stevehopwoodforex.com • 10.4 A Complete System

Author:

nanningbob [ Sun May 05, 2013 6:00 am ]

Post subject:

Re: 10.4 A Complete System

cosmo wrote: Wow..... Bob, thanks so much for your full and concise reply to my questions, I appreciate the time taken to explain and in so much detail. I understand now why I was having a problem following your trades by simply following the charts, your trades are really more intuitive rather than a rigid process but you are still using the 240ma RSI2 and Pivot Points as your road map or guide but with added flexibility by using fundamental analysis.
Apart from FF, which other sources could you recommend for good fundamental information, do you have a particular website that you consult on a regular basis?

I seldom listen to Forex commentators. The vast majority is hogwash. Once in a while you will see me pick on them. For instance you will read how the BOJ surprised the market with their announcement at the beginning of April. You kidding me that one was coming and you could see it coming months in advance. I had been writing about it for months that it was coming. So were most knowledgeable writers in economics. Macro-economic writers are the best. I like John Maudin and those associated with him. Stratfor Etc. His book on "End of the Debt super-cycle" is a classic. Everything he writes about is coming around and he wrote it several years ago. In fact knowing and understanding Macro-economics helps me more in my Forex trading than anything. Forex markets move on Macros Fundamentals. The problem is so many traders have buried their heads in lower end charts that cant see the big picture. Just look at those monthly charts. They move clearly and smoothly. It is no wonder most traders get their heads bashed in. That 240 line is meant to keep you with the main move of the market. So most of my knowledge comes from not reading Forex gurus but economists who understand the basics of what moves a market.

I stay away from conspiracy theories, non of them are traders, they just want to sell books.

Let me give you two Macro-Fundamentals that will determine the future for the next 5 years and on. You probably have been reading a lot of USD bashing over the last 4+ years and yes we deserve it too. However, it is never as bad as it is written. 100% debt to GDP ration is the third time in our history we have come to this point. Civil War and WW2 were the other two times. Both times we recovered. One because of the industrial age and western expansion and the second the post war boom. What does the USA have going for it this time? If you read it is almost impossible to find anyone writing anything good but there are two major Macro economic fundamentals that can and will keep the USA on top.

1. We are the only major economy since 2008 that has reduced its overall debt. If you take all debt, govt. personal, corp. etc and lump it together. The USA has reduced its debt by 15% and growing. We have so focused on Federal Govt. debt that we have missed that the USA is in position now to have economic recovery. However, the Federal debt must be brought under control for it to finally kick in. If the President can just come up with any plan to reduce Federal borrowing and reversing its growth, the rest of the economy is ready to go. Corp. and business have cash and reduced debt and are in position to grow. Banks have plenty of capital to loan. Plenty of people are ready to go back to work and become credit worthy again. Its all there. The market is ready to grow again but we got idiots in Congress and the White House who cant do what we elected them to do and that is pass a budget for crying out loud. Businesses are not going to go forward until the govt. puts its house in order.

2. Within 5 years the USA will be the #1 oil producer in the world. Of course you know what happens to countries that are energy rich, money and growth happens. We use our resources wisely and we have a strong growth pattern that could last for several decades.

3. The other part is the USA has food, water, and other natural resources to overcome the deficits it is in. Will we have the wisdom get our way through this mess? Only time will tell.

These are Macro-fundamental issues. They guide the markets.

What other Macros are out there. Euro debt with certain countires is weighing down the markets in Europe. The question is how long will the Northern Euro Countries put up with the free spending countries in the south. The fate of the Euro hinges on the answer to that question. Germany will call the shots on that one. When it decides no more borrowing you can kiss the Euro good bye. As long as it sees the Euro is viable it will continue.

Japan 240 debt to GBP ratio. Ok we solve that problem, depreciate the JPY in half or more by doubling the money supply over the next two years. Maybe cut that ratio in half over the next decade or so. Maybe they survive.

China, to keep their miracle economy going 2/3 of all new borrowing or new loans in the world originated in China the first quarter of 2013. Last years loans equaled 50% of GDP. You think they can keep that up?? Instead of accepting a more normal growth rate of 3-6% they want to keep that 7-9% going. Good luck with that one. Watch China if its economy continues its slowdown, then down go aud and nzd. IF they keep that growth rate up they will stay up. You dont need any Forex guru telling you this or that. aud and nzd are so dependent on China that you can trade aud nzd just on China economic news. Both are slipping below the 240 line showing China is slowing down.

GBP. I love the Pound. I dont care how much they borrow they are the masters at playing the debt game. They seem to survive anything ever thrown at them. I can always rely on the pound bouncing back into play.

CHF. I　hate the SNB, One of these days I am going to figure out how they think.

DO I expect people to agree with all of this? Of course not. But I have learned to stay away from the conspiracy theorists and rely just on economic basics. Price moves in one direction for months for a reason. Find that reason and you can successfully trade Forex.

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10.4 A Complete System https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?t=1481	Page 400 of 745

Author:	KevinT [ Sat May 04, 2013 1:07 pm ]
Post subject:	Re: 10.4 A Complete System

Author:	spillini [ Sat May 04, 2013 11:41 pm ]
Post subject:	Re: 10.4 A Complete System
Just some FYI for everyone over this wonderful weekend. With all 10-4 & 10-5 stuff pulled off the chartr, If you draw your 4 Hr fibs from the up move 4/15 to 4/25 you will see an amazing thing happened. The pair turned at the 61.8% level, to the tee, which also happens to be the 240 line when you superimpose the 10-4 & 10-5 indicators back over as seen in chart #2. Same thing on E/J and G/J turned at the 38% level. Just FYI Jim

Author:	nanningbob [ Sun May 05, 2013 2:19 am ]
Post subject:	Re: 10.4 A Complete System
effluvium wrote: nanningbob wrote:...... I had several really sorry trades. 240 line got hit quite a bit. But I made that all up in one good day. Unfortunately most of that was from a series of gbp/chf trades. I hate CHF. So you guys have seen me win and lose, the bar color thing was made so I dont do that again. If you hate too much CHF, why do you continue to trade it ? There's a radical solution: You ban all pairs with CHF from your sight, by disabling them. Take it easy Bob, and don't put too much hate and rancor in you heart. Not too good for your health. It is a challenge, a puzzle to solve, an irresistible urge, a ....................... dang I am going to figure it out.

Author:	nanningbob [ Sun May 05, 2013 3:00 am ]
Post subject:	Re: 10.4 A Complete System
cosmo wrote:Bob, I have looked through your past trading statement but am finding it difficult to reconcile your trades with my 10.5 charts. Could you please clarify a few things that i am sure will help me and others to replicate your success. 1) When you get a positive RSI 2 and 240 ma signal do you place your pending order at the first pivot point on the 4 hour before going to the 1 hour. 2) When you enter pending orders on the 1 hour do you enter on all pivot points or only the main ones, for your target are you using the DR1 and DS1 PPoints? 3) Stop Loss, are you using the 240ma (960ma) or some other indication to close orders. Bob, thanks to you and the team for your hard work, dedication & patients in developing and explaining this method. I look for my best entrances. The problem is I just look at a chart and start placing orders. It is not based on set rules but, .................... I guess on experience. Some of my entrances are based on previous highs. Previous S/R/P/M lines. You ever see price go just past a line and reverse?? Well that is usually the day before line, so i put my order above that. Sometimes I have 2,3,4 trades going and I close them all and go back to 1 trade. This protects my profit, protects potential DD, but keeps me in the trade. Experience teaches me that is ugly bye bye, or wrong entrance do a second. It is like driving a car, I dont have a rule to follow to turn a right turn signal, I just do it when the time comes. I see a kid on the sidewalk to my right I put my foot to the brake and slow down. A car pulls out in front of me I swerve. That is what trading has become. I can teach entrances, exits, things to look for but when you are driving a car you just drive. Decisions are made moment by moment, not based on any rules but what I see and then immediately react. No rules, no substance, I am just driving my Forex car. Thursday, before USA open, JPY sells spike up, I immediately went to FF and saw no news. Some how I knew instinctively that was short term. WHY? Prices dont spike 1/2 hour before the USA open. I closed everything as fast as I could and pocketed my profit. Minutes later price went back to their starting blocks. Friday, USA open, JPY sells spike up. This time I knew it was NFP I stayed in for over an hour and then began closing my biggest profits but letting some others ride. These are all things I have learned the hard way in Forex. I can tell you about them. I can give you a rule like if price spikes before an open something very unusual happened so take your profit. But there is no such rule. It is instinctive, it comes from trading for years and years. I cant give you rules for that. You just have to study and trade, study and trade, study and trade, until it becomes like driving a car. That is why I promote, (what is referred to at FF as the stupidest thing ever heard) if you have to put 10K in the account and trade a one penny trade to trade without fear, then that is what you do. The reason I trade 20 plus pairs is to get a feel for the market. It moves, it breathes, it all fits together. It is like one giant river flowing with tributaries, rapids, waterfalls, pools, dams, and eddies. I dont carry my drivers handbook anymore. I probably couldnt even tell you what is in the book. But I do know how to drive a car. Forex is like that. Now to answer your questions. When I see a trade I like putting pendings where I think price will break up/down. The best indicator would be trendline and start placing orders above the trendline. Whether they are pivots, S/R, or Mid lies i dont care I just start placing them above some point I think price is going to turn around at. If you need a line on your screen put a MA 5 shift 1 LWMA set at open on your screen and place your pendings on any line above that. Me I just need to look at the screen and start setting trades. To me Pivot crosses are usually your best trades. Many professional traders will put their trades there back into the trend. That is one of the most common trades in any market and you sometimes get an explosion in price when they are crossed or bounced off of. WR1 and WS1 are your best profit points. I will close part or all on my way up/down and set new trades often. Rarely do trades go in a straight line. 240 line is my line of last defense. As you can probably see I close way before that most of the time. 10.4 theory is the 240/960 line is the line where fundamental direction changes happen. Prices bounce off of that back into its fundamental trend or cross it in a change of fundamental direction. Crossing back and forth means there is no fundamental direction and the currency is just wandering waiting for direction.

Author:	cosmo [ Sun May 05, 2013 4:18 am ]
Post subject:	Re: 10.4 A Complete System
I look for my best entrances. The problem is I just look at a chart and start placing orders. It is not based on set rules but, .................... I guess on experience. Some of my entrances are based on previous highs. Previous S/R/P/M lines. You ever see price go just past a line and reverse?? Well that is usually the day before line, so i put my order above that. Sometimes I have 2,3,4 trades going and I close them all and go back to 1 trade. This protects my profit, protects potential DD, but keeps me in the trade. Experience teaches me that is ugly bye bye, or wrong entrance do a second. It is like driving a car, I dont have a rule to follow to turn a right turn signal, I just do it when the time comes. I see a kid on the sidewalk to my right I put my foot to the brake and slow down. A car pulls out in front of me I swerve. That is what trading has become. I can teach entrances, exits, things to look for but when you are driving a car you just drive. Decisions are made moment by moment, not based on any rules but what I see and then immediately react. No rules, no substance, I am just driving my Forex car. Thursday, before USA open, JPY sells spike up, I immediately went to FF and saw no news. Some how I knew instinctively that was short term. WHY? Prices dont spike 1/2 hour before the USA open. I closed everything as fast as I could and pocketed my profit. Minutes later price went back to their starting blocks. Friday, USA open, JPY sells spike up. This time I knew it was NFP I stayed in for over an hour and then began closing my biggest profits but letting some others ride. These are all things I have learned the hard way in Forex. I can tell you about them. I can give you a rule like if price spikes before an open something very unusual happened so take your profit. But there is no such rule. It is instinctive, it comes from trading for years and years. I cant give you rules for that. You just have to study and trade, study and trade, study and trade, until it becomes like driving a car. That is why I promote, (what is referred to at FF as the stupidest thing ever heard) if you have to put 10K in the account and trade a one penny trade to trade without fear, then that is what you do. The reason I trade 20 plus pairs is to get a feel for the market. It moves, it breathes, it all fits together. It is like one giant river flowing with tributaries, rapids, waterfalls, pools, dams, and eddies. I dont carry my drivers handbook anymore. I probably couldnt even tell you what is in the book. But I do know how to drive a car. Forex is like that. Now to answer your questions. When I see a trade I like putting pendings where I think price will break up/down. The best indicator would be trendline and start placing orders above the trendline. Whether they are pivots, S/R, or Mid lies i dont care I just start placing them above some point I think price is going to turn around at. If you need a line on your screen put a MA 5 shift 1 LWMA set at open on your screen and place your pendings on any line above that. Me I just need to look at the screen and start setting trades. Wow..... Bob, thanks so much for your full and concise reply to my questions, I appreciate the time taken to explain and in so much detail. I understand now why I was having a problem following your trades by simply following the charts, your trades are really more intuitive rather than a rigid process but you are still using the 240ma RSI2 and Pivot Points as your road map or guide but with added flexibility by using fundamental analysis. Apart from FF, which other sources could you recommend for good fundamental information, do you have a particular website that you consult on a regular basis?

Author:	Wkcfx [ Sun May 05, 2013 6:34 am ]
Post subject:	Re: 10.4 A Complete System
nanningbob wrote: DO I expect people to agree with all of this? Of course not. But I have learned to stay away from the conspiracy theorists and rely just on economic basics. Price moves in one direction for months for a reason. Find that reason and you can successfully trade Forex. Thanks Bob! I really appreciate your logic and that you share it with us!! all the best.

Author:	Staedtler [ Sun May 05, 2013 7:24 am ]
Post subject:	Re: 10.4 A Complete System
this is great info, bob you are amazing

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