Thanks, Terry. Yes, I do drive it everyday. If you’re gonna be a fan…
Asian markets are up. Nikkei up +114, so that’s a good indication that DOW futures will be on the rise tonight which [I]COULD LEND ITSELF TO FURTHER DOLLAR WEAKNESS FOR TOMORROW.[/I]
The night’s still young, so anything can happen between now and 9:30 EST US. Fortunately, I’ve found it more beneficial to just go to bed and check the charts once a night or less till I get up at 6AM. Tend to make more money by not watching the charts.
I’m sure 99.9% of you know exactly what I’m talking about!
EUR/JPY re-breached the 68 to the downside. That blew my bullish positions.
Out of EUR/USD @ +5, EUR/JPY @ +7, and GBP/JPY @ +6.
Looking for reversals off a bounce downward off the 68 and the 38 for the GBP/JPY. EUR/USD may have a topside wall it can’t breach.
Shame…was up over 100 on the three for a few minutes…
I take it you mean the game that is mainly played with hands by padded up giants, and not the beautiful game played worldwide. Please don’t call it soccer. 
As for 4x4’s, has to be the Land Rover. All tooled up…nice.
Great thread BTW.
cheers4now
Former marine. Need to master this or its more contracting in the badlands. LOL
The reversals did pan out from Sunday night:
+71 EUR/JPY REVERSAL
+94 GBP/JPY REVERSAL
+5 EUR/USD REVERSAL
-8 GBP/USD REVERSAL
[U]MONDAY[/U]
+24 GBP/JPY Break of the low
+72 GBP/JPY Break of the low
-104 EUR/JPY REVERSAL
-156 GBP/JPY REVERSAL
Interesting thing about the -104 and -156 trades; those were about as perfectly set up as you could ask for and were over 40 pips apiece when I went to bed. But, as the gods of forex would see fit, those positions reversed hard to the point of failure. So, even the best set ups can fail.
[U]TUESDAY[/U]…so far…
+96 GBP/JPY Break of the high
+42 EUR/JPY Break of the high
+10 EUR/USD Break of the high…then kinda stalled…
One of the most popular statements that has EVER circulated around the Fx forums is, “No system can perform in all market conditions”.
my opinion on this is thus:
BALONY!!!
Indicators are designed to respond to the market and are not a crystal ball, but a probability indication of future events. While some indicators work better in certain market conditions, there are indicators that work in all time frames and all conditions.
That being said, and being understood as true and factual, why cannot there be a system that works in all market conditions year after year?
There can…and there always have been. Only those who mask personal failure behind blaming a failing system object otherwise. An objective and discretionary trader has only himself to blame for his mistakes and never the indicators that merely respond to math.
Now, I’m not going to give you a system of method, but a list of my favorite indicators that I believe are timeless and when used alone, or in a combination based on your own methodology, [I]WILL ALWAYS BE PROFITTABLE[/I].
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[B]Moving averages:[/B] used properly, these little gems can give you amazing insight into past, current, and future price movement. Now, with a name like, “moving average”, how could their effectiveness ever decrease?!
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[B]Parabolic SAR:[/B] I’m a big fan of Wilder, who I believe was a brilliant man and never appreciated for all he has given to the trading world. The SAR can be a stop out level as well as an entry indicator as it always trails in the direction of the trend.
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[B]MACD:[/B] A stochastic type indicator revolving around those little gems, moving averages. I think this indicator is EXCELLENT on charts above hourly.
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[B]Stochastics:[/B] Varying styles of this excellent indicator are available to suite anyone’s discriminating taste and it’s usefulness has never decreased. Good for both entry and exit.
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[B]Commodity Channel Index:[/B] Woody has by far become the master of this oscillator and used it successfully for many years in all types of market conditions. I, myself, feel it should only be used on hourly and below.
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[B]Relative Strength Index:[/B] A good confirmation oscillator. However, I’ve never found it to be good enough to trade solo.
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[B]Bollinger Bands:[/B] An acquired taste…but useful in all markets. Good for slower charts.
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[B]ATR:[/B] There is an excellent thread buried in the 2550 EMA thread at FF by Diallist where he explains it’s proper usage.
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[B]Ichimoku:[/B] Ah!, the loved and hated Ichimoku! This beautiful indicator combination takes some time to master and understand, but within it’s mass of confusion is an amazing amount of information.
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[B]Trailing Volatility:[/B] This unpopular indicator is by far one of my favorite indicators of all time. It’s fool proof and timeless in that it does one thing: it trails price and indicates at reversal. Used properly in a corresponding timeframe…yeah…that’s nice!
There ya’ go, babypipsters…the keys to the kingdom. If you don’t use them wisely, they don’t unlock a damn thing. but with experience, study, and belief in yourself, these 10 indicators can keep you profittable in the market for years to come.
Well said, muddbuddha.
I, also, believe that a good strategy/system should work under any condition.
Surely, nobody actually believes that professional traders only make money under certain market conditions. Or, that they frequently change strategies every time the market changes.
Thanks, also, for that list of indicators.
Terry
Thanks, Terry.
Let’s go over last nights trades…
+369 GBP/JPY - BOUNCE OFF THE 38 TO THE DOWNSIDE
+62 GBP/USD - I figured if the GBP/JPY was lacking upside support, it would drag the GBP/USD with it…it worked.
If you look at the screenshot below, you can see the last area where it rode the 38MA (Brown) for several periods on the bottomside without making any real breaks above. Eventually it gave way and dropped down to 223.27 where I closed it out. I went ahead and closed the GBP/USD at the same time…no need to look at the charts as it was all a momentun trade on the GBP/USD and once the GBP/JPY started to give up the ghost, the GBP/USD had no choice but to follow.
You can tell by my trading style that I am highly discretionary. Sometimes I’m wrong, but for the most part, the patterns that I’ve observed using my method will repeat themselves over and over on the charts. Unfortunately, a lot of times my trades are long waiting decisions and not something I can “call” a day or two ahead of time. I wait for a developing thunderhead and watch to see if it develops into the tornado I hope it will.
Sometimes I bail out during or after the first period if I feel momenutm is lacking. So I have no set SL or TP. I trade by what I see solely. I feel more “in tune” with my trading and with myself that way and I think it keeps me keen. I also sleep all night. I go to bed around 9-10 and get up at 6AM. I may check the prices on my blackberry if I wake up during the night or look at the laptop if I’m up letting the dog out, but I don’t stare at the charts waiting all night. Normally the good trades develop around 7-9 PM and explode at the London. I have found it more proffitable to sleep through the London and close between London and New York. Then during the day I may take some retrace trades or small break of the lows.
I’m not telling you all this because I want you to trade like me or use my system. I’m sharing this to show that you can be successful AND sleep. You can break away from the dogma of being a hard core techie or hard core fundy and trade based on knowledge and common sense. But it takes time, patience, and a TRUE LOVE OF TRADING. Not a love for money. I love to trade. I ache to trade when the market closes on Friday night. So each trade is an effort to be a better trader than I was the trade before. It’s quality, not quantity that wins this game.
Happy Thanksgiving.
Go Pack!
Or,put another way, that you match your approach to the market depending on the conditions, rather like a rally driver and that you have sufficient skills both to identify the market phase and some tools that will do the job for you in that market. Thats where non discretionary mechanical systems may fall down as they tend to work (if they work at all!) in only one type of market phase
Good point.
Turned out to be a choppy Thanksgiving with some made and some lost.
Thursday:
+1 GBP/USD
+28 GBP/JPY
-124 GBP/JPY
-60 GBP/JPY
+93 GBP/USD
Friday:
-160 GBP/USD [B]CLOSE ABOVE THE 68MA[/B]
+128 EUR/JPY [B]BREAK OF THE LOW[/B]
+78 GBP/JPY [B]BREAK OF THE LOW[/B]
The EUR/JPY and GBP/USD’s MA lines are coming together and price is bouncing around the lines. [U]Normally[/U], when this occurs, it indicates a top or bottom starting to form in what is typically known as the “chop”.
The -160 GBP/USD was a close above the 68ma which quickly turned the other direction and headed back. It plunged to the point of failure and is now climbing back toward the line. This is common in the chop and is the roughest patch to trade through.
I’m not forecasting a reverasal or break out of any type, just giving you my observations from past & present. Now the chop is relative to your timeframe. If you are trading weekly charts, you would only see a period of slight consolidation. If you were trading short term charts, you would observe a lot of whipsaw. For me, on the three hour charts, I see chop forming.
I’m currently on SHORT on four pairs, which were doing well this morning, but have since started to see reversal. I may not be able to determine prior to the close whether the reversal is for certain or just a little whipsawing. So, these trades will stay open till Sunday at the earliest. All in all, it was a highly profittable week, so even with several trades turning against me in holiday chop, I can’t complain. 
I may be called in for jury duty next week :mad:, so my trading may lighten up drastically.
Okay, not one of these panned out. These were just utterly bad positions from the start. When you force a trade where there is no trade, you have only yourself to blame when they fail.
GBP/USD -65
EUR/USD -25
GBP/JPY -175
EUR/JPY -74
That being said, smack your wrist and move on. Feeling sorry for yourself after a stupid trading decision does no good whatsoever. [U]Acknowledge your mistakes and move on[/U]. Most importantly, learn why you decided that at that time, you decided to take that position.
One thing I decided to do on Saturday was visit the local Dollar General and purchase three personal journals. In these, I intend to record every trade and the reason for the trade. Knowing that I have to record the time, price, pair, and reason for the trade, will force me to re-evaluate my decisions prior to the open. Also, I can record observations of market movement that occur frequently or post certain events.
Okay, I made trades today that put me right back to the same level as before the forced trades:
GBP/USD +36 : closed due to failing momentum.
EUR/USD +36 : closed due to jury duty the next day.
EUR/JPY +129 : closed due to jury duty the next day.
GBP/JPY +133 : closed due to jury duty the next day.
Yeah, that’s right…jury duty tomorrow. Since I won’t be able to monitor my trades, it’s best to close them now and lock in the profit. Now, tomorrow I’ll start scanning the charts for possible openings, but will be much more cautious prior to opening a trade in low volatility.
A lot of chop this week. I’m sure it stressed more than a few thousands traders minds trying to determine for the love of god, WHICH WAY IS IT GOING?!!!
It appears that the YEN crosses are at a choppy bottom and could possibly be reversing as traders have poor memory and often return right back to what they know works once the panic has died down. This may re-birth the carry trade and cause the whole process to start anew. We’ll see.
Now, that being said, how do you trade through the chop without having your arse handed to you? There’s a lot of opinion on this and most will say, “Stop trading” or “Trade LONG TERM”.
I want to give you a differing opinion on this: trade shorter term.
I’ve found that lower my time frame often gives better results than trying to go to the daily charts and hope that the current direction stays intact for the next week or so.
If you can’t beat the chop…trade INSIDE the chop.
Now, to fully explain what I mean, let me give you my own personal circumstance. I typically trade the 3 hour charts. I like them. They get me in faster than everyone waiting for the four hour charts. They let me sleep and I find that direction is easier to determine on the three hour charts.
But what do I do when the three hour charts turn choppy and unpredictable?
I trade the 30 minute charts utilizing a different system with set stops and limits. Why? because even the chop has a pattern. But that pattern may be short lived. So holding a position for long periods may be counter productive. So hold only as long as absolutley necessary and get out.
Here’s the catch though…you must have already an effective short time period trading system/plan. You can’t just jump in and use the same mindset, methods, money management, etc., on the 15, 30, hourly charts that you would on the 240, 480, daily. Just a little fore warning.
So if you find yourself frustrated with the chop (whipsaw) on the time frame you normally trade, try going against the grain and trading the shorter timeframes. Just be sure to do your homework first. Develop a plan. Learn from those who do; and be confident.
Below is an example of the recent chop on the Oanda three hour charts. you can see how price has whipsawed back and forth. The next pic is price on the 30. Little more smooth and was much easier to trade. It took me a couple of stop outs to determine that it was time to go faster…but in the end I didn’t end up losing any money this week…and that is more than most can say! 
hey buddha, havent heard from you lately…whats shakin?
Well, with the low volatility, I switched over to the 30 minute system…it too started to get spanked with the ever decreasing volatility, so I shot out a 5minute system with a sweet equity curve that has performed very well.
I recall complaining about the low volatility almost every December for the last few years…and this year was no different.
The stock market finally broke from it’s bearish attitude and triggered a EUR/JPY rally which boosted the account balance back to where it was prior to the dulldrum setting in.
Just proof that WE must conform to the market…not expect the market to conform to us.
Anywho…any “real” trading will have to wait till January.
Hey buddha,
Would like to share this with everyone…
Since VT now includes volume information, I felt it necessary to include one of my favorite volume indicators I use for stocks. The Volume Flow Indicator (VFI) is from the June (I believe) issue of Technical Analysis of Stocks and Commodities magazine. Please refer to this article for more information about this indicator.
This indicator has its strongest signals when it (volume) diverges with price. I like to use momentum to also confirm price action.
For those of you traders who use vt platform enjoy!!!
Here is the formula just in case anyone wanted to transfer it to another platform…
The value inputs
period:21
coef: 0.2
vcoef: 2.5
The formula
avg := (high+low+close)/3;
Inter := log(avg) - log(ref(avg,-1));
Vinter := stdev(inter,30);
cutoff := coef * Vinter * Close;
vave := ref(mov(volume,period,s),-1);
vmax := vave * vcoef;
vc := min(v,vmax);
mf := avg - ref(avg,-1);
vcp := if(mf > cutoff,vc,if(mf < -cutoff,-vc,0));
vfi := sum(vcp,period)/vave;
vfi := mov(vfi,3,s);
vfi_ma := mov(vfi,7,s);
Hope this serves you well!!!