Here’s a comment and my reply which I think might be relevant to other traders out there.
Busy last couple of days….market looking like it is last gasping here – UJ,EU,EJ….volatility indicating something might be turning here..
what do you think – might this be indicating a turn in risk for the time being at least ( im readig pullback correction here – will be trying my profits to the short side next week – depending on market action of course
What does your system read into that last thrust in EU late Friday? That was something…got me thinking that there might be some more to this….sharp pullback Monday though will confirm my shorter targets – hopefully
Im looking for higher highs on EU and EJ to go short on though on Monday
Anyways – just my thoughts…
thanks again for your posts
are you still holdiong the EJ shorts without the hedge?
was just wondering on this – witht the Japanes electoin tomorrow results will be known before the amrket opens – might result in some large gaps….what do you think? ”
My reply to the comments:
” My system only gives me entry and exit signals. After an entry, there are no more signals until the exit signal, which is why it is so good and why I like it. It prevents me (if I follow it strictly) from making second guesses, from getting out too early, etc. But from my experience, Friday’s action does look extreme. Another key empirical insight comes from the weekly closing price. If the week closes at near highs, it’s pretty likely that prices will open Monday near the highs and likely go higher. So EURUSD is likely to open pretty high on Monday. What happens by close on Monday will be important – if it spikes and closes lower that is bearish, if it consolidates it is likely to go higher later in the week.
You will notice that there are many words like ‘likely’ ‘if’ ‘probably’ above. Those words get the trader into difficulty – how can one judge the probability of a single event? We go on gut feel, there are no ‘rules’, trading gets emotional, which is a reason for frequent failure.
Regarding my EJ shorts, they are open. I closed the hedges at about 1pm NY time. I did not expect EURUSD rise up towards the end. I confess I am nervous for Monday morning. However i) the Japanese election results are fully baked into the prices now, so at most we get a retail ‘newbie’ pop on Monday morning, and then it drops. ii) The LDP is fully expected to win the election, but it’s not certain if they win 2/3 majority. If they do, then for sure the Yen will weaken dramatically. If the LDP don’t get 2/3 majority the Yen bear train will come to a temporary halt.”