“Today’s trading brought to you by central banks worldwide!”
First, some accounting; directly below, the 20 day range MA for EURUSD,
EURJPY, & USDJPY.
If anybody has been paying attention lately, and by that I mean since the start
of 2012, and more specifically since the “Swiss Debacle” in January 2015 and
the FED led bailout of the crude oil industry in February 2016, three [3] things
should be self evident; 1) day-to-day risks in the FX markets has skyrocketed,
without any appreciable increase in the reward, 2) market sentiment among
traders in the major FX pairs, is “whipsawing” to extremes like never before,
and 3) intraday volatility in major FX pairs [including crosses] goes from
having tea with Aunt Bea in Mayberry, to wrestling starving alligators in the
swamp, at the flip of a switch! … all brought to us by the cabal of Central
Banker Twits that run the world’s financial system through CNTRL-P
… currently the heavyweights are Spicoli [FED], “Peter Pan” Kuroda [BOJ],
Super Mario [ECB], & Jordan [SNB].
In practically every objective assessment of the current trading environment,
you’d have to say the Central Banker Twits are “winning” … which is not to
say there haven’t been those who’ve tried to fade them … just that, they
quickly run out of money and are no longer playing, the scumbag banks
taking the cash and never looking back. Now, more than at any time in the
history of modern day financial trading, that started roughly in the mid
1970’s, central bank manipulations for “policy purposes”, IN ALL MARKETS,
is the norm and not the exception.
When you “step back from it all”, away from the minutiae of making daily
trades, and look at the bigger picture of FX pairs through the weekly and
monthly candlestick charts, what you most likely see is about 20% “trend”
and 80% nothing but “chop” … “and while they’re implementing policy, they’re
also killing retail & small institutional specs along the way, which is a bonus in
their minds, cuz nothing can be allowed to mushroom into a massive trend and
affect investor psychology” … hey, even central bankers have their limits, and
the important objective is to create as much “chop” as possible in markets, to
1) hurt and destroy as many trading accounts as possible, 2) allow the TBTF
& TBTJ scumbag LP banks to make [read steal] vast amounts of money to
repair and/or improve their balance sheets, and 3) create as much chaos as
possible through PIE HOLE & Apparatchik musings, now almost daily, to
leave the impression of “randomness”, and just the way the ball bounces.
From an historical perspective, USDJPY has been unusually quiet these last
months … volatility [implied on a daily close basis & more so intraday] here
has dropped precipitously versus years and decades past … it had a great run
right after the 2016 elections, but since January 2017, it’s my impression
“Peter Pan” Kuroda has created enough confusion via the BOJ
[Bank of Japan], to make traders back away from the Yen for other markets
… not the least of which are the various “crypto” markets Asian traders have
gotten slaughtered in … in any event, USDJPY has lost its “mojo” for now,
versus other pairs, but remember things are always cyclical when it comes to
sentiment … trust me, there will come a time when USDJPY goes FUBAR and
leaves people in the dust.
After staff [Cousin It & CoS Milton Waddums] and I finalized the “-vegas
EURUSD Algorithm”, about a month ago we decided to run the algorithm
“as is” versus every FX pair on the Turnkey MT4 platform that had a “usual”
[meaning of course, non news pending] spread of 1 PIP OR LESS … we
divided up the pairs, and set about in our spare time analyzing results. Our
objective here was simple; 1) identify any FX pairs that had equal to or better
profit results than EURUSD, and 2) identify pairs that had better reward/risk
profiles, while maintaining reasonable norms of volatility. We’ve got EURJPY,
that we have now, but last week we all finished and compared results.
There is one other pair, that surprised us and is often overlooked, but shouldn’t
be when and if you think about it … especially in the light of the “logistics” of
the FX marketplace. Let me explain.
Over the years and decades since FX came onto the scene, most notably since
the start of the new century and complete availability of high speed internet,
the “TOP” major pairs, which are EURUSD, USDJPY, & GBPUSD, have all
become “internationalized” … meaning, they are no longer isolated to a
particular 8 hour trading session, meaning Asian, European, or U.S., but have
become “spread out” in terms of volatility; most likely this is due to the growth
and influence of China as a world economic powerhouse, but in any event,
moves come at random in all three [3] sessions, thus making “daily ranges”
somewhat misleading as a guide to intraday volatility … for example, if
EURJPY has a 100 PIP range at 3 A.M. EST, and we finish our US trading
session in FX around 3 PM EST, and the range for the day is 110 PIPS, what
do we really know about what happened? … well, not a helluva lot actually,
except there was a slight bip up to extend the range by a few PIPS and that
was it! … looking back, you see it spiked higher at 2 AM by 60 PIPS on some
“Brexit” rumor mill bullshit, and realize at that point the day was bullshit,
from a trading perspective.
When you take this “internationalized” phenomena, and couple it with PIE
HOLES & Apparatchiks wanting to up the ante in the mistress funds, at the
start of the U.S. “early bird” trading session around 7AM - 8AM EST, it makes
for impossible reward/risk profiles that are unacceptable to anybody but a
“gunslinger” … and what eventually happens to gunslingers? … that’s right,
the “traders graveyard”.
Now, there isn’t anybody reading this that can trade 24/5, unless you want to be
addicted to meth and never sleep or do anything else … some choice, huh?
… so, no matter what you do, you end up playing “whack-a-mole”, if you try
and time which session will have the greater volatility day-to-day. So, we got a
twofold, big & nasty problem; 1) “internationalized” pairs, and 2) coupled with
“bigly & yuge” spikes coming from PIE HOLES & Apparatchiks … and not
getting raped & mauled by either has got to be your major priority.
“Wonderful, how do we do that exactly”?
To be sure, no FX pair can eliminate risk and give reward … we all know that,
and no matter what we do, there is always the risk of “sudden announcements”,
unscheduled on the docket that make there way to headlines on Bloomberg, etc.
Our thought process, then, should be to identify and analyze, 1) non
“internationalized” major FX pairs, 2) deep enough liquidity and volume for any
reasonable trading size, 3) tight spread as low as possible with decent volatility
“IN A GIVEN 8 HOUR TRADING SESSION”! And since I, along with most of
my clients, are in the U.S. [I’m in the Caribbean, which is close enough for
government work], that would ideally mean the U.S. trading session.
And what we discovered is CADJPY, which Milton Waddums has been trading
this last week and loves the results. I traded it some Friday, and I to very much
liked the results.
You get approximately 90+% of the volatility of EURJPY, with statistically
significant LESS RISK, from 7AM - 3PM EST, which fits nicely into the biz
lifestyle of us in North America. The average 8 hour average range for 2018,
from 7AM to 3PM EST, is 55.9 PIPS, and the median for 2018 is 54.1 … taking
a deeper look into the numbers for 2018, so far, shows that approximately 70%
of all days have an 8 hour range > 40 PIPS … what is more important, though,
is that CADJPY shows a FAR SUPERIOR VOLATILITY CONSISTENCY
that other pairs right now are lacking … so while EURJPY goes from the
morgue to “insane on crack” in less than a blink of an eye, CADJPY maintains
a far greater consistency in overall intraday volatility, WHICH MEANS
MORE TRADING SIGNALS … which is the key to making money in markets
… you have to play volatility, and when it goes from “0” to “∞”, and then
back to near death, like EURJPY has been exhibiting, it makes it extremely
difficult to trade … for the most part, this is a problem CADJPY doesn’t
exhibit … now, don’t get me wrong, any market pair can hurt you, and don’t
let steady volatility fool you into thinking it can’t turn into a complete
“shitshow”, cuz it can.
With our analysis complete on the MT4, looking at all FX pairs with spreads
less than 1 PIP, when using the “-vegas EURUSD Algorithm” to generate trade
signals, there are three [3] markets that the algorithm really does well in and
excels; 1) EURUSD, 2) EURJPY, & 3) CADJPY.
As I’ve said before, CoS [Chief of Staff] Milton Waddums is currently working
on spot gold [XAUUSD], and cousin It is looking at some of the other more
popular trading pairs as well … what differs is the analysis for those markets
“personality” and characteristics in the way they trade differently from the
three markets listed above … you can’t take a square peg and jam it into a
round hole and expect good results … in essence, what it all boils down to, is
that different markets have different manipulations by banks, and policy
differences among central banks plays into that.
As for CADJPY, there is far less “scumbaggery” among the scumbag LP banks,
so slippage should be very low to non existent, and the spread is about the same
as it is with EURJPY, right around 0.3 - 0.5 PIPS … my problem with both
EURUSD & EURJPY right now, is all the bullshit associated with 1) European
politics [Italy, Spain, Hungary, Poland, & Greece], and 2) the daily bullshit
“Brexit” stories that never stop and have been running 27 months, with no end
in sight. Every frickin’ day, it’s non stop PIE HOLES & Apparatchiks waxing
eloquent over something that ends up moving either EURUSD and/or EURJPY
violently, with no warning, and then it dies on the vine. One day it’s Italy’s
budget, the next day it’s some “Brexit” rumor, and quite frankly it’s nothing
more than coordinated stop hunts for the various mistress funds … and it’s
happening just about every “Hoover Dam” day.
The big advantages CADJPY has over EURJPY are, 1) the North American
8 hour trading period, from 7AM to 3 PM EST., sees the vast majority of the
day’s range most days, 2) less slippage on fills, 3) less PIE HOLES &
Apparatchiks “blah blah, yada yada” during the 8 hour trading day [to be sure,
you can’t eliminate it entirely, but Canada is pretty good compared to others,
and Kuroda and crew are asleep during this time], 4) EURJPY and EURUSD
aren’t that much more volatile than USDCAD to justify the increase in risk
they both are giving the market right now, and 5) LESS RISK MEANS
HIGHER VOLUMES CAN BE TRADED. So while EURJPY may give you
approximately 10% more of an 8 hour range, how am I at any disadvantage
trading CADJPY with 2X or 3X the volumes of EURJPY, knowing that its
intraday volatility is far more stable and consistent, with better moves that are
“purer” in nature and scope? [Hint: “I’m not”.]
In 2017, USDCAD actually was more volatile than EURUSD … so far in 2018,
EURUSD is slightly more volatile than USDCAD … does that justify the large
spikes we see in EURJPY that have the potential to wreak havoc on an account
versus CADJPY, where there frequency is a lot less? [Notice I didn’t say
absent, cuz that’s not the case … you have to pay attention to Canada
economic numbers and when their BOC members are scheduled to speak
… but right now, outside of NAFTA talks that are being negotiated, there isn’t
much to blitz the market like we’re seeing on a daily basis in EURJPY.]
So, bottom line is this: for the PAMM & C2 advisory signals, my three [3]
markets are EURUSD, EURJPY, & CADJPY … as I said earlier, we’re
finished analyzing all MT4 markets, so these three [3] markets are all I’m
interested in, utilizing the “-vegas EURUSD Algorithm” for trade signals.
When all of this “Brexit” shit is over and done with, and if EURUSD &
EURJPY can maintain a stable volatility, along with decent ranges, I’ll look to
trade them when appropriate. Until then, it makes no sense to overlook
CADJPY, which truth be revealed, is cranking out the algorithm profits. So,
starting tomorrow [Monday], look for CADJPY trades based off the
algorithm.
For newer readers, I’m all about the money, and I’m never been a trader that
gets “stuck” marrying a market cuz everybody thinks that’s the one to trade
… “I’ll trade dirt futures if conditions are right”. Here in the very near future,
I’ll be updating the “Information Tutorial” to reflect these changes … the
website header has already been changed. Starting next Sunday night, I’ll
have included on the list of 20 day range MA’s, both USDCAD & CADJPY.
Onto tomorrow mi amigos! Onward & Upward!!
Have a great rest of your weekend everybody!!
-vegas
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