“Meet your new BFF, the EURJPY market!”
Well, how utterly convenient! … USDJPY finally showing a pulse, since the
bloodbath in markets in March and joining EURUSD in what could be the very
beginning of a gigantic dollar collapse I have warned about before on the blog
posts …. and maybe … no DEFINITELY!, that means a pickup in IVIX and ranges
not only in Yen, but also in EURJPY … and quite frankly, given the way EURUSD
can trade on many days, with downright pitiful European session ranges locked
in the “Flying Wedge of Death” [FWD], any kind of welcome movement in
USDJPY means more & better opportunity in EURJPY by comparison
… yesterday & so far today a perfect illustration, as today sees after
approximately 3 - 3 ½ hours of European trading EURJPY with an approximate
60 PIP range, and by comparison EURUSD an approximate 36 PIP range … and
as New York comes into trade, who knows what happens in FX as tomorrow
sees a FED meeting on interest rates … “buckle up Skippy”!
I’ve traded EURJPY since the beginning of online trading some 20+ years ago
… before electronic trading it had no spec interest simply cuz the CME in
Murder, Illinois ony had the dollar dominated majors with no crosses, and at the
start of the century it was the only cross that had a relatively reasonable
bid/offer spread … if memory serves me correctly it was around 4 PIPS … by
2010 it had fallen to approximately 2 ½ PIPS, and in “dribs & drabs” since then
it’s now under 1 PIP, where at COINEXX & Turnkey it’s currently around 0.5 - 0.7
PIPS … in the March slaughter of markets, it was running around 1 ½ - 2 PIPS,
but IVIX was off the charts, even though ranges were generally contained to
around 200 PIPS, with one day at 300+ PIPS … it’s by far the most heavily traded
cross, rivaled only by EURGBP & GBPJPY, so liquidity & volumes are generally
excellent.
I hesitate to trade Yen straight up, cuz when it slows down it goes dead quickly
… by comparison, I don’t see any downside of trading EURJPY rather than
EURUSD … if both Yen & Euro are dead, what’s the difference? … if EURUSD is
active, it’ll be reflected in the cross as well, but the added kicker is the fact that
on most days, Yen moves opposite the other majors, which means their
respective crosses exhibit much greater intraday volatility … the other majors
versus the Yen have too high of bid/offer spread for what the market is giving
you … in other words, you pay for volatility, but 90% of the time you’re
overpaying for the other 10% of the time … with EURJPY, the spread is only
fractionally higher [usually 0.2 PIPS] so it’s not an issue, and we get
approximately 20% - 30%+ more IVIX … the trading algorithm works excellently
in this market, so what’s not to like here?
Make no mistake, on most days, it’s the crosses that drive trading in the major
dollar pairs, as cross flows between countries is more important than whatever
Spicoli is saying or whether or not “risk” is “on or off” … bottom line is simple:
we get plenty more algorithm trade signals in EURJPY than we get in EURUSD,
so if EURJPY “goes dry”, imagine what EURUSD would be like? ...yes, horrible
beyond words! … the key criteria here is of course the bid/offer spread, and
having it at 0.4 - 0.6 PIPS with a 0.2 PIP RT commission, means total cost under
1 PIP … given the IVIX & VIX of this pair, that’s a steal for us and about as good
as you’re gonna get anywhere … “in essence, it’s the DOW30 MINUS the
horseshit of HORRENDOUS SLIPPAGE & ranges that make no sense from the
perspective of risk control” … all it takes to move EURJPY are fractional PIP
moves in either Yen or Euro, so if your trade entry is right, it will “pop” … given
the IVIX, there’s no shortage of “buy fuel” at the proper times, and quite frankly
I don’t give a shit whether gains come from Euro or Yen or both, I simply care
about making money! … “just look at this cross and think “soiled underwear”
futures, and you won't be far off”! … So starting today, I’ll be trading EURJPY
as a proxy for Euro.
I thought yesterday was bad … today shaped up in the first half of the day as
worse for EURUSD, with tomorrow looking like death on a stick in the NYSE
hours, as markets will surely wait for the 2 PM EST FED interest rate decision,
accompanying statement, and of course Spicoli’s presser … and that’s some
2+ hours after Europe closes, so tomorrow has bullshit written all over it … but
then after stocks opened today, all hell broke loose, and the dollar dumped hard
and fast led by the Yen crosses, and while EURUSD melted up, there was very
little if any flow to the trade … as for the low of the day, a complete bullshit led
stop hunt by the scumbag LP banks that saw a “V” shaped bottom with
immediate panic buying … these people should be in jail, but we already know
that.
The trade in EURJPY today was dramatically different! … a little over 5+ hours
into the day and EURJPY already had an approximate 90 PIP range, making a
complete “round tripper” from high to low to back to another high … mostly
thanks to Yen, but it dragged Euro higher in the process as EURJPY shorts
panicked … an amazing 10+ buy signals and the day was only about 60% over
… granted, not everyday is like this, but it isn’t “rare” either … looking at the
daily candlestick, about on a par with normal ranges, with this week’s 20 Day
Range MA coming in at approximately 105.5 PIPS, and the days range so far at
about a little less than 130 PIPS … so, nothing unusual here.
What you have to always keep in mind when trading crosses, is that “it’s the
cross stupid” that counts and NOT the individual components … movements in
Yen will move the cross farther and faster cuz it’s the denominator, while the
numerator Euro moves it a little slower … trade the cross, and don’t worry about
the individual FX pairs … crosses “run”, so it’s important to NOT try and catch
the proverbial “knife from the airplane” or you’ll run out of fingers … and from
the “runs” you’ll get very nice trades to profit from on scalps … much better
than in simply USDJPY or EURUSD, and most importantly, you can utilize lower
trade volumes to achieve your profit goals.
If you think buying rallies is a bad idea in the dollar pairs, I got a news flash for
you … IT’S DEADLY in the crosses, so don’t do it … 99% of the time crosses
“correct” and retrace, so there’s no reason to FOMO a cross … understand this,
or they carry your account out toes up! … remember, PANIC rules FX crosses!
… and the trading algorithm specifically targets “panic” cuz that creates
“buy fuel”, and while others create the up spikes, we liquidate into them for
profit … and with meaningless commissions and a spread of 0.4 - 0.6 PIPS,
what’s not to like here?
Two algorithm trades today, one in EURUSD & one in EURJPY … TURNKEY
PAMM / MAM UP SLIGHTLY LESS THAN 0.1%
What I traded yesterday in EURUSD volume wise, today sees BETTER LATENCY
TIME ON FILLS IN EURJPY, AND NO SLIPPAGE, using far less leverage and
volume than yesterday … took an algorithm buy signal in EURJPY and it was
simply “time to ride the pony” up and liquidate on a spike, and in the process
had a lot less theoretical risk on the trade than I was carrying yesterday … so
like I said, what’s not to like here? … “oh, won’t tomorrow be interesting with
the faculty lounge meeting on interest rates? … should be an interesting night
into the European morning, where New York will snooze ‘till 2 PM EST … more
profit less risk, without the bullshit … I like that, and so should you!
Before Europe closed, I was watching both EURUSD & EURJPY like a hawk
looking for food from 1,000 feet up in the air … and what I wanted to discern
was whether the bullshit “mystery ticks” in EURUSD carried over to EURJPY
and were reflected in that market’s quote box … cuz what pisses me off to no
end, is what takes place most days, and that’s the mystery ticks when you go
to buy or liquidate, and even if you do it correctly, you “click” the offer button
and here comes the ½ - 1 PIP uptick in the offer out of nowhere, and once filled
it goes right back down to where it was microseconds earlier … so when I see
that in EURUSD, does it get reflected in EURJPY, and the answer is most times
NOT! … and the reason is, that EURJPY is its own market with its own flow &
dynamics, and just cuz some scumbag LP bank screwed you for change,
doesn’t mean the EURJPY marked cared enough for the bid/offer to change
with it … and this is a definite positive!
Don’t get me wrong, EURJPY has its own sets of moments, especially when
USDJPY goes berserk … in addition, there are stop hunts that can get quite
messy at key daily / weekly / monthly chart points, and you need to have
“situational awareness” of those points … “but, it frickin’ moves”! … not as bat
shit crazy as the DOW30, so risk can be maintained adequately, unlike the
“Stock Bellies” where nobody has a fucking clue where risk is, either on the
upside or the downside … and with increased IVIX comes MOAR “buy fuel”,
which is what the algorithm needs to be profitable … both yesterday & today in
EURUSD points out the problem with Euro straight up trading, and that is one
day the European session ekes out a 40 PIP range, and the next day [today] it’s
120 PIPS … feast or famine, so where do you tell the difference? … you leave it
alone and it blows up, and you get in and hold on and it bleeds you dry as it
just slips away quietly back to the middle and ends the day … it’s maddening to
be sure, but what solves that if you trade Euro straight up, is that your IVIX in
EURJPY is at least 5X higher, and the “pops” are far superior to anything you
get 99% of the time in EURUSD … compare today to both on the M1’s and you’ll
see the difference!
… until tomorrow mi amigos … Onward & Upward!!
Have a great day everybody!
-vegas
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