EUR/USD & GBP/JPY Trades

EUR/USD
Stopped out at 1.2800 (long at 1.2920).

AT LONG LAST!!!

My feelings: TOTAL RELIEF.

Pure joy, actually, to be out of a 10-day trade that went nowhere.

GBP/JPY
While EUR/USD was plunging, I went short on GBP/JPY for a scalp (an hour before EUR/USD trade was stopped out):


Yes, was totally hedging.

54 pips.

Makes me feel a little less sore about losing 120 pips...

GBP/JPY has since pulled back, and is still pulling back...

TF Trade 12/8 Update

Canceled yesterday's order. Wasn't filled. I'm really contemplating staying up til 3am daily to get in manually. You just can't let a TF trade go on auto-pilot, especially with the biggest moves happening after 3 these days.

No more swings. Not for today. Limited upside. Scalping instead.

TF Trade 12/8 - Swing (Pending)

TF 5min


What I'm seeing is a triple top/ HS in the making, and a possible throwback to around 468.7.

Will cancel the following as and when TF breaks above 480 for real:

TF Trade 12/8

1.1 point for now.

TF is stalling beneath 480 resistance. Waiting for it to retrace to fib 61.8 (around 462) before going long again for possibly a swing to around 490. An entry now is just too far away from where I would place a stop loss (slightly below 462 - the fib 61.8 retracement level).

TF 5min

EUR/USD Trade - Holding

Holding long position for now.

Reasons:

- Pair broke out of Diamond Bottom formation
- BB widening and price is traveling along upper band
- MACD: positive histograms and 2 lines in positive region
- Stoch: in overbought region, which is where I usually go long or stay in a long position (provided that both MACD and BB are showing that bullish trend is still intact and there's no nearby resistance)

My only concern is that PSAR is getting too near to the BB centreline (MA 20) for my comfort. Resistance below my entry point (1.292 - red dotted line) is a little worrying, but I'm guessing that if price were to pause, it will likely pause around where I had placed my entry.

Will see how it goes. I'm still of the view that a correction at this point is timely.

EUR/USD Trade

While I'm more inclined to be more bullish than bearish on the market (applies to the coming week only), I can't seem to say the same for my EUR/USD trade.

EUR/USD Daily


EUR/USD Weekly


First glance at daily chart tells me the pair is on an uptrend and the pattern emerging is a double or triple bottom. A closer look shows a symmetrical triangle in the making. That most recent high looks very much like a partial rise to me. And that's very bad news, coz what usually happens after a partial rise is going to be a breakout on the DOWNSIDE of the triangle.

Whether what follows is a plunge is not my immediate concern. I AM LONG the pair at 1.292 (red dotted line) and my stop is at 1.2325. The pair could very well break down, move slightly below its low (at 1.2325) and take out my stop, only to climb back up again to trade in a sideway manner for God knows how long.

The weekly chart clearly shows that the pair has overshot its potential in Sept 07 and looks like it now wants to keep trading below 1.37. What's forming (the triangle) is simply a pause and another leg down looks PROBABLE. Classic bear wedge. Although I'm really HOPING that since EUR/USD has already completed 2 measured moves down that it will at least do some DECENT CORRECTION, like to at least 1.37 (which is barely 38.2% of its move down from the top of 1.60)??

I doubt I want to wait to be stopped out. If the pair continues to move down on Monday, despite what the market does (or if it goes down together with the market), I'm out. I've been sitting on the trade since Nov 24, and patience isn't exactly one of my virtues.

Charts - DOW, SPX, XLF, GS, TF

SPX Daily

Pipe Bottom on Nov 20 and 21 failed to send index back up to the point from where it dropped (about 1008, indicated by pink dotted line), and has formed what looks like the mirror image of a "J" flipped up (chartists call this the "Inverted Scallop") instead.

The low of Friday's session is about 50% of the upward move from the pipe bottom to the previous high of around 896. Assuming that SPX were to continue to climb from this point on, an Inverted Scallop COULD send it all the way to around 1060.

Given that the sentiments aren't generally bullish, and taking into account overhead resistance (from downsloping trendline), it pays to play conservative. A reasonable target would be around 970.

A successful Inverted Scallop pattern could retrace to fib 61.8%, so, if I were trading based on this pattern, I would place a stop slightly below fib 61.8%.

DOW Daily

DOW's daily chart is looking just as cheery.

First, we have a Pipe Bottom too; second, that mess we're seeing forming now looks like some sort of a Diamond Bottom; third, the 2 bottoms when squeezed look like an Adam & Adam Bottom to me...

In a nutshell, the DOW looks like it wants to go up.

Like the SPX, its pipe bottom has somewhat failed and what has formed is an Inverted Scallop. So, at least in the very short-term, it's likely that DOW could climb up to 10,252, or conservatively, 9500. Overhead resistance after 9500 is around 9650.

DOW Weekly

Not certain if I should make a big hoo-ha over the Oct marabuzo candle and bullish engulfing pattern that's formed given that both are not first level reversal patterns.

However if we're not looking for a reversal (just being realistic), these patterns SHOULD give us a decent pullback to around 10,300.

But then again, it's irrational to ask the market for what's reasonable. As long as we're not in a confirmed uptrend (even if it's just a short-term one), it's best to take for granted that the market will continue to go down. Some wise trader once said that you can only be wrong ONCE when you go with the trend, and that's when the trend REVERSES. So, I would either go with the trend, or be very conservative with positions and targets when going against it.

XLF Daily

If XLF can clear its overhead resistance at 12.87, the formation COULD very likely send it up to 16.65.

My calculation is actually 17, but with that kind of resistance on top, I'm going to say it's not even going to make it to 15 on its first attempt up.

That said, I would keep an eye on DOW and SPX. If I were to go long, my stop's going to be far below at a point that's slightly below fib retracement 61.8% of the move up from 8.67.

GS Daily

GS looks like it could go up to around 96 - 97, but the more probable scenario is that it would be stopped by the downsloping trendline. A conservative target would be around 86.

Again, if I were to go long on GS, I would place my stop below fib retracement level of 61.8%.

TF Hourly

Tripple Bottom and Ascending Triangle. Looks like TF COULD break above blue resistance, especially if Monday sees a follow through on Friday's mid-day rally.

TF Daily

For a confirmed reversal, TF will have to break above 560. If the outlook for next week's good, TF should get there by next week. That's a big IF of course. As the market goes about searching for a bottom, I'm not going to swing anything for now. Scalping or daytrading is still my preferred play.

Not Trading

There's no fucking point.

TF Trades 12/4 & TF 12/5

First entry costs me 4.1 points - serves me right for getting in without confirmation. TF had NOT broken out on the downside of the uptrend line in red (refer to TF 5min chart below - candle in blue rectangle was where I entered).

Excitement over seeing what seemed to be my favorite head and shoulder / double, triple top / failed bull flag pattern in the making got the better of me (yes, I was very confident that my solid blue resistance line at 460 was going to stop TF, which was why the line was drawn THICK in the first place), and I completely ignored my rule #1 about entering a daytrade: always wait for confirmation.

Trade was stopped out as TF went up to test resistance at 460 (blue horizontal line) again.

TF 5-min

I had set a stop at 460.5 (1 tick above the high made a few candles before), just in case TF tests the high at 460.4 again, and was taken out as TF made another high at 460.9!

$%&#$*#$)!!!!!!!!!

I should have set a stop at 462.5!! But had I waited for a CONFIRMATION, I wouldn't have had to make such a high risk entry in the first place.

Second entry gave me my profit target of 9.5 points. This time, entry was made only after TF had breached the red trendline and gone below the first low made after breaking out.

Entered short at 455.5; stop was set at 460.

If TF was going up to test it (460) again, I would have had just called it a crazy day, cursed the market, and gone to bed.

I turned in anyway, after setting my profit target (at 446, which was slightly above a minor resistance - I was being conservative, and gave up the idea of setting it at 430, which was the previous low on my my hourly chart).

No more staring at the screen.

It just doesn't pay to get fixated.

Stop loss had to be wide though whenever I let my trade go autopilot (ie without my constant adjusting of stops).

This is something I noticed about trading the futures: the more you don't want to lose money, the more you will. If you're bent on setting a tight stop, you'll just get stopped out time after time until you begin to wonder if you should even set a hard stop.

But of course one SHOULD ALWAYS set a stop.

It's just that with futures, you can't be stingy. If you're constantly setting a 1,2 or even 3 point stop, and expect to get a 10-point gain, the market will punish you accordingly.

Back to TF.

So, 460 proved to be a strong resistance after all. TF traded below that for the rest of the session, and is now hovering above the base of my red channel, below the green channel (which is probably going to be resistance for TF today).

TF Hourly


I'm more convinced today than yesterday that the movement within the green channel is indeed a partial rise, and TF is likely to punch through the floor of the red channel and head towards the blue downtrend line.

We'll see.

TF 12/4 - Bull Trap?

This is really starting to look like a bull trap to me...

Bulls are going to be slaughtered and TF's nose-diving to...at least 415??

The bear in me is apparently still alive and kicking.

Well, IF (notice it's a BIG "IF") TF indeed were to plunge, it's going to bounce back up, and then the bears will be trapped.

Such is the kind of market we've gotten quite used to these days anyways....

But then again, maybe it's just me and my imaginations....I have to stop predicting the market...especially one that's gone psycho....

TF 12/4

I'm seeing 2 scenarios at play here:

1) Within the green broadening channel, it looks possible that TF could break out of the channel on the upside

2) Within the bigger broadening red channel in which the green channel is forming, the pattern seen likely to emerge is that of a partial rise, which often is a warning of a break out of the bigger channel on the downside, followed by a significant plunge

The way I see it is that the odds are stacked against scenario (1).

Main Reason:
The solid blue horizontal line (460) I've drawn is the ceiling of an area of strong resistance - given that prices have congested there in at least 3 trading sessions before, the stalling or even reversing of price at the ceiling is an outcome that is not so unimaginable to me.

It's easier for me to imagine TF punching through the floor of the red channel - but NOT before having moved up to test the blue resistance first - to head for the channel beneath the blue downtrend line.

That said, it's not likely that I'll take a short position before TF falls through support (red horizontal line) at around 412. This is what I need to see TF doing to confirm it's reversed from its previous uptrend (supported by the pastel blue trendline I've drawn).

So, here's my plan:

1) If TF were to break above 460, I'll look to BUY. To avoid being caught in a fake breakout, I'll be looking for volume PLUS a pull back to, or near, 460, which is followed by a further breaking of 2 to 3 points all within a single 5-min candle. First profit target would be around 480, the next area of resistance.

2) if TF were to fall through 412, I'll look to SELL. Again, won't do anything unless I have enough conviction that the breakout is for real. First profit target would be around 380 (the next level of support after 400...although 400 does seem like a stronger support to me...)

While waiting, I'm definitely going to go for scalps if the tape is friendly.

TF Trade 12/3

Canceled my initial stop order when market showed no sign of wanting to go up.

No staring at charts after that, stealing only glances from time to time to see how the market's doing in general.

Once TF started to reverse up and climb towards 444, I continued to work on what I was doing. I was adamant about trading the pattern that I had planned to trade and nothing else.

TF finally closed way above 444, which was significant, as that was a strong resistance. After that, it sped all the way up to 448, then 449. Just the momentum I was waiting for, and I entered at market.

8 minutes into the trade and TF's upward move started to show signs of exhaustion. I covered.

Moments later, TF has retraced more than 3 points from my exit price.

My profit target was initially set at 460, but I decided not to push my luck, as the market wasn't looking exactly bullish by today's standards (something like +50 points for DOW).

Another day that went well coz I wasn't staring at my charts, the tape, and the market. There was only one goal on my mind, and it's to trade the plan I've prepared for earlier today. And I knew that by staring at my charts, the temptation to alter my plan and get into a trade on impulse is not going to be just a possibility. It will be a certainty.

Que Sera Sera & TF Trade

Placed a stop limit order to buy TF at 448.

If it can't break above resistance at around 444, that's just too bad.

I'm not going to drive myself crazy drawing all kinds of lines and channels anymore. And I most definitely am not going to go for ticks and a few points anymore.

So if it is not strong enough to pierce the ceiling, I'm letting it go. It's not like I absolutely HAVE TO play.

My experience with TF and FX and every instrument I've traded is that the best trades are the ones I paid the least attention to: once I've made up my mind about which way they were going, I placed my bet, my stops and my profit target, and then basically just put them behind me and went about doing something else.

On those occasions that I got stopped out, I barely felt a thing, coz I was fully prepared to part with what I considered merely a cost in doing business in the first place.

If only I will apply that to my life....

Instead, I have let the way I live my life influence the way I trade. I am obsessed with details, and frequently sit for 3 to 6 hours - without so much as getting up to take a sip of water - just analyzing dozens of forex pairs, and up to 7 timeframes for all the major indices and futures that I don't trade. I looked for and experimented with methods that will allow me to get as much as I can from a move and never get shortchanged by a retracement. Even when I have a view of the market in the short, mid and long term, I find myself desperately needing to establish trends in the lowest timeframe. There's hardly a moment during market open that I don't ask myself "so are we up, down or going nowhere now??".

Enough.

Today, I gave myself a break. With all the applications running on my computer, and all the books I wanted to finish sitting right in front of me, I closed my eyes for a good whole hour, in a room that hummed with the queerest sound.

After coming out of my trance, I realized that I've not been ME for a long time.

When was the last time that I was COOL?

How did I end up becoming a nervous wreck?

When did I start giving a damn about details?

When was the last time that I was cold, unaffected and just blatantly obnoxious?

When did I stop being steady and unflustered?

When the light of my life was put out abruptly, I guess.

And I became who I am today - constantly afraid of losing something: love, career, freedom, respect, pride, my sister, my cats, my life, MY MIND.

If I don't get fear out of the way, and if I don't find a way to curb my insane need to have COMPLETE control over everything that's in my life, I'm never going to make it in trading.

I have to stop wanting the very thing that no amount of money can buy. It's as if I've been on a 15-year quest to torture myself so I can numb the pain of having directly and indirectly cost the lives of those supposedly dearest to me.

I am going to have to stop being uncool in my interaction with that special someone. He shall be treated like everyone else in my life - people I am fully prepared to bid farewell to anytime and know that I will not feel an ounce of sadness after they're gone. I cherish my friends for as long as they want to be my friends. But I'll never shed a tear or pester them should they decide they're too good for me. They know that about me and hence never feel pressured to call on me on a regular basis. So why shouldn't he be given the same assurance and peace of mind?

When I can treat him like air - and I'm really starting to notice it's not that difficult - I'll be more hopeful that I'll eventually succeed in finding my edge as a trader.

In life as in trading, I must EMBRACE "que sera sera", NOT condemn it.

TF Trades 12/2

It never fails to amaze me that whenever I am looking for a trade, the trade will end up giving me hours of stress, and that those that I am NOT looking for tend to run into profit zones immediately.

Was looking for a daytrade but needed TF to breakout on the upside of the triangle (see chart below). So I wasn't looking to scalp. But the tape was so predictable today that I couldn't just sit watching.

So, while waiting, I took a few scalps.

TF 5min


Am seeing a bull flag in the making.

Waiting PATIENTLY for a breakout and then a pull-back before placing a long entry.

Am not too hopeful about today's range though...

Anyway, if I can't get a good entry before lunch, I'm turning in.

TF 12/2 - Fib Retracement Level 61.8%

The market is in such a dire state that Briefing no longer knows what to say.

TIME TO BUY!!!! LOL!

Of course it's only prudent to wait for a valid pattern to emerge before one hits the "ask" button.

TF Hourly

What I see:

- Yesterday's 50 over point drop has taken out 60 over percent (ie. ENOUGH!!) of TF's gains accumulated in the past 4.5 sessions

- TF's fallen through support provided by Nov 20's peak, and sitting on my purplish downtrend line

- TF bouncing off the floor of my red descending triangle (I did say "what I see", didn't I? Ok, maybe "imagine" would be a more suitable word...)

- Strong resistance above at 460 - 488

A breakout from the descending triangle and piercing of the resistances provided by the price consolidation area above (460-488) would be needed to confirm trend continuation (ie. UP).

A more likely scenario is that TF would test the 412 low again.

Whether it'll bounce off from there and break out of all the resistances above is anybody's guess.

At this moment, I'm not sensing any bullish bias in the market.

But maybe...just maybe...and I'm REALLY HOPING...that we'll see a breakout on the upside today.

TF Trades 12/1

Stopped out once, stopped out twice.

Loss: 550

So much for today.

BUY again tomorrow!!

TF Trade 11/ 28

As with my FX trade, this was a trade I sat on.

Entered LONG at 437.8 on Nov 26.

I guess I was both tired and fed-up of scurrying in and out of a market that's searching for direction itself.

I took a view that it was going up - even if it's going to turn out to be yet another sucker's rally - and I stayed. Trailing with a 3-point stop now.

Where Are You Going, DOW?

DOW Weekly (Click to enlarge)

What I'm seeing:

- Trendline 1 and 2 NOT breached.

- Trendline 3 NOT breached yet (no closes below that line to date), but more on this below

- Trendline 4 breached in Aug 2001, but DOW resumed its uptrend after retracing slightly more than 50% in the 1st quarter of 2003

- Trendline 5 breached during last week of Sept this year.

BAD NEWS:
Given that what DOW has punched through is a weekly trendline (trendline 5), the likelihood that it's going to continue to fall is high (at least that's what I'm going to assume for now)

Using trendline 5 as the neckline to measure how far DOW will fall, the estimated target is around 5210 [ 9914 - (14,198 - 9494)].

By the time that DOW drops to that level, and closes below that, it would officially have breached trendline 1.... (I'm going to have to stop projecting beyond that before I fall off my chair....)

Consolation:
As DOW has broken out of an Uptrend line, volume after breakout will have to be trending up to support a substantial drop.

The way I see it is that volume is not exactly on an uptrend after breakout. So there's HOPE that things could get better afterall? (With the Fed's money printing machine starting to go in full force again, I'm keeping my hopes HIGH in the short-term...of course that would mean a depreciation of the USD is imminent...which means that I can now SHORT THE USD...which is exactly what I'm doing now anyway)

As it is now, DOW is seen to be testing the high (after breakout) of around 9800...

GOOD NEWS:
Although DOW has breached trendline 5, it's NOT breached trendline 3, and it's not known if we are looking at a trend reversal or merely a correction (to date, DOW has retraced about 50% from beginning of trendline 3) looking at the period spanning 1991 and the present.

In fact, anyone looking to short the market after DOW's breakout from trendline 5 would be wise to wait for DOW to:
a) first test the high (after breakout) of 9655 to 9800, and having tested that,
b) to fall below approx. 7445 (red solid line in chart above)

Personally, unless both conditions a) and b) have been fulfilled, I won't be comfortable taking short positions (except in scalping of course) from this point on, not with trendline 3 apparently providing some sort of support...

Now, the REALLY BAD NEWS:
Should DOW punch through trendline 3, and fulfill the conditions for a trend reversal (points (a) and (b) above shows how I would qualify a confirmed reversal), we'll find DOW all the way down at 1040 (which effectively brings us back to 1983, when DOW first took off from its base and went on a parabolic ascend without looking back even once).

I'm PRAYING for DOW to climb back up to hit at least 9800, and stay up there for a while...if it doesn't, the future's going to be pretty bleak for everyone on planet earth.

FX Trade 11/27

Tired of scalping. Am letting this one run until there's reason for me to change my view wrt where the pair's heading.

Trades on 11/25 were all stopped out at minimum damage to my account. Am starting to accept that getting stopped out doesn't mean I'm a failure. Although it still doesn't feel good, it sure helps to keep my drawdowns small.

FX Trades 11/25

Long: USDJPY, CADJPY, AUDUSD, GBPJPY, GBPUSD