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Jacko's Forex House of Pleasure and Pain

  • #9,061
  • Aug 27, 2009 3:31pm Aug 27, 2009 3:31pm
Price leapt up above the top trendline in the last 4 hour candle, could be time for a retest of that trendline from above before a nice move up towards 1.4550.

Jacko (or turtle), do you use the fib extension as a profit target ever or would you just go back to the trailing stop if we're back with the main trend?

Also, would you place a pending order just above the top of the last move so that if it broke out above the previous resistance you'd be in the trade or would you wait for price to retest the top of the trendline and enter if/when it gave a valid signal for a long trade?

Thanks

Edit: Presumably it could well range where it is for a little while giving a clearer range top to use if you wanted to go for the breakout method.
  • #9,062
  • Aug 27, 2009 3:36pm Aug 27, 2009 3:36pm
what just happened? Anyone have any idea what caused such a move?
Nihil inimicus quam sibi ipse Marcus Tullius Cicero
  • #9,063
  • Aug 27, 2009 3:38pm Aug 27, 2009 3:38pm
Quoting coscorp
what just happened? Anyone have any idea what caused such a move?
No but I'm glad I closed my short earlier
  • #9,064
  • Aug 27, 2009 4:14pm Aug 27, 2009 4:14pm
Quoting LasVahGoose
There are always going to be some exceptions, but overall and in general the statement is true, especially here on a public forum.
I don't feel misled at all.

Many experienced traders advice newer traders starting out to start on the longer time frame. They move slower and give you more time to react and think about what you are doing.

If you nit pick enough and zoom into micro detail, you can say (just about) any statement is misleading.
I was perusing the threads when I ran across Jacko’s post, I’m not trying to stir up problems nor do I have an agenda or anything to prove, just I know there are other professional traders who will trade smaller time frame charts, although not exclusively.

Jacko’s method works for Him and those that follow, but there are many ways to skin the cat, and no one has the corner on the Grail, as success has just as much to do with the mental makeup and the mesh between trader and method.

The best, well known example I can throw into the mix, and I’m not advocating his techniques is Tim Morge, 36 years in the market, very successful and He trades Daily, 240min (4 hour) as well as 20 minute charts. His trades can last several days to just a few minutes and anywhere in between.

Although there’s something to be said for not entirely focusing on the small charts as they must conform to the larger charts, but ignoring them completely imho, is in err.

But to each his own, wishing all good trades.

a
  • #9,065
  • Aug 27, 2009 4:26pm Aug 27, 2009 4:26pm
Quoting Snr Dinero
I believe that there are people making money scalping but to me it's a waste of time.
Also scalping allows risk minimization as your position is only open briefly. You shouldn't discount the risk exposure you have with position trades, as illustrated with the market gyration today.
  • #9,066
  • Aug 27, 2009 4:31pm Aug 27, 2009 4:31pm
Quoting digitil
Also scalping allows risk minimization as your position is only open briefly. You shouldn't discount the risk exposure you have with position trades, as illustrated with the market gyration today.
I see your point, thanks for making it.

For me, I'd still prefer to trade higher time frames and spend less time watching the charts. I'm sure it's a personal thing and noone should knock anyone else's preference.
  • #9,067
  • Aug 27, 2009 4:51pm Aug 27, 2009 4:51pm
its the definition and how its done that determines whether someone can scalp long term and make money.

99.99999 percent of "scalpers" trade like madmen and decades of broker statistics clearly show they dont have a snow balls chance in hell at success.

"scalpers" that succeed almost always have the following approach.

1. huge account.
2. set up that is not common but is very high odds when it does occur.
3. refuse to let a winner turn into a loser.
4. breakevens are wins.

if i have a set up that is 95 percent sure to give me 25 ticks or breakeven and im in and out in 60 seconds and that 25 ticks makes me 50,000 once a week am i a scalper?

hell yes.

problem is most "scalpers" think to be a scalper means 25 trades a day and its usually with a 1000 account and a method thats shaky at best.

this is all just my opinion and could be totally wrong. lol.

30 years tells me im probably right.







Quoting digitil
Also scalping allows risk minimization as your position is only open briefly. You shouldn't discount the risk exposure you have with position trades, as illustrated with the market gyration today.
  • #9,068
  • Aug 27, 2009 5:02pm Aug 27, 2009 5:02pm
Quoting jacko
...NEVER seen a scalper last more than 12 months as a fulltime trader.
I'd like to second that, but add some dimension to the statement. I've been scalping since '06 and had mixed results. The reason that scalping doesn't work full-time is that you have to be very conscious of market liquidity. If you open a trade during a slow market you will almost invariably be forced to close it with a loss, becasue of the spread.

So I found myself looking at PA, wait like a hawk, and eventually, I'd pull the trigger. Sometimes it would take 2 hours before I could enter the market, and often times I wasn't able to do anything at all, essentially "wasting" 2 hours on "nothing". After the session is over, the market becomes too slow and so I had many days without any "action". This means that I wasn't a "full time" trader, because I only looked at the market maybe 1 or 2 hrs max, and not even every day. Eventless days are too boring.

After gaining some experience, I was usually right about 50% of the time, and as my MM skill improved, loosing trades were 2% of account size, while winning trades were on average closed with a 2.5% gain, roughly. That's a net gain of .5% - it's profit alright, but not great.

Increasing frequency yields higher risk exposure and eventually lowers net gain, mostly due to the spread. Secondly, it's been very, very, very, very, very, very, very, very boring work for this brain of mine, which likes to be stimulated.

Today I still scalp on select few occasions - can hardly call that full time, more like "micro-part-time" ;P. My scalping activities this year have resulted in a net gain of 11% YTD, while position trading alongside Jack resulted in 43% net gain YTD (I trade less often than him because I only trade when I totally understand, and agree with, what it is he's talking about).
  • #9,069
  • Aug 27, 2009 5:30pm Aug 27, 2009 5:30pm
Quoting james16
its the definition and how its done that determines whether someone can scalp long term and make money.
precisely!

Quoting james16
99.99999 percent of "scalpers" trade like madmen and decades of broker statistics clearly show they dont have a snow balls chance in hell at success.
I've never had the luxury of seeing a broker's view of the market, but I'm certain that the reason why forex retail is such a crowded market these days is the fact that so many people treat it like legal form of roulette. hey, if that's all they want from it, why not?!

Quoting james16
"scalpers" that succeed almost always have the following approach.

1. huge account.
to ilustrate "huge account": if someone trades with $1,000, that person should probably trade only 0.02 lots if they're doing a trade with 10pip SL (2% risk). Make it a winner at 10pips (plus spread) in your favor and celebrate a $20.- profit. More likely that person would want to call it a profitable trade after 3pips (plus spread) for a staggering $6.-
Quoting james16
2. set up that is not common but is very high odds when it does occur.
just as Danny Ocean said: "Cause the house always wins. Play long enough, you never change the stakes. The house takes you. Unless, when that perfect hand comes along, you bet and you bet big, then you take the house (http://www.imdb.com/character/ch0002216/quotes)."

Quoting james16
3. refuse to let a winner turn into a loser.
4. breakevens are wins.
not to forget: to make a break-even you must at least "win" the spread.

Quoting james16
if i have a set up that is 95 percent sure to give me 25 ticks or breakeven and im in and out in 60 seconds and that 25 ticks makes me 50,000 once a week am i a scalper?

hell yes.
scalping=microscopically short trades. my point exactly in earlier post.

Quoting james16
problem is most "scalpers" think to be a scalper means 25 trades a day and its usually with a 1000 account and a method thats shaky at best.
but that's called a gambler!
Quoting james16
this is all just my opinion and could be totally wrong. lol.
with respect, I bet you're bored right now, cruising around FF looking for some distraction. but I could be wrong about that.
Quoting james16
30 years tells me im probably right.

3 years tells me you are right
  • #9,070
  • Aug 27, 2009 5:33pm Aug 27, 2009 5:33pm
lol.

i wasnt bored reading that.

thanks for making me smile.

jim

Quoting digitil
precisely!

I've never had the luxury of seeing a broker's view of the market, but I'm certain that the reason why forex retail is such a crowded market these days is the fact that so many people treat it like legal form of roulette. hey, if that's all they want from it, why not?!


to ilustrate "huge account": if someone trades with $1,000, that person should probably trade only 0.02 lots if they're doing a trade with 10pip SL (2% risk). Make it a winner at 10pips (plus spread) in your favor and celebrate a $20.- profit. More likely that person...
  • #9,071
  • Aug 27, 2009 6:18pm Aug 27, 2009 6:18pm
Quoting Snr Dinero

Jacko (or turtle), do you use the fib extension as a profit target ever or would you just go back to the trailing stop if we're back with the main trend?
for now just the 50% fib, as well as S&R, round numbers and trendlines, but usually a combination of 2 or more works best for profit targets. The more off these indicators line in a zone, the more chances that the price will stop there, because most likely a lot of people will unload or enter a position.
Once the volatility comes down and trend resumes and I'm able to make 100+ pips with a trailing stop I'll go back to it. You just need to adjust to market conditions so that you are making profits while still following the general method.


In the current market conditions I have learned to place a trade, have a 100 pip stop and don't touch it until my profit target is hit. Many times I've seen my position go to 60-80 pips gain, then it spikes the other way to break even or a little at a loss only to resume in my original direction. This is where a lot of people get shaken out and reenter 50 pips later after they get stopped out only to propel the trend more while I'm still in my position. I learned to have confidence in my decisions, because as long as my analysis is correct, more times than not I will have a gain as long as I let the trade go where I think it's going.



Quoting Snr Dinero


Also, would you place a pending order just above the top of the last move so that if it broke out above the previous resistance you'd be in the trade or would you wait for price to retest the top of the trendline and enter if/when it gave a valid signal for a long trade?

Thanks
wait for a retest and reneter, jacko's method is about buying at a discount, when price is cheap and not when it's going up. Most of the times, previous highs get broken by a few pips only to get back into the range.
It's NOT GAMBLING when the odds are in your favor
  • #9,072
  • Aug 27, 2009 7:55pm Aug 27, 2009 7:55pm
Quoting james16

99.99999 percent of "scalpers" trade like madmen

The other thing with scalping is that most people who love scalping have a certain personality that is not good for forex trading. What I mean is that if you like scalping you probably are impulsive and are the kind of person that goes out and makes a big purchase such as a big screen TV or a car just because it was on sale even though you just got a new TV or a car last year. You also probably think that if you can make 40% per year trading at 2% per trade, than if you trade 20% per trade you will make 400% and if you scalp you can make more trades which means you can make 4000% per year, then you say hmm, I can make a million starting out with $1000 no problem.

Not to mention the disadvantage you have with scalping. If you scalp the Euro for 10 pips profit and 10 pips loss you are at 20% in the hole from the start of your risked amount or 0.4% in the hole of total account equity. Not much but if you make 10 trades per day at 2% of account equity, 50 trades per week and 200 trades per month you need to make 80% gain that month alone just to break even because of the 2 pip spread, that's 960% per year to break even. If you trade a pair that has a 3 or 4 pips spread it gets even worse.
Hope I got my math right , but if I did thats why almost all scalpers fail.

This is a little off topic, but the other thing that I didn't understand is hedging, which is not allowed anymore, but having 2 positions opened at the same time is like paying the spread for not having anything open
Some people cant see that paying the spread is a disadvantage

Quoting james16

30 years tells me im probably right.
my limited experience tells me that I should listen to people who have a lot more experience than me and not the onces that say they can turn $3000 into $100,000 in less than a year
It's NOT GAMBLING when the odds are in your favor
  • #9,073
  • Aug 27, 2009 10:05pm Aug 27, 2009 10:05pm
Quoting auxesis
If your looking for posters here on FF that post profitable calls, you won't find many if any, but there's plenty of people, in the real world, who trade smaller time frames in conjunction with a larger picture that make a very good living.
Hi auxesis
Welcome to the thread.

What you seem to be saying is that there are traders who are determining the direction of the market using the larger picture, but using the smaller time frames to to micro manage their entries and exits.

I don't disagree with that at all...but I would be surprised if those traders saw themselves as scalpers. They have based their trade on the larger time frame. Without a strong belief in where the larger picture is pointing, they would not enter the trade.

.
  • #9,074
  • Aug 27, 2009 11:55pm Aug 27, 2009 11:55pm
User Name, thanks for your reply. If I understood that right you are advocating entering once price meets the support of the top of the downwards trendline it has recently been following without waiting for confirmation of that support holding?

The theory behind this I am guessing is that this pattern comes good more often than it fails and for the times it does come good I can make an extra 30 or 40 pips per trade over waiting for confirmation which will easily cover any losses I may make along the way?

As far as a target is concerned I have two ideas. The 50% fib extension of the last move would be 1.4530 but I have 1.45 as a strong historic s/r level from the weekly chart. Which would you use? I'm thinking of entering the target as 1.4530 and watching carefully if/when price meets 1.45. Is that a plan?
  • #9,075
  • Aug 28, 2009 12:22am Aug 28, 2009 12:22am
I am a recent member of Jacko's group and I have a question that I would appreciate an answer either from Jacko himself or the members who have been with Jacko for a longer time.

After you enter the trade and after the trade goes in to profit, lets say by 90 pips, do you secure the profit some how on your own? by moving the S/L, or applying trailing stop, or even closing the trade?

I have been burnt two times by fooling around with the trade on my own, but it is very tempting!!
Thank you Jacko for being such an excellent mentor.
Bernard
  • #9,076
  • Aug 28, 2009 1:07am Aug 28, 2009 1:07am
Price spiked up and closed above 4H trend line...that should mean we now looking for a pullback to that line which should act a support in order to go long?

Or are we careful as the spike yesterday was caused for no fundamental reason just low liquidity, and just ignore the extreme spike and thus looking to go short?

I'm with the former based on pure technical reasons. Price is sitting near the 4H line and horizontal support is just below. Thus long with stop below the 4H and horizontal support line...if it breaks then support broken and trade 'invalid'.

Any thoughts?

http://i25.tinypic.com/21c8p74.jpg
  • #9,077
  • Aug 28, 2009 1:42am Aug 28, 2009 1:42am
I'm a novice, but you have a lot of resistance in that 1.4350-1.4380 area. Then you have the 1.4450 swing area to break through. Going to need a lot of bullish action to get price moving through all that.

Price is just hitting a ceiling and you can see where all the bars are stopping just be looking to the left of your chart.

We'll see what the London session brings.



Side note: if you can resize your chart a little bit, that would be great.


Quoting lovejoy80
Price spiked up and closed above 4H trend line...that should mean we now looking for a pullback to that line which should act a support in order to go long?

Or are we careful as the spike yesterday was caused for no fundamental reason just low liquidity, and just ignore the extreme spike and thus looking to go short?

I'm with the former based on pure technical reasons. Price is sitting near the 4H line and horizontal support is just below. Thus long with stop below the 4H and horizontal support line...if it breaks then support broken and trade...
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #9,078
  • Aug 28, 2009 1:53am Aug 28, 2009 1:53am
Yes, there is is resistance above and support below.

The fact that the price is hovering around the support line rather than boucning off it indicates we are looking at a break to the sort side...an as you say we are near the top of the overal range...

I'm a watcher at present looking for the direction before trading
  • #9,079
  • Aug 28, 2009 1:56am Aug 28, 2009 1:56am
Quoting lovejoy80
.an as you say we are near the top of the overal range..
You said it better than I did.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #9,080
  • Aug 28, 2009 2:05am Aug 28, 2009 2:05am
Apologies for the awful spelling in the last message!

No sooner had I typed that the price did break downwards - I entered half a position short at 1.4340
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