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  • #1,221
  • Jun 17, 2008 7:50am Jun 17, 2008 7:50am
Oil had another wave collapse.
Attached Image (click to enlarge)
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  • #1,222
  • Jun 17, 2008 9:06pm Jun 17, 2008 9:06pm
I was reading the "No Free Lunch but all the Free Coffee you can drink" thread and a former pit trader (Peter Crowns) gave some very valuable advice in a post which I'd like to add to my journal. I have a few pull quotes which I'll post here and will include the link at the end for further reading. Definitely a must read.


Losses are an integral part of trading, and those who spend most of their thought processes trying to figure out how to trade with the fewest losses, don't "get it".


Until you learn how to lose, you cannot win, long term, as a trader.


 What is everybody's problem? Don't you know that only losers get so freaked about having losses???? Losses are just losses. Make sure they are smaller than your winners, in aggregate, and you're home free.


I feel extremely comfortable in stating that most of you don't anywhere deserve DIBS. Because most of you believe that perfection needs to be changed. Try taking 100 trades (at a penny a pip even) before you pass judgement on how it should be improved.... Ego has no place in trading methodologies

It's like being given a Porche 911 and before you even drive it a block, you say, "I think the engine would be faster if I drained the oil and replaced it with water. That heavy oil is too sticky." Good luck on that.

The full post can be found here...
http://www.forexfactory.com/showpost...&postcount=438
  • #1,223
  • Jun 17, 2008 9:42pm Jun 17, 2008 9:42pm
Just wanted to take some time to reflect back on some of my trading up until this point and things which I'll most likely be changing with my wave trading.

STOPS
After reading through Peter Crown's post, what I'm going to be looking into further is reducing stops. I've started to explore this more this week and believe stops can be knocked down by quite a substantial amount. If you truely understand Jacko's method and the basis of trend trading including the AH, you'll be able to figure out "how".

RISK/REWARD
Another area I will be focusing more on will be risk/reward ratio. I wasn't getting into this at the beginning because I wanted to understand what I was dealing with first and knowing my boundaries. If you don't know your boundaries, it's very hard to say what works/doesn't work. Since I'm now in what I consider phase 2 of wave trading, this area will start to play a bigger role. This ties in with stops and my focus now is to cut losses short and find the best way to let my winners run.

The above changes that I will be addressing tend to be more personal preference so I'll be leaving this open.
  • #1,224
  • Jun 17, 2008 9:56pm Jun 17, 2008 9:56pm
Today we didn't get much movement on the eurusd which was a little surprising after all the big news that came out. I also noticed throughout the day although we did manage to get above 1.5500, the move wasn't one that followed through. When I see this sort of movement, the market is basically giving me clues that there aren't enough buyers at this level so we could very well slide down to the next level. If this happens, there's a very good chance of a wave collapse.
  • #1,225
  • Jun 18, 2008 8:10am Jun 18, 2008 8:10am
5500...5490...5480...5470

I don't see any buyers and we're approaching 5470. Whenever I see the x.xx70 level give way, that's usually the backbone and the price slides down to the next x.xx00 level.

Markets have been real boring as of late. We need Bernanke to move his lips or something lol.
  • #1,226
  • Jun 18, 2008 8:18am Jun 18, 2008 8:18am
Yes the EU has been weird lately, my last couple of trades have gone the wrong way.. thats what i get for trading against the trend.
  • #1,227
  • Jun 18, 2008 8:25am Jun 18, 2008 8:25am
Here's a chart of the EJ H4 possible wave break down, i would be careful going short if it does break because the long term trend is up.
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  • #1,228
  • Jun 18, 2008 8:28am Jun 18, 2008 8:28am
Quoting greywolf238
Yes the EU has been weird lately, my last couple of trades have gone the wrong way.. thats what i get for trading against the trend.
It's making up for the crazy movements we got a week ago where we hit 400 pips within 2 day lol.

I have a feeling the wave I should be following is the one which collapsed. The more I look at the waves, the more I see the one retracement up as noise and not a defined peak. If I'm right and the current wave does collapse, we may even see close to 1.5100 although I shouldn't be trying to predict like that since the market can shoot up any time it wants.

My advice when you see the market like this. Let it play out and follow the big waves.
  • #1,229
  • Jun 18, 2008 8:36am Jun 18, 2008 8:36am
Quoting greywolf238
Here's a chart of the EJ H4 possible wave break down, i would be careful going short if it does break because the long term trend is up.
You may want to zoom out a bit to see the size of those waves relative to the ones prior to the current set of waves. Those waves seem relatively small to me compared to the ones I've marked down in my chart.

Another way to think of it...
The bigger the wave, the bigger the splash.
Attached Image (click to enlarge)
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  • #1,230
  • Jun 18, 2008 8:50am Jun 18, 2008 8:50am
Just wanted to post this to show how "zooming in" quite often clouds the real picture. This is similar to the "squeeze effect" I wrote about a while back in my journal which can be found through the index. When one zooms in too much, noise is exaggerated and you quite often end up picking the wrong waves to follow. I've taken a screenshot of my 4 hour showing how the current wave could be viewed differently just by zooming in/out. The exact same information but when viewed differently can yield very different results/conclusions.
Attached Image(s) (click to enlarge)
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  • #1,231
  • Jun 18, 2008 8:58am Jun 18, 2008 8:58am
Quoting zoopy
Oil had another wave collapse.

oil collapse = USD rise
  • #1,232
  • Jun 18, 2008 9:07am Jun 18, 2008 9:07am
Quoting sonicdeejay
oil collapse = USD rise
USD strength = gold + oil weakness

What's interesting right now is that gold broke a wave to the upside and we're about to have oil inventory news in about 30 minutes. Possible eurusd could shoot up but I'll wait and see what happens before trading it. Best not to trade what you think is going to happen. Have it happen first then trade it.
  • #1,233
  • Jun 18, 2008 10:03am Jun 18, 2008 10:03am
This is what happens when waves collapse. Dow Jones broke a wave to the upside but collapsed again.

Don't buy if waves collapse. Buy when they break up.
Don't sell if waves break up. Sell when they collapse.
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  • #1,234
  • Jun 18, 2008 11:06am Jun 18, 2008 11:06am
Now this is what you call scary on the Dow Jones weekly chart. We had a wave collapse and looks like we're headed for another one.

For those that follow Jacko's method and since I'm a turtle, one way you can utilize waves is to follow the direction they break on the weekly chart. If they break up on the weekly chart, only take long positions on the 4 hour. Opposite if the weekly waves collapse.
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  • #1,235
  • Jun 18, 2008 12:20pm Jun 18, 2008 12:20pm
Quoting zoopy
It's making up for the crazy movements we got a week ago where we hit 400 pips within 2 day lol.

I have a feeling the wave I should be following is the one which collapsed. The more I look at the waves, the more I see the one retracement up as noise and not a defined peak. If I'm right and the current wave does collapse, we may even see close to 1.5100 although I shouldn't be trying to predict like that since the market can shoot up any time it wants.

My advice when you see the market like this. Let it play out and follow the big waves.
If we break up anywhere near 1.5600 and close, we are officially breaking waves to the upside. What I will then be doing is buying all waves breaking up and on pullbacks.
  • #1,236
  • Jun 18, 2008 6:12pm Jun 18, 2008 6:12pm
Quoting zoopy
If we break up anywhere near 1.5600 and close, we are officially breaking waves to the upside. What I will then be doing is buying all waves breaking up and on pullbacks.

We're definitely on the same page.

Looks like there is some upside pressure building.

Can't really explain why, but it feels like there is a semi-strong move coming.
  • #1,237
  • Jun 18, 2008 7:08pm Jun 18, 2008 7:08pm
Hey Zoopy or anyone, i have a question, something i still have a hard time with is when to add to a winning trade, do you wait for x amount of pips in your favor before adding more lots or do you wait for the beginning of the next candle..?
  • #1,238
  • Jun 18, 2008 8:22pm Jun 18, 2008 8:22pm
Quoting greywolf238
Hey Zoopy or anyone, i have a question, something i still have a hard time with is when to add to a winning trade, do you wait for x amount of pips in your favor before adding more lots or do you wait for the beginning of the next candle..?
Hi greywolf

I don't scale in. If my money management allows for 2%, I enter the full position in. Don't complicate things. It's way easier just to enter 2%, get your pips then start from scratch again. Also see the posts below...


All in / Scale in / Pyramiding in (post#204 / page 14)
Compounding + bouncing off profit (post#974 / page 65)


Post#204 is probably more along the lines of what you're looking for so might be worth a read.
  • #1,239
  • Jun 18, 2008 8:27pm Jun 18, 2008 8:27pm
Quoting static
We're definitely on the same page.

Looks like there is some upside pressure building.

Can't really explain why, but it feels like there is a semi-strong move coming.
Right now I'm in long because we're breaking waves up. If we were to negate the last daily wave, price will have to break and close around 1.5800. That or we create a wave and that one breaks up.

There's so many rumours right now about the eurusd falling, others about it going up because of a possible rate hike etc. Best thing to do is just to watch the waves. It's the big players who have the advantage and inside scoop, they'll be the ones that create the biggest waves.
  • #1,240
  • Jun 18, 2008 8:32pm Jun 18, 2008 8:32pm
Here's the reason for the long trade. We created mini waves for the past two days or so. My thinking was if I was originally right with my first wave analysis going up, price will head up breaking out of the range. If I was seeing waves collapsing, it would have dropped back down.
Attached Image (click to enlarge)
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