Through the glass darkly

lol - You leave that Pound where it is mate ! :slightly_smiling_face:

The last thing we need atm is cheaper imports and dearer exports - Let’s see what sort of a trade agreement they look like coming up with first - cheaper diesel would just increase pressure for yet more “green taxes” :wink:

On the contrary, I’ve got three years of reduced sterling income to catch up with! :joy::+1:

I guess that will depend more on the EURGBP rate than the GBPUSD? At least according to this table of import/exports with EU and US (% 2018)

This lumps the total EU trade as one block. But, indeed, when looked at as individual countries, indeed, the USA is the UK largest trading partner. But, personally, I think the outlook for the Euro is weaker than for the Pound, so I guess that currency relationship will also favour the Pound!

Either way, I am only buying dips on both the Pound and FTSE for the next year, I think!

Yes, we are going to see some interesting negotiating during 2020 and I am taking bets on how much tariffs will be placed on UK trade with the US if BoJo doesn’t play ball with DT!!! :joy:

UK government bares its teeth!

Before the new parliament has even begun its new session, Boris Johnson is showing the EU "how things are gonna be". Yes, he has always done this, but now he really has got teeth in the form of a workable majority.

If there is one thing that the EU is good at it is talking and talking. But that is not going to happen with the transition period following the UK departure from the EU on 31.1.2020.

In a surprise announcement yesterday, it was announced that the WAB (withdrawal Agreement Bill) will include a section forbidding the UK government from agreeing to any extension to the trade agreement negotiations beyond end of 2020 - and, of course, it will pass into law. So this is no negotiating tactic!

But what does it mean? Well, in my opinion, it is a breath of fresh air to the entire Brexit process. After having waited for over three years to actually get to leave, there was the prospect of at least another three years of trade negotiations between the UK and EU. But this new law will put a deadline on negotiations at the end of 2020.

If no agreement has been reached by then it will throw the UK-EU trade relationship into another Brexit-style cliffhanger about how things continue…

The news caused a drop in the GBP rate against the USD, but soon started to bounce back and is now back to 1.33 area.

Personally, I see this as good news for the GBP and for the UK as a whole and am now wondering is this the time to re-enter the GBPUSD. But let’s wait to see how the UK itself reacts to the news before checking for a buy signal.

It is good to give the EU a “wake-up call” having slipped into a drowsy attitude regarding anything “UK” where nothing ever seemed to move. Now it is moving - and it is going to move fast! The EU needs now to shake itself into realising that the whole Brexit process is nowhere near over yet. Maybe the UK will be out of the door by 31.1.2020 but the question of how the EU and UK get on as neighbours has a long way to go in terms of talking and agreeing and only a few months in which to sort it. :smile:

The BoE next rate decision and minutes are timetabled for Thursday this week. At present, I don’t think there are any expectations of a change from the current 0,75%. But there may be some interesting comments and reflections concerning changed prospects on growth and inflation after Brexit.

It is also worth noting that the Governor of BoE is talking later today and the ECB President, Christine Lagarde is talking tomorrow. Both these speeches will be scrutinised by the market participants for any signs of changes in the light of the post-election UK environment…

Still no signs of a buy signal for GBPUSD today as we have continued to drift lower.

We have now reversed the sharp upmove at the end of last week completely - which in itself is a healthy move, putting the market back where it was before election euphoria. The lower we go the better the entry level - eventually.

FTSE, on the other hand, is, not unexpectedly, holding up well.

But one needs to be aware that the holiday season is well upon us and markets can be thin and erratic.

But the time is well nigh for concentrating on other things than trading and, unless something dramatic turns up, I am probably done for this year apart from passively following the market.

Well, I admit I wasn’t expecting to see this big a sell-off. Once again, it was the charts that said it all. If it wasn’t for a lack of a buy signal I am sure I would have bought at some point on the way down. But the charts kept me sidelined.

But I am a bit disappointed that I missed a good down move which the charts were showing, a) because I really thought the election result and the Brexit exit was good news for the future and b) too busy with the Christmas shopping!

Well, I guess that is it. I don’t see much hope of a significant move now and we’ve got the visitors.

Looking back, it has been a tough and messy year. The only instrument that played well was SP100. All the rest has been in’s and out’s and with far fewer Target hits than normal and mainly “gut feel” exits to be honest, just to keep the pips. It has not been the most enjoyable year at all.

But that’s trading! And there is always next year…

Season’s Greetings to all Babypippers, both staff and members, and best wishes to all for a successful 2020.


And so the glass gets darker

Many terms in trading become clichés and even so much so that their real meaning gets buried in their familiarity.

Terms like “Price Action” sound so “cool”, while “Naked Chart trading” sounds positively “hot”!

But another term, “Lagging” is banded about in such a way as to segregate various methods of TA into “camps” which are, for some reason, considered as mutually exclusive and proponents of one such “camp” will try to trash the others as homogeneously defective.

Actually, all methods of performing TA contain, by definition, elements that lag the current price. Lets look at some examples:

The stargazer:

This one looks at the historical chart and identifies certain “significant points” which might be relative such as a higher high or absolute like a swing low. They will then draw lines connecting all these dots (remember those pre-school colouring join-the-dots books?) and end up with something that vaguely resembles a stellar constellation. But it is all historic and running behind the current price. They will then extrapolate from this constellation to the vertical present line running through the current price, upon which it forms a reference value. The current price is then compared with this lagging reference value to deduce trading actions and a higher probability of which way the current price is most likely to continue.

The Battle Commander:

This one will tell you to look at your historic chart and identify horizontal lines that touch, or nearly touch, extreme points on various candles or bars, etc. They will tell you that the more points that touch the line the more relevant it is as a support or resistance level (although other such gurus will dispose of this as rubbish, claiming the opposite, that the more times such a line is touched and reversed from the less likely it is to hold yet again). This horizontal line is again entirely historic and the latest point on the line is behind the current price. This horizontal line is then projected to the right until it crosses the present line, where it again forms a reference value which lags the current value and with which it is compared. There will be a series of such lines like war trenches across the chart each of which may or may not repel the “attacking” current price.

Both these examples create static lagging reference points which are only updated once current price forms a new significant point.

Then we have the snake charmer:

So-called because their methods are typically called indicators and are mostly based on mathematical formulas which produce something that constantly snakes up and down with the movement of the current price. Typically, they will, for example, select a train of consecutive candles/bars the length of which reflects the “normal” flow of the timeframe concerned. They will then calculate an average value of these points (which may be closes, or HLC or OHLC, etc). But instead of placing the average value in the middle of the chain of candles/bars where it mathematically belongs, it is positioned at the right hand end of the chain right on the present line including the current price. In fact, the current price is included as one of the chain values and therefore the average value is repainting in line with the movement of the current value - which actually makes an MA less lagging than the first two options. In this case, the reference value is dynamic and constantly appearing to “catch up” the current price - which is the main reason why many only see these types as “lagging”.

Therefore we can see the common elements here. Current price can only be evaluated with respect to earlier prices. These earlier prices are selected according to a method and processed to produce a historic reference value which is then placed on the same vertical present line as the current price.

The reference value is (almost) entirely historic and therefore has a value that is lagging the current value and is constantly trying to “catch up” with the current value.

Does it matter?

No, I don’t think so. The aim of any TA is to use historic data to anticipate where price is most likely to go next, how far it might go, and where to conclude that the initial prognosis was false.

Each tool has its own characteristics and strengths and weaknesses. It is up to the individual trader to decide what information is needed to make a sound prognosis and what tools are most suited to provide that information.

For example, I, as a trend trader, use basic chart significant points, weekly ranges, trendlines and a few MAs, some to identify the strength and direction of a trend and some to aid in defining entry /exits.

But one only needs to look at something like Trader View (or whatever it is called) to see the infinite range of variations and combinations that traders put on their charts.

However, in spite of all that is said and claimed by various proponents and the forum “Messiahs” with their own versions of “The Way”, the fact still remains that over 70% of all retail traders LOSE their money.

So I would suggest that the reason for that is not in what approach one uses and how “lagging” things are or not - it lies between the ears of the trader and their experience and understanding of how markets move and what, exactly, their chosen tools are designed to do and how they are interpreting the data flows that these tools are streaming to them.

But that is another topic for later, maybe.

But now the Christmas Holidays are starting and I will return to this after Boxing Day.

With best wishes for Happy Holidays to anyone who might have ventured this far! :christmas_tree::santa:


I’ve been thinking about 2020.

The strategy for 2019 was to focus on the SP500 and that proved to be a good result for the year. Although other areas were not so fruitful at all, mainly due to my own fears arising from Brexit and the US-China trade war impact on global growth and currencies.

I had initially thought of delving into the Gold industry as my theme for 2020. But I really couldn’t get interested in it as a commodity and I was kind of even forcing myself to read stuff.

But I think I have now decided that, in the light of the end of Brexit, and the start of new directions for both the EU and UK, I am going to focus on GBP pairs for 2020. The poor pound has been “pounded” for 3 years now and now that the Brexit shroud is being lifted there is potential for some very interesting moves as the UK starts its new love affairs with both the EU and the US.

So that is it for 2020 for me - back to currencies! :slightly_smiling_face:

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Well that was one New Year’s Resolution that didn’t last very long! :slight_smile: . Not because the currencies were a problem but simply because the SP500 offered so many opportunities that there was no need to look anywhere else to trade - but what a rodeo ride it has been this year! I hope you are all doing well in your own chosen fields!

Just stopped by to extend to you all my hopes and wishes that you and your families are all safe and well and that you are enjoying your self isolations indoors! I don’t go out very often but when I do it kind of reminds of the International Space Station and feels a bit like going out on a space walk into a hostile environment with an ever present risk factor that is totally invisible.

So obey the rules, stay safe, and trade smart…

Great to read from you!

I’ve had some recent trades on the GBP…

During 2019 I kept thinking that all the “big” money is going to be getting short, buckling in for taking it over the top. We did get out of the market and missed the big drops.

I am goinig outside approx 2x a day to walk the dog. Both foot and car traffic are way down in our town.

Take care and good luck with the 500.


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Hi @frandlost! Good to see you are still here :slight_smile:

Are you still using your earlier method? How has it stood up to these changes in market actions and volatility?

We got a new puppy just a few weeks back. It was born and reserved before the coronavirus broke out - and now we can start taking it out. Luckily we have a lot of forest on our doorstep so not much chance of bumping into other humans! :slight_smile:

Thanks! You too! :slight_smile:

I don’t know about the direction but one thing I think is probably clear for the rest of this year - and that is that the so-called “big” money has no better idea of where things are going than we do! :joy:

I’ll reply here but don’t want to swerve off thread topic and will PM if you prefer…

Still a similar @Trendswithbenefits strategy from his befuddled thread. My problem is… still is… not closing losers soon enough. I have a mental block when to close. If I am deep in the red I look at the chart saying “only a little more and I hit support” hope dope. It’s the gateway drug to big losses. I seem to have the ability to take the small loss and “tap-out” on the BIG loss due to emotional pain. This is bad. Trendswithbenefits has recommended using a trailing stop, a few times. But I fall into the beginner mindset of losing those pips until it hits. I’m being a bozo!!

This isn’t good. I was up 30% down 60% then back up 20% from that low. I have to review my losers to see why I take them - Am I actually waiting for my trigger or entering on “anticipation” of the trigger - and what was/is the early warning it’s time close out. I also have to take a look my winners to see how much, if any, “red” occurred in the beginning.

I’ve been taking money off the table at 50 pips and placing a pending order. I’m trading .01 lots.

Again I need a better “out” than I currently have.

My wife and kids convinced me - out voted - to get a dog… I love her! Great decision. Would love to have the woods in my back yard. We don’t live in a city by any stretch but certainly not the country either. I’ve been looking at the night sky during the pre-bedtime walk. I love it! My thoughts just wander and wonder all around in the vastness and distance.

The thing that I love about walking in the woods is being surrounded by all the life! Especially the trees. They are alive!! I think most folks don’t think about that.

I’m rambling …

Glad all is well!


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No worries there! This thread has no topic! It is intended to be like a newspaper - covers whatever happens to be current :slight_smile: But naturally, trading is the core theme :slight_smile:

Any strategy coming from TWB has a wealth of experience behind it and has been successfully tried and tested by TWB himself - so it should be working for you. But I guess this particular strategy does not have specific exit criteria? Or are you applying your own intuition in spite of the strategy rules?

I would guess this is a common problem - and often combined with its sister problem, taking profits too soon! What this suggests to me is that you are not paying enough attention to your risk/money management rules? For example, do you have a typical risk/reward ratio which you use to assess a trade’s viability before entering? This does not need to be carved in stone but should give a reasonable appraisal of whether the anticipated target level is worth the risk when compared with the sensible stop level?

This is critical in discretionary trading and irrelevant in mechanical systems. But it sounds like you are trading on a discretionary basis.

It is worthwhile focusing on your overall results over time rather than on the specific trade that you have open at the time. Losses should not be an issue at all. They are just overheads and are an inevitable feature of trading probabilities. Like any business, overall expenses need to be less than profits to continue in business, but the individual expense is not a concern if a) it is in line with the “business plan”, and b) within the budgeted allowance (i.e. risk/reward).

For example, my own R:R is normally around 1:1 and my trade success:failure rate is usually around 75%. And I am strictly disciplined by my trading rules.

Trailing stops are indeed one way of overcoming this problem of running losses. But I agree with you that it has to be far enough “behind” to avoid the accidental stopouts and that usually means missing out on the profit potential. I also think this is more suited to longer term trading off maybe daily/4H trading methods as it needs bigger moves to leave some of the profit available.

You are right, that is not good. And I don’t think that is the fault of the method you are using. One possible solution might be to apply a “set and forget” approach whereby your target and stop are preset when the trade is entered and you let the market do its work for you. If your method is good then your only concern is selecting your entries in line with the criteria and then take the dog for a long walk! :slight_smile:

I know what you mean! It certainly puts matters into their right perspective! Having now passed the equinox, our nights are rapidly getting shorter and the stars will soon be gone until the autumn comes around again.

Very much so! It is a sobering thought how we just rush around all day every day worrying about this and that - but the trees just stand there on the same spot for decades and decades. And when they fall it is fascinating to see how they gradually rot back into the undergrowth whilst feeding all kinds of life.

I don’t know if any of the above is of any help or if you wish to talk about these things here, but I am more than happy to share some thoughts about these issues with you. This thread is a quiet by-way off the main threads and topics and it is a cool place to ponder on such issues! :joy: :joy:

Bingo! I gotta have faith, a faith, a faith, ooo, faith, a faith, a faith.

I just have to follow the rules. Just because it’s simple doesn’t make it easy. It always helps to get input from the experienced.


I completely agree with you on that one! I also have that problem. Maybe it’s a matter of personal psychology but the battle I personally fight is a tendency to try and outsmart my own system! You know, I design a system to optimise my trading - and then try to show I can do better than my own system! - and, of course, it never works! :joy:

But I have gradually overcome that and I now have a much more relaxed approach to observing my rules. For what its worth, as an example, here is my day trade for today on SP500. This is the 5 min chart and price is above the band in synch with the longer term chart. I waited for a pullback and then entered on the close back on the upside of the band.

My target on a 5 min chart is around 200 points which would have put my exit just above 2625. But that is a pschological resistance value so I put the target just under 2625 for 193 points.

My stop level was the recent lows of that earlier pullback in the blue circle and line. If we broke that and entered that blue rectangle then the trade would be invalid and closed.

R:R roughly 200:100 points. That made sense and all the rules were in place so I took it, shut the screen and walked away.

One other general “rule” with my day trading is never to try and gain all the pips. This market is most likely heading to test the weekly 200SMA at around 2650, but I’ve left those pips for others, I got my share! It really does not matter how many pips the total move makes. The main point is to pre-determine what you consider reasonable and probable and just take that amount.

At least that is my trading philosophy and, of course, everyone develops their own - the point is, whatever it is, stick to it!!!

I would really like to see some examples of your work, if that would interest you to do so! :grinning:

SP500 is closed today (Good Friday) and so yesterday’s close was the close for this week - and it was an interesting close.

We had already spent most of the week above last week’s high as well as above the weekly 200SMA, but the significant level that overrode these lies just under the 2800 level (depending on one’s price feed). And we closed the week right there - precisely on the 50% retracement of the entire down move starting from late February.

That represents a rapid regaining of value, and supports the view of many that we will see a “V” shaped return back to where we were. This is indeed the hope and intention of the governments around the globe when they are agreeing huge support packets to prevent businesses from collapsing during the lockdown period.

However, it is a big question can we return to where we were as though the pandemic never happened. For example, are these huge new borrowings by governments just going to evaporate or are they going to linger as a burden for future generations to pay off and act as a drag on future consumption and growth for years ahead?

Although signs are appearing that some countries are passing the peak impact of Coronavirus, does that mean we are getting back to normal, or will the virus continue to cause problems for months to come - or even swell again into a second-wave pandemic once the current restrictions are removed?

The market has returned 50% of the lost value, but can it do more? During a US election year we will no doubt hear every possible means of talking up the market, but will the reality do the same?

Some doomsters claim we are on the brink of the worst global recession/depression in living memory, one that will take many years to overcome.

Can we have a return to a booming stock market as well as a global depression?

I think that question is why we will continue to see the huge volatility that has characterised this market since this saga began. Not only does this daily chart (since the start of 2020) show the 50% climb back up from the lows, but it also shows the vast difference between the daily ranges prior to the collapse and thereafter (which, by definition, also shows the potential for some powerful trading opportunities within those gargantuan moves :smiley:) :

We’ve been trading so far today (London closed) below Friday’s close on the SP500, but not looking especially weak either. The 4H chart looking just about on the plus side.

So I am thinking of a long position up to around Friday’s closing area which is also a retest of the 50% retracement of the big down move.

Thinking… we’ll see.

That worked out ok today, just closed out for 281 points, that was close enough for me to that 50% retracement, and probably leaves some more upside to come, but its Monday and its a “play-safe” start to the new week just to bring some joy to an otherwise mundane further lock-down week ahead.