Bollinger band trading with MAs

[hellogoodbye4201]

well, by the looks of my chart ill be going short on AUD/USD @ .8891 or if it continues higher ill re enter @ .8989

[Headmaster111]

To me, flat bollingers show relatively weak expanding strength of the PA and therefore the order flow does not have enough momentum to start a trend or break to the upside/downside. So, if I see that combined with a long wicked candle on the Daily, I’m definitely in for the trade.

My EUR/AUD trade was a trendline bounce, a bollinger bounce, and a long wicked candle.

Good point.But i have a hard time seeing the chart.Does this apply to daily chart only or 1 hr or 4hr as well?
Enjoy your weekend.
Headmaster.

[Headmaster111]

@JohnnyBSmart

Hello Headmaster,

I’m afraid the bottom is a moving target that isn’t going to stabalize anytime soon. With the Vix going up and oil going down this will add to the dollars rise. Add the flat economy just reported out of Germany and the continued downward spiriling of the PIGS and you have a recipe for continued strengthening of the dollar.

A strong dollar is not what the US wants either. A stronger Europe buys more of our products and a stronger world makes less wars. The recessions and depressions of past history were the catalyst’s of past world wars.

China is going to come out of this recession the best of any country and will own large chunks of the best companies in the west. They have found a way to defeat the west and cut the heads off its past enemies. By 2020 they will own the world as America goes the way of past super powers such as Britain. The big difference being the Brits were smart enough to retain the wealth and still own a lot of the US companies. Most Americans and British would be shocked to learn this fact but investment money had to come from somewhere when the US was young and broke. Now we are old and broke with our resources depleted by the robber barons Carnegies, Rockefellers and others. They were as ruthless in their greed as any conqueror in history and make China look like a bunch of boy scouts.

It was British investors that financed America’s past growth such as the gold and silver mines of the west and oil and timber at the turn of the century. America will be forced to cut it’s military budgets in the future as China’s growth over takes the rest of the world in combined GDP. The will of China will become the wishes of the world and the west will be powerless to stop them.

It’s ironic that the west is being defeated by China beating them at their own game. That game being the game of the greedy western capitalist. They are gobbling up world resources right now at an alarming rate. Iron ore mines in Australia and Brazil, steel manufacturing plants, oil tankers, ship building, oil companies and oil contracts. How better to control rising commodity prices then to own the companies that produce them.

What China is doing now is no different then what Henry Ford did in America when he built his own foundries and steel mills to build his Ford cars. He owned everything from the ground up. He crushed the competition for years and amased a huge fortune in the process. His manufacturing plants built the armaments of war and his wealth financed WWII when our government was dead broke from the Great Depression.

China is in the unique position to copy everything good from the west and correct everything that is a detrement to their success. The things like over loaded prisons, government pensions and high costs to run the government, Wall Street theft and greed, worker strikes, and crime is dealt with swiftly although harshly by western standards. I don’t think you have to think too hard how the government of China would have dealt with the CEO’s of AIG, Wall Street investment bankers and others who orchestrated this fiasco as well as the thieves like Bernie Madoff. They would all just disappear never to be heard of ever again and no burden to society sitting in a prison.

The west is like the aged boxer who made millions in his youth but through bad investments and a high life style is reduced to being a door man at someone else’s hotel.

This recession is not of the short term variety and will last more than a decade. Nothing will ever be the same except the stupidity of the government and the greed on Wall Street. It’s all business as usual on those two fronts and they are unlikely to change bed partners in the future.

Any bottoming of the Euro will be short lived as Greece is only part of a long list of problems that are not going away. Some experts are already looking at the 1.25 to 1.22 level.

There is already more problems then there’s money to fix it. Countries connected to the Euro are now wishing they were not, as they cannot devalue their currency as they did in past recessions.

The truth is the EU is fed up with Greece and their indiscretions over the last 10 years. The EU doesn’t have the money even if it wanted to help Greece.

The world is in a sad state of affairs to say the least. The good news for the currency trader is that volatility will be remain high. It’s going to be a wild roller coaster ride.

Trade well and prosper,

Johnny

Johnny,

I have read this twice.It seems you have a flair for analysis.Why not set up a consulting firm on world economy to be making cool money there as almost all your predication comes to pass.Remember i suggested before that you take a faculty job in finance dept of a university(Half of the profs there dont know what you know).
Great job.
Enjoy your weekend.
Headmaster.

[Headmaster111]

SanMiguel,

You can call it whatever you want and I’ll call it the result of the weak Euro and the stronger AUD and we both will have a fist full of cash. I’ll call it price consolidation with a classic Pennent flag forming and the fundamentals will show me the direction is down.

I don’t know about the flat chested Bollingers or how bouncey they are or if PA’s getting weak and has no strength for any up or down moves. If the sight of a wicked long candle gets you excited daily and makes you jump into the trade then I’m happy for your success. Different strokes for different folks I always say. I know all of this has me darn excited and I hope your PA survives all of it. Damn ain’t this is fun. I think I’ll take MA out and let off some steam tonight.

I think PA is getting his strength back nuzzling up to Ms. Bols. See attached.LOL

Have a great week-end and don’t do anything too crazy,

Johnny

Really,this pic is crazy.Where the heck you always get pic like this?

[JohnnyBSmart]

@Headmaster111

Good point.But i have a hard time seeing the chart.Does this apply to daily chart only or 1 hr or 4hr as well?
Enjoy your weekend.
Headmaster.

Hello Headmaster,

This is an example of the fundamentals and it’s effect on a chart. Here is the H1 and the price is going into an ever narrowing downward consolidation with only small changes in direction. A bearish Pennant Flag shows the direction if you were oblivious to the news. Trading in a narrow channel trying to pick up pips from LowerBand to UpperBand is like working at McD’s at minimum wage. Why do it if you don’t have to? With this chart a trader should wait to get in when the PA is at the UpperBand.

The problem with charts is the head fakes which occur. Notice the little bounce of the Bols LowerBand just before the PA fell off the cliff. This is an example of a counter trend trade gone very bad. This is why I preach the fundamentals and discourage countertrend trades. This is especially dangerous during periods of consolidation. Also look at the M1 chart and it shows the PA actually hitting the UpperBand of the Bols before moving down.

The average newbie just playing the charts would have made a “Long Buy” on the bounce and had his stoploss hit. Most would have been stunned and pissed off missing the downward movement totally. He would then jump on a “Long Buy” again after such a long down bar expecting a bounce up after such a move making his second counter trend mistake. This type of trader and his money are soon separated because he didn’t follow these simple steps:

1. Analyze the fundamentals.
2. Analyze the chart.
3. Plan the trade.
4. Trade the plan.

Don’t ever be in a hurry to lose your money it will disappear fast enough buying cars, houses and fast woman or is that fast cars. LOL.

Trade well and prosper,

Johnny

[JohnnyBSmart]

Really,this pic is crazy.Where the heck you always get pic like this?

Hello again,

Google it.

[SanMiguel]

Good point.But i have a hard time seeing the chart.Does this apply to daily chart only or 1 hr or 4hr as well?
Enjoy your weekend.
Headmaster.

Click on the chart a few times, it will zoom in.
Technical analysis or boll bands work on all time frames, the application of the trade in each time frames might have slight differences.

[SanMiguel]

The problem with charts is the head fakes which occur. Notice the little bounce of the Bols LowerBand just before the PA fell off the cliff. This is an example of a counter trend trade gone very bad. This is why I preach the fundamentals and discourage countertrend trades. This is especially dangerous during periods of consolidation. Also look at the M1 chart and it shows the PA actually hitting the UpperBand of the Bols before moving down.

The average newbie just playing the charts would have made a “Long Buy” on the bounce and had his stoploss hit. Most would have been stunned and pissed off missing the downward movement totally. He would then jump on a “Long Buy” again after such a long down bar expecting a bounce up after such a move making his second counter trend mistake. This type of trader and his money are soon separated because he didn’t follow these simple steps:

I think you make a good point here. How often do you hear people say “trade with the trend” (the trend includes fundamentals as well) compared with how often they actually trade with the trend?

I think if you follow 1 or 2 pairs and understand the PA, counter trend trading is fine but you need to spend a lot of time understanding that pair, how it bounces, its daily range, average pips targeted on counter trend trades, money management on counter trend trades (moving stops to break even, etc.). When I say understanding here, I mean watching that pair from open til close for a few [U]months[/U] at least. If not, then you trade with the trend to keep it conservative - there have been many posts on this thread about trading [U]with [/U]the trend only (following the higher timeframe’s trend).

[JohnnyBSmart]

@Headmaster111

Johnny,

I have read this twice.It seems you have a flair for analysis.Why not set up a consulting firm on world economy to be making cool money there as almost all your predication comes to pass.Remember i suggested before that you take a faculty job in finance dept of a university(Half of the profs there dont know what you know).
Great job.
Enjoy your weekend.
Headmaster.

Hello Headmaster,

My oldest son is one of those University Profs and my youngest son works in the computor lab department. I’ve been a consultant since 1993, just not in this industry so analyzing things is how I made a living. The fact is the last thing I want is a another job. Working for a steady paycheck has some advantages as well as disadvantages. The disadvantages are having to work when they want me to work and another is having to be someplace at a set time which means fighting city traffic. The most unbearable thought is having to answer to some arrogant know-it-all as I don’t keep my mouth shut. LOL.

The reason the University Profs are still teaching is they haven’t figured out how to trade or are just too busy. Like most people out there in the world they are too busy making money for somebody else to have any time to make money for themselves.

Here are some quotes that seem to fit the University Profs.

The only source of knowledge is experience.
Albert Einstein
Any man who reads too much and uses his own brain too little falls into lazy habits of thinking.
Albert Einstein
Education is what remains after one has forgotten what one has learned in school.
Albert Einstein

The last company I worked for was taken over by a Professional Engineer and a CPA. This proved a disasterous mix as neither new manufacturing or sales. Their stupidity led the company very quickly to a reduction of sales to 20% of what it was within one year. When I left I told them it would be 30% within six months and I wasn’t far off the mark. They made one excuse after another why the company’s sales and profits were falling like a rock.

Having helped build that company I watched them dismantle a perfectly good profitable company down to a very small unprofitable company. The only reason they have any sales at all is replacement parts but even that is slowly going away with competition now making the same parts.

The CPA thought he could help the cause by changing the worker’s pay system. On one of the major production lines the end result of his efforts was to increase the per foot labor cost of the product by a factor of four. It’s hard to imagine how this could have happened but it did and I knew it would. He was looking at per hour labor cost and oblivious to product labor cost. He reduced per hour labor cost by 28.5% but only reduced total labor cost by 4.2% per shift. The decrease in production resulted in two more shifts being added which tripled supervision cost as well as indirect labor. I worked with the union and he worked against them. I had a win-win no nonsense relationship with the union that policed their own members. The non-producers did not last at the request of the union. Having an arrogant attitude and lowing the employees paychecks doesn’t go well with union cooperation. The US automotive industry found this out the hard way.

While the CPA was undoing years of hard work the PE decided he needed to hire more PE’s. He hired one to take over sales of all things and others to take over the plant. These were high payed individuals who think they can solve the world’s problems by spending huge sums of money of which they did by hiring hordes of IE’s and buying expensive pieces of equipment. The problem with a PE in sales is they are by nature not very good people persons. The first one embezzeled from the company and not to be dismayed the owners hired another PE to take his place. That one was even more clueless but at least honest.

The sad part of the storey is they still believe to this very day they did all of the right things and will go to their graves with that belief. They now produce a costly Mercedes Benz product for a Ford market and wonder why they can’t compete. They neglected the most important part of competing in any market and that is to analyze the market first and then produce a product that’s just right for that market at just the right price. And then service, service, service those customers with top sales people. A product that is anything less or anything more simply won’t survive. The DeLoren and the Yugo automobile companies are good examples of not fitting the market. Top this off with bad sales people and it’s a total disaster.

All of the good people have long gone on to greener pastures and the ones that are left are all idiots or underpaid just waiting for retirement. It won’t be long before they file for bankrucy if they haven’t already. I could probably pick this company up for a song when it goes on the auction block but I’ve learned to much while I’ve been away. The cost to have the Chinese manufacture and ship this product is half the price I could manufacture it here. Sad but true. Manufacturing will soon be totally dead in the US. All of the money is in the sales side anyway so why have the headache of manufacturing.

The first year working for myself increased my net yearly income six fold. It taught me to never work for anybody but myself ever again. Yes there are stressful times of long hours but so is there working for somebody else.

So no I really don’t need a job and consulting has amused me enough over the years to last a life time. Some of the company names I’ve consulted are household names and it would surprise you of their stupidity. The sad part is that few took my advice and the ones that I saved millions of dollars never even paid their bill without me threatening to take them to court. Nothing surprises me anymore as I’ve seen first hand why the Japanese have kicked our butts and why the Chinese will continue to do the same.

Trade well and prosper,

Johnny

[Headmaster111]

Hello Headmaster,

I’m afraid the bottom is a moving target that isn’t going to stabalize anytime soon. With the Vix going up and oil going down this will add to the dollars rise. Add the flat economy just reported out of Germany and the continued downward spiriling of the PIGS and you have a recipe for continued strengthening of the dollar.

A strong dollar is not what the US wants either. A stronger Europe buys more of our products and a stronger world makes less wars. The recessions and depressions of past history were the catalyst’s of past world wars.

China is going to come out of this recession the best of any country and will own large chunks of the best companies in the west. They have found a way to defeat the west and cut the heads off its past enemies. By 2020 they will own the world as America goes the way of past super powers such as Britain. The big difference being the Brits were smart enough to retain the wealth and still own a lot of the US companies. Most Americans and British would be shocked to learn this fact but investment money had to come from somewhere when the US was young and broke. Now we are old and broke with our resources depleted by the robber barons Carnegies, Rockefellers and others. They were as ruthless in their greed as any conqueror in history and make China look like a bunch of boy scouts.

It was British investors that financed America’s past growth such as the gold and silver mines of the west and oil and timber at the turn of the century. America will be forced to cut it’s military budgets in the future as China’s growth over takes the rest of the world in combined GDP. The will of China will become the wishes of the world and the west will be powerless to stop them.

It’s ironic that the west is being defeated by China beating them at their own game. That game being the game of the greedy western capitalist. They are gobbling up world resources right now at an alarming rate. Iron ore mines in Australia and Brazil, steel manufacturing plants, oil tankers, ship building, oil companies and oil contracts. How better to control rising commodity prices then to own the companies that produce them.

What China is doing now is no different then what Henry Ford did in America when he built his own foundries and steel mills to build his Ford cars. He owned everything from the ground up. He crushed the competition for years and amased a huge fortune in the process. His manufacturing plants built the armaments of war and his wealth financed WWII when our government was dead broke from the Great Depression.

China is in the unique position to copy everything good from the west and correct everything that is a detrement to their success. The things like over loaded prisons, government pensions and high costs to run the government, Wall Street theft and greed, worker strikes, and crime is dealt with swiftly although harshly by western standards. I don’t think you have to think too hard how the government of China would have dealt with the CEO’s of AIG, Wall Street investment bankers and others who orchestrated this fiasco as well as the thieves like Bernie Madoff. They would all just disappear never to be heard of ever again and no burden to society sitting in a prison.

The west is like the aged boxer who made millions in his youth but through bad investments and a high life style is reduced to being a door man at someone else’s hotel.

This recession is not of the short term variety and will last more than a decade. Nothing will ever be the same except the stupidity of the government and the greed on Wall Street. It’s all business as usual on those two fronts and they are unlikely to change bed partners in the future.

[B]Any bottoming of the Euro will be short lived as Greece is only part of a long list of problems that are not going away. Some experts are already looking at the 1.25 to 1.22 level[/B].

There is already more problems then there’s money to fix it. Countries connected to the Euro are now wishing they were not, as they cannot devalue their currency as they did in past recessions.

The truth is the EU is fed up with Greece and their indiscretions over the last 10 years. The EU doesn’t have the money even if it wanted to help Greece.

The world is in a sad state of affairs to say the least. The good news for the currency trader is that volatility will be remain high. It’s going to be a wild roller coaster ride.

Trade well and prosper,

Johnny

Well said.I need to figure out how to make cool money from Greece’s misfortune then.:D.

But i learn that France and Germany are somewhat ready to help in collaboration with IMF.When this was announced last week,Spain,Portugal and Ireland bonds started to pick up.
So, i am not sure Euro will be as low as being speculated by experts this year.Mind you,Greece’bills are only due in June.That is about four months which are enough to turn things around for other struggling countries as well.
Just my take.
Headmaster.

[Headmaster111]

@SanMiguel

Click on the chart a few times, it will zoom in.
Technical analysis or boll bands work on all time frames, the application of the trade in each time frames might have slight differences.

Thanx.I will demo your system and see what happens.As i am working on my own with something similar to yours.

[Headmaster111]

@JohnnyBSmart

Hello Headmaster,

My oldest son is one of those University Profs and my youngest son works in the computor lab department. I’ve been a consultant since 1993, just not in this industry so analyzing things is how I made a living. The fact is the last thing I want is a another job. Working for a steady paycheck has some advantages as well as disadvantages. The disadvantages are having to work when they want me to work and another is having to be someplace at a set time which means fighting city traffic. The most unbearable thought is having to answer to some arrogant know-it-all as I don’t keep my mouth shut. LOL.

The reason the University Profs are still teaching is they haven’t figured out how to trade or are just too busy. Like most people out there in the world they are too busy making money for somebody else to have any time to make money for themselves.

Here are some quotes that seem to fit the University Profs.

The only source of knowledge is experience.
Albert Einstein
Any man who reads too much and uses his own brain too little falls into lazy habits of thinking.
Albert Einstein
Education is what remains after one has forgotten what one has learned in school.
Albert Einstein

The last company I worked for was taken over by a Professional Engineer and a CPA. This proved a disasterous mix as neither new manufacturing or sales. Their stupidity led the company very quickly to a reduction of sales to 20% of what it was within one year. When I left I told them it would be 30% within six months and I wasn’t far off the mark. They made one excuse after another why the company’s sales and profits were falling like a rock.

Having helped build that company I watched them dismantle a perfectly good profitable company down to a very small unprofitable company. The only reason they have any sales at all is replacement parts but even that is slowly going away with competition now making the same parts.

The CPA thought he could help the cause by changing the worker’s pay system. On one of the major production lines the end result of his efforts was to increase the per foot labor cost of the product by a factor of four. It’s hard to imagine how this could have happened but it did and I knew it would. He was looking at per hour labor cost and oblivious to product labor cost. He reduced per hour labor cost by 28.5% but only reduced total labor cost by 4.2% per shift. The decrease in production resulted in two more shifts being added which tripled supervision cost as well as indirect labor. I worked with the union and he worked against them. I had a win-win no nonsense relationship with the union that policed their own members. The non-producers did not last at the request of the union. Having an arrogant attitude and lowing the employees paychecks doesn’t go well with union cooperation. The US automotive industry found this out the hard way.

While the CPA was undoing years of hard work the PE decided he needed to hire more PE’s. He hired one to take over sales of all things and others to take over the plant. These were high payed individuals who think they can solve the world’s problems by spending huge sums of money of which they did by hiring hordes of IE’s and buying expensive pieces of equipment. The problem with a PE in sales is they are by nature not very good people persons. The first one embezzeled from the company and not to be dismayed the owners hired another PE to take his place. That one was even more clueless but at least honest.

The sad part of the storey is they still believe to this very day they did all of the right things and will go to their graves with that belief. They now produce a costly Mercedes Benz product for a Ford market and wonder why they can’t compete. They neglected the most important part of competing in any market and that is to analyze the market first and then produce a product that’s just right for that market at just the right price. And then service, service, service those customers with top sales people. A product that is anything less or anything more simply won’t survive. The DeLoren and the Yugo automobile companies are good examples of not fitting the market. Top this off with bad sales people and it’s a total disaster.

All of the good people have long gone on to greener pastures and the ones that are left are all idiots or underpaid just waiting for retirement. It won’t be long before they file for bankrucy if they haven’t already. I could probably pick this company up for a song when it goes on the auction block but I’ve learned to much while I’ve been away. The cost to have the Chinese manufacture and ship this product is half the price I could manufacture it here. Sad but true. Manufacturing will soon be totally dead in the US. All of the money is in the sales side anyway so why have the headache of manufacturing.

The first year working for myself increased my net yearly income six fold. It taught me to never work for anybody but myself ever again. Yes there are stressful times of long hours but so is there working for somebody else.

So no I really don’t need a job and consulting has amused me enough over the years to last a life time. Some of the company names I’ve consulted are household names and it would surprise you of their stupidity. The sad part is that few took my advice and the ones that I saved millions of dollars never even paid their bill without me threatening to take them to court. Nothing surprises me anymore as I’ve seen first hand why the Japanese have kicked our butts and why the Chinese will continue to do the same.

Trade well and prosper,

Johnny

Thank God you are able to find your bearing earlier enough.I am pretty young but i have learnt so early that working for yourself is one of the quickiest way to be rich.No matter how much you are paid,be rest assure that it is less that 20% of what you are contributing to the firm.
Headmaster.

[Headmaster111]

I think you make a good point here. How often do you hear people say “trade with the trend” (the trend includes fundamentals as well) compared with how often they actually trade with the trend?

I think if you follow 1 or 2 pairs and understand the PA, counter trend trading is fine but you need to spend a lot of time understanding that pair, how it bounces, its daily range, average pips targeted on counter trend trades, money management on counter trend trades (moving stops to break even, etc.). When I say understanding here, I mean watching that pair from open til close for a few [U]months[/U] at least. If not, then you trade with the trend to keep it conservative - there have been many posts on this thread about trading [U]with [/U]the trend only (following the higher timeframe’s trend).

Lets back to business.What are the pairs ripe for trade or that to look out for this week?

[Headmaster111]

well, by the looks of my chart ill be going short on AUD/USD @ .8891 or if it continues higher ill re enter @ .8989

What are the pairs ripe for trade or that to look out for this week?

[Headmaster111]

Thread seems to have strayed WAY off topic?

Looks like PA has bottomed out on EU & GU. Looking for a retrace on the asian.

Where is Robert Carter?
I seriously need trade to look out for this week

[SanMiguel]

Lets back to business.What are the pairs ripe for trade or that to look out for this week?

Better still…what’s your shortlist and let’s comment?!
Expect it to be a bit choppy again on all EUR pairs with more Greece news expected.

[hellogoodbye4201]

AUD/USD, probably going to short that one sometime this week if the opurtunity presents itself, need price to hit .8989

USD/CAD, probably gonna long this one as it looks like it has completed a 50% retracement on the daily chart

EUR/USD, not sure what to do with this pair, its right at the 161.8 extension, maybe a retrace is in order? or maybe its best to simply short it?

GBP/USD, currently bounce off the 127 extension to the 118, not sure whats goin on, maybe a retrace to 1.5830? havent been paying much attention to this pair.

USD/CHf, maybe a retrace to 1.0610? that point as two fib levels there, or maybe like the euro it will just keep going.

im also planning on trying that market open technique that Johnny BSmart posted
btw Johnny, is it “Johnny B. Smart” or “Johnny BS mart”?

[Headmaster111]

Better still…what’s your shortlist and let’s comment?!
Expect it to be a bit choppy again on all EUR pairs with more Greece news expected.

Yeah.Thank you for your response.Almost all pairs of EUR and pair of CHF are good to me.I looked at some CHF pairs this weekend and it seems CHF behaves in opposite direction of EUR.(I now understand why Swiss declined to join Euro money).That is as EURO is getting weaker and weaker,CHF is gettting stronger in comparison to any pair.But it works best with USD/CHF and CHF/JPY.Take a look at these pairs to see things for yourself.
I dont know if you notice this too.

[Headmaster111]

AUD/USD, probably going to short that one sometime this week if the opurtunity presents itself, need price to hit .8989

[B]USD/CAD, probably gonna long this one as it looks like it has completed a 50% retracement on the daily chart[/B]

EUR/USD, not sure what to do with this pair, its right at the 161.8 extension, maybe a retrace is in order? or maybe its best to simply short it?

GBP/USD, currently bounce off the 127 extension to the 118, not sure whats goin on, maybe a retrace to 1.5830? havent been paying much attention to this pair.

USD/CHf, maybe a retrace to 1.0610? that point as two fib levels there, or maybe like the euro it will just keep going.

im also planning on trying that market open technique that Johnny BSmart posted
btw Johnny, is it “Johnny B. Smart” or “Johnny BS mart”?

Thanks.I think this sounds good.Of all the pairs available here,i only have my concern with USD/CAD.It seems this pair is unpredictable.Have you traded it before? If yes,how is the volatility on London-Nyc sessions?

[d-pip]

Monday is a holiday in USD, CAD & CHF so the market might be pretty flat for the day.