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Jacko's Forex House of Pleasure and Pain

  • #6,101
  • Feb 10, 2009 3:33am Feb 10, 2009 3:33am
Quoting dawsonsg
Hi Guys,

When you look at the Euro at the weekly, daily and 4 hourly the trend looks down.

What my question is is this. "Do you look at a smaller timeframe to determine your entry."
This is what Jacko says...

"I start with weekly, then move closer in using daily, 4 hour and 1 hour to help me make a decision. Less than 4 hours tends to be "noise" rather than a "trend". They are the "sucker" rallies and declines.
PS Don't be the sucker..."
  • #6,102
  • Feb 10, 2009 5:46am Feb 10, 2009 5:46am
Hi Dan,

Thanks for the reply. I have read all of Jackos posts.

The problem is if you have a sucker rally go against you it will still take out your stops.

Steve


Quoting DanUK
This is what Jacko says...

"I start with weekly, then move closer in using daily, 4 hour and 1 hour to help me make a decision. Less than 4 hours tends to be "noise" rather than a "trend". They are the "sucker" rallies and declines.
PS Don't be the sucker..."
  • #6,103
  • Feb 10, 2009 6:02am Feb 10, 2009 6:02am
  •  krue
  • | Joined Mar 2008 | Status: finger scares cat, power of illusio | 410 Posts
is this an AH strategy? I resume the stop out position again. coz I feel the momentum will continue.
Attached Image (click to enlarge)
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  • #6,104
  • Feb 10, 2009 6:13am Feb 10, 2009 6:13am
Quoting dawsonsg
Hi Guys,

When you look at the Euro at the weekly, daily and 4 hourly the trend looks down.

What my question is is this. "Do you look at a smaller timeframe to determine your entry."

You determine that you should be going short at a 50% fib or round number or something but at what point do you make your entry. The number of times that I have entered and being stopped out is crazy. I just dont know if I should be going to a smaller time frame or what.

Could someone offer some advice.
When price is approaching a technical level on a higher time frame, for instance a 50% fib level or trendline on a daily or 4h chart I zoom right in to a 5 min chart as any bounce from that level will show in that time frame first.

You need to be careful as the price rarely will touch or bounce in that time frame only once, it may test the level a number of times in the 5 min chart before going in the expected direction. This is why Jacko says to use no lower than a 1h chart but I use 5 min chart as I find I can use a smaller stop loss, say 20 pips, and just reenter if I was too early.
  • #6,105
  • Feb 10, 2009 6:35am Feb 10, 2009 6:35am
Quoting dawsonsg
Hi Dan,

Thanks for the reply. I have read all of Jackos posts.

The problem is if you have a sucker rally go against you it will still take out your stops.

Steve
Steve - Jacko provides a method where it is "OK" if your stops are taken out. It's the Anti-Hedge Theory. If you are trading in the direction of the "major" trend, a rally against shouldn't hurt you becuase you will put an order right where you were stopped out of the trade. And since you are trading the trend, it ALWAYS comes back.

I could be wrong, I just picked up on his methodology about 2 months ago, but have studied it quite a bit lately and it has been profitable for me.
  • #6,106
  • Feb 10, 2009 6:40am Feb 10, 2009 6:40am
Quoting krue
is this an AH strategy? I resume the stop out position again. coz I feel the momentum will continue.
Hey Kru - Thanks for the screen shot that helps.

BTW, I'm still a student as well AND I use some other methods to refine my entry point but sometimes I feel like I would be better off just trading the Jacko method.

The AH in short is when your trade is stopped out, you let it continue against you. Once it moves 50 pips against where you where stopped, place an order of your original intent where your stop was hit. This lets you get back into the market where you got out AND you aren't risking anymore money until the trend continues in your favor. Hope this helps...

Good discussion here, it's exciting to see some thoughtful posts!
  • #6,107
  • Feb 10, 2009 9:42am Feb 10, 2009 9:42am
Quoting dawsonsg
Hi Dan,

Thanks for the reply. I have read all of Jackos posts.

The problem is if you have a sucker rally go against you it will still take out your stops.

Steve
Hi Steve,

Yes that is true, although ideally this is where the Anti Hedge strategy should get you out when the market comes back around.

The reason I said should is because the sucker rallies can be pretty big these days; which is why I mentioned a few posts back what people thought about increasing the standard stop size from 100 pips up to say 150 or 200 pips.

And of course you could go to a smaller timeframe but I think the whole purpose of trading Jacko's way is that you cut out the micro-analysis and just trade the big picture with minimal T/A.

Regards,


Dan
  • #6,108
  • Feb 10, 2009 2:16pm Feb 10, 2009 2:16pm
Dan - Have you increased you TS to 150 or 200? If so, what has the result been? I can def see the need due to the increase volatility but I need to seriously think through it since it would completely change my RM ratio. Thanks in advance!
  • #6,109
  • Feb 11, 2009 2:25am Feb 11, 2009 2:25am
The most annoying circumstance is when price hits your stop loss, but doesn't go much further, thereby not presenting you with an A-H opportunity.
MUCH gnashing of teeth!
  • #6,110
  • Feb 11, 2009 3:22am Feb 11, 2009 3:22am
Quoting bgin2end
Dan - Have you increased you TS to 150 or 200?...
No, at the moment I still use the 100 pip stop loss but I am also recording what my results would have been if I had increased the stop loss. At the moment it is too early to tell, which is why I asked if anyone had any similar thoughts!

If we did have to increase our stop size it would just mean reducing the pip value but overall position size could remain the same. For example, if $100 represents 2% of your capital and you were to trade with 2% risk then your pip value is $1 each, right? So if we had to use a 200 pip stop we can still have $100 position, but each pip would have to be scaled down to $0.50 each. Of course it would mean that it would take more pips to make the same % returns but if increased volatility calls for it then it might make sense.

As I said though, it is just a thought that I am monitoring at present!
  • #6,111
  • Feb 11, 2009 4:02am Feb 11, 2009 4:02am
Quoting DanUK
No, at the moment I still use the 100 pip stop loss but I am also recording what my results would have been if I had increased the stop loss.
Could the ATR (Average True Range) be an easy way to determine the Stop Loss Pip value?
ATR(14) was roughly around 100 pips from april -august 2008 for EUR/USD. The time when Jacko raised his Stop Loss value to 100 pips.
Until april 2008, ATR was 50-70 pips.
In september ATR jumped up to around 200 pips. Today it is at 184 pips.

When applying Jacko's trading method to other trending markets, ATR could be also an easy method to determine the necessary SL pip value. The daily range is important information about market behaviour, and when the market moves a whole ATR against the prevailing trend, then it is quite probable that something substantial happened, which might be either the start of a major correction, or even a whole trend change. So it could be a good point for setting the SL.
  • #6,112
  • Feb 11, 2009 8:16am Feb 11, 2009 8:16am
standard operating procedure is to use your longer timeframes for TREND and the lower timeframes for ENTRIES.

while i dont use stop losses when trading with the trend, if you wish to you will obviously have to make them bigger, a problem of the "new" volitility we have in the market what with the entrance of the "equity" people who have no stocks to play.

the idea of trading with the TREND is that you dont have to WORRY because (as everyone including Jacko states) the TREND IS YOUR FRIEND ---- even if it reverses, IT WILL COME BACK TO ITS TREND, and forex is one of the most TRENDING trades there is.

essentially, if youre WITH the trend, youre chickening out or your stops are too tight !

enjoy and trade well

mp

Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !

As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence -- BUT I KNOW WHERE THEY HID THE KEY !!
  • #6,113
  • Edited 4:21pm Feb 11, 2009 8:30am | Edited 4:21pm
Quoting grxlwpf
Could the ATR (Average True Range) be an easy way to determine the Stop Loss Pip value?
ATR(14) was roughly around 100 pips from april -august 2008 for EUR/USD. The time when Jacko raised his Stop Loss value to 100 pips.
Until april 2008, ATR was 50-70 pips.
In september ATR jumped up to around 200 pips. Today it is at 184 pips.

When applying Jacko's trading method to other trending markets, ATR could be also an easy method to determine the necessary SL pip value. The daily range is important information about market behaviour, and when the market...

If you are trying to allow for volatility you might want to try using something like ATR10 X 1.6 on the 4hour charts or if you are planning to stay with your trade a number of days try ATR5 X 1.6 added to the daily charts.

Another way would be to measure the average corrective wave length on the 4Hour & add a percentage of say 20% for stops, and to determine your take profit target try measuring the average impulse wave on the 4Hour and deduct say 30%.

Regards,

BabeFX.
  • #6,114
  • Feb 11, 2009 1:23pm Feb 11, 2009 1:23pm
Quoting Interceptor
The most annoying circumstance is when price hits your stop loss, but doesn't go much further, thereby not presenting you with an A-H opportunity.
MUCH gnashing of teeth!
HAHA - yes much frustration there...and it always seems to take out your stop by one or two ticks and then resumes in your favor!!! I love the AH but if I get taken out and it doesn't allow for an AH it forces me to think, "Hhhhmmm, i guess I was a bit trigger happy and should have waited for a better opportunity."

And then I jump off the bridge.
  • #6,115
  • Feb 11, 2009 1:29pm Feb 11, 2009 1:29pm
Quoting mparker
standard operating procedure is to use your longer timeframes for TREND and the lower timeframes for ENTRIES.


the idea of trading with the TREND is that you dont have to WORRY because (as everyone including Jacko states) the TREND IS YOUR FRIEND ---- even if it reverses, IT WILL COME BACK TO ITS TREND, and forex is one of the most TRENDING trades there is.
mparker,

Interesting idea, but what I don't understand is how do you know when the market has changed trends or has had a severe correction. I know if I threw my stops out, my Risk Managment would be thrown out as well (Don't throw the baby out with the bath water).

I am most likely trading on a much smaller account, but I can't afford to let it correct as much as it did from Dec 3rd (1.2602) to Dec 17 (1.4720) if I was in a short. What the stop did was get me out with profit and then forced me to wait for a new entry to show itself...hopefully at a discount.

How do you determine when to close your order if you don't use stops?
  • #6,116
  • Feb 12, 2009 3:49am Feb 12, 2009 3:49am
first post here

are we still in a downtrend or could this be considered moving sideways at this point?
  • #6,117
  • Feb 12, 2009 8:10am Feb 12, 2009 8:10am
Quoting Arkons
first post here

are we still in a downtrend or could this be considered moving sideways at this point?

Welcome Arkon - I just started posting too and it's addicting, so careful.

It depends on what timeframe you're trading. The daily is still down, the 4H (my main timeframe) can most likely be called sideways and I am considering the 1H to be sideways but in a slightly bullish range.

Anyone else seeing what I am seeing?
  • #6,118
  • Feb 12, 2009 8:40am Feb 12, 2009 8:40am
Quoting bgin2end
Welcome Arkon - I just started posting too and it's addicting, so careful.

It depends on what timeframe you're trading. The daily is still down, the 4H (my main timeframe) can most likely be called sideways and I am considering the 1H to be sideways but in a slightly bullish range.

Anyone else seeing what I am seeing?
That's exactly what I see as well. When the trend seems uncertain is the play just to wait it out?
  • #6,119
  • Feb 12, 2009 9:39am Feb 12, 2009 9:39am
Well - to me...what ever that's worth - the trend is still down, so if the smaller time frames are ranging, I am selling every pull back or top of the range. Esp this one because the range is about 400 pips wide...so there is plenty of room to let your profits run.
  • #6,120
  • Feb 12, 2009 10:01am Feb 12, 2009 10:01am
thanks for the advice. I was planning to enter a short at 1.30 - 1.31 if we see it.
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