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Wednesday, February 8, 2017


“Physics ain’t got nothin’ over trading when it comes to problems.”

Albert Einstein called it “spooky action at a distance”; trader’s call it, “statute meet pigeon’; stuff, whether it’s “color” of entangled protons [always perpendicular, and when separated if the angle changes in one the angle changes in the other immediately without “knowledge” passing between the two], or cosmic trading karma, the universe is here to let you know you’re in the trading biz so “get used to it”. In any event, it’s a little spooky when about 5 minutes after I post yesterday’s blog Turnkey’s IT web staff decide it’s a great time to do some website maintenance and take down their website for a few hours along with my links. 

Well, I’m happy to report maintenance is finished and everything is back online, and the link [which is below] does work.

I can relate directly with management when the “computer guys” take control and do “stupid poo poo”; before I came back to Google Blogger [which is always up, always here, and linked to files in the cloud which are always available for you, 100% of the time!], readers/clients remember the problems I sometimes had with the website hosting service Square Space. Some days it worked and some days it didn’t, and when it “didn’t”, the web geeks at SS wondered out loud “what’s the prob man, just a little maintenance is all .. geesh”, when I would send a “less than friendly” email wanting to know what’s going on.

And usually within minutes I would start getting the obligatory fan email wanting to know, A) did I go “belly up” today, B) did you die, C) are you “hanging it up”, D) do I know how “discomforting” it is not to have my website up, or E) all of the above. So, when your name is on it, but you have very little control or input over the process, and they take it down without any notice cuz they think nobody cares and/or totally understands why it’s being done, you end up being like a basketball coach who tells his team with 2 seconds to go in the first half NOT TO FOUL, and then exactly 1 second later 50 feet from the basket somebody fouls and the other team gets 2 free throws. Is it any wonder coaches got no hair and when they’re 50 they look 90? So yea, I sympathize with ‘em a little [but not too much cuz they’re a brokerage house (hehe)].

I sent a reader/client today 4 trading books I wholeheartedly recommend people read; 1) ‘Fooled by Randomness’ – Taleb, 2) ‘The Black Swan’ – Taleb, 3) ‘Tunnel Thru the Air – Gann, and 4) ‘Gann Square of Nine’ – Mikula. The first 2 by Taleb are excellent at giving the “big picture” in trading and lessons in “situational awareness”; Gann’s book is his only novel, and operates on multiple levels of trading and discipline … written in 1940, he predicts WWII and gives you plenty to think about and research; finally, Mikula’s book is a great primer on Gann’s ‘Square of Nine’ and will give you plenty of ideas you can explore with the computer link for the creation of your own ‘Square of Nine’ in seconds directly below.

If any of my readers/clients would like copies of any of these PDF’s, simply email me at and I’ll send them to you ASAP; simply tell me which ones you want [any or all]. You don’t need to be a client, I make them available for everyone to enhance your trading education and broaden your horizons; they’re all a worthwhile read and worth the investment in time to read them. [And no, I’m not gonna sell your email address or flood you with vitamin offers]

Turning to today’s markets … gold continues to stay up near the highs established the last few days … supporting gold is pressure on the Dollar, where sentiment has changed sharply due to falling treasury yields. The “bullion wall” of dealer selling is getting a little shaky, as any selling pressure recently is being met with buying demand. If prices can get above the 1250 – 1260 level, we could see an explosion higher rather quickly. USDJPY [and to some extent GBPUSD] seems to be slowing some in terms of intraday volatility … we aren’t getting the “knee jerk” moves from gold translating over into this market … the correlation trade is unwinding some.

The other thing I wanted to mention about gold, is that it is starting to emulate the steady buying pattern seen in the last great bull market that started in 2008 [about 700] and ended in August – September 2011 [about 1900]; where, it would just go steadily higher with very few breaks day-after-day, week-after-week, and this upward “drift” would absolutely spook trader’s because we all know what gold can do on the downside when it decides to “waterfall” lower in seconds. It’s called the “wall of worry” that bull markets climb.

As a side note, the higher gold climbs, the higher intraday volatility should … key word should … climb as well. However, as seen in the DOW30, intraday volatility there has dropped significantly even though the index is close to 20,000. In the entire universe of trading, there isn’t a better market to trade [especially with the spread & RT commissions we got now] than gold when HVALUES and/or daily ranges get consistently above $20 per OZ. Hope isn’t an investment strategy, however, “here’s for hoping”!

First trade of the day, from the Turnkey live server directly below.

[click charts too enlarge]

Notice, right before the second buy signal, a couple of minutes earlier there was a buy signal also; they’re so close to each other I simply put the second one up. Either way, they both basically yielded the same result. One very important feature of the updated algorithm, is that it is difficult in an up/down trending market to get the requisite 3+ M1’s to cooperate all the while the 3 lines [price vector momentum fields] are trending up/down; this is the attempt to drastically reduce chop and put your trade in a profitable position rather quickly. From there, you hold all the cards; take the scalp profit or make the “free trade” and let the horses run so to speak. There is no “right” answer in real time; hindsight is easy and a fools errand, so don’t fall into the trap of beating yourself up cuz you scalped the trade and 20 seconds later it screams leaving you in the dust. Simply move on to the next opportunity.

Algo lines changed to negative, the second trade directly below.

The market changes short term trend, and the signal now is from the short side; we’re too close too the highs for me to want to “free trade” this, as I’m thinking the probabilities of a big reversal day isn’t showing itself. After this second trade, I’m now up approximately 1 ½ % for the day based on approximate 10X leverage; why trade more when I’ve hit my goal about 2 hours into the day? [Hint: I’m not.] Whatever happens from here, I could care less. [And yes, I see the immediate rally after I liquidated, but it was still a good signal; like I said, too close to the high for the day to hang on. Another thing on this subject while I’m thinking about it; you don’t have to take every signal to be profitable. If you skip some, just be ready to accept the consequences if you weren’t right about it. All you’ve lost is opportunity, and there’s plenty of that in abundance each and every day.]

One more thing about the PAMM/MAM before I exit stage left and go to the beach; I will be archiving the P/L spreadsheet and all PAMM/MAM trades in the cloud for viewing online and/or download; everybody can see the algorithm trades on the charts and also see the math. So, no need to wonder, “hmm, wonder what he did that day?”, cuz it will be available. Beach beckons … I’m outta here … until tomorrow. Oh, and once again, if you want any of those books in Adobe PDF, email me.

Have a great day everybody!



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