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  • #1,841
  • Apr 9, 2009 3:16pm Apr 9, 2009 3:16pm
Quoting strat
Pull up a long term Daily chart, put a 150 EMA on it and see how well she respects it AND she is at THAT POINT now.

Also, draw a TL from the swing low close on Bonfire Night last year to the swing low close/opens on Jan 6, 7 & 8 and project forwards and guess where that takes you!

This all makes 1.2200 a very, very interesting level
Indeed

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  • #1,842
  • Apr 9, 2009 4:11pm Apr 9, 2009 4:11pm
Also look at the way EURAUD has moved. The MAs in USDCAD are in a similar setup to it 2-3 weeks ago and the charts not unlike it either. Could make a move through the weekly 20 to the weekly 50. That'd be nice pips. I'll wait for confirmed break, then pullback with PA for entry. Or else see if it can hold here.

And yes, I did watch the EURAUD move and didn't trade it. I was still in my observation period.
  • #1,843
  • Apr 9, 2009 4:31pm Apr 9, 2009 4:31pm
Quoting Bloom
Also look at the way EURAUD has moved. The MAs in USDCAD are in a similar setup to it 2-3 weeks ago and the charts not unlike it either. Could make a move through the weekly 20 to the weekly 50. That'd be nice pips. I'll wait for confirmed break, then pullback with PA for entry. Or else see if it can hold here.

And yes, I did watch the EURAUD move and didn't trade it. I was still in my observation period.
I don't have sufficient data (only goes back to May 2008) to do a thorough analysis so I am PASR "blind".

The only thing I can add is that both my short and long term cycles are bottoming, bearish momentum is accelerating and the BOSS 20 is holding everything up.
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,844
  • Apr 9, 2009 8:31pm Apr 9, 2009 8:31pm
Strat do you trade breakouts from strong SR levels like the one on USD/CAD right now? There is a good chance that it will break this level and move down for some good pips, but the problem is that with trading the Daily, by the time the bar closes below the SR it might have moved a whole lot, and you might not get any PA to signal the break. So would you put an automatic sell stop below the SR to get in on the break as it happens or just let it be and wait for setups that have clear price action?
  • #1,845
  • Apr 9, 2009 8:54pm Apr 9, 2009 8:54pm
Quoting Naws
Strat do you trade breakouts from strong SR levels like the one on USD/CAD right now? There is a good chance that it will break this level and move down for some good pips, but the problem is that with trading the Daily, by the time the bar closes below the SR it might have moved a whole lot, and you might not get any PA to signal the break. So would you put an automatic sell stop below the SR to get in on the break as it happens or just let it be and wait for setups that have clear price action?
Good question. We haven't covered those kinds of entries yet.
Bang.
  • #1,846
  • Apr 9, 2009 9:27pm Apr 9, 2009 9:27pm
Quoting Naws
Strat do you trade breakouts from strong SR levels like the one on USD/CAD right now? There is a good chance that it will break this level and move down for some good pips, but the problem is that with trading the Daily, by the time the bar closes below the SR it might have moved a whole lot, and you might not get any PA to signal the break. So would you put an automatic sell stop below the SR to get in on the break as it happens or just let it be and wait for setups that have clear price action?
Break out trading can be BOTH very profitable AND losing.

First of all, it depends on the pairs. USDCAD is pretty volatile - look at the long wicks and tails - also, the big boys know where the break out orders are and frequently drive prices there to suck everybody in - called false break outs AND stop runs.

Second, it depends where the price is relative to the Daily and BOSS trends. If it's in a strong trend either way, then break outs above highs and lows are USUALLY very rewarding.

BUT, in a situation like USDCAD where it is basically oscillating around 1.2200, it is a very risky game. If you draw in the 1.2200 line which is so very important to this pair, you can see that it has mostly acted as support. Add to this that the 150 EMA is also providing support. On this basis, you would expect support to hold and prices go North but it is not sufficient for me to put my account on the line.

Third, if I was expecting a trip South, I still would NOT place a sell stop below that support because of my first argument. I would much rather let it close below that line and then RETRACE and TEST that line as RESISTANCE and sell from there.

This is really where it separates the men from the boys or the amateurs from the Pros. The boys/amateurs want to jump in with all guns blazing and get in from the beginning and make a big kill. (Sounds similar to what you asked - right?). The men/Pros want the Queen to reveal herself (maybe show Baba G her grail) and confirm she means to go South (by way of the test of resistance).

Yes, there is the possibility that you will lose some profits and yes, there is a chance that the move may be so strong that there may not be a test but at least YOU HAVE NOT LOST ANY $. Usually, there is PA somewhere to get you into a strong move.

So it all comes down to how far you have grown as traders.

Can you excercise patience?
Can you excercise discipline?
Can you think like Pros?
Can you think more about LOSING and less about winning?

Always remember - we want to play WITH the big boys NOT against them NOR be their breakfast!

Hope this helps, if not, ask again.
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,847
  • Apr 10, 2009 12:41am Apr 10, 2009 12:41am
Thanks Strat that's what I wanted to hear. We definitely want to trade like the pros and if that makes us miss some moves then its ok because we are lowering our risk and PA will always show us more setups.
  • #1,848
  • Apr 10, 2009 1:12am Apr 10, 2009 1:12am
I played the break out on GBPJPY at 142, it moved well but had I waited for the break, then the retrace I could have gotten in at a better price, with a tighter SL. I think I'll wait on CAD.
  • #1,849
  • Apr 10, 2009 2:09am Apr 10, 2009 2:09am
Wanted to pick up on what Strat said about trading in general...And we got a great lesson live right now in the form of Nzd/yen......

You know we got boss and big boss action.....you know we got a nice long bias forming.....so all we want is a daily right.......opps theres a pin,which i passed on,Swami out Evens,FxPippy took profit,Naws is holding.........and its a breakout....like usd/cad if it happens indeed all pairs are looking to do a similar thing if we get there.........

Now the 1.7 Trillion doller question is where is the "THERE" and "when".....

This the the point that ruthless adherance to price action comes in.....its now that you need to be the most perfect,the most patient,the most careful.....

Now if this is the big "trend change" in the sky i dont mind missing a few hundred pips having that validated in price action.......cause once the trend is engaged it gets easy.

Mind games......
If i was trading demo or an account that didnt pay my bills i would have probably filled a ticket on the nzd/yen.When i became pro i found myself getting more picky about PASR,waiting and waiting and waiting i would mentaly note where i would have gone in,in demo land and i would agonise at first that i had lost my balls or something untill..........pow here it is what i was waiting for. Even though i didnt know what it was i was waiting for when it turns up you will know.

Blackeagle pointed it out the other day and i feel its something that only a live and a decent sized accout holder (min 250k)at that would understand.

The great mystic LAO TSU;

Dont invite the battle,accept it instead.

ART OF WAR;

1 gold coin of enemy money is worth 30 of your own.


Swami S ;
Later is always later than you think.
  • #1,850
  • Apr 10, 2009 3:06am Apr 10, 2009 3:06am
Baba,

I saw that someone had mentioned an account size of minimum of $250k to trade for a living. What do you reckon. I can get nowhere that size. Is there any hope on smaller account sizes for professional trading? Bearing in mind I'm spread betting.

P.S. Closed my NZDUSD for a few pips, so only holding NZDJPY with 1/2 stake, with tight (ish) SL. Its going ok, just frustrating that the setup came just before the holiday period.
  • #1,851
  • Apr 10, 2009 3:08am Apr 10, 2009 3:08am
There are a whole world of systems out there designed to constantly dangle the carrot infront of your nose.

Keeping there subs up or there hit rates high so they can sell advertising space to the highest bucket shop .
With free intro offers or "Amazing platforms for dynamic system activation".

They prey on the weak and the helpless by pandering to the most base parts of the human character.Fear and greed.....

Why is FX so full of lossers....95%.....easy cause 95% buy into all that crap.....and all around us........the wolves howl!!!!

This is Good Friday,im not religous but i love culture.I think of the story of Christ,his walking to his own death......cross on his back and all around him they yelled.......all around him the institutions wanted his life.Like a lamb to the slaughter or a newbie in a bucket shop.

The FX training industry is worth many many millions....and like any market they will defend market share.

Friends rest assured just as Obewan became more powerful than Vader could ever imagine or the warden in "SHAWSHANK REDEMPTION" got it at the end......."there judgement cometh,and that right soon......"

Have a little rebirth this easter.....Think for yourselves,be yourselves and lets work harder next quater than we ever have in our lives.For the time will come and wisest of us know not how soon ,when we must go to the great fibonacci in the sky where we must take account of our profit and loss and on reviewing my yeild curve of life i wanna look back on a good 45 degree rise............the currency pair? love vs fear..........dudes im long love....always.

Enjoy your holiday people.
  • #1,852
  • Apr 10, 2009 4:35am Apr 10, 2009 4:35am
Quoting Bloom
Baba,

I saw that someone had mentioned an account size of minimum of $250k to trade for a living. What do you reckon. I can get nowhere that size. Is there any hope on smaller account sizes for professional trading? Bearing in mind I'm spread betting.

P.S. Closed my NZDUSD for a few pips, so only holding NZDJPY with 1/2 stake, with tight (ish) SL. Its going ok, just frustrating that the setup came just before the holiday period.
Bloom.
This is where yeild curve comes in.You need to know how much your system returns you in the lion AND the lamb times.When you have this number you can work backwards through this process to see what account size you need to make the % you return meet your bills.........Q.E.D

Thats why it takes so long to build a system..... to be consistant........... build the confidence.

If you get good the money will come..........g
  • #1,853
  • Apr 10, 2009 5:13pm Apr 10, 2009 5:13pm

Dr. Joe does electronic trading – Part I

I have promised this many people shortly after my first Dr. Joe post and started it a few times but could not get it finished because I couldn’t find all my notes, paperwork etc. The Easter recess has given me time to get some of my stuff together.

From Dr. Joe’s visit to CME, we know a little bit about what went on in the Futures/Commodities pits at CME in the early 90s. Before we move on to the crazy 21st Century world of trading with electronic wizardry and gadgetry, we need to understand how we worked with our brokers at that time.

In the late 80s and early 90s BC (Before Computers) when we were drawing our own charts, doing our own indicator calculations and drawing indicators ahead of charting packages, we had a similar mechanical order placing process. Once we had decided on a trade, we had to place our order with our broker. We would call our contact at the broker (or fax, in my case, when I was living and working overseas) and give him our trade. Even though the broker knew what we meant, we still had to speak “their lingo”, so we had to say something like “Account abc123, Long 1 March Deutschemark at 2.1020 or better”. The broker would then give us a ticket number which we recorded in our files.

The broker would then send our order, now with a ticket number, to either their “runner” at the exchange who in turn would give it to their assigned trader in the pit, or send direct to their trader in the pit depending on the size of the broker.

The pit trader would read the order and try and find a seller to take the other side of the trade. Remember, this is a ZERO SUM BUSINESS, someone wins and someone loses – always. The pit trader would find a seller with his “hue and cry” by screaming and shouting and waving his arms frantically until another pit trader screamed, shouted and waved back with a price. That price was then recorded on the ticket number and sent back to your broker. Now, depending on your broker and how big of an account you were at your broker, he would either call you back immediately with your “fill” or wait for later to do all his calls.

So then hours later, in my case, I would be notified of my “fill” against my ticket number which was duly recorded in my files. Sometimes I wouldn’t get my “fill” until a day later and after receiving the previous day’s data. Talk about “trading blind”

After receiving our “fill” we would then call the broker with our Stop Loss order. “Account abc123, Short 1 March Deutschemark at 2.0020 on a Stop.”

When it was time to get out of our position, we had to do the same thing again. Call the broker, “Account abc123, Short 1 March Deutschemark at the market.” In those days, and still with Futures and Commodities, you had to take the opposite of your original position to Close your order. The same routine then happened with the broker and their pit trader until eventually, they would get back to you with your “fill”. Because of all this “mechanical” delay, your fill would be nothing like you expected and often times when you were expecting a small profit or break even, your “fill” would be at a loss.

In those days, the “little trader” really got stuffed between the brokers and the pits because we were a “nuisance to them”. Our little “1 contracts” were a pain in the armpit to them and the pit trader would always put these “little” orders to the bottom of his pile while he focused on the huge orders from the “big boys”.

Instead of adding an extra “1 contract” to the big boys’ fills, which would have been at far better prices, the pit traders would wait while they had cleared all the orders and then start on ours. This meant that we would ALWAYS get the worst fills – our fill price would always be far away from our original price. Trying to use Limit Orders was a joke for exactly the same reason and they would never get filled.

We had to keep meticulous records because there were so many errors and mistakes in those days. Most of the errors would be on our part where we would have extra positions still open because we would have not closed our open positions correctly. This got real crazy when you were trading different currencies and commodities.

Now fast forward to the 21st Century AC (After Computers). I am indebted to this information from a Professional Trader of some 40 years trading vintage who visited the CME Exchange many times through his golf buddies who were either floor traders or in some way connected with the Exchange. I thought this information was from a couple of years ago but when I eventually found my notes, it was from 2005. How I wish my trading account grew as fast as my idea of a couple of years did!

His initial observation in visiting the Exchange was one of shock. He had seen the Exchanges and Pits on TV many times and thought he knew what to expect.
Like all of us, I guess, he envisaged a very busy open pit for futures trading but what he didn’t expect was the size of the Exchange Floor with hundreds of people each sat in front of a wall of computers!

On closer inspection, each Market Maker had 30 or 40 monitors on his “wall” all linked together so that he could access each individual screen with a touch of his mouse. He was just absolutely amazed that one person could follow what was happening on so many monitors as he personally, had difficulty following his 3 monitors and still retain his sanity!

What really surprised him was that there were very few charts, sometimes none at all, on the monitors. What was on just about every monitor was price, price activity, buying and selling pressure and other information related to price. “What were these guys doing with all that information?” he wanted to know. Well, 10 years or so later from Dr. Joe’s visit, with the latest computer hardware, software, electronic wizardry and gadgetry, these guys are not doing anything any different to what Dr. Joe observed. They are WATCHING and REACTING to PRICE.

The big difference now is technology. The data shown on each monitor is integrated and networked into other computers and their software which automatically responds to changes in volatility, bid and ask spreads, volume spikes and abnormalities, exceptional order quantities, institutional trades, Government Bank trades and everything and anything influencing price activity.

For example, if volatility changed on a particular instrument, the percentage increase or decrease was immediately reflected in the Market Makers bids and asks automatically without any human input whatsoever. Similarly, and at the same time, if there were bids and asks which were incorrectly matched or “discounts” based on their software, trades were instantly and automatically initiated by the software based on the programming and parameters set by the Market Maker.

The Market Makers have their plans programmed into their software so that when all the criteria are met, their software takes over and issues the trade. This then highlights the importance of the trading plan. Where ours is mechanical, theirs is fully automated.

So, the bottom line has not really changed, the Floor/Pit traders/Market Makers are still “piggybacking” on what the market does – buy when price goes up and sell when price goes down – it’s just that now, they have very sophisticated computers and software to give them advanced notice and automatically place their trades for them.

Understanding what we are up against, (the big boys with their sophisticated hardware and systems), confirms how difficult it is (not impossible) for the little trader and how important it is for us to thoroughly know and understand PRICE ACTION and trade WITH the big boys (not against them).

In Dr. Joe does electronic trading – Part II, we will discuss the role Brokers and Exchanges play in Forex.
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,854
  • Apr 10, 2009 11:34pm Apr 10, 2009 11:34pm
Finished my cursory read of the thread. Man there is a lot of information here. My brain is numb at this point. It needs some time to sort this info. Anyway, thanks Strat for sharing what you have shared. I can already see that I need to go back and really study certain areas of this website. At least I have identified the areas I am most in need of improving. I need a lot more practice in reading price action, and I need to get better at weeding out support and resistance lines. Way too many lines at this time. Now the fun begins. I have identified my weaknesses, time to study and practice till I have them both down to an art. Thanks again for the thread, as time goes I can see myself becoming quite active here.

rgrace
  • #1,855
  • Apr 11, 2009 2:19am Apr 11, 2009 2:19am
mate what the hell is a "recess"!!!!......you need ....NEED to get back to blighty for a bit..........H O L I D A Y..........recess indeed....lol
  • #1,856
  • Apr 11, 2009 2:28am Apr 11, 2009 2:28am
Quoting rgrace
Finished my cursory read of the thread....
YO dont feel behind the curve here.......we are all doing the same thing....welcome.
  • #1,857
  • Apr 11, 2009 2:36am Apr 11, 2009 2:36am
I thank my lucky stars i was born in the 21st century......having to deal with all that cra8.

In fact if the bucket shops didnt make so much money out of the retail side of FX they would have probably banned it by now.......see the newbie is usefull...lol
  • #1,858
  • Edited 5:51am Apr 11, 2009 5:20am | Edited 5:51am
This is absolutely fantastic guys,

Thanks for sharing your insight Strat and Baba G

Still going... only at page 20

All the best,

VB,

Update: I've decided to stop at page 20... I'm going over to the J16 thread for the first 200 odd pages and then I'll be back
  • #1,859
  • Apr 11, 2009 11:04am Apr 11, 2009 11:04am
Quoting Baba G
I thank my lucky stars i was born in the 21st century......having to deal with all that cra8.

In fact if the bucket shops didnt make so much money out of the retail side of FX they would have probably banned it by now.......see the newbie is usefull...lol
Wow, you are only 9 years old? I thought you were much older! Must be all that pasta you were fed as a baby!
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,860
  • Apr 11, 2009 11:29am Apr 11, 2009 11:29am
Quoting Baba G
mate what the hell is a "recess"!!!!......you need ....NEED to get back to blighty for a bit..........H O L I D A Y..........recess indeed....lol
This is a little surreal..... B G is translating into English?
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