cowpip

Wasp, I've been going through your posts on this thread and have answered most of my own questions. I know... I should have done that first before asking. My wife keeps telling me to think first, then speak. But hey, I'm a guy! What can I say! The only big question I have right now is in the way you draw and use your trend lines. Most of them seem to go from open/closing prices, rather than from the lower/upper wicks. The trend lines drawn that way encompass the majority of the price action and I can see how they might give you an earlier alert to a trend change at a key S/R level. Is that how you're using them?

Understandably so! I apologize for picking your brains, but I'm finding your methods attractive and in-line with many of my personal views (except perhaps for my need for a fundamental fix). I'm doing well trading using my own strat, but am always on the lookout for other methods and/or tools to apply. So I really appreciate your willingness to enlighten me. A 20-pip "zone" on a 240-min chart is usually a dinky area to engage on your screen. Rejections at a support area, as you know, will manifest themselves more readily on the hourly or sub-hourly charts than on the 4-hour charts. In my experience (which undoubtedly is less extensive than yours), by the time a 4-hour rejection candle forms, price is well beyond your desired 20-pip range and that boat may have already sailed. So I was left thinking that you probably zoom into the hourlies to swing from, getting confirmation of a reversal and then waiting for a pull-back to your zone for the entry? Or, does GJ generally provide you with a 4-hour candle reversal pattern and then retest the lows to provide you with an entry (like a double-bottom type pattern)? For me, an entry to within a 20-pip S/R range on GJ IS somewhat perfectionistic given the nature of that pair.

Wasp, when you actually push the button and take on a trade, what time-frame do you typically have focused on your screen? I realize it probably varies depending on the type of pattern you're seeing, but every trader I know will fine-tune entries by zooming in a certain extent. If you do this, I'm curious how far you "typically" zoom in.

Excellent point! Well said.

Wasp, when you take your entries, do you have any profit targets marked? Do you go all in, all out, or do you manage your money through stepped scaleouts / add-ins? I'm curious where your current targets are (previous support levels, no doubt, such as 211.60, followed by perhaps 209.85)?

If I had any conviction in my opinion, I would have traded short, wasp. But I did not. I've been neutral on that pair, preferring to wait until after NFP and this horridly flat week. At least you had the gumption to work the pair. Sorry to hear about the loss, but hey, that was a BEAUTIFUL location to short the pair from... and in your sleep to boot! I'm beginning to see the value of waking every 4 hours. Well done indeed!

Thanks for the clarification. You do what works and that's all that matters.

Are you aware of when specific news will print and do you care about how the data print compares with consensus? Or is that all just noise?

Yip... I kind of figured as much. Hey, that's cool. I know several traders who could care less about fundamentals and do just fine. I personally can't do that. I require a fundamentally slanted view of the market. That's just me. Whatever works...

Fair enough. Thanks.

Wasp, are you trading in this direction based on any fundamental theories? Hoping, perhaps, that the Japanese housewives are able to pull rank? I'm curious because fundamentally, it looks like GJ may illustrate some further weakness, given how precarious Great Britain's economic outlooks is. Aren't they thinking of cutting rates soon, or is inflation so horrid that they have no choice but to hold the line?

Thanks for your insight, GJ. Those of us with lesser knowledge appreciate it. I knew "tick volume" was a bogus concept in forex, but I didn't understand it as deeply as you have explained. Even when you've been in this gig this for years, there's still a mountain more you can learn. That's what I love about this.

Cool. So I've learned something new today.

:hmmmm:.... ummm.... :hmmmm:.... :did I say that?:

Part of the problem is that there is no way to determine how much size was placed in (or taken out) of the market to move price those ticks. On GJ's platform, absolutely nothing went through yet price moved. Yes, somewhere, size was put into the system, but because forex is not centralized, there is no way for anyone to tell how much size went through. It's possible a tiny amount went in during low liquidity to move those pips. It's also possible heavy volume was involved in both directions to move those few pips. The point is, you can't tell. No one can. Thus, any indicator that claims to measure volume is utterly incapable of telling the truth. It isn't volume that these indicators are measuring in forex. It's tick changes and nothing more. Equating tick change with volume can't be done in forex.

Thanks for the example, GJ. There is no possible way you could explain this any clearer. These other guys need to start using a different term other than "volume." They're using a word that doesn't properly describe what they are measuring. It's like using a thermometer to measure weight.

I envy that ability. I'm afraid I'd engage ghost-entries and wouldn't remember why I lost money during the night, with that amount of sleep. Then again, who knows... maybe my subconscious would trade better when my conscious self is half asleep. As far as GJ being smoother than other pairs... I must admit... Smooth curves are always the more attractive ones to watch.

LOL... I thought you meant gigantic juggs... :rofl: I understood. I'm not well placed geographically to play the yen crosses as well as I'd like. Yeah, they get awful whippy during the US session. But once in a while, particularly when 'ol Ben takes a misstep, they can kick some pretty good booty. I usually keep a closer eye on them - but not today. But that's ok. There's plenty of meat to chew out there.

Indeed it would. I'd do just fine if I didn't have to perform that ritual called SLEEP. Ugh... what a pain that is, isn't it? You're in a much better position playing GPY/JPY (profit wise) than am I with $/yen, but then that's what you get for playing with a bigger gun. I'm not complaining... profit is profit... just wishing I had not taken my eye off of that pair this morning. It had been playing so dully lately that I disregarded it. tsk tsk...

Maybe "patient" would be a better term. Nice trade there, Wasp. Pretty well telegraphed even down to the 5-min. Missed that one myself. I took $/yen long off of the base of the morning and rode the ADP news higher.

Walter, see my previous post. I have a problem with "proxy forex volume data." Why don't you guys think up another term? Something like, rainbow-average analysis or mean-stupified-assumption index? The use of the word "volume" is where this problem of interpretation is originating.

It doesn't hurt to ask, but it does hurt to ask if there is no willingness to listen to the answers. The answer here is pretty clear: volume analysis in forex is bunk. Any correlation with positive trading results is more likely the result of some component of the volume equation correlating with price action - like momentum or moving averages or some other component of the equation. It couldn't have anything to do with volume. So if Walter is experiencing success, it isn't because his indicator is representing volume. It is because his indicator is representing some other aspect of price action that he is able to properly decipher. To lead people to believe that volume indicators work in forex is misleading in the extreme. People who use volume indicators would do the forex community a better service by breaking the volume indicator into as many pieces as they can, and then correlate each of those pieces with price action. I submit that what they discover will be completely unrelated to true volume.

Who is about to be slaughtered? I may want tickets.

Downrivertrader has demonstrated why markets work. There are more than enough people trading the markets for a counterparty to exist. A diversity of opinions is a healthy thing, so I wish you the best in your dollar short trade (I will probably join you at times during the weeks and months ahead). I envy your patience and risk tolerance. I suppose this statement is what led me to believe you were planning on initiating a short trade now. It also implies that because you had not recognized this trend long ago, you probably don't have a long-term position in-place. Please correct me if I'm wrong. I hope your "guess" is liberally stitched with sound reasoning and properly interpreted price-action. I also hope that you have a good money-management plan in-place to handle your trade as it progresses in your desired direction. I finally hope you have a solid stop in place just in case your guess is wrong. Don't forget that all reversals start with the shorter time-frames, then build into the larger time-frames. By the time you see a true reversal pattern on the monthly frames, you will very likely be unable to execute a meaningful trade without exposing yourself to greater risk. Zooming in to the faster (daily, weekly) frames will provide you with far greater insight into market sentiment than just looking at a monthly line-chart of the dollar (I find other charting methods [bar or candle-stick, for example] far more "telling" of market sentiment than line-charts, but to each their own). I fully concur that based on the monthly chart, the trend is still down. But I would never take a trade based solely on what the monthly chart is saying (and a line-chart to boot). I would need confirmation on the weekly, the daily and maybe even the 4-hour charts before I would ever consider initiating a long-term entry as you have considered. I believe many here would concur. I will do everything in my power to minimize my risk before initiating a trade. If I miss the boat on what ends up being a huge move, then so be it. There's plenty more fish in the sea. As I said, I'd much rather be out wishing I were in, than in wishing I were out. Too many people (mostly new people) make the mistake of shorting a downtrend just because they think / hope it will continue. I don't know what kind of experience you have trading, but I hope you are one of the more experienced people. I have demonstrated in greater detail why a dollar long trade is not unreasonable, based on price-action. Thus far, you haven't provided any sound reasoning to support your trade recommendation. I would be interested in learning why you believe this so staunchly. For me, a downward sloping line just isn't enough information to base a trade decision on. If you wouldn't mind sharing, I would like to know what sort of technical and fundamental analysis has led you to your conclusion, downrivertrader?

Just because the trend is down doesn't mean it's safe to short. You need to look at price action too and that tells me a different story. I see that price has already moved a significant distance lower and the risk now is for a retracement before another leg lower kicks in. Price is oversold and the last several candles seem to confirm exhaustion. An inside bar has formed and has been broken on the long side, and has not yet been invalidated. The price action to me suggests that this may be a decent location to take some profits off of the table, if not take an outright tactical long position. I definitely wouldn't short here. It's too risky for my taste. I'd rather be out wishing I were in, than in wishing I were out.