ForexTraderX

Ahhh darn... just realized that the time stamp won't be on this, because of posts arn't going live yet. Oh well. W/E. short cad/jpy around the tokyo open from 78.12, shooting for 40ish + pips

Oh, just for the record, i'm short CAD/JPY from 78.12, due to it setting up on a different setup of mine (a counter trend setup). This, combined with my overall analysis concluding a pullback likley, i'm short from 78.12, with a 34 pip stop 40 pip target. I'll have stops at BE at 30 pips.

Finally, I look at the daily charts of the 6 markets I feel have the best chance to move in the direction of my bias... and look to see what could trip that up. Specifically, ranges, areas of S/R, stalling patterns on an intraday basis, congestion, etc. With these considerations, I've found 3 markets look like they could be ranging, or stalling, or it isn't clear if we are possibly loooking for a deep retracement, a shallow retracement, or what. For these, I'll play the deeper levels, and I may require PA confirmation before entering. However, for the best 3, AUD/USD, AUD/JPY, and NZD/USD, i'll look to get long at the first stalling point, but I'll have 1 or 2 deeper levels in mind, with written criteria for all possible entry points of what I will need to see in order to enter, including my stop, targets, and amount risked per trade. There. Now. Finally, I have the technical aspects down to determine DIRECTIONAL BIAS FOR THE DAY. Just for the day, and just the bias. I still don't know levels, or if there is a possible warning, or even supprorting event going on in the real world. At this point, I take a break away from the charts... and when I come back in 20-30 minutes, I open up bloomberg, forexfactory, the WSJ, and take a look at what events are moving the markets, what is coming up, what I should be concerned about, and what may further support the reasons for my directional bias. More on that later...

From what I've heard... the loss was just that... a huge F****** loss. Think about it....if they had done something illegal.... wouldn't it be to like... oh, I don't know... NOT lose??? No one cheats to get themselves snookered by 9 billion. And besides, I heard about the trader MONTHS ago on the newsfeeds and other financial sites I check out. Was referred to as the "London Whale". In fact, it was known by the trading community before even JP MORGAN realized the situation that he was basically just a fool who was totally out of control. He had been offsetting such large, sophisticated positions over the past few years in many markets, but for the last 2 years, he was profitable. immensely so (to the tune of hundereds of millions in profits that his trading personally generated). So, JPM felt to open up the floodgates this year and give Bruno and others access to more funds to do what he did best = use a hundreds of millions to make a hundered million. He had held positions into the billions before, and had come out smelling like a rose and making over $100 million last year doing it. (or was it $80 million. no matter. a LOT of money) So he, AND JPM, thought they were hot stuff. Thought they knew something. Thought they could beat the market. No... maybe poor oversight, or maybe even some fraud with not disclosing the loss earlier (thought they may not have been able to know how big it actually would be, due to his positions being so complex)... but no fraud in losing the money. Just another couple traders who thought they could beat the market, and forgot to respect risk while doing so. Rookie mistake TBH. Only difference between most guys on this forum, and Bruno/JPM, is the number of zero's behind their losses. Nothing more, nothing less. TraderX

Here's where the moving averages come into play. I lay a 20 on a 50 SMA, and look to see a strong trend. Defined by the fast above the slow in an uptrend, both sloping up, best of all after recent consolidation or congestion. In other words, a picture perfect, smooth, strong, channeling trend on a daily chart. If this is the case, then I DON'T trade this setup against that trend. simple as that. In doing this, I found the MA filter just disqualified the GBP/JPY from being a potential long trade today, as well as the USD/JPY (which was the one with a neutral strengh/weakness bias, so that makes it an official "no trade" market today.) I am now down to 6 markets to look for opportunities... but they should be a very good 6. Now, I go back over the daily charts on those 6 markets, to see if they are currently in some sort of congestion pattern, or a range, or strongly trending, etc. In other words, I'm loooking to draw trendlines, and specifically determine what types of possible opportunties exist. If they are primiarily ranging, or even more to the point, in congestion... I will generally look to identify only the single best opportunity, and/or use intraday PA for confirmation that a level will hold/break as I need for a winning trade. If they have just broken out of a range, or are making a nice sloping trend, I may pick 2 or even 3 possible prices to place orders at, as I am more willing to get stopped out once or twice, if such a nice opportunity can give a 3, 4, or even 5+ reward for the risk. Ranging markets this isn't wise to count on, but in a market breaking out, or strongly trending? the odds greatly increase that the pullbacks will be shallow, and the continuations powerful. So, these I will risk more "stabs" to catch the move.

At this point, I now take those same 9 markets, and check the weekly chart, AND monthly chart, for each of them. While doing so, I noticed while looking at a monthly chart of EUR/JPY, It CLEARLY shows monthly price action is biased down. So, this pair for today, which I did have on that list of 9 as being potentially good for a long trade.... just got disqualified. I don't care how good the daily chart looks, if the monthly looks bad, or the weekly, well, it doesn't get traded. The weekly and monthly don't have to agree and have the same bias however! "neutral" or "i can't tell" is totally fine! it just can't be in opposition to the direction I'm looking to trade that market today. The list is now narrowed down to 8... but we filter further still...

Now, I go over all the currency pairs I trade (majors, comdolls, and most crosses) I look at the daily charts for all of them. Just the dailies. And I look to answer one question and one question only: Based on recent daily price action, as well as S/R level, are we more likley to have a bulllish day in this currency pair? or are we more likely to have a bearish day in this currency pair. What is the "Bias" for the day? I look at about 22-26 forex pairs this way each day, and today, I have narrowed it down to 9 markets that I feel recent price action has given me a pretty clear indication of where it is likely to be moving today. It is these markets that I will find my trading opportunities in today. HOWEVER, not all of them will be traded. In fact, of the 9 that I have isolated for today, 8 of them happen to correlate to being "long the stronger, short the weaker" as I deteremined in step one today. But, one of them is a "bearish vs bearish" market... and therefore, I will most likely avoid it today, unless I find an very compelling reason to consider an opportunity in that market today. So, I'm really down to 8 Forex markets. I still may find more opportunities in other futures markets, but I'll cover that some other time.... Now, I filter a bit further...

If you have some experience reading price action, you will likely agree with me that the NZD looks pretty strong over all compared to a weighted basket of other G8 currencies. In fact, I have a 7 point system that I apply to estimate just how bullish or bearish a market is. "very bullish" is the most it can be, and that scores a 7. "neutral" or "can't tell" is a score of 4, and "very bearish" is the weakest score, a 1. So, when looking at the monthly chart for the NZD, i'd say it's bullish, the weekly chart is very bullish, and the daily chart is slightly bullish. Comes out to be about "bullish", which for me is a score of 6. Why is this important to me? Well, it's all about stacking probabilities. I have found recent price action to be superior in determining the price action that is about to immediately follow. Better than "trend", better than moving averages, trendlines, indicators, fundamentals, etc. Now, 4 or 5 candles later? even 3 candles later? well, I can't say. But, if I can get a clear read on a market like this, I CAN say that the august candle will probably continue to set a new high for the summer, rather than a new low. That's an edge, IMO.and it may only have a predictive value of 1 or two following candles... well, they are MONTHLY and WEEKLY candles folks. So, I can have a statistically valid idea that the NZD is more likley to make a new summer high than a new summer low, and I know that will continue to hold true for the next 30 days. Pretty cool. But most of all, it tells me that against all other currencies, on the average, the NZD is showing bullish longer term price action. It scores a "6 out of 7" in fact. So, today, I will continue to rank each and every major currency, and I will ONLY trade the NZD long against anything with a score below a 6. If another market has the same score of 6, I can trade them either way. The only way I could take a short NZD trade today is if some other major currency looked "very bullish" on all 3 TF's. But then, why would I do that... when I would be much better off trading the NZD long, against something like.... oh... the JPY today... which has the lowest "Strengh/Weakness" score of all the majors for today. AUD and NZD look strong, the JPY looks the weakest, and close behind it is the USD. It doesn't mean that I will take all my longs on AUD or NZD, and shorts on USD and JPY.... it just means that under NO circumstances will I go short the aud/usd, or the nzd/jpy. I may go long, I may not... but no way will I go short. Simple. One quick little edge I now have, and one more way I know of to stay out of trouble for todays trading. TraderX

Normally, the first order of business is to review any open orders, alerts, trades, etc... and see if anything has met the criteria for a stop to be moved, or partial profits taken, etc... but, today, there was none of that. Next, I review all my losing trades from the previous day, but this was done yesterday (though don't worry, I expect at least a couple more losses during the rest of my trading career, so you'll see how I do my review then) My 3rd step in my day is to review the markets I will be trading (primarily currency and currency futures), and make a longer term TF analysis based on daily, weekly, and monthly charts, and the recent candle PA, to determine a general sense of which currency is very strong right now, and which is not so strong. For the currency markets, I do this for each individual currency... not a currency pair Just like the dollar index is a weighted basket of major currencies that fluctuate against the dollar,.. well, I use a "weighted basket of currencies" against each currency market I trade, which these days is: USD, EUR, GBP, AUD, CAD, NZD, JPY (I don't trade the franc due to the SNB peg) I then take each currency, and pull up a monthly chart. I look at recent PA, and make a determination: what I'm looking at RIGHT NOW.... does the market look more bullish? more bearish? or "neutral": ie: I have no idea up or down. for this process, I ONLY consider price action in the form of candlesticks and classical SR. Here are some pictures to give you a better idea of what I'm talking about:

Agree with the "create new means", as well as study TA in depth for years to really get it. To the OP and others: As for definitions, I think fundamentals are anything other than price or volume derived, quantifiable factual information that can reasonably be used to determine if a market is more likely to go up, or down, over some period of time. Sentiment and sentiment analysis is more a measure how the market is interpreting and acting on both fundamental information, as well as various expectations of fundamental information both past and future, and relatively "overbought" or "oversold" market conditions (COT analysis can help with this type of idea). Technical analysis, IMO, is anything that is primarily derived from price, volume, and the fluctuations of both price and volume over time. This would include stat arb, since stat arb opportunities arise as a function of changes in price over time, as well as trend, market correlations, And finally, "tape reading" - which doesn't so much consider price, or the change in price over time, but more focuses on liquidity as a function of bids and offers, and the fluctuation of bids and offers over time. Rather than as a change in price over time (as tech analysis fall under, IMO), tape reading is the change of bids/offers over time. This DOES affect price of course (so it in fact has a direct effect on what data is produced and then used by tech analyists), but it is, IMO a distinct catagory. These are the 4 catagories IMO, and this is how I see they break down. TBH, it seems like an argument of semantics more than anything else, other than simply to say "I don't believe the following specific chart patterns are effective edges in the market" I disagree there too, to a degree.... as classic chart patterns can and do work, depending on the circumstances they appear under. TraderX

Only very slightly. very, very slightly. I believe those that have a higher aptitude for objective, emperically influenced, critical thinking skills, as well as a higher than average curiosity and a deep seated need to understand more, particularly that which is abstract, tend to be the types that have a higher than average aptitude for scholastic acheivement. These same traits are also a big advantage when it comes to trading. However, the are so easily undermined by SO MANY OTHER challenges in trading, and for the most important of all (psychology) they are just a bit better than useless.... It's something like being "a big guy" equating to being good at football (american football). Yes, being 6 foot, 3 inches and weighing 255 lbs does indeed endow one to be naturally more likely to BECOME a professional football player.... but man, there are so many, many other things that matter more, or must be mastered regardless of physique, that it's basically statistically no advantage of being big, or only average, if you want to be a pro football player (how many guys out there are above average height and build, yet DIDN'T make it to the NFL??? probably about as many average sized guys that didn't.) Yet, I will say without a doubt the best traders I know personally, and know of, were highly capable of academic excellence. Of course, many did not actually acheive great academic success for a variety of reasons... but, if they had applied themsleves, they would have. More so these days, with the pits and floors drying up. The raw, more primal instincts that one would find a potentially massive advantage in pit trading does not translate at all to the screen. So more so these days, I would say academic potential is more correlated to trading potential. but it's just that. potential. maybe. if everything is lines up too. TraderX

Been lurking around for a little while now, and I like what I see in terms of community, so I've decided to take it upon myself to try out a little experiment. I'm going to take my analysis, AND my trading, out into public view on a pretty regular basis, to give some of you a good idea of how one trader runs their particular trading business. Since this is my first post here, i figure you might want some background info. I've been trading for almost 10 years now, successfully (more or less) for about 4. Yes, I do this for a living, although this year has been particularly tough for me. In my primary account, I'm holding a double digit return for this year (just barely), although I had a time of it a few weeks ago, and halved my yearly profit in about 3 days. It was absolutely terrible of me to do so, but all things considered, it would have only been about a month of profits from 2011 (which was a much better year for me). I've traded just about everything under the sun, though I currently am trading primarily a few futures markets (currencies, equities, and crude primarily, though I do others sometimes), as well as the spot forex markets. I also am getting more involved with equity stat arb, though it's not something i'll be discussing much at this point. I've traded options, stocks, bonds, ETF's, currencies, futures, even softs, so i've been around the block. My trading style : well, I really just focus on 3 indicators. The MACD, an RSI, and a 21 period stochastic..... Just Kidding. I'm primarily a technical trader, but I don't subscribe to a single system or method or anything like that. I also consider the underlying fundamental drivers in the market, as well as near term and mid term sentiment. I've found if one wants to get the best results in the market, one must have a comprehensive understanding of what information other people in the world are basing their trading decisions on. For the record, I don't use any "indicators" though I will use a couple moving averages on occassion to filter for a strong trend. I have a few other tools, but I'd say moving averages is the closest I come to any "indicator" So, it probably seems like I should be doing pretty good eh? well, that's where you all come in.The problem is my head, and i've decided to really focus on some of the more positive aspects of the markets, as well as re-enforce all the necessary lessons and rules i've learned in the past... And the best way I know to do this is to teach it to those who care to listen. Not to mention trading is an isolated business, and I'm hoping this experiment here will give me an outlet to chat with like-minded folks. And most of you folks seem nice enough. Here is what you can expect: - Live, Realtime Trading in a real futures account. - An open "forum" for discussing trading, mine, yours, market thoughts in general, trading aspirations, just to shoot the shit, or even the most painless ways to commit suicide (common discussion for the "i don't use stops" group usually)... whatever. - A comprehensive trade analysis with some explanation behind it (as I feel compelled to do so anyway) - trading and the head game discussions. This will probably be my favorite topic, but who knows. - something akin to being a fly on the wall of the office of a real, full time trader. I will go into many things here, including more info about my method, setup, rules, etc... but it'll be an organic process. The only thing is it will require some mutual participation. I'm not gonna get anything out of this if there arn't any "students" who care to participate, or at least others who care to debate the finer points of the capital markets. So, as long as there is some participation, I'll be happy to roll stuff out. If that ends, (or doesn't begin)...well, I probably won't stick around. NOW: For the FIRST order of business: I will be hosting a live trading "chat-minar" over at anymeeting.com. It's obviously free, though I don't plan on doing any talking... just typing.. It's easier to keep it more casual that way, and that way I don't have to worry about filling "dead air" time. If you attend, you will get to see a general overview of my approach to trading, as well as watch, in real time, how I place my trades, and how much I make (or lose... as it very well may end up to be the case. we will just have to wait and see) I'll be starting the "chat-minar" after toyko opens, but before europe opens. I'm just going to basically have a screen up the entire time with a chart and my orders (if there are any) on it... so, it'll be something like "TraderCam" Here's a link to check out the TraderCam and learn how I trade from home: http://www.anymeeting.com/currencytraderx1 Also, the chat function on anymeeting.com kinda sucks. I'd prefer to start a skype group for this webinar here, so you can use anymeeting.com to watch the screen, and we can all discuss the markets via skype. If that's too much for ya, there is a chat function in anymeeting.com, it's just not ideal. But, for now if you don't have skype, don't worry about it. Anymeeting will do for today My skype name is: forextraderx Oh, and lets keep this positive folks. I know some of you are probably really cynical about anything remotely close to vendorspeak (and rightfully so!) But I'm not selling anything, and for some crazy reason i'm actually going to be doing this live... probably 2-4 times a week for quite a while if everyone (including me) is getting something out of it. While I'm not guaranteeing "A 93.6%+ win rate with my system!" I am guaranteeing live trading, in a real account, in real time, with plenty of premarket analysis, all just for the heck of it. So stop by, and lets talk trading and make some money! TraderX