The Really Useless Thread

Well here's how I sit at the moment. After being confused and flip flopping around before and throughout the push up to the 1.08xx handle (even taking a stupid entry and stopping out) I ended up taking a short position from 795 with an uncharacteristically wide stop at 985. I took off half the position at 605 to "pay"for that stop. Normally I wouldn't take a stop that wide but in this case I'm cool with it because I don't know what will happen with Fed reaction and if I have direction right obviously the trade works but if wrong I'll have plenty time to bail without any pain. Seemed like a decent way to enter in the expensive ticket zone. Time will tell as always.

ok.. now the king of the thread said it.. waiting for copyxxxs to come with excuses. it is going to be real fun here from next week.

Reading some back post I think the main problems have raised because lots of traders ignored (consciously or unconsciously) that what we have in play is a mid term swing.

On of the first points we discussed very early in the year is to get in synch and consistent result is to first define mid term direction and then take the short and flows swing in between in order to get the best bang for the buck and risk.

Just to get back in synch. Lets review where we are:

1. The main issue is that we completed all short term swings of the second part of the mid term leg on the last week NOV with the test 1.061x clearly when we easily announced 'DEC expectation rate is gone' and markets reached a 98% chance of hikes
2. While on the TA side, 1.061x has been for the last 2 years (check back posts since 2015 for more details) the FA support on rate differentials and then changed the short term outlook to Neutral via ECB expectations.

We were here last time we update mid term chart:

Here is the last update of the short term chart after we finish that leg

 

1. Here is where a lot of people got confused and screwed. The moment we reach that area we entered in the area for the momentum play in the mid term swing.
2. For those who have been following the conversation. That is the RED area where there are only EXPENSIVE tickets available.
3. Translating timing for the next move was a no brainer. We have the ECB/FED combo for it. PRE ECB was the pull, confirmation of ECB was the trigger, FED is the rain maker.
4. On the TA side, we have massive combo with NFP that triggered Q/M/W/D imminent break down alerts and we changed to short term sell as the top side became untradable and very risky to trade on a compress short term range 1.071x -> 1.061x -> 1.056x.
5. On more time we have all aligned and as always you plot your map short term. Anything above 1.071x was exhaustion red / don't jump the gun' --> 1.071x /1.061x cheaper tickets ---> 1.061x / 1.056x ---> regular tickets ---> 1.056x and below PREMIUM tickets (red zone short and mid term)

Here is where lots of question pop up. The short squeeze before the ECB above 1.071x (the exhaustion leg to red on short term) caught a lot of traders in the wrong side.

1. Remember that the timing for the play was for the ECB / FED combo. ECB confirmation was our trigger. ECB expectations was the positioning for that part

If you were swinging already for the mid term, it was nothing to see but let any squeeze play out and keep adding positions with cheap tickets in the way down.

1. The move up was sharp and painful for those holding short term positions. If some got stopped out in that move. There is no shame, its just the cost of doing business. The spike above 1.08xx lasted 45 seconds ...and is nothing you could have done to avoid it if you didn't have a proper position and risk before hand
2. The natural stop for the short term play in ECB was at 1.097x which was very far from 1.071x (as widely expected on moves on expensive red tickets).

If you didn't have mid term positions and you got caught in the spike. Just lesson learnt about expensive tickets area.

However there is absolutely no excuses to not take the short term map on the way back again.

We are here mid term chart outlook.

To wrap up. The swing in play was for the ECB/FED combo and in red zone in the mid term.

--> If you entered short term trades for the ECB alone BEFORE the NEWS, you probably got stopped out as the spike was large and deep and the risk to the natural stop was very far. No blame no shame.

--> You were trying to outsmart the flows and in this particular time the squeeze was very deep (and even tradable for those who wen long against all TA and FA). 8 out of 10 cases the opposite will happen (the squeeze will fail miserably trapping all soft long hands). Italian referendum was a beautiful smart money squeeze that need to be admired rather than feel scared or confused.

--> However, not taking back the trade on the way back (to the 1.07xx handle---> cheap tickets short term after exhaustion) after the news it's not acceptable. That is/was the textbook trade to take.

I hope it helps

sisse

Wonderful analysis!!!

you're a 'convinced' serious bull now !! beacuse honestly I question your ability to understand that lot of information posted by what you call our 'King' , and yes we are his followers for a reason .
See ya next week 'serious bull' , I hope you're not deep underwater though ...
Dig deeper into his posts in the weekend maybe you'll learn a thing or 2 ... no offense but your analysis is complete BS frankly .
Anyway , have a nice weekend all .

see ya too "Neutral bear" as king said!!

Came across this chart today and found it interesting so thought id share.
Have a great weekend everyone! And thanks sisse for once again proving solid common sense analysis is the best noise cancellation tool on the shelf.

After reading your great analysis sisse, I am confused in a comment you made.

"Failing to take the .04xx handle in the next hour will kill it for the week. "

Does that mean you are saying we won't be making any more lows this week.

Or

Does it mean we may ride another short term leg to the .061x/.071x handle again?

I'm positioned at .0720 and .0665. Just don't want to get hit again. I played the moved after Dovish confirmation.

Thanks!

It means exactly what it say: If Euro didn't slip to the 1.04xx handle after the European close day and week was over for trading. No more no less.

sisse

sisse,

And, that means w my positions to sit tight? I just don't want to lose my rewards again. I would rather TP and wait on a smaller retrace than have .0560 haunt me again after losing it and then being squeezed out another time.

My first TP is at .046x. But, now I am wondering if I should have taken profit at .054x.

wild card for next week.....I was already positioning short equities for a FOMC reaction...

https://www.washingtonpost.com/ampht...ak-some-havoc/

If i understood him right what he is saying is, the action for today and the week is done if it cannot take out the 1.04xx handle. Since it is not going to move anymore today and currently we are at the expensive ticket area, meaning from here it can either retrace or continue to move down, and you do not want to sit through the retrace, you might as well close the position....

Why are you trying to interpret or read anything else from it.

It just mean markets were going nowhere [as it happened] else today neither up or down or nothing ....Europe went home and week and day ended with it.

sisse

Not meant as trading advice, but I'd close if I were you. Besides, it's friday, not smart holding over the weekend because when a disaster happens, your stops will be ignored and at week open your positions will be closed automatically at "next best price", meaning: a much bigger loss than anticipated. Also: cash in the pocket is better than cash flying around. Always time to reload next week when needed on a retrace. Price never moves continually in one direction so take advantage of the inevitable retrace to reload when conditions are more clear.

Xzavier,

I don't think that's what he meant. Look what he said. I believe this means sit tight as I got tickets in a better price area. Thanks for your input though. And, we closed under the infamous .0560 and .0610

1. plot your map short term. Anything above 1.071x was exhaustion red / don't jump the gun' --> 1.071x /1.061x cheaper tickets ---> 1.061x / 1.056x ---> regular tickets ---> 1.056x and below PREMIUM tickets (red zone short and mid term)"

...and we are rolling for the week. No surprises in the Euro sitting in the same 1.056x with imminent break alerts in all tfs for over a week now....On the rest of the board nothing new. All markets behaving and in synch.

US in full control from the close today. All markets across the board on the back seats till the FED with Treasuries and Dollar in total control until hikes.

sisse

Mark your calendar January 20, 2017 ... a week from there...

the Trump Inauguration? Well, maybe....Trump will always be a tweet or two away from some major shitstorm, but it's hard to plan those trades.

Yes, you are right. I closed mine way too soon.

Sometimes I use sellstop limit orders and buystop limit orders. It is a missing function in Metatrader 4. But is available in Metatrader 5, Ninjatrader and also possible with EA on MT4. Just wantet to mention since I suspect that many metatrader4 traders are not familiar with this function.

Very nice tool to have. I got two positions in at the spike that lasted less then 45 seconds and I would possible not manage to get filled if done manually. Both on the way down. It has rescued me more often then not. I get 5 to 10 pips worse fill ( depending how far away I set the sellstop order) but often avoid DD or getting filled if wrong or if spike become very big during news I can get filled at a better price by moving my orders that was not filled to better fill prices.

Here is a brief description of the sellstop limit orders taken from Metatrader 5 functions and the two last is covering buystop limit and sellstop limit orders:

1. Buy Limit a trade request to buy at the Ask price that is equal to or less than that specified in the order. The current price level is higher than the value specified in the order. Usually this order is placed in anticipation of that the security price will fall to a certain level and then will increase;
2. Buy Stop a trade order to buy at the "Ask" price equal to or greater than the one specified in the order. The current price level is lower than the value specified in the order. Usually this order is placed in the anticipation that the price will reach a certain level and will continue to grow;
3. Sell Limit a trade order to sell at the "Bid" price equal to or greater than the one specified in the order. The current price level is lower than the value specified in the order. Usually this order is placed in anticipation of that the security price will increase to a certain level and will fall then;
4. Sell Stop a trade order to sell at the "Bid" price equal to or less than the one specified in the order. The current price level is higher than the value in the order. Usually this order is placed in anticipation of that the security price will reach a certain level and will keep on falling.
5. Buy Stop Limit this type is the combination of the first two types, being a stop order to place a Buy Limit order. As soon as the future Ask price reaches the stop-level indicated in the order (the Price field), a Buy Limit order will be placed at the level, specified in Stop Limit price field. A stop level is set above the current Ask price, while Stop Limit price is set below the stop level.
6. Sell Stop Limit this order is a stop order to place a Sell Limit order. As soon as the future Bid price reaches the stop-level indicated in the order (the Price field), a Sell Limit order will be placed at the level, specified in Stop Limit price field. A stop level is set below the current Bid price, while Stop Limit price is set above the stop level.

Other brokers I've been with have made those available (and countless other OCO/OSO combos) but I guess I never understood the sellstop limit/buystop limit's best use. So from above your entries you put these sell stop limit orders in place? Like say right at the moment when price was at the top of the spike you sent these orders, price came down to trigger your stop, sending your sell limit at a higher price. Then price came back up to trigger it and you got filled. Right?
I must have a misunderstanding about it since I imagine if that were the case you would have just used one Stop or Limit order rather than trying to get one of each sent/filled when time is short and price is moving.