The Really Useless Thread

Well, there was the 0,1 increase, which FF/investing.com calendar did not have as "expectation". However, no change in core CPI. So I guess nothing so new as u say.

Looking forward for the review

Any clue who would be buying gold right now? Just normal pre-FED volatility or someone is getting afraid?

Just to share:
Chart 1: Last few days the price has been sticking from a downside to a tradeline, which has been important for the whole year.
Chart 2: part of the same line can be seen on H1 as a part of the channel.

So the tricky question: short now as a pre-FED positioning as the price is gonna go back into the middle of the channel (most-likely)? I guess way too risky.

sisse,

My answer would be yes; however, I am not sure how you calculated the r:r. And, to make sure I understand what this really means, I would like to see how you calc the r:r.

--> BEST r:r (MAX Potential Reward/Risk)

4.42 | 13.33

--> Expected r:r (Realistic Potential Reward/Risk)

1.65 | 2.45

Thanks for taking time to explain Risk, Mapping and Timing. You are correct. I have never done this calc before nor thought of it in this way. I am hopeful I can hone in on understanding the right levels and legs to make these r:r better in the sense of less risk. Thanks again for your analysis and time to help assist in making our trading better and reduce our risk with tips.

...I assume it's

Risk = 204, Max Reward = 2720, = 2720/204 = 13.33. Risk = 204, Realistic Reward = 500, = 500/204 = 2.45

...very interesting following this thread! ..thanks to all

mOST wELCOME...

Thanks for the reply .... i use to follow every post of your's .....

any ways from my perspective i am seeing E/u (technically) on the downtrend with minimum target of .04xx ...

if for any reason it goes on the north side ... sooner or later i am going to close all my trades .... ...

If you go short now, take 1.093x up to your target = X pips. Multiply that with your lotsize $1 per pip. That's your potential profit. Also calculate your potential loss in the same fashion. Then take Profit / Loss --> this is the R:R ratio.

Thanks for the info. I figured it out after trying different numbers. Makes sense. Appreciate the help!

So you both answer yes so why should you or anybody don't trade it right now without waiting for anything else?

--------

The final 2 points before i wrap up.

2. Mapping

The second important thing of using a map is that it must give you the AREAS where you should be paying attention to the chart so you avoid getting glue to the screen looking for phantom waves in between....

In order to properly map a trade and paraphrasing options talking your entry AREAS for trades MUST be IN the Money not OUT of the Money. If current price its trading way out of any of your areas either "there is nothing to see" (meaning no trading opps ...go and do something else) or if this is happening frequently is because you are trying to TRADE EXTREMES (meaning your levels are the extremes and not a healthy area for entering and exiting trades)...

In my books ONLY SUCKERS trade extremes ...smart money will trade the 'meat' of the move ...

--> According to your maps and only from this particular point only Imarich should be looking for positions in the coming sessions ...

+++++ MAP MATCH ++++

------------------------------------ -------

TRONERAS

Wrong level --> 1.119x (out of the money)

FLIP --> 1.050x (way out of money)

VS

IMARICH1 (SHORT-BIAS MID TERM)Based off WEEKLY Chart

Wrong level --> 1.134x (out of the money)

Support (Resistance) level --> 1.1096 (Jan 2015 LOW Extension) (in range)

FLIP --> 1.0808 (in range)

------------------------------------ -------

So whats the point in all that ?

1. My 2 cents, is try to 'Center' /'align' your map to the current range so you have a clear area in the money to look for entries.
2. You want to trade the meat of the move not the the ultimate pipet in and out, avoiding areas/trades in the obvious ultimate high/ low or very out of the money ranges.

In simple words, if you just first evaluate RISK, you are already filtering a lot of chop and wasted screen time.

If you then have a proper map aligned / in synch with the market (whatever the tools you use, trading is not a exact science !!!! whatever you hear around here) you are already cutting more than 3/4 of the chart noise and time (why because you don't even have to even bother looking at detailed charts outside these areas).

Now for the final bullet, if you on top start paying more attention and mastering TIMING rather than indicators, triggers and CHARTS you pretty much will be miles away from the competition... and all that without even mentioning so far one single TA indicator or FA reason to take a trade ...

We'll continue later before the news ...

sisse

sisse,

Now that makes more sense to me. Clueless I was to this. I have never looked at it from this perspective nor used Longer Term TF to assist in making out this plan. Very invaluable information for trading. I need to learn Levels and Legs better in order to really manage the r:r or at least have better success. But, it gives me the ability to see if there is anything to trade or not for now.

Now for the final bullet, if you on top start paying more attention and mastering TIMING rather than indicators, triggers and CHARTS you pretty much will be miles away from the competition... and all that without even mentioning so far one single TA indicator or FA reason to take a trade ...

We'll continue later before the news ...

sisse


Timing has always been an issue for me but I believe with knowing my r:r and having confidence I have mapped out a good plan; then, timing should dramatically improve for me.

Thanks for the help!!!!!

I was looking for a move to .0750 to 1.1090 pre- FOMC but it appears that short term leg didn't develop or not just yet.....I am not confident I will see this now pre-FOMC. Thought Asia/London session might move it in this direction but it has stayed relatively calm.

... and that was it across the board with only OIL to watch out for another wild week after inventories (a tick below lows open $26.xx rather for early next year ....)

US equites (S&P) held 2062.xx which is the RAIN MAKER for the hikes play / W close. Holding, will pretty much lock the highs in equites (2100.xx) for the foreseeable future (Q2/Q3 2016). We are all set after the opening range and we are ready for the FED.

sisse

S&P certainly is an attractive sell right now. Looking into 2016 I believe below the 2000 mark will be the new norm.

Gold also looking ripe to sell before the announcement. Not much else to do with everything else in no mans land

Lets start wrapping up this chat as FED is around the corner. The final point:

3. Timing

--> The third key point on properly mapping a trade is TIMING. Meaningnot what?, why?, where? or how? but WHEN to trade the areas in the map.

-->If you have been long enough in the business you will know that market direction (any underlying) is defined by major fundamentals (call them supply and demand factors, valuations, or what have you its irrelevant for this conversation) while the inner moves (flows/waves/legs, etc) in between are given by different factors (minor reports, pure speculative forces, taking profits, algos, etc etc).

--> For the purpose of this post I will just focus on mapping macro direction for timing not in the inner flows (thats for another chat). In general, we can divide the triggers for timing in 3 categories:

 

1. Externalities. These event are random in nature and is nothing you can do about that but have your stop always in place. Usually (but not always) are related on risk-off events (an earthquake, terrorist, a weather event,etc) There is nothing to do with these events and tracking 24/7 the makers wont help either so they are basically taken as unexpected risk factors.
2. On the other side are MAJOR EVENTS | GAME CHANGER NEWS. These are the bread and butter for swinging a market because even if you are not planning to ride a whole mid term leg, etc they will give you DIRECTION. Typical examples of these events in currencies (are monetary policies, QE, RATES, BANDS, major economic shock in the economy, major political/wars issues, etc )
   1. The moment you 'define' macro direction you have solved 80% of the problems in trading !!! (wonder why some of us expend more time talking about this than why the micro pipet trigger or RSI, MA cross or E/W wave ASDFG...etc).
   2. More importantly, these events can define direction that can last months meaning once you are aligned you DON'T have to analyze the market bias every second H1 bar allowing you to trade the inner legs with CONFIDENCE and avoid fading the unnecessary retraces/pullbacks.​

   
   
   

3. The scheduled reports/events/announcements. The events just provide the ebb and flow of a leg. They are not meant to be treated or read it in isolation as they represent a series/trend in time. It applies differently depending on the instruments you are trading but for this chat lets use currencies. For example a single NFP number(or any) or as basic as today's German Flash Manufacturing PMI, etc. Those series of numbers represent and mark trends and conditions that will mark change of direction when they consistently start pointing to the other side, etc.

Nice so what ?

--> If you know when a major scheduled event is coming guess what? ...yes is time to plan your swing trade (or ride the next inner ebb/flow, etc) and that alone will already cut the other 15% of the chop and noise in your charts because you have a clear MAP with your levels, you RISK defined and your TIMING of when to trade reduced to a very clear range.

--> In simple words, you HAVE REDUCED RISK as much a you could before you even PLACE a trade ....and if you remember from the first post, the task for a trader is reducing RISK, not maximising profit (that come after)...

So how this translate in practice? Well I leave you to answer that by yourself with these reference (demo it both so you can compare and evaluate after the fact).

You either trade you area before the EVENT in YOUR TRADING LEVEL for the best potential R:R or wait after the KNEE jerk REACTION and sacrifice reward for a very SOLID winning RATIO.

--> Don't peak at smaller TFs, don't outguess your map, don't use any other TOOL or the typical 'I will wait price to tell me mumbojumbo' You are either right or wrong. If you analysis is solid, your levels are decent and you are trading at the right time (you are only trading when a move have the highest odds to happen) you are either RIGHT OR WRONG.

A better trigger, a micro TFs whatever is not going to give you anything extra except a headache and losing perspective !!!.


To wrap it up, the whole point of this MAPPING a TRADE is to develop a very STRICT framework where you can evaluate EFFICIENTLY your trading decision to make your result CONSISTENT in time !!!

--> Place a BLIND ORDER on your ENTRY LEVELS for today with stop at the max wrong level (..in the case of TRONERAS your don't have much options as your entry is your max stop).

--> Place a MANUAL order after the knee jerk reaction has passed (as late as W close) and post the levels here to compare ....

The mid term swing has a time scope of week to MONTHS so we will have plenty of time to evaluate, the point of these 3 entries so far is to evaluate them after so HOPEFULLY you will get a EUREKA moment !!!...

+++++ MAP MATCH ++++

------------------------------------ -------

TRONERAS

Wrong level --> 1.119x (blind entry before FED)

VS

IMARICH1 (SHORT-BIAS MID TERM)Based off WEEKLY Chart

Support (Resistance) level --> 1.1096 (blind entry before FED))

------------------------------------ -------

Now back to market talk before the FED ...

sisse

Well Written article but would you like to add info about fundamental news that from where we can get a hint for the numbers like NFP,Rates etc before the announcement in order to plan a timely entry and where not to get trapped about news and speculations by forex factory traders etc?
regards

Hello sisse:

The biggest reason the Fed has kept interest rates so low for so long and the biggest reason I believe Yellen will not raise interest rates this time is the effect on the Federal debt. In a nut shell the government has to borrow just to pay its bills since its expenses exceeeds its income. So while all of the arguments you have raised are very logical from a traditional central bankers point of view they ignore the biggest elephant in the room, Federal debt. As far as the jobs number go and so called improved economy this country is running mainly on debt not because of any genuine improvement in productivity or efficiency.

I would like to say I do appreciate your very scholarly financial analysis in your posts and look forward to reading them. And thank you for your replies to my posts.

See
When Will Interest on US National Debt Exceed $1 Trillion? When Will the Fed Hike Rates?
http://globaleconomicanalysis.blogspot.com/2014/01/when-will-interest-on-us-national-debt.html

...Shifting Goalposts

Really think the Fed is going to hike? They know they can't, and the Fed is disingenuous as to why.

See
The Federal Government's Interest Rate Problem
http://danielamerman.com/va/BenefitAge.html

..While little remarked upon or understood, the United States government has an interest rate-related problem of its own when it comes to the debt and the deficit.

That is, tax revenues are not sufficient for the federal government to make either principal or interest payments on the federal debt.

So each time a principal payment is due the federal government issues a new debt to get the money to pay off the old debt.

And each time an interest payment is due, the federal government issues new debt to make that interest payment. Indeed, borrowing the money to make interest payments is the source of over half of the annual federal deficit.

What this means is that the federal government has a compound interest problem, as shown in the graph below. The issue is not just about the interest rate itself going up, but the amount of borrowing that must be entered into to pay those interest payments rises sharply as well.

Thus the exact same rising interest rates that would provide what savers need which is the rapid compounding of investment interest would simultaneously set off the extraordinary danger of a rapid compounding of debt interest for the federal government.

Hello chester123:

Thanks for your detailed reply and article reference. It all seems to make sense from the article's point of view but I do not believe Yellen will raise rates this time.

See my reply to sisse explaining why.

See Post 138,155
http://www.forexfactory.com/showthread.php?t=310676&page=6908

Borg

... I understand your point and I don't necessarily disagree with the debt and fiscal issues in the US but the FED, like it or not, is just a traditional Central Bank no more no less.

The FED mandate is price stability and promote economic growth not controlling public debt or managing the federal budget. Thats why a CB is always separate from the government in charge, otherwise we will have a proper mess (as it sometimes happens in countries like Zimbabwe, etc where the Dictator in charge has the key of the printing machine, etc)

In simple words, I agree that the US FEDERAL debt is a long term issue that will have to be address sooner rather than later but monetary policy can't and wont be dependent on this issue alone (..otherwise we'll have 0 interest rates for the next 100 years !!!...).

We'll see how this pans out in 2016 when we will have a few hikes already in place ...

sisse

sisse,

What do you mean by blind entry before FED as I don't anticipate Price going to this level before FOMC but I could be wrong.

+++++ MAP MATCH ++++

------------------------------------ -------

TRONERAS

Wrong level --> 1.119x (blind entry before FED)

VS

IMARICH1 (SHORT-BIAS MID TERM)Based off WEEKLY Chart

Support (Resistance) level --> 1.1096 (blind entry before FED))

------------------------------------ -------

I believe he's referring to a blind entry on the spot (current price level). Correct me if I'm wrong.

Hello sisse:

“0 interest rates for the next 100 years !!!...).” can I quote you on that ? Do you have any economics degrees that could get you a job at the Fed - lol. I'm sure the ptb would agree with that idea. Just kidding.

Janet Yellen got her Ph.D. in Economics from Yale University so I am sure she is well aware of the consequences of raising interest rates on the Federal debt. So she will have to resolve this apparent conflict shortly and we will find out soon if the tail wags the dog or the dog wags the tail.

Borg