GU, GJ and EU Analysis Thread

Still holding this opinion: http://www.forexfactory.com/showpost...1&postcount=42

...and also a cheeky short to the level that I expect for a reversal.

Discussed on a few threads my thoughts, and so how I do not think that any move will be plain sailing. That said, one never knows.

Sorry to all, and blame Smikester for the following flooding of the thread. I just got carried away this weekend after Smikester’s question earlier in the week on Stocky’s thread, and thought I would reproduce elsewhere, as well. The following submissions are based on the expectation that Cable will break north of the 1.64 zone, and are preparatory observations for mid to long term entries.

Post broken into two owing to attachment constraints of FF.

Three charts with slightly different projections.

Nice chart work 45C

Stocky

Gold starting to shoot, Oil on a drop, Japan in the mire, and then this:

http://www.telegraph.co.uk/finance/e...-negative.html

Are today's drops a preparation to buy at discount for those crosses matched against the greenback? Hey, the FED want a cheap dollar - reduces debt burden to creditors you see (China etcetera who are themselves playing their games and trying to hide inflation); and many a commentator has spoken of the impossibility of the US being able to finance their current debt even if the Dollar holds current value, never mind increasing; the move away from meaningless paper presentations from the G20; movement away from dealing in Dollar between the BRICS; rumour that the Federal Open Market Committee will not renew QE after the second quarter, and so on, and so on, and so on...

http://www.washingtonpost.com/busine...O8D_story.html

And still playing the same charts as for Cable and Geppy as submitted previously.

Hello everyone,

I thought I would join in on this lovely thread after a discussion with a friend who goes by the handle of sinner on this forum.

We are two buddies from way back, he was my intro and guide into the markets a few years later.

We spoke recently and I was discussing forexfactory with him, as I've tried to post here previously in the "Cable Update GBPUSD" thread looking for online trading discussion but did not like the overall caliber of posters. He suggested I look into this thread and offered to "vouch" for me so I could make this post. I am personally not so sure he will actually retire, he likes the game of trading, but he is adamant it is time to cash the chips in and live on a tropical island. I reckon as soon as a big fat market swing appears he won't be able to stay away

So I've spent a little bit of the Easter holidays looking over the last bunch of pages to see and very impressed with the effort and variety. If it's ok, I will give a little about myself:

I'm a full time intraday trader on the forex majors as well as running some models on the carry trade currencies which uses fundamental data as input. Sometimes if there is a bit of extra profits I will speculate in the options markets against longer term macro trends. I run a fund but it isn't large, just the business capital of me and a few guys who run the desk, we cover the whole 24 hour gamut between us, my portion is Hong Kong trading and London Open. We aren't after a lot so leverage is low, just looking to maintain a nice annual salary per head.

There are two methods I use mainly,

1. I buy and sell breakouts on the daily using the Bill Williams Chaos model. I am very big on the Chaos Theory, Mandelbrot and Hurst. In fact my forum handle comes from a term coined by Mandelbrot. The win rate on these trades isn't so high, but it ensures I never ever miss a trend and the trend is what pays me in the end. Between the majors there is plenty to do each day, managing pending orders, adjusting stoploss and monitoring intraday price action to gain an understanding of what is going on inside each daily bar. The example below highlights one of my more recent trades in cable (grey rectangle is the breakout price).

If you are curious about how the systems work there is plenty of stuff on the internet and you can also read the books written by Bill Williams. I personally love the Market Facilitation Index but I do not think it is applicable in the forex market with tick volume.
2. I trade price action continuation signals on smaller timeframes, usually 15 minute bars during Hong Kong and 5 minute bars after Frankfurt has fired up and liquidity abounds. These most usually consist of inside bars/outside bars but sometimes I will take a key reversal setup against the intraday trend if it lines up with support of the daily/weekly trend.
The purpose of this method is bracketing, my entry might be 0.5% or even 0.1% of the total account available, and half the trade is taken off when a 1:1 risk reward ratio is achieve to largely derisk the trade (omitting cost of carry, commissions etc). Most of these trades stop out for a net breakeven as the market jogs up and down, but a small amount are never stopped out and these form the basis of my "book", i.e. I am always holding positions both long and short across many markets, some are cable shorts from 2.0 or longs on the Aussie from 0.7, others are trades just established in the last month or even hour.
My job as the trader in this case is to simply be looking to always capitalise on low risk setups to build the book. In this way a small 10 pip risk on an inside bar as London is opening can one day equate to 1000s of pips in gain.

For example, tonight I'm interested in the GBPUSD and have managed to obtain 3 free trades from around the time Frankfurt opened. These will never be exited unless they are stopped out (and the result of a stopout is only net breakeven on the whole trade):



The grey rectangles highlight the inside bars in question. All three positions have been derisked so the notional leverage on the book is 0, my work for the evening largely done. I don't care if they get stopped out while I sleep tonight, nor do I have to close a position to lock in profits. I keep an eye on the interbank and retail sentiment, and if the book looks to be too far out of whack with where I want to be (hint, close to interbank sentiment as possible) then I may adjust in the form of taking profitable positions off the table but generally this is not necessary.

We have accounts with Dukascopy and FxPro. Generally, retail spreads at MT4 brokers like FxPro are shit compared to what is on offer with brokers like Dukascopy, so most of our intraday turnover happens where trading costs are cheapest but we are familiar with MT4 and its MQL coding platform and also enjoy the ability to access market maker prices when the interbank dealers have widened their spreads so have retained access to FxPro for these reasons and conduct mostly the daily trading here where spread costs are less likely to impact on our edge.

Anyway that is enough from me, hope to see some posts from the members here who seem to be a good mix of styles and desired outcomes. Glad to have found somewhere which seems to be good for trading discussion!

Hi NoahEffect,

Glad to see your contribution. It's a little quiet in here, with Easter and holidays probably accounting for this.

Glad to see your analysis, and hope to see the regulars back in the not-too-distant future.

Hi Noah. Welcome to the thread. Your whole post is fascinating but I picked out the best bit for me. These must be trailed on a weekly ma or something?

I'm still stinging from sinner's absence. If you are in touch ask him if he would call in once in a while. I once misunderstood a post of his and called him cowboy. It's possibly the worst post I ever made, I later found out. That is one of the problems of posting here on FF as you have found out. People get over excited and post a load of drivel and often good traders can be sidelined or downright discouraged.

Anyway, I for one am looking forward to your contributions. You can spend time putting together charts and a post and hardly get an acknowledgement - it doesn't mean it's not appreciated. More a function of not wanting to be sycophantic (nws) divided by possibly not fully understanding the points made (nfu) where smikester for one (s) and the time available (t):

s*t =nws/nfu

Hi Noah,

Welcome to the thread mate.

Glad to have you here and I look forward to your posts. As you can probably tell its more quality posts than quantity here but there are no restrictions on maximum or minimum number of posts you can submit. Feel free to post on any pairs you like and even stocks for that matter.

Send my regards to Sinner.

Stocky

Credit must go to PhAnTi for pointing this out, but anyone notice the possible shoulder (I'm not good with patterns, so please don't attack me too harshly) now forming off of the 100 FE mark?

Asked what he thought of the EEC proposed bail out of the irish economy a man in the street was heard to say "Ahhhh, go and shite". I'm not surprised and an excerpt from this programme: "Many believe Ireland was bounced into the bailout by Europe - and in particular the European Central Bank" The link is here and it's a must, in my opinion: http://www.bbc.co.uk/programmes/b010mryv

What kind of pattern, Condor?

...well, if I was to assign any pattern, it would be reverse head and shoulders. However, I am interested in the kiss of the current FE 100, as happened in 2008, and so wonder if we will see a reversal around here.

May pop over to TLC's thread and take a look at what those boys are seeing.

Hi 45Condor, I do not agree that the chart you posted is of the pattern you posted.

Bulkowski lays it out proper as always:

http://thepatternsite.com/chsb.html

Just out of curiousity, why must they be trailed? They are, but not using any moving average or similar "derivative of price" equations. We use hard S/R levels as our trailing mechanism and these are obtained from pure price action charts (i.e. no time component) to ensure the correct definition of support and resistance zones.

Yeah the response to my previous postings was pretty discouraging so after I wrapped up my trading for 2010 I never bothered to come back until now.

Couldn't help myself in reference to your comments, and just had to do a search for the word "cowboy" with your name tagged and found the posts in question. Very amusing! If I recall correctly, around that time sinner was always ranting, saying the EURJPY couldn't range forever, had to break out sometime and he was gonna make the money he lost in the chop all back on one or two trades. Don't remember being with him when he placed the trade in question, but it looks like he was trying to scale in on some Elliott Wave type move. He was very unhappy at the time with the massive ongoing range in EURJPY and his inability to leg into a big position at the range boundaries.

Stocky Monk, looking back on the thread, you are my kind of trader! Love your analysis and charts dude! Glad to be here.

I will throw one up, in continuation of my last post regarding cable longs on the daily using the Chaos Model, last night was a clear signal from the market personally, support at the 1.64 region held strongly and formed a daily candle with a higher low, as well as forming a swing low above the support region.



Today will be quiet for me in London, I will be largely looking to take some decent profits on the above position, and lock the rest in by adjusting stoploss up to just below the higher low zone. Now that prices across the board have broken out, I doubt I will be chasing any intraday trades. I might even take Friday off!

Hi NoahEffect,

Yes, I am probably trying to look for things that are not there, and yes, Bulkowski's site is invaluable for explanation - should have gone there earlier.

Conducted the search as you did - tut tut, Smikester, you naughty trader you.

Condor you were right to ask me not to be harsh... Better not to say what I think. A point of interest, though - a good head and shoulders formation usually appears as a pin bar on a higher time frame. Blowing my own trumpet here but how was this for a cowboy trade call?: http://www.forexfactory.com/showpost...postcount=4763

Can you show some examples? I am having trouble visualising it.

To me a head and shoulders is just another way to say "trying to catch the breakout of a proposed first lower high or higher low. A-B-C up, A-B-C down.

I just drew this example in paint



Don't mean to dirty your stirrups cowboy but that is a nice safe dip buy after a higher daily close in an established uptrend selling the dollar has been like shooting fish in a puddle with an uzi. That trade call is more like sending the Terminator back to the O.K. Corral!

I am just fooling around though.

Now we are all about cowboy calls, and Stocky invited me to post other charts so here is a good one brought to my attention to by a market old timer.

This is the May ICE Cocoa contract. I've marked it up a little bit to give you an idea. But the basic premise is: cocoa has bottomed, it was a good dip to buy on the break of the small narrow range bar of two days ago high. That was the cowboy trade, buying a few tonnes of cocoa on margin with a tiny stop targetting 4000+...hehehe.

I drew in some resistance lines so you guys know when to start stocking up on chocolate.

Hi Noah... So many questions to ask you, I thought I'd just acknowledge your post/s. Now you also set me a task to post some charts. Will do. Busy just now...

Here is an example of the head and shoulders formation on H4 forming a pin bar on the weekly. I should point out this is just an observation, not scientific proof or study: