Strat's Long Term Stress Free Trading

YES YES YES INDEED!!!

Christopher, it looks like it wants to get down to the key level of 0.8650ish. Since this is a key support level from which price action will tell us future direction, I’m not interested in EURGBP until we see resolution of this.

However, let’s take the opportunity to review your analysis:

The BIG BOSS is in a retrace of it’s uptrend and, so far, with a week to go, has made an almost 50% retrace. It has hit monthly support at psycho 0.8800 and formed an unconfirmed swing low and in doing so, has confirmed the March bar as a swing high.

Now the BOSS. If you look closely, you can see the Elliott Wave. The period from the end of the year to now is a simple A-B-C Wave 4 consolidation. Can you see waves 1, 2 & 3 and the A-B-C consolidation? For EW theory to hold, the end of Wave C correction has to be lower or equal to Wave A. This would mean that price should come down to Wave A bottom at, wait for it, 0.8650ish. However, neither trading or EW theory is perfect so we must still wait for price action at this level although now, we are slightly biased in our future direction. This week’s weak hammer also puts in an unconfirmed low.

If you remember my posts on time frames, you will remember me saying that the higher (longer) the time frame, the more accurate and meaningful are the technicals. The higher the time frame, the less perfect our candlesticks need to be. There have been many reversals of trends on Bond hammers and shooting stars on the BOSS and BIG BOSS timeframes. You can verify this yourself by looking at thousands of charts. Again, nothing is perfect in trading and what worked previously on a Bond hammer may come back and bite us in the aspect next time so we must always protect ourselves with sound MM.

The WORKER:
Everything you stated is correct.
I would like to draw your attention to “”All MAs are above current PA””. While what you have stated is correct, your thinking needs “fine tuning”. Remember, it is price we are concerned about and it’s position relative to everything else, not the other way around. So you should have noted and said “Price is below all MAs” – see the difference in focusing on price rather than MAs? Also, it is the position of price relative to the 20 that we are more concerned with – the other MAs will fall in line after the 20.

Your conclusion that the Worker retrace is weak is a good one but also bear in mind that Friday’s volume, being the day before a 3 day week-end holiday, was very low probably meaning that the big boys were already taking their groceries on board their yachts!

Your final conclusion should be that with the BIG BOSS and BOSS at such critical levels, just watch the WORKER for price action at these support levels


Hope this helps

You did very well, young man!

Yes, the doji on the BOSS is a NEUTRAL BAR but look where it closed and what that fib % is. It was also rejected by the 93.75 support and formed an unconfirmed swing low.

Don't forget to consider the BIG BOSS as this tells us even more information - can you see it?

Your analysis and course of action are very sound, good job!

BIG BOSS:

“”This downtrend since Dec 2008 is a retracement of the longer term uptrend since April 2008””
Take another look at this. This is a continuation of the long term downtrend. March 2008 was a LL, November 2008 was a LH – see how it is still part of the downtrend? The major swing from Nov 2008 is still “swinging”.

Now, if you want to get really silly, this leg “could be the A-B-C “B” leg correction, IF the “A” leg is from March 2008 to Nov 2008. “IF” it is the “B” leg, then this “should” be followed by a “C” leg up. But this is theoretical EW stuff which, while interesting, rarely serves any purpose though “when” it does, it can be very powerful.

BOSS:
Yes, a BEOB on my data making a very solid statement. However, BEOBs are best traded when they are at the top of a trend. The lower and further down they are in the trend, the RISKIER a trade off it becomes. Also look where the next major support is

WORKER:
Agree, except “”All MAs are above the price and turning downwards”” Upside down thinking again. Should be “price is below the 20 which is accelerating downwards.

Good job again, Christopher, you are definitely getting the hang of this!


Don't worry about missing anything - there is always a trade being set up - somewhere!

As you know, my trading style is getting into a trend and hanging in for the long haul. There are as many ways to managing a trend as there are in trading itself but here is one of the ways I do my trend trading.

USDCAD WORKER chart: (S&R left out for clarity)
This downtrend is not a “smooth” trend and instead is a trend stepping down a stair at a time. These stairs are the swings within the major swing from S to Z (providing Z is the low).

This particular swing from S to Z completely blows EW theory out of the water as, (so far), we have 4 Impulse waves down (S to T; U to V; W to X and Y to Z) and 3 corrective waves up (T to U; V to W and X to Y). EW theory has 3 Impulse Waves and 2 corrective waves followed by an A-B-C correction. The EW theorists explain this as “going into an alternate count” – yeah, count me out!

Within the stair steps is a little pattern that I see repeated many times in different pairs. I call it a “wobble”. It is actually sellers taking profits and/or a breather allowing price to “float” higher. It presents us with a beautiful opportunity to compound and add more contracts (when we know what we are doing!).

Look at the first stair step, S to T. The “wobble” as I call it is A to B. When you see this and know what it is and fit this in with PASR, it is as good as a blank cheque! This wobble happens in all subsequent stair steps apart from the last incomplete one.

This “wobble” is built into my trading PLAN. I expect prices to go down on a swing, make a “wobble” and then put in a swing low. Among many other things, I monitor the health of the downtrend with the “wobble” highs – the following swing high must not close higher than the previous “wobble” for the downtrend to remain intact. For example, the swing high at “W” must not close higher than the A to B “wobble” on swing U to V. There are exceptions to this especially around news events and especially when the political idiots start talking.

In a stair stepping trend like this I normally trade the swings, that is get out at the swing low and in again at the swing high. Sometimes, I will also leave a few contracts running up and down the swings in addition to adding contracts at the “wobble” highs and swing highs. On less volatile pairs, I just ride the complete major swing up and down but still adding contracts at the swing highs.

This is how I do it and not recommended for those only a few steps on The Path of Learning. It looks easy in retrospect but is much more difficult in real time. If you attempt this when you don’t know what you’re doing, it is guaranteed to blow your account!

Strat, You make it look so easy! On this occasion the swing high @ W was higher than the A/B of wave U/V. ( on my feeds). Is this one of the exceptions?
Seeing this happen, what criteria do you apply to convince you that this is going to continue going down? Was it the fact that price was strongly rejected by the daily 50?

Roy

(Been quiet here lately)

Strat said " the following swing high must not CLOSE higher than the previous “wobble” for the downtrend to remain intact. For example, the swing high at “W” must not close higher than the A to B “wobble” on swing U to V."

So although swing high at W was higher than high price of B, the close at W was lower than B. Hope that helps.

Yes, that makes sense. Note to self: Read every word until it sinks in!
Now, is an A/B wobble measured from swing low to swing high or lowest close to highest close.

Roy.

Although your question is not clear, A/B wobbles are countertrend price moves, much smaller than corrective waves (in the same direction with corrective waves) and as much as I can see from the chart attached, they are measured from low of bar A to high of bar B. They have nothing to do with swing low/high in terms of measurement. They appear somewhere between swing high and low (trend direction swing).

Strat, thanks you so very much for your comments on my two analyses. Your detail and constructive approach helps an enormous amount.

I will study them in detail and then have another go at some other pairs.

Many thanks

I wasnt being funny or anything.....im sure there are traders that make more than me.....or less than me....i dont mind.
My last trade was aprill 22....short gbp/swiss....ib to target.

Im not in any longs right now...why i hear you say....well my plan is to use "markets money"(my spare profits and its been quite dry of late) AND more importantly the longs i wanted didnt close right on my feeds to give me the price action i wanted which i already posted a while back...

My plan is still in motion....even not trading is apart of my plan when i dont have enough spare % to throw in..

two old proverbs come to mind:

"Dont invite the fight,accept it instead" and
"One gold coin of markets money is worth 12 of your own" or "whats yours will come to you"....damn thats 3,out,out ,out....start again...

I have yet to see a consistant trader in the ltfs or hear of one.The more i fly around this biz and meet new people,clients,fellow traders all i hear is stories of pain and loss from down there.I would love to hear of someone that made it and ran a happy ship.I thought killphill maybe the one.I do wanna trade more.....i do...and i see little moves all the time but a 7:1 reverse risk reward is pushing it a little no?......"so look on the lowers!"....."get a smaller stop"......but then all the stories of pain and woe surface and i think "no thanks".The way i deal with this is by the old "markets money" thing....if you got some to spare that is....

No brothers and sisters im gonna trade more markets....The full potential of my system is when im charting the world.

When i got into this it was about freedom....now its about the full application of the plan.I have seen a few things out there that have caught my eye.Well the demo on crude is going well.In all this time i saw 1 set up i liked on the black bitch....would of got a good 1% out of her....thats not bad.

Im so happy to hear of your progress and thanks for your P.Ms your all doing really well.....one of you is 18% up!!!! short Usdcad i guess....but whats more important is that you stick to a set structure in all your undertakings in the market and i think that message is sinking in.

Some say im conservative in my style,yes i have had 8 trades this year or so but im 10% upish and absolutly no stress....I can do more markets.

In hindsight i wish i had thrown a penny in the wishing well,popped a little 0.25% "set and forget" just to see but it just didnt come to mind at the time then again id rather get a 1% return in a new market from a good set up.Im not here to sign a song a sixpence to the wishing well..im here to apply my system and win.

So it must come as no suprise that i aint swung my bat once this month and till we get a nice bit of daily im not going to........but the planets are coming into alignment....slowly.


One of the best bits of advice i ever got for trading came from my brother,he is not a trader.He said "get 1%return to cover all your bills" and he is right "and if you need OPM, get good enough so they give you some".......simple.

And you know what the OPM i got came from intros from clients i already have.....there family,there friends ect and i say the same to them"make 1% return a month from your capital investment mean something"

So keep it up and work on your curve and getting a good eat out of 1% return.....if your good you will attract the capital.....trust I.......g

Hello Roy and thanks Blackeagle for answering Roy's questions so admirably in my absence.

I don't measure the "wobble", I just expect it and look for it. It is a visual "thing". I get some "comfort" seeing it and recognising it and then knowing that the rest of my PLAN "should" continue as planned.

Its a similar story all round.....which ways the trend?

1995 levels....gbp swiss

Now thats got my attention.....

Its better on the BOSS

In the zone....The USD CHF....thats a sign of something bit of daily there somewhere be nice.

I see usd weakness....in price.

PPZ of all time

It is saying something....