THE WIDOW MAKER

“WTF! If only I knew ahead of time!”

Long before the age of electronic trading, when there were only “pits” to do any trading biz, and that biz was strictly Dollar pairs, GBPUSD was known on the floor as “the widow maker”. Guys would avoid getting within 50 feet of that pit, and if they did happen to walk by it, they would put there head down, turn their badge over, put their hands in their pockets, and walk briskly away; nobody wanted an “accidental” fill … and while many might think I’m being facetious, I’m not. Every day saw this pair harm somebody, and the moves were eye-watering; it was nothing to see 200 – 400 PIP ranges for the day, with intraday swings that got people back in the “Pudding Business”. People thought the Swissy traders were nuts, but those that traded GBP were clinically insane.

Well, welcome to another day of terror in GBPUSD, thanks to the folks who brought you “Brexit”; if it’s not one thing it’s another, and while Cable foolishness isn’t EURGBP’s fault, it is the denominator and makes for some wild swings … and today has certainly seen its share … wow! Talk about “tail risk” and knowing where the dangers are, this day is a classic case study in “situational awareness”, and the absolute necessity of managing risk … cuz if you didn’t, you got hurt. Oh sure, there was “reward” here today … markets give you that every day; but today’s risk, and the sheer number of times the market spiked [I count 11 large to extreme up spikes and its Noon New York], were enough to wipe most accounts out if they got stubborn or pig-headed and kept selling the Cable rally in EURGBP.

Quite frankly, I’m getting sick and tired of dealing with Pols, central bankers, and other “wizards of smart”, who move markets with their lips … and the ‘event risks” for the rest of the week include both BOE FPC minutes tomorrow, German data later in the week, NFP on Friday, and of course, more “Brexit” bullshit “dribbling and drabbling” out over the course of the next few days as negotiations between the E.U. & the U.K. continue towards a final deal for exit from the E.U. … this isn’t the way markets are supposed to trade, but sadly, in the world of TBTF banks who control trading, the rumor mill simply feeds their bottom line … meaning it isn’t gonna stop anytime soon. And while things got a little “whacky” in EURGBP, they were outright dangerous in every other market cross.

And of course, now that it’s Noon in New York, and Europe is about to close, EURGBP, EURUSD, GBPUSD, and all the crosses have literally “died” across the board … where are the rumors gonna come from this afternoon? … who’s gonna float some bullshit rumor from an Irish 90-Watt radio station claiming the deal is “off” or “on”? Where do any of these markets get their “mojo” for the New York P.M. trade? “How about nowhere … accounts are either happy it’s over, or sad they got whacked … there isn’t anybody going to shove this stuff around this P.M. … all the GBP crosses and GBP itself are exhausted"!

I’m thinkin’ like Dorothy … maybe if I click my heels 3 times, I can escape George Costanza’s “bizarro” world … what do we have to do to escape this monumental “tail risk” we see practically every damn day across the FX spectrum? And now today, EURGBP acts like it’s on steroids, thank you very much Brit Pie Holes … cuz what’s pissing me off about all this, is the fact that these spikes rob our potential positions of “fuel”; they clean stops out, and at a minimum force people to cover … we want them to cover when we’re in the market, not from some market explosion of 10 – 20 PIPS+ that comes like a lightning strike while we’re sitting here … “it’s been nothing but a succession of “WTF was that” the whole morning, and wondering where the next lightning strike will come and from which direction … I got news for you; that isn’t trading, that’s gambling”.

So, coming in this morning and starting the day just before 08:00 server time, all I see is big fat RISK … if Cable gets “frisky”, EURGBP isn’t gonna escape the wrath of a market gone berserk … and guess what? … what we saw today was nuts; if you got caught the wrong way, there was no hope of getting a fair fill on the way out.

My hope is that people finally start to understand what I’m saying about risk … that it demands your total attention all the time. Markets lately have been “widow makers”; pick one, they pretty much all have been insane. I can’t control event risk, but I can sidestep it, and do my best to escape its clutches. Overall, notwithstanding the spikes up/down, I’m happy with the algorithm and how it performed in EURGBP … there weren’t many viable signals, but the 5 & 9 M1 signal generator was on the right side of most of the moves. One trade today, a short position where after the market hit a new low stalled … and you know what that usually means when new highs/lows can’t sustain a move … it’s time to liquidate and cover, and my fill was right on the market offer with no slippage … didn’t make all that much money on the trade, but was very happy with the fills nonetheless.

Plenty of “event risk” the rest of the week, so it doesn’t look like we’ll be leaving “bizarro” world anytime soon … would love to say otherwise, but too many big reports plus “Brexit” BS for that to happen … “I’ll be putting on my glass slippers, though, just in case I need to click my heels three times … hey, it could work”. Onward & Upward!

PAMM spreadsheet directly below, as I finally got it fixed and working. I’m outta here …

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”!