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Jacko's Forex House of Pleasure and Pain

  • #4,281
  • Jul 2, 2008 5:07am Jul 2, 2008 5:07am
In my attempt to learn Jacko's method, I am reverting back to Technical Analysis 101. Because as Jacko says, everything he does, is in every book on technical analysis.

I am also learning how to plan longer term trades, and I am learning how to wait for the good setups.

Looking at the daily chart of EUR, I see 3 distinct possibilities and would like some feed back on my analysis.

1) The price is rejected by the resistance at 1.5846 and pulls back, possibly as low as major support at 1.5300, or to the rising trendline in the 1.5450 to 1.5500 area. So we must be looking for a long opportunity on a pullback. I have seen people posting that they will be looking to go long as high as 1.5650 or 1.5700.

2) The price breaks the resistance at 1.5846 and then pulls back, near that level, as resistance becomes support. This may also give us an opportunity to go long in the 1.5800 to 1.5850 area after the pullback.

3) The price pulls back from the resistance at 1.5846 and works its way down through the support at 1.5300, where it then tests 1.5300 from below, as support becomes resistance. At this point I may start thinking that the trend is starting to change, and consider looking for short possibilities.

I made a major turning point in my trading at the begining of the year as I started to slow down, pick the best entries I could find, and trade with the trend.

I think working here with this thread and with Jacko's group is going to allow me to learn to spot even better entries and too let my positions run for maximum profit.

Thanks to everybody for contributing.

James
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  • #4,282
  • Jul 2, 2008 6:32am Jul 2, 2008 6:32am
Hi:

My EUR/USD trade of a few posts ago was up about 85 pips. Being (insert whatever I am) I moved the TSL to 50 pips below that price.

Hopefully today I will get some time to clean up the document I posted.

I entered that trade because I saw a retracement and then the price moved above the retracement low. That sounds like a standard Jacko entry. I'm happy I went with a 100 pip initial stoploss.

Barry
  • #4,283
  • Jul 2, 2008 6:34am Jul 2, 2008 6:34am
what do u think guy long at 1.5900(round number entry). resistence at 1.5848 already broken which is the strong resistence..now it seemed heading to 1.6020 again with the strong eu fundamental at the moment and bad for USD.it gonna sent us 1.6020 again tomorow.see the graph below..
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  • #4,284
  • Jul 2, 2008 6:44am Jul 2, 2008 6:44am
what do u think guy long at 1.5900(round number entry). resistence at 1.5848 already broken which is the strong resistence..now it seemed heading to 1.6020 again with the strong eu fundamental at the moment and bad for USD.it gonna sent us 1.6020 again tomorow.see the graph below..
  • #4,285
  • Jul 2, 2008 6:54am Jul 2, 2008 6:54am
Fibonacci Lines and Round Numbers

These are not magical. They are places where a large group of professional traders view as goals. They are a self-fulfilling prophesy. Jacko uses only the 50% Fibonacci retracement level, and round numbers ending in "00".

TIP: You don't need an indicator (such as the "Sweetspots" series of indicators) to place the round number lines. You will be working on the daily chart, and can simply draw (and adjust to accuracy via the line's "properties" dialog) with the horizontal tool.


Support/Resistance (S/R) Lines

These work like Fibonacci Lines and Round Numbers. Here, instead of the "self-fulfilling prophesy" of the Fibs & Round Numbers, we have places where price action has stopped for one reason or another. Price action stops, and retreats (making the high point to draw resistance lines, or the low point to draw support). These can then move into the "self-fulfilling prophesy" realm.

The "self-fulfilling prophesy" aspect is that, "It just stopped here, so this is where I can trade."

Using the Lines in Jacko Trading

I believe that Fibs and Round Numbers should be used only as alerts. As price moves toward one of these values, the astute trader should watch the price action to see how price will react at the level.

One trading method (on forex4noobs.com, I believe) looks to trade only penetrations of S/R.

Does the price barge right through the level? Then perhaps watch to see if it goes down to the next level.
Does it linger at that level?

I think that Jacko said or quoted this:

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.

(For example we know that professional traders love round numbers to target...it brightens up their dull day to push and cajole the market to a target number. Now Euro/USD 1.3000 is the roundest number there is around those levels, so the pros have gotta be saying that the big game in the industry is to now grind and push the market to 1.3000. After that they don't care, they have had their fun...and thats why a market will whip and drop/rise dramatically straight after the target has been hit).
-----
So to me, these lines are like your telephone ringing; it may be an important call, or it may just be a telemarketer. But you should heed the alert in either case.

Just my thoughts to attack while the NFP and other reports hit the fan.

Barry
  • #4,286
  • Jul 2, 2008 7:18am Jul 2, 2008 7:18am
Ive been part of Jacko's second group, and can only say it has defiintely worked on my patience. Based on trendline and the 50% retracement on the 4 hour, my buy in point is at 1.5650. Obviously it hasnt been going there 'yet'
Normally my patience would have been tested and i would 'chased' a trade...
and perhaps gotten lucky......or lost 100 pips....
I guess the main point so far is that i have learnt not to trade all the time....Just wait for the higher probability of a good trade that wont stop me out.
I was just looking at Barrypips posting, and found it very interesting. Currently i just set a good buy in point and wait for it to hit the target and get me in. Has anyone using jacko's method applied what barrypips was talking about? Basically watching the price action before entering?
  • #4,287
  • Jul 2, 2008 9:12am Jul 2, 2008 9:12am
The Anti-Hedging (A-H) Strategy

I think that the A-H Strategy is excellent, and could provide even more benefit to traders. It is a signal that things are not as they should be.

There was some question on this thread about taking new trades while you have an A-H set up (even if not triggered).

I believe that once you get into a position that you are able to set up an A-H trade (simply, that you have been stopped out of a trade for a loss), that you should NOT take any new trades until your A-H has been hit and is returning a profit. (If you have more than one trade on before getting stopped out, then yes, you should use the A-H with each of them.)

However, to repeat, once you have been stopped out for a loss (and thus are looking to set an A-H trade), then you should not put on any other new trades.

The A-H (stopped for a loss) is a Signal

It is telling the trader that the market is currently going against the trader's expectations. Don't put on new trades until the market corrects itself (indicating that the market is back on track).

For example look at a EUR/USD 4 hour chart from April 30, 2008. Suppose that you put on a (buy, as the overall trend is UP) trade at the recovery from the candle at 0400 (4 AM GMT). Later you would have gotten stopped out at a loss.

This is where you put the A-H trade if the price moves down about 50 pips.

But your A-H trade would not be hit, as the market did not go back over your A-H level.

So the "market is not acting as I expected" signal is set.

But you don't heed this signal, and you take trades on the recovery from retracements all the way down (sounds like you are commodity scale trading). Any winners there? To be truthful, I was hopeful that trades could be taken, as it looked that the recovery from the downward retracements (for example at the May 04 mignite bar) would produce gains. But these gains would mostly be minor or would turn into losses.

Looking back you could say things (when the A-H signal appears) like "I would use smaller stops, and take quicker profits" when I have this signal. That is fine, provided you have set a plan to do such a thing.

Thus I think that you should have waited while the original A-H signal is in effect. Wait until the A-H trade (or trades) have turn to profit. Patience, I am learning it.

Jacko mentions a counter-trend method. My GUESS is that he or his associates puts this into effect once an A-H signal occurs. But I don't know.
  • #4,288
  • Jul 2, 2008 10:09am Jul 2, 2008 10:09am
Looking at the 4 hour chart, there seems to be a high at 5886 and low at 5723...any opinions on setting up a buy at 5800?
  • #4,289
  • Jul 2, 2008 11:38am Jul 2, 2008 11:38am
Hi:

I'm about 90 pips up on my trade.

I moved my stop to be a 3-bar Gann stop on the 1 hour bar. My SL is at 1.5845. Price is at 1.5879.

I apologize...I'm weak and cannot deal with a 50 pip trailing stop when things look so good. (Jacko please don't read this. That's why i need to be in your group...discipline!)

InterbankFX and others seem to say that tomorrow's NFP report looks bad for the US$. I'll see if I'm still in the trade when the report comes out.

Barry
  • #4,290
  • Jul 2, 2008 11:42am Jul 2, 2008 11:42am
Quoting BarryPips
The Anti-Hedging (A-H) Strategy

I think that the A-H Strategy is excellent, and could provide even more benefit to traders. It is a signal that things are not as they should be.

There was some question on this thread about taking new trades while you have an A-H set up (even if not triggered).

I believe that once you get into a position that you are able to set up an A-H trade (simply, that you have been stopped out of a trade for a loss), that you should NOT take any new trades until your A-H has been hit and is returning a profit. (If you have more than one trade on before getting stopped out, then yes, you should use the A-H with each of them.)

However, to repeat, once you have been stopped out for a loss (and thus are looking to set an A-H trade), then you should not put on any other new trades.

The A-H (stopped for a loss) is a Signal

It is telling the trader that the market is currently going against the trader's expectations. Don't put on new trades until the market corrects itself (indicating that the market is back on track).

For example look at a EUR/USD 4 hour chart from April 30, 2008. Suppose that you put on a (buy, as the overall trend is UP) trade at the recovery from the candle at 0400 (4 AM GMT). Later you would have gotten stopped out at a loss.

This is where you put the A-H trade if the price moves down about 50 pips.

But your A-H trade would not be hit, as the market did not go back over your A-H level.

So the "market is not acting as I expected" signal is set.

But you don't heed this signal, and you take trades on the recovery from retracements all the way down (sounds like you are commodity scale trading). Any winners there? To be truthful, I was hopeful that trades could be taken, as it looked that the recovery from the downward retracements (for example at the May 04 mignite bar) would produce gains. But these gains would mostly be minor or would turn into losses.

Looking back you could say things (when the A-H signal appears) like "I would use smaller stops, and take quicker profits" when I have this signal. That is fine, provided you have set a plan to do such a thing.

Thus I think that you should have waited while the original A-H signal is in effect. Wait until the A-H trade (or trades) have turn to profit. Patience, I am learning it.

Jacko mentions a counter-trend method. My GUESS is that he or his associates puts this into effect once an A-H signal occurs. But I don't know.
I completely agree with you. If the price never makes it back to your AH price, then there is no point in taking a trade because the trend has yet to resume. This is kind of a grey area though, because some traders will look to buy lower at a "discount" at a point of support or confluence. I know what you're saying though. By not taking a trade until the AH price is hit, you are saving yourself from taking trades in a non-tranding/ranging market.
  • #4,291
  • Jul 2, 2008 12:01pm Jul 2, 2008 12:01pm
Jacko tells us that entries are based on a retracement, often at what I call a signal level (see a few posts ago).

How do we analyze that retracement? There are several price-action-only methods, such as the 1-2-3 move.

However, I have found much good information regarding entering on retracements and trading in general in the thread called "The System (Irony Included)": http://www.forexfactory.com/showthread.php?p=1696472#post1696472

The thread starter, feb2865, has ideas similar to Jacko.

Again, I am posting this, not to modify Jacko's system (don't mess with a good thing), but to show the way I like (would like) to enter trades.

If this is off-topic, I apologize.

Barry
  • #4,292
  • Jul 2, 2008 12:26pm Jul 2, 2008 12:26pm
Looks great!

Subs for later
  • #4,293
  • Jul 2, 2008 3:53pm Jul 2, 2008 3:53pm
I am thinking more in the the 1.5800 range for a risky trade. For a more conservative trade below 1.5700. I would love to see 1.5650. However, living in the U.S. and being a luxury home builder, we may not see my wish come true. The U.S. economy absolutely sucks and the NFP may confirm this tomorrow. I am a Jacko first group Turtle and have learned to let the market come to me. If it runs, so be it, I will draw new lines and look at the fundamentals to plan my next trade. The beauty of this trading plan Jacko has developed is "inner peace". This market will be here long after I am dead and even after you 20 somethings are gone(with much more government regulation of course). I am almost 50. No need to rush. The dollar is in serious trouble and will be for several years. Yes, the oil thing has a big effect and will add volatility. Better for us to get in on the dips. Trade your charts. Revise your charts when we miss one. Trade with the AH. You might be like me, up 264% since November of 2007.( I traded with too much risk early on in my association with Jacko). But even half of that would make most fund managers S--t. Plan your trade, trade your plan. Like I keep saying in my posts, you will do fine if you follow the plan.

Archer
P.S.
Hey MPP can you help me with attachments. I want to post my chart but, I am almost 50 and I have a love hate thing going with this F ing box in front of me.
  • #4,294
  • Edited 4:09pm Jul 2, 2008 4:03pm | Edited 4:09pm
In football (US style), the "Hail Mary" pass is a pass made when all looks hopeless...the quarterback has nothing else to do with the ball so he/she throws it wildly at any member of the team.

I don't trade all night long...I sleep.

So what should I do with an open position, when I am no longer at the computer?

I suggest a "Hail Mary Take profit." Jacko's system does not use a take profit. He suggests a trailing stop, and let the market take you out. That's what I use when I'm not sleeping (or otherwise unable to check the computer hourly).

But suppose that I put on a Hail Mary Take Profit, having it on only when I'm not able to be trading (sleeping, living).

Setting the Hail Mary Take Profit

Look above (assuming you are long) the current price, perhaps at the next resistance level. Just below that level, you set a take profit. The "Hail Mary Take Profit". Now go to sleep.

Removing the Hail Mary Take Profit

When you are next able to check your trade, if you are still in the market, then remove the "Hail Mary Take Profit", and continue with your trailing stop.

The benefit is that if there is an overnight blow-out -- a price spike -- followed by a retreat, you would have gained more profit than if your trailing stoploss were hit.

Please note that the Hail Mary Take Profit does not preclude your having a trailing stop...you never remove the trailing stop.

Apologies Again

I realize that this is a Jacko trading thread. With these posts, I am simply attempting to tune the system, fixing up a few crumbs.

I might suffer most. I have applied to be a student of Jacko. He might read these posts (I gave him the links to some of them) and come to the conclusion that I am full of beans.
  • #4,295
  • Jul 2, 2008 4:52pm Jul 2, 2008 4:52pm
I had a buy limit order at 1.5650 when I changed the buy limit to 1.5800

The reason for that entry is because ....
1) In 1H chart ... 5800 level was penetrated quite vigorously ... (price had been lingering around area 5750-5800 for quite sometime and finally someone just launched a ballistic missile thru 5800 ).
2) 5800 is a 50% ret in 1H chart and a round number which is a favorite for dip buying activity ...

I wonder if this bull will last long enough ... ...
I'm also looking to add a new position at another 50% ret in 1H chart ... (in picture)
A vigorous break above 5800 means a high possibility for price to hit 1.6 ... this justifies the reason for adding another position ...
With bad fundamentals being announced ... I feel like this is a good bet ...

But then again ... I could be wrong
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  • #4,296
  • Jul 2, 2008 5:00pm Jul 2, 2008 5:00pm
Hey everyone. I just wanted to take a minute to introduce myself. My name is Scott, I'm 25, and the newest member of Jacko's 2nd group. I started trading about 6 years ago while serving in the Marine Corps. Unfortunatley I got off to a bad start and lost a lot of money in penny stocks and other risky plays. Since then I have experimented with stocks, futures and currency. I have a passion for trading, and I know deep down inside that this is what I'll end up doing for a living. The hard thing is that I've succeeded in everything I've ever tried, except for trading. I know though, that by continuing to put in hard work and time, I will eventually succeed. That's all the motivation I need. I currently live in Los Angeles where I'm an Air Traffic Controller in LAX Tower. Stress is my middle name I guess. haha Anyways, time to get back up there and work some planes. Just wanted to say hi to everyone and I can't wait to start this journey of transformation into a successful trader. Thank you again Jacko, for everything you do. Happy trading!!!
  • #4,297
  • Jul 2, 2008 5:19pm Jul 2, 2008 5:19pm
hi Scott,
welcome to the club.
Still waters run deep
  • #4,298
  • Jul 2, 2008 6:43pm Jul 2, 2008 6:43pm
Archer- we too are custom home builders..at first thought this trading thing was too much like gambling (I'm in the Bible belt) but looked at our own business - building a 600K spec home & hoping someone will come along and buy it...decided that was gambling!
Been to the bank lately and tried to get a loan? Love the leverage thats available in the FOREX market. No loan applications, 2 year tax returns...LOL.
We've been trading for about 8 months, found Jacko about 2 months ago and finally got a clue and joined up this week. Alot of people preach the "give back" sermon, but Jacko seems to be one of the few who really practice it. Looking forward to my first trade with the Jacko Turtles.
  • #4,299
  • Jul 2, 2008 7:02pm Jul 2, 2008 7:02pm
Haha,
The last time I went to the bank for a loan they gave it to my wife instead. Jacko is truely one of the most giving people I have never met. I think he gets a rush from watching his group do well.

The last time I sent him an email he responded in less than an hour. My kids take longer to respond to an email. Jacko thanks for everything you do for us.
Archer
  • #4,300
  • Jul 2, 2008 7:35pm Jul 2, 2008 7:35pm
Hello all. I am also a luxury home builder in the midwest - at least for another year anyway.
Still trying to get through the whole thread here but definitely agree with the KISS strategies outlined by Jacko and also the other great thread - James 16. The longer I trade the simpler my trading strategy becomes. The days with charts loaded with TA indicators are long gone. Now it's give me a few fib pivots, Bloomberg, maybe a SMA and let the games begin.
Looking forward to more excellent reading.

John
History is written by the victors.
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