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Friday, February 16, 2018

THE “LAB RATS” IN ASIA GET MAULED [AGAIN]!

“An Asian FX trader shares his life!”

“Well, that escalated quickly didn’t it”? Oh, the setup was perfect; 1) most of 
the Pacific Rim on Chinese New Year’s Holiday, 2) trading liquidity thin at 
best with most shops manned by the “C team”, and 3) the rest of the world 
asleep at the switch. A “perfect storm” if you will for some opportunistic 
scumbag LP’s & large hedge funds who want to be short at or near the top, 
to jam EURUSD higher along with the Chuckleheads, taking out client buy 
stops above the old multi-year high … then along comes Europe and ruins 
the party.

This was the 10th day in a row, that the Chuckleheads bid EURUSD higher 
from the open into the Asian session; and like the vast majority of the other 
times in the last 9 days, the “lab rats” in Asia opened a bag of cats and all hell 
broke loose … and as I have said before, “where the hell do they get all the 
money they consistently lose to the Europe & U.S. sessions”? After today's 
action, they may want to rethink this strategy of taking everything in sight 
higher out of the gate.

To be perfectly candid, I’m a little surprised EURUSD got mauled like it did 
today … sure, it was over-bought … so what? … nothing really on the news 
front to account for an approximate 130 PIP move to the downside from the 
European open … and there was nothing “stealthy” about the decline; it took 
off and never looked back with more than a couple of “Thelma & Louise” 
moments facing longs. As I write here in the early NY afternoon, it’s still 
hugging near the lows of the day after repeated attempts to get above 
yesterday’s low … it looks very much to me like some “big money” longs are 
still trapped from higher levels, thus capping any rallies. The decline all the 
more impressive considering the world’s most corrupt and manipulated 
market, the SP500 futures market, is ramping higher yet again on “Plunge 
Protection Team” [PPT] buying.

What a week … nothing from Monday & Tuesday, and then on Wednesday the 
CPI “bloodbath reversal” to the upside, and now 2 days later, the “bloodbath 
reversal” to the downside … as Zero Hedge says, no wonder the trading world 
is confused.

We are still very much in a bull market in EURUSD, so I don’t want to be short 
… in order to make money, your timing has to be absolutely perfect, both in 
entry & then in liquidation … if you're off just a fraction, you’re toast, and it 
makes life extremely difficult, cuz in addition to having to be perfect, you got 
the trend against you, and that can make your day a living hell [see 
Wednesday’s melt up for details]. Today’s melt down offered only one “setup”  
for a decent long trade, but it didn’t work out for very much profit at all … the 
rest of the moves, including the low of the day [so far] offered no good “setups” 
in my book … the patterns I look for, including “The Teacup Handle Turn”, just 
not there today, and once the ball got rolling lower, being long carried with it a 
reward/risk ratio very much against you.

The other day in a blog post, I mentioned retracement “fingerprints” for 
EURUSD; since today was a large down day, I mapped some of the up 
retracements from the interim lows … directly below, 3 examples, in succession 
from earlier today, with commentary.




Now, I need to mention, cuz if I don’t people will go nuts thinking I’ve found 
the “Holy Grail” of trading, that the ‘Square of Nine’ is great at showing what 
happened, but utterly worthless as a predictive power … the reason should be 
obvious; “you can always go out another level, and that could be the retracement 
high. In other words, just because the current retracement is on the 19th minute 
and hitting a high, doesn’t mean it can’t go to 31 rst minute and be higher still 
… or the 40th minute and be still higher … so you can’t trade off of it … the 
algorithm plum/yellow crossover after these minutes is the key, not the numbers 
by themselves”. I point these out to you, so you know the market is “cyclical” in 
nature and not random … I didn’t just pull these numbers out of my donkey, 
they are today’s interim lows to the retracement high … shouldn’t they be  
“random” in scope and nature? … “yea well, guess what, they ain’t”!

Only one trade today … PAMM up fractionally … being long today not the best 
or easiest strategy in a market that very much wants to “Thelma & Louise” any 
long position. 

For the last 2 weeks, “setups” have been completely compromised by the 
assclown Chuckleheads in Asia … every frickin’ day they take EURUSD 
higher and it makes for a difficult European and/or U.S. trading session, for 
the very simple reason that their early buying robs the market of fuel later in 
the day … and that is fuel we could potentially use when we are long and they 
need to scramble to cover short positions … when they are always buying out 
of the gate, it means later on we are on the same team getting out in a bull 
market, AND I DON’T WANT COMPANY! “I swear, if they take this stuff 
higher on Sunday night into Monday’s morning session in Europe, the blood 
vessels in my head are gonna explode”! [Note: the Mrs. has put out a mop and 
pail in the study so I can clean up after myself … “thanks baby, you’re the 
best”!]

So, while I’m disappointed in the number of setups we are getting, not to 
mention the measly profit from today, we are up on the day, and that is all 
that matters on a day like this … really a Slim Pickens kind of day from the 
long side in this bull market. Monday is President’s Day, so the U.S. session 
will be dead to non-existent … trading will die out around Noon New York 
time … most of Asia is celebrating Chinese New Year, but I expect somebody 
will shove EURUSD into the European open and give us a decent session 
… we’ll see … I’m outta here … until Monday mi amigos! 
… Onward & Upward!!

PAMM spreadsheet directly below. 


 -vegas

UPDATE: EURUSD has gotten “monkey hammered” below 1.24000 on sell 
stops that got crucified unmercifully … this is a teachable moment, in that 
never get long or short cuz you think the range can’t grow larger … this is FX, 
“never” or “can’t happen” should not be in your vocabulary.

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND
OPERATIONAL; SEE “PAMM/MAM MONEY PROGRAM” IN
“DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN
FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND
START YOUR JOURNEY FROM WHERE YOU ARE AT TO
“ESCAPE TO SUCCESS”!


















 

Thursday, February 15, 2018

“STRANGE ATTRACTORS” & FX

“A Chaos Theory representation of a “strange attractor” in 2D”.

In dynamic mathematical systems, for example Chaos Theory, represented 
by non-linear differential equations, there exist a set of numerical values 
towards which a system tends to evolve … and here’s the “Twilight Zone” 
part of it … no matter the infinite number of possible initial variable values 
put into the system, the system finds a way to still come to those values 
… these values are known as “strange attractors”. Is not trading a dynamical 
system?

And as we flip from the fractal world of Chaos Theory to trading, what I 
have often viewed as trading “strange attractors”, especially coming out of 
the Asian session into the European and U.S. sessions, are the days high and 
low, and the relationship that has on trading behavior going forward into the 
day, when you know there’s no way the range is going to hold a small PIP 
number. “As such, no matter what technical condition the market is in, or how 
it got there, the market finds its way to either the old high, old low, or both”! 
Somebody tell me … how is this possible given the supposed “random” nature 
of markets every academic Prof tells us “has to be”?

Well, here’s a little hint: 1) markets aren’t random, 2) we can trade at our 
leisure and don’t have to accept all market values for profit or loss, and 3) 
academic Profs couldn’t trade their way out of a wet paper bag, and have no 
clue how markets operate or function outside their controlled “stat labs”. 
“If they could trade, trust me, they wouldn’t be teaching 8 A.M. classes to 20 
year old “skulls full of mush” at State U.”.

Whereas fluid dynamics & solid state dynamics have no emotion, trading 
markets have human interaction, and thus add another variable to the mix 
that makes and creates volatility … something physics lacks. And it’s this 
variable that gets people to panic as markets move toward the old high or the 
old low, “cuz they know they don’t want to get caught in the scumbag LP bank 
stop parade and get a horrible fill that makes their loss more pronounced 
… they don’t want to liquidate, but they do cuz they know the pain of a larger loss 
… and so, there cumulative liquidations, whether institutional or spec doesn’t 
matter … what matters is that their behavior drives the market in one direction 
… and at the end of that dark rainbow, waiting like a cop behind a billboard on 
the highway for speeders, are the large hedge funds and scumbag LP banks 
waiting to take the other side of your stop … these are the trading “strange 
attractors”, and where behavior starts to change and influence price is the 50% 
retracement area of the earlier moves out of Asia”.

And despite all your efforts … despite all of your common technical indicators 
that may suggest oversold or overbought, the market continues its drumbeat 
up/down and leaves you either in the dust or with large losses … and it is the 
 “setup”, which I have been screaming in your collective faces forever, that is 
the proper way to see and react to markets … everything else is condensed 
bullshit.

I will admit, it is very hard to train yourself to liquidate on the spike up if long, 
or liquidate on the spike down if short … your emotions and indicators tell you 
there is more “low hanging” fruit on the tree, and that more money is an easy 
few minutes away … but a funny thing happens on the way to the Porsche 
dealership to pick up your shiny red new car … and that’s called the reversal, 
and it’s painful  when experienced. Remember, “OY” is an element best 
avoided.

Turning to today’s market … good grief, what a bucket of slop this is from 
Europe open to close [8:00 - 16:00 server time] … classic “Flying Wedge of 
Death” [FWD] inside an approximate 35 - 40 PIP range at the extremes, with 
most of the time spent inside 20 PIPS or so between 1.24750 - 1.24950. How 
many bad trips on the yo-yo does it take to ruin a day?

“Is there some kind of law that they passed that I missed? … 9th day in a row 
Asia opens and goes higher into the European open in EURUSD… I mean 
seriously, can you Chuckleheads give the buy side a break for a while and 
discover selling”? … Where does the money come from that they consistently 
lose?

OK, 10 hours into this clusterfark, and it feels like I’m in a bad dream … how 
do I get out of this thing? Considering yesterday saw about a 200 PIP range 
with a double reversal, today sees a 62 PIP range? “Wut”? … I want no part of 
the rest of this New York afternoon; whatever they want to do, they can do it 
without me … good grief what a pitiful trading day of action. And here in the 
last hour, after 16 hours into the day, EURUSD basically goes from near the 
low to near the high straight … another yo-yo swing in the FWD.

Only one trade today … PAMM up a few bucks, but nothing more, so a 
negligible profit, but a profit nonetheless.

And you can add me to the list of people that are confused by yesterday’s 
trading action; let’s see, higher inflation, lower real wages & productivity, 
higher 10 YR. rates, a higher stock market & lower dollar. “Huh”? And that 
probably is more the reason today literally sucks … there are a lot of 
confused traders out there, and after yesterday’s gigantic moves, traders are 
totally unsure where to place trades next. In any event, though, exiting 
today’s action up anything is a complete victory … I’ll take it and exit stage 
left … I’m outta here … we’ll see what tomorrow brings 
 … Onward & Upward!!

PAMM spreadsheet directly below. 

Once again today, upon clearing everything out and closing the trading app, 
I end up with a EURUSD 0.07 lot trade; I have no idea why this is happening, 
and I’ll have a talk tomorrow with IT support at Turnkey. I have treated it 
as a “Trade Adjustment” in the PAMM Spreadsheet … it was $0.17 in our 
favor, but the important point is, why is it happening. Last time it was a 0.05 
lot in GBPUSD, today a 0.07 lot in EURUSD. In any event, I’ll get it figured 
out tomorrow.


 Have a great day everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND
OPERATIONAL; SEE “PAMM/MAM MONEY PROGRAM” IN 
“DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN
FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND 
START YOUR JOURNEY FROM WHERE YOU ARE AT TO 
“ESCAPE TO SUCCESS”!