STA Blog

Yesterday Thomas Anthonj of JP Morgan Securities, Ltd. was invited back to tell STA members more about his successful systematic trading method which is based on Elliott Wave theory and Fibonacci applications.  As a foreign exchange strategist for the firm his focus was on currency pairs, with practical current day examples which I’m sure were of great interest to many.

But before turning to his interesting charts, he reminded us of the importance of mastering emotions when trading.  That ‘the market’ does not give one jot about us and whether we make money or lose the lot in one fell swoop.  That we have to overcome always wanting something and the fear of not reaching it.  He pointed us in the direction of Manuel Schoch’s Time Therapy which teaches us how to focus on the positive aspects of our life rather than the difficulties.

He explained how, roughly at the age of two, a toddler begins to get ideas about the self as a separate being which ends up becoming ‘the human character (ego) which is a disturbance of the psychological equilibrium’.  The concern for how we look is something which traders ‘must de-activate because emotion kills success’, and because ‘fast feelings are the quickest way to Hell’s Kitchen.  Ego is a permanent defence mechanism’.  Do look closely at his T-shirt!

On to his charts, mainly weekly candles going back five years or so where he believes that ‘all human activities have three distinctive features – pattern, time, and ratio – all of which observe the Fibonacci summation series’.  Detailed examples were presented of some fairly minor currency pairs like US dollar/Swedish krona, Hungarian forint, Israeli shekel and Malaysian ringgit – to the Korean won against the Japanese yen.

He has three trade concepts, Type I which starts either at the beginning of Elliott Wave 3 or Wave 4, Type II (with a tight stop) to catch Wave 5, and Type III which catches Wave C.

Rounding off with a hilarious video clip of a cut-rate psychotherapist telling his very disturbed patient, ‘stop it, stop it, STOP IT!’  was a lesson to us all.