21, 2008 10:10am
what's 15 minute rule?
  • #846
  • May 21, 2008 10:20am May 21, 2008 10:20am
Quoting kaunasny
what's 15 minute rule?
I have a quick navigation feature added to locate some of the information I may be referring to in post#1. This is more to make my journal more user friendly so if you remember me talking about the "squeeze" effect or colours etc, you'll be able to find it quickly by visiting the first post.

http://www.forexfactory.com/showpost...&postcount=434
  • #847
  • May 21, 2008 10:22am May 21, 2008 10:22am
Quoting zoopy
Here's another chart of oil (1 hour). Again... same thing. Where's the retracement? The reason why I consider these high probability traps is because more often than not a price bar retraces first before continuing. If you look at all bars to the left, you'll notice that there was some sort of retracement FIRST before a move in the intended direction. We not only don't have that now on the 1 hour but on the daily too. Keep in mind the 15 min rule that I have as well. We haven't even reached 15 min yet and price has already shot straight up lol.
lol... yep, it was a trap. Look at what price is doing now. It's returning to the area where it "should" have retraced first.
Attached Image (click to enlarge)
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  • #848
  • May 21, 2008 11:04am May 21, 2008 11:04am
Here's an updated view of the gbpchf 4 hour. The 4 hour wave collapsed last night giving us a direction to follow. I have now highlighted an area where I would look to short this market. The closer price gets to the orange highlighted box, the tighter my stops will be. Even though I won't be making a trade on this pair (I'm focusing more on the euro now), I would feel comfortable shorting anywhere within the blue highlighted box area.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpchf_4hour.gif Size: 10 KB
  • #849
  • May 21, 2008 5:04pm May 21, 2008 5:04pm
Quoting zoopy
Took a small euro short based on the daily chart. Not sure how this will play out but we'll see.

Reason for the short
1. Daily wave collapsed as indicated on my daily chart
2. Price has now retraced back up to the 50.0% area
3. Using the concept of how I determine a trend, I believe we may be in the early stages of a larger move down (I could be wrong which is why I'm taking a small position). If I'm right, this next move should not produce a peak higher than the recent one at 1.6000 or thereabouts. If I notice a steady decline and the market starts to show signs of another collapse, I will add to this position. IF I'm wrong, then I'm wrong and will take a hit on the smaller position.

Short at 1.5646
Temporary stop: 1.6000
*shakes head*


Should have followed the 4 hour waves until they collapsed. That will teach me to swim against a tidal wave. Just as well I went in with a small position to limit my risk. At least we know that approach works LOL.

On another note... this move up seems extreme. Rising oil prices doesn't help in this equation either. What I typically look for when I see extreme moves like this, especially when it happens so fast and by so much is a retracement that can be just as aggressive as the move going up. Not sure if it'll happen with this euro though. We'll see what happens.

Trade update
Still in this trade
-150 pips (this is when you start praying that a wave collapses haha)

My plan for this trade from this point will be to leave stops at 1.6000 until a wave is created on the 4 hour. When a wave has been created I will move my stops down to limit further losses.
  • #850
  • May 21, 2008 9:38pm May 21, 2008 9:38pm
Quoting zoopy
*shakes head*


Trade update
Still in this trade
-150 pips (this is when you start praying that a wave collapses haha)


your trading will take180 degrees turn once you progress to $100/pip.
It will be totally new zoopy..... There will be no more 150 stops ..?
  • #851
  • May 21, 2008 9:44pm May 21, 2008 9:44pm
Quoting raczekfx

your trading will take180 degrees turn once you progress to $100/pip.
It will be totally new zoopy..... There will be no more 150 stops ..?
Probably true but then again I may not be settling on trading just a line chart either. I was discussing with someone how the waves give me a good sense of direction. Once I know that direction and I know the area to look at, it may be just a matter of using PA in that area.

Right now this approach is more to see how well I can tell direction based on a simple line chart and how "sloppy" I can be and still get away with it. There's so many ways to really trade this. As for the 150 pip stop, that's not too bad, Jacko uses 100 so not that much more.
  • #852
  • May 21, 2008 9:58pm May 21, 2008 9:58pm
Here's an example of how powerful waves can be when used with PA (keep in mind the hunter vs trader analogy).

I'm not trading this way yet since I'm going to be looking to see how far I can push things with the line chart first. But just to give a "hint" of how powerful it is, I have provided a 4 hour line chart showing the first wave collapse. When that happens I know to wait for a pullback and keep shorting (this is where PA can be used). I will continue to short until a wave breaks to the upside. When it breaks to the upside I will wait for a pullback then wait for PA to tell me when to go long. Also keep in mind this is done through the use of just waves and PA. No trendlines, no fib retracements, no indicators.
Attached Image(s) (click to enlarge)
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  • #853
  • May 21, 2008 10:02pm May 21, 2008 10:02pm
Quoting zoopy
*shakes head*


Should have followed the 4 hour waves until they collapsed. That will teach me to swim against a tidal wave. Just as well I went in with a small position to limit my risk. At least we know that approach works LOL.

On another note... this move up seems extreme. Rising oil prices doesn't help in this equation either. What I typically look for when I see extreme moves like this, especially when it happens so fast and by so much is a retracement that can be just as aggressive as the move going up. Not sure if it'll happen with this euro though. We'll see what happens.

Trade update
Still in this trade
-150 pips (this is when you start praying that a wave collapses haha)

My plan for this trade from this point will be to leave stops at 1.6000 until a wave is created on the 4 hour. When a wave has been created I will move my stops down to limit further losses.
A Jacko turtle trading counter trend?? Wouldn't you know it? You take a counter trend trade on E/U and the oil market confirms it's parabolic rise the next day. No telling when this will cease. The US politicians are the primary cause for the rise in oil and the weakling $. The new group elected in November will most likely be even more ignorant of the supply/demand relationship. Hillary blames "speculators", Obama is on the "sue OPEC" pander bus and McCain wants to produce oil anywhere but the US. One of my trades is long on the US$ and I'm getting burned on it at the moment. I should have known better than to go long US$ on any pair right now. Once I extricate myself from this USD/CAD long you won't be able to get me to trade long on USD/Magic Beans.
  • #854
  • May 21, 2008 10:12pm May 21, 2008 10:12pm
Quoting KissFan
A Jacko turtle trading counter trend?? Wouldn't you know it? You take a counter trend trade on E/U and the oil market confirms it's parabolic rise the next day. No telling when this will cease. The US politicians are the primary cause for the rise in oil and the weakling $. The new group elected in November will most likely be even more ignorant of the supply/demand relationship. Hillary blames "speculators", Obama is on the "sue OPEC" pander bus and McCain wants to produce oil anywhere but the US. One of my trades is long on the US$ and I'm getting burned on it at the moment. I should have known better than to go long US$ on any pair right now. Once I extricate myself from this USD/CAD long you won't be able to get me to trade long on USD/Magic Beans.
lol.

That trade is based more on my exercise. This whole exercise actually started off from an email discussion I was having with Jacko a while back so I wanted to look into things in a more deeper perspective in the hopes I would learn something from it.

These trades aren't to be viewed as "Jacko" trades because I'm dealing with something entirely different. I'm using the concepts within his method to see why it works so well. I know there are some traders who will just take his set of rules and follow them blindly. I don't trade that way unfortunately. If market conditions change, you have to know how to shape it so that the method works. The only way you'll know how to do this, is if you understand the method inside and out.
  • #855
  • May 21, 2008 10:30pm May 21, 2008 10:30pm
Quoting zoopy
lol.

That trade is based more on my exercise. This whole exercise actually started off from an email discussion I was having with Jacko a while back so I wanted to look into things in a more deeper perspective in the hopes I would learn something from it.

These trades aren't to be viewed as "Jacko" trades because I'm dealing with something entirely different. I'm using the concepts within his method to see why it works so well. I know there are some traders who will just take his set of rules and follow them blindly. I don't trade that way unfortunately. If market conditions change, you have to know how to shape it so that the method works. The only way you'll know how to do this, is if you understand the method inside and out.
I understand your motives completely. Just having a little fun. I don't think that any of us will be able to leave well enough alone in this business. It seems that traders who know "how" will probably tread water in this business. You are a know "why" kind of trader. That's why I read your journal.
  • #856
  • May 21, 2008 10:35pm May 21, 2008 10:35pm
Here's a look at the 50.0%. Again, I'm using the previous wave to determine the direction. To make things interesting we'll switch to a bar chart and place a 50.0% fib retracement to it. Keep in mind the AH and the reason behind why it works.

None of this stuff is a "secret". All of what you see has been out in the open for ages, just that no one really seems to pay attention to it. They prefer their charts to look cool with indicators instead.
Attached Image(s) (click to enlarge)
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  • #857
  • May 21, 2008 10:41pm May 21, 2008 10:41pm
Quoting KissFan
I understand your motives completely. Just having a little fun. I don't think that any of us will be able to leave well enough alone in this business. It seems that traders who know "how" will probably tread water in this business. You are a know "why" kind of trader. That's why I read your journal.
No worries, all in good spirits. Just pointing out things that others need to see. The last few charts should give an idea of where I'm going with all this. Things may not make complete sense now, but I'm sure they will in the end
  • #858
  • May 22, 2008 3:38am May 22, 2008 3:38am
  •  MPP
  • Joined Jun 2007 | Status: Be yourself, everyone else is taken | 2,734 Posts
well here's my view on trade management.

we open a position with our preferred trade size based on our MM methods. this is then divided into 3 even portions (positions A, B and C), once price has reached a point that is in profit equal to our SL we close 2/3 of the trade (close A and B), locking in some profit and balancing the potential loss to a Break even point, we then trail the third position using wave lows or set number of pips, when we enter the next position, we can do this with the same full amount as the last remaining trade is already at BE from the start and holds no risk.

Position A all profit
position B covers positions 3's risk
Position C Sl at BE and room to run

as we move up the SL on 3 it's all profit that’s added to position 1.

ie
enter 3 position(A,B,C) on EU at 1.5300, SL @ 1.5200
A tp 1.5400
B tp 1.5400
C tp open
price hits 1.5400
close 2 positions (A,B) @ 1.5400

position A gives us 100pips profit
position B covers position C’s risk and allows the trade to be a free trade with the SL @ 1.5200, 200pipss below price, now considered break even with no risk
Position C is allowed to run being trailed by either the current 200pips and/or using waves (remember every time we move the Sl up this is also now profit)

Leave the SL on position C at 1.5200 gives us 200pips of room, this is achieved because the 100pips profit on position B covers positions C potential loss.

next we look for the next wave to trade enter the 3positions again and again close out 2/3, now we have 2 positions running as free trades with large stops being exited via a trailing stop or on a wave collapse

Position 3 could also be managed the Jacko way using a simple TSL of 100pips if you like and let it tend to itself, that way the trade can be forgotten about.

We treat the initial 3 positions the Jacko way and AH them if they fail from the get go.

Hope this is clear enough
  • #859
  • May 22, 2008 3:40am May 22, 2008 3:40am
Well, out of longs now. I had a TP limit set at 1.5800 before I went to sleep yesturday, woke up today to see it being missed by 1 pip and I decided that market going further today so I took TP off the table to see where it will go today to be stoped out at 1.5750 , there was bottom of the wave just above 1.5750 , so now I'm beating myself up.
Looking for new entry price, 1.5650 looks good . This was a 300+ pip move up without much retracement showing market has strength to move up. 1.5650 is exactly at 50% fib of last move up. There is a 200 MA right around there on H4, and a rising trendline at 1.5600. I believe market is strong and will not take price to hit the trendline that low.
I'll take a quess and say we're going to get that price tommorow afternoon or 6 am New York time
  • #860
  • May 22, 2008 4:05am May 22, 2008 4:05am
Quoting MPP
well here's my view on trade management.

we open a position with our preferred trade size based on our MM methods. this is then divided into 3 even portions (positions A, B and C), once price has reached a point that is in profit equal to our SL we close 2/3 of the trade (close A and B), locking in some profit and balancing the potential loss to a Break even point, we then trail the third position using wave lows or set number of pips, when we enter the next position, we can do this with the same full amount as the last remaining trade is already at BE from the start and holds no risk.

Position A all profit
position B covers positions 3's risk
Position C Sl at BE and room to run

as we move up the SL on 3 it's all profit that’s added to position 1.

ie
enter 3 position(A,B,C) on EU at 1.5300, SL @ 1.5200
A tp 1.5400
B tp 1.5400
C tp open
price hits 1.5400
close 2 positions (A,B) @ 1.5400

position A gives us 100pips profit
position B covers position C’s risk and allows the trade to be a free trade with the SL @ 1.5200, 200pipss below price, now considered break even with no risk
Position C is allowed to run being trailed by either the current 200pips and/or using waves (remember every time we move the Sl up this is also now profit)

Leave the SL on position C at 1.5200 gives us 200pips of room, this is achieved because the 100pips profit on position B covers positions C potential loss.

next we look for the next wave to trade enter the 3positions again and again close out 2/3, now we have 2 positions running as free trades with large stops being exited via a trailing stop or on a wave collapse

Position 3 could also be managed the Jacko way using a simple TSL of 100pips if you like and let it tend to itself, that way the trade can be forgotten about.

We treat the initial 3 positions the Jacko way and AH them if they fail from the get go.

Hope this is clear enough
...not crazy about the 200 sl on posi 2, you really think thats necessary? Cant it be below the earlier wave? 200 is a lot I think, Raz
Never say never.
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