(binned per thread starter’s request) GEfx Trading Journal

No charts this morning. Shorted the E/J after the E/$ failed at 1.4900 again, the short trade indications on the $/J, and on the drop in equities in Europe and Dow futures. Stuck with it to pick up 100 pips. Now watching the E/$ for a possible trade once Trichet starts speaking. Also, took a quick short trade on the GBP/$ on a fib strike and picked up 20 pips there, too.

Waited for the E/$ to give at least a small retracement, which it did about 30 minutes ago on the hit of the .50 fib at 1.4686. I am short at 1.4683 with a target at the -.618 fib at 1.4614, now protecting 20 pips at 1.4663. Will move my stop to 1.4643 now that 1.4623 was hit. Back to focusing on trading.

Square on the E/$ trade at 1.4616 as the 1.4614 price level was hit about three minutes ago.

Here are the charts for the E/J and the E/$ trades:

Short-term trend on the E/$ is down, but as the following chart shows, it has squared up the candles nicely after the run south during NY today, with only three candles to go. Maybe we will see the completion of the retrace during Tokyo.

Two trades on the GBP/$ this morning, each for 42 pips. Both trades were based on PA striking a .50 fib. Here is the chart:



Am now in a E/$ trade going north, based on a 123 trade. Protecting 3 pips and am currently up 21 pips. Will take 30 if I get them!
Edit: square with 3 pips as the E/$ pushes south.

I stuck with the euro 123 after getting only 3 pips. Re-entered now 4 times, with one trade still going. Here is the chart:



Edit: Moved the stop on the last trendwall trade to 5 pips and will see if it bounces, but getting squeezed by the developing top at 4210-12. Moved my limit to 25 pips because if it breaks the top it may move quite a bit higher.

Edit2: Just got the 25 pips and am done for the day.

Last 3 trades on the Euro after taking a long run. All trendwall trades, trades 1 and 2 going to 30 pip limit, the last trade taking out the 7 pips stop. Now that the channel's lower trend line is breached, the TA of PA is no longer valid, and must be discarded until a new TA model can be developed (in my approach using channels, trend lines, fibs, etc.). Here is the final chart, which is a 10M chart instead of the 5M above:

Not going to post any charts from today's trades, but I traded the E/$ and the GBP/$ south during the NY session. This was a very good trading day.

The dollar strength/euro weakness continues. I have monitored several other FF threads today and there seems to be some confusion about the PA today (and this week). Dollar strength was in the market today after NY fundamentals. Higher inflation was reported in the CPI and Michigan consumer numbers trended up (although they are still low).

The GDP data from Europe was pretty interesting. Euro zone came in at something like +.8%; Germany was up 1.5%; France was up 1%. I think Italy was also a positive number. However, when you start to think about that, Germany and France are about 1/2 of the EZ GDP, so if they are together up an average of 1.25%, then the rest of Europe is growing at about .2%. So, the PIGS are having a growth problem and a debt problem, which should make for an interesting few months of trading. Now compare EZ growth rate of .8% with that of 1.8% GDP in the US.

Finally, I think we are seeing the market begin to reflect on the end of QE2. As the US moves in the next six weeks from QE2 to quantitative neutrality, the pressure on the dollar will begin to subside, and the market should begin to factor in the next step (later this year of early next year) of quantitative tightening. However, there is real concern that the end of QE2 will lead to slower US growth, so those predictions of 3% growth in the US in the second half of the year may be more like 2% (which is still better than the EZ at .8%).

In summary, if you are looking for a reason for the recent dollar strength, here it is:
1. PIGS in Europe will eventually lead to a Euro crisis, it's just a matter of when; 2. Higher US growth compared to EZ; 3. the upcoming end to QE2. One final word about interest rate differential: the higher rates in EZ are trumped by GDP differential and the QE2 stuff.

Hi GEfx. Very interesting inside! Thank you.

Hi Fana, Good to hear from you. How is your trading? Hope you are doing well. I decided to focus more of my attention on my journal to help record some of my trading progress. Its kind of fun and helps me stay focused on the things that I need to be focused on. Take care.

Hi GEfx. Thanks for asking. I think i made a progress. A lot of work ahead of course, but really positive results. Yeah! Focused, disciplined... working on my plan. Even in the weekends i study e-books about trading and psychology...

A view of the euro as we start the week:

Very good trading today on the E/$. I had total of 4 trades today that I will show in the next 6 charts. First trade was on the break of the channel wall in the direction of the 1H chart trend, with my limit at 1.5X my stop:

Second trade was on the strike of the channel wall and entry was nearly the same as trade 1. Moved stop on trade 1 to approx. equal trade 2. Was risking about 25 pips for about 90 pips.

Trade 1 and 2 reached their limits.Captured nice profits on these two.

Trade 3 was on the retracement to the 50 fib with a stop at above the .786 fib.

Trade 4 was on the price rejection of the previous resistance level with a very small stop.

Was watching the equity markets fall during trade 3 and 4 , which gave me more confidence in both trades, which reached their limits.

Quick post of my euro trades today. Trade one is out at the 55 pip limit. Trade 2 is still on with stop now at 5 pips below entry. More on initial analysis later but here is the chart as reference.


Edit: I moved my limit to 4215 and am now out.

Cleaned up the chart a bit and am now in trade 3. Will move my stop to zero when I get this posted:



Edit: flat

Nice trade and analysis.

Trade 3 ended with zero pips. Trade 4 is now entered and will move channel and stop as soon as I am done with this post.

New chart for trade 4. stop is now only 10 pips, probably better if it were 15.

This 4243/44 level seems to be important. PA has tried to move south several times but continues to return to my entry. A break south is good, and a break north is not, so my stop at 4253 stays put for now (small risk). If it breaks north, I would expect a pretty strong pulse up before stopping.

Edit: square at 4253 with a 10 pip loss. I am up nicely for the morning and it's time for a fresh cup of coffee before the NY trading starts for me.