Taichiseal Charts

Manchester United 2 - Liverpool 1

2012-02-11T22:38:00.002+08:00

Ryan Giggs : Liverpool's most dangerous player. Reflection of how poor Liverpool was. Unbelievable the number of stray passes Giggs made and gave possession to Liverpool. Thank God we had Valencia, Scholes (94% passing completion rate) and Welbeck.
Suarez : Refusal to shake hands with Evra was petty. 小气. Admire his footballing skills but lost all respect for the guy now.
De Gea : another great save (Johnson), protecting the MU win. Last week against Chelsea (3-3) too, 2 great saves (Mata, Cahill) near the end. Have to revise my low opinion of him.
Kenny Dalglish : got it wrong. Lack of ambition in starting line up cost dearly. Really sour character if you watch all his post match interviews. Always on the defensive and unnecessarily confrontational responses to completely reasonable questions. What a grouch. From admiration (super duper footballer) to neutral (Man U rival manager), to falling off a cliff (insisting Suarez should never have been banned AFTER QC led independent commission found Suarez guilty + today's rubbish interview) here in my book.
Carroll : Beaten in the air by Rafael. Spends more time whinging than playing.

Reverse Indicators

2012-02-11T15:05:00.000+08:00

From Business Insider

GBP/USD : Back to My Old Style

2012-02-10T22:11:00.001+08:00

Enough of dicking around all of this week, net net, gone nowhere with my short term trading. Waste of time, made broker happy only.
GBP/USD chart set-up now warrants a return to my old longer term trading system. Happy to be back within my comfort zone.
Initiated longer term short cable at 1.5770.
Weekly : Complex SHS top. That has not changed throughout my recent whipsaw ie consistently longer term bearish. Even if the SHS hasn't come into play yet, at a minimum a return to 1.5400 should not be difficult (based on the daily - see below).
Daily : Key reversal Tue/Wed, indecision Thurs, and today back below the old 1.5780 triple spike tops = sell signal. Of course, still need it to close below at NY end of day but have to jump the gun somewhat now. Will cut if we fail to close below 1.5780 tonight = no signal.
Better to make/lose money doing my own thing than to trade like a headless chicken.
[From these relative lofty levels, may not be a bad idea to use sell stop-in orders below]

BOE FX Turnover Survey

2012-02-10T17:24:00.000+08:00

via ING Research

Top 4 pairs : EUR/USD, GBP/USD, USD/JPY and AUD/USD. Perhaps I should restrict myself to trading these 4 pairs.

Also from same ING report : FX turnover share UK 38%, US 18% and Singapore 5% = Top 3 FX trading centres.

EUR/USD : Step Down in Time Frame

2012-02-09T14:57:00.001+08:00

Battered and bruised badly here recently operating on weekly SHS top assumption. Risk built up to too large and strong uptrend on daily killed me.
Confidence low. Can't stomach the swings on a weekly time frame anymore.
So lower a gear and trading on daily chart now. Recent high 1.3233 taken out and we had a pull-back towards that level last night. Taken a long position here at 1.3246 with tighter stop than my normal weekly chart based. Position will not be held for as long as usual.
At some point, I will revert to shorting on the weekly. Just trying to regain confidence and rhythm with a few quick (hopefully profitable) trades. Stop on this trade now moved to breakeven.

Man U + Man C Remaining Fixtures

2012-02-08T15:28:00.000+08:00

Manchester City (57 / GD+44)

12Feb : Aston Villa away +3
25Feb : Blackburn home +3
03Mar : Bolton home +3
10Mar : Swansea away +3
19Mar : Chelsea home +1
24Mar : Stoke away +3
31Mar : Sunderland home +3
07Apr : Arsenal away +1
09Apr : WBA home +3
14Apr : Norwich away +3
21Apr : Wolves away +3
28Apr : Man U home +1 (potential cup final)
05May : Newcastle away +1
13May : QPR home +3
Forecast +34; Final +91 (estimated max)

Manchester United (55 / GD+35)

11Feb : Liverpool home +3
25Feb : Norwich away +3
04Mar : Spurs away +1
10Mar : WBA home +3
18Mar : Wolves away +3
26Mar : Fulham home +3
02Apr : Blackburn away +3
07Apr : QPR home +3
09Apr : Wigan away +3
14Apr : Aston Villa home +3
21Apr : Everton home +3
28Apr : Man C away +1 (potential cup final)
05May : Swansea home +3
13May : Sunderland away +3
Forecast +38 ; Final +93 (estimated max)

Forecast is simplistically assuming win for game against team out of top 5, draw vs team in top 5. Clearly, can expect a lot more twists and turns eg against the likes of Sunderland, Fulham etc (or even MU v Liverpool this weekend). Exercise here only to illustrate that Man C have got marginally more difficult games out of the remaining 14. Both have 7 home and 7 away games left. Going to be a tight run in. Absorbing.

Japan : Recent Stock Market History

2012-02-07T19:10:00.002+08:00

Source : Morgan Stanley

GBP/USD : Poker Game

2012-02-06T17:51:00.001+08:00

Daily chart shows how tricky it has been trading cable. Bluff and double bluff, non-trending range extensions.
Rectangle range between 1.54 and 1.5750 from late Nov11 to mid Jan12.
Downside break of range below 1.5400 in early Jan12 was a false break.
Followed by latest uninterrupted bull run above the 1.5770 area (significant as marked by the 3 circled spike tops).
After making high of 1.5881, we are now at 1.5740, back below the spike tops. So, good potential for the recent upside range break to be another false signal.
Trade : Initial short at 1.5771 (on way up!), still holding. Pyramid on close below 1.5700.
To revive the real bearish trade off the weekly complex SHS top, I would require a return below 1.5500.

Thomson Reuters is the PITS!

2012-02-03T18:22:00.001+08:00

Recall in Nov11 I made the decision to terminate my TR Eikon subscription. When informed, the account manager who had never ever called me during the entire tenor of my relationship with TR, suddenly sprang to life and tried to sweet talk me into not ending my contract. I do not recall ever getting so much attention from TR until then. In fact, prior to my request for termination, I didn't even know who my account manager was. But after much back and forth, I stood firm and this email (11Nov11) was TR's very last attempt to keep me as a customer (click to zoom) :=

To which my final reply was NO (11Nov11) :=

Complete radio silence from TR after this so I assumed that they had lost interest in me given that they could not persuade me to stay. Still, I thought at the time that it was a lack of common courtesy that they did not bother to reply their confirmation and agreement but I let it go since I had no wish to speak to anyone from the company again. In any case, their email and my reply were clear enough about the termination wef 31Dec11.

Come 03Jan12, unexpected Eikon invoice for SGD 8,442.30 (for 1Q12) received from TR :=

And my reply (12Jan12) :=

I assumed it was just an operational error and that TR would sort it out internally among themselves. I did not ever receive a reply to my 11Nov11 and 12Jan12 emails.

And then, today (03Feb12) - phone call from TR chasing for payment !! WTF?

Totally speechless. Can there ever be a more clueless company? Everyone in there doing their own thing in a completely uncoordinated manner.

I would love it if someone from TR can explain all this. Doubt it. After 6 years of dealing with their Helpdesk as a retail customer, I have come to expect that for TR, getting things right is the exception rather than the rule. (See comments section for a typical example of my frustration with TR).

Citi Research : Global Yield Snapshot

2012-02-03T03:59:00.003+08:00

Running Windows XP under Mac OS X Lion

2012-02-02T21:46:00.002+08:00

MacBook running Windows XP in VirtualBox

My 6-year old MacBook almost dying now. It doubles up as my Disaster Recovery system. Because PATS and SaxoTrader only run under Windows, I need Windows installed on my MBs.
My new MB (with super fast SSD!) comes with Lion which does not support Windows XP under Boot Camp. Minimum requirement is Windows 7. Tried to BootCamp Windows XP onto my Lion but can't find a way to get it to work.
Was not willing to ditch Windows XP and pay S$359 for Windows 7 (which is only going to be used for Disaster Recovery).
Solution found - foc - Oracle VM VirtualBox. Detailed installation manual here. Care on the RAM allocation between Lion and Windows.
Unfortunately was over 3 weeks ago that I did the installation and details all a bit hazy now. Should have written this up immediately. Can't understand more than half the terms in the manual. Was a miracle I got it to work at all. Not confident I can repeat this in future.
This note is for my own future reference. Wanted to record in detail what I did but cannot remember most of it now. Hence, short version.
SaxoTrader runs perfectly under VB/Windows XP (Home edition). No strange keyboard behaviour etc. Is better than BootCamp because both OS run simultaneously without having to reboot to switch.

EUR/USD : When It Rains, It Pours

2012-02-02T02:07:00.001+08:00

Initiated a short EUR/USD yesterday at 1.3193 on basis of 1. still valid SHS top on weekly chart, this upmove being the pullback to the neckline. 2. Daily chart running into overhead resistance around 1.3200.
Trade worked almost immediately and daily candles (red=down) from Mon + Tues together indicate possible reversal to downside. Added to initial short at 1.3077 when we took out Mon's low.
At inception, placed profit take order on the initial 1.3193 short at 1.3028. But given the very tiny positions I am running (after a horrendous Jan), decided earlier today that it was just not worth the hassle and better to just let the position run as I am looking for a return to 1.2850 at a minimum. Market was trading around 1.3050 when I pulled the order.
Sure enough, low of the day in ECH2 = 1.3027! I would have been filled if I hadn't changed my mind. And now, it's all the way back up to high on day of 1.3221. And overall position is now out of the money.
Sigh! Very humbling.

T4L Rethink

2012-01-31T15:02:00.001+08:00

T2W = Trading to Wealth. T4L = Trading for a Living.
Approach here until now = identify long term trend, get on board and ride it to conclusion. This worked well with nice long uninterrupted trends in 2007 and 2008 to play with. Supernormal returns were then possible. Ever since, I have kept trying to apply the same methodology. T4L is my stated objective but in the back of my mind, I am always trying to leapfrog into T2W (greedy!).
Because market conditions are not favorable, riding on so called trend positions the past 2-3 years has on many occasions seen me riding profits into eventual losses while keeping to fuzzy exits (giving trends every possible leeway to perform).
What I am absolutely certain of is - I am always able to make money. The problem is with keeping it.
Thus, by way of experiment, I am going to make the following fundamental changes in my trading :=
Set fixed monthly target (and by necessity, a corresponding monthly stop loss). Once achieved, EAR to be AUTOMATICALLY REDUCED to <= 6% of Total Equity. Usual 25% EAR limit is maintained for normal trading. Monthly target is set consistent with a normal salaried job.
So its back to T4L basics. Abandon dreams of T2W, at least for now.
Locking in open profits now take priority over beauty of chart patterns and trends. Once "salary" for the month is earned, that's it. Lock it in and leave the table till next month. The 6% remnant should give me some kind of handle (however small) on the trend still.
This "limit your profits" approach clearly goes against the central tenet of trend trading. But going by my past trading records, I would have many less sleepless nights and a better overall financial performance had I been on it. For sure P&L volatility would be much reduced.
[This modification means that I will rely more on daily charts from now on instead of weekly].
If this limited upside, limited downside approach works, I envisage account growth will be achieved by a slow measured increase in monthly parameters over time. But ... first things first.

Plea to SAF

2012-01-30T15:09:00.001+08:00

For the rest of this season, until it is mathematically impossible to catch Man C, please don't start David de Gea in anymore BPL games. The boy is a danger every time he plays, to his own team.

Trading wise - not going well. Rethinking my entire approach. Keep getting killed by holding out for T2W instead of just regular steady T4L. No positions until I get myself sorted out. Likely I need to downgrade my expectations and abandon T2W altogether.

Guitar Score : Daydream Believer

2012-01-21T21:10:00.001+08:00

Took me 2 long years to finally get hold of this score from an out of print book (Popular Pieces for Guitar Solo Volume 6) by Noriyasu Takeuchi. Posting it here in case any one is interested.

Looked for it in guitar shops all over, order it online, begging people who have played it on Youtube, contacted the publisher, asked around guitarists friends (and their sons), searched 2nd hand bookstores, eBay, all without success. Finally found it last night.

All good things come to him who waits. Listen here to a good rendition.

PS : Still trying to find "Screen Music for Guitar Solo Volume 3" by Mr Takeuchi. Please get in touch if you can help?

Core Book : Bullets Spent

2012-01-20T17:50:00.002+08:00

Managed to cover some short EUR/USD at 1.2633 and 1.2666 last week, but nowhere near enough to prevent feeling pain in this short squeeze.
Also increased cable short near the lows of last week's move = caught by false break again.
Took profit on short USD/CHF ie back to EUR/USD short only, no more EUR/CHF.
Bullets spent so can only watch from sidelines with what I deem to be the right sized position ie no panic induced when regular 200-300 pip squeezes occur (all too often these days).
I do not see a downtrend reversal from the charts. The skill is in correct sizing to keep right position intact through the noise. Not easy. When wrong, any position is too large. When right, no position is large enough.
Dilemma : Recent price action has made it wrong to pyramid when in the money (violating rule 8 = profitable) and right to add to losers (violating rule 9 = profitable). However, must not be sucked into believing this and change long held beliefs. Rule violations and resulting profitability is only a temporary state of affairs. Sooner or later, we will revert to the old and one fine day, adding to losers will blow you up.

Away 15-18Jan12

2012-01-14T16:59:00.002+08:00

Blogging resumes on Thurs 19Jan12.

EUR/CHF : To Fill Previous Vacuum?

2012-01-14T02:33:00.000+08:00

On 06Sep11 when SNB implemented the 1.20 peg, market shot up10 big figures from around 1.10 to above 1.20 almost instantaneously., leaving a price vacuum which we should theoretically come back to at least partially fill.
Since the peg announcement, price has traded within a rectangular band roughly between 1.2120 and 1.2470.
The past few days we have a confirmed downside break of the rectangle. Now trading at 1.2080. Technical downside objective is at 1.1730. If not already short, sell any pullbacks towards 1.2120.
Chart is telling me markets want to challenge the SNB in the days/weeks ahead. Perhaps due to serious downside pressure on the EUR which the SNB alone cannot stem.
Slight care on positioning. No longer correct to diversify book into a general Risk Off pool. This is a EUR-centric move. Shorting US equities, Copper etc will not work.

Corn : Heartbreaking!

2012-01-12T23:38:00.001+08:00

Short a tiny amount of Mar Corn since 21Dec11, at 611.
Finally cut loss at 658.25 earlier this evening in Globex.
Market just opened for today's main session, limit down 6% at 611.50.
WTF !

GBP/USD : Increased Short @ 1.5325

2012-01-12T04:08:00.003+08:00

Suffering on short cable (at 1.5418 average) looks like it might be over. Have been squeezed to as high as 1.5674, fortunately only in small size not sufficient to induce panic abandonment of a good looking chart trade.
Complex SHS top looks like it is breaking down now (again!). In spite of having been tricked into pre-mature entry only recently, I have yet again stuck to my guns and increased my short position at 1.5325 tonight. (Averaging only when in-the-money, not out-of-money).

USD/CHF : Short @ 0.9553

2012-01-12T00:22:00.001+08:00

Risk Off book performing, mostly from cable and EUR/USD, which is good as the 2 account for >70% of core book risk.
Have just sold USD/CHF at 0.9533 (+SFH2 @ 1.0477), in half the short EUR/USD amount, thus turning half of EUR/USD short into EUR/CHF short.
This achieves 2 objectives for me. 1. I want to reduce some of my naked long USD risk. 2. I think EUR/CHF is a good trade from a technical viewpoint as long as we stay below 1.2150. P&L volatility should be reduced from Risk On/Off swings provided the SNB does not spring any big surprise on the peg.
[Weekly USD/CHF looks like in 5th wave of rally so worth a shot on the short side - though not something I would ever want to try on an outright basis]

USD/CAD : Inverse Copper

2012-01-09T14:12:00.000+08:00

Notice USD/CAD picture is very much the inverse of Copper. Both weekly triangles - Copper awaiting downside breakout trade signal, USD/CAD upside.
Breaks = Risk Off trend continuation.
USD/CAD triangle chartpoint this week around 1.0420.
CD IMR = US$3105; HG IMR = US$7763. So CD is more easily scalable for small account trading.

EUR/CHF : Partial Switch from EUR/USD

2012-01-09T12:38:00.000+08:00

Attached chart = EUR/CHF daily. Looks very much like a topping price action. In addition to EUR weakness, one wonder if perhaps "insider trading" suspicions of the EUR/CHF floor's chief architect might perhaps contribute to the chart performing on the downside. Had previously planned to be buying EUR/CHF near to 1.2150 but have now changed my mind and gone the other way instead.
Have today :=
1. taken profit on 25% of short EUR/USD 1.2680.
2. switched 25% of short EUR/USD to short EUR/CHF by selling USD/CHF at 0.9594 (almost high of the day). [Actual trade = Bought SFH2 @ 1.0433].
3. Balance of 50% - still holding (direct short EUR/USD).
Markets tend to always want to challenge central banks' line in the sand. Buy more CHF if we close convincingly below 1.2130. Since day 1, I had thought the SNB move was foolish.

2012 Green Shoots

2012-01-05T20:11:00.001+08:00

Carried forward Risk Off positions from 2011 subjected to squeeze first few sessions of the year. Apart from cable and corn, the trades on board look all right still. Fortunately, position sizing was correct and I was not squeezed out. Early flush-out is good. Yet to do a trade in 2012 but P&L has already swung wildly.
My 2 favorite trading charts re-presented for 1st blog post of 2012 - EUR/USD and Copper.
EUR/USD : By far the biggest position here (short), this is an ongoing SHS top in action. For now, lets shoot for Jun10 low of 1.1875. Signs are good.
Copper : Trading within triangle. Sell break of 333. Square within.
[Corn and cable are bad positions held in tiny quantum; averaging is an option which I might well consider].

Asset Returns in 2011

2011-12-30T23:42:00.001+08:00

Chart produced by Scott Barber.

Broadly speaking .. a Risk Off year.