thalestrader

One thing about oil and gas, as far as price is concrned, they are very well -behaved instruments. Best Wishes, Thales

I wish I had snapped this earlier when first drew the channel or crude. It had a nice rally, followed by a choppy decline confined to the boundaries of the channel. The horizontal blue lines represent levels that would have been tradable on a break (long/short). The little "triangle" is just a small chop zone out of which you would expect price to break the channel in the direction of the thrust out of the triangle). As it is, it is but a hindsight contribution to what should have been a real time post. But it is a good technical chart, so I thought I'd share it with you good folks. Best Wishes, Thales

You should be long now. Best Wishes, Thales

The futures for the GBPUSD (symbol 6B) trades at $6.25/tick. If you are trading it through a spot forex bucket shop, then you can basically trade it in almost any increment, from as low as 10 cents/tick(pip) to hundreds of dollars/tick (pip) I'm not EmNQ, but I'm going to go out on a limb here and say that he selected his target by identifying resistance at that level, and then checking for nearby fib related levels, in this case, a 2.618 expansion of the chop zone created yesterday, which coincided with the 61.8% retracement of the decline from the 1/4 high to yesterday's low. That's how I did it for my second profit target (which was right in the area of EmNQ's). Best Wishes, Thales

That short was very obvious, and, if you re-read my posts, I initially was not going to trade it at all, but then I did do so, but with a small 30K (3 mini lot) position in my daughter's account. I wish now (wouldashouldacoulda) that I had sold a handful of 6E, but at the time I saw what you saw; and though it was an obvious opportunity (which does not assure it will be profitable, only that it has a 123 at resistance) I too did not want to fade that rocket ship. As you can see, that short move was but a pullback, and the rocket has refueled to at least circle the atmosphere once again, and perhaps to break out into space. By the way, I know I have said this more than once: For every rule or guideline I cite, I have a bushel or two or four of trades where I broke with one or more, and not always happily (ever after). Best Wishes, Thales

Hi folks, I got a PM today fasking about which pairs to trade. I get that one alot, so I thought I'd post the response here as well: I would think that the EURUSD, GBPUSD, and USDJPY should offer sufficient opportunity for you. My daughter came to prefer the EURJPY, and when she trades, she is mostly trading that pair. The other three pairs I mentioned have the added benefit that each has a corresponding, fairly liquid futures contract associated with them (6E, 6B, and 6J respectively), and I would think that your goal should be to "graduate" at some point from trading only with a bucket shop to trading listed futures. Best Wishes, Thales

I set it up with $300 (it has an extra 70 pennies in it from a little trade I did when I first set the account up a week or so ago with a micro lot [one dime/pip] on the GBPJPY just to see what the margin level really was for that pair). I haven't decided how I am going to trade it yet. I have too much between the fund account, my futures account, and baby sitting my daughter's account to try to seriously day trade this little micro account. I'm working up something of a "very short swing" trading plan where I can find maybe one trade/day, set a stop loss and a take profit, and forget about it. It will be the same approach as we've been doing here, of course, but I will be looking to trade off larger swings and breakouts of more significant S/R levels. Once I start trading it, I'll post the trades here in advance, and I'll share the PnL over in Brownie's thread. Best Wishes, Thales

My daughter is short from last night, and her stop on what she has left is now your proposed entry (kind of reminds one of daedalus's excellent post from earlier this week, doesn't it?). Her profit target is 132.20. I should have closed it for her manually on the spike down that way but I was watching other things and it happened so quickly. Best Wishes, Thales

Its the same as I always trade, whether NFP or any other day - High at resistance, a 123 indicating a possible short opportunity, etc. If anything, what is not typical is that I did not feel comfortable going against that impulse, and so I did not short the 6E as I would usually do, but instead shorted a small position in my daughter's micro account (very small - three dollars/pip). So is this typical NFP? No, it is just the same thing I have been doing here day after day after day. But what is not typical is that I really did not trust what price was telling me, so I basically stood down. I'm not terribly happy with myself for that, but I called my broker, and they will not allow me to enter a short based upon where price was thrity minutes ago, so I am stuck with a little 30K spot position. Of course, if this goes back to the lows of the session, then that little short will be worth $300, which isn't bad when you figure the initial risk was a $66 bet, right? Also what is typical is that I usually do not enter a position before the number, and I will almost always wait for price to get somewhere significant, i.e. S/R and then decide what, if anything, I'm going to do about it. Best Wishes, Thales

I guess so ... Best Wishes, Thales

I myself would have waited for the break below the level you mark as "HL". But that is me. There are plenty of traders who would enter a position just as you mark here (Joe Ross calls this the "Trader's Trick Entry" I believe). If you are comfortable with making your entries at such points, and you have success with it, then you should continue, right? Best Wishes, Thales

a short on the EURUSD after all that ...? (I'm not trading this short, by the way, but I am watching). Best Wishes, Thales EDIT: I took it short very small size in the micro account at 1.4373, stop is 1.4395, and stop will be trailing with no set profit target.

And in spite of the fireworks, nothing has changed with respect to the daily views. For now, the US Dollar is in a nascent uptrend per the daily view and the EUR is in a nascent downtrend per the daily view. Each has been consolidating in a range that implies a cntinuation of those new trends. However, I always remind myself that the longer price consolidates, the more likely it is to reverse rather than continue. Neither of these have been unusually long, however, and the levels that would confirm continuation or warn of reversal are clearly visible on the chart. As Firewalker's excellent thread taught - "all you need is a chart." Best Wishes, Thales

Two nights ago a sold the 6E (chart shows spot EURUSD) short soon after the Tokyo open, and it took nearly 36 hours to decline to the profit target. Then, in less than 30 minutes, it recovers the entire decline, finding (momentary?) resistance at that prior break down point. This is a remarkably impulsive, remarkable rally. If it has exhausted itself, this would be a good place to rest (or reverse). I haven't been able to catch my breath, myself. Best Wishes, Thales

Excellent trade, EmNQ, Congratulations! Best Wishes, Thales

This is a great example of what I mean when I say that the market cycles between periods or range expansion and range contraction (and I am not taking credit for the observation). Best Wishes, Thales

Daily view of the EURUSD - basically the inverse of the US Dollar. The market is selling dollars and buying Euros in response to NFP. Now its a waiting game to see whether or not that follows through, reverses, or, as sometimes happens, the move is over for the day and its time to call it a weekend. Best Wishes, Thales

Daily view of the US Dollar Index - Looks to be in a little "bull flag" type consolidation. Two trendlines to clear and just minutes to NFP. Tonight's business news headlines might be speaking of the "Unexpected Strength of the US Dollar." Best Wishes, Thales

Hi Steve, Thanks for sharing your chart with us. If I may make a comment: Your long entry was a bit early, in my opinion. Price, you see, was in a chop zone. When dealing with price inside a chop zone, consolidation, wedge, etc, take your cues from the last real high and low that bounds that zone for a break. I think this is the biggest reason that most folks wrongly believe that "most breakouts fail" or that ne shouldn't trade breakouts because most of them are "false." I am not the only one who has found that quite the oppositie is true - most breakouts allow for at least a breakeven if not a small profit, and of course the occassional large run. Breakouts are a high probability trade, but you have to trade a break of a significant level, and not, as daedalus mentioned yesterday, a break withn a zone of many layered stops, i.e. a chop zone. You can trade within a chop zone, but you should be loking to sell against the upper level and buy against the lower level if price gives an indication that that level is going to hold. After all, if that level holds, what is it going to do? Well, it wants out of the chop zone, so if support hols, it will likely try to escape through resistance. If resistance then holds, it will try again to break support. Now this would not have worked well yesterday and price basically went into a narrowing coil all day without ever really testing the upper level of the chop zone, and floating stubbornly along the lower level. The fact that it established its resting place in the lower half of the range should have been a clue as to which level price (i.e. the market) thought would be easiest to break. I have attached a chart that shows the levels I noted yesterday, and how they look this morning. As far as anyone's current views on the EURUSD, all you need is a chart. Best Wishes, Thales

Nice trade, EmNQ ... here is how it looked to me before and after ... Best Wishes, Thales

Hi Folks, Not tading this at all ... just throwing a chart out there for the oil traders ... Best Wishes, Thales

Updated look at the GBPUSD Best Wishes, Thales

I wish I had found today as clear and easy as tonight. Another thought about this trade - entry at resistance allowed for a 3-4 pip stop loss. I used my little excel spread sheet to show what this means for trading a small account using position sizing instead of a fixed trade size, i.e. basing trade size on a fixed equity at risk model. In this case, I assumed a $500 starting equity, 2%/trade risk, a 4 tick stop loss (this sounds insanely small, but look at the entry - in this case, you are either right or you are wrong, and it only right and wrong is only divided by 4 ticks). Using position sizing, you would trade 25K size for a total risk of $10, and a potential reward of $87.50 at the first profit target (I'm assuming a 132.63 entry, 132.67 stop loss, and a 132.28 profit target). Even if you are a skittish trader and you set a 20 pip take profit you would stand to make 10% on this type of trade. That folks, is the power of position sizing. Position sizing is the science of using leverage responsibly and to maximum effect. Whether you are trading spot, futures, or stocks, it would be worth your while to at least apply position sizing on paper, and see how it might effect your equity curve compared to whatever you are doing now. Best Wishes, Thales

This is textbook break and hold - enter at the test, very close stop just above new resistance. It either drops for a decent profit or you take a tiny, tiny loss. Best Wishes, Thales

Thank you for sharing your charts, and I encourage you to continue to do so. I trust you will receive no abuse here in this thread. Best Wishes, Thales