The market holds its breath

Before FOMC decision the mkt is in an extremely tight range. I missed todays earlier GBP/JPY trades so I caught a late trade on EURUSD short however the mkt seems stuck. Not ranging to the downside at all so far in the US session. Low volatility could bring this trade into a loss. Or if volatility should pick up, after FOMC EURUSD should find time for a pullback for exit.

relentless trending

The only truly risky part of trading mean reversion is when trends begin relentlessly moving in one direction without so much as a pullback. This morning was quite clearly one of these days. There really is no remedy for staying out of the way of these trends. In my experience, trading smaller time frames tend to give you the briefest of chances to grab an exit, today was no different. Using the 55 tick chart on Ensign there were 3 sell signals on the way up, when price finally touched back down on the lower keltner, the loss was only a collective 10 points and a buy signal soon formed a few bars later.

I didn't buy enough on the bounce, only one unit, this seems to be a remaining bias of the previous trade for the mkt to drop further than the charts gave me. This is a liability in trading a system I have to improve my faith in my system.

stick with it

Today I want to keep my eyes away from the futures markets, they were simply ugly yesterday, turning just a sweet signal was setting up. Today I will focus only on GBPJPY. There have been 2 trades thus far on GBPJPY, both on the short side. However the keltners are trending upwards.

I have taken a free trial over at ensign and have used the template which originally inspired me to port the system over to mt4. You can take a look and see the difference between a tick based chart and a time based one, its much smoother. I am seriously debating whether or not to sign up for ensign and trade off of these charts instead. The only problem I have at this point is how to get a better method of judging support and resistance, I have grown accustomed to the murrey math levels now and would like to continue to use them but its a bit cumbersome to have to look back on the mt4 charts every 5 minutes when there is a big move.

http://charts.dacharts.com/2007-10-26/LD804139-03.png

Smooth trade

I want to document the tough trades and the smooth trades, but this week has been simply brilliant! Starting to get more confidence in my system adapting to every market condition. My biggest concern has been getting on the wrong side on trend days when price doesn't retrace enough to exit at the keltners, but this is what the aboslute strength has been extremely effective at eliminating.

Divergence on ES

Prices were ticking higher this afternoon, but stochs were still short, up to reistance and a good short op.

FDAX divergence yields big trades

Take a look how FDAX sets up with major divergence clear as day on my system.

Dax chart

Compared to the ES the DAX gives you more bang for your buck. 17 plus per tick 20 points(2 ticks a point) in the last 5 minutes, the ES 5 points in the last 5 minutes...need some iron balls to handle the moves though..