MPB Journal

....and closed out last night for 1R loss

The Yen beat-down continues

GBP/JPY - Long opened last night. Large move so have moved stop loss to breakeven already.
EUR/JPY - Self explanatory really....stop raised to 115.75 which is just below the recent swing high that got busted last night.

General Update

Nice trade on EURJPY. You must be up like 10R - ish already!

USD/CAD

Today printed another pinbar. After relooking at the context of the pinbars they are not really ideal. They are not located at the end of a 'clear' retracement. They are at the bottom of a run down and engulf the prior eight consecutive bars.

This pattern is potentially playing out more like a continuation entry (down-consolidation-down) rather than a retracement entry (down-pullback-down).

I still like it so am keeping orders in place as a breakdown should see us target 0.97.

GBP/JPY

Human error. After looking at my analysis chart and deciding to move stop up to 142.50. I updated the chart however failed to follow through with my dealer. As a result I should have been stopped out last night....but am still long.

Perhaps a bit of a blessing as it bounced again last night to close off its low. Now, looking at the chart my stop move was probably a little premature anyway so maybe I am getting a second chance at this. Either way my stop is still at breakeven (only just missed getting hit last night)

Thanks Griz,

So far I have 13.5R locked in. A sharp pullback is overdue but until it occurs and my stop gets hit its pay day every day

Could it be coming down to retest the breakout of that consolidation? Or just reverse since its been a while in the uptrend?
Anyway, I think giving up that much of a profit just to see if it flips to support is not a good idea. Is that why you trailed it so closely?

Obviously I got stopped out a few hours ago now.
Regarding trailing up the stop quicker, this trend is very mature now and yes I did not want to give up too much profit as a retracement/reversal could be sharp.

This could be the beginning of the carry trade again, time will tell on that though.

What I see in the COT data is an unusual situation where the Commercial net position is beginning to follow price.
This is VERY significant. It either means a large scale reversal is about to get underway or a parabolic upmove is likely to unfold (or continue depending on how you read current PA) Either way it is exciting times with lots of opportunities around.

Can you expand the reasoning behind this please?

And this is what i see with my noob-ish eyes.

JPY at extreme net long positions = expect a rally to unfold:



On EURO i don't really notice much, only that we are in a Commercial Uptrend from an extreme net long position in June 2012 ( Should i notice anything else ?)



JPY seasonal in start of February is bullish:



EUR seasonal is Bearish in the beginning of the year:

March Sugar

This commodity is not ready to rally...

Hey Griz,

The large reversal I talk of is the COT extreme reversal panning out. As noted by all your analysis, which I am 100% supportive of as this broadly forms my core approach to trading so we are on the same page there.

The Parabolic upmove is a situation where the Commercials 'got it wrong', it does not happen all that often. I could paraphrase the mechanics here but instead check out the explanation of this located at the below link under the heading Advanced Setups (Commercial Capitulation).

http://cotbase.com/on-cot/typical-setups

I have recently started to look to fade these COT extreme setups as well i.e. follow the current established trend until the COT extreme reversal plays out then flip positions. This is what the EUR/JPY trade was all about. This trade was clearly a JPY play and the signal presented nicely on the EUR/JPY chart.

With the Fade Trade I am attempting to take advantage of a mature trend with the belief that established trends are hard to reverse and tend to be very stubborn. I dare not bring it up but, if there is any truth to the Elliot Wave theory we know that the 3rd and 5th waves are often the most destructive and can persist for a long time. I figure I am jumping on the 5th wave somewhere. Just to clarify though....I do not count waves or even bother looking for the Elliot structure, I am merely aware of it and it is supportive of my fade strategy.

The Fade strategy can bring about some good returns but like most things in this business it's not always the case. My idea is that with a Fade trade I must have a clear path and no 'significant' S/R in the way, I must see 3R minimum in the trade.

Hope this helps clears up a few things.

Mmmmm, my opinion remains unchanged.
If that Dec low gets taken out then forget the upside.

COT data is a bit conflicted atm:

Legacy and CIT data show a bullish bias
Disaggregated data shows flat to bearish.

Waters are a bit murky here.....someone will prove to be right eventually.....in the meantime we must remember that 'no position is a position'

General Update

EUR/JPY - Position closed for +13.5R profit
GBP/JPY - Position closed for 0R
USD/CAD - Orders cancelled as pinbar highs taken out

AUD/JPY

We are so deep into this trend it's scary. A textbook pinbar on this chart (also on the other crosses) has me looking to rejoin the party. I had to go to a monthly chart to see the next resistance level. At the very worst for the bulls I see 100 but more realistically 105.
I am placing orders about today bar.
[email protected] [email protected]

AUD/JPY - Long opened

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Coffee

Coffee has been in a very obvious downtrend for some time now. Commercials have been hedging to serious extremes as a result. Over the past few weeks these positions have been unwinding and as a result we have price moving back up and starting to look good for the bulls. However, the Disaggregated and CIT report now have a one year index of 0. In other words there is a short warning now in place.

Bull Scenario
Technically we are challenging a huge downtrend line at the moment. If we can get above this and hold I would be buying long signals. This means holding above around 158 - 160. I then see resistance at about 175 (minor) and 190 (major) as potential targets. This is fading the COT Hedgers positions.

Bear Scenario
If we get rejection at this 158-160 area I will be taking sell signals as this is in line with the current COT analysis and the longer term trend.
Looking at the three COT charts attached (Classic/Legacy, CIT and Disaggregated) it's pretty obvious that when the 'hedgers' were positioned at these levels in the past a nice downswing ensued. This is trading with the fundamentals on your side.....my preferred scenario.

Hi MPB

I am also looking at coffee. Most likely to sell. I am also looking to see the reaction at the downtrend line. Reversal signals around there will get me short. However a breakthrough, retest and continuation upwards will get me long.

Olu

O,

Always at these 'line in the sand' points on charts you get two tradable setups. It's a matter of picking the correct one and riding it usually for a good risk reward ratio.

I had been bullish this market for some time. What concerns me from the long side is how quickly the positions have been unloaded to an opposite extreme with a relatively small price move. Once again more evidence needed for the actual decision.

Hello Pipbull!
Your thread is amazing. It one on the several gems on FF.
Thank you for maintaining your journal here.
And i would ask you, if you can post your basic stats for 2012 year. (number of trades, win/loss ratio, av.win vs aw. loss, profit factor, total R etc).
I also was long on EURJPY of one of my automated systems, but made only 3,4 R of this huge trend.
Thank you man for so great information here.

+1