EurAnalysis

Folks, I was surprised to learn that many here are still learning about the unpredictable ways of Forex. Instead of telling you about the dangers of overleverage or heavy emotional trading that some seem to show in this thread, (please do not take offense. I have been there myself and I know the feeling of losing) I want to share this weekly graph to give context to this week.

During the last 10 years, there have been ONLY 18 times that PA changed direction that would take somebody into large losses if caught in the wrong direction. Basically, it is a change every 6 months. Two questions come to my mind. (1) is this week N=19, (2) has anything changed in the world that justify this move? I do not know about number 1 but I cannot see any big change but a fool given speeches as well as NF employment No that say that US is still doing pretty sour!?

I believe that those that lost a lot this week, and are emotional about it, might be playing with too high leverage, need to learn more about MM, or do not have a clear MO. More experience, more practice, etc. If a trader cannot take 500 pips drawdown and keep smiling....well well well...overleverage or greed is probably present together with and eventual margin call or short trading career.

Again. No offense to anyone. I love this thread. Cheers and bring the wine

I will post some reports on Saturday and share some trading thoughts.

Undercapitalization.

well said iusan i couldnt agree more.i havent traded for several days due to actually working the olympics but over the last few weeks i have mentored my trading way to a few people and they have all made a bundle this week and they are oh so happy, Its just the same as the turtles sticking to the plan they do not listen to hype they just trade simple, watch the chart plot bthe triggers and rake the money in EASY, take care all

http://www.jsmineset.com/wp-content/...001_thumb1.jpg

I'm with you buddy 3 losses and 2 entries missed by 1 pip or so (for 150 pips, and 250 pips from this chart I posted earlier in the week.

Quite frustrating indeed.



and after...

http://www.financialsense.com/contri...ressure-points

5 Important Snippets: Read the rest if you wish to learn the real story not the Hype and BS Spin.

Snippet (1)

Some extremely powerful differentials in power are setting themselves up, in a manner never seen before in modern history. Those who dismiss the uniqueness of the situation are those who continually are surprised by events as they unfold. The pressure features the managers of the system, complete with corruption and fraud with official coverups in a never-ending sequence of crime scenes, pitted against the forces of justice and fair markets. Not a single fair market exists in USDollar terms. In pure Orwellian style, every single market has a US-based or London-based financial engineer at a control panel doing duty in price intervention. The Western defenders of the syndicate do not wish for the price structure to reflect the reality of physical shortage or the bounty of paper-based surplus, for the currencies to reflect true toxic value, and for the discovery price systems to reflect the raids of private accounts. The system is broken, and the pressure is building.

Snippet (2)

Euro Central Bank vs Margin Calls

The European Central Bank is in a pickle. The opened their windows to accept all manner of toxic paper as collateral for newer fresher toxic paper. Market forces reduce the value of the sovereign bonds. The stream of debt downgrades is making life difficult within their chambers. The pressure rises for acquiring cash funds, as the resistance grows toward fair pricing of garbage paper bearing ink and signatures adorned in fancy calligraphy. The debt downgrades force many borrowers at the EuroCB window into a corner. They must deal with margin calls in the same way speculators do at the COMEX on futures positions. Thus the natural tendency toward lower potential energy. So conclude the ECB is nothing more than a purveyor of leveraged toilet paper with ornate trim, whose officers have dropped their pants, yet few notice. What holds constant is the utterly ghastly odor emanating from the window, where greater dispersion is underway of fecal effluence. It will end ugly, as the ECB will simply dispense paper currency to hold the system upright and to avoid collapse. They long ago became a Weimar apprentice. The conflict and pressure will grow until the pressure spills over.

Snippet (3)

Troika Bankers vs PIIGS People

The battle between bankers and people has been clear for over two years. The Greek Model is stark and clear. The bankers wish to redeem their toxic sovereign bonds by whatever means. The European Commission of babblers from Brussels has not shown any restraint, despite their forum being discredited as an empty chamber of voices. The finance ministers continue to talk a good game but with nothing under their belts to impress eager hands from the private sector in search of satisfaction, even a cheap thrill from a quick redemption. The Euro Central Bank has conspired to accumulate a mountain of worthless bonds in its basement, sure to disappoint their masters in the castles. Their balance sheets are running negative in the $trillions. On the other side is the people, the depositors at banks, the taxpayers to fund the government offices, even if their disheveled outposts resemble a tsunami on the day after in Athens. The stock investors and bond investors have been ravaged by the Troika who pay homage to the bankers with one vacant bailout after another. My forecast 12 to 18 months ago was that the bailouts would continue until the streets witnessed protest and violence. That has come. The pressures build for public release of anger. The dissipation is of people to the streets, out of their confined offices which no longer seem to harbor the function of added value in production terms. Random violence has grown common. The conflict and pressure will grow until the pressure spills over.
LIBOR Big Banks vs Lilliputian Victims

The LIBOR scandal is best described as an assault on the center of Western banking, where the discovery process as part of justice will pry open every conceivable filing cabinet, computer hard drive, email box, and contract in a drawer. Permission is granted to search. The process will relieve the pressures upon distorted markets and inherent collusion. The brush fires will extend from the basic LIBOR forest to the narco money laundering fields to the Allocated Gold account basements to the raided GLD fund vaults. The extended brush fires will be enabled by the dispersion forces known to the crowbar. As the light is directed to the scummy basements and putrid laundry fields, the potential exists for serious systemic change as the pillars of syndicate controls are slowly removed. That process will come by means of erosion, faltering, and dismantlement.

The other side is chockfull of victims, the lists becoming gradually clear. Any recipient of a swap contract is a loser. Any underwriter to an adjustable rate mortgage is a loser. Any financial engineer who re-geared complex machinery via swaps is a loser. They will all line up in lawsuits, sure to capture attention. The gaggle of class action cases will be just as important as the collection of high profile cases.

The armada of smaller victims will form like Lilliputians to tie down the oversized Too Big To Fail banks. Oh, how the Jackass despises that moniker! It means too big to control, too big to enforce the law, too big to succeed, standing as the billboard of failure on the flipside to the Fascist Business Model. Pressure will be relieved and lower potential energy will be realized as the big banks suffer massive lawsuit awards as pent-up grievances are addressed. Their control of the system cannot continue under such circumstances. The greater de-centralization of bank power will be the manifestation of much higher randomness.

Systems might seek some concentration of power, but not like what the West has formed. The banks will eventually serve a noble but boring cause, of acting like utilities in bill payments, cash dispersal, and currency conversion. They will also manage credit dispensation. The age of the investment banker will revert to regional offices. The conflict and pressure will grow until the pressure spills over.

Snippet (4)

USFed QE3 vs Financial Market Beggers

Since 2008, a queer pathetic phenomenon has shown itself. The broken financial markets and their captains of futility seek constant and regular aid (if not sustenance) from the official offices. The call for more Quantitative Easing with its attendant destructive bond purchases in direct monetization initiative are heard more frequently. No calls for the system to remedy itself through proper pricing and seeking equlibrium due to supply versus demand, during a vast liquidation process. The desperation is evident and thick. Whenever the S&P500 stock index falters too much, the calls are heard louder for more intervention. Heaven forbid the move to proper pricing of assets, or even of the USDollar arbiter. The fund managers, the big investors, even the Wall Street office managers appear in regular pop-up interviews calling for urgent USFed bond monetization, to feed the badly needed liquidity infusions. Two or three years ago the conversation centered upon the many alphabet soup facilities devised by the USFed to accommodate the liquidity needs. Nowadays the facilities have folded like tributaries into the primary channel of QE. Little does the investment community realize that QE was followed by QE2, and Operation Twist was actually QE3, which morphed into QE4, while the entire nest of central bankers engaged in Global QE. In fact, the pathetic fact of financial life is that QE to Infinity is the working theme. That or collapse.

In my view, QE to Infinity assures the destruction. It is an implicit admission of central bank failure brought about by debt saturation. The group of major central bankers has failed in full view and in front of governmental panels. Chairman Bernanke is a bagholder. The modern nobility of economists is unspeakably incompetent, having lost their chapters on capital formation, having replaced them with chapters on controls and hidden intervention tools, with an appendix of banking system diagrams that appears like a perpetual motion machine (or vast money laundering system). The pressures are building for the hidden tools to work their way to the surface, much like pus does from a giant boil on the skin. The toxic condition of the banking system has proved to be prevalent acne on the body economic. The system strives toward more equilibrium in market price structures. In my view the stock market and bond market and currency market for the United States should be priced 50% lower across the board. Panic is nigh it seems. The lower potential energy from a lower priced asset structure is sought. The conflict and pressure will grow until the pressure spills over.

Snippet (5)

Many quiet leaders are apalled at the course of events, who sit in offices that never receive much spotlight, but which harbor much power. The forces toward greater randomness go hand in hand with the movement toward free spirits. The forces toward reduced potential energy go hand in hand with the direction toward de-centralization of power. The entire broken system revolves around a toxic USDollar and its fierce defense by dark powers. Their failure is evident in the 0% official interest rate managed by force by the USFed central bank, together with the bust of sovereign European bonds. The USTreasury Bond ultra-low rates serve as a mockery to the asset pricing system. The strain with wars and press support add pressures from deep within the system. The conflict and pressure will grow until the pressure spills over. When it does, a new global system will be in effect, based upon Gold. The shiny inert yellow metal is the fair arbiter of trade, the true store of value, the timeless object of money. Gold has often showed its value during times of upheaval and radical systemic change. These are dangerous times, especially for those who refuse to heed the warnings. Gold is the refuge and core of stability, as the thermodynamic forces show themselves.

Thank you for your generosity. Did u get my PM yesterday ? Have a nice weekend and be happy .

Legend says there were two inscriptions written in gold letters on the doors of the ancient Delphic oracle which taught mortals how to empower themselves. One read 'Know thyself', the other one read 'Nothing in excess'. Everyone remembers the first, but the second is easy to forget. That said, thanks for the post which reminded of nothing in excess, leverage included.

thank you all for your kind comments

many of us on here are trading very small 3 digit and less accounts. Even using sometimes as little as 1 Micro-lot when working in certain time frames is over leveraging.

Unfortunately there really is not many ways around being under-capitalized.

Again i can only speak for myself and others I have known. It truly tests ones discipline having to build up a very small account $1-3 per day when.

Im not saying it cannot be done nor am I discouraging traders from attempting it. But seemingly traders who do not start with at least a 5 digit account have a much higher failure rate since oftentimes we are forced into scalping very small time frames from the onset to mitigate risk.

HI Wulf ,

sorry for any loses that might been there !!! you will never believe that how many time my account wipped out or burned but the best thing that everytime i was learning a new thing and believe me you cant find it in any book ... so far im happy with my self and working it out but there are some habits are part of everyone's personallity those habits or behaviours what we really need to work on them and control them as much as we can , i been following yor posts and others your a dam good trader and loses are always there as there is trading

anyway i just felt to share !!! and please accept the attached book maybe you find anything useful in them

cheers and tomorrow is a news day !!!

good luck !!!

I know exactly what you mean. I trade manually a small account, and I'll keep at it until I earn the right to trade bigger.

It is certainly a journey in this endeavor. make no mistake!

Thank you for the PDF. i respect Kathy Lien and Boris very much. They are couple of very intelligent folks in the currency markets!

Powerful words for sure my friend

I will remember them. I was unaware of the "nothing in excess" legend.

Hobbes- "nosce teipsum"...

Seems a fitting sig to have in your avatar. hope to see you around here my friend.

welcome Mate !!! i have more if you like !!

CurrencyMan that was a great read by Jim Willie, he isn't afraid to tell it how it is. Thanks for posting it.

Couldn't help myself, had to post a weekly chart as the pair seems to want to test much higher. Or it was just a bull trap followed by a bear trap followed by another bull trap into 13.0 fib area, taking out watermark high stops and reversing yet again quickly sometime next week, but I really don't think so.

Some levels I am looking at for another attempt at position trading. I'm not going to let adversity get to me. One of the best quotes I have ever heard...

"Adversity causes some men to break; others to break records." -William Arthur Ward

1.2420 - 13.0 fib yet to be tested (might try with stops above 2450 because I am not very confident on this one)

1.2520 - Purple EMA that I cannot explain what it is (I honestly don't know and the creator of this MQ4 won't tell me, at least not yet)

1.2623 - Jan 2012 low

1.2725 - 23.6 fib + mid of bollinger bands + major down trend line confluence + 2745 is the peak of last retracement (most recent large historical supply area)

1.2870 - January 2011 swing lows of a large retracement + Blue EMA confluence (I think this is 34 EMA but again I am not sure)

OR any test of the next major down trend line

If it doesn't reach within 20 pips of these levels (not counting 13.0 fib) I won't try a position trade (150 pips stop loss, 300+ target or 300 pip stop 600+ pip target)

The EMAs will probably move slightly lower with the open of next weeks candle so I will update.

E/U Weekly

Hi PT,

What are the fundamentals in the coming weeks that will make it to break the lower ascending channel.

I have difficulties to connect the dots. I have one lot just to see the movement but don't know what exactly moves it other than risk-on and risk-off. Reading this thread is more useful than reading and hearing the news with the noises filtered out.

Wish I have half the brain of most of the people here.

Hi Wulf,

Sorry to hear your loss. Hang in there. Hope you don't stop posting. There are good posts to read.

1.2430 is important point for me. I was expecting this for middle term. But my bullish sentiment is ending here. If we cannot break 2430, my next target is 1.19 for middle term. If we break 2430 i still will remain bullish for 1.2680.

Looks like I missed quite the roller coaster week while I was away! Up, down, up 250 points. Scalpers must have had a great week. I'm no further ahead than I was when I left on my short position, so nothing has changed for me

Still have some reading to catch up on and need to fix up my charts. Should be an interesting week ahead I believe.

Sorry to hear about the people who had losing trades last week. All of you hang in there. Rethink your trading strategy and regroup for a better future.

Cheers and see you Monday.

an idea in the 4H chart