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".

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.

nanningbob » Wed Apr 23, 2014 12:59 am wrote:

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.

Ben12 » Wed Apr 23, 2014 11:39 am wrote:Hi,

Thanks to Bob for this great system!

I was looking for a "tape" version of the 10.7 indi because it's easier for me to read. Believe the attached indi & template provide this.

Cheers
Ben

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.