| JoeRoss joined. | |
| sprink | Hello everybody |
| Susan | Hi da-net, sprink |
| t.kaderavek | Good evening all |
| t.kaderavek | Good evening Joe |
| JoeRoss | Hi t. |
| sdavis | Hello from San Antonio |
| JoeRoss | sdavis |
| aussiebrett joined. | |
| Susan | Hello from Fredericksburg, VA |
| JoeRoss | Hi Susan |
| aussiebrett | Evening Joe hi everybody |
| JoeRoss | hi brett |
| t.kaderavek | Joe, do you mind starting off with a longer "chart reading" question connected to one trade mentioned in the TMC? |
| Susan | Hi Mr. Ross. You need to tell me what you and Loretta want from VA before i visit. |
| JoeRoss | t. give it a try |
| JoeRoss | Susan. We really don't need anything. Just bring yourself. |
| t.kaderavek | OK. Here it comes - In the last three weeks I am focusing really hard on identifying congestions. Your book „Trading the Rh“ as well as „Daytrading“ and other materials on the internet are of a great value for my studying. Still, after many hours spent watching charts develop I do have questionmarks surrounding congestion. A great example of such questionmark is connected to the weekly ALEX trade sugessted in the TMC. When I study the chart I see the last four complete bars are alternating bars and thus by definition the situation should be judged as a congestion. Additionally, the last four bars all close within the range of the preceding bar, which is (by definition) another confirmation that we are indeed in congestion. From all of your teachings there is one major thing that I have learned – that is – trade with a trend. Now I am quite confused. You teach us to trade with a trend and then I find a suggestion for a trade where we are in congestion. Could you kindly share your wisdom on the following: 1. Am I identifying the situation on the weekly ALEX chart wrongly as a congestion? 2. If there is indeed a congestion, why do you suggest such a trade since you teach us to trade with a trend? 3. How would you approach / manage this trade if you were to enter into it |
| EMini_Player joined. | |
| JoeRoss | t. Trend always takes precedence over congestion. ALEX is still trending |
| JoeRoss | You have a Rh with only 3 bars of correction so far. |
| t.kaderavek | So If I get a Rh I have to wait at least for four complete bars, before I can declare a situation as a congestion, correct? |
| JoeRoss | yes correct. The chart is still showing a defined uptrend |
| EMini_Player | Which chart are you all referring to? |
| EMini_Player | S&Ps? |
| JoeRoss | There is a TTE as mentioned in Traders Money Club. You would take breakout of last week's high, and manage according to your risk management |
| JoeRoss | emin: A stock ALEX weekly chart |
| t.kaderavek | Great. So the Rh is the important point from which to start to judge if there is a congestion. WAU. THANK YOU VERY MUCH INDEED! |
| cumbers | hello everybody |
| JoeRoss | you are right on queue cumbers :-) |
| cumbers | makes a change! |
| da-net | joe, have you ever done a study to find the failure rate of the TTE? if so what is that percentage? |
| JoeRoss | da-net. Nope. I don't look at the negative side of things. I know my own rate of success with Traders Trick Entry. It's 78% |
| da-net | thanks |
| EMini_Player | What markets do you all trade? |
| t.kaderavek | Emini - stocks and YM |
| t.kaderavek | Joe - I liked the special Traders Money Club issue. Thanks for that :-) |
| EMini_Player | I tried the YM back in 03' |
| EMini_Player | It was fairly new back then |
| JoeRoss | E-mini Russell, Mini crude and anything that looks like it will make me money |
| aussiebrett | all seasonals outrights and spreads |
| cumbers | recently into spreads with Andy Jordan and Joe which is going well, and forex (from Malaysia so time difference with London is healthier than trading US! |
| EMini_Player | Ok guys, weather is beautiful here in Chicago so going to run out for now. Will join you guys next week |
| JoeRoss | cu |
| philippe | Hi Joe, Hi All, from moddy Shanghai |
| marsh | The 15 min YM is reasonable to trade, I think. |
| cumbers | how many trades should you test (in general, though i suppose it varies with the probabilities) when backtesting a strategy? |
| JoeRoss | cumbers, I test 40 trades minimum, 50 max |
| philippe | Joe, got a question.. There is a GM subcontractor, now chapter 11, slipped into the pink sheets. Quote nearby absolute 0... Might be re-capitalized and/or purchased by outside investor. Do u think such a speculation is worth considering, either the purchase being a psycoholgic trigger, either because this implies there will be a new strategy on the way to turnaroud? |
| JoeRoss | Hi philippe |
| JoeRoss | philippe: A person would have to be pretty desparate for a trade to be looking at stuff like that. There are so many better trades available. |
| philippe | yes.. just considering that the multiple, coming from a quote so low, might be interesting oin the midterm |
| philippe | and i would be able to know the moment of purchase, thats why.. |
| cumbers | thx joe - will follow that - i have many forex trades and pairs to test |
| starbucks | Joe, do you feel that we have made our bottom in the DJ or that we'll make new lows later this year? |
| philippe | u think it's just a loss of time? then i dont pursue.. |
| JoeRoss | starbucks: I don't think we've seen the bottom yet. This thing they called a bottom a couple of months ago felt too good to be a bottom. |
| JoeRoss | Everyone was eager to jump in. When the real bottom occurs the only buying will be short covering. |
| JoeRoss | philippe: I can only speak for myself. To me it woud be a total waste of time. |
| philippe | ok thanks... that was my fear, wanted to have ur opinion. |
| cumbers | presumably when we see the institutions, pension funds etc start to seriously buy this will be significant bull sign? |
| JoeRoss | cumbers: I can't say that for sure. The only thing we have to go by is what happened after the crash of 1929. And there was a great false rally before the market dropped to its true low. The only buying then was short covering. I don't know who got brave enough to start buying until the outbreak of war sent the defense factories into overtime. Then I imagine the real traders came on line and bought. The public never did until the 1950s. They were too scared. |
| cumbers | thanks - very helpful. And I think the time scale around 1930 was quite long (too long for today's media) wasn't it? eg 2 years from one bottom to a bigger one. |
| philippe | the Quartlery RSI has not been at such a low level in more than 20 years, and the rally already brought this indicator far from the lowest level. This canot speak for a real bottom? |
| starbucks | I've been thinking we're ready for a turn down here or soon and fearing that with this economic situation that we could find ourselves in a market that is flat and dead and hard to trade in and maybe for quite a while. I trade YM or R2K. What do you think? |
| t.kaderavek | Joe - so you think that the current rally is not caused only by the shorts covering their positions? Who else is buying then? Big institutions? |
| JoeRoss | cumbers: Possibly. |
| JoeRoss | philippe: If you are going to ask me about RSI, I have no comment to make. RSI means nothing to me. |
| JoeRoss | starbucks: There are many who would agree with you. Some are calling for a dead economy for the next 12-14 years, and some are saying we'll have recovery later this year. However, the economy is not the market, and I think we will see rallies and drops just as in the past. But likley one more big drop to new lows. |
| JoeRoss | t. Bargain hunters of all sizes |
| da-net | cumbers, a good friend wrote an article that might help you find your answers...it is at financial sense online...title..."master class.Ir's about time" by john needham |
| JoeRoss | If the market takes another big dump there may not be any fund or institutional money left for creating a bull market. |
| cumbers | thanks da-net. I'll look it up |
| JoeRoss | If people yank their money out to put in a "safe" place, it could take years to see a bull market. |
| cumbers | bad news for pensions then |
| JoeRoss | One thing to keep in mind: by their very actions, the current administration and the leftist leaning Congress seem hell-bent on destroying capitalism in the US. It doesn't jibe with their idea of "fairness." |
| JoeRoss | Obama seems to think it is is his job to play God and decide what is fair. |
| JoeRoss | He thinks it is fair to turn half of Chrysler over to the union. |
| JoeRoss | And screw the bond and stock holders. |
| JoeRoss | He wants to do a similar thing with GM |
| da-net | joe, the bigger issue is contract law |
| sprink | Hi Joe if funds and insitutional money dries up would that mean less market movers and more real trends? |
| marsh | His Goldman Saxs buddies probably don't hold much auto stock, so what does it matter to him? |
| starbucks | Yes, been thinking such also...can't do anything about it but must make a living for myself and so thoughts must go to the concern of my own and several I'll be helping's future income viability, but as long as the market moves during the day I'll be fine. BTW, I agree with EVERYTHING you are saying about about Obama and leftists. |
| JoeRoss | da-net: It will take years in the courts to overturn what Obama is doing. By then it will be too late. His disregard for established contract and common law is despicable. |
| JoeRoss | sprinK: Yes, the markets would become more professional |
| sprink | Thanks |
| JoeRoss | Please keep in mind that congress is considering taxing every trade you make. Even if it doesn't pass now, the camel's nose is under the tent. |
| JoeRoss | It may take a few years for the camel to be all the way into the tent. |
| starbucks | If that law actually passes it kills markets doesn't it, and where do we go? |
| JoeRoss | These guys hate markets, traders, and anything that smacks of capitalism. Also anything that makes you independent of them. |
| da-net | phillippe, what is the name of that beer in the brown bottle? i can;t remember, but like it better than tsing tao |
| t.kaderavek | I think you just hit the nail on the head Joe. They do not like YOU to be INDEPENDENT. But that is why we are in this business, right? |
| JoeRoss | starbucks. You will go overseas, just as now overseas people have to trade our markets. But the markets won't be here anyhow. they will move to where they are wanted and appreciated. |
| JoeRoss | t. right. This is the ultimate self-sufficient independent career. |
| philippe | yes, they want generations of slaves and taxpayers.. the true key to controlling people is by creating debt |
| philippe | i hate them |
| marsh | We already pay NFA fee. That's a government institution isn't it? So we already pay a tax for trading. They just want to up it by a large amount (several thousand times?) |
| JoeRoss | Interesting to me is that the best markets will probably be in ex-socialist countries who have learned that socialism doesn't work, and are now embracing capitalism. |
| starbucks | Thought we would have to go overseas Joe and we really can do it without their interference? Do you hve any particular mkts in mind? |
| JoeRoss | marsh: NFA is an inside-industry regulator. The fox guarding the chicken house. CFTC is a government institution. Bureaucracy would be a better word. Bureaucracies love anything that gives them more money and power. |
| t.kaderavek | Well Joe, do not be so optimistic. People here in the Czech republic are dumb enough to vote in a socialist goverment who has a "big debt" agenda. But they know how to sell it to the dumb masses :-( |
| JoeRoss | starbucks: Brazil looks good. Europe too. China may turn out to be excellent. It will depend on where the markets find the friendliest places to go. Australia also looks good. |
| marsh | Joe, won't currency trading always be there? |
| JoeRoss | t. I wasn't thinking of Czech republic. Thinking more of China, which is the most capitalistic communist country around. |
| JoeRoss | marsh: currency trading will be there until the world decides to burn all the fiat money. Probably not in our lifetime. But what if there is a one-world currency? Then how will you trade it? |
| t.kaderavek | :-) I thought that you did not have Czech rep. in mind. I cannot imagine this country to be a place of any big market. |
| philippe | ahah yes.. communist is just a word for "controlling pilitic party". u have to kow that only 4% of the population is a member of the party here, yet they control the other 96%. it is an elite party, a corporation, an oligfarchy |
| JoeRoss | t. It could be that eurex will have many of the ex-communist countries involved in it. |
| marsh | If the whole world has one currency, the Swiss will probably not join, so it will be Swissie/World trade. |
| JoeRoss | Sometimes I wonder why the Europeans are so in love with Obama. Maybe it's because they see how weak he is and that he really offers them a chance to beome the economic power that will compete with China. |
| philippe | no its become Obama makes them like america again |
| JoeRoss | Bible prophecy indicates that the US will become small, lose its power and that the power will shift to Europe. |
| t.kaderavek | Joe I think that it is partly because of the fact that Obama has his marketing and PR very powerful even here. |
| starbucks | And US gov and IRS can't stop us or control it while we live in US? And what OF the law as far as forex--or currency futures? Same Euro/Obama love Q I've had for a long time - bizarre. |
| JoeRoss | philippe you are talking about the little guy. They like Obama, I'm talking about the big guys who see him as a weak fool who they can push around. |
| JoeRoss | starbucks You may have to leave the US if you want to trade. |
| philippe | then i guess u right on this one! |
| JoeRoss | That's why I keep telling people to get their money into foreign currencies and get themselves a bank account overseas before it becomes impossible. |
| cumbers | going now - thanks for v interesting chat |
| JoeRoss | I have to go too. |
| t.kaderavek | When I list through the newspaper there is so much Obama exposure that I cannot believe it (and I am not happy about it). But as I told you people here do not want to think too much. They simply take what the mainstream media gives them - for the moment it is Obama the savior of the US and the world. |
| JoeRoss | See you next week |
| t.kaderavek | Good night |
| da-net | nite people |
| philippe | by all bye joe |
| JoeRoss | Good night all |
| JoeRoss left. |