The Consummate Base Hit Player

Growing up in Harlem, NY, I played baseball for the bigger part of my life. I LOVED the game. It consumed most of my life, much how the market does nowadays for me. My childhood dream was to become the next Derek Jeter of baseball. As a player I was great defensively, winning a gold glove award during my Junior year of high school. The same year we brought a city championship to the school after a 56 year drought. Offensively, I was no Barry Bonds or Mark McGwire hitting home runs out of the park left and right. I was more of a top of the order guy with the ability to hit singles and doubles.

In playing the market there are two types of “hitters”. There’s the slugger, a Barry Bonds type, who takes his shot at going for it all when the opportunity presents itself; then there’s the singles hitter, a Pete Rose type, who consistently hits singles and doubles, throwing in the occasional home run every now and then. My dad has always been a slugger throughout his career but has made an effort to encourage myself to be more base hit oriented. If you look at the way Dr. Dan Mielcarski, who is one of the most consistent traders on this planet, trades the equity market it is very similar to: SINGLE … SINGLE … DOUBLE … SINGLE … B/E … SINGLE … HOMERUN !! …. SINGLE … SINGLE … etc.

With a base hitting approach to the market you will create better income than 80% of all Americans. Here’s an example of me applying my own base hitting style of trading to the market (PNL shown is for the week May 6, 2012 – May 11, 2012) :

PS Check the number of losses for this week. Who says you can’t be perfect?

5.27.12 Look Ahead: GBP/AUD

GBP/AUD Daily

This week, I want to direct your focus to GBP/AUD.  This pair has been very bullish over the recent two or three months.  It’s been on a nice uptrend and ripping higher.  However, I believe price is a bit overbought and due for a pullback.  A BIG pullback.

If you take a look at price on the daily chart, it has created some sort of double top.  In addition, price has pulled back placing itself below the daily moving averages.  Now that price is below the moving averages, we could look for a retracement to retest the area it previously broke and then move lower.  Whenever price transitions to the opposing hemisphere, it is important to pay attention.

GBP/AUD H4

Now, if we take a look at the 4Hour chart of GBP/AUD, we will see the footprints of price weakening.  We notice the bear 180 and topping tail off the 8MA giving great indication of price heading lower.  I did not point this out, but if you take a look even at the hourly you will notice lower highs that have formed. With price now below the moving averages here on the 4hour it is great to begin looking for entry opportunities.

I currently have two entries in this pair.  My first entry came at 1.61260; my first add at 1.60730. My plan going forward is to look for another add opportunity after price retraces a bit towards the daily moving averages.  Let’s rock this !

 

5.18.12 Look Ahead: AUD/CHF

AUD/CHF Monthly

AUD/CHF has been on my watchlist for quite some time now.  Price made an incredibly bullish move during the second half of last year.  Price has bust through prior resistance of the monthly moving averages and is currently retracing to retest those moving averages.  Remember, what was once resistance becomes support.  As price has made its way back down to the moving averages, I would like to start eyeing for more bullishness and the catch of support.

In this area AUD/CHF is in there is the support of both the monthly 200 period moving average and the monthly 20 period moving average.  In addition, we have the 23.6 Fibonacci retracement level of the most recent bullish move.

This trade is more longer term as it could take a while to truly develop.  However, it is never too early for preparation. “Luck is what happens when preparation meets opportunity” – Lucious Annaeus Seneca

Stay tuned ….

5.18.12 Look Ahead: USD/CAD

USD/CAD Weekly

For many many weeks now, USD/CAD has consolidated under its weekly moving averages giving us that “Christmas tree” (green light, red light) effect.  Finally this week, USD/CAD has placed itself back above weekly moving averages.  With price being so bullish this week, I believe that is will kick start another uptrend in this pair.  Currently, USD/CAD has rallied into some extension levels and should retrace some before moving higher.

In the coming weeks, I would like to see price retrace back towards the weekly moving averages and give us a nice buy setup that we can take advantage of.  I certainly foresee price going higher for this pair.  I will likely update on targets once I have established a long position and the trade begins to develop.  Let’s keep a close eye on this one and strike when the market provides us with an opportunity.

5.15.12 Update: GOLD & SILVER

GOLD

 

SILVER

 

INCREDIBLE !!! increíble !!! incroyable !!! 信じられないです  !!! Απίστευτη !!! Whichever language you want to say it in, INCREDIBLE is the only word to describe Silver and Gold over the past two months.

5.9.12 Update: GBP/JPY

GBP/JPY 4HOUR

GBP/JPY continues to move lower.  Earlier this week I added to my position once we got follow thru on a topping tail off the 4Hour 20 period moving average.  I looked for price to move down to 128.100 area as the next profit taking target.  From my add, price had no trouble getting to that area.  If you notice, that 128.100 target was near perfect as price bounced from this area.

I do see GBP/JPY continuing its move lower down to the weekly 20 period moving average at 126.350.  However, this pair does have some support to break where it currently is trading.  My plan going forward with this pair is to add here on the 4Hour chart.  If the next bar triggers a sell setup, it would be a perfect add opportunity once again.  I think the next stop for GBP/JPY will be 127.400 before eventually reaching the weekly 20MA.

5.8.12 Update: XAU/USD (GOLD)

In my last post about Gold I pointed out another lower high which had formed. I have had a short position in Gold since $1707.10. Needless to say, but Gold has been a great trade up until this point. A bit frustrating at times over the past few months as price flurried back above the daily moving averages giving a bullish look and making me sweat a bit. However, I never waned on my position. Today, Gold made me a proud papa. We had been struggling to break below that $1620 area. As you can see, Gold bounced nicely from that area three times and finally today the break of that support area arrived. I decided to take some profit as Gold got into that $1600 area. With a huge move like today approaching a whole number, we should see some sort of pullback here.

From my initial entry, I have booked a $107 move in Gold. I still think this trade has a lot left in its tank. I see Gold a bit lower even from these levels. The next major target area for Gold will be $1460. Yes! $1460. But let’s leave that as a tentative target for now as I may adjust it later. I know that is a ways away so two minor targets prior to $1460 will be $1577 and $1530.

5.4.12 JPY Pairs (GBP/JPY & CAD/JPY)

As mentioned before I have continued to play GBP/JPY multiple times over the past month booking some very handsome profits from this pair.  My latest entry came earlier this week when price rejected hard off the 200 and 20 period moving averages on the 4 hour chart.  This rejection also created a rejection off the 8 and 20 moving averages of the daily chart.  From my entry, price took a little time before it showed true follow thru to the downside.  That follow thru came earlier this morning and was rather violent.  I did lighten my position on GBP/JPY as price traded into the prior low.  However, I do think this pair will see even more downside. The weekly 20MA is still close to 300 PIPS away from where price is at the moment.  Let’s look for more downside in this pair come next week.  I will be awaiting a pullback to the moving averages for an opportunity to add an take price lower.

CAD/JPY is another pair that I have continued to play over the past month.  Similar to GBP/JPY, CAD/JPY rejected off an area of resistance once again sparking my interest.  My entry came on a little GBI on the 4Hour chart.  From my entry point price consolidated for a couple of hours before violently tanking south.  The way in which I played this trade mirrored GBP/JPY in that I lightened my position into the prior low.  Now, I will be awaiting a pullback into the moving averages for an opportunity to add and take price down to the weekly 20MA.  Another pair to keep an eye on come next week as I believe it could finally complete the cone trade as NZD/JPY did earlier this week ( 5.3.12 NZD/JPY Target Hit ).

5.4.12 Update: GBP/CAD

GBP/CAD Daily

Last week and earlier this week I played GBP/CAD for a nice gain back into the prior high ( 5.2.12 Update: GBP/CAD ).  After a pullback, I looked for an opportunity to take another entry in this pair as I see price much higher.  I noticed this pair formed a bottoming tail off all three daily moving averages yesterday. In turn, this bottoming tail created yet another higher low illustrating the strength of price to the upside.  My entry came once the daily buy was trigger at 1.60070.  So far price has shown nice follow thru making its way back into the prior high.  It is currently triggering a weekly buy so let’s keep an eye on how price finishes this week.

5.3.12 Update: SILVER & GOLD

Everyone knows the saying, “a picture can be worth a thousand words”. Well there aren’t enough words to describe this picture and how beautiful SILVER has been. To be honest, I’d rather all my pictures be worth thousands of dollars than thousands of words. In large part because some people nowadays just talk too much lol. But that’s beside the point. Silver has truly been the play of the year !

Since its huge bear elephant bar to end February, Silver has shown nothing but strength to the downside. Once price slipped below the moving averages, it has stayed below the moving averages as we see Silver in s nice power downtrend on the daily.

I see silver in the mid $20 range. I believe that once we break below that 61.8 retracement level we should be in the clear to reach our target area.

GOLD and I have had this love-hate relationship with one another for a quite some time now. At the moment Gold and I are full of affection for one another. Lately Gold had been on my bad side due to the bullishness going on in this commodity. However, price actually continues to remain true. Although at first glance you can easily get sucked into thinking it has not been.

Price action in gold continues to make lower high after lower high after lower high. Great sign of strength to the downside. This is the main reasoning as to why I did not get sucked into longs on Gold last week because I identified these lower highs and realized the channel Gold has been trading within. As price once again transitions itself back to the southern hemisphere the next test will be $1620. Gold has had lots of trouble breaking below this area, as price has bounced significantly off this level two or three times now.

I see Gold in the mid $1500 range at minimum. It is valid for a cone trade on the monthly chart so lets see if we can take price down to the monthly 20 period moving average.