Anna-Maria

That will have tripped a bunch of stops under 9390 then huh? Breathing hot on your weekly s&r zone now mister!

Ooops :o I must have deleted those when I was trying to configer today's pivots for you. Agree re: this Fib-pivot confluence zone. 9435 is also a weekly (23.6) Fib from back at the June 25, 8085 upkick - so this area is drawing some heat. Be glad to see the back of todays NFP to be honest, it might just iron out one or two of these each-way levels into Jan.

I like to see weakness on any retracement (in line with the short trend) if prices have attempted a kickback thru a prev range low, such as y'days low. The 240m & subsequent swift move back up on the sub hourly was looking quite aggressive into the London shift. The Tokyo top could well cap it, but with NFP printing later, we might just be in for some consolidation?

For me, the optimum trade has been & gone with that chipper move during Tokyo. An hourly inside bar printed at the mornings low + a long legged doji on the 15m has printed at the S1 torero. I'm not saying it won't drop back, but the sub hourlies look a tad strong to me leading into the London Open?

Tokyo sure took advantage again during their shift huh? Driving it down to the 161 small range Fib, which is also a confluence (50%) Fib from the 8830 leg up in Nov to the Dec highs. Unfortunately, Asia doesn't always play ball so perfectly, but when it does it often behaves pretty good from a tech perspective! Shame we have to sleep No wonder Buk likes this timezone so much!!

I meant to add: A good indication of this is when studying your bottom line results log. By that, I mean once you've been trading for a while & attain an acceptable level of consistancy, you'll notice a pattern appearing. The win-loss ratios, peak to valley drawdowns, total % profits & typical positive set up expectancies should be pretty close to an avg line. Taking out irregular market behaviour (which will skew short term results), the 12mth accounts should be pretty much balanced. A good % of this consistancy can be attributed to a traders psychological maturity & symmetry with their normal plan-structure model. And again, this type of behaviour will be due in part to the instincts gleaned by familiarity with the chosen instrument/candidate. Well, that's my take anyhow!

I think if you trade a particular instrument or candidate on a pretty regular basis over time, & your set ups revolve around repetative triggers etc, the subconscious kicks in. These ingrained behaviour traits (especially based around price activity at key levels & patterns) tend to form alerts, & whether we realize it or not, illicit a response/reaction to a previous consistant behaviour pattern. I guess those who eventually begin to notice this type of behaviour tend to be traders who adhere to a well honed & developed strategy-plan. Nothing like wrapping a workable set of rules, trade plan & repetative structure around you to focus the mind

Not a bad stance to adopt under the circumstances Jack! Nice trade btw. Any slight emotive shift whilst the volumes are returning to near normal levels, will accelerate these nervy runs back & forth thru the range. The bars & patterns are certainly still playable, especially at the regular range/days extremes etc, & I guess either cautious stake deployment or sensible paring/exits are the order of the day until the markets top up on liquidity!

I guess this type of activity will sit comfortably with your outlook torero Continuation signals on the weak overnight action - failure to penetrate back thru the near term Fib resistance lines - well below the day's main pivot zone - threatening the larger 4hr range supports (9450) & Fib ext targets from the arrowed H-L mini swing down to c9425/9385. I doubt it will have the strength to climb back towards the Tokyo low @ 9492, given the strength of the penetration bar out of the bear flag pattern. And if this 4hr bottom range collapses, this could weaken pretty quickly.

There are certainly enough opportunities out there every week to satisfy every conceivable style of trading. What suits one, doesn't necessarily suit another. Experimenting with & exploring options are part of the business. Horses for courses as they say

On the subject of "mechanical trading systems" & the pro's-con's etc: One of the guys in our office zapped this missive across to me late last night. I won't reveal the blog/trader, it's immaterial - however, it raises the complexities of this type of trading when the template/mechanics are not built & managed within a solid psychological and/or physical framework. I think the (abridged) commentary say's it all:- Firstly to report, results which are rather shitty, and second to suspend / close the blog, possibly forever. Reasons to follow. First of all lets talk turkey about the results. The month was terrible - in fact the worst that we have experienced in the 14 months trading it, however not the worst on record from our tests. We suffered this month a 48% drawdown. We suffered this drawdown at a point when i was supposed to be enjoying a holiday in New York - it was 30% when I left the UK and 45% when i got back. Needless to say due to things beyond my control, much of my holiday was totally spoilt. The month of December ended up at -45% on the account - from £100,502 down to £55,000 The system still works and is within parameters but the money management, which at the end of the day is the bit that creates the severity of drawdown, was at fault and has since been rectified. We were running the account at 100% efficiency - which meant that at a max drawdown there would just be enough in the account to sustain it. what i didnt take into account was the psychological pressure of actually getting close to reaching this level and seeing the account decimated. Even after five years of trading, the market can still humble you, and this drawdown certainly has. So if you are reading this and you're a trader - dont ever think you have this thing licked. To this point, i hope that you've enjoyed the journey and it's with sadness that I am to close this blog. There are a few reasons for my decision, some of which I cannot talk about at the moment, however the main one is that because of the blog I am getting emotionally involved when the system has a losing month. The fact that it's in a drawdown at the end of a month shouldnt matter because it peaks and troughs no matter what the date is - the fact it's at the end of the month is immaterial. Getting emotionally involved in the trading of a mechanical system is not good - you start to analyse every facet of the trades and it can drive you nuts.

Remember guy's, don't neglect or forget to take a peek at the crosses if you're seeking alternative (longer) swing candidates?? The GBP & Euro pairs are continuing to display decent opportunities due to their strong fundamental bias. Take a look at one or two of those instruments on the 240/60m frames, they're adhering well to the 'trend bar stacking' behaviour on their respective journey's. Jack: I feel the UK & Eurozone regions are best placed to hike rates in the near term as opposed to our (U.S) internal situation. If anything, the rates differential could well contract between Sterling/Euro & the buck, thus eroding further the Dollars hierarchy. As ever, the Data will confirm that particular outlook!!

The sub 240m charts are very noisy. Not surprising given the thin markets leading into Dec. I guess reading the harder lines off the 240 & drilling down to maybe a 30-15min reference will offer a clearer view as price bounces around these important s&r lines. It's always pretty gusty when we return from extended holidays/thin volume environments, as most of the big cats are still trickling in & taking a look around at the current scenario. Get this week in the can & things will begin to balance out a bit more.

9750 is the fulcrum here for sure. Bust that niggly resistance line & it looks good for another cent up on the ladder. If you stand on the side of the current fundamentals, then Sterling (& Euro) appear well placed to run the buck ragged during 1st Quarter? $ Bears will certainly rip into it should this round of data come in shy. The Dec highs will set the stage for me should this 9750 hurdle crumble.

Hey Jack! I'm sure you'll attract a whole sack of pips this year!! torero: Attempting to run the larger swing returns will occasionally involve the necessity of larger stop placement. Unfortunately, it's not always possible to run these intraday entries into bigger potential swing moves without some adjustment of initial risk as the picture develops. It's merely a trade-off. You have to decide whether you're gonna take a little profit off the table on the initial leg (as Jack mentioned) & compound back as price breaks thru your staged s&r levels - or trail the stops once price moves away, & counter trade any moves back against your primary position by 'jobbing' via the smaller timeframes? That will obviously be dictated by the size of your account & your overall aims & objectives. It's tough watching an initial c1.5 cent profit position slowly erode as price shuffles back & forth thru the intraday levels...but that's just the way it goes. Unless you're willing to trade the intraday oscillations against your main swing position and/or keep your stops well hidden from the fire, then you're in for some pretty frustrating sessions in front of the screens. A good percentage of your intended (larger) swing moves will fail to kick on. The healthy profits are returned (in our experience) by compounding aggressively into the ones which develop & kick on quickly. I run a dual strat as normal practice. If an intraday entry looks like morphing into a potential larger swing move, I'll babysit the trade for a day or so, then leave it be. All it'll require then is managing. A case of then reverting to the intraday strat/account & playing the opportunities as they arise during normal market conditions. But then, that practice has been part & parcel of our methodology for a good lick of time. Like anything, it requires practice & a solid psychological base!!

Very pertinent points Walter. I agree, unless the trader or fund can bankroll their automated system with deep pockets, the drawdowns will freak most folks out. As you say, the ever changing climate dilutes the vast majority of these programmed systems, well certainly in the FX environment anyway. Obviously, there are well capitalized firms (excl the large corporates) & individuals out there who can & do run successful forays into the automated streams - but they're few & far between. For the average market participant, total automation is a tricky prospect.

Hey Torero! A Happy New Year to you (& everyone), hope 07 is a big pip returner!! Straight out the blocks this month huh? I'm not back into the swing as yet, markets still a little subdued on the liquidity side for my liking - but the techs sure played ball this morning by the looks. Price running out of steam at the 618 extension. Those 2 ext levels looked like good zones to book a little profit huh? You still riding it, or did you cover already.

They require patience LOL. You wouldn't think I'd spent years over this side of the pond by the blank expressions I still pull when their humor surfaces I still have trouble deciphering some of their lingo & stuff, but those movies are really cool. Yeah, one of our sisters is a 'pizza junkie' & frequents 'Stevies' up that neck of the woods (near Fenway?), I think that's on Boylston someplace. Long time since I've lived there to be honest, we hail out of Beacon Hill. I've had more goddamned parking tickets there than anywhere else on earth Still, home is home wherever in the world you find yourself.

Having spent a little time over here in UK, I'm beginning to get a handle on their quirky humor. My brother has a box set of the Ealing comedies, with the likes of: Margaret Rutherford, Alastair Sim, Will Hay, Kenneth More, Alec Guinness etc. Some real funny movies amongst them. Favorites include: The Lavendar Hill Mob, The Ladykillers, The Mouse that Roared, Whiskey Galore & Passport to Pimlico. A lot of them hail back to the 40's & 50's, but they're real cool pictures nonetheless. These guy's sure know how to make good movies! Don't really get too much time to catch a whole lot of t.v but tend to go for the Nat Geographic documentaries when time permits.

Looking back on the day's events, the support barriers did indeed shoulder price into the triple Stateside news releases. And the overall bearish tone eventually pushed Cable back towards the 38% Fib zone, resting some 60pips north of that line into the close. We remained flat this pair all day, & will likely snub any further activity on Cable now until the Xmas/New Year holiday period rolls over. As next week grinds out, any sensible s&r guides become foggy due to the reduced volumes, therefore it's generally wise to leave it be. I'll take a peek at it again as January winds up & see where we're at then. 240min frame highlighting the current near term bearish outlook. 15min snapshot of the s&r levels & it's journey thru the bottom intraday supports to current pattern zone.

No, I'm not suggesting to anyone that they should pack up their kit bag & trudge off home. Just be careful of the spikey, choppy behaviour which ensues when the volumes on these instruments begin to subside. The Aug & Xmas holiday periods are historically low volume periods. You'll still continue to unearth opportunities within FX, but you might need to be extra choosy about where & how you engage. Personally, I/we initiate very very few intraday positions over these periods - we've been mugged before inside choppy, windy ranges. The risk increases & the conditions make it difficult to address our normal strat based triggers. Therefore, we simply stand aside & manage those trades we're already engaged in. Once, or if they close out naturally, we turn our backs until the volumes drift back to something resembling normality. Just be careful that's all.

A zoomed in snapshot of the 240min frame highlights this lacklustre behaviour around the upper Fib of the recent ascent. Nothing setting up. Merely choppy, diluted activity with no real directional emphasis thus far. If anything, taking a 'short' bias off this lower top activity is probably the less risky option (back towards the 38.2). But there are better candidates out there to watch at the moment if the temptation exists to trade? Definitely time to go do a bit of holiday shopping if Cable is your main focus instrument

Horrible, clacky price activity on Cable again this morning. The 240m continues to display tight lower top behaviour, with the 60m frame chopping around aimlessly. Our resistance guides blanketed the price action near the top of the Tokyo range, leading into the London open, which kept us sidelined on any bullish potential. No defined pullback, so nothing to do on that side of things. Neither have we triggered a short, although close inspection of the 5m frame around that negative 15m behaviour at the London open would have offered more appetite to short it rather than take the alternative play. Typical lethargic end of week behaviour on this pair - not very enticing at all. We'll see whether our support % lines will contain it until the impending NY data hits the tape later on. But I'm not getting involved in this clack today.

Ditto. Some very good points, well presented. Especially those highlighting the psychological & discipline measures!

I'll answer your direct questions first, then elaborate on the generics second. Yes, each of the currency candidates possess distinct personalities, due mainly to the extremes of their specific range parameters, unique fundamental elements & volume attraction. However, if your strategies or basic tool-kit revolves around pure price action sprinkled with a good dose of Math based ingredients, you'll find similar opportunities across most of the instruments. Those % (35/50) s&r guides apply ONLY to the main 2 european pairs, yes. Those are the only pairs we'll trade via a "range based" trigger, again due to their volume attraction & high degree of emotive reaction - "herd attraction" We were raised & instructed from a young age on the principles of mathematical sequences. Price instruments, over whichever set of candidates you choose to observe, display general parameters of tradeable sequences. Fibonacci & pivot based s&r variables have been around for years. All we do is scan a candidate & eyeball a Weekly or Daily timeframe snapshot. If price is backing onto, or reacting against a defined Fib or % based zone, we’ll zoom in & inspect that candidate further, plotting the exact lines from the tools available on our charting platform. We’ll then look for accompanying (hard price based) s&r lines which marry up that zone of interest. Our 3rd item on the tick list of confluence will be the price footprints. If price action is grouping & setting up according to our ideal parameters (ie: doji’s/spinning tops/engulfing bars etc), displaying exhaustive or neutral emotive behaviour at a defined key zone of interest – we then have a possible trade set-up. A case of then waiting for the ideal opportunity to engage: using our size, stops & r/r tools. It’s the same overall template for whatever we trade. No difference, no complicated variables, nothing to confuse the psyche etc. Just plain & simple repetition. We know it works because we’ve utilized these simple confluence tools for years. Why re-invent the wheel? You’ve witnessed & followed Buk’s work (much of it in live scenario’s) 1st hand over the past few years Cary, has it changed much at all? Myself, Tess, Shona & Lorie all follow similar routes. We hate making life hard for ourselves, & there’s no point. If an instrument isn’t playing ball, we simply look for one which is. If nothing’s occurring, we remain flat until one offers a possibility or a probable opportunity. Obviously, these specifics suit our style, personality & trading objectives. They won’t suit all tastes, & if not – then an alternative set of tools will need to be utilized for your own working template(s). But whichever tools you use, try keep them nice & basic….and simple. Like I said in the prev thread, the GBP is attracting strong attention, due in part to it's positive fundamental play. Pair it against a candidate which offers a decent (& extreme mix of interest rate/economic variable) tradeable risk & you can then hone down your strat tools to spot opportunities? Such is the case with GBP/YEN. Just scoot thru your Weekly-Dailies to see the reaction to the fundamental plays.