GBP/JPY Equity Building Profitable trading strategies

[cadarkitek]

Originally Posted by mytwopips

The cable is at pretty decent support going back to late 05 early 06. U/J daily is at the bottom of an uppward trendline. Our guppy is at pretty nice support going back to 02 and 03.

I would say no more shorting for me, but that has already been proven to be a bad idea last time I stated it almost 400 pips ago.

I will not short anymore for now, but who knows. I'm just collecting my interest and slowly loaning the market more & more capital.

Good analysis but my bias is still bearish until 178.

[Andrewunknown]

Originally Posted by Andrewunknown

We have a significant congestion zone just above 194.02, which is where the 261.8% extension level is for the move from 206.52-201.79 (see linked post above for details). Price hasn't really looked back for the descending triangle break late last week.

I think this has been mentioned here or on the GBP/JPY winning strategies thread before, but the move from 192.64 to 215.89 was a rising wedge off of the decline from 252. Rising wedges are (sometimes unreliable) continuation patterns. The initial textbook goal for such a pattern is a 100% retracement from peak to trough: so, 192.64. Keep in mind because this a continuation pattern the pair could (by definition) continue on after that.

194 may turn things back: certainly the pair is very oversold...but I don't think so. Best to stay away from longs (unless you're adding equity for this strategy, of course) until the pair is firmly based out. All those upper wicks that are roughly 50% in length of the candle body on the 1H candles since 0400 ET this morning don't inspire much bullish confidence.

Hard to believe this comment was 750 pips ago and it's only been a few short days. 6 weeks and a drop of almost 3000 pips.

I quoted the above to key in on one thing: rising wedges (192.64 on 03/17 to 215.89 on 07/22) retrace their advance and then continue the prior trend - which is downward from last year's high @ 252.

Noteworthy as it is that 192.64 was breached, it's actually the function of the pattern. It made good sense to be very wary of a bounce there because it was the year low and low of (the first leg of) the downtrend that began last year; but again, that was only the initial target, not likely to be the terminus of the decline according to the pattern.

Here's something I posted about a month ago:

Fair value v. perceived value: what is the fair value of USD v. the EUR, the GBP, the YEN, the CAD, etc.? Disagreement over this point makes the market in which we trade. What better resource to gauge perceived value than the market itself? But, traders - for various reasons - are often deluded, insisting on asserting their own perception of fair value vis-a-vis naked market behavior. This is often where bottom (or top) picking comes into play. Expressions put forth by any trader such as "It surely can't go down any further than this" and such practices as buying at support with a very liberal or no stop loss because you're "all but certain" price will bounce are examples of the delusional superimposition of opinion onto the wider market as objective fact.

What's the intrinsic value of the GBP vis-a-vis JPY? 1:192? 1:252? 1:170? Do any of us have any clue? No. We can't answer that for any currency pair because we don't have a comprehensive grasp of the fundamental picture and the intuitive/computational faculties capable of figuring the answer. As Origen famously said once upon a time, "God knows". In fact, it is our collective inability to answer this question that creates a market (any market) in the first place.

[mytwopips]

Don't worry guys, only 18,700 more pips until we can all accurately call a bottom.

[mytwopips]

It took ~one year for the pound to lose ~25% value compared to yen.

[pipsquito]

Originally Posted by Andrewunknown

Hard to believe this comment was 750 pips ago and it's only been a few short days. 6 weeks and a drop of almost 3000 pips.

I quoted the above to key in on one thing: rising wedges (192.64 on 03/17 to 215.89 on 07/22) retrace their advance and then continue the prior trend - which is downward from last year's high @ 252.

Noteworthy as it is that 192.64 was breached, it's actually the function of the pattern. It made good sense to be very wary of a bounce there because it was the year low and low of (the first leg of) the downtrend that began last year; but again, that was only the initial target, not likely to be the terminus of the decline according to the pattern.

Here's something I posted about a month ago:

Fair value v. perceived value: what is the fair value of USD v. the EUR, the GBP, the YEN, the CAD, etc.? Disagreement over this point makes the market in which we trade. What better resource to gauge perceived value than the market itself? But, traders - for various reasons - are often deluded, insisting on asserting their own perception of fair value vis-a-vis naked market behavior. This is often where bottom (or top) picking comes into play. Expressions put forth by any trader such as "It surely can't go down any further than this" and such practices as buying at support with a very liberal or no stop loss because you're "all but certain" price will bounce are examples of the delusional superimposition of opinion onto the wider market as objective fact.

What's the intrinsic value of the GBP vis-a-vis JPY? 1:192? 1:252? 1:170? Do any of us have any clue? No. We can't answer that for any currency pair because we don't have a comprehensive grasp of the fundamental picture and the intuitive/computational faculties capable of figuring the answer. As Origen famously said once upon a time, "God knows". In fact, it is our collective inability to answer this question that creates a market (any market) in the first place.

Andrew...I hope you make a lot of money, because you REALLY know this stuff...

[cuero]

Originally Posted by mytwopips

Don't worry guys, only 18,700 more pips until we can all accurately call a bottom.

You are making a big assumption that the NAP doesn't go the same way of the Reichsmark then you might have to pay people to take it away from your driveway, hence its value will become negative ;-)

[Andrewunknown]

Originally Posted by pipsquito

Andrew...I hope you make a lot of money, because you REALLY know this stuff...

From what I've read, you typically do all right yourself. Experimentation with new and relatively untested methods can cause some rough going for just about anybody. Whatever your edge was/is, find it, hold on to it and take advantage of it over and over again.

How do/did you trade away from rrram's strategy?

[trav72]

Originally Posted by Andrewunknown

"It surely can't go down any further than this" and such practices as buying at support with a very liberal or no stop loss because you're "all but certain" price will bounce are examples of the delusional superimposition of opinion onto the wider market as objective fact.[/i]

what was i thinking...short was so obvious!!!!!

Originally Posted by Andrewunknown

"God knows"

How/why/what made price crash 250pips in 15minutes at 2100GMT.

back to drawing board for me......
all i have left is one short @ 186.30 (currently -140pips) can you believe it....sold it and sold out right at the bottom!!!!.....for now....

[rrram2]

Nor this morning or in Frankfurt/London.

I am thinking this is very viable, AT least this time around half of the drawdown is ON profits from shorts! So if and when she rockets back up and trust me she will, you dont have to look at some old charts to see that.

I am sorry I have been dragged over to the short (dark) side.
I can tell you as a result of this week I have never banked so many pips in such a short time. Every time I looked at her she was shooting south
often hundred pips at a time.

She seems to be running down now. And as much as I would like to see her go up I am 12L/8S ATM, I think she is going to keep running down and filling my short orders sitting at the border.

Then of course we know she can not go further south than the south pole,
but has anyone ever been there? I here it is way way way south, further south than you can imagine. It would represent 0 and we all know despite the yen hey day going on cable cannot go to 0. As long as rates hold thru the year, it will be hard for the yen to gain too too much on the cable.
The yen is NOT a safe haven currency whoever is running around saying that is insane. You dont put your money in an investment at .5% interest.

It has been a wild week at the market, and all sorts of veterans are getting killed. MY dad even took some beatings. Yes I took a beating on Sunday/monday but only for 5000 pips = $500. I say only becasue I made those 5000 pips and more back, now I just have the drawdown issue which will hurt me some on rollover as I have shorts but it is only a couple bucks I guess I can spare that and go back to what I do best scalp guppy.

I dont care what anyone says or thinks (negatively) about my guppy trading.
But I have even come a long way since she got me for (i am trying to forget)
tens of thousands on march 17th, that was ahuge blow out and she was only at 192.60 ish. We are another 500+ pips down from that.

I consdier to be a guppy expert now after 3 short years of being obsessed with her. She is running down now I have to go I am out of balanmce and may need to add more shorts.

I am not going to tell everyone like I normally do what I expect and normally get on NFP, lets have some input from the masses on their NFP thoughts.

7:30am USD Non-Farm Employment Change -73K -51K
7:30am USD Unemployment Rate 5.7% 5.7%


Ok I will tell you, but I cant tell you how I always know in advance
NFP is going to be about the same as previous forget that expecting -73k it is likely to be more like the previous -50kish. unemployment really isnt as critical previous 5.7 expected 5.7, not expecting much deviation here.
Deviation is expected in NFP, no way it will be that bad, it will come in close to -50K which should cause GU and UJ to go the right direction for the dollar bulls. Expect another kick up for the USD after this morning. I suspect GU will fall further and UJ will kick back up.

its Friday I am looking forward to the weekend! NExt week I will be back up in Prince Frederick MD for service.

[rrram2]

at 187.50 that is a nice price to get short. I think GBP is going to fall further after NFP which should carry GJ down further. My Tp's are set to 180.00.
I too am leaning to the short now 11L/12S. It will be a wild day and I am ready no matter which way she runs, but it is more likely that USD gets stronger after the news and GBP gets weaker. And Yen is sailing high obviously and it may be some time before the yen crumbles

Originally Posted by cadarkitek

Good analysis but my bias is still bearish until 178.