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Strat's Long Term Stress Free Trading

  • #11,841
  • Apr 29, 2010 10:38pm Apr 29, 2010 10:38pm
Quoting strat
Good evening Strat!Today,you named 78.6 fib level and you call it a "critical" level.You said that the price find S at 78.6% so the price keeps the direction.So is 78.6% a maximum limit till where the price could retreace? Ex:up trend-price retreaces till 78.6% fib ,where is the last level where the price could make a HL,if the price goes through 78.6%,could reach 100%>no more HL>no more up trend.Could you please explain more?Thanks.
P.S. Sorry for my "lagging" english and black background. (igmal)...
Strat, I want go over this again since I'm not quite sure about it.

I may be oversimplifying this somewhat but I'm trying to get a basic concept I can work with to start.

Speaking about the long term trend, on the chart here of USDJPY the move down from A to B would be considered an impulse wave and the move from B to C is a corrective wave at this point in time, correct?

So the long term trend is still down until there is break through the fib 78.6 to the upside? And the trend would be considered to be up after that (about 98.00 on this chart.)

Again, referring to the long term trend, until that level is breached the move from B to C would still be considered a retracement in a downtrend, and if that's the case any long positions in the last three months would be countertrend trading with respect to the long term downtrend. Looking at it that way, taking a long position is the higher risk play unless someone is trying to get an earlier entry to a possible trend change, etc.

However, looking at it from a short term perspective, trading can still be profitable by looking for long entries during this retracement if you are trading PASR from one SR level to the next until the downtrend resumes (if it does resume) because it can be considered a short term uptrend until then. Of course you do need to be aware that the long term trend can resume at any time until the fib 78.6 is broken, so you wouldn't want to hold a position for much time.

After the 78.6 has been passed then the odds increase for an opportunity to take a position that might allow you to ride an extended bull trend.

Am I explaining this properly and have good understanding or am I missing something completely?

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  • #11,842
  • Apr 30, 2010 12:52am Apr 30, 2010 12:52am
Quoting erikte279
So basically what I gather from STRAT and everyone is we should try to get a few good entries and trade for the Long Term??? Wow Dude, what a Good Idea!!

Yep,

IMO it really is that simple - unfortunately its not that easy.

Also if you gradually build your position a la Peter Crowns(add on the pullbacks) - thats when your talking serious money.
  • #11,843
  • Edited 1:20am Apr 30, 2010 1:05am | Edited 1:20am
I get the distinct impression that a lot of people on this thread have just 'seen the light' - Credence Clearwater revival.

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  • #11,844
  • Apr 30, 2010 2:56am Apr 30, 2010 2:56am
Quoting qunlebada
so what do you say to 1hr timeframes?do you think they work also?or 4hrs?
Hi Gunlebada and welcome.

It may work or not but this is not what this thread is about. Higher time frames make for stronger S/R areas.

Here you are required to read the thread complete, or a least quite a bit before you start asking questions. And read means UNDERSTANDING.

It will show in your questions too.

Cheers
Spinner 'Tis in the Waiting.....
  • #11,845
  • Apr 30, 2010 3:41am Apr 30, 2010 3:41am
Quoting PistolDave
Speaking about the long term trend, on the chart here of USDJPY the move down from A to B would be considered an impulse wave and the move from B to C is a corrective wave at this point in time, correct?

So the long term trend is still down until there is break through the fib 78.6 to the upside? And the trend would be considered to be up after that (about 98.00 on this chart.)
Hello Dave,
in my opinion, impulse and corrective waves can form in the direction of the trend and also counter-trend.
I recognize an impulse wave by comparing the "speed" or the price relative to the other waves. If the price covers a distance in a short time, i consider it an impulse wave. If a wave is steeper than the waves in its neighborhood then it could be an impulse wave.

Correction waves have a gradual slope compared impulse waves. The price "speed" is lower in a correction wave, relative to the waves in its neighbourhood.

In the attached picture, I've marked with green the waves that I consider to be Impulse waves. Marked with Red are corrective waves. Some people might see other waves but these are the ones I see. Within each wave, there can be other waves.

I see waves [AB], [CD] and [EF] are impulsive, while waves [BC], [DE] are corective.

If we take the TREND-TRAIN analogy, at the beginning of the trend where the TRAIN is accelerating and gaining speed, it is likely to see IMPULSE waves on the direction of the trend.
If we start to see IMPULSE waves against the trend, then this could be a sign that the TRAIN is approaching a station and its slowing down as the mechanic is pushing the brakes. Corrective waves can be seen as inertia of the train as it is slowing down.

Then when the TRAIN leaves the station, IMPULSE waves are in the new direction of the TRAIN (reverse or continuing the previous direction) and corrective waves are again the inertia of the train which tends to preserve its current state.

I hope my post helps.
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  • #11,846
  • Apr 30, 2010 9:02am Apr 30, 2010 9:02am
Quoting PistolDave
Strat, I want go over this again since I'm not quite sure about it.

I may be oversimplifying this somewhat but I'm trying to get a basic...
Speaking about the long term trend, on the chart here of USDJPY the move down from A to B would be considered an impulse wave

Yes but within that wave are also about 7 Impulse Waves.

and the move from B to C is a corrective wave at this point in time, correct?

Yes

So the long term trend is still down until there is break through the fib 78.6 to the upside? And the trend would be considered to be up after that (about 98.00 on this chart.)

Yes, on THIS the Worker chart.

Whoa!. You cannot go any further than this Dave because you are IGNORING the Boss and the Big Boss which tell you a completely different story.

As you admitted on your earlier post you are forgetting to consider the higher time frames. Seems to me you need to go back and re-read my posts on the Higher Order of Time Frames.

You are forgetting the Worker will follow the Boss which in turn, is following the Big Boss.

Never trade the Worker in isolation. Always trade the Worker in conjunction with the Boss and Big Boss.

Also, remember that the Markets are not as orderly as we would like (if they were, everyone would be $Gazillionaires!). Many times an Impulse Wave is followed by another Impulse Wave which is really part of a wave of a HIGHER order time frame. This is what drives the EW guys crazy.
15 YEARS OF PASR ON FOREX FACTORY!
  • #11,847
  • Apr 30, 2010 12:07pm Apr 30, 2010 12:07pm
Guys, I appreciate the explanations on the impulse and corrective waves, but it seems a lot more complicated than I thought at first so I think I'll hold off on trying to dig any deeper into it for the time being. It is more important for me to be sure to understand the basics first before getting into anything more advanced. I was just wanting to see if I had some idea of what it was about. I don't. That is fine for now.
  • #11,848
  • Apr 30, 2010 1:00pm Apr 30, 2010 1:00pm
Goldman Sachs, the world's biggest investment bank, reported profits of $3.5bn (£2.3bn) in the first three months of this year, almost double the amount it made in the same period in 2009.
It was recently criticised for helping Greece mask the full extent of its debt problems by using complicated currency swap trades.




First 3 months of 2010, let’s see, ah yes, the EURUSD, GBPUSD, GBPCHF sell off combined with USDCHF appreciation!
15 YEARS OF PASR ON FOREX FACTORY!
  • #11,849
  • Apr 30, 2010 3:29pm Apr 30, 2010 3:29pm
Strat,
You and the seniors are great for starting and continuing this thread. I have been trading on my demo without the indicators. I have used the four hour to kinda cheat especially with the choppy market errrr ranging/consolidation on the GBP pairs. I noticed all the time have traded in the past i was looking at price then looking at the indicators to place the trade and talked my self out of what the price was telling me causing a loss or a loss do to lack of confidence closing and taking the retrace as a loss....that adds up quick. Well I wouldn't say the light switch has completely flipped but it is on more than off. So I am taking that as a positive. Will try and submit an evaluation after I look at the charts this weekend.

Much thanks Steve.

PS Wont take up anymore thread space with narrative, just wanted to share.
  • #11,850
  • Apr 30, 2010 4:03pm Apr 30, 2010 4:03pm
EURJPY is still in an uptrend with prices were supported at 38.2 fib (retraced 61.80%) and went back to test 126ish which is 76.40 fib. Worker, Boss and Big Boss all are showing signs of bullishness. Depending on the price action I am expecting the price to go back up to resistance between 127-127.50 and then to 133ish which is 161.80 fib. Strong support at 121.40 area.

GBPJPY is also in uptrend and the prices have closed just at 143.65 which is 61.80 fib calculated from the low of 132.25. Same as EURJPY with the help of PA I will expect the price to go even higher with support at trendline 141.50 (50 fib) and resistance near 147ish (76.40) Boss & Big Boss are all in alignment with worker.
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  • #11,851
  • Apr 30, 2010 9:37pm Apr 30, 2010 9:37pm
Quoting Alexandra
No discouragement necessary. You are correct: You listen, You are humble. You will succeed. No mantra needed. Just keep learning to spot those monthly turns...no need to rush into them, just time them after they occur. When everyone else sees them, then exit.

Alexandra,

I've been thinking about this quoted post. I'm curious to learn if I'm on the right track. My interest in the U/J was sparked from your previous post about the mother ship possibly setting sail.

USD/JPY Big Boss has broken a long term trend line since June 06, followed by a bueb and a hammer, although the upper wick is a tad long.

The Boss is showing HH's and HL's with a LH in Feb. (curious your thoughts on this lower high) long term trend line has been broken with a bueb and hammer.

The worker has previous resistance @ 93.68, could become support, wait and see. Resistance again @ 94.60 and 96.30.

I'm concerned with my lower trend line placement on the worker. I would like to know what relevance, if any, they would have to you, particularly the latter, steeper line. Thank you,
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T
  • #11,852
  • Edited 10:31pm Apr 30, 2010 10:06pm | Edited 10:31pm
Quoting tmanbone
Alexandra,

I've been thinking about this quoted post. I'm curious to learn if I'm on the right track. My interest in the U/J was sparked from your previous post about the mother ship possibly setting sail.

USD/JPY Big Boss has broken a long term trend line since June 06, followed by a bueb and a hammer, although the upper wick is a tad long.

The Boss is showing HH's and HL's with a LH in Feb. (curious your thoughts on this lower high) long term trend line has been broken with a bueb and hammer.

The worker has previous resistance @ 93.68,...

The steeper the trendline, the less the relevance. They are important to watch, but I consider the static levels to be more important. I, too, am in the bullish camp on this one, as you will see from the thread. It should also be said, especially in this case, that the longer term trendlines are very important relative to the shorter, even if they are steep. In my experience, a steep break fortells a bumpy ride at first, but a solid opportunity if timing is correct. You are watching the proper market, especially if you missed AUDJPY. EURJPY may be next, but it's too political at the moment and fluctuations historically will wash many traders out.

The closes today were rather ugly across the board. They developed, however, rather late in the Friday trading day at the end of the month; they are, therefore, in my opinion, quite suspect. Strat will correctly say that the conflicting signals dictate waiting. I will be a bit bolder and feel confident ignoring them.

You are insightful to say that longer wicks do generally show resistance, and must be respected. They allow one an opportunity to place stops below confirmation points.

Dollar/Yen really needs to take out that neckline to really have any hope. Recovering 93.70 is reassuring, but the market is obviously stalled. I view it as a consolidative stall rather than a reversal at this point.

The other long wick of interest (no, not you Strat) is in EURUSD. In spite of another round of political bashing, the Greek currency has really not moved much over the last 4-5 weeks. That 1.32 level that I mentioned a while back has held again. Hence my rationale a few days ago for not selling it again. If anything, I am a buyer here. But, it is definitely a beyond the candle trade only for bold (uhhhh foolhardy) traders like myself.

The chart that bothers me most tonight is AUDUSD. But again, as above, I am ignoring the late move for now.
  • #11,853
  • May 1, 2010 12:05am May 1, 2010 12:05am
I'm sitting here glancing over the monthly, weekly, and daily charts of USD/JPY. That 94.50 area has been rejected again. I would not be surprised if we see that 93 area get tested again. If it doesn't hold, than 91.50 could be the next destination.

I am bearish this sorry sack of dung and the two main crosses (Gbp and Eur Yen) until proven otherwise. As long as there is fear, the yen will strengthen. The game changer in my opinion will be the rising of interest rates in the US and Helicopter Ben has made it clear that that is out of the question. It should be interesting to see how all of this plays out Alexandra.
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"Don't trade to trade . . . trade to win." - James16
  • #11,854
  • May 1, 2010 12:07am May 1, 2010 12:07am
I keep forgetting to change the backgrounds to white. Sorry about that.
"Don't trade to trade . . . trade to win." - James16
  • #11,855
  • May 1, 2010 2:09am May 1, 2010 2:09am
Boss Euro/Usd chart. Some observations. The downsloping trendline from 2008 is playing a major role of support. It seems like every time price touches it, the market thinks it's the bottom, as seen by the long tails.
This weeks candle found resistance on the underside of the 61.8 fib.

Any higher high on Daily or Weekly must break the current trendline. On the other side there is more room to move down. I have 1.2916 as the convergence point of three trendlines, which is just below the 76.4 fib.

My gut feel is we have one more low to come.

These 2 cents are starting to mount up.

I hate white charts and week-ends.

Roy
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Polishing my crystal ball
  • #11,856
  • Edited 7:42am May 1, 2010 7:13am | Edited 7:42am
Quoting Flem26
I'm sitting here glancing over the monthly, weekly, and daily charts of USD/JPY. That 94.50 area has been rejected again. I would not be surprised if we see that 93 area get tested again. If it doesn't hold, than 91.50 could be the next destination.

I am bearish this sorry sack of dung and the two main crosses (Gbp and Eur Yen) until proven otherwise. As long as there is fear, the yen will strengthen. The game changer in my opinion will be the rising of interest rates in the US and Helicopter Ben has made it clear that that is out of the question....
That makes a market....all the way from 86.

I'd have more faith in that opinion if it were based a bit more on the chart as well as the view on rates, i.e why is the monthly TL wrong? why are the weekly and monthly patterns inaccurate? The daily point is acceptable. There is reasonable debate about the implications of the daily chart, but I do not see it as coorrdinating with either the medium term or fundamental view. If that formation occured at 100, I might be ready to sell. Perhaps you will be correct and the daily will develop into more than a weekly pause, and the monthly will turn bearish.

At this point, 93 is a nice (though stingy) protective zone for my positioning and any readers following along. That's a good return for dung. Imagine what it would be if we were trading metals!
  • #11,857
  • May 1, 2010 9:32am May 1, 2010 9:32am
Here's another pair that seems pretty bearish to me. That weak doji on the monthly feels like profit taking to me and the April candle confirms that thought. On the weekly, it looks like the retrace to the 20 may be all she wrote. When it comes to the worker, price is in the 20/50 trap. If Friday's low goes, a test of Wednesday's low (1.5124) may be the destination.

The more I look at these pairs, I get the feeling that a catastrophic drop like we saw during the Summer Olympics is imminent. But you know what Strat says about gut feelings. At the end of the day, it's all about the charts. They rule. Watching and waiting and trying not to get bored. Trade safe.
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"Don't trade to trade . . . trade to win." - James16
  • #11,858
  • May 1, 2010 2:45pm May 1, 2010 2:45pm
Closed at .7266 just below the resistance near .7275 area. Expected to find support near trandline at .7200. Blow .7200 willbe exposed to test .6960 where there is a confluence of support and 61.80 fib.
BOSS and BIG BOSS are in uptrend as well.
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  • #11,859
  • May 2, 2010 4:24am May 2, 2010 4:24am
Not sure this fits with Strats teachings but I'm watching this ATM.

Boss and Big Boss are at the 50 fib - almost.

Nice SS at triple top on worker.

Bit early maybe but worth watching IMHO - As Strat would say tho be patient.

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  • #11,860
  • May 2, 2010 9:12am May 2, 2010 9:12am
Hello everyone,
This week was rather dull (for me at least) as although there was some lovely movement none of the on trend pairs I was watching produced entries so we’ll see what this week brings.

The only candidates that appear to be in agreement with their larger time frames (excluding doji's) seem to be the NZD crosses.

I have chosen the NZD/USD for my weekly analysis as I imagine its actions will dictate the moves, if any, on the crosses.

Monthly: April’s bar closed quite bullish within the corrective range of the last 6 months proving .7000 and .7100 as support again. It is not too big of a stretch to imagine that an A B C correction has been completed and that it will now try to test the upper range support where it found a bit of supply evidenced by a small upper shadow.

Weekly: Has closed above the smaller weekly supply line and triangle but has to now bash through the larger monthly supply DSRI followed by daily .7400 and strong resistance at.7500.

Daily: Friday’s candle closed as a shooting star at the top of the 2009 Oct-Dec daily range. Selling this shooting star would have you battling the possibility of supply turned demand DSRI and a pause resistance at the .7220 area. Judging by the S and R scattered around it looks like we may see more choppy movement over the next week. If there will be opportunities in the NZD crosses one may have to take with trend ATM trades.

Please let me know if I’ve missed anything as I’d like to improve my skills. Cheers.

John
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Finally out of the shadows.
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