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Friday, January 19, 2018

TGIF FROM THE FX CLUSTERFARK

“You should have been in FX … now that’s a shitshow!”

I think it would be highly appropriate to start today’s blog off with just one word … “Oy!” Kind of sums up the entire week really, as EURUSD is “anywhere & everywhere” at almost the same time, and regardless your position, go grab something from the fridge and come back to find your up 7 PIPS position is now down 7 PIPS … oh wait, sorry, your stop just got filled and your down -11 … literally 3 seconds later it’s back to where you got in. And today’s warped FX trade in EURUSD can be perfectly summed up in one M1 chart from this morning, directly below.



“Ah yes, nothing says lovin’ like losses in seconds no matter what you do … this isn’t just nuts, it’s insane … and the dirty little secret in this, is that you have no idea if it’s going up 10 – 20 PIPS or down 10 – 20 PIPS in the next 3 M1’s … it’s literally a coin flip, where you risk 15 – 20 PIPS to make 2 – 5 PIPS”.

When I came into today’s trade near the European open, all Asia did was chop with an upward bias [“the Chuckleheads checks haven’t cleared yet, so no rocket rides until next week”.], and Europe took the ball and tried to shove EURUSD through 1.23000 … that got rejected faster than the Mrs. attempt at getting a no-limit credit card.

And while this week has been a complete “shitshow” in terms of trend trading, what with M1 up & down spikes all over the place making any position completely perilous, next week fasten your seatbelts cuz there’s plenty of event risk coming up … in fact, it may be the reason for today’s “chopfest”, first to the upside, and now of course to the downside, and stay tuned 10 minutes and it could change another 3 times. First up is Sunday’s coalition agreement deadline in Germany for Merkel and her CDU party, and the opposition SDP, to form a coalition government; and the “troops” for the SDP vote on Sunday. Since it’s widely expected they will ink an agreement that the troops endorse, that outcome is baked into the EURUSD cake … however, not all is roses in bratwurst land, as rumbling from the SDP troops hint at a possible revolt … I think the odds of this are slim, but they ain’t zero either, and I’d say they are about 10% for a complete revolt. If that happens, Sunday nights trade in EURUSD will be “messy” to the downside.

The other event risk for next week is the Thursday ECB meeting with Super Mario, followed by his presser … depending on where EURUSD is at the moment he starts talking, this has the potential to be a huge market mover. My guess is he will splatter EURUSD bulls to shreds, but if the market senses he’s Ok with higher EURUSD pricing, look out above. It will surely be interesting.

With these two events looming, I’m somewhat surprised both Asia & Europe today, attempted to rally EURUSD for the 8th day in a row … and yea, they got it up to 1.22950, but from there it was a painful lesson for longs, as the scumbag banks lowered the boom quickly & viciously. And this has been the M.O. of the trade all week …  make a new marginal high for the day, and then get crushed immediately … rest some for a few minutes, and then sky rocket up to another high on large M1 spikes …rinse, repeat … “Are we having fun yet”? Hang around the long party a second too long, and oh boy, look out below. And the problem is, you can’t tell me where it stops, cuz EURUSD most definitely needs a correction to the downside … we haven’t really gotten one yet, outside the FED’s “gift” to the very short scumbag LP banks the other day.

So, here we are on a Friday, after a really psychotic week of trading within a 100 PIP range [1.22 – 1.23], and stripping away the bullshit from the off hours, and 2 event risks on the horizon; EURUSD right now, is 45 off the high and about 20 off the low, hanging in the mid to upper 40’s to mid 50’s … as we go forward out of Europe and into the afternoon New York session, there will be tons of “position squaring”, and quite frankly given the nature of the week, I wouldn’t be surprised to see a test of 1.22 on the downside and a retest of 1.2295 on the upside, or both! It’s been a horrible week for weekly volatility, where the intraday volatility has been insane.

Quite frankly, I was expecting more from this week, but we simply didn’t get it from the market; all week long the trade between 1.22300 – 1.22700 has been an epic nightmare, with alternate large spikes up & down within seconds or a couple of minutes … in essence, it’s been a war zone with a shipload of spec casualties along the way. Sure, I’d love to “ride the profit pony” somewhere, if only it would go somewhere … this week it didn’t. You can only do what the market will let you do, and no more, unless of course you sign up for the “risk 20 make 2” scenario guaranteed to produce losses.

As I said in an earlier blog this week, in this hyper-ventilated EURUSD market, the algorithm is almost useless … too be sure, there will be winners, but there will be a ton of losers as well, and if you do one signal, you better be willing to do all of them, cuz you can’t pick which ones will work ahead of time … simply put, the probabilities aren’t there, and it ends up being a coin flip.

Today, all the scumbag banks are doing is waiting for you to do “stupid shit” … they aren’t pressing EURUSD lower, cuz there is probable strong support, but by the same token, they stand there above 1.2250 – 60 with a veritable wall of offers to sell … as we move through the day, who blinks first? More importantly, if you end up getting whacked on some trade, how do you make the loss or losses back? … and if you’re dumb enough to add to losers and this gets whacked, now you really are in a shitshow … “this is where I refuse to go”!

Not getting whacked is a silent payday, versus losing large amounts of money and then making it back … here’s the difference  though; you ain’t gonna bat 100% in your trades “getting it back” over your trading career, and when the second or third batch of losses comes flying in, then what, cuz now your account is in jeopardy of going “buh bye”? “Don’t put yourself in the “stupid shit” class; trade and make money as early as you can, and when up on a position, don’t let it go against you for a loss … you can always get back in. Will you miss some moves? … Yup … Ask me if I care? … opportunity is infinite, capital is finite, and don’t ever forget that.

One trade today, up very near the high of the day, which was simply a stop hunt on my part; made a couple of PIPS, and the PAMM is up just a couple dollars short of 0.1% on the day. Would have liked to see more, but if it isn’t gonna play, then I’m out. Next week should be much better, and hopefully the weekly range becomes much larger … Now that Europe’s closed, I want no part of a clusterfark New York afternoon on a Friday, especially since there’s so much going to be happening next week …  I’m outta here … Onwards & Upwards!!

PAMM spreadsheet directly below.
 



Have a great weekend everybody!

-vegas

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