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Thursday, November 30, 2017

MRS. WATANABE & SCUMBAG LP’S TAKE THE CAKE

“No Mrs. Wantanabe, you can’t break the trade cuz you lost money!”

I feel like I’ve been transported into the "bizarro" world of George Costanza. 

Does every frickin’ day this year [almost] have to exhibit “tail risk”, that in some cases hasn’t been seen in years or decades? Ok, let’s start at the top, and I’ll work my way through this day … another “bizarre” adventure to be sure. I hit the computer screen about 15 minutes prior to the 08:00 open, and what’s my first reaction within 2 seconds? “WTF is this all about? 115 PIP range in GBPCAD in Asia? Seriously? … This is gonna screw things up “bigly & yuge” … only God knows what’s gonna happen, and at this point I’m not sure He even knows”. Cuz here’s what I know: both CAD & GBP are the slowest and least volatile pairs in the Asian session historically … hell, some nights you can’t get a 15 PIP range after 8 hours … now all of a sudden, Mrs. Wantanabe and her “gal pals” have started to trade CAD, GBP, & GBPCAD? “Please Mrs. Wantanabe, go back to gold and Japanese stocks, where for years you’ve gotten “monkey hammered” … people need you there … the last thing I need is for you and your pals to create volatility in Asia for these 3 pairs, cuz when you do, you totally screw things up for the following 12 hours”. And boy, are things screwed up today.

So natch,, seeing this, I know the first minutes will be dull … yea, like the first 440 minutes of the day, where once again [like yesterday] we’re looking at an approximate 45 PIP range at the extremes, where any and all algorithm signals so far have failed due to the extreme lack of price movement.  Directly below the first 4 hours followed by the 8-hour, with commentary.


[click on charts to enlarge]


And, as you can see from the second chart, the infamous “Flying Wedge of Death” [FWD] ever present yet again today … “gee, what could go wrong”? So, with only approximately 35 – 40 minutes to go in the 8 hour session, all hell breaks loose with the 121 & 183 EMA’s flat, and after trying to take out some lows [which failed], it’s off to the races in a “to the moon Alice”. I was hoping to get long on a spike down [20 PIPS+], but the decline down to the 173.130 interim low, still only put the 8-hour range around 50 PIPS … that’s simply not enough of a range to start trying to pick bottoms. Well, from here it’s straight in GBPCAD, up 135 PIPS in an hour and 35 minutes, with the last 50 PIPS in 100 seconds in 10 PIP increments [would have loved to see the fill on 5 million stuff trying to buy on the way up … no, not really!]. The only legit signal all day, is after the explosion to the high and the subsequent selloff, where the EMA’s are flat, and the buy signal shouldn’t be taken … but again, in George Costanza’s world …

But first, let’s step back some, to U.S. data that came out at 8:30 EST; personal income and jobless claims were on the docket … yawn, big deal, cuz everybody knows they aren’t important enough to worry about … unless they are 10 standard deviations off consensus, they won’t move anything. But that doesn’t mean the scumbag LP’s can’t siphon money out of your account if you are in any position in GBPCAD and have a stop either above or below the market.

Right at the 9:30 bell, directly below I was able to be quick enough to capture a screenshot of the bid/offer order box … look at the tick chart to the far left to see the spread, and what they did, was jack up the offer and at the same time “monkey-hammered” the bid … how does 30 bid at 65 sound to you on minor data? Cuz I hope you realize, that by doing this these assclowns have just taken out all buy stops above the last hour high and at the same time have just taken out all the sell stops below the last hour market low … nice work if you can get it. Directly below, first the order box, and then the M1 chart with commentary.




I want everyone to know, and see with your own eyes, the utter LP bullshit I [along with others] have to put up with and deal with so as not to get totally screwed by these thieves, that call themselves legitimate liquidity providers. There’s no such thing … these assholes are only interested in one thing and one thing only; that is, stealing money from customers every single day, without batting an eye, cuz the regulators and brokerage houses are bought off, and basically told to look “the other way”. It’s disgusting, but it won’t stop cuz nobody but us is affected; everybody else in the “food chain” gets to eat at the “customer account” buffet gratis …  even when they get caught [HSBC, Barclays, & Deutsche Bank  anyone?], nobody goes to jail … all they do is pay a meaningless fine, and it’s back to biz as usual.

So here we are at 2 P.M., and for the second day in a row, USDCAD has put in a “double reversal”; this with employment data out tomorrow … I’m trying to believe it, but I’m having a tough time getting my arms around this … it’s tough to get one of these once in 2 or 3 years, and now 2 days in a row? … but in George Constanza’s “bizarro” world, I guess we can expect these now on a regular basis … I’m trying real hard not to go crazy. [Just as a side note, in all my years and decades of trading, once an established range has ben put in, I have never seen a triple reversal during a trading day … never … with the way things are going, expect one next week.]

Of course, all this simply means GBPCAD can jump 20 PIPS+ in seconds; which it has done, and if you’re on the wrong side of things, it can mean a very messy liquidation. This day, like yesterday sees the following:  1) Asia goes nuts over GBP & CAD, which it doesn’t do 99.99% of the time in all trading days, 2) both days have … literally … ZERO trading action the first 7 hours plus in our trading day, and then explode, and 3) both Cable & CAD are exhibiting “double reversals”  and the FWD way, way, way too often; historically, there have been frickin’ years you don’t see this ONCE, and now it’s as if it’s an everyday occurrence … ho hum … I guess this is how markets trade? Again, I’m in George Costanza’s “bizarre” world … somebody shoot me in the head to see if I’m dreaming; if not, that’s OK, cuz I’ll be dead and don’t have to deal with this “bat guano” anymore.

And, as I write, GBPCAD goes “berserk” … natch, why not? … and goes orbital due to “Brexit” news, going up 40 PIPS in less than a second to new highs by less than a PIP [buy stops anyone?] before immediately dropping 30 PIPS in a heartbeat. “I’m sorry … this volatility of going from literally ZERO price movement to “off the charts” in seconds, with bids/offers littered with huge slippage, and any stop filled at the appropriate high/low … this isn’t trading, this is gambling”.  Fact is, whether you’re long or short you WILL GET HURT, and plenty of people are getting obliterated. And, just in case somebody wants too know why I wasn’t long, it’s cuz the 121 & 183 EMA’s were flat, and the algorithm doesn’t take positions when the EMA’s are flat.

I said the other day, that I wanted a market like the “old” Swiss Franc futures from back-in-the-day; so far, GBPCAD is about 10 times more volatile, with the old Swissy never exhibiting this kind of volatility we have seen in the last 3 days. Watching prices go up/down 50+ PIPS in seconds, and then 5 seconds after that it’s 30 PIPS away from the extreme; seeing this multiple times, it isn’t a question of capturing it, it’s a question of “how to avoid being on the other side and seeing your stop get butchered by scumbag LP’s; and that is a very real problem when a market gets like this”.

Quite frankly, I don’t know where this ends … every attempt at selling GBPCAD gets obliterated quickly, and if you’re short, the spikes up taking out your sell stop or you hitting the “market execution” button to liquidate, are ugly as hell as the scumbag LP will absolutely not fill your order fairly; add it all up, and the losses can mount very fast. What I do know from experience, though, is that if this continues much longer, this will be ugly as hell on the way down … I really don’t want to see this, but it is what it is. Tomorrow sees Canadian employment data; if the “Chuckleheads” in Asia bid it higher tonight and then into the report the market is in fact higher, and the news is “Loonie bullish”, GBPCAD will get crushed tomorrow in seconds. Not predictin’, just sayin’.

What we’ve seen this week in GBPCAD, I don’t think we will see again for a very long time … every “tail risk” event with not just low probability, but extremely low probability, has happened simultaneously every single day. I still truly believe GBPCAD is the market to trade with the “Scalper’s Algorithm”, but realize that in the last 10 trading days [excluding today], 8 of those days have been below the 2017 average for the 8-hour range … most significantly lower, and both yesterday and today sees an explosion in price during the last minutes of the 8 hour period, thus saving 10 in a row below normal. The problem, from a trading perspective, with this kind of market scenario, is that the signal generators are flat and can’t respond fast enough [even though they are as fast as I can make them and not have “false positives”] to these types of moves that come in seconds and then disappear just as fast … and then the market “dies” for hours on end and the signal generators go flat again; when prices explode, there’s no way to know at the start whether it’s legit or simply a fake out. What generally makes the crosses great trading instruments, is due to the fact that between 2 markets there should be a “give and take” to prices, thus allowing signals to be generated and profits captured … “except, we’re in George Costanza’s “bizarro” world”.

If I didn’t know better, watching the very large spikes on almost every signal generated by the algorithm, I’d be thinking there are those “gaming” the algorithm to get traders to buy/sell the spike so they can fade it; but I know better … still, we re in George Costanza’s “bizarro” world, so just sayin’.

I really thought today could have been a stellar trading day …that is, until I opened my computer and saw what Mrs. Wantanabe and her “gal pals” did to the least volatile FX pairs on the planet in the Asian session; well, whaddaya gonna do, cuz if you “wing it” with low volatility, it simply becomes a “coin flip” over and over from high to low and then back again multiple times. How many times you gonna do this before you realize it’s stupid?

It’s easy to look at today’s 200 PIP range in GBPCAD and think it was “’easy pickins”; it was anything but, as all the gains after about 15:15 server time, came on fast spikes that quickly got sold off … if you took any of the 3 algorithm signals that came before the big 50 PIP spike, you lost money on each or maybe you were lucky enough to scratch them, but there was no money to be made; one had you buying a large spike that was a sure loser, the second one could have made a few PIPS if you sold the high M1 [unlikely], and the third was a pure 10 PIP loser. Why? Cuz at that point we already have a 150 PIP range and traders fade the spikes … yes, they got it rammed up their “you know what”, but nonetheless the 3 trades didn’t yield anything. So, no trades today, simply cuz there were no signals to buy that weren’t 20 PIPS away from the signal in seconds, and the interim low was to low to buy with only a range of about 50 PIPS. It is what it is, but remember, both yesterday and today we’ve been in George Costanza’s “bizarro” world.

Yea, I’m just as frustrated as anybody else at not seeing an algorithm trade in GBPCAD today, but it doesn’t do me any good to take a series of 10 – 15 PIP losses, and then need a “Hail Mary” to break even … which we got … but it’s not a position you want to be in, just so you can say you broke even. I don’t know if tomorrow sees a reversal in price, as Friday’s aren’t historically large trading range days … if it does happen, most likely we will see it in CAD via the employment report at 8:30 EST … still, a plunge in USDCAD will get bought aggressively by the trade, and that, by default, will goose GBPCAD … I hope we see it, otherwise it could be a very slow day, cuz I don’t think anybody is going to go after Cable tomorrow on the downside … a little profit-taking early at the European open maybe, but after that I doubt it … it too will get bought as well on quick moves lower.

Hopefully tomorrow sees some good algorithm trades; quite frankly, I’m getting pissed off at seeing nothing but less than 5% to 10% probability events happen day-after-day. I realize everything has to happen eventually … that word is “eventually” trading Gods, not every frickin’ day! … Geesh … I’m extremely happy at the algorithm’s theoretical performance … I’m not so happy with large spikes that seem to accompany every damn one of them, cuz those spikes are what we want to see when we liquidate, not at entry; the spikes rob our position of “fuel”, and I’m not the one who wants to be buying/selling “fuel”, when everybody else is in a short-term panic and the scumbag LP’s are handing out slippage like Halloween candy. That scenario doesn’t make for good entries.

I’m still trying to get the PAMM spreadsheet up and going; ever know anybody with as much trouble as I have either with MS Excel or Open Office? Some days I wonder, but I’m gonna try it again tonight … hopefully it will be up for tomorrow’s trades … we’ll see.

Tomorrow is another day [Duh], and I’m looking forward to some good algorithm signals … only wish I could find the transporter to get out of George’s world … good grief, this is like getting 10 #23’s in a row on a roulette wheel [which has happened], but this too shall pass, trust me. As for me, it can’t come soon enough, and believe me, I’m ready for it cuz the algorithm is pure “gold”. Stay patient & disciplined mi amigos; Onward & Upward!!

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”!


Wednesday, November 29, 2017

WE’RE GONNA NEED BIGGER BAND-AIDS

“Dude, was today for real or am I dreamin’?”

You got to go back a very long way to find the last “double reversal, “Flying Wedge of Death” [FWD], with 50+PIP spikes all over the place, and the ranges as large as they were today. Quite frankly folks, the speed at which GBPCAD moves off highs & lows is frightening … checking the “tape”, directly below, first the HR4 from 08:00 – 12:00, and the second, the same M5 covering 08:00 – 16:00.



Please note, off the interim lows around 1.71400, the thievery and shenanigans of the LP’s on full display, as they widen the spread to over 10 PIPS, thus taking out retail spec sell stops by lowering the bid, and at the same time refusing to lower the offer below 1.71510 for those looking to either cover shorts or get long … pure thievery, any way you cut it ,and these F-ing thieves should be in jail somewhere … of course they won’t, cuz they got the brokerage houses & regulators in their hip pocket, as well as the HAL9000 computer systems that tells you “everything is F-ing Awesome Baby!”, before then telling you to STFU and go away. And within seconds … literally … we’re up in the 1.7180’s before you can say, “WTF was that”!!

All told today, again for the umpteenth millionth time I’ve pointed this out, the algorithm performed well … in theory … from a logistical & practical standpoint, however, it continues to see very large spikes on buy/sell signals, thus making it extremely difficult to judge whether to take the signal … problem is, you got no time to make the judgement; literally zero … and then BOOM!, it’s 15+ PIPS higher/lower in a heartbeat. Today saw 2 ‘bloodbath” M1’s, where in seconds price plummeted 50+ PIPS, thus insuring your sell stop got filled at the bottom if you’re long… doesn’t matter if you were up 10 PIPS when it happened; here’s your fill and you lost 40 … deal with it.

I made 3 trades today; two of them the LP deemed it necessary to add some outrageous slippage … the first buy I tried to make around 22 ½ to 23 and got filled at 26, whereupon after the spike, literally within 1 second it’s at 17 ½ and the liquidation saw anther PIP added for “bat guano & giggles” … the second one I tried to buy at 17 ½ to 18 and got filled at 23; again, immediately its 5-7 against me, and throw in another PIP, thanks for playing … the third trade saw no spike on the buy signal, and my fill liquidating was right on the market. All told, after RT commissions, down collectively about $50 … quite frankly, given the day’s double reversal in a large range with FWD, losing fifty bucks is a victory … and if you think I’m kidding, I’m not … today was an extremely dangerous day; even being long most of the day, 2 M1’s alone could have seen you down 100 PIPS+ … and while I’m not making excuses cuz I don’t do that, all we’ve seen from these markets lately is “tail risk”. Since I came back from the hurricanes, and traded GBPJPY, all we saw there was low volatility “tail risk” for 2 weeks straight; now 3 days into GBPCAD,  the first two days were two of the worst of the year, and now today a double reversal with FWD, and crazy ass spikes up/down in size, that nobody can see coming until it’s too late … these are things you don’t normally see with a high probability; yet, here they are day-after-day … yes, it’s frustrating for me, but we aren’t down all that much money; one half-way decent day that has a normal to high probability of occurring, and the Scalper’s Algorithm is in the black; take away the slippage, and today would have been a winner.

What I’m not willing to do is throw away discipline & patience, hoping the market will bail me out with a move in my direction; been there, done that … if the algorithm doesn’t say do it, why would I possibly “fade it” and hope for the best?

What is patently obvious, is that day-to-day, one of the pairs is the clear driver of the cross, and the other kind of “tags along”; so far, after 3 days, it’s been all GBP and very little CAD. Today saw CAD volatility pick up some, but the double reversal in it really messed with the cross. Point is this: I’m dropping my PIP requirements for “special situations” … from now on, if I see in GBPCAD [especially on the downside] a large spike down that is predominantly the result of one of the pairs moving violently, while the other is doing nothing, I’m giving myself the flexibility to “make the trade” and take advantage of the move. I simply don’t see the need for the PIP requirement, after reviewing market history of spikes in this pair; the upside is a little different, but I’m more doubtful of the effectiveness of fading a large spike up … we’ll see, I’ll take it on a case-by-case basis.

Tomorrow should be a good trading day; I’m looking forward to it, cuz I think the algorithm will perform very well after today. Trust me folks, it’s Onward & Upward!!


Time for the beach … I’m outta here … until tomorrow. PAMM spreadsheet directly below. [I need to re-install my spreadsheet … getting a “corrupted file” error message; I’ll have it up later this evening after dinner.]

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”!



Tuesday, November 28, 2017

HOSTAGE TO DATA; PART “PICK A NUMBER”


“What volatility dying looks & feels like.”

The first 4 hours in GBPCAD a complete joke today; market held hostage by data, no doubt. Directly below, our friend the “Flying Wedge of Death” on the M5.


No range, back & forth, USDCAD not doing much; GBPUSD looking weak after multiple days going higher. Even though the chart is an M5, clearly nothing to do on the M1, as the 121 & 183 EMA’s are flat … maybe a little up/down, but no real slope in either direction. That leads to the 5 & 9 signal generators jumping over each other every few minutes, which is NOT something we want to see.

Inflation data came in a little “hot” for Canada, and I thought that might get things moving in CAD, but no dice … stuck in a tight range, the data didn’t give rise to much reaction in the market. Ok, maybe the interest rate decision at 10:30 EST, followed by the BOC presser at 11:30 EST will get things moving.

We were on tap, after 7 hour and 50 minutes, of having one of the top 10 worst volatility days of 2017, for our 8 HR period 08:00 – 16:00 server time; at approximately 63 PIPS at 10 minutes to 11:00 EST, and the BOC having released their policy initiatives [no change], Cable took a massive dive and that plunged GBPCAD about 50 PIPS in 3 – 4 minutes … and we haven’t even started the BOC presser yet. Well, that was unimpressive, and the focus on CAD provided nothing in terms of price movement of any significance … 100% of the action in the cross belonged to the numerator, namely GBPUSD.

Once the BOC shenanigans ended, a couple of sell signals that really went nowhere; why? With CAD doing nothing, and Cable already having a 135PIP+ range, where is the cross gonna go? It’s got nowhere to go, unless either CAD starts moving, or Cable goes further in the “rabbit hole” and makes further lows? Regardless of the fact the cross only has about a 100 PIP range, I simply look at the numerator & denominator and ask, “what’s the probability Cable goes past a 137 PIP range, and even if it did, how far”? I have often talked about situational awareness in trading, especially the non-dollar crosses … “you can never take anything for granted, cuz they are like chained, dangerous predators; ignore them, and they hurt you”.

Once the 50 PIP plunge out of nowhere happened; nothing much happened after that of any significance; a couple of new marginal lows by a PIP or two, but the “market message” here is, “hey Skippy, there ain’t nothing left … sell at your peril”!

“Well, that escalated quickly didn’t it”? … a massive reversal day in 7 minutes on “Brexit” news, from the lows to new highs, here in the New York afternoon … talk about “cleaning out” the order books … nothing says lovin’ like an approximate 120 PIP move in 6 minutes [and climbing]. Again, I remind readers, don’t worry about profit; learn to evaluate “risk” and how to avoid it. Know where the danger lies, know where the stops are, and understand the importance of not doing “stupid shit”. And in my book, looking for more downside in GBPCAD this afternoon, what with GBPUSD having the largest range since 11/2, and CAD doing zero is “stupid shit” … you simply got nowhere to go on the short side, and plenty of risk “if” it moves higher … and boy did it move higher.

Today brings up in “spades” the need for tight stops, and not letting the market get away from you … if you don’t pay attention, days like today sneak up and whap you up side the head and leave a mark you aren’t gonna like. I’m not saying I saw this coming; all I’m saying is I viewed it from the other side once the BOC meeting was over, and with zero movement from CAD, it was all the “Cable show”, and 2 things stood out like red flags in the breeze; 1) it’s not moving lower, and 2) without CAD movement, where’s this thing gonna go on the short side? I don’t want to be long cuz the 121 & 183 EMA’s are negatively sloping, so the only choice I got is to sit.

Ok, bullish “Brexit” news takes Cable up and cleans out the buy stops and “kills” shorts; and now in one M1, GBPCAD plummets 130 PIPS+, cuz “sources” in the U.K. government say “The Daily Telegraph” is wrong and there is no deal … if you got hurt being short, only to get long at the top and not pay attention to the signals in the algorithm, you get “double bagged” in about 35 minutes with multiple hundred PIP losses … “and if that happened to you, you’re probably sitting somewhere and asking yourself how this can happen … problem is, it happens a whole lot more than people realize … today points out why the algorithm’s primary focus is to “stay out of trouble”; then and only then, can you look to profits. Do it the other way around, and it’s eventually back to the “Pudding Business” after the trader funeral”.

Here’s the bottom line: “you can take all the little short positions, from all day long, and thumb your nose at the algorithm cuz you were making a little profit on the positions; fine, but as I said before, you’re gonna need all of ‘em to cover the ones that “get away from you” and hurt you … and today points this out as best as I can point it out”.

Professional traders used to all have one thing in common; nobody ever wanted to go back to the real word and work for a living. If you want trading as a career, your focus MUST BE ON RISK CONTROL, no matter how much it pains you to either take a small loss OR sit on your hands doing nothing. I’m betting there are a whole lot of people wishing they stayed in bed this morning, after what has transpired here in the New York afternoon … it’s not about how many trades you make, or how smart you think you are … you aren’t … what matters is controlling risk.

80 PIPS off the low, before the first “Brexit news” afternoon buy signal kicks in … no way am I giving the market 80 PIPS to get long … it’s getting late in New York afternoon, and the trade is winding down … time to leave it alone and come back tomorrow. No trades today, simply cuz 1) it was worthless up to 15:50, and 2) no good signals after that. Hell, everything came on news, and when that happens the signal generators can’t change quick enough to matter. If you take a position, you are simply “flying blind” without the proper setup … and this is something I refuse to do. The market will be here tomorrow; you lose 30%+ of your account today, and if you survive the emotional baggage, it could take months to get it back … and for what?

I don’t see anything of significance tomorrow on the news front for either Cable or CAD, but with “Brexit”, who knows … for you Newbie traders out there, let today be a lesson in market mechanics you should never forget. We’ll see what tomorrow brings, and I’m hopeful for good signals, after 2 days of total crap. Onward & Upward!!

Time for the beach … I’m outta here … until tomorrow. PAMM spreadsheet directly below.


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”!


Monday, November 27, 2017

WALKING BLINDFOLDED IN A MINEFIELD

“What could possibly go wrong?”

Do I laugh or do I cry? I mean, you can’t make this bat guano up! If you understand how FX crosses work [viz., the numerator & denominator math], when you see such small ranges over hours, it gives a pretty good picture of just how pathetic the Dollar pairs are doing relative to each other; and right now, we are in “hurry up & wait” mode again in just about every market but spot gold, where once again prices rise so they can fall and wipe out some more retail specs in about 2 seconds via the “fat finger” of sell side manipulation.

I realize it’s early, and the day is only about 4 hours old, but the 121 & 183 EMA’s in GBPCAD so far, look like I-80 in Nebraska; flat and straight. Meanwhile, the 5 & 9 oscillate back & forth and yield nothing … 4 ½ hours into the day, and we are less than a handful of PIPS from where we started … a little up and then a little down … “a little song, a little dance, a little seltzer down your pants” … yea, so far, it’s been that kind of welcome for us in my chosen pair GBPCAD, which is doing its best to make me look like an idiot … “Well, I got news for you; I don’t need your help to look like an idiot … I can do that all by myself … so there”! [Two thumbs up from the Mrs.!]

At least the King with one eye in the “Land of the Blind” has one eye; I feel like markets are flying a jetliner with no instruments, during a thunderstorm in the mountains, and everybody on board is arguing over who gets an aisle seat for more leg room. It’s all so predictable … at some point some Apparatchik Pie Hole [government or central banker], whose mistress needs a shiny new red Mercedes for Christmas, will stroll out and say something that moves all of this in seconds … up, down, who knows? Meanwhile, as the FX world awaits blond mistresses getting their Christmas presents, we can all sit here and drool over ourselves watching “up one tick, down one tick” ad infinitum nauseum, until my eyes glaze over and I think, once again, of sending my resume to the circus. And wouldn’t you know it, just as I write, a 20 PIP spike up in Cable on “vapors” … well, it is getting late in the day in Central Europe [after 4 P.M.], and the Benz specials won’t last all week … just sayin’.

In all seriousness, I thought today would be the least productive trading day of the week; the data barrage starts in earnest tomorrow with inflation numbers of out Canada, and on Friday we get Canada’s version of the NFP report; in between, a lot of data out of Europe and the U.S. that will move things. Sure enough, we started off slow enough, and the first 5 hours saw almost nothing. “Well, that escalated quickly didn’t it”? I’m not that surprised Cable leaped like it did; I’m surprised at the reversal of USDCAD to the upside, after hitting new lows around 1.26800 … with all the data this week, it sure looked and felt like a “position squaring” day in USDCAD … that in turn had me cautious about GBPCAD running away to the upside; 10 of the last 11 days has seen Cable go higher. How long is this stupidity going to last?

True to form, GBPCAD went into action; problem today is once the 121 & 183 EMA’s got going to the upside, all three buy signals came on spikes higher. The first one I took with lower volume, the last two I ignored. That higher buy fill meant on the spike up to a new high I had to liquidate … there’s the spike up I need to liquidate a long position on; there isn’t time to think about “what ifs” in the crosses … I hesitate, and it’s a coin flip as to whether it’s 10 against me within a second. Like I’ve said before, in the crosses, “you snooze you lose, and then you just move on”.

Overall, I’m happy with the fills on both buy and sell liquidation … both right on the market. A couple of things to note in GBPCAD; 1) you must absolutely liquidate long positions on large spikes higher since your position started, and consequently you must also liquidate short positions on large spikes down, 2) if you don’t get any large spikes, but simply a “soft trending” move, that’s what the “Parabolic SAR” [white dots] is for, and it works beautifully getting you out at the extremes when allowed to work, 3) you have to treat each day in this market like its very own “bull” and/or “bear” market … yesterday doesn’t matter … just because it’s up 200 IPS today, doesn’t mean it can’t be down 400 PIPS tomorrow … use the daily & weekly candlestick to gauge where buy/sell stops are and use to your benefit if possible … stops, when hit, can run this puppy farther and faster than you can dream … use limit sells above the market when long, and limit buys below the market when short … when it moves 30, 40, 50+ PIPS in seconds, you won’t have time to click the liquidation button and get a good fill … it will be over and you were to late … it simply doesn’t matter if it goes past your liquidation point, cuz you aren’t going to get the sell at the top, or the buy at the bottom anyway, 4) be very, very careful of using the “special situations” chapter in the Scalper’s Algorithm manual to fade tops and bottoms; GBPCAD is volatile enough as it is, and the only way I would do it is if 2 conditions are met; A) there is no news flow to explain the big move for the day, and B) the day’s range from the European open is at least 150 PIPS … if I don’t get these 2 conditions, I’m not fading the move, no matter the candlestick formation at the top/bottom,  and most importantly 5) do NOT anticipate signal changes to get long/short; if you do, you will get burned … sometimes you will be right, but that isn’t going to be enough to cover the losses when you’re wrong.

As I’m watching GBPCAD today, it is eerily familiar to the “old” Swiss Franc futures traded in the pit; how many times today did I ask myself, “hey, where have I seen this before”? Fact is, the “action” is a carbon copy of the way the Swissy used to trade before it got ruined by the SNB, and turned into a EURO “clone”. Here just shortly after Noon New York, about an 86 PIP range for the 8HR period … market avoided the “tail risk” parameter which is the 75 PIP “line in the sand” … this is the approximate demarcation line, where if the market fails to achieve at least a 75 PIPS [in the 8HR period] range, the probability of the infamous “Flying Wedge of Death” [FWD] or a daily “Doji” becomes a very real probability; above that mark, not so much … and today’s action, where it looked early like “bat guano on a stick “, has turned into a mediocre day, given the data dumps later [starting tomorrow] and the fact that the market at least made a couple of small runs to the upside.

Overall, not nearly as much profit as I would have liked from today’s trade … that’s the bad news; the good news is that the fills were excellent, the market performed admirably given the nature of the week at hand, and the fact [notwithstanding the spikes up] the algorithm performed very well. One final thought to leave you with; if you understand the algorithm, you quickly realize over time that starting the day at 08:00 [server time], your first algorithm signals are the very best performers … once you get past the third or fourth ones, unless there is market moving news, the statistical probability of very nice profits starts to shrink … this ties in with 1) loss of time left in the day, and 2) the inherent nature of markets to correct and make life miserable for those who hang around looking for more. I don’t talk about it much, cuz it lacks relevance in today’s marketplace, but the fact remains, that back in the day in the pits, I wanted to make money on the first moves and then leave the rest of the day for the “jackals” to fight over the up/down scraps … come in the next day, and start all over again like the day before never existed. It’s as good a trading philosophy then as it is now, and GBPCAD is every bit the “old” Swissy reincarnated on the MT4.

As I stated earlier, I’m surprised USDCAD has taken off to the upside, given the data due tomorrow and the rest of the week … didn’t see this coming. Going forward in this pair, I’ll be taking nothing for granted; there’s simply too much here in terms of price movement to ignore … the rest of the week should be a hoot. The future is so bright in this pair, I need sunglasses!


Time for the beach … dog and I are outta here … until tomorrow mi amigos. PAMM spreadsheet directly below. Onward & Upward!!


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”!

Saturday, November 25, 2017

DOUBLE SPECIAL WEEKEND UPDATE: GBPCAD & GBPCHF

“Steadfastly following the data … wherever it takes us!”

Over in the right-hand column under “Download Links”, I have posted the respective Appendices for GBPCAD & GBPCHF to the “Scalper’s Algorithm” (8HR data [08:00 – 16:00 Turnkey server time] & weekly data from 12/31/2011 thru 9/10/2017). However, before I talk a little about each of these FX crosses, first a few words about the data & GBPJPY.

Quite frankly, until I spent a considerable amount of time going over the data, I have had an “uneasy” feeling about GBPJPY; yes, it’s called “The Dragon Trade”, and it can destroy accounts with ease if you get stupid; turns out, my assumptions about this market have been entirely wrong relative to other pairs in the non-correlated FX crosses. Sure, GBPJPY is great when it moves, and part of the problem is that it moves “bigly & yuge” when it moves and leaves traders in “total awe” of the “yuge” moves; now comes the other part of the problem, namely, just when you think the doldrums are over, it goes into a complete shell for weeks on end … in other words, it’s not consistent; one week an 800 PIP range, and the next 4 weeks it’s 170 PIPS per week, and everything comes on spikes out of nowhere, and leading to nowhere … It’s “hurry up & wait”, as week-in, week-out the trade looks to the “Peter Pan” BOJ, or the totally clueless FED for direction, and when it doesn’t get anything, the market “dies” … and then somebody says something “out-of-the-blue” and all hell breaks loose & SHTF … rinse & repeat endlessly … all that is achieved is stops [buy & sell] get butchered by the scumbag LP’s, there is no follow through, and consequently you get burned. And if you think you can pick the week(s) that it’s “active & volatile”, good luck in your new “guru” role, cuz nobody can.

I have stated repeatedly over the weeks & months, that what I want is CONSISTENTCY … I want something that has above average volatility “day-in, day-out”, rain or shine, March or October [or any other month for that matter], and isn’t a “one hit wonder”. “Well, it pains me, but GBPJPY isn’t gonna cut it … not to say there aren’t those who love it, wouldn’t trade anything else, and will trade it to the end, but for me it simply isn’t consistent enough, nor treats traders well via the algorithm when things slow down … it doesn’t; with spikes all over the place it can take your stop out in a heartbeat”. Simply put, I want a market that emulates [in many ways] the “old” Swiss Franc futures from back-in-the-day, from my floor trading days … “now THAT WAS A MARKET”!

Here’s specifically what we have learned in 2017; 1) spot gold [XAUUSD] is a cruel, manipulative joke, no matter the spread or RT commissions; trade it and the stop hunts & consistent outrageous slippage on fills will kill you, 2) the 3 major stock indices [SP500, DOW30, & DAX30] are “dead”; killed by central bank manipulators, they are untradeable without taking huge risks [for very little gain I might add], and 3) most of FX is a correlated, tangled mess, with absolutely no room to maneuver and profit unless you trade the very lightly correlated or non-correlated FX pairs.

I’ve identified seven FX Pairs that I call “The Magnificent Seven”; to be sure, they each have their “moments” of nuttiness, especially on major news that affects each, but in this list of 7 markets, you can find the ones that are right for you. After analyzing all 7 [EURUSD & EURGBP data are partially completed; enough for me to draw some conclusions], it is clear to me there is “one” that has everything I want … on the surface, not the obvious pair, but when you dig into the data and spend some time analyzing the market … then actually trade it [I have in my own account] to see how I’m treated by LP’s … well, the obvious winner in the list of 7 markets is GBPCAD … “nothing else comes close to its consistency for large PIP ranges, and I didn’t even analyze the North American afternoon … if I had, the ranges would be larger by approximately 10% - 20% [educated guess] … most importantly, as far back as I could go on the M1, the “Scalper’s Algorithm” works very well with this pair [in fact it’s excellent], for the most part due to the fact there aren’t nearly as many large spikes on M1 signal changes, and the SAR on long running trades does a great job of liquidating near the top/bottom of a move”.

Now, I grant you, the spread in GBPCAD is a little higher than I would want, coming in around 1.1 – 1.2 PIPS during most of the day [very acceptable given the ranges]; however, when you add it all up, that’s a very small price to pay for 1) 8 HR [remember, not counting afternoons in New York] ranges that have averaged almost 120 PIPS in 2017 so far, 2) approximately 87% of days in 2017 so far have seen 8HR ranges ABOVE 75 PIPS … GBPJPY is at approximately 75%, and GBPCHF is at a whopping approximate 54%, just so you can realize the comparison, and 3) a “relative” absence of the “nutty” spikes that plague GBPJPY, which we see practically every hour of every day non-stop.

Having said all of this, though, there will be “slow days” in GBPCAD, just like every other market … point is, I want to eliminate as many as possible, while at the same time, having a consistently high profit potential with relatively high 8HR ranges; “I get that in GBPCAD, and don’t get it in other markets … the data is clear, and I am more than happy to abide by the data and go there”. Don’t get me wrong, I have no problems with anybody trading any of the 7 markets I’ve identified … for the PAMM, though, this is clearly the best, and has been for a very long time. No reason anything should change going forward!

I do realize however, “different strokes for different folks”; that’s the reason for the other 6 markets, and why I have the data for each. Next weekend, I’ll have all markets finished, as well as a “Summary Volatility Table”, that will show all the comparisons of the data without having to wade hip deep into each Appendix.

GBPCHF is above EURGBP, but below GBPCAD in terms of volatility; however, for those wanting a pure European non-correlated cross, this is an option. Be warned, though, that the history of USDCHF is filled with actions and dates that live in “infamy”; just ask those who were long any cross with CHF in the denominator when January 14, 2015 came along and the SNB [Swiss National Bank] “unexpectedly” ended support for EURCHF @ 1.20. An approximate $36,000 gain or loss within 60 seconds per each 1 lot in volume … just beware of what you are getting into with the Swiss Franc in any denominator of any cross … I don’t think you have to be afraid of it, simply respect it and be situationally aware of what is going on in FX.

Starting this week, I’ll be trading GBPCAD; look for higher volumes as well. In the future, I’ll be monitoring closely these 7 markets, and commenting at various times on each. Quite frankly, if we can’t get the movement [8HR ranges] we want and need out of any of these 7, we can’t get any movement out of anything else either.

What originally started out as the algorithm to trade the GBPUSD non-correlated market, has happily morphed into GBPCAD; for an approximate 6/10th’s of a PIP per trade higher spread, we get an average range that is approximately 60% greater than GBPUSD [approximate 119 PIPS versus 76]. If an extra 43 PIPS per day can’t make up for 6/10th’s of a PIP, and translate into greater daily profits, then something is seriously wrong …and there ain’t nothing wrong here. Throughout my trading career, I’ve never, ever been one to stick around a market and either watch it die, or slow down to the point it’s an exercise in futility … my job has always been to find the “greenest pasture” to graze in, and then enjoy eating all the grass; I’m not about to sit around and wait for any market to “get its act together” and play by my rules … that could take a very long time. As I have stated on many occasions, I’d trade “dirt futures” if the trading conditions were right … I don’t “marry” a market. And, if I see either I was wrong about a market or it changes its fundamental paradigm, I’ll be the first one out the door, cuz the name of this game is to make money … what in doesn’t matter. I’ll be the first to admit, right along with many of my professional peers who sadly won’t, that 2017 has been [so far] a very frustrating year in many, many respects; issues I never dreamed possible I’d have to confront and solve from as little as 5 years ago. But the changes came regardless; I saw, I solved, and here we are.

If the past is any guide in terms of price, for the future, then I feel very comfortable trading GBPPCAD [and secondarily the other 6 pairs]. Through crude oil’s ups and downs, and economic conditions in both Canada & the U.K. pointing to more uncertainty and problems ahead, I can’t foresee ranges significantly growing smaller over time; if anything, they could easily get larger. But hey, who knows … certainly not me, cuz I’m no “analyst”, simply a trader; but this trader knows that if “The Magnificent Seven” can’t outperform, nothing else will either, and that’s why the focus is now on these 7 markets, and now specifically GBPCAD going forward; statistically, and probability wise, it’s our very best market to trade … the data says so, and I have always “abided” by the data, no matter where it has led me … this time is no different. Onward & Upward!!

Have a great rest of your weekend 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”!

Friday, November 24, 2017

FX CALLS IN SICK

“Well, that certainly isn’t any FX pair, now is it?”

There’s pathetic, and then there is downright sad … today should have been cancelled; in the immortal words of Art Cashin of UBS, “today was a waste of a clean shirt and a tank of gas”. I thought there might be a chance for some movement near the European open, but the ranges coming out of Asia were so small and tiny, relative to normal conditions, that anything that might occur could be the start of a reversal, double reversal, or worse the “Flying Wedge of Death” [FWD], and then how do you escape from that crap once the clock starts ticking down? [Hint: you don’t.]

Technically, there’s still some time before Europe closes, but as far as I’m concerned, this day is over … put a fork in it, it’s dead! … volatility 70% lower than normal, and that’s saying something. Range for Europe today in GBPJPY is about 30 PIPS, where the norm sees about 100 PIPS. These are known as “Holiday weeks”, in case you’re wondering, and why traders hit the exit gates early in the week. Why hang around for this?

On Sunday night, I’ll have an update for GBPCAD, with the 8 HR. & weekly data; I think you’ll be surprised … I certainly was, and even today, this pair put in approximately a 100 PIP range. The numbers are terrific, and compare very favorably with GBPJPY, and that is all the more impressive since I’m not tracking the North American afternoon [08:00 – 16:00 server time] … take part of the 16:00 -18:00 afternoon, and GBPCAD would be more volatile than GBPJPY, without the LP games being played in USDJPY via the correlation with XAUUSD [spot gold]. To be sure, every FX pair has its moments, and that goes for GBPCAD, but for the most part, it foregoes the dealer BS and is a pretty smooth trade relative to GBPJPY …simply put, it trends better. No better example than today directly below.


As you can see from the M1, three white arrow buy signals, and the market is trending higher … profits could have been liquidated on either short term weakness in the M1, or using the SAR [white dots]. In any event, a nice trade setup. When was the last time we saw this in GBPJPY, which is turning into a nightmare chopfest?

In addition to GBPCAD, I’m also adding the pair GBPCHF to the mix, giving us “The Magnificent Seven” to trade; there will be Appendices for each of these markets available shortly [next week or two], and starting in 2018, they’ll all be updated quarterly with 8 HR & weekly data, so everybody can stay on top of everything. GBPCHF isn’t quite as consistently volatile as GBPCAD, but it has a history of some extremely wild swings [EURCHF debacle in January 2015, and the GBP debacle on 10/6/2016 to name just two.]. In any event, they are 2 very good non-correlated FX crosses that move. I’ve looked at every other pair in the MT4 mix, and for the foreseeable future, “The Magnificent Seven” will be our focus. I’ll have much more on both pairs Sunday night. Now that this disastrous volatility week is behind us, let’s hope trading conditions improve starting Monday.

Obviously, I didn’t do any trades today … between LP’s bagging fills, and the “herky-jerky” bid/offer changes, any trade today is a guaranteed loser 2 seconds into the fill … nothing to do here except marvel how slow and pathetic both daily & weekly ranges are in these “volatile” crosses … ain’t no volatility here this week! To illustrate how bad it is in GBPJPY, since the start of 2015 [about 300 weeks], there have only been 10 [including this week] weeks where the weekly range is UNDER 200 PIPS … this week marks the third week in a row of sub 200 PIP weeks! And this week, with its 173 PIP range, is the worst week since July 2014 [not counting other Holiday weeks].

Well, I see as I write, that GBPJPY has suddenly made a new high on vapors… wow, now since Europe opened, its got a 50 PIP range [normal is 100 remember] … I guess dealers needed to click off a few stops before they go shopping later today. I hate these kinds of days, cuz it’s nothing but a stop hunt [both sides], and like I’ve said before, you get caught in one of these and you’re toast, cuz there is no way to make it back in thin conditions. Next week sees the start of more normal trading [let’s hope] … I’ll be raising my volumes and if GBPJPY stalls, look for some trades in GBPCAD to pick up the slack; until Sunday night. Onward & Upward! PAMM spreadsheet directly below.


Have a great weekend 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”!



Wednesday, November 22, 2017

WAIT … WHAT?

“Clearly, there was/ is a disturbance in the force”.

Another very sloppy, crap day in GBPJPY, volatilities running severely under the norm; from the European open, how many times to the low, then the high, and back & forth all frickin’ day? Words fail me to describe this kind of action, where it’s nothing but scumbag LP “hit jobs” on fills. “Why yes, I’d like some whine with my cheese”!

Seriously, hitting the liquidate button when the offer is in the 14’s, and getting filled in the 23’s? And that was just the first trade; add another couple of PIPS to the list on trade #2, and while I can take losing about $100, it doesn’t sit well with me when $120 of it was slippage. I’d complain to Turnkey, about this and the fact the LP raised the spread today, but they aren’t going to do anything, and of course the scumbag LP just laughs in your face. So, it is what it is.

Simply an incredibly frustrating day, with the market going nowhere [until Fed minutes, but even then not much], but the bids/offers reflecting a very nervous trade, with traders getting caught numerous times on the wrong side of the equation and that led to some nasty spikes, both up and down. You couldn’t buy it and you couldn’t sell it without getting into trouble; truth be revealed, losing $100 feels like victory … that’s how bad it was.

Tomorrow sees some U.K. GDP numbers in the early A.M., and then as the U.S. morning dawns trading comes to a halt for the Thanksgiving Holiday. Small post tomorrow, if I do anything … otherwise I’ll be here on Friday. I’m outta here … until tomorrow, or Friday. Onward & Upward!! PAMM spreadsheet directly below.


Have a great Thanksgiving 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”!


Tuesday, November 21, 2017

HOLIDAY WEEK TEACHABLE MOMENT

“… though, it doesn’t help much with financial markets!”

Directly below the M5 for GBPJPY today … “look & weep” as the classic “Flying Wedge of Death” [FWD] makes another appearance right before tomorrow’s big U.K. budget and MPC BOE meeting results [4:30 A.M. EST], and of course the Thanksgiving Holiday in the U.S., which will kill trading action on Thursday & Friday in New York.



This is day 7 of trading GBPJPY, and unless something “magical” happens with respect to price, today will mark the 6th out of 7 days where either the 8-hour range [08:00 – 16:00] is 30% - 50% less than normal, or the FWD has been spotted. Today offers a “classic” case of why the algorithm is structured the way it is, and why it is sooooooo easy for traders to get in serious trouble on days like this.

First warning flag up the pole is the daily range coming out of the Asian session; for a cross to have a day’s range in the 20’s [PIPS] is exceedingly small, and as a result of this reversals are easy to effectuate, with double reversals or the FWD definitely in the cards. It all starts innocently enough, with a small rally that runs out of steam about 30 PIPS higher; traders who want to “jump the gun” and buy the dip before the 5 & 9 cross, end up taking successive losses or “triple up” or worse. That all ends with their sell stop getting flushed to the low at 148.63 on the spike down, only to see a rally back over 149.00 within half an hour. “Now, here’s the $64,000 question; how do you make this back if you got whacked”? This is the conundrum of low volatility, and why all the statistics for the 6 markets are included [and will be updated as we move forward into the future]; it is to guide you through periods of high and low volatility, so you have some firm footing underneath your trading actions. If you don’t know what’s “high” or “low”, how do you expect to sidestep action that could potentially hurt you?

Everything in the algorithm is there for a reason, and especially when volatility drops [like now], not only from an intraday perspective, but from a daily & weekly candlestick chart perspective as well, everything collapses on top of each other and all it takes for changes in signals are very minute, often random, price changes. That leads to a significant drop in the statistical probability advantage the algorithm offers … basically everything becomes a “coin flip”! The 121 & 183 EMA’s point towards higher price momentum when prices fall, and point towards lower price momentum when prices rise; the 5 & 9 signal generator gets “gouged” with price spikes a high percentage of the time, and nothing goes anywhere … you’re lucky if you escape with a PIP before the market takes it away.

This, of course, shouldn’t be a surprise to anybody that has read and understands the algorithm manual; no matter your method of trading, you better understand, as my mentor Bert would say, “What’s the form of your destruction”?  And, if you somehow don’t think you have at least one … “well Skippy, you better head back to the demo and do some more research, cuz I’m here to tell you “straight up”, that whatever it or they are, they will manifest themselves soon enough and carve you a new donkey, simply cuz you don’t know what they are. How can you solve or sidestep losses if you don’t know what causes them”?

When you understand the math of the non-Dollar crosses [do some numerator and denominator “what ifs” to prove this], you quickly realize that “low volatility” is not a high probability over time for crosses… and sure, like everything else, simply cuz it has to happen eventually in a “bell curve” normal distribution probability environment, there will be times it comes up and rears its head for all the world to see … this is “tail risk”; whatever your method, you got it … understand what it is and how to deal with it, cuz when it comes to trading you most definitely don’t get your cake and get to eat it to.

Problem is for most traders, and especially Newbies to trading, nobody out there [well almost, cuz I talk and write about it] wants to talk about “tail risk”, reward/risk profiles, situational awareness, & scumbag LP’s [to name just a few “unmentionables”] … and then how to use all of them to your advantage when possible. What you end up hearing or reading is, “it’s all roses & sunshine”, and everybody makes millions trading … just send $595 to … yea, you know the rest, and we’ll just sweep the unpleasant shit under the rug for you to find out about after you get whacked, and blame it on “shit happens” in the marketplace and move on … and you sit there, and don’t have a clue about anything except you’re substantially poorer, and then come to the conclusion, “well, the Pudding Business sucks, but this biz is bullshit”. MY RESPONSE: “well Skippy, remember college? Remember all the “genius” classes with the “genius” professors? Then you went out and got a job … how many minutes [no wait … seconds] did it take that first day, for you to realize that college was/IS the biggest scam in the history of the world? A retarded kitten could do your first job in corporate America, and you knew it; yet, you played the “get the degree” game and now here you are. I’m betting it didn’t even take you ‘till lunch time to figure out who to “schmooze” to get promoted, and who to ignore … well, trading is the same, only everybody is invisible and you’re matching wits with others like me, and of course the scumbag LP’s, who spend every second of every day trying to figure out how to screw with your account to their benefit … trading is simple; I never have said it is easy … your biggest problem is the space between your ears, and the delusional reality most people create in their heads about markets and how they should perform … they don’t, and coming to grips with making money in a probabilistic world that operates in “wave functions”, that aren’t at all like a regular paycheck, is most troublesome for a lot of people cuz they can’t wrap their arms around the math … and then, of course, they dwell on the “sizzle of the steak”, not wanting to think about the cut of the meat … well, there comes a day [usually sooner than later], and markets being predatory like nothing earth has ever seen before or since, you get eaten for lunch and it’s all over … back to the “Pudding Business” wondering what happened and why”.

Today, that early “sell stop flush” [to the new low] was a classic “fill you at the bottom” no matter where your stop was placed … orchestrated by dealers and large hedge funds [no doubt about this in my mind] to get themselves out of all the short positions at the bottom from your order, and now “goose” it higher and make you bleed. When it happened, I could hear the cries of anguish all over the world, it was so loud. The only thing that prevented me from getting long on the flush, was the fact the day’s range is so small … it doesn’t even come close to the 120 PIP range necessary from the “special situations” section of the algorithm manual … just because it looks, feels, and smells like a FWD, doesn’t mean it can’t go lower still; you have to respect the probabilities of success on this [low] when the ranges are small and not get caught up in dealer LP bullshit.

Coming into today’s trading, looking at the calendar for the U.K., Japan, and the U.S. [cuz it affects everything], tomorrow’s U.K. MPC [Monetary Policy Meeting], and release of the new year’s budget take center stage … that is a very big “red flag” that Cable action will be “choppy” and mostly position squaring today going into the events … expect some fireworks from one or both. Japan has been relatively “dead” for days now, and while adding some volatility, hasn’t been the driver of the cross these last couple of weeks. So, what else would you expect for today, other than a high probability for a FWD and/or “Doji”?

Late morning New York, and the LP’s and large hedge funds can’t help themselves, they just got to run stops … EXIT QUESTION: “What happens when you hit a new low inside a day with a relatively tight range, and the market refuses to lurch lower within about 100 seconds? Well Skippy, everybody is short and asking, “hey, where are the sell orders?”, and since there aren’t any … whoosh! … it’s up and away within seconds”. As I stated before, in the volatile crosses, you got no time to think … thinking kills. If you were short, your thinking should be, “stops hit off, no selling, I’m gone!” Sadly, there just isn’t time to stop things so you can make up your mind.

And so, on that late morning New York low, the 121 & 183 EMA’s finally turn south; and yet, when the 5 & 9 give the sell signal twice soon after, they both go nowhere or lose a few PIPS. Why? Cuz the range is less than 70 PIPS, and trading action is constricted. So far, in 7 hours, we’ve seen a new high, a new low, almost back to the high, a new low, and now a rally back to the middle … welcome to dealer stop hunts and position squaring ahead of tomorrow’s key events in the U.K.

Quite frankly, about 2 hours into this clusterfark, after the new high, then new low on “vapors”, and a rally back above 149.00, it was evident to me this is a day to leave the hell alone; quite simply cuz if you lose there is almost no way to make it back combined with the distinct possibility of making things worse … keep the powder dry for when it matters, not on POS position squaring days ahead of a major reporting event. It is what it is.

I am in the process of finishing up the 8-hour & weekly data for the other 3 pairs [GBPCAD, EURGBP, & EURUSD]; it won’t be long, and I’ll have all the data for viewing and/or download over in the “Download Links” section of the website. I will say this: in my own account I’ve been trading all 6 pairs, and am most impressed with the signal generation of the algorithm in EURGBP and GBPCAD. And while EURGBP lags a little in terms of overall relative volatility compared to the other crosses, it has 3 things going for it that make a huge difference; 1) signals generated make moves that can be captured without large spikes [although they do occur, make no mistake], 2) PIPS are in GBP, which means they’re worth approximately $1.32 per 10,000 you trade; that’s over 40% higher than PIPS in GBPJPY, and 50% in GBPCAD, and 3) the spread is excellent, coming in around 2/10th’s to 3/10th’s of a PIP most of the time, and often lower than that at 1/10th of a PIP. So, when EURGBP has a 50 PIP range, that’s about equal to GBPCAD having a 100 PIP range, and the cost of doing business is a lot less … there’s more in EURGBP than meets the eye on first glance, and don’t be surprised to see me trade it in the days ahead, especially if GBPJPY continues to sit and waste away in tight ranges.

Late in the day, and maybe things change, but I doubt it … this day is simply a waste until tomorrow morning, when all hell breaks loose at 4:30 A.M. EST. I’m not prejudging anything, but the promise of higher rates, inflation, and robust economic activity for the U.K. is a “pipedream” … it’s gonna be a long time until they see that scenario. Nonetheless, if the trade is short, along with MPC comments on rate hile possibilities, Cable could take off. I dunno, we’ll see … all I want is more volatility, and to see expanded ranges into the norm for this pair.

I’m outta here … until tomorrow. Onward & Upward!! PAMM spreadsheet directly below.


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”!