zentauro67 » Wed Apr 23, 2014 9:20 am wrote:GBPJPY (also known as Geppy or The Dragon) is probably the most difficult pair to trade. FF has a very long dedicated thread where you can find (as usual in FF) a mix of great posts with the most stupid and agressive ones. After some reading, I summarized this: most of indicators that use to work well in other pairs fail here. Moving averages, MACD, divergences, oscillators, etc. are to be avoided. Most serious and professional traders dedicated to The Dragon use only fibos or cycles (I think Boltrader would be part of them). The study of Geppy cycles has two different approaches: one is based in fundamentals (as Bob´s and -if I´m not wrong- Traderdesk´s here) The other use cycles based on Gann or Ehlers theories that have a good dose of mysticism. Some of Ehlers toys (inspired in Gann´s theories) work fine in GBPJPY. I have tried the sinewave series, Hilbert transform, Fischer, COG, some extrapolators, etc. Finally I found one (Cyan4) that mixs a kind of stoch behaviour with a cycle forecast. It gives some decent signals on reversals, tops and bottoms for GBPJPY. It´s a kind of stoch that instead of lagging try to give the moves in advance, before they happen. Of course, this is very risky, but I must say it works reasonably well with The Dragon. At his moment, it´s saying that the bearish move started this week, on sunday opening. Price is going up in an apparently healthy bullish trend, but this could be the last push before a big correction.
I also use harmonic patterns as confirmation for reversals (a last leg of the pattern on a ATR + -3 or near increases the odds) Here a bearish shark just appeared. The shark is one of the most agressive reversal patterns. If it works, it uses to produce big moves. I have in my chart a dotted aqua line with the weekly open. My feeling is that this will be a 'doji week' and price will close on friday very near or even below the opening line.
Too late to go long and too early to go short. As Livermore should have said: "It´s time to go fishing".
Boy that was a mouthful. Whenever I trade gbp/jpy I know I am going to use multiple levels. It usually takes a couple of positions to get it right but that is trading. Surprisingly I have made more than I have lost on this pair so I cant complain. Of you course everyone knows the pair I hate is the gbp/chf. If you ever figure that one out they owe me a lot of money.
nanningbob » Tue Apr 22, 2014 11:59 pm wrote:
snip .....
Deflation on the other hand has never really been solved. Japan hasn't solved it in 30 years. The depression was solved by WW2 and that was done by destroying everything so you have a post war building boom. USA had a big crash 1859 (so much for the greatness of the gold standard) and Civil War spending got us out of that. Peasantry/slavery/serfdom during the middle ages and other periods of history are permanent deflation.
Inflation can be licked in a short period of time. Even now the world economies are still fighting the deflation bug. The solution in the past has been war, the solution today is massive borrowing, it will be interesting to see if massive borrowing/debasing will solve the problem or we have to go back to the war option and destroy a bunch of building and land so we can rebuild and get the economies going again.
A third option is everyone is stuck in the social strata they are in and growth becomes limited. Interesting to see if someone has a fourth option.
Great post Bob - Thanks
What makes the world go around?
Maybe just two things Money & it's supply/demand & religious beliefs and that's it .... maybe just money.
Anybody who spends long enough in the financial sector to understand how it works and is willing to ask uncomfortable questions about political decisions being made easily finds some very smelly stuff going on every day.
alorente » Wed Apr 23, 2014 12:45 am wrote:
I agree with you. Japan is in a heap of trouble and they have to throw everything into the inflation fire to keep their currency low. Everything sounds too easy though. It is easy to get the inflation genie out of the bottle but very hard to put him back in. Remember Volcker´s 16% funds rate to kill inflation once it took off... I don´t doubt they will achieve their 2% target, the problem will be making it stop where they want. What if it keeps going? To 3%, 4% or higher... If that happens they are in deep dodo. I see they are reluctant lately to increase their asset purchases. Maybe that´s exactly what they fear... Friday´s CPI could be the first sign that the genie likes it out of the bottle. If that happens the Yen will take off... We´ll see... It will either be that or a blowup in Ukraine, but the charts look like it very well may happen...
Actually I would like to kindly disagree with you on one point. Inflation is easy to cure. You raise interest rates and slow the money growth and you raise taxes and take the excess money out of the system. Within a couple of years problem is licked. Problem is people hate for their taxes to be raised but that is how you get the excess out.
Deflation on the other hand has never really been solved. Japan hasnt solved it in 30 years. The depression was solved by WW2 and that was done by destroying everything so you have a post war building boom. USA had a big crash 1859 (so much for the greatness of the gold standard) and Civil War spending got us out of that. Peasantry/slavery/serfdom during the middle ages and other periods of history are permanent deflation.
Inflation can be licked in a short period of time. Even now the world economies are still fighting the deflation bug. The solution in the past has been war, the solution today is massive borrowing, it will be interesting to see if massive borrowing/debasing will solve the problem or we have to go back to the war option and destroy a bunch of building and land so we can rebuild and get the economies going again.
A third option is everyone is stuck in the social strata they are in and growth becomes limited. Interesting to see if someone has a fourth option.
Thank you Al for all your input, greatly appreciated.
Inflation in Japan would be easy to cure? I don´t think you quite understand what I meant. Inflation in Japan would be impossible to cure... If the government raised rates steeply in order to tame runaway inflation, Jgb´s would plunge in value and since the entire Japanese society is built around Jgbs, that would quickly bankrupt banks, companies, pension funds and individuals... Of course, interest on the huge public debt would soar and would become unpayable. In other words, Japan would be instantly bankrupt... No, if Abe and company lose control of inflation with their experiment, it´s game over in Japan. That is why the closer they get to 2%, the more nervous they will become with QE and they know the market is watching this like a hawk.
Last edited by alorente on Wed Apr 23, 2014 3:57 pm, edited 1 time in total.
does anyone know if there is any indi or EA that draws the order lines in different colors? Ideal thingy would draw five different colors for buys, sells, sls, tps, and pending orders. I couldn´t find anything as that in the web.
I´m trading EURUSD in a profitable way, milking the dynamic range with buys/sells and pendings set all at the same time 1 hour after the London opening (using just 60 LWMA 4H and ATR channels), but the chart becomes a mess. I´ll stop this when a decent trend resumes. 240 is actually useless in this pair (lot of crosses in both ways) but 60 is of big value. Price is dancing around 80 pips up and down the 60 LWMA in a very predictable way. Its not a range built on horizontal levels, but a dynamic range on the 60. ATR channels (levels 1 or 2) are of big help to catch the moves.
alorente » Wed Apr 23, 2014 8:58 pm wrote:
Inflation in Japan would be easy to cure? I don´t think you quite understand what I meant. Inflation in Japan would be impossible to cure... If the government raised rates steeply in order to tame runaway inflation, Jgb´s would plunge in value and since the entire Japanese society is built around Jgbs, that would quickly bankrupt banks, companies, pension funds and individuals... Of course, interest on the huge public debt would soar and would become unpayable. In other words, Japan would be instantly bankrupt... No, if Abe and company lose control of inflation with their experiment, it´s game over in Japan. That is why the closer they get to 2%, the more nervous they will become with QE and they know the market is watching this like a hawk.
Because of their 240% debt to GDP ratio Japan is not the norm. They should have done this 25 years ago and they wouldnt be where they are now. According to Maudin only one nation has gone above 150% and not gone bankrupt. (Probably the debt masters of England, they know how to play the game for centuries) The problem they face is they didnt borrow the money from other countrys' bankers, they borrowed the money from their own people and its gone. Everyone in Japan will become a peasant again when the top blows. Greece is smart they use other people's money (Hello Germany, France and the rest of the EU) Of course that is what happens when you dont balance the books. You have two choices, cut govt. spending and bring it in line to income (taxes) OR raise taxes to pay for the spending. There is no other economic system that works better than that. Countries who do that keep their debt to GDP ratios under control. In the year 2000 the USA had a debt to GDP ration of close to 30%. Extremely manageable for a country our size. So what did we do, we cut taxes and raised govt. spending. Good choice. Then Republicans wonder why people wont vote for them and we get Obama again. Anyway Al, we both agree Japan is cooked. It is just a matter of time before the bug finds a big fat windshield.
