ForexTraderX

Exited crude at + 10 ticks... just holding 6B now... shooting for more

Stops now at +1 on 6B

Closed the 6E out at 1 tick profit...but crude is up 3, and 6B is up 6...

got long 6E at 1.2283... but probably will close it out pretty quickly here... unless we can pull this turn up in hte next few minutes...

Well, just got long crude at 90.29... stop 25 ticks, target 30 ticks for now...

I reduced my 2 contract order at 5685 to 1 contract long at 5685, 35 stop, and 40+ target. In case the 6B futs continues to move against me, I don't want more risk on this trade idea than I originally had, which was 2 contracts, at 35 tick each.

Long 6B again at 5702... and this time, i'm holding it to the full stop if it moves down to 75-80

Seems risk on is in style today... not to mention with few interested in getting long the USD with the expectation of some sort of easing or stimulus... with the meeting coming up on wednesday thursday, and with the amount of euro shorts still in the market who likely are looking to cover, and the longer this goes, the more desperate they will get... closed 6B at -12 ticks, and 6E at +7 or 8.... will update with a screenshot or something. so far, up about $135 today... after comissions, likely about $110

moved my stop up another tick on 6E... also, my stop on 6B is right now at 5680... looking to move it up quickly though.... so, now at +7 ticks stop on 6E, target +20 ticks

got long 6B at 5711 right now... we'll see...

seems EUR/JPY has a pretty big option expiring today at the NY cutoff I believe at 97.00... this will likely have an upward effect until 10 am EST.... which will only help my long euro trade in the futures... moved my target up 5 more pips... stop still +6

Stop now up +6 ticks... target still at +15 ticks Either make $75, or $187.50... but it's a good situation either way

Looks like I missed my fill on crude by about 4 ticks...but, still may get it.. who knows. up on euro futures tho. nice start to the day... $100 bucks is never a bad thing. Trader X Now, just sitting back. If we get to 2297, i'll move my stop on to +5, which is 2290 on the 6E futures... whoops...there. almost targetdd....

closed 1st out at 92.... stops at BE+1.... target now 2300

grabbed a 2nd long at 2285....

Just got long the 6E contract, euro...at 2284.... we'll see...

Right now, looking to scalp long on crude, long at 90.17, 12 T stop, 13T target. right now at 90.22...

One last thing tho....if anyone IS interested in seeing something today... just send me a PM here, and I'll get it set up. I'm not doing anything else for now except watching some news show and updating my trading plan. I'd rather be showing some folks some successful ways to speculate in the markets... so if you PM me and i'm at the computer, i'll fire up the webinar thing and we can talk trading and maybe get a few live ones in TraderX

Well, in this case, you really have two seperate transactions. One is a money to money "trade", and the other is a proper investment, because you have a static base unit to measure the financial success or failure of your Aussie bars in an absolute fixed term "how many AUD's." One is an investment, one is a trade. I'm really taking this from jack schwagger of market wizards fame. He ascertains that an "investor" by virtue of the act of investing is looking to profit via the appreciation of value of some entity that capital is allocated for. A trade or the act of trading does not need capital appreciation or an increase in value, because in a short trade, it is the loss of value that creates the profit. It is, in the most basic sense, a "bet". It needs something to intrinsically lose value for it to work. but an investment requires just the opposite. So, by his inference, a trader is one who can and will go both long and short depending on the particular opportunity, where as an investor will always go long (warren buffett vs. george soros, for example) Anyway. I don't wanna go round and round on this. I'm sure we both get it. i'm more surprised by the misinformation over all than this particular distinction of semantics. What really got me was that the forex market is made up of primarily traders and investors. it was not created for such purposes, nor do they comprise even 50% of the motivation behind currency market transactions. I can't remember ever seeing a mutual fund diversified in currencies of some sort for the sake of captureing exchange rate fluctuations. Hedge funds, yes! but then...these are traders right...? not really investors. Anyway, I see 2 transactions. One is a trade, other other an investment, the are distinct. TraderX

To further your thinking here a bit if I may... the real issue that should be addressed here is "what am i trading for.... what are my goals". If your goal is to turn $100 into $1 million in 1 year, and you have a hypothetical holy grail strategy that will provide a big enough edge to justify a massive risk amount, then in fact that is what you should be risking per trade, even if it is upwards of 30%. Of course, only fools make it a "goal" to "win the lotto". And if you have such an edge that really could do this...well, you won't need that $100 anyway, you'll get rich almost regardless of any risk management approach. But of coiurse you DON'T have this edge. Now, say your goal is to take a 10K nest egg, and grow it to the point where you can make 50K a year with. And you determine your edge justifies taking a 2% risk per trade, and in doing so it will very likely not suffer more than a 20% drawdown, at any time in th next 10 years, and and with that risk amount you can make about 50% ROI per year... and you want to be able to go full time making that $50K within 7 years. WELLLLLL... now that you actually know what you have, and what you are shooting for, and how long you are willing to give it, and how your method will likely perform over that period of time... you also know what you should risk per trade. And notice how the question or issue of leverage now is actually completely irrelevent. Discussing what leverage one should use on a trade is like discussing what pair of pants you should plan on wearing at your 350th birthday party. It doesn't matter, because your not gonna get to be 350, and even if you were... it has absolutly nothing to do with your goals or why you are trading, or your account, or what your system can handle or anything else. Because when you start talking leverage, as in "how much is enough", you're probably already F'd. I know of no professional trader who even considers leverage as a function of capital. But I know every single one of them looks at risk, reward, drawdown, percent return per year, month, week, expectancy per trade, standardard deviation of drawdown, etc. Why anyone cares about leverage escapes me. It's like caring how much foam rubber they put in your seats in your car, but totally overlooking the miles on the engine, or if the car even drives....etc. Personally 4Ever...I'm wondering who this richard cox guy is... he must have a ghostwriter doing this. his articles are either total fables, or highly irrelevent. I'd be willing to bet anyone $1000 bucks that no one reading this or anything else he's posted tonight will be able to do a single thing with any of it, in terms of trading. Anyway, the leverage issue is age old, and frankly, my trading success or lackthereof is actually more dependent on whether my wife prepared a good dinner for me or not on any particular evening, than it EVER is on my "leverage" TraderX

Well, I was going to to some live trading tonight, but I was really unable to post any follow ups or notifications until now, so with such little notification of a start time or whatever, I'm going to hold off on tonight, and I will do it tomorrow. However, I'd like those who want to attend to post in this thread that you plan on stopping by. I realized that I sat around since most of asia open waiting, and I don't think anyone came by! lol. Not too surprising, I just posted it up, but since I sit in from of a screen for enough time as it is... i'll post a time up tomorrow. either around the london or the NY open I'll do some live futures trading. As for my orders, I'm looking to get long the sept kiwi futures at 0.8025, with about a 40 tick stop, 40+ tick target. the GBP futures, 5685 long, 38 tick stop 50 and 75 target (2 contracts) and the AUD futures getting long around 0345, 30-40 tick stop, and about 40-50 tick target. I'm already long the NZD/JPY from around 63.30, and short the cad/jpy from 78.10. However, I have more of a belief that the NZD will target while the CAD/J stops out.... however, both trades had valid setups, just one is a counter trend setup I use, and the other a trend following setup. So, we'll see. maybe I get really lucky and they both target. Will post more later. Please feel free to ask questions or comment on anything you want to. TraderX

Well, that's well thought out... and I agree in general with the sementics, but I do see a distinction, even if it is a debatable distinction. When one makes an investment, the common understanding is that they are allocating capital into an entity of some sort that will be intrinsically worth more at a later time. Their "base unit of value" is their capital, ie their money. At a later date their investment will have appreciated, and they will get more of the base unit back when they sell it or use the cashflow or whatever. But, bottom line is, the entity they are devoting capital towards needs to increase or otherwise generate more of the base unit than they put into it initially, otherwise, they will have lost on that investment. Currency trading howeer is a special case, because you have two "base units". So, you have no static frame of reference. If I go long aud/usd, and in 1 year, sell my aud and buy back my USD's.... and if the aud/usd went up, I will have more USD. However, do i have more USD's because the USD itself decreased in value? or because the AUD went up. or both? So, if somehow you could directly specify that in fact, I had more USD due 100% to the fact that the AUD went up in value, but the USD didn't go down, then I would say, OK, THAT'S A CURRENCY INVESTMENT! However, it's impossible to say that, because you have no static frame of reference. Just like it's impossible to tell speed without distance. You can't just say "that car is going 60 fast" you have to say "it's going 60 KPH" IE 60 "static frame of reference" Since all money is equaly considered a "base unit" to every other potential entity that could also be considered a storehouse of value, like real estate, crude oil, gold, stocks, a franchise, an airline company, a dot com start up....etc... those things always go up or down in reference to the fixed amount of money paid for them. At least that is how the world looks at it for the most part. But, money against money is a special case. No fixed frame of reference...so, in some view points, it would actually be "impossible" to "invest" in a currency, since you are always betting that one will lose value to the other, and in fact if one goes up, the other went down to it, and visa versa. But other than this somewhat debateable semantical arguement.... the rest of the article is still... well, it could use some "editing" TraderX

I agree with just about everything you've said here Db. I have one setup, that has one particular "filter" to see if a fast and slow MA are in a strong trend, particularly after a period of consolidation (IE: breakout). I run a few hundered tests to see if it improves my trading, and lo and behold, I get about a 10% higher win rate, and make about 10% more money with less variance. But, I also use supply and demand areas, but particularly with an eye towards a potential "stop run" that sits slightly above an area where price was consolidating or congested previously...thus, I have a situation where larger traders are using stops to fill their exits at the apex of a move, while simultaniously just a few pips below are losing traders looking to get out at break even, not to mention new market participants looking to buy value... all the while we are in an uptrend as defined by H/H and H/L, in accordance to a trendline, and better yet if we've just made an impulse move to break a previous downtrend line. Of course, This is best to catch the market off guard, in fact, better still to have such a trend change and impulse move up on BAD news... only to see the word off the newsfeed show people "confused by the recent change in price action" yet price continuing to go up. This tells me we may have a full blown short squeeze on top of it all. Then, if we can actually get a bit of good news, which the market responds to with elation and explosive moves upwards, this tells me we also have now an underlying sentiment shift, where not only do we have a full blow short squeeze, but a real buying of a percevied undervalued asset or market. But, I also get a live newsfeed myself, that LITERALLY tells me exactly where stops, bids, and offers are in the market, as well as large option positions, and their expiration time, and sometimes barrier options as well, as well as the interested parties who stand to make a great deal of money should price be on the other side of that option line when expireation a few hours away comes to pass. Very good to know about to know what side I want to be on, and if i should be looking to push into a level at a certain time or distance, or if i should fade the push in, with a 10 pip stop, and catch a nice 5:1 on the reversal. And of course if the underlying fundamental picture looks good as well, and the market was really only pulling down because of irrational overreaction to an overall insignificant or significant but not directly affecting situation, that's even better. Better still if that trendline break upwards was preceeded by a parabolic move down.... you know, a true full lblown exhaustion/panic situation, and if the COT report shows both large and small specs at record extremes of holding short, all the while the commercials have been absorbing liquidity out of the market at a faster pace than it will be available to be re-captured by specs once the specs get caught too short as the market finally decides it's all sold out, and there is no obvious impending and large scale central bank or soverigen invervention to try to stop this new bullish move... Then ya. Ya. Then, I think I like a long. Long is good. In fact, to let you all in on a little secret, markets will often gun into some of those more "technnical" levels like a 200 day MA, if it is able to do so after a period of consolidation, and on a low liquidity day like a holiday or a friday, and particularly if there is a potential catalyst in the news coming up in the next day or so.... it's a good bet to look for those big techincal levels, particularly MA levels, as well as previous highs and lows that have been established, but not yet retested... those have lots of tight clusters of stops...perfect for larger traders to use to exit AND enter new positions at the very turning point of the market. Heck, it's there massive orders that NEED that tight block to be able to get in and out without 20+ pips of slippage due to their $100 million position they need to cover, and another $30 mill they intend to take the other direction. Oh, and for those that are skeptical...here's a bit from a live newsfeed source I have... this just came out 6 minutes ago i fact: EUR/JPY, EUR/USD, EUR/Crosses vulnerable to real money selling from Japanese banks, trust, regional and custodian names on JPY repatriation, linked to huge EUR21bln Spanish bonds and redemption due today. EUR/USD at 1.2287-88, with focus on the above huge repatriation. Focus on Italian bond auction today as well - good to watch any spike in borrowing costs. "EUR/USD at 1.2286-88, looking a tad offered after the rally to 3-week highs of 1.2390, vs its 2-year lows of 1.2042 seen last week. Not surprised to see some correction down, after the sharp spike up from 1.2115-20 levels. Interestingly - the same levels last Wednesday and Thursday - on ECB Ewald Nowotny ESM banking license on Wednesday and then ECB Pres Mario Draghi on ECB will do whatever on Thursday. EUR/USD offers at 1.2300-10. Bids 1.2275-80, stoploss below 1.2270/50. EUR/JPY at 96.25-30, eye break of 96.00 handle again, after the 3 JPY rebound from 12-year lows of 94.10-14 to 2-week 97.33. WL" Go ahead, watch those levels that the offers, bids, and stops are quoted at.... and see how price reacts around them today So... anyway. ya. indicators? Good luck guys. I hope they work for you. As for me, my indicator is the overall sentiment of the bigger players, the zones where there are large amounts of losing trades who would love to get out at break even, the price points where your stops are, and the flow information like above to know where the REAL institutions and banks and nations are buying. Hope that stochastic/MACD combo works for ya. As for me, I just look to find out where someone wants to buy a few hundered mil of EUR or GBP, and put my order 1 pip ahead of theirs. It still doesn't always work, but I do get to do this for a living...at least, as long as my psych doesn't get the best of me I do. Because that.... well, that I have no answer for, and still struggle with it myself. I guess i'm really just a crappy trader. Maybe I shoulda stuck ot the indicators. TraderX

Hmmm. I'm not really sure even where to start here... I'm actually kinda wondering why you posted this up. First, The BASIS of the forex markets in operation today is the same as it was since bretton woods and nixon flipping the bird to the french when they requested payment in gold instead of paper dollars. It's for COMMERCIAL and GOVERNMENT interests to hedge their needs against future potential adverse fluctuations of currency values. It's not for trading, or for investing per se...but actually for hedging. And, less than 50% of the market is made up of speculators, retail, commercial, institutional...etc. So... who REALLY forms the basis of the forex market??? Commercial and government interests who hedge in the market. Also... investing? currencies? really? No. Hedging. Trading. But.... investing?? nahhh... I can't honestly say I know of more than just a handful of currency "investors"...because those interested in buying and holding for capital appreciation or for capital preservation and interest derived income go for more lucrative, more steady things, which you can get more of in other markets. Furthermore, when you go long one currency, by definition, you go short another. And an investor would NEVER go short. Ever. That, in fact, is one of the hallmark aspects of what really makes the difference between an investor and a trader.... because one cannot "invest" in something that is going to depreciate in value. Totally off base with that one there.... Then you go on to say that traders "tend to base their decisions on the assumption that economic fundamentals are very difficult to understand in their entirety...and that they therefore focus on price action...etc" Where in the world did you get this idea? MOST of the full time traders I know of spend a considerable amount of time doing EXACTLY what you imply that they don't: reading through fundamental and other "OFF CHART" based data and info in order to understand what the driving or influencing forces in the market are today. I know I do. I do it every day. Because it helps. A LOT. For example, did you know the reason the primary driver in the euro being crushed the last month is? it's been the fact that the ECB reduced interest rates, particularly the amount they pay on the overnight carry rate, making it particularly attractive to fund a carry trade with. The carry trade itself is a fundamentally based TRADING principle, and this has been the largest segment from the institutional side of the markets to be plowing money into other currencies and away from the euro over the last month. So, who was the PRIMARY market participants who speicifcally were most responsible for the euro devaluation over the last month? That's right... "carry traders"... the ones who were trading based off of essentially fundamental info. As far as "asset diversification" goes... your gonna first have to prove with a single shred of evidence how that is anything other than a hedge against stupidity, as no less than the investor, warren buffett has said. And when it comes to holding trades...? Jim Rogers and George Soros, both are argueably the greatest traders alive today, are known to hold trades for months, even years. Trades. For years. Not investments, Trades. Soros built up a massive short position in the GBP to the point he broke the bank of england and pocketed a cool billion. He didn't make that trade as a "scalp", and by virtue of the fact that he was short...well, it's tough to argue that he was "investing" in the GBP. So. Hmm. as I started with... I don't actually have any clue why you posted this. Nevermind that it is entirely wrong... i'm just wondering what the motivation was...? Anyway. I'd like to know that at least I suppose... TraderX

I've just copied and pasted this in here... I don't use this to get in any trades, but it gives me a great idea of what to expect, and what markets to favor to the long side. when it matches up with my tech analysis....BAM... those are great situations to trade. And for now, the AUD and NZD should really move up against the JPY, and the USD. Here's my work for today. I do this all over every single day. It helps me trust my trades and stay away from trouble: DAILY FUNDAMENTAL AND SENTIMENT ANALYSIS: Seems now options dealers are charging the biggest premium in 4 months to protect against possible losses in chinese companies, amid growing concern that china is slowing down move, and more. the Hang Seng has slid 1.8% this month, the 3rd monthly drop in a row, and the asian volatility index has risen upwards of 32% higher than the CBOE volatility index, showing a disparate sense of fear regarding china when compared to the U.S. It’s the largest gap since march. A govt report on July 27th showed chinese industrial profits fell for the 3rd month in a row, and the expansion is slowing more than it has in 3 years. This is combined with questions regarding chinese accounting, and it’s making it all the more negative for sentiment. To make it worse, chinese ETF’s are rising...causing more bubble talk, and more concerns. This all is bad for the AUD, com dolls in general, and risk markets over all...except for one thing... comdolls, and the AUD in particular, is likly to get a boost due to the fact that the rumors are spreading quickly that China will have to lower it’s interest rate, and persue further aggressive stimulus. The interest rate decrease isn’t likley to be extremely strong for the AUD, but any direct easing WOULD be, and this plus the other positive aspects of the aussie economy and currency fundamentals are likely to over-ride chinese concerns, particularly as the AUD is gaining credibility as a more mainstream currency. On the U.S. front, the ever steady 8%+ jobless rate since feb 09 is putting real pressure on the fed. They meet on July 31st and Aug 1st to discuss further stimulus. Watch for rumors of more easing, since they have continued to vocalize a willingness to do so, and now things are looking like they are getting worse. Market will likely react with some caution to the USD until the meeting is over, and lean on the safer risk currencies to move upward. Also, world currencies and markets in general soared against the euro last week, on word that europe is committed 100% to saving the euro, and that they will start a bond purchase to stimulate things. THis will only bode poorly for the euro, but better for related markets like tha AUD, NZD, and the GBP. stability + a cheap euro = stronger risk markets around the euro. THe only interesting thing to note is the dollar has been so strong the last few months, that the euro bond buying to increase euro stability will likley reduce a lot of fear in the marketplace, and thus, without new and bigger problems developing to create euro panic selloffs, the short position being held will start to unwind, putting upward pressure on the euro. At this point, stability is more risk on than increased money supply of the euro is risk off. Also, the GDP confirming the dire economic situation in the UK with a return to a recession was followed by a curious rally! this is ALWAYS telling sign, when such fundamentally negative and overarching news comes out about a market, but yet the market rallies up like the GBP has...it implies more upward movement over the next few weeks at least for the GBP. Consider this as a bullish bias. SUMMARY: the dollar seems to be likley to be the weakest, along with the jpy. The euro has two opposing forces working on it, but for now, a choppy, slow rise wouldn’t surprise me with the hope of a bit more stability on the investment worlds mind. (and thus, and unwinding of shorts). The real winners are likley to be the AUD, NZD, and the GBP, with the CAD not far behind. the AUD wins in ALL situations. a euro short squeeze, a chinese stimulus, a U.S. stimulus. and japenese stimulus, risk on in general...etc. the GBP is pushing some impressive height given the new recession, and I’ve learned to not ignore it. I think in genereal, short USD and JPY for now, and look ot get long comdolls, or the GBP.