“Some things are meant for each other!”
And another couple of things that go together; “the whooooosh syndrome” &
Cable trading, cuz when trading Cable, you never know when the next shoe to
drop is gonna hit you right in the face. In “floor culture”, all it took was one
disgusting look from another trader, who simply was expressing his total
exasperation from a trade or series of trades, to know what the problem was
… he got caught in the “whoooooosh”, and it sometimes really left a mark.
And simply, it goes like this; you stay long or short for what seems like forever,
fighting the move against you and trying to keep your nose above the water line
… finally, you throw the proverbial towel in, and anywhere from 1 second to a
few minutes later it screams in your “ex” profit position … and nowhere does
this manifest more than GBPUSD among the major FX pairs.
Yesterday was a clusterfark from the get go, and I got nobody to blame but
myself … Cable algorithm worked to perfection, wishing only I could say the
same about myself … after reviewing my trades last night, there’s no doubt I
did “stupid shit” by trying to chase the market down … if I had simply done
what I was supposed to, I’d have been backing the Brinks truck up to haul the
money away, and telling the driver I think we’re gonna need two trips to get it
all … and, I wouldn’t be telling the Mrs. it was the dogs fault [“bad dog, bad”!]
… I “effed” up worse than a high school kid on his first big date … worse than
the first day of class and I got a pimple the size of a golf ball on my forehead
… I looked worse than a guy talking to a babe in the mall, and then realizing
my zipper is all the way down … I felt like “Flounder” from “Animal House”
… getting a general idea how badly I screwed up?
So, I can put on my “big girl” panties and own up to it … look into the mirror
and tell myself what a Schmuck I was in FUBAR-ing that one up … Ok, time
to refocus and make sure it’s a “one off” … back on the horse, in the saddle,
time to ride. “I ain’t afraid of the horses”!
But, the secret to “screwing up”, is if two things come out of it that are positive;
1) don’t make a habit of it, and 2) keep the loss as low as possible … this sage
advice I got early and often in my floor trading career. In fact, after sitting
back last night reflecting on my trading “prowess” yesterday, with the dog
laughing hysterically right next to me, it came back to me why I developed the
Cable algorithm in the first place; “which is to avoid massive whiplash on
market direction, and attempt to be on the side of the trade that has the highest
probability of success, cuz as we all know, this stuff can move and create riches or
it can do some real damage … the riches come, the damages can make everything
go “buh bye”, and nobody wants to say hello to the Pudding Business anymore
than the next person”.
Turning to today’s GBPUSD market … “well, that escalated quickly to the
upside out of the 06:00 server time open, didn’t it”? … and of course, it meant
being long, something I’m not real crazy about early in the day, in this market
environment of being down 800 PIPS in 12 trading days … and as I stated in an
earlier blog, trying to sell the highs as it goes up can be very risky business.
Today’s rally produced 8 new highs and then a double top high, so even if you
got the price right the first 8 times, and gave it 5 PIPS of loss, your down 40
PIPS on the 9th trip up … and if you sold it, you needed that break otherwise
you’d have been “toast” … all above the “blue box” zone for being long or short
… even back in the day, I don’t want to be in a position of “prayer” for any
position, cuz at some point the trading Gods ignore your pleas and you find
yourself in big, big trouble.
Directly below, the GBPUSD algorithm M15 chart for today.
FED rate decision out … mostly a nothing burger. Cable so oversold at the
moment, looking like some short covering after the announcement. And once
again, the “wisdom” of the algorithm shows its mettle, cuz it doesn’t call for
being short unless the bottom blue box boundary is violated and the market
stays below that level. Next up for Cable is tomorrow’s U.K. services PMI at
08:30 server time … that, in my opinion, more important than today’s FED
announcement. Anything can still happen, of course, but it looks like another
“doji” type day for Cable, albeit one with a slightly larger range than more
normal “doji” patterns.
Three trades today … PAMM up slightly about half of 0.1%. Not much here
today, and I have no desire to trade after the FED with no time left in the day.
My three long trades today all came early, and it wasn’t one of your typical
“blow the roof off” the top short covering affairs … yes, the first half hour was,
but after that, it was like watching the fattest kid in school climb stairs; it
eventually gets there, but it was tough sledding. And all the while, I’m thinking,
when does the “whooooosh” come, and how much on the downside? Well, we
found out later, and it’s these early rallies, with NO REVERSAL pattern after
almost straight down 800 PIPS, that had me scalping out of long positions every
time they got threatened … simply not willing to hang on without some kind of
retracement to the downside, which we finally got, but being long in that into
the FED announcement is a very tough way to trade and not expecting disaster
on the horizon.
I think the upside could have produced a better range high, if we had started
out and gone lower some before the ramp higher … cuz we opened, went down
a few PIPS, and then blew the lid off … a move down to the 1.35500 - 1.35600
level would have been ideal. These type of small reversals have great power, as
they tell the market that the initial direction has failed, and it’s time to go the
other way. Remember, approximately 64% of the time, GBPUSD makes some
kind of reversal off the first M30, and over these last few days, all we’ve gotten
is straight shots out of the starting gate … a little weird, but not out of the
Tomorrow’s another day, and that report at 08:30 for Cable will most likely set
the direction for the day … we’ll see. I don’t think, though, that even if it beats
expectations, you’ll see Cable take off to the upside … it’s gonna take a while to
undo the chart damage the last week has inflicted on this market, and what I’ll
be looking for from the short side are higher 06:00 - 06:30 opens, that go slightly
higher, and then reverse lower, setting the tone for moves down. Not much we
can do on FED days, they’re somewhat tricky … although we got the rally the
algorithm called for on an upper boundary breach, the action was horrible
… it looked and felt very much like the proverbial “dead cat bounce”, and
staying long as it rolled over wasn’t an option.
Obviously, I would have liked to make more today, but the setup was all wrong
… you don’t want to see early rallies, if you want this stuff to go up, you want to
see the lower price first, and then the reversal. But, anything on the plus side is
better than the FUBAR I laid out and participated in yesterday … on to better
trading … and with that, I’m outta here … until tomorrow mi amigos
… Onward & Upward!!
PAMM spreadsheet is down again, and I have another tech support chat with
Google in about 2 hours … after it gets fixed, I’ll update and post after
Have a great day everybody!
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