Trading Excellence

Quote from Galactisol:

Focus or Diversification

There is and always will be a contentious debate between focusing on some markets or diversifying, playing various at the same time.
I used to do various but as of lately have been more inclined to start focusing on 2 to 3 markets, cause this way can trade using pyramiding, which is very important and effective!
There is a saying in trading that we should not only focus just on the tree, but also in the whole forest. Well I just read a very interesting extension of this saying: "one ought to know also the small details of the tree", which trees give fruit, when, how can we distinguish which trees are of interest or not.


Cheers!:cool: [/B]
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A trader friend knows and has spent time with someone who has purportedly made a fortune and all he does is focus on the EUR/USD, knows it's every move or tries to, trades purely technically and could retire from what he has made in the last 3 years. He averages over 300 pips per week... a Master. He's in demand as a teacher and lecturer now. Few will reach that level I suspect. I intend to be one.

I've focused on Forex but watch multple pairs which has taken me longer to master because they all have thier own idiosyncrasies however think that I have arrived as gains are consistant even when analysis is rushed. The biggest challenge I have that remains are other interests that take away from trading time and focus.
 
I've followed the aspect of automated news trading systems however with Elliot Wave analysis one can often enter the trade well before news and be correct on where the news will take the price.

Time permitting I'll attempt to consistantly place some well chosen trades in the forum here, complete with ideal entry and targets with healthy Risk Reward Ratios. 2-5 good ones per week is the goal. :)
 
EUr/Usd


Alsmost confirmed, the ride upwards! Good news! very good indication that prices will bounce-off of SMAs.



Loonie

It's been tough holding on to a short position on this one! As yesterday almost decided to get out, though luckily the reaction to the half point decrease of rates was not convincing enough. Today it looks as price is going down right at the last momment, still need to see what happens in the next day or two.


Focus Diversification (part 2)

The reason i wanted to join ur journal is because it looked more professional and u have discipline, which has been missing in my trading. I've been trading for 2 years now with losses and right now I'm beggining to see things changing due to 2 facts in particular: 1- I was trying to follow too many markets at a time with not enough market depth in each one (about 38 pairs); 2- meticulous planning and execution without excuses, in other words, discipline.

Also I was trying to trade the 15min to 1-hr timeframe without being full-time: killer recipe.

You are absolutely right about the person u mentioned and the reason i brought up the issue is becasue FXCM has mini account contest and if u check trade registry all of the winners focus on one pair and use extensive pyramiding.
I intend to be a professional speculator and investor, too. And I believe that ur objective is what makes this journal more professional and enticing!
Also this journal is good because it keeps the stream going, providing discipline and consistentency, at least in following the markets and hopefully in profits too!

Also I have come to learn from u that elliot wave can be a very powerful indicator. I've already shortlisted some books exclusively on Elliot wave theory for the purpose. Tnx for that!


:cool:
 
Elliot Wave is very helpful, took some time to get used to but wouldn't want to be without it now. I prefer the 3rd wave because even if ones Count is wrong and the 12345 you think is actually an ABC then at least you can expect to do some trend catching. The trick for me is how to find excellent entries even if the count is wrong, in other words how to make at least some profit even when wrong. Now that I have the entry aspect mastered I simply have to bring up the consistancy that I leave a partial position in for longer Swing trades. Often pairs move further and faster than I have expected. G/J was a perfect example of that this morning, up 300+ pips.

The U/CAD bounced slightly below 9900 but has since broken down so my expectation of higher hights is defunct. I bought at 9890 for 7 pips up but didn't stay in the trade due to strong fundamental pressure down on the pair and the fact that the pair was a long way up on its trend(E.W. Count). The fundamental strength of Commodities seemed to have effect on the AUD/U as well as it hardly double bottomed before rising this AM. despite other aspects of the Aussie economy slowing.
 
I think that these fundamentals give confirmation that the larger, long term trend of U/CAD is basically over and despite high commodity prices the large bias for the U/CAD pair is a rebound up from 11/07/2007. I think that the probably count for the pair since then is ABC up with A having been completed, B down now happening and C up after touching as low as just blow 9500. On a smaller scale the pair is probably doing a B down as of this morning then will go up once more near 1.0000 after touching 9850ish although could go as low as 9800 short term. The recent move is either an ABC down with C completing it's 5th pulse down or the 3rd pulse completing of a large A down, hence the two targets. I always prefer the conservative target and resume trade if further breakthough indicates the more distant interpretation. Hope that's clear enough. Out of time ATM.

Canada's Dollar Falls
Published: 3/4/2008 5:31:51 PM By: TradingEconomics.com, Bloomberg

The Canadian dollar fell to its lowest in a week after the central bank's new governor lowered the benchmark interest rate half a percentage point and signaled more cuts may be coming, raising concern that the nation may not escape the U.S. economic slowdown.

Canada's currency stalled this year, after gaining about 17 percent in 2007, on speculation the Bank of Canada would lower borrowing costs amid increasing signs the U.S. is headed into a recession. Canada ships about 80 percent of its exports to the U.S.

The Canadian dollar, known as the loonie after the image of the bird on its one-dollar coin, fell 0.4 percent to 99.43 cents per U.S. dollar at 4:07 p.m. in Toronto from 99 cents yesterday. Earlier it touched 99.78, the weakest since Feb. 26. One Canadian dollar buys $1.0058.

Carney, in his first decision as central bank governor, cut the target rate for overnight loans between commercial banks to a two-year low of 3.5 percent from 4 percent. It was the third reduction since December. Thirteen of 26 economists in a Bloomberg News survey had forecast the bank would cut by 25 basis points, or 0.25 percentage point. The other 13 anticipated a 50- basis-point reduction.

The loonie climbed to its record high last year even as growth of Canada's biggest trading partner slowed amid a housing recession. That spurred talk of a decoupling of the two economies. Speculators led by hedge funds were so impressed by the currency's gains that the net bets favoring it reached a record 83,001 in October, according to the Washington, D.C.-based Commodity Futures Trading Commission.

High prices for the nation's commodity exports boosted the currency's appeal and helped the government balance its budget.

The picture is different this year. Economic data has showed signs that the world's eighth largest economy is faltering as the slump in the U.S. broadens. Canada's economy grew at the slowest pace since 2003 in the fourth quarter and contracted in December. Its current account, the broadest measure of trade in goods and services, fell into deficit for the first time since 1999 in the fourth quarter.

Tumbling exports to the U.S. will limit 2008 economic growth to a seven-year low of 1.8 percent, the Bank of Canada said. They've erased the northern nation's broad trade surplus for the first time since 1999.
 
Quote from FXAnalyst:

I think that these fundamentals give confirmation that the larger, long term trend of U/CAD is basically over and despite high commodity prices the large bias for the U/CAD pair is a rebound up from 11/07/2007. I think that the probably count for the pair since then is ABC up with A having been completed, B down now happening and C up after touching as low as just blow 9500. On a smaller scale the pair is probably doing a B down as of this morning then will go up once more near 1.0000 after touching 9850ish although could go as low as 9800 short term. The recent move is either an ABC down with C completing it's 5th pulse down or the 3rd pulse completing of a large A down, hence the two targets. I always prefer the conservative target and resume trade if further breakthough indicates the more distant interpretation. Hope that's clear enough. Out of time ATM.

The above is best observed on 5 minute charts. Bounce off 9832 may or may not be finished for now, had I been at computer I suold have seen that as a bouncepoint and taken it in case it is the end of downward action for a few hours. That way I can still momentum trade for a few pips at least, taking some off the tabel at the 10-15 pip marke and hold 1/3rd for larger profit if it doesn't do one more micropulse down. The 5th micropulse down doesn't show yet but often fails to materialize on minute charts. If it drops further then I expect abother bounce up in the mid 9820's.

Currently it bounced up to 9852.
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The recent peak of the U/CAD was a good example of a choice entry at 9975 because if one draws a line along the tops upward on a 5 minute or 15 minute chart then counts Elliot Waves it was a probable top. Selling there and taking 1/2-2/3rds profit at 25-35 pips and leaving the rest for a potential swing down, which is what happened is what I'm looking to do.

The U/CAD could have dropped in an ABC patter that was smaller and done an extended 5th wave up higher but it didn't. Such is the strategy of catching big swings by catching probably reversal points, taking profit early in case trend resumes after small reversal, leaving partial position in for if the trend doesn't extend and swings distant in the reverse direction.

On U/CAD there was a clear 100 pips to be had using that strategy. Failing that a catch of the trend below 9975 would have worked safely for some pips and is something that has my confidence for a consistantly profitable trading. The Elliot wave provides the target although I've learned that the small counts on minute charts are incline to produce a failed 5th microwave especially in the case of opposing dynamics... fundamentals for example.
 
U/CAD analysis...

The numbers are a bit faint I see however the count, albiet tricky is 12345 up for probable large "A" up then "B" down in an a-b-c pattern as shown in small red letters, "c" just finishing its last pulse if it doesn't truncate(fail). Then a large move up comprised of 5 waves, completing the large "C".

The light blue small a-b-c is a possible alternative count as mentioned earlier. One that could take the price significantly lower, however I prefer the conservative targets unless breakout lower and pattern analysis confirms a lengthening trend.
 

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Quote from FXAnalyst:

Testing... A technical pattern set of examples.
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Note that the pattern in the examples are portions of the Elliot Wave phenomena although the original source of the examples is not an Elliotician:)
 
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