No Brainer Trades

lemmingboiv2 this is definitely question of the day. Very interesting finding.
By the way is there an option not to choose any but wait for a clearer picture?

Ya I am pretty much thinking of taking a walk for the rest of the week or at least till this bailout scam gets settled. No sense wasting money on trades that could blow up every time a congressman farts.

Hopefully it will settle down soon.

Good trading!

well..... that sums up the day .... it didn't even get to the 23.6% retracement before going up and taking out the 106.14 resistance !!

Do you think it is best to leave the charts closed for the rest of the week guys ?

We now seem to have 'Market With No Brains'.

Night all !!

By the way would it make sense to zoom out a bit to H4 or even D1 and take only what's clearly there? Like UJ resistance around 107.
Of course it means fewer entries.

I confess I started trading equities. . . I am no longer monogamous to forex. . .

So a week ago after Rimm gapped down I started looking for a place to buy and using S&R I targeted 61.00 even as the bounce (it got as low as 60.3 or so). . . . and BAM 68.30 by EOTD

I just I just cant thank you enough BRV. . . Can I send you a steak or something?

Hahaha - I like that; "No Brainer Market" will be the name of the next thread.

Hey David - today was just about anything other than ordinary. I went for a fade myself earlier today and had to sit on it before things got normal again.

Dont feel bad you didnt take that long. Today's US session was completely out of control, and around the same time that long hit we had news coming out in a little bit, etc.

Its a matter of feeling when price has pretty much exhausted its options. Again its one thing to read what I write here but its another thing when youre actually doing it.

Someone asked me this a while ago and I had to say it becomes a matter of looking at the daily range, how strong the level is, and what kind of fundamental hysteria is driving the market. Also, you just get used to it. Screen time. Always check out bloomberg.com and read up on whats going on, and how the market is going to react to it. The US/London overlap is by far the most volatile time to trade, and can get you in the most traps. Thats why I generally prefer to trade early London. No one saw this move coming today though and with thin liquidity better to remain on the sidelines if unsure at all.

I posted this on the blog so sorry for any double posting; just something I found interesting:

For those of you who don’t know anything about Dennis Gartman, he’s been writing “The Gartman Letter” since 1986. It’s a newsletter that is widely-subscribed to by banks and fund managers all over the world. He’s frequently on Bloomberg. From his website: “The Gartman Letter is a daily commentary on the global capital markets subscribed to by leading banks, broking firms, hedge funds, mutual funds, energy and grain trading companies around the world. The Letter each day deals with political, economic and technical circumstances from both a long and short term perspective.....” Source: http://www.thegartmanletter.com/

I stumbled across his 22 rules of trading tonight and found them a little interesting and thought they would be good to post, so here they are. I also couldn't help but notice that many of these rules have been widely discussed by us already through our talks. Confirmation is always a good thing:

1. Never, under any circumstance add to a losing position.... ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!

2. Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.

3. Capital comes in two varieties: Mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.

4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is "low." Nor can we know what price is "high." Always remember that sugar once fell from $1.25/lb to 2 cent/lb and seemed "cheap" many times along the way.

5. In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral. That may seem self-evident; it is not, and it is a lesson learned too late by far too many.

6. "Markets can remain illogical longer than you or I can remain solvent," according to our good friend, Dr. A. Gary Shilling. Illogic often reigns and markets are enormously inefficient despite what the academics believe.

7. Sell markets that show the greatest weakness, and buy those that show the greatest strength. Metaphorically, when bearish, throw your rocks into the wettest paper sack, for they break most readily. In bull markets, we need to ride upon the strongest winds... they shall carry us higher than shall lesser ones.

8. Try to trade the first day of a gap, for gaps usually indicate violent new action. We have come to respect "gaps" in our nearly thirty years of watching markets; when they happen (especially in stocks) they are usually very important.

9. Trading runs in cycles: some good; most bad. Trade large and aggressively when trading well; trade small and modestly when trading poorly. In "good times," even errors are profitable; in "bad times" even the most well researched trades go awry. This is the nature of trading; accept it.

10. To trade successfully, think like a fundamentalist; trade like a technician. It is imperative that we understand the fundamentals driving a trade, but also that we understand the market's technicals. When we do, then, and only then, can we or should we, trade.

11. Respect "outside reversals" after extended bull or bear runs. Reversal days on the charts signal the final exhaustion of the bullish or bearish forces that drove the market previously. Respect them, and respect even more "weekly" and "monthly," reversals.

12. Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.

13. Respect and embrace the very normal 50-62% retracements that take prices back to major trends. If a trade is missed, wait patiently for the market to retrace. Far more often than not, retracements happen... just as we are about to give up hope that they shall not.

14. An understanding of mass psychology is often more important than an understanding of economics. Markets are driven by human beings making human errors and also making super-human insights.

15. Establish initial positions on strength in bull markets and on weakness in bear markets. The first "addition" should also be added on strength as the market shows the trend to be working. Henceforth, subsequent additions are to be added on retracements.

16. Bear markets are more violent than are bull markets and so also are their retracements.

17. Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are "right" only 30% of the time, as long as our losses are small and our profits are large.

18. The market is the sum total of the wisdom ... and the ignorance...of all of those who deal in it; and we dare not argue with the market's wisdom. If we learn nothing more than this we've learned much indeed.

19. Do more of that which is working and less of that which is not: If a market is strong, buy more; if a market is weak, sell more. New highs are to be bought; new lows sold.

20. The hard trade is the right trade: If it is easy to sell, don't; and if it is easy to buy, don't. Do the trade that is hard to do and that which the crowd finds objectionable. Peter Steidelmeyer taught us this twenty five years ago and it holds truer now than then.

21. There is never one cockroach! This is the "winning" new rule submitted by our friend, Tom Powell.

22. All rules are meant to be broken: The trick is knowing when... and how infrequently this rule may be invoked!

Source: http://www.dacharts.com/articles/_22rulestrading.htm

I like rule #22. Reminds me of "Rules are for the guidance of wise men and the obedience of fools" . Thanks BRV.You've helped a lot. I struggled for a while selling into resistance, but now seem to have got it.

A little clarity -

look for a break of 4185 for further upside movement
4300 is a sell area
4425 same, a sell
4615 would be a good target for longs
3925 is a buy - thats a retest of the massive monthly trendline

I'm bullish EUR in general, so looking for opportunities to go long - a little more color in the blog - further downside risk from where it is now is there though and should be noted.

Thanks BRV,

Would there be any reason why this may not go down to the previous low (3882, 11th Sept.) rather putting in a Buy order at 3925?

I am purely asking a question as I am not clear why you have pinpointed 3925 as being the reversal price you are looking for.

Thanks.

Keep uo the great work on the blog .... very impressive now

Hi ya!

Im not too confident at this point of any buying yet even at 3925 - its just a big technical level - still waiting to see how the day pans out. I might wait for some kind of confirmation price is headed back up before I do anything actually - yesterday's movement is enough to paralyze anyone and get back to the reality of "anything is possible". We're getting more heavy selling today and again very low liquidity - just a mess here.

EUR just dropped another 150 pips in the last hour. Best thing to do is just play it safe. These arent normal times we're in here.

sorry forgot to mentionthis in my last post

I notice that the GBPUSD recently shot right through a very similar monthly trendline (without much resistance at all) so would you use this in any way to decide whether to trade the EURUSD long at this level?

I am sure the real answer is .. it MAY do the same, or then again, it MAY NOT, but I would like to hear your thoughts?

...and this doesnt change my overall outlook by the way - just looking for a little cooler conditions to nab these trades......basically what Im saying.

I look at my interbank spreads and theyve been relatively high all week (theyre not fixed), not to mention what I know coming from the banking side.

So I'm seeing 1.3925 as a target becuase its the big "rumor" level, and I know theres talk going around about it; thats pretty much it.

Right, and its a pain in the butt to decide sometimes, but keep in mind that some days some pairs react well to some levels, other days they dont, etc etc. - I think its more of guaging overall market momentum at that particular moment in time and seeing where all the pairs are in relation to any important levels.

Again this goes back to the question of guaging momentum in general, and is one thing that can be based on market hype and open to subjectivity. There are indicators to tell you to "stay the hell out of the way", but again we're in special times here. Seeing a lot of "normal" rules broken in the past 2 months.

Sometimes you just have to go for it. If you follow a consistentent system, wait for the setups and use strict money management guidelines, you're all set. Brings me back to my favorite post I ever wrote here: http://www.forexfactory.com/showpost...postcount=1253

...is bouncing off of the 762 retracement at 1.7735 - use this level as a meter - if anything is likely to hold around here its this price level.

If it busts, the 1.7630 area is the next stop on the train.

.

Dollar Demand Huge today again - most important takeaway here is the premium being paid on dollars - spot market would have some catching up to do.

If this continues $ will just keep getting stronger - one day at a time.

http://www.bloomberg.com/apps/news?p...refer=currency

Again looking for it to taper off though - everything is on a comparative scale.

Rumors of lots of orders / bidding going on around these areas in order to curb volatility on eur 1.4000, offers on chf 1.3000, etc.....just a heads up.

Im long EUR in the 3990's for the time being, but protecting....

From the desk of Ironman: Hourly pinbar formed on EUR/USD here.