Espresso and such

So this past week I have developed quite an obsession with espresso and this morning I decided I would master the art of pulling the perfect shot on my $150 Krups machine.  My conclusion – it’s not possible, however, I did refine my skills and can now pull a better shot than Starbucks, but that’s not saying much.  Sorry to all of you Starbucks fanatics…no offense intended but their coffee tastes like burnt rubber in my opinion but we all know how much that is worth! Now off to trading…

This week was an interesting one for sure.  ALL week price was consolidating and setting up a perfect triangle formation.  The bigger the better right?  Well as I’ve said before, Fridays play by a different set of rules than the rest of the week AND this Friday happened to be the end the month as well.  We did break to the south side as my prior post stated which was great for my short that I had in play but 2600 seemed to be pretty good resistance and then the Friday craziness took over.  Once 2600 rejected price, we had a 135 pip run up in 2 hours, only to be followed by a 100 pip drop the next hour.  This type of whipsawing is what can ruin your day…it certainly ruined mine.  Fortunately I decided that I wasn’t putting any new trades in on Friday and only was taken out of my current position.  The good part about all this is I will have a nice sell opportunity come Monday morning barring any significant gap.

I am becoming more and more convinced that we will see the low 2000’s soon, however I keep getting taken out due to the high volitility.  I might cut my position size in half and double my stop to 200 (so that I keep the same R%) and then add to my position if it moves in my favor…I just can’t keep letting the market whipsaw me out of a good position.

Currently the e/u is still in a very well established bull channel that has lasted since the beginning of February until now and we are smack dab in the middle of it…not a good place to be thinking about putting a position in…but I am.  We also have a rising trend line from the Oct 2008 lows to the most recent low on the 18th of Feb another good reason to not thing about jumping in…but I still am.  We could see some sparks fly when price meets this (I think it will next week) somewhere in the vicinity of 2540 and 2560.  This is when I think I need to be patient and wait for the market to respond and decide if it wants to be a bear or a bull, but how do I let 100 pips slip through my fingers?? I am going to let this question marinate and perhaps I’ll let it linger…

As a young – undercapitalized trader, I think I get these feelings that I need to get every peice of the market, that I can’t “afford” to miss any pips.  If I had a million dollar account and made $2000/pip, I would be happy with 10 pips/ day…check that – MORE than happy (so would my wife). But since my account is much less then that, I mean much less – in order to build my account at a bit more than a snails pace,  I need to score 100 pips in one day.  This causes me to let trades run longer than they should or take trades that I really shouldn’t.  Which brings me back to the question, “How do I let 100 pips slip through my fingers?”  – My logical, responsible trader personality would respond, “It’s not that you are “losing” 100 pips, you are waiting to confirm a move to make even more or not loose as much.”  I need to listen to him more often…I will call him Patience.

My resolution this week –  ask Patience his opinion before every trade…

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8 thoughts on “Espresso and such

  1. No need to apologize to anyone there – the Mermaid Lady’s coffee is abominable. When it comes to the financial apocalypse I eulogize rather than elegize SB’s decline. The coffee is just that repulsive.

    On E/U: EUR/USD is in a symmetrical triangle basing out around the mid-124 lows – if we’re speaking continuation, we’d see a break into the 123s and things would get interesting, tending off the direction you’ve been calling for. But, with that pattern forming at what is (as yet) the bottom, failure rate on a continuation remains high.

    On the other hand, looking at USD/CHF, there’s an ascending triangle abutting 1.1826. That level doesn’t appear to hold much density as a resistance level: 1.1830 is the trough point in the double top from 11/24/2008, and the same level stands as the local high outside of the volatility on 02/20 from 02/18. A break here goes to 1.1885-1.1935. The EUR/USD cognate there would be a retest of the 10/2008 lows @1.2330…. Or we could see another failure here with reversal. The AT (such as it is; not much clarity to the pattern) seems more probable, adding to the breakdown argument on E/U. We’ll see when Europe comes in a few minutes from now.

  2. Well, both patterns (the AT on USD/CHF was grainy at best, frankly) failed and the Fiber has rallied about 100 pips. Hopefully you caught some of the updraft. Looks corrective and apt to top out somewhere between here and 1.2640 before heading down again….

    Interested to hear your analysis. Hopefully your EOM sales went well, and your not downing too many shots of espresso!

  3. Maybe not shots of espresso, but shots of whiskey – YES.

    Wow, that move was a big up swing (200 pips)…the better to short it with my dear. I rarely counter trend trade so I miss a lot of up swings in a bear market…just like this one.

    I really don’t see this stopping until 2650 or 2700…and I hope that this wasn’t a head fake or false breakout on the triangle…this would not be good for my position. I am short in the market right now with an average position of 2578 – if it reaches 2700 I will add again, but I think it is unlikely.

    I have an hourly bear channel and we are at the top. We are smack dab in the middle of a daily bear channel with no HH’s or HL’s since middle of December. Super Long term (secular) is still up, but I don’t think we’ll see a resumption in that trend until we hear from 2150 or there about… I use a 65 SMA on the daily, weekly and Monthly charts and all prices are below it and on the Monthly charts if it breaks the 65 it usually does it with force. So pretty much I have a case for overall down, but I am not sure how high we’ll go before we get there.

    By the way – where are you from that you are up at 1 AM American Eastern Time??

  4. Will the ECB cut this morning take off the gains yesterday, or was the bullish harami completed on the daily yesterday day signaling a bottom which will continue with a EUR rally out of a baked-in cut? So goes my dilemma. Same scenario on anything EUR/xxx or GBP/xxx with both pairs dawdling ahead of their rate decisions.

    Up at 1 a.m.? I could give you the whole “just wait until you have kids” but you’ve heard it all before, I’m sure. I’m often up in the middle of the night for an hour or so changing a diaper or what have you. Change a diaper, monitor some trades, back to bed. But I’m on ET like you.

  5. I should’ve said “any pair including those currencies” insteand of “with both pairs”. :-D Can’t be expected to get everything right at 3:30 a.m.!

  6. Well, some good shorting opps on EUR/xxx – GBP/xxx’s more on the mixed side with the quantitative easing measures thrown in. EUR/JPY in particular, but now with EUR/USD back below 125 as well. Looks like you were poised to capitalize well on that!

  7. Wheeew, Yes I got in at the top yesterday and left it to ride overnight and was very happy when I woke up this morning. I just moved my 100 pip TSL to 2580 with some good pips locked in now. I think I’ll be looking to sell the rallies as we approach the London close.

    My nieces and nephews are the best birth control known to man…

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