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Wednesday, November 2, 2016


“Hmmm, maybe I should just follow the algorithm instead of thinkin’ all the time… what has thinking got me so far?"

Last night, as I’m sure some of you have noticed, I added 2 files to the “Download Links” section of the website [right hand column for you “gifted” Cankles voters]; 1) “Gold Algorithm Exhaustion Charts June Thru Oct 2016”, and 2) “Gold Exhaustion Spreadsheet June – Oct 2016”. All of the exhaustion moves [9 minutes or longer in time] in gold, no matter the time of day are in this file; charts are catalogued by month. You can view any chart online, download any chart, month of charts, or the entire file of 174 exhaustion moves. Charts are labeled in shorthand to make it easy to find what you are looking for to download or view. For example, here is a chart in the AUGUST 2016 sub directory;

DOWN RM=1 1740 START 8_26_16
This was the down move in price that hit the exhaustion lines @ RM=1; the move started from a short term top @ 1740 LMFX server time; the move occurred on August 26, 2016.
The second item is the spreadsheet; here you get the numbers of all of the moves for handy reference, and any exhaustion move RM=2 or above is highlighted in red so you can easily spot bigger moves without hunting too hard.
For many of you, these 2 files are the first “pieces of the puzzle”, if you will, for you to see the power, simplicity, and visual nature of the volatility algorithm and just how easy it is to follow in visual form as the trading day goes by without any need to “do math”. All of the math has been “internalized” and works behind the scenes in the computer code, because when you get right down to it, we’re all like Jethro [below]when it comes to “cipherin’ & trading” at the same time.

“In the end, we’re all like this.”
In the coming days I’ll have the tutorial finished in gold and get it up in the “Download Links”; I intentionally released the charts & spreadsheet before the tutorial because I wanted you to see the absolute power behind the trades with your own eyes. More than likely, tonight I’ll have the October 2016 spreadsheet & charts for the DOW30 linked up as well; it’s every bit as good as gold, but remember it uses a different dynamic and has different rules than gold. DO NOT take the rules for gold and assume they will work for the DOW30; they will not and you will lose money.

Having said that, though, here are the 3 exhaustion moves in the DOW30 yesterday afternoon.

Now, I ask you; can you find for me any other technical indicator that models exhaustion behavior any better than the volatility algorithm?
Again, I release this before the manual & tutorial are finished and posted so you will look at the data and see for yourself the power of the volatility algorithm, before you just hunt for the rules so you can start trading. Remember the following:
If you do this, and start on a demo platform with play money for a while to get familiar with the algorithm and the signals, and can actually see your account balance grow, then when you have convinced yourself it most definitely works, then you can come to the conclusion of my most recent protégé Christina; “Fuck yea it works! Gimme some of this money shit right now!!”
Everybody in life has talents that make them special; I’ve talked about Christina in the past, and she is one smart cookie. Not in the usual sense of “book smart” or “Ivy League” smart, or “hey, I got 3 college degrees so I’m smart!” She is “street smart” and once she digested the algorithm and the “lights went on upstairs”, her instincts and ability to follow the algorithm for profit are every bit as good as mine; some days, she even got slightly better fills than I did.
But here’s the thing; on paper, and if you judged her by some dumb ass resume, you wouldn’t hire her to mow your lawn. So, I don’t wanna hear from anybody, that some how some way, their circumstances in life are such that they have convinced themselves that they just don’t have what it takes to do this. My response to that is simple: “Bullshit.”
I will never forget the first day I showed her the MT4 with all the “gizmos” up and running, and she looked at me and said, “Are you fucking kidding me? This is Chinese; how the fuck am I gonna know all this shit!! Seriously man, are you sure you know what the fuck you’re doing?” Months later she’s a pro.
I put all of this information on the website for release, not to impress or try and make you think I’m some kind of “math whiz trader genius” type [“It’s time to vote boy … a Beggin’s Strip for a ‘yes he is a genius’; I just knew you would come around and see it my way!”]. I put this data “out there” so you can convince yourself it works and back up that claim with data. Some of you can trade without knowing what’s behind the algorithm, but I know most of you better than you know yourself; and that kind of guy/gal needs data and needs proof before they commit money to trading.
In essence, then, you now have 3 pieces [out of 4] to the volatility algorithm puzzle for gold; the only thing missing is the tutorial which will be up for download in a few days. Take the time to go over some of the charts and data and then ask yourself if you think all of this is somehow “just random” in nature and we’re all just “lucky as hell” to be on a winning streak, OR the algorithm absolutely “nails” exhaustion moves and gives us very high probability trades for entry? After 5 months; bull runs, bear runs, “chop city” days & weeks,  and 174 moves [more months to follow as they come and go and will be added to the database for analysis and viewing], the data and evidence from the charts is overwhelming. And I’m asking myself, “Where can an ordinary guy/gal go, who wants what I wanted many years ago, to get stuff like this and get on the right track to success, without laying out a fortune to those whose only purpose is to invade their wallet?”
Of course, the Mrs. thinks I’m the dumbest ass in the world for opening the vault to the public and not asking for a “pound of flesh”; but she is not a trader, she does not know what it is like to start in this business all alone and having no idea where or who to turn to. She could care less about trading; has no interest in it except to tell me, “show me the money bigshot!” And from that, all interest is lost.
Trust me, I’ve walked in all of you “Newbies” shoes, and up and until you get up that “learning curve”, this is as brutal a business as there is in the universe. And the cold brutal truth of the matter is, I do this because of my mentor Bert; his legacy and memory I honor because he didn’t have to do for me what he did, which was spend almost 3 years and thousands of hours teaching me the trading business and got absolutely nothing for it, or wanted from it, except for me to succeed. All of you are beneficiaries of his kindness and love of trading.
Turning to gold today … well, that escalated quickly into the 1290’s didn’t it … round up the usual suspects in Asia … bingo! … here we are in the 1290’s! … hmmm, new high for the day right at the open; not good, as with Asia rallying last night this looks like a “sucker” rally to pull traders in. I’m really not liking this kind of action, and of course today at 2 PM we get the FED decision on interest rates; nobody looking for a hike here, right before the election, but if they did gold will get absolutely “monkey hammered” lower given the recent runup. Make sure you are flat going into this; we trade, we don’t gamble.
More than likely gold will have some “profit taking” [in the immortal words of a talking head at CNBC] at the same time the DOW30 rallies; we’ll see, but it’s time to be “patient beat” 45 minutes into this so far.
Ok, a little SP500 strength was enough to get gold down a little and the first buy signal; the trade directly below.
If I wasn’t excited about being long in the 1280’s, how do you think I’m feeling about the mid 1290’s? Right, and it means on a move up I got a very fast trigger finger. At first, I thought it was going to be a loser trade, but it only went about 30-50 cents against me, not enough to hit my sell stop. On the way up, I’m mentally adjusting my sell stop, and when we got above 1298 my stop went to a bid on my screen of 1298.05; I see that, and I’m liquidating. Being near the top of the move and before it started to go lower, my liquidation fill was only a penny off at 1288.04; very acceptable.
Second trade on an algo buy signal directly below.
Sold this spike up very near the top after it backed off when the SP500 rallied off the low open spike down; like the first trade, I got a hair trigger here.
A little bit higher than a buck profit on this second trade bringing my total to just over $2 for both trades.
A few moments later another buy signal; third time’s the charm, right? Below trade #3.
Now this is what I’m lookin’ for; I’m out on the above average spike higher since the trade began on the first M1 that goes red. Ok, with these 3 trades, I now have about $4.50 in captured profits, and with the stops at 1300 taken out, I’m not looking to get back in this stuff today no matter where it goes. I can honestly tell you, I don’t want to be long up here; we’ve come too far too fast and I’m seriously worried about getting caught in a waterfall with a stop underneath.
A break is coming to buy that will be a damn good trade entry; I just don’t know from where, but I’m fairly certain it will be a lower exhaustion hit when we see it. Could come later today with the Fed, or could come tomorrow … but the action up here is “sloppy higher” … sooner rather than later the dealers & bullion banks are going to go for the “Johnny come lately” longs who have sell stops underneath this most recent climb … until we see that, I’m not going to go back into this stuff, and I don’t care where it goes.
And, we also just had 2 upper RM=1 exhaustion “hits” in the DOW30, which is the reason gold turned around and headed lower; THE DOW30 CHART DIRECTLY BELOW.

Can I get you out at the top from being long any better than this? Still think trading is “random”? Imagine me in a pit with 300 other traders, and I’m the only guy selling this top in size; think anybody notices? You’re damn right they do. “What’s your secret man, I gots to know!!”
Ok, I just closed the laptop for trading; it’s 10:30 AM here in Paradise, and the sun is shining and the beach awaits; the Mrs. is doing what the Mrs. does best which is spend money, the dog is going nuts cuz he sees the laptop get closed and is running around looking for his leash and beach toys. Me? I’m happy as hell I rang the register and now get to do what most of you only wish you could do at 10:30 AM; that’s right, go to the beach for some Vitamin C therapy, take in some sun & waves, watch the dog have fun chasing anybody with food, and realizing this is a great way to live! We’re soooooooo outta here … until tomorrow.
Have a great day everybody!


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