Forex Trading EURUSD June 7 2008

It is now 12:30 PM EDT. Starting at around 11:15AM, I started playing EUR/USD on short and range bound sides. EUR/USD bears: this might be a very place for you to short this pair at this price area and at this time. (remember that trading is not only about price, but also (mainly) about time).

Chart of sell and buy forex operations is displayed.

StockTrading for June 7 2008 -- A Text Book Stock Market Top

I posted on this blog yesterday (June 6, 2008) my stock market calls in real-time. The lastest call came in at 3:25PM in which I indicated that I am shorting NDX at 2055.

This morning the stock market gaped down at the open. At of the time of this posting, NDX is at 2015, which is 40 points from the top of yesterday where I got in on the short side.

This up and down movements have been great for short term traders. I will do the count of the profits in NDX points I have made with my calls, but the calls I have been making in just the last 14 trading days in the forum where I post have made more than 300 points. That is more than 15% in just 14 trading days on a major market index. That is a huge number.

The experiment I have been conducting via post in a forum, and here have shown that it is possible to time the tops and the bottoms of the market (at even the one-minute level).

The previous day's low is broken. My mode of operation is now to short rallies. I have put my stops below entry at various points which gurantees a profitable position. I can now do whatever I want to do with my time, and the stop are doing their job to protect profits. Notice that stops on an index of stocks are reliable for short positions, and are not reliable for long positions because of gaps when the market goes down. There is a well known quote "The market climbs a wall of worry, and jumps from windows". That is a main reason why option volatility typically rises when the market goes down, as it goes moves faster on the way down then on the way up.

Happy trading!

A trading system for June 6 2008 trading Nasdaq 100

I just sent a note to fellow at the trading forum. It says this:

"... Today's NDX close was at the high, and the bar at a bollinger band. So tomorrow (Friday's) low should be shadowed by the bar of Thursday. Therefore, I have shorted the close (partially), and would add if it gaps up"

Check this method, and tell me what you think.

Stock Trading Question: Risk vs Reward, Which of These Two Trades Would You Take

I am about to the post the following question to a forum known as a hanging place of traders. The question is below. The question is important, and I will see how the people there handle it. Like a professor, I have the answers, but the purpose of the question is to teach in more depth some fundamental questions. I posed the question I noticed that a larger number of people do not really understand them deeply.

The post will be:

Trading is difficult. But let us see if it is that easy even in hindsight. So I have these trades for you to ponder, help us understand, and pick your trades.Experts we need your help on this one (risk, reward, and information value).

In hindsight everything is known. But let us consider an incomplete hindsight. To make the case a bit concrete, let us say that there is a One Stock House around the corner, where you can go do some "trading" because you cannot trade during the day. You have no source of information whatsoever, except what the house gives you.

There is only one stock that you can trade. You can either go LONG the stock, or Short the stock. You are always given the Open price. You do not know anything else except what will be given to you in the questions below.

The Stock Open price is $10.255. The Closing price is unknown. The gain and loss (except when otherwise indicated) is the difference between Closing Price and Open Price. The One Stock House gives you the High Price and the Low Price of the stock which are $10.18 and $10.28.

1. Question 1: What is the reward/risk ratio if you were to go long or short the stock?
2. Question 2: Would you go long the stock or short the stock?
3. Question 3: In two separate corners of the House there are two sources named LS and SS (LongSource and ShortSource) from which you can drink a healthy liquid which gives its drinker an edge on the probability of the stock closing higher or lower than the Open Price. You can drink only from one source, and it is free (before your start dreaming, the liquid is not beer).Which source will you drink from?
4. Question 4: The One Stock House has another play for you. You can drink from one of the two sources, but you have to long the stock if you drink from the LS source, or short the stock if you drink from the SS source. You and the house then replay the time-sales tape. You have to put a trailing stop on your trade whether long or short.Would you drink from the LL source or the SS source?
5.Question 5: If you were to help the House put a price sticker to the LL source and LS source, would recommend a free service or a premium service for these sources and why?

Feel free to answer just one of these questions or to simply comments on them without any answer at all.

Read Tomorrow's Price Today

I posted in a forum the following saying.

"Locate one of my major posts at ET about tomorrow.
and you shall today know the price of tomorrow.
I will reveal to you that post tomorrow"

I would like to add that

"I will reveal the meaning and content on this blog tomorrow"

Happy trading

PS: The EUR/USD and EUR/JPY short positions of today at around 5PM are both making money.

Forex trading- Short EUR/JPY at 4-45PM June8 2008

I just shorted 3 times 1/8 of intended position on EUR/JPY in area of 165.20. I have shorted earlier when I was posting in the forum. I took the profits, and now I am re-entering. Chart is attached.

At around 5:05PM, I also shorted EUR/USD. Size if a bit more than what I allocated to EUR/JPY. EUR/USD is better to short based on price action, and technical levels.

These trades are for few hours, and we will decide on whether they should be for beyond that based on future price action.

Happy Trading

Trading NDX June 05 2008 NDX at 2055

I made some NDX points on the earlier shorting. NDX is back up. I just shorted it again at 2055. Sorry, I am busy, now.I will review this later.

Trading the nasdaq 100 (NDX) June 05, 2008,12:32EDT.

Trading the nasdaq 100 (NDX) June 05, 2008,12:32EDT. NDX at 2051. I am getting ready to send the firing squad at the bulls. But we have to remain on guard in any case.

Trading Equities 10-32AM-If I were a buyer I should stop now

10:32AM, NDX at 2047. If I were a buyer of NDX related underlyings/derivatives, I would at least stop buying. Better I would go flat. I am now looking at the short side.

stocks trading NDX June 5 2008

The market is up, and I am on the side line. Time is now 10:23AM. EUR/JPY has made a big move, since it is positively correlated to equities, I closed half of a normal size position I made on NDX at end of day yesterday. I closed it immediately after the open with a 2 to 3 points loss. Yesterday, I made 33 NDX point. The day before it was 40 NDX points.

I am going to study it and decide from here.

Forex Trading EUR-JPY June 05 2008, at 00:42AM (New entry)

I entered on short side of eur/jpy at 162.57 area, with time at 00:42AM (EDT).

I have to be careful as it can break on the way up. Also, it may go to 162.72 area, but my analysis picked what could be at least a short time peak. This is one may need some skillful management. Also, it should be done with small size (1/8 of intended size is what I would put in this trade).

Adddition at 10:31AM: I was right to be careful when I shorted. It went down, I took have profit, then it zoomed up. I run through a 15 pips stop, which when I put the half position that I took off for some pips made the stop at only 5 pips or so. So it is ok. I re-entered at 163.20 area, and that one took 30 pips from me on 1/8 the size, as I was sleeping when this happened.

At 10:06AM, I shorted it with EUR/JPY at 164.85, as I posted it on the forum in real time.

Forex Trading EURJPY June 04 10:22PM (update)

I am re-entering at 162.49 area now.

Update: 11:15PM: took profits on visit of pair to area of 162.35.

Attached is a chart showing how I played it the whole evening of June 04, 2008.

EURUSD Currency Trading (Update of Position)

May 27, I sold EUR/USD at 1.5817. Now I am evaluating taking profits even if I think that it might go to 1.53 and possibly break it. Risk/reward ratio has changed since I entered the trade, and I may reduce my size or take it off depending on price behaviour.

Currenlty I have unrealized gains of 425 pips. I like swing trades like this one, but it requires a lot of patience. That is one of the reasons, I get busy trading EUR/JPY and NDX to avoid taking profits too soon on certain positions.

A have included a 3 hours chart. 1.5360 is the price point where I currenlty plan to take some profits if it is reached in the next few hours, but I may not control my patience and might take profits a bit earlier. I will decide.If you know of ways to work on patience in holding winning trades as long as possible, please let me know.

Shorting EUR/JPY on June 04-Update

Dear readers,


I hope you are making money. I think we nailed another daily top. Notice that it went to the top where we sold yesterday at 162.67 and it failed. That is a good sign for the bears of this pair at the present time.

I am adding a chart to tell where I stand.

As indicated in my plan, the pair went up to retest, but could not reach the high. I re-entered part of what I took off on the visit back to 162.60 area.

Addition to this post: Now the pair is at 162.35, which gives the entry a +37 pips gains. Happy trading guys!

Addendum: While I was waiting for the image to load, I noticed a support at the 1-minute level. I am now going to take some profits.

UPDATE: 9:50PM I just took some profits (30 pips in the bag). Left a part of the position for potentially more.

10PM: I am adding the chart after the most recent profit taking.

Shorting EUR/JPY on June 04

I hope that you managed the previous trade well. I made on it 15 pips. Few moment ago, I re-entered at 7:39PM, and shorted it in 162.67 area. I will include a screen shot later today. I will also revisit the other post to comment on the trade.

This is an update to the trade:

It is now 7:50PM. I just took off half the position I shorted with a 12 pips profit. I plan to re-enter on a rest of high and fail if any. If not, it would mean that the current trade will go for a lot.

The point is that I am managing the risk of the trade, after deciding on entry.

Included in this post are charts of enter and profit taking on part of position, as well as a chart containing what is left of the position.

Shorting EUR/JPY

I have been posting live trades in forum know as a hangout of first rate traders. The last time I posted a trade was yesterday June 03, 2008. The trade was placed at exactly 3:41PM EDT. I shorted EUR/JPY at 162.67. 24 hours later (3:41PM on June 04), it turned that what I shorted was indeed the top of a forex trading day (forex trades 24 hours). The low for 24 hours was in the 161.78 area, or a 90 pips move.

So it was as good profit for the followers.

I am going to post some trades on this blog. I will post them in real-time (shortly after I place a trade).

I divide my size into 8 pieces (as I like numbers that are multiple of 2.
(8 is 2 power 3) :-). There are other reasons for this, that I will discuss in future writing depending on the taste of my future readers.

First trade on this blog is:

Short EUR/JPY 1/8 of intended size, at 162.54 and time is 5:14PM EDT. This is a real-time forex trading call.

Once I will learn how to do it, I will add means to allow you to receive my calls, by sending you emails and something equivalent that does the same thing.

Trading the Markets on June 4, 2008 --- UPDATE

I just covered the short position I put in at 2031 in the previous post. I covered when NDX was at 2017. Profit is 14 NDX points. The bagholders top timing indicator has now delivered 26 NDX points in a matter of few hours.

Trading the Markets on June 4, 2008

It is now 2PM EDT. I just shorted NDX which is now standing at 2031. This trade is based on a "bagholders" indicator. I shorted earlier based on this indicator at 2032 at around 11:18AM, and covered when NDX visited 2020, with 12 NDX points gain. So it is the second time I am shorting NDX based on this indicator. I will explain what this inidicator is later. Have good trading.

Market Vs Bagholders

"RiskFreeTrading is a King

He knows how to swing

So, rise and hail the King"

RFT (turning to writing some poetry) - June 3 2008





"Market chewed them out

In its big mouth

And spat them out

Bagholders have blown out"

RFT (turning to writing some poetry) - June 3 2008

It Is Possible to Sell Tops and Buy Bottoms Consistently

I may edit this article tomorrow, so please consider it a draft at this stage as it may contains typos and is not complete. But I believe it contains a good part of the essence of what I want to discuss in this first article.

Let me start by indicating my trades today June 03, 2008. I went short a vehicle that follows the NDX at 10:12AM, and covered my shorts at 2:25PM. My two operations correspond to the top and the bottom areas of NDX during the cash session of today.

The proof is provided in a chart of NDX, and a copy of an execution report give at the end of this note. Note that if one sell calls, one is short delat of the underlying. In this case , at 2:25PM, I covered what I sold earlier at 10:12AM. The net position is shown to be zero.

I do not like to post copies of my trading reports, but I left that some people at the forum seem blind or pretend to be blind to facts. So my posting what is below, it would add the evidence made in a forum where the whole discussion started.

In that forum, I posed the question of whether it is possible to time tops and bottoms of financial markets (stocks, currencies, etc) consistently. I think I demonstrated it with enough evidence, and will come back to this point in future articles.

I have been posting market calls in that forum on this topic. I posted them in real-time (or few minutes thereafter) to show that it is possible to do so with a probability significantly higher than what one would expect from a probabilistic analysis of financial market. The calls have been impressive in timing daily tops, and bottoms. My calles nailed the bottom of March, and have been nailing the daily top of a large number of days, and in all (or most) cases have shown profit immediately (small) and definitely good profits in a window of 6.5 hours.

I have made a significant number of such calls in order to build a sample sufficiently large to test the hypothesis of consistently calling top and bottoms even at the level of a minute. To my "surprise", I found that some people are blind to facts, and seemed to be extremely bullish at tops, and extremely bearish at bottoms. I put the word "surprise" in quotes because I was expecting it it not to hold in a forum where possibly the cream of the crop of traders hang. I am wrong in my supposition.

I will dwell more on this topic, and other topics in future articles.

I want however to say that I decided to post some of my thoughts here, as certain contributors in the forum in question have become too much blind to engage in a meaninful and productive discussion.

In this blog they will not have the luxury to intrude and make statement that they themselves know are factually untrue. But I will not oppose them making comments here in this blog.

Today is June 3, 2008. I did not have the pleasure to post a market call as I did in the past. I did not wish that those who were intentionally unfair in their discussions continue to possibly profit from my calls. Therefore, I hinted my views in a post, but left the picture incomplete or inconclusive. But I knew that the bright of the readers, and contributors (and there are some) may read well enough my mind to understand where I might stand. Of course it is understandable that they may have various interpretations of my statement.

As I indicated earlier in this note, I want to tell you, my dear readers, what I did today, and provide you with a screen shot of my trades of today.

At around 10AM, my analysis led me to conclude that we started the formation of a first top, which if the market dynamics were to continue as they were read via my analysis, the top picked by the analysis would prove to be a top of the day. An hour later or so, the top formation was running exactly as picked up in the radar earlier.

I also analysed, in rough terms, when I would expect the bottom to take place. I should up at around 2:15PM to log to my account and I covered my shorts while posting on the forum. I also did not say anything about that as I did not want the non-good readers to have a free lunch.

I however felt that the good readers deserved to know both calls. But sometimes just one stinky fish spoils the whole room.

Well, I went short the QQQQs at 10:12AM, and covered the shorts at 2:25PM. These turned out to be the top and bottoms of the NDX and the QQQQs today June 03, 2008.

The QQQQs is one of the vehicles that follows NDX (the Nasdaq 100 Index). There are others vehicles to trade NDX including other ETFs, futures, etc. I will come back to this topic at a later article. In addition on each vehicle, you can sell calls and buy put to go short, or sell put or buy calls to go long the underlying.

Now to play the short side of the QQQQs, I sold calls. I do not wish to discuss which calls I sold today, but essentially my thinking is that if my trade does not develop as I expect it would, and if I decide to hold the trade a bit, I would also have the time running in my favor as selling calls implies selling time-value.

In the next two images, you will find a chart of the NDX during the day, and a screen shot of my trades as evidence that I traded what I stated I traded, and at the times I stated. I have covered material not needed to prove the direction and timing of the trades, as to minimize privacy issues. Forgive me if you find posting trades as inappropriate, as I agree with you. But I wanted others who may have doubts to see for themselves. I expect some people to never accept facts, as it appears to be their nature. "One can get the boy out of the country, but one cannot get the country out of the boy".

Click on images to enlarge.