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Jacko's Forex House of Pleasure and Pain

  • #7,621
  • Edited 7:24am May 18, 2009 7:06am | Edited 7:24am
Quoting Sierra8561
Does Jacko post much on this thread anymore?
Hi Sierra8561,

Only if someone needs some help.

Otherwise I let the traders here use the method outlined on the first page of the thread.

The effectiveness (that is, profitability) of that method is seen here:
http://www.forexfactory.com/showpost.php?p=1431044&postcount=85

AND it has continued to be PROFITABLE every quarter of every year since.


.
Jacko
  • #7,622
  • May 18, 2009 7:21am May 18, 2009 7:21am
Quoting citizenjack
hi guys,
...... fyi i'm a newbie to forex trading.
i'm just learning to analyze the chart and hopefully i could do like what you pro guys are doing here.

looking forward to hear any feedback and advices from you all. thanks.
)

Hi citizenjack

You have soooo many lines on your chart that my eyes were hurting.

You need only one Resistance line (linking up the highs on your chart)
You need only one Support line (linking up the lows on your chart)
You need only one Fib line (the 50%)

That is all. Anything more than that is an irrelevancy.

If you can't make a trading decision based on the above three lines, then another ten lines is not going to help you. (They will only confuse you!!)

.
Jacko
  • #7,623
  • May 18, 2009 3:23pm May 18, 2009 3:23pm
Market now at 1.3550. Glad I didn't go short, at least not yet. Thank goodness for Jacko who advised of the uncertainty in the market.
  • #7,624
  • May 18, 2009 3:49pm May 18, 2009 3:49pm
Hi all,

I'm looking for a potential short at 1.3550. I'm waiting until price goes a little higher first, around 1.3570/80. Then I'll place my sell order to catch the market on the way down, instead of trying to second-guess.

Reasons for taking the trade:

50% Fib level from last high passed.

Confluence of 50% and 61.8% Fibs (from last two swing highs on 4H chart) at 1.3570.

Downward channel forming. Upper line converges with Fib levels - Ideally, I'm looking for a bounce off of this.

Minor S/R at 1.3550.

No further support below this level until 1.3350-1.3400, so good pip potential.

However, I'm waiting patiently for now.

Fingers crossed!
  • #7,625
  • Edited May 19, 2009 9:41am May 18, 2009 4:09pm | Edited May 19, 2009 9:41am
Hi, Pipped.

There is some heavy resistance at the current levels (1.3560-ish). But I agree with you, and will be looking to SELL alongside you around the current price level(s) . . . unless, of course, she breaks through.
Attached Image (click to enlarge)
Click to Enlarge Name: eur02, 5-18-09.gif Size: 17 KB
  • #7,626
  • May 19, 2009 3:02am May 19, 2009 3:02am
Since a month I am trying hard to follow jackos' method. I found there are some different psychological things that come into play when trading his style.

Personally, the biggest test is to sit and wait. To wait for an opportunity to get into the market. As this long term style does not provide so much signals to get into the game.

Yesterday (and still today) I saw EURJPY drive away more than 400 PIPs. I saw it bumped on a daily resistance and went straight up, but it was already 2bars and 100 PIPs away when I recognized it after I woke up... following jacko one has to wait now to get another entry as I am said to be no market hunter. Every day I sit and wait for signals, I nearly can't resist in drawing more TLs or Fibos into the chart to get more entry points.

What about you? Are your experiences similar? Or which things make you gnatching when trying to trade like jacko?
  • #7,627
  • May 19, 2009 3:41am May 19, 2009 3:41am
Hi all!

I am having a difficulties finding the right entry point when the price is near S/R area. The price seems to touch a couple of times to this meaningful S/R area and comes back and forth, so that I do stopped out often in this area until I finally ride the trend. I am trying to find the safe way to enter the market regarding this situation. Does anyone have any advice on this issue?

Thanks in advance.

PS) My setup is... Define S/R lines(Area) in Weekly/Daily/4H/1H chart, finding the entry point in 15M or 30M chart for digs after finding the opportunities in 4H chart. Deciding general trend starting from Weekly to 4H, and try to trade in the direction of the trend only.
  • #7,628
  • May 19, 2009 4:55am May 19, 2009 4:55am
Quoting oookie
Hi all!

I am having a difficulties finding the right entry point when the price is near S/R area. The price seems to touch a couple of times to this meaningful S/R area and comes back and forth, so that I do stopped out often in this area until I finally ride the trend. I am trying to find the safe way to enter the market regarding this situation. Does anyone have any advice on this issue?

Thanks in advance.

PS) My setup is... Define S/R lines(Area) in Weekly/Daily/4H/1H chart, finding the entry point in 15M or 30M chart for digs after finding...
Hi oookie,

Are you using the 100 pips stop loss?

If you are getting whipsawed out of your trade but your trades tend to work out in the end then I would suggest moving up a timeframe to place your entry. Rather than using the 15m/30m try using the 1 hour timeframe to get your entry (whilst continuing to use weekly/daily/4 hour charts for trendlines, support and resistance lines).

Continue to demo but using the higher timeframes and see if you get better results.

The other alternative is… if you find you are continually getting stopped out say 50 pips short of a successful trade, identify where you would normally enter and then enter a position 50 pips further away!

Hope that helps!

Regards,

Dan
  • #7,629
  • May 19, 2009 5:07am May 19, 2009 5:07am
Thanks for the advice, DanUK.

I just checked back the spot in higher timeframe, and it seems it would work as you adviced. I will try to do that in my next trade and see if it works.

I guess no one would know which low(high) is the lowest(highest) before new low(high) comes out.

Thanks.

Quoting DanUK
Hi oookie,

Are you using the 100 pips stop loss?

If you are getting whipsawed out of your trade but your trades tend to work out in the end then I would suggest moving up a timeframe to place your entry. Rather than using the 15m/30m try using the 1 hour timeframe to get your entry (whilst continuing to use weekly/daily/4 hour charts for trendlines, support and resistance lines).

[color=black][font=Verdana]Continue...
  • #7,630
  • May 19, 2009 5:26am May 19, 2009 5:26am
Quoting oookie
I guess no one would know which low(high) is the lowest(highest) before new low(high) comes out.
That's right - no one knows for sure but we can use the tools that Jacko has shown us to guide us to the right area. Also remember the importance of entering at round numbers!

Let me know how it turns out - if you still have trouble there are always plenty of people here (including Jacko himself) who are happy to help out.

Regards,

Dan
  • #7,631
  • May 19, 2009 7:20am May 19, 2009 7:20am
Quoting TheCyberCore
Since a month I am trying hard to follow jackos' method. I found there are some different psychological things that come into play when trading his style.

Personally, the biggest test is to sit and wait. To wait for an opportunity to get into the market. As this long term style does not provide so much signals to get into the game.

Yesterday (and still today) I saw EURJPY drive away more than 400 PIPs. I saw it bumped on a daily resistance and went straight up, but it was already 2bars and 100 PIPs away when I recognized it after I woke up......
Hi TCC,

I would say that my experience has been pretty similar to you. It took me a long time to get round to the idea of only taking a small number of trades. My biggest concern with only taking a small number of trades was missing out on the opportunities... just like in your example; missed a good move so now you have to sit back and wait for the next opportunity to present itself. You did well not to get in and hunt it though!

But the wait is well worth it. By sitting back and only taking the best setups you will keep your losses small. Also you gain more freedom by trading less often which is the ultimate goal for most people.

Out of interest how many trades do other Jacko followers find a month on E/U? I find I take 1 or 2 trades per week.

Regards,

Dan
  • #7,632
  • May 19, 2009 8:38am May 19, 2009 8:38am
Quoting DanUK
That's right - no one knows for sure but we can use the tools that Jacko has shown us to guide us to the right area. Also remember the importance of entering at round numbers!

Let me know how it turns out - if you still have trouble there are always plenty of people here (including Jacko himself) who are happy to help out.

Regards,

Dan
I have a question about the round numbers. I've struggled with this because round numbers seem to be a natural S/R point. So when price starts to reach a new level (1.3500, 1.3600, etc), it tends to bounce off round numbers, which proves to be bad for your move if the market is exhausted and just barely reaching that level. So how do I trade that? I want to get into the move with the momentum (I.E. let the price move through my entry, not back to it), but I don't want to catch the top (or bottom) right at exhaustion, whats best for this?

Thanks in advance for any replies and thanks to all for helping out here.

Moose
  • #7,633
  • May 19, 2009 8:58am May 19, 2009 8:58am
Quoting DanUK
Hi TCC,

I would say that my experience has been pretty similar to you. It took me a long time to get round to the idea of only taking a small number of trades. My biggest concern with only taking a small number of trades was missing out on the opportunities... just like in your example; missed a good move so now you have to sit back and wait for the next opportunity to present itself. You did well not to get in and hunt it though!

But the wait is well worth it. By sitting back and only taking the best setups you will keep your losses small....
Hi Dan,

thank you for your reply. As I am very fresh in Jackos' 2nd group I currently follow his trades to understand his system. But today, I placed a sell order on EURJPY just 20 Minutes before Jacko placed his on EU. This was such a feeling of success...

Now I trade both trades and my EJ sale is also 70 PIPs green additional to my PIPs in EU.

In future I would try to guess Jackos' trades right just before he places them. This is the best way to learn.

And to increase my amount of trades I will use EURJPY additionally to EU as both are merely similar but sometimes EURJPY seems to have much clearer signals and also higher moves (more PIPs to come).
  • #7,634
  • May 19, 2009 9:37am May 19, 2009 9:37am
Traders, I appreciate your comments above. I have learned a great deal from many who have posted here.

I hope my experience (or lack thereof) can help someone.

One thing of the many things learned from those much wiser than I is to ONLY use higher time frames. It is so much easier and nicer to trade this market without worrying about a position entered into on the M5 or M15 time frame. Trust me . . .

I was once an indicator junkie who used everything from everything to everything else on everything, through everything and under everything. At times, I would have eight or nine indicators on one chart . . . while at the same time, trying to decipher what all of them were saying. Garbage!

Use your instincts. Pull everything off your charts. Look at the "naked" chart, identify the S/R levels, identify the trend (resistance and support lines) and then wait until the market has reached a level you're pleased with . . . then trust yourself and your analysis.

It may take some genuine time to become more comfortable with yourself and your analysis, but it is much more rewarding when things finally "click." You'll still make mistakes, but they are fewer.

Notice price movement and pay attention to how it ebbs and flows. I used to use an indicator for convergence and divergence (the Awesome Oscillator), but I even find now that I can somewhat pinpoint the convergence and/or divergence without using that indicator (or the MACD).

Since learning to trade higher time frames (Daily, Weekly and Monthly) using very few technical "tools" (not indicators), I have found that my performance has nearly duodecupled WITHOUT the stress of watching each tick, without the stress of wondering if I made a good decision, without the stress of being stopped out prematurely.

If I can advise anyone (keep in mind, I am merely repeating that which has been told before), DUMP the lower time frames. If you use MetaTrader4, then completely remove them from your platform. Don't even look at them. We do not need to base everything off of H4 or higher and then go down to lower time frames to enter the market. (This makes little sense to me.)

Just trust yourself, use higher time frames and wait for the market to reach your desired entry level, then re-evaluate your analysis and if she looks good, then go for it. If she does not, then wait for a better entry.

As Jacko ALWAYS says, "Slow down . . . It is better to get rich slowly than to go broke spectacularly fast."

Ah . . . . . stress-free trading. Love it!!! (Strat, I am not trying to coin your phrase.)
  • #7,635
  • May 19, 2009 9:56am May 19, 2009 9:56am
Hello guys
How many pairs do you trade? I thought you trade just EURUSD.
  • #7,636
  • May 19, 2009 10:04am May 19, 2009 10:04am
Quoting alter
Hello guys
How many pairs do you trade? I thought you trade just EURUSD.
Yes - as all the major currencies are related to each other. Jacko trades EURUSD only, because it is the most trendy pair and as well the biggest market (the "supertanker") of all pairs.

In my case I would like to have more opportunities and more trades. I also like the volatility combined with the also trendy appearance of EURJPY, so I decided to trade it in parallel. But this has nothing to do with the method described in this thread.
  • #7,637
  • May 19, 2009 10:12am May 19, 2009 10:12am
Quoting hans356

Ah . . . . . stress-free trading. Love it!!! (Strat, I am not trying to coin your phrase.)
On the contrary, use it as much as you like. I'm really glad you are taking what you are learning with us and passing it on to others. That's what FF is all about.

http://www.forexfactory.com/showthread.php?t=155459
15 YEARS OF PASR ON FOREX FACTORY!
  • #7,638
  • May 19, 2009 11:04am May 19, 2009 11:04am
Quoting DanUK
Hi Moose,

I hope I can help with this one - I struggled with this same issue. I think the more you trade this way the better you will get at identifying the right levels to fade. I don't like catching falling knives (although if you can do it right you can get a better entry price) so I try to watch for a rejection near the level I am looking at entering at - I tend to use the 1 hour chart to do this, but that is just my personal preference. Please see the attached chart, hopefully it will explain better at what I am looking for.

Hope that helps!...
Dan,

Thanks for the quick and informative response! I think my problem is more related to when the market is heading in my direction. Rather than pullbacks, what happens when you want to get in at a price that is above you (for longs) or when a price is below you (for shorts).

For example, if you feel you're in a consolidating market and you're waiting for the volitility to die down (as many seem to be doing now on the EURUSD), I want to see a strong break above 3750 region (where there is strong resistance) for entry long. Now if I want round numbers, I would have an entry target at 1.3800? If that's the case, how do I best approach this, while implementing this strategy? Or am I totally off base for finding an entry the Jacko way?

Thanks again for your help!

Moose
  • #7,639
  • May 19, 2009 11:37am May 19, 2009 11:37am
Hi c49ermoose

"For example, if you feel you're in a consolidating market and you're waiting for the volitility to die down (as many seem to be doing now on the EURUSD), I want to see a strong break above 3750 region (where there is strong resistance) for entry long. Now if I want round numbers, I would have an entry target at 1.3800?"

The way I see it - there is a great supply vs. demand (resistance) area at around .3825-.3850 area. I, personally, would probably have a bearish bias in this area. Should this area break through, which i think unlikely, at least least from the first try, then .4150 area looks to me as a secondary resistance zone. All of these areas are around significant whole numbers and fib levels & all of them have manifested as great supply vs. demand imbalance zones in the past.

Just my 20
  • #7,640
  • May 19, 2009 11:41am May 19, 2009 11:41am
Quoting TheCyberCore
Yes - as all the major currencies are related to each other. Jacko trades EURUSD only, because it is the most trendy pair and as well the biggest market (the "supertanker") of all pairs.

In my case I would like to have more opportunities and more trades. I also like the volatility combined with the also trendy appearance of EURJPY, so I decided to trade it in parallel. But this has nothing to do with the method described in this thread.
I am going to preface this by stating I am not an expert trader, just someone who has been a student of the market for a couple years and trying to find a suitable approach. I recently signed up to Jacko’s second group (2 weeks in). I’m also in the boat of those who would like to have more opportunities to trade than Jacko’s method provides. However, like most of you, I’ve learned in my short time in the group that one of the main reason’s for Jacko’s success is his patience.

I am trying to be more patient in finding the right setups on EURUSD. To help with this I am planning to add another pair once I get more comfortable with the method. I see that others have done same. I only plan on adding one more pair as this should give me the ideal amount of activity given I have a 9 to 5. The other reasons for this are as follows:

1) I’ve noticed that even though Jacko is a technical chartist, he does keep an eye on the fundamentals for the pair he trades. He indirectly cites that as one reason for only trading EURUSD. Each additional pair added potentially means more time spent keeping an eye on fundamentals.

2) the more pairs you add the more you are trading correlated instruments whether positive correlation or inverse correlation. While this gives you a greater opportunity to make profits, it also increases your exposure and your draw-downs when you have them.

So how do I go about finding a pair to add? In searching for a pair to add my criteria is as follows:

1) a pair that does not have extremely strong positive or negative correlation with EURUSD (ideally one with 0 correlation);

2) a pair that is not a cross (i.e. GBPJPY).

3) a trendy pair.

The pair I’ve targeted so far is USDJPY. I am currently demoing this pair trying to apply what I’ve learned from Jacko as I go. USDJPY meets all the criteria with decent volatility. According to mataf.net, it currently has a daily correlation with EURUSD of -32 over the last 20 days and 0.1 over the last 100 days. These seem acceptable to me. You can view their correlation tables here: http://www.mataf.net/en/tools/correlation-table

The reason I don’t want a pair to be too correlated with EURUSD is because if the correlation is too strong and I risk 2% per trade on each currency, I am effectively risking 4% on a single trade. If I increase my risk to 3% like some people do, I am risking about 6% between the two trades. The math might not be exact. Nevertheless, this to me seems like you are increasing your risk exposure. Admittedly, your reward should be greater most of the time. Conversely, if you have a pair that has too strong of a negative correlation you could frequently end up with a sell of one pair and buy of the other. To me this seems similar to having a buy on two positive correlated pairs. You’re still doubling your exposure when you factor in both trades. Of course you could buy or sell both pairs but then this would effectively mean you have a hedging strategy.

These are just my thoughts. If anyone believes my thinking is faulty please don’t hesitate to inform. I welcome a discussion from others.
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