Wednesday, December 5, 2012 — NZD/JPY

by jennifer on December 5, 2012

NZD/JPY:  This could get pretty ugly… But I’m going for it. I will share my notes with you, but please do you own trade planning on this one fundamental/technical move.

4 Hour: 

1. I’m calling it… This pair will at some point in time fall through this space. I think it’s coming. OF COURSE, I COULD BE WRONG, SO PLEASE DON’T MORTGAGE YOUR HOME.
2. You could just as easily pick EUR/JPY, GBP/JPY, USD/JPY, AUD/JPY or CAD/JPY. Pick one. NZD/JPY is my favorite.
3. I am planning a series of sells beginning at the top Combo line and through all of the sup/res lines in blue.
4. Price and indicators are flat. Waiting.

I have looked at the daily, weekly and monthly charts, and feel like this pair is in line for a move for multiple reasons. The current position on the longer term charts could be a reasonable retracement/pause in the down-trends which follow risk averse economic times. I happen to think more bad news is on the way, or at least I think no truly good news will be possible economically in the world for a long time, so I suspect Yen will pull some strength.

Daily: 

WEEKLY #1: 

WEEKLY #2: Fibonacci retracements 

MONTHLY: 

PLANS:
I currently have entry orders to sell at:

67.25 for 30 pips
66.45 for 70 pips
65.37 for 70 pips

Of course I will move my stops to break even as I can, and I may not hold for +70 pips on the last two, but I will try. :)

Good luck!

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GBP/USD:   I was setting up this 15 minute Hopper Trade to buy if MACD Line crosses up over the zero line, and I noticed that on the Combo chart template, the Combo space is pretty good too, so I thought I would post it here for you. I hope you don’t mind if I do.

1. This is a 15 minute chart, and I like the 30 pip space up to the top Combo Line.
2. As a Hopper setup I was looking for an entry when the blue MACD Line crosses up over zero, and price moves above the level of  the sideways action.

PLAN:
1. As a Hopper setup, I planned an entry order at 1.5984 to buy for 30 pips. I will watch to be sure MACD has crossed up over 0 when it opens.
2. Initial stop loss is -30 pips, with a move to BE over +15.

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Are You Thinking About Joining The Combo Course?

by jennifer on November 2, 2012

This morning I received an email from someone who knows someone who knows me, and recommended my course.  The mutual friend is Mark T. When Mark’s friend was thinking about signing up for my course, he had some questions, so Mark gave him my email address and said “You should talk to her about the course and ask for the Mark T Discount.”

Ha ha, I love that! I really do care about traders who become my friends, and I plan out great trades every week because I want you to make money. I want to make money too! I realize we are not in this alone. At least we don’t have to be. I’m not even a social person, in fact I could be borderline asocial. I keep to myself, I still don’t have a Facebook  and, even though I would like to join a running club, I don’t do it.  But I do talk to traders everyday.  Yesterday, I figured out why talking to you has been so good for my trading.

I went to my daughter’s last high school cross country race yesterday. She is a senior and this was a big deal, running the final race and saying goodbye to something that has been a huge part of her life for many years. She ran a great race, 10 seconds faster than her goal, and all was about to end well as we were waiting for the awards ceremony to commence. She was running around (feeling like stud, I’m sure) having fun with her friends, and other parents were doing club things, and collecting in groups socializing and having a great time. All of a sudden it hit me. I could see “accountability” everywhere, and I was struck by how profoundly success follows accountability.  It improves life in every arena.  My daughter, a captain on her team, was accountable to her teammates  to run hard even though it was the last race and she was ready to be done with it. She had put it out there to lead by example.  The teammates followed her around like little puppies, and many of them can out-run her, but she was their leader and they were accountable to her. They planned goals together, planned for how to deal with the pain together, and there was a powerful energy in it that carried them all to perform amazingly. It’s quite something. No wonder all the parents had tears in their eyes. I could see it, Accountability, like magic glue or something that held people to a level of commitment which leads to a level of achievement that is nothing less than great.

What was I doing in that moment, waiting for the ceremony to start? I was sitting on a bench off by myself, looking at my trades stacking up on my cell phone. It was great! My trades were doing well, safely set to break-even, and I was talking to you on Twitter!

I know accountability is scarce for people like me, who trade from the privacy of their homes or offices (or a park bench). Accountability is magic though, and is very good for our trading practice. So I’m happy to participate with you and I feel the energy and the magic of accountability in trading that we plan together. It’s not perfect but it’s better than solitary confinement. It’s a way to  stay focused on my own trade plans and see charts and setups from other people too. When I see other people do what they say and reap the benefit of a winning position, it makes me stronger every day. Here’s to you, Traders!

So, I got an email from Mark’s friend, and he listed four things that are important to his trading, and he wondered if my Combo Course would be a good fit for him.In case you’re thinking about the same things, below is my answer to him, followed by a link for The Mark T Discount available to anyone until November 15th.

 

Thank you for your email. I would be happy to talk to you about trading. Most people haven’t spent any time reviewing their goals before joining a class, so I would be happy to give you a thorough response. It’s always nice talking to traders who want to think!

I will review your list of trading goals in order:

1. PRESERVE CAPITAl
I completely agree. Did you know that the success rate for entry-level Forex traders is only 3%? That is,only 3% of people who set out to learn to trade the currency markets stays with it long enough to make a profitable career. Most people lose about $5,000 over the course of 2 years and then drop out.  (These are loose statistics by the way, and I would have to dig up some support to back them up, but those are roughly the numbers). The reason is not because trading is difficult. You have probably already experienced the relative ease of learning a trading system and finding entries and exits in this 24-hour marketplace; but you have probably already discovered how easy it is to also give it back. I think the reason is because people get pie-in-the-sky high hopes and they turn a blind eye to their failures and keep throwing money out to trade after trade. I call it random trading, and none of it means anything. I wrote an e-book about random trading, called You Already Know. Perhaps you already saw it on my site, but if not you can download a copy from this link:

You Already Know

Back to your first point. Preserving capital is only difficult because people quickly get addicted to the feeling they get when they close a profitable trade. In order to grow a retirement account from a $1,000 trading account, you only need about 6 years and 5 trades per month. That sounds so logical to spend six years building a retirement account, right? But in the heat of the moment, we want it right now. We say we want to trade for the rest of their lives, but in reality the idea of putting in six years to build our wealth flies out the window during the day when we want to take another trade or another 10 trades! We go ahead and toss our profits right out the window with all our good sense in that hot moment.

It’s hard to preserve capital because trading is fun and some part of every stay-at-home-trader wants to have fun. If we could stop trading each month after our first 5 good trades we would be golden, but when 5 trades come in the first week of the month, no one stops trading, (including me, by the way!) It’s not that we’re “greedy”. That’s a bit harsh. But we think if 5 good trades “rocks” my retirement account, wouldn’t 10 be better? There is no end to that thinking, and we lose site of the goal, and allow more risk to enter our finances than was necessary.

All of that is to say, I agree with preserving capital. The operative question is how to do that. Less trading? Less risk? Better strategies? It really all comes down to the trader.

2. Take trades with risk/reward of 2:1 or better (most of the time)
I completely disagree. If you want Risk:Reward of 2:1, you don’t want me. And I’m totally ok with that. I don’t take offense. Believe me, there are plenty of people who will soap-box about an up-side-down risk:reward practice such as mine. You can find them all jamming up forums at ForexFactory, but you won’t find me there.

I have so much to say about Risk:Reward, that you’ll have to wait till my book gets published to get my whole spiel. It is a deceptive piece of a trading strategy and has come to mean nothing. Same with win percentage. These statistics don’t help anyone trade better.

Fact is, the more room you give a trade the higher your win percentage. But that doesn’t mean you’ll end up in the green! You could trade 100 trades in a row without a loss by not using stop losses, and in fact, I have done that. My setups are so solid and they almost always go in my direction (eventually) and placing the stop only insures that I will take a loss now and then. So should I use a stop-loss? Yes, but I would rather risk 3 to gain 1, not the other way around. A trader needs to know what his/her trades can do before applying a risk:reward to the strategy. 

While I believe in strategies that don’t use stop-losses, I do not trade without a stop-loss, and I do not encourage people to trade without a stop loss. I’m just saying that the more room you give a good trade, the more likely it is to succeed. If your strategy is crappy it doesn’t matter how good the R:R is, the trades will not produce. If your strategy is good, R:R is a moot point.

Most of my trades are placed with stop-loss of -50 and profit target of +30. When something goes wrong, and I’m stuck in a trade that I still believe in, I’m willing to give it a maximum of -70 pips. I have to pick that maximum draw-down number in order to know how much money to place on each trade. I consider “risk” in terms of what percentage of my account I’m willing to risk on one trade, so I need to know my worst case scenario. I use the number -70 as my worst case scenario so I know how much money to put on my trade. It has nothing to do with how much I expect to gain in the trade. I don’t remember the last time I took a loss over -50, because it hasn’t happened much this year, but I use the maximum loss number to determine trade size, and it has nothing to do with how successful my setups are expected to be.

I try to enter trades when I’m expecting momentum. If I am right (with the timing), I can move my stop to break even very quickly, and then just walk away. If I am wrong about timing and momentum, I’m willing to wait a little while, but as the setups falls apart, I can usually close the trade with -10 to -30.  I hardly ever wait for my stop loss. My initial risk was -50 or even -70 on occasion, but within 20 minutes moving my stop to break-even means my Risk:Reward is 0:30. It doesn’t get any better than that. And with a “usual” loss of -30 my R:R was 1:1. Therefore, R:R is meaningless (to me).

3. Get 20 pips each day consistently (more great) with little drawdown (i.e. from the edge)
I love this! I completely agree. And I think Edge Trading probably does this very well, too.

I try to get 30 pips with each Combo trade, and I usually trade a space that has 50 to 200 pips of “room.” People ask me all the time if I’m frustrated when I closed the trade with +30 and it went all the way to +200. The answer is no. I can get 30 pips over and over and over. Can you? If my trade is up 20 and the market movement slows down, I just take it. I am ALL IN FAVOR of just making money, and the way you do that is close your trade with profit and don’t try to hold on for the 100 pip winner. Repeat tomorrow.

There is nothing wrong with holding one once in awhile, but not until you have made your money. I have a blog post about that:

Hungry Trading And Fat Trading

4. Trade 2 hours/day, but no more than 4
Once again, I agree. I don’t think you need to trade more than 2 hours!

I spend about 4 hours a day but I write a lot of analysis for multiple sites, and that takes time. If you know the pairs you trade, you know how to use your indicators, charting should not take more than an hour. You might want to do that a couple times per day. You might check in and see that you’re done for the day after 15 minutes when no trades are setting up. I don’t waste my day in front of my computer

My course is already at a sale price, but I really like Mark, so here is an extra 10% off for the Mark T Special! I am happy to do that for you, especially since you come well recommended as someone who cares about making progress as a trader.

The Mark T Discount Link

If you have any more questions, let me know. Good luck!

Be calm, trade well.

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Hello Trader Friends,

I want to talk to you about trading.

A lot of us are like kids in a candy shop when it comes to finding trades, learning new strategies, and closing a trade with a profit. Making money from your kitchen table is so much more fun than going to work! But, too much candy will make your tummy hurt, and too much trading can hurt your bank account too. For bankers and institutional traders, trading is just a day job, and I think there is some place in between that we, the retail traders, can make a living and enjoy what we do every day.

Not all trading is fun. Not all trading is profitable. It is true to say that while sometimes trading is fun… Trading for a living is always difficult, and you should pat yourself on the back every time you make a profit. Keep track of what went right and do more of that.

It comes down to two types of trading which I call Fat Trading, and Hungry Trading.

In the beginning of the week I am Hungry Trading. I haven’t made any profit yet, and I have a fresh new week ahead of me. I spend my time wisely, don’t blow it on a stupid short-lived thrill-trade. I don’t take 10 standard lots on a whim. “Be smart, Jennifer. You are starving here!” That’s what I tell myself early in the week.

Take advantage of the fact that other market makers know it’s the beginning of the week, and caution might be low. I have noticed there is regular volatility that we can be ready to trade early in the week. It is as if market moving traders are relaxed because the whole week is ahead, plenty of time to get tough later. We are not like that. We are not random. It’s the beginning of the week and our caution is high! Don’t waste time on Monday, and don’t shoot for the sky on Tuesday. Put money in the bank. When you are hungry you will put anything you can find in your mouth. I’ll admit, I am fortunate and I don’t know much about true hunger, (although I did read  The Hunger Games!) What do I know about hunger, really? My only personal experience is after an athletic event when my body is all the way out of fuel, and I’m so hungry and I need food so bad I would eat anything. Most of the time I’m a fairly picky eater. I won’t eat it if it’s fried, processed, not organic, full of artificial sweeteners or if I don’t know who prepared it. After skiing all day or running a 10K, I’m so hungry I will eat anything off the cafeteria line, and that’s disgusting! But that’s exactly how I trade on Monday and Tuesday. If it’s a pip, I’ll take it!

Hungry Trading is my mindset early in the week when I want to bank some pips. Instead of of holding on for 30 pips, I will take 20. Or 10! Instead of holding a trade overnight, I will close it before I go to bed, and take anything that’s on the table. I will take profit as fast as possible. I am hungry to bank some pips, yes, starving to put some pips in the bank on Monday and Tuesday. I’m so hungry for profitable trades, that I will be very cautious! When you are hungry you are urgent, not careless. You are diligent, not anxious. You will be there when the trade opens and you will be there to close it, taking what profit comes quickly.

Fat Trading is my mindset after I have successfully fed my account. I have made some profit and feel like I have a little wiggle room. I don’t want to be careless when I “get fat” but I am willing to take more break-evens in an attempt to hold for something larger. I made some money, the week won’t be a bust, so it’s a good time to move my profit target to 50 or 70 and give the trade a little more time and space to see if it will produce something special. These are the gravy trades. They are not essential to my trading existence  but they will be nice, maybe even fun!  It can be tempting to be careless when I’m no longer “hungry” for profit, but careless is never the right angle in this field. I’m always protective of my bank account, and want to move to break even as quick as possible so no unnecessary loss comes. But it’s a time to hold on for a higher gain. It’s a time to spend a few hours trading a short-term strategy such as The Hopper or even Combo Trading from the 5 minute charts. It’s not my bread any butter anymore, and I have time to give and time to wait it out for other types of profits. (And I have time to write blog posts and share ideas with you!)

This is my trading life. I am very intentional about it, and I plan for my need to make money, I plan for my need to have fun, I plan for my need to stay in control so I don’t become careless or random, but do it all with a plan. At the end of the day, I ask myself, “Am I calm today? Did I do the right thing?” Ask yourself these questions and keep track of your answers in your notebook, and your trading life will prosper.

I got an email from a Yo’s Trader, one of our Combo Trading members. He is a real trader, and he is gaining experience this year that will really set him apart as a trader. You either starve or you thrive. You either learn or your fail. You either make trading work for you, or you take your ball and go home. It’s life. I think it’s a discussion we all have and it’s relevant to the trades we took this week, so I’m sharing with you some clips from our email exchange:

This is what he wrote:

How are you, hope you are well. Its great to see you on TFL tv, I try to watch it when I can but mostly the recordings.
I love how calm you are and Rob as well but you have more patience.
I am starting back up into trading after that big loss earlier this year, I have taken some Hopper trades and some combo trades that are successful but I am having a hard time in the following. Every Sunday night I scan the pairs on the daily and combo 4h charts,( I have a profile in Mt4 that has all the pairs on daily and 4Hcombo, so 26pairs x2) I take snapshots of the interesting charts and make notes in my electronic notebook as you do. Now comes Monday and trading starts and I don’t know how to keep up between the notes I took and the progress each pair is doing, I do not know how to monitor the pairs that I took notes for, so always they end up making the move and I miss it cause the market is moving on many fronts and I lose track of what is doing what. Even If I check your notes of the pairs you are watching I end up missing the trade like yesterday on AUDCAD move down from 1.0236 , USCDAD and today on GBPUSD move up to the resistance.
Please can you in few words guide me on how do you stay on top of the pairs that you took note of and watching to make sure you get on the trade.

WIsh you all the best.

Here is what I wrote back to him:

About your questions, I think I can help. And I want to say everyone feels that way at times.  It’s ok to scan that many charts, but when you find trades setting up you need to narrow your focus to just those charts. As the set up gets closer, decide which ones you really want to take. Then we can use entry orders because we can estimate, “by the time price gets to this point, it’s likely RSI and MACD will be in good position; and I already know I like the day chart.” If you can estimate what point you think you would want to be in the trade, then place an entry order there. A tip is to place a few pips farther away than you think, so the spread doesn’t slip you in sooner than you wanted. Use an initial stop loss of something like -40 to -50, and an initial profit target of +50. I start with 50 during the day because if the market moves quickly, sometimes it will go all the way there or at least get me into the 40s before I have a chance to close it. When I get to my computer, I go ahead and close it with whatever profit is there, usually somewhere between 25 and 45.

If I get to my computer and the position up 15 pips, I always move to BE.

Lastly, if I’m going to bed and I’m not at BE yet, I have to make a choice. Sometimes I just close the trade because I don’t want to risk the -40 or -50 pips loss. Sometimes I’m already to BE and I will set my profit target to 20 if I haven’t won any pips yet for the week, or I will set it to 30 or 40 or 50 if I can afford to risk stopping out at BE. It all depends on if I have had any profit yet in the week. In the beginning of the week I’m quick to take smaller profits, and as the week progresses I’m quicker to take very small losses or Break Evens because I don’t want to give back what I’ve earned, and then I might try to hold for something in the 40s to 70s to boost the week.

Here is an example. I entered that sell on USD/CAD trade yesterday right after I got 40 or so pips on AUDCAD. USDCAD just sat there all day. It seemed to go back and forth from -10 pips to +10 pips a long time. When I went to bed last night it was -6, and I closed it. I just didn’t want to risk losing what I got from the AUD/CAD the day before. When I woke up, of course, the trade had gone in my favor and if I had left it alone I would have +30 pips right now. Do you get the point? We don’t know which ones are going to lose, and it’s as much about protecting what I already made as it is about getting more.

The projections spreadsheet I wanted to share with you is based on 5 wins per month for only 30 pips. I get that many most weeks right? Well, it only takes 5 per month to grow your wealth, and the hard part is reducing exposure to risk and sticking with 5 good trades, knowing we are missing other good trades too. Remind yourself you are missing other bad trades too.

This is NOT a popular trading truth. People want 26 charts to look at every day. And I certainly can analyze that many every day which we do on TFL-TV. I do NOT trade that many pairs live every day.

I wish you a great day. Be calm, trade well. It’s not easy! Great analysis is easy, and we all get better at it every week. Great trading is difficult, but we can do it.

Jennifer

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Did anyone get a Hoppa this morning? They were hopping around!

Join me and Rob Booker for another free Hopper webinar tonight. You can register for the webinar by clicking  here: 

Have a great day!

 

 

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Tuesday, October 9, 2012 — EUR/AUD and GBP/AUD

by jennifer on October 9, 2012

Here are two trades taken by an awesome Yo’s Combo Trader, who posted it on Twitter last night.  He is new to Combo Trading but he posted these two setups he took yesterday.  It doesn’t take long to make these simple Combo principals your own. There are many more Combo trades setting up.

EUR/AUD and GBP/AUD:   Over 100 pips of room in each one. It was an easy capture of 60 pips in Combo Trading for Julian.

Great work Julian! Thanks for posting on Twitter.

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Thursday, August 30, 2012 — AUDUSD update

by jennifer on August 30, 2012

Because the RSI went back up over 30 I closed my short position at -1 and will wait to see if we get a buy or a sell: buy if MACD goes positive, and sell if RSI goes back below 30.

I will post more updates as the markets move.

Jennifer

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Monday, August 27, 2012 – EUR/USD UPDATES

by jennifer on August 28, 2012

Good Afternoon!

I hope you got a piece of the EUR/USD trade I sent out by text this morning. I can’t say it went “fast” but it never drew down, so that was very pleasant. I’m selling it again from this Combo chart:

1. Price has gone through the Combo entry line, and RSI is breaking below 50.

PLAN:
1. I took 30 pips off the table this morning, and I’m selling a second position for 30 pips.
2. Move to break even at +12. Don’t risk letting it run against me and take back my morning pips.
3. Initial stop loss is -40.

 

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Good Morning Trader Friends!

Looking at daily charts across the majors, EUR/USD, GBP/USD, and USD/CHF are looking rather neutral, while AUD/USD and USD/CAD show signs of reaching the outer edges of it’s normal range, both in favor now of an equalizing move towards USD. What I mean is that EUR/USD, GBP/USD and USD/CHF could move in either direction without getting into over-sold over-bought territory according to mathematical indicators for market movement, while the the AUD/USD and USD/CAD are already reaching highs against the USD, such that a move further against the USD (that is, up for AUD/USD, and down for USD/CAD) will send these pairs into areas of over-extension on the daily charts. Possibly, the AUD/USD and USD/CAD are ahead of the others and giving us a clue that the next market move will favor USD. If that is the case, I’m looking for upcoming news events to trigger market moves in favor of USD, and the charts would look like this:

EUR/USD:

GBP/USD:

USD/CAD:

AUD/USD: 

Overall assessment:  I am looking for opportunities to trade in the direction of the USD. I know I may be wrong and the market could run hard against me, so I will keep tight stops, and also look for EUR/USD and GBP/USD Reverse Combo setups to be prepared with a counter-thesis plan.

Good luck! Enjoy the rest of your week! See you at 5 am on Friday for non-farm payroll trading with Rob Booker and Rob Wilson. Watch for a link to the webinar from @Robbooker.

If you are not a Combo Trader yet, and you want to be, have a look at this 2 1/2 minute video for a peek into our world of Calm Trading.

 

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