Peterma in your opinion who leads who, USDX Bonds or vice versa.
Any of you guys want to look at the BTC/USD charts and let me know when to sell???
Kuzia - I posted at 2.15pm yesterday - but it took the LO this morning to do the work - itās always a question of timing but very often LO the following day when the divergence is persistent, that is why I was saying Jonny was right to exit his short, even if it did continue down for the rest of NY - the important lesson for me is that a bell rings - change up ahead.
The timing part - when I see that the bell was right by price action then my bias is confirmed - then I look for ote etc to get aboard, sometimes I jump in - thatās bad because then Iāll get the timing wrong.
Getting the signals right is relatively easier for me now - getting the entry timing right is a work in progress.
Just a quick point re bond/usdx/fibre divergence:- sometimes like today when we have US10 yr higher, USDx lower and fibre higher it begs the question is the usdx going to follow the 10yr and thus tank the fibre for a good short trade. Well one thing that could cause the divergence could be recycling of US dollars from US equities into US bonds. Looking at the DJI and SPx and youāll see a big pull back today. If this is the case it would not require a consequent increase in the USDx as the recycled money is already in US$. One to think about guys?
Yep, good point, follow the money essentially (Im beginning to appreciate intermarket analysis more and more these days). This is why, for me, its important to have a number of things line up before considering to take the trade. It would have been so easy to jump in today while all that divergence was happening and get burned (shorting at all the pauses on the way up).
Yep - all risky assets down, s&p, indexes, even silver, even good old used-to-be-safe gold, all around the soft US numbers release.
Safe assets up - US and EU bonds , chf up - everything as it should be ā¦ with one exception ā¦Fibre up.
So Iām figuring why? - I know other usd crosses helped usdx down - chf and jpy - but if risk is off - then how long before some good old usd buying?
Probably take Friday to sort it all out. - I see the ote on usdx 15min on fibre and usdx - hmmā¦, nah , back to timing.
Hi Mapman,
Very interesting and a solid point!! I want to understand this a little better - Lets say there is a total pool of funds (no new inflows) and the funds flow from one asset class to another. If the majority of fund flows are moving from equities to bonds, we can expect USDX to follow as they are positively correlated, resulting in a downtrend on its paired currency like fibre. Is my understanding correct? But what exactly do you mean by the recycling of US dollars from equities to bonds?
The main point I was trying to make was to be aware that there may be instances where US 10yr (and other US bonds) may be or seem to be out of short term synch with the USDx due to flows into these bonds not having first to be converted into US$'s. Lets say a major fund wanted to reduce weighting in US equities. As it was already invested in the US equities market in US$s in wouldnt have to convert any other currency to enable the transaction therefore wouldnt impact the USDx. In which case we might see an initial pop higher in the US10 yr without any similar move higher in the USDX. If we assume that all market players generally follow the herd (particularly flights to perceived safety) any mismatch between USDx and US bonds (btw I am only speaking of the 10yr as I have not looked at any other term bonds) might be short lived as the move to bonds from equities is taken up by holders of non US$ denominated assets switching holdings and thereby impacting the USDx.
I hope this helps but please bear in mind these are my ātop of mindā thoughts only and I stated them purely to help the discussion on bond correlation and for us all to think through what might happen in the market in a bit more detail. Intermarket analysis is a complex subject and there will be others much better qualified to comment than me.
Looking forward to the action today and tomorrow - have a good one.
Mark
and again 
closed my fiber short from 1.2860
H4 70.8%Rs belong in an art gallery!
the amount of bad trading decisions Iāve been taking the last few months are disgusting!
I seriously traded better when I just started out!
in the second and third quarter of 2012 I had an astonishing win ratio (8 out of 10 trades where winnersā¦ small winners maybe but winners never the less) and now I am happy to win 1 trade out of 10 and I am not even sure what I am doing differentā¦ maybe the market environment changed and Im not adopting fast enoughā¦
I miss all the obvious trades and then make up for it by entering stupidly and risky - and lose.
It seems I have this huge toolbox, and the hand full of tools I used to use successfully are not working anymore, and now Im trying to choose a new set of tools everyday to find something that worksā¦ which obviously ends in failure.
While I am strong on my risk management I was able to keep my losses as small as possible. But I did manage to eradicate all my profits and I am now (slightly) in the red for the first time ever!
while the charts and I seemed to have been speaking the same language for a nice little while, it now seems that the market has switched to Mandarin or any other language that I simply dont understandā¦
It is getting close to 6 months now that I have been constantly losing, and it is beyond frustrating!
while I can see (in hindsight each day) that ICTs tools are working, they seem somehow to have stopped working for me.
I am still dragging along, but if I cant seem myself to start improving again, I will have to start looking somewhere else.
the more frustrating it gets, the worse my trading decisions seem to get (and I didnt have a meltdown yet! I only enter on confluencesā¦ I just seem to pick the wrong ones)
my latest episode today LO: fiber long at 1,2830 SL 1.2799 go figure! at point of entry if was just not clear if we had set the high of the week on tuesday, or the low of the week on wednesday (as in so many weeks) and I entered on confluences of: fiber-usdx divergence, smt divergence,LO killzone, reflection at 1.2818 (which I expected to be the judas) was expecting to get 30 pips or more out of it.
and I just got stopped out while writing thisā¦
sure, can happen, on to the next oneā¦right? (ive been saying this for the past 6 months)
Maybe my crying here will also eventually get me a private one on one? Maybe it will finally come to my long awaited AHA momentā¦ I was very profitable and now I am only losing trade after trade while I do not realize to have changed that much other than a normal evolution ( im reading everyday and Im sure some of it stuckā¦ maybe thats the problem?)
please excuse, but I needed to let off some steam (of frustration)
its like learning to ride a bike, and getting quite good at it, and then one day just not being able to balance yourself anymoreā¦
I did start to expand my learning into longer term trading on a demoā¦ too early to tell.
but I need to draw a line somewhere, and If I do not see some nice improvements (also account wise) during this year, I might have to move on, and that is a scenario I am very scared off to be honest!
any insights or critique is always welcome
cheers
fredy
How glad am I that I started to take note of petermaās Bond obsession!
Nice move this morning!
Just got home and saw that move - Damn that wouldāve been nice to catch!!! Congrats on whoever did!
Hi FF,
I donāt have any advice, as such, but I just read your post and am a little relieved there is someone else feeling exactly what Iām feeling right now. I started trading live in Feb using only what Iāve learnt from ICT (as thatās all Iāve ever learnt when it comes to trading) and I took my Ā£2,000 account up to Ā£2,250 in about 6 weeks using less than 1% risk on every trade. So then I thought, it must be time to up my risk to a real manās 2%. Wellā¦ever since then I have been losing like crazy and as of right now my account is back down to Ā£2,002 and I canāt bear for it to drop below Ā£2,000 so Iāve just stopped.
A couple of weeks ago I started reading Nikitaās price action thread because I thought maybe Iād be better off to get away from the M15 chart and start trading using some HTF price action (mainly because I think trading the M15 chart is going to give me a heart attack at some point). Anyway, one of her big rules is āIf yesterday was a buy then today is a buy, if yesterday is a sell then today is a sellā. Obviously you canāt just trade that blindly, but as a general rule itās pretty simple and seems to be right more than itās wrong. But, if you look at Fibre for the last few weeks, that rule has been a recipe for disaster.
I would love to blame the markets and say theyāve been a bit crazy, at least for the last month or so, but then I see jonnycab and others smashing it. I can see exactly what they see, but I just canāt see it until after itās happened (maybe Iād be good as a forex teacher!)
Anyway, Iām not sure what to suggest. For me, I think I either need to cut my risk all the way down so Iām not scared of losing and then maybe Iāll let my trades run a bit more. Or maybe up my risk and then that will force me to only take really top quality set ups because Iāll be so scared to lose on a trade that isnāt a perfect set up (now Iāve said this option out loud it doesnāt seem like the most sensible idea).
I dunno. Itās hard. But there was definitely a time when these tools were working for me. And while Iāve been losing, other people are making money using these tools. So all I can think is that there is some psychological thing going on that I just canāt figure out.
This message probably hasnāt helped at all, so I apologise, but itās nice to know someone else is feeling what Iām feeling right now
bonds and usdx seem to be back in sync now imo.
First off, 6 months of losers and youāre only just below break even. Impressive risk management. You will be in this a long time if you can keep that up. Dont get sloppy now and over leverage to get back those profits.
Can I ask, how many tools are you focusing on and which ones are you using the most? Do they include the absolute core concepts, such as S&R and Market Structure? Back when you were placing winning trades, were the same tools being used? What timeframe do you typically trade off?
Iāve been using only the following tools:
HTF S&R levels (also, look at the short term S&R levels in the image below, we retest some key points before moving away from them again)
Market Structure
Fibs
Thats pretty much it.
My reasoning for the trade this morning, because of what happened yesterday with the USDX and 10Yr, I had a slightly bearish bias towards the Fiber today (rightly or wrongly). First, an asian range with quite a bit of sell off, sometimes this signals for us to be positioning Long. This move down in the AR, takes out a swing low on the 15M, possible bear move? I waitā¦ Price springs back up sharply into that OTE zone of the AR, big rejection (another clue we are potentially bearish today). I missed this or should I say, I waited some more, I need more confirmation. Price swings back down below the AR low, taking out yet another swing low formed yesterday, indicating to me that the noted S&R level of 1.2830 has probably been worked enough, no more orders are being filled around this level to keep price up. Price bounces back up above 1.2830 for one final sweep and then down she went.
The key factors for me are S&R and whether the current levels are still valid (how easily is price moving around these levels). Market Structure. We broke down two levels of swing lows, I like to see this sort of thing for confirmation before I enter.
The same thing happened yesterday from a MS perspective. We took out a swing high, is that enough to get in Long? Maybe. Lets see what happens, up it goes again, taking out yet another swing high. Looking good. Retrace down and retest the old swing high that we took out initially, then away it goes again:
Having said that, I missed the move up yesterday, I was actually short from 1.2830. Still a profitable trade, but ultimately I was wrong. I only spotted this after I was stopped out and I was analysing why. The 10Yr/USDX divergence was one reason why I was initially positioned short at this level, but we only saw the results of that divergence this morningā¦ This also kept me out yesterday from getting back in again shorting at every pause.
The more time you spend at this, the better you get, dispite what you may be experiencing now! 
With your impressive risk management, all you need is one or two trades that are good to wipe out any losses and get back to the original profits.
Dear BearMark and Fredfresh:
If you are having a string of losses, switch back to practice account (if you arnĀ“t already) until you get your trading plan tested and feel confident.
And then read the book Think and Grow Rich by Napoleon Hill. Here is a quote that you will like
"Just keep this fact in mind, and remember when your plans fail, that temporary defeat is not permanent failure. It may only mean that your plans have not been sound. Build other plans. Start all over again ā¦ Henry Ford met with temporary defeat, not only at the beginning of his automobile career, but after he had gone far toward the top. He created new plans and went marching on to final victory.
We see men who have accumulated great fortunes, but we often recognize only their triumph, overlooking the temporary defeats which they had to surmount before āarrivingā.
No follower of this philosophy can reasonably expect to accumulate a fortune without experiencing āTemporary Defeatā. When defeat comes, accept it as a signal that your plans are not sound, rebuild those plans and set sail once more toward your coveted goal. If you give up before your goal has been reached, you are a quitter.
A quitter never wins and a winner never quits.
Write this sentence on a piece of paper in letters an inch high and place it somewhere where you will see it ever night before you go to sleep and every morning before you go to work."
^^
In the book, Hill emphasizes the necessity of a MasterMind Group. I like to think that this thread is a sort of MasterMind group. ^^
xxx
Regarding trading, I have recently been studying Carry Trades in depth, trying to learn EVERYTHING about it. This has lead me to other areas such as Bonds, I.R. Spreads, as well as learning how to identify different āpersonalitiesā of currencies. And these personalities can change, mind you.
Different types of currencies include:
Flight to Safety Currencies
Funding and Lending Currencies
Investing Currencies
Commodity Currencies
Do you know what kind of currency it is that you are trading? You should profile your currency to properly understand itās personality (Sounds cheesy but itās true!!!)
Hope thatās helped!! Keep up the Divergence analysis I enjoy reading and following along. Also as a personal request try and specify if you are talking about bond price or yield because sometimes itās hard to tell. =)
Studying Carry Trades has really helped me understand bond Yields since some currenciesā bond yields go up but perhaps another goes up faster so even though one goes up that currency will depreciate. Think about it
sKratch
Jonnycab, this is such a great post that iām replying with the quote in its entirety LOLā¦
FredFresh (and others reading this thread) you are not alone on this and the fact that you have not burnt your account is nothing but astonishing. To me without proper risk management you will fail, regardless of your ability to pick optimal entries. Donāt get frustrated - Consider this a lesson and be proud of how well youāre managing your risk during a string of losses, which WILL happen no matter how experienced you are. Take a look at your entries, re-evaluateā¦ you will get better over time. Its not a race, its a marathon, yet consider the opportunities at hand if you master this - an invaluable life tool.
Iāve been paper trading around since December last yr with a practice account of $5k, now sitting at $5,400. Highest was at $5,800 approx. I made a cr@pload of āwrongā trades. I was taking longs in a MS that implied shorts. I was literally trading retracements, which automatically reduces my chances of being profitable by a large amount. I also didnāt let my profits run, but would push my stops like a dork. Look at yesterdayā¦ Grabbed that long (I went long because to me MS implied it - higher highs/lows on euro, usdx was showing the opposite, some divergence). Took profits at 20 pips for 50% (crucial for me psychologically), another at 30 pips and left a small portion to run, which hit the SL at this fall we just saw. I had a great trade yesterday that bumped the account up 4% and offset about half of my losses from the previous week.
Keep it up thats all I can say. Also, donāt look at one method. Look into Chris Lori, Al Brooks, Sam Seiden, anyone else that is a pro trader, extract parts you find useful. Make trading simple, remove all indicators (maybe a MA here and there). PRICE is the indicator!
Also, Jonnycabās explanation of his trade was one of the most helpful posts iāve read thus far. I think we should focus on this guys - When the trades work and it utilised ICTās tools, share it. If it doesnāt, share it too! I will do the same in my next trades.
Thanks a lot for that post, jonnycab. Itās really helpful to see how you actually think through it. You always seem to wait for confirmation which is one thing Iām sure I used to do but then I obviously got a bit confident and decided to start entering trades without waiting for any confirmation. Combine that with upping my risk to 2% = losing money.
sKratch, Iāve had that book sitting on my window sill for about a year and a half and have never even opened it. Youāve just given me a reason to go and read it now so thank you for that.
Just to mention a trade Iām in because I would love to know what people think if anyone has time to reply:
Iām long from 1.2794. My thinking was/is: EU has hit support at yesterdays low, USDX has hit resistance at 83.30ish, divergence between USDX and USDCHF.
But now Iām looking at H1 and thinking, Wednesdayās high didnāt take out Tuesdayās high, and today we have taken out yesterdayās low. So would this be a time to start looking for shorts? At the moment Iām thinking of taking profit at 1.2842, but Iām thinking it might not quite make it up there. But if it does it seems like a good place to take a short.
Anyway, if anyone has time to look at their charts then Iād love to know what you think.
Thanks again for the helpful posts.
EDIT: It also looks like thereās something juicy to be had up at the 1.2960-1.2980 level. But you can be sure that the day it decides to reach up there is the day I will be short on EU.
Bearmark,
In this particular scenario, if I was in that trade and was uncertain I could move my SL close to my entry level and perhaps take partial TP (20%), another 50% at about 1.2816, leaving the rest to ride a little longer.
Why?
There is a good chance that all the orders at 1.2823 or 1.284 werenāt filled, it may be going back up there for another round. If you make a fib from 1.2787 and 1.28050 you will see the 2nd leg up found resistance at 127%, the 161% being where a possible second TP and is close to the 79% retrace of the most recent swing down before that brief consolidation period.
This way, yeah your profits wonāt be as large, but youāve just turned a potentially losing trade to a break even or profitable one.
Just my 2c though, maybe someone has a better idea.