Zappa's Journal

So far so good. I'm currently in the biggest GBDUSD position I've ever been in. Am I nervous about this? NO, I am more comfortable with my positions now than I have ever been. I'm still glued to the screen, but I am very secure in my decisions. I am really thinking (and hoping) that this will be the year I take trading to a whole nother level. God knows I've paid my dues.

Never ending persistence fueled by a daily jolt of emotion. Not happy, not sad. Just intensified by the power of determination.

I feel compelled to describe this, because it almost feels like rage. The blood is boiling, and there is a hint of anger, but not towards any person or anything. It's cool.

It really makes life exciting!

It's why I KNOW I will realize my dreams.

Notice the hints of buying power. It will go up from here, I think.

A big sell-off from 1.5600 looking unlikely at this point. Maybe more like this, I think.

I'll admit, forecasting daily bars this far into the future can seem rather silly, but it really is a great exercise to do. It is good for many reasons. Anyone reading this should try it.

But here's an expanded forecast.

Yes, I really think things can unfold this way, but I also am quite certain there will be many adjustments. The main thing is that I remain focused and constantly question my position and outlook. I must remain open to all possibilities AT ALL TIMES, and ready to act without emotion.

Pound shouldn't go to 1.5340. Placing stop there.

Adjusting road map.

Yep, its Friday night and I'm still drawing.:nerd:


1st chart is 4hr
2nd chart is daily

Why am I still bearish to 1.5050?

Its really hard for me to believe in this rally. Upon seeing higher prices this morning, I had to question myself and if I was pushing my bias into my analysis. So I went with a bullish mindset. The price action is just so easy, yet it keeps going up. Experience tells me there are no free lunches in trading.

I had to cut my size down in half yesterday to accommodate a wider stop, but I can add it back if price finally turns. I like to exit a trade before it hits my stop, if I can determine that odds are high of it getting taken out. Its increasingly looking like my stop will be hit, but I am not ready to throw in the towel yet. I can't help but see a powerful selloff occurring before we really make a big move up. Maybe I'm way off here, but I have to go with my gut. If 1.5620 gets taken out, so will I.

Here is an interesting chart.

And there's others below this! But this one was way too obvious to not get tested.

Further strengthening my confidence is that USDJPY looks ready to go UP, while GBPJPY looks ready to go DOWN.

As well as the GBPNZD and GBPAUD pairs, which both look like they'll drop. It doesn't mean that GBPUSD will too, but it increases the odds significantly.

Party has just begun. Market proves again that fundamentals be damned, it wants YOUR MILKSHAKE!! There is no free lunch.

Mistakes were made by me prior to things turning and going my way. Learning from mistakes is how we improve. I strongly believe in looking back at trades and seeing what clues were missed or misinterpreted. One of the clues I knew about, but did not give enough weight to, was this popular pattern called a wedge/triangle. Again, when it is this perfect the market will use it against its participants. Everyone knows of this pattern, so it is used against them.

It breaks the bottom triangle line, has a pullback, then fakes a small break again only to reverse for a strong move. It then takes out the high.

So basically, some traders sold at the 1st break. Some more sold on the 2nd break after pullback. Those two groups were then stopped out at the high of the triangle. This created liquidity for bigger fish to accumulate size as stops were triggered. Finally, we have the move back down where many stops remain, yet to be triggered.

I should have taken this clue to realize that the top of the triangle would be tested and broken after the break of the triangle to the downside. I should have been faster to take profits near 1.5350 and reversed, instead of letting the profit turn into a negative and having to cut my size in half at a $3,800 loss.

Something like this maybe.

First, about the last post. I did actually try to play this briefly before taking a small loss and getting back into my short. I didn't like the trade from the start. I was about 51% sure that it was the correct thing to do at the time, and I didn't have a lot of time to think about it. I kicked myself afterwards, because the market was telling me not to do it and I still did. Difference between now and in the past is that now I just quickly accepted the mistake, paid my fine (about $1,300 if I remember correctly) and reversed back to the original position at a slightly worse spot than where I exited. In the end, the market fell and I did good, but I need to trust even more in my market instincts.

Now, to the current conditions. There are not big buyers down here, but that doesn't mean we can't go higher from here. The market sold off nicely, but it wasn't THAT strong, and there were some really easy spots that could used some testing. This is what I'm seeing at the moment. Key is to stay very flexible and attentive to clues.

Bought AUDJPY at 92.58 late Friday with very small size. I have most risk tied up with large GBPUSD short position. AUDJPY trade on chart. Its a nice 1:6 trade, but I might get out sooner. We'll see what market looks like on way up (if it goes that way).

And now the stop on AUDJPY is moved closer, making it better than a 1:12 r/r.

GBPUSD pulled off the lows some, but it looked weak and simple. 1.4250 is still on, I believe. I started with 5 lots on this trade and I'm now up to 14 lots. Risk is not much more than I initially risked, which was half my maximum anyways. This might be my first win over 100k! I am excited by this thought, as I have dreamed of a win like this for many years now, BUT......I am not glued to that number. If strong buyers show up before 1.4250 I need to forget about my 100k trade and react to what market is hinting at.

But so far, everything looks right.

It will get there, the question is when, and what the high of the next retrace is... I'd love to just stay in my shorts and think we topped at 1.4850 (it is a zone which we fell straight off of few days ago and now have revisited), but I'm sort of leaning towards one last move up to 1.5ish..... we'll see. Screwed up when i had my entries @ 1.53-1.55 range..... those were keepers till 1.42~!!

1.5 would require quite a lot of buying at this point and I'm not sure I'd want to be short anymore. I think we just had a nice fake out for another top, and now we're selling off with power. That's a very good sign for shorts.

Ya , doesn't look good for bulls right now.. let's go to new lows