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Sunday, July 8, 2018


“There is a principle which is a bar against all information, which is proof 
against all argument, and which cannot fail to keep man in everlasting 
ignorance. That principle is condemnation before investigation.” 
- Edmund Spencer
First up today, directly below the 20 Day MA’s for our most historically 
volatile markets on the MT4; you’ll notice, I’ve added USDCNH [Reminbi], as 
this FX pair doesn’t act or trade like your ordinary currency pair … for one 
thing, it’s only quoted in 4 decimal places, so no tenths of a PIP, and secondly 
it’s not directly the Chinese Yuan, but “offshore” Yuan, so it’s a secondary 
derivative of what the “ChiComs” want to see outside mainland China. And 
since it indirectly affects the Hang Seng, I’ve added it so traders can get used 
to it.

Stripping the shell away from the nut, I’m gonna get right to what’s the most 
effective way to make money in the world’s most volatile market, which is the 
Hang Seng stock index in Hong Kong. “Yup, the Hang Seng algorithm is pretty 
good, but after my first full week of trading this market, and attempting to use the 
algorithm to guide my trades, several points need to be made; 1) as a professional 
trader [and by default, those who’d like to become professional traders and leave 
the “Pudding Business” and trade for a living], the signals aren’t good enough for 
me … too damn many moves where I’m left in the dust, 2) while the 
“Kumo Cloud” does a decent job mapping support/resistance, it leaves my 
reward/risk profile lagging badly … How do I know this? … cuz when my 
winners stall and momentum starts to die, I’m left with smaller profits, and when 
the losers turn, look the hell out! … as a result, even acting as quickly as possible, 
I didn’t achieve the kind of reward/risk profile I desire or need, and 3) I’m left 
hanging on too many trades where I don’t see any obvious “buy fuel” on the 
horizon … if I objectively back away from the market and look at the M1 
candlesticks, too many times I’m left with the thought of, “why the hell am I long 
from here? … the place to be long from was 100 lower! … algo, why the hell 
aren’t you getting me long down there”!!!? … and so it goes”.

Cuz I got news for everybody … making 1 or 2 trades a day and making $16 
isn’t gonna cut it, if you want to do this for a living. I know from the original 
“Force Volatility Algorithm”, the PSAR dots and the Heiken Ashi candlesticks 
turning are too slow for even the DAX30 half the time… in the Hang Seng, it 
would be analogous to using pony express versus your laptop to place orders 
and trade! But in addition to that, I need 2 items which are of critical 
importance; 1) I need statistical reliability to “hang my hat on” to trade the 
volumes needed to make “triple digits” percentage returns in these markets, 
without getting taken out back and “whacked”, and 2) I need an honest market, 
where scumbag LP’s don’t “quote you one thing, and then fill you at another! 
… the entirety of U.S. & European markets are controlled by Citibank, JPM, 
GS [Vampire Squid], Barclays, & Deutsche Bank; these are the most dishonest, 
untrustworthy, and thieving crooks in finance. If the market has ANY 
VOLATILITY, and I mean ANY above “dead in the water”, you can expect every 
quote you see on your screen as a complete phantom illusion … those “tight” 
spreads for FX, U.S. indices, & the DAX30 blow up immediately, and your left 
wondering “WTF happened, how can I get filled here … this is bullshit”!

Unfortunately, it’s all to real, and if you attempt to scalp any trade, they are 
gonna screw you tighter than if they used a drill bit … you know, cuz “duh, 
market conditions, duh”!, and please be assured, our HAL9000 checked itself 
with its own rectal exam, and found your fill was perfect! … [“Yes, perfect for 
them, not for you”!]

All last week, my trades in the H33HKD were right on the market … I 
suffered no slippage on anything … this in a market that is 5X greater 
volatility than the DAX30, where all I get is shit fills off the market by 1 ½ to 
2½ points consistently. So, we have a great market in the Hang Seng, and the 
Pacific Rim LP’s treat us fairly … really that’s all anybody can expect or want 
“why the hell can’t the US & European banks do the same”? [Hint: cuz 
they’re thieving scumbags who only know how to do one thing, and that’s steal 
money … they aren’t there to make anybody a “fair” market, and then be 
compensated for that, and the attendant increase in business … they’re there to 
rip your account apart and take whatever won’t get them indicted.]

Ok, so from the second point, I believe we got it covered, but that leaves the all 
important first point of “statistical reliability”, and for that, I simply can’t rely 
on a “Kumo Cloud”, a trendline, or some other support/resistance technical 
indicator that is destined to fail too often for my taste … I got to have 
something better than that, and that takes me to the title of today’s blog post 
“Eyes Wide Open”!, and the quote from the 16th century poet Edmund 
Spencer … cuz when you close your eyes and won’t look at something  cuz you 
think it’s a waste of time, cuz you’re so smart and everything, many times you 
get your eyes forced open faster than you ever thought possible … and nothing 
in the universe will “open your eyes” faster than a volatile market!

By the end of trading on Wednesday, I was not a “happy camper” … missing 
way too many moves in the Hang Seng … don’t need to capture all of ‘em, but 
the algo isn’t capturing any of them either … sure, it’s got some scalps that 
work, but I’m not getting positioned where I clearly need to be positioned 
“hell, that’s the bottom line! … the low hanging fruit is getting picked and 
I’m nowhere to be seen”! And I said to Cousin It & CoS [that would be 
“Chief of Staff”] Milton Waddums, “boys, this shit’s gotta change”!! Time to 
hit the math software big time.

Now, I’m fully aware of the concept of “garbage in - garbage out” … so, the only 
thing I want to know from the market & the math software is twofold, “where is 
the most force of price movement up and down over any 15 minute time period”, 
acutely aware that the questions you ask the math software, will only be 
answered EXACTLY AS PRESENTED, nothing more and nothing less. If you 
assume anything, that single assumption or GROUP of assumptions will often 
turn out wrong and lead you totally astray.

And when I got the answer, I had to take 20 minutes and go outside for a walk 
to take it all in and digest it … quite frankly, I don’t wanna believe, but there it 
is, right in front of you … As Groucho Marx once said, “you gonna believe me 
or your lyin’ eyes”? Then came the secondary and tertiary questions on risk, 
risk profile, and profit potential, and as I got the answers back on those, it 
started to come together quite nicely … by Friday, all of us agreed we had the 
correct answers, and it’s why I was sooooooo tired and exhausted, as I posted 
Friday’s blog … mentally folks, I was wiped.

Now, I’m gonna leave the “Hang Seng Force Volatility Algorithm” up on the 
website … don’t get me wrong, it works, just not well enough in real time for 
my needs … I need something better, simpler, with less risk & more profit, and 
unless the Hang Seng market decides to start doing something it’s never done 
before in its history, the new “Hang Seng Explosion Algorithm” will deliver on 
that ideal. Over in the “Download Links” section in the right hand column is 
the very short file explaining, 1) the purpose of the algorithm, 2) the component 
necessary to get trade signals, and 3) implementing the algorithm with very 
simple rules. In short, it works, and works beautifully, with a staggering 95% 
win rate, AND LOW RISK. In short, easy to get on your screen, easy to 
understand, easy to implement … on average about 6 - 7  signals per day over 
time. You just have to make the trades.

So, a lot on our plate today, and over the last 4 or 5 days … time to trade 
volumes and make the kind of money expected! Until tomorrow mi amigos 
… Onward & Upward!!

PAMM Spreadsheet directly below.

Have a great rest of your weekend everybody!!





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