Silent Service Method

I was going to post a chart on this, but you beat me to it! This could be a set-it and forget-it trade...

I actually got in on the weekly inner bar a week or so ago at 81.26. Originally I was going to "scalp" the weekly, but now I am riding the wave, hiding under 4 hour clusters. I think I will let the market take me out now; whenever that happens.

I love the weekly bars, they are a real strong indicator most of the time.

Wonderful and so funny using simple means.

This is great, "the Ben Bernank buy the treasury bonds from the Goldman Sachs?...."

rofl

Exactly, and since you are allowing the 4 hour clusters to point the way - you won't do too much damage in case you are wrong.

Kulu and I were talking on the phone last night, and he and I have decided that the #1 killer of accounts - trying to pick tops and bottoms. While this is essentially what is being done here - at least you are doing it the smart way - keeping your risk under control. Far too few people do that anymore it seems.

Chris

Here is the trade I took. It's a small position. I took screen shot before I set stop, it's just under the 83 handle....

Thanks CW. I am also in the EUR/GBP trade you have been discussing, another great bar provided on a longer term chart, i.e. the pin bar. Good stuff.

Hi mate,
I think you have highlighted that it is a trade should be watched carefully by mentioning "small position" but I wanted to share my thoughts. Hope my thought process is not completely wrong :-).

I found it risky ( especially as a newbie) due to following reasons,
1. Against the trend
2. Dotted line which has 'buy' label was support now turned resistance ( BEOB on around 4Oct).
3. Just to be on safe side, I will consider buy if daily candle 'closes' above that buy level.

Am I on right track? Not questioning your trade, I am sure with your experience you will come out of this with flying colors. Just for newbie like me, I am learning to manage risk.

Appreciate your thoughts.

cheers

Great way to start the morning!

No, I agree with you completely, and might have been stopped out by now. (I have been out buying a new car, and haven't even logged on to the computer until now.)

The biggest thing with this trade was the very small size. Do I disagree with your analysis? Hell no. I actually applaud the way you are standing by what you have learned.

The whole idea behind the trade was this: If it were to work, it would be something I would add to when it was way in my favor, and I would try to build a new long-term position.

If not, I get stopped out and take a small hit. Trust me, it's a small loss - the position is 1/3 or so what I would normally trade....

No worries.....

I am looking for the ultra-long term on that one. I have no planes on getting out of it anytime soon, and will update that trade from time to time here.

Chris

These same cats put something out about the new iPhone not too long ago. Pretty good stuff.

Chris, I've noticed that along the way of your thread, you've started talking more and more about fundamentals. I must say that its a development I like, and there have been many good discussion here. I personally haven't participated in many of these discussions mainly due to a lack of time.

I was wondering, do you have any opinion on the Yen based on fundamentals? From what I understand (and note that I don't watch the news nor do I read the paper), there is a battle going on now between the "market" and the Bank of Japan.

From my previous post, it may be clear that I'm bearish on the dollar. Uncertainty rises as US prices seem irresponsive to inflation targetting by the Fed. Therefore I wouldn't be surprised if a continued flight for "real" safety will drive the Yen up further. Again, the BoJ doesn't like this, but they are not in full control either. That's why I predict very little upside potential on pairs like USDJPY and EURJPY in the next quarter.

I'm sorry if you have already answered this question as the bulls have ruled the JPY for a while now, and I've only looked back for posts so far.

sounds good!

Just looked at the USD/JPY finally......this is what I saw:

The biggest problem with fundamentals in this pair is simply this: As markets go up, the JPY generally will weaken. Also, the USD will as well - but this pair has it's own psychotic personality.

Truthfully, the Japanese economy has very long-term structural issues. I think that this pair runs on pure fear and speculation most of the time.

Audio piece up at the blog

Looks like the Irish finally asked for the handout.

This can make the EUR/USD strong for a minute.....there will be a knee jerk reaction - you can bet on that. The truth is - is it a real move?????? We don't know, but only time can tell.

Notice yet again.....there was a signal beforehand. The weekly pinbar is no accident. Damn, I wish I knew the right people!

Adding my 2c on the fundamentals topic.

Regardless of whether one is a believer that fundamentals matter or that price action already has the event risk partially or completely priced in the fact remains that:

What are fundamentals? On the most basic level it is information, made widely available in the public domain. Because there are so many competing agendas in the public domain the chances of receiving fundamental news [be it company specific, country specific, financial or geopolitical] without any bias is extremely low - unless of course it's insider info.

For this reason it is VERY important to only use fundamental news as a complimentary tool in the formulation of analysis.

It is also important to understand the distinction between holding a bias in one direction or another due to fundamental analysis GENERALLY or holding a bias in one direction or another due to fundamental analysis SPECIFICALLY over a set timeframe of reference.

The former is purely speculation the latter is at least trying to formulate a quantifiable set of circumstances that are likely to achieve an end result and are measureable as to whether the bias was true or false.

e.g - I think the USD will devalue because "the Bernank keeps buying the treasury bonds from the Goldman Sachs" (speculation) OR I believe that the USD will devalue widely against its trade weighted basket of currencies and I measure this bias in readings of domestic price inflation, employment numbers, housing sales and retail sales and I expect that this will occur over the coming 3-6 months.

The first bias is due to hearing a cartoon rat thing with a fat head postulate about a topic. The latter is based on an expectation that is then quantified and followed up with measurement. The second method requires the trader to maintain vigilance and continually watch the market environment so as to learn and adjust if things change - e.g Fed mandate to print cash is changed by congress and rates get hiked etc (not likely at the moment but certainly more likely than a broad based USD bearish stance being self fulfilling over an indefinite time period which would lead the USD to = 0).

I think everyone has at some point decided that from a fundamental perspective X occuring is an absolute no brainer giving justification to holding losing trades longer because "I know what is going to happen longer term".

This just leads to account blow ups.

Some people will understand where I am coming from here and others will read this as a vague and circular arguement.

To those in the latter group ignore the above however those who get me realise that I am trying to say be careful with the weighting that you give fundamentals as they are:

A - always presented with a bias to benefit certain parties - e.g "the goldman sachs"

B - too heavier reliance on fundamentals can lead to a belief that what one expects to happen, will actually happen and therefore an inherent under pricing of the risk being taken in trades.

Perfect examples of this are CNBC and that oxygen bandit Cramer.

I think that fundamentals can be beneficial however only when used in conjunction with a solid technical analysis on a longer time frame - enter the Silent Service method

Sure Warren Buffet may have made a literal fortune off fundamental analysis however the average FX investor does not have actual access to the "company account" of the entire FX market. These days it is used as much as a geopolitical financial weapon on a global scale as it is for conducting international commerce. I bet Warren Buffet doesn't speculate in FX for this very reason....

4x,

To summarise, if I may, I think what you are saying is 'if it's in the news, its in the price' lol