MORE ON THE USDJPY TUTORIAL & TRADING

“The King of Asset Classes.”




As we wind down to the Christmas Holiday this Sunday [and New Years the following Sunday], this week is a very good time to focus on trading concepts rather than specific trades; with “Peter Pan” Kuroda out of the way, with last night’s uninspiring BOJ meeting where absolutely nothing happened outside of consensus, trading from here on out to the New Year will most likely be a “chopfest”.


There are 2 things I want to focus attention on today; 1) patience & discipline with the volatility algorithm, and 2) an item from yesterday’s blog post about getting you to “your finish line”.

It’s easy to sit here and pound the table on the virtues of discipline & patience; forget trading for a moment, every adult in the room knows the importance somewhere in their life of maintaining discipline. And just as importantly, making rash decisions or acting impulsively isn’t in your best interests either. I’ve literally seen people agonize over which dishwasher to put in their house; they’ll spend 6 months pouring over ‘Consumer Reports”, driving a total of 200 miles + over several weekends to the various Lowes and Home Depot’s in the burbs, as well as various local appliance stores, looking for the best deal they can possibly squeeze out of somebody, in the hope they can save $50. These same people will open a trading account, and before you can say “WTF!”, they’re out $1,000 and their attitude is one of “meh, it happens.” 

I have known, in my trading career, way too many people that are completely undisciplined and lack patience, in their utter thirst for profit; they can’t sit and wait for the algorithm to give them the signal. And so, I hear things like, “ohh man, it was so close to a buy [sell] signal, I just went ahead and did it anyway”, OR my favorite, “this stuff is going up [down], so why not just buy it [sell it] now?”
 
I initially got involved in trading for the money; and as a result of the money you get the freedom from corporate & government tyranny and can live life on your own terms. I don’t need anybody or any thing to motivate me when it comes to trading, hoping I stay disciplined, focused, and show patience in my trades, because I know that everything I value in life from a physical standpoint comes from trading, and that to continue the lifestyle the Mrs. has become accustomed to [“Work? … honey, that’s a 4 letter bad word … please don’t ever mention that world again, OK? … OMG! You’re scaring me … here, gimme some cash so I can go shopping and calm down.”], I can’t do “stupid shit”.

When I turn my computer screen on for trading each day, I don’t have to figure out anything … zero … zip … nada … zilch. First and foremost, I have the algorithm; I know exactly what to do and when to do it and there is zero guesswork involved. All the “thinking”, all the “what if” scenarios, all of the higher analysis math along with probability theory, all of the market history … it’s all sitting in front of me in a visual display that I simply have to react to and “press the order button”.


Secondly, away from the market action, I have predetermined the amount of money in my account and leverage that I will be using along with my profit goal; I know exactly the volumes I trade, and I pay absolutely no attention to the money … I pay attention to the trade … when the trade tells me via the algorithm it’s time to exit the trade, then I exit it … only after I’m finished for the day and I know there will be no more trades, will I look and see how much I’m up … now it’s time to “book the money” and add it to yesterday’s capital for tomorrow’s starting capital.

Last, but certainly not least, when you withdraw money from your account, make sure you always do 2 things; 1) always see to it your account balance is growing, and 2) take at least 10% of your withdrawal and place it in an emergency “rainy day” fund for potential slow periods during the year where you just might need cash and don’t want to make a withdrawal request on your account. Try and build it up to a level that meets at least 1-2 months of expenses for you; once you do that, simply replace when needed.

PATIENCE … show some … I fully realize everybody reading this would love to have a 6 or 7 digit account balance and be able to trade USDJPY in the millions and be able to book $5 - $20K a day; at that level who’s worried about the price of cheese? And the Mrs.? “Fugetaboutit!, give her some plastic and fund it, and she’s in hog heaven; you might even get her to bake you some cookies [wait … what? … Yea, it’s nice to dream now and then isn’t it?]”

And even though I wrote it yesterday, let me repeat it again today so it becomes “tattooed” on the inside of your eyelids going forward; from yesterday’s blog post:

***

In the past I have done the math before, so let me repeat the result again: “No matter the size of your account ($200 minimum) at the start, if you make on average 3 PIPS per day AND USE CONSTANT LEVERAGE OF 10X, by the end of year 6 EVERYBODY IS A MILLIONAIRE (assuming no withdrawals)! Obviously, the more you start your account (i.e. over $200), the quicker you beat that 6 year time frame to death. So, unless you are 110 already and maybe you figure you don’t have 6 years, for everybody else, even this extremely modest PIP goal gets you to the finish line. So, I don’t wanna here about how 5, 10, or 15 PIPS doesn’t matter; it most certainly does matter, and the sooner you realize it the better. EVERY DAY YOU FINISH WITH PROFITS, YOU ARE DAYS CLOSER TO YOUR GOAL OF“ESCAPING TO SUCCESS”!

***

Ok, so imagine where you’ll be in a very short time period with a steady diet of 20+ PIPS per day when your profit goal is 20 – 40 PIPS? And what will life look like for you when you’re trading Inter-Bank “paper clip chump change” volumes of about $2 million stuff at a whack? That approximate $4K per day IS your million bucks per year. SHOW SOME PATIENCE, FOLLOW THE ALGORITHM, WORK TOWARDS YOUR GOAL, AND IT WILL CHANGE YOU & YOUR FAMILY’S LIVES!

I practically get “tingles” down my leg [“Umm, which one?”] thinking about all of you 21 to 110 “somethings” out there who 1) are over educated [most likely over indoctrinated] and/or under employed, 2) think life sucks, and 3) got a lifestyle that demands champagne but your pocketbook screams beer. Time to do something about it don’tcha think?


As I stated yesterday, in the history of trading, conditions have never, ever been better than they are now for retail specs [you & me], with zero disadvantages. One of my goals heading into 2017 is to provide you every single thing you need to be successful in trading; 1) I got the [almost] perfect place to trade for you with the very best conditions, 2) you have the volatility algorithms you can view online or download from “the cloud” for FREE along with the mq4 file [computer code] that goes into the MT4 trading platform, along with hundreds of charts and spreadsheets proving my premise, 3) complete instructions for Newbies that is “Grandma & Jr. High Kid” tested and approved so you got no problems setting things up, 4) manuals & tutorials for your study, 5) “continuing education” from the blog posts daily during the biz week, and 6) email support from me when you need it. “Do I literally have to come to your house and take you by the hand over to your computer?”

And if all this above is just too much for you cuz maybe you got small business’s you run and/or are involved in other professional ventures that eat up your time, the –vegas PAMM should be ready by the end of Q1 2017 if LMFX keeps to their timetable, with the only cost to you a 17% incentive fee on profits. In other words, I got all the bases covered for you. NONE OF YOU READING THIS SHOULD BE FARTHER THAN 6 YEARS [FROM RIGHT NOW!] FROM A VERY HIGH 6 DIGIT TO 7 DIGIT ACCOUNT BALANCE! Now, if you’re gonna sit there and tell me you don’t have $200 to start this, then my response is you’re trying to find ways not to do this … not to take this seriously … I dunno, maybe you can’t handle the thought of more money in your life … who knows, I’m not a psychiatrist … maybe you think this is all BS, that it can’t be true … Ok, do as I advise and demo it first with play money and see for yourself … “You do realize none of this costs you anything, right?”.

So, if in 6 years you’re still  sitting there surfing the net, trying to figure out how to make ends meet, and wondering how you’re ever going to get, not only the lifestyle, but also the freedom and financial security you want for yourself and your family, THEN IT IS SIMPLY & PURELY YOUR OWN FAULT. PERIOD.

Turning to USDJPY today … Kuroda has run out of ideas … nothing new from the BOJ interest rate decision last night as everything in “Peter Pan” land just got put on hold until next year… got a little short covering to take the market up towards 118, but from almost 4 hours ago USDJPY has a 15 PIP range … nothing to get excited about as it appears markets are in “holiday” mode; therefore, no trades today as I can’t see anything moving that makes it worth while to trade. Until tomorrow …

Have a great day everybody!

-vegas

OPEN A DEMO AND/OR LIVE ACCOUNT [CHOOSE THE “ZERO ACCOUNT”] AT THE LMFX LINK IN THE “DOWNLOAD LINKS” SECTION OF THE WEBSITE TITLED “OPEN TRADING ACCOUNT – DO IT NOW!”

 
 
 

TORTURE: GOLD STYLE

“FUNNY, I FEEL EXACTLY THE SAME WAY ABOUT GOLD!”

The only good thing to say about today is that it’s almost over; other than that, what a waste of time. Just because this game is simple, doesn’t mean it’s easy; I keep saying this to people who seem to have to learn the “hard way” that patience & discipline are the critical keys [next to actually having the algorithm of course] to making money. When the trade isn’t there via the algorithm rules, leave it the hell alone.

I must say, though, with all the news about the troubled condition of one of Europe’s largest trading banks [Germany’s Deutsche Bank], aside from one small pop up in price a week ago Wednesday when the troubles first came to light, gold has not reacted very well at all in terms of price. So, this answers one of the questions I posted last week, which was “will commercial sellers erect the ‘bullion wall’ of sell orders going forward?” I think we got our answer, and with today’s late morning move down below 1320, once again the vaunted 1300 level starts to come into play again.

Perspective can often offer us a glimpse into things that might otherwise not be seen, and for a great many traders, especially those in the Pacific Rim from Japan to Australia, the technical indicator “Ichimoku Kinko Hyo” is very popular in anything related to “Yen” & also the precious metals.

Now, I’m not going to be giving a tutorial here in Ichimoku; if you want to know more about the parameters, history, and it’s uses, all you have to do is “google it” and you will have more info than you need to keep you busy for years. However, having said that, the specific “cloud formation” the indicator creates is pretty damn good on a longer term chart at nailing support and/or resistance.

Directly below are 2 daily candlestick charts in XAUUSD with the Ichimoku indicator with the cloud formation overlay only; I’ve stripped out the other parts of the indicator because I find them less than useless. I have used 9, 26, 52 as the daily parameters for creating the cloud specifically because they are the most widely used parameters among traders. If this is in fact the case, then traders should buy/sell around the cloud and thus support/resistance becomes a self fulfilling prophecy.

Just as a side note, I don’t particularly find this indicator to be reliable for short term trading, like what we do with the gold volatility algorithm; it’s much better with longer term trading, and in fact, when I introduce my intermediate term volatility algorithm [sometime here soon] for crude oil [and by default some other markets to be named later as well], the ichimoku cloud formation will play a role. So, for those of you who want longer term trading buy/sell signals, you’ll get them!

[CLICK TO ENLARGE]

As you can see from the second chart, from yesterday it is only the second time since Nov. 2015 that gold has broken below the bottom of the cloud formation on the daily candlestick chart. So, unless this foray into “bearish territory” only lasts a day or two, you can expect an assault on 1300, and I’m telling you again, if/when it goes it will be ugly as hell if you’re long with a “protective” [hahaha] sell stop below. Anything below 1315, and especially 1310, if the support at 1300 gives way, it 1) won’t be orderly, and 2) your sell stop will get filled at the bottom of the spike down. So, while you “think” you’re risking $3 or so with a stop on a long position, in actuality you’re risking $20+. The upshot here is this: anything below 1315 in the days ahead, and you leave this market alone.

Obviously, I’ll have more on the intermediate term trading volatility algorithm later; for now, I wanted to give you some “perspective” on gold that doesn’t exactly look good at the moment. And I must say, just from a trader viewpoint, I haven’t felt good about being long gold very much this last month or two; I’ll make the algo trades obviously, but since Brexit and the days immediately following it, it very much feels to me like I’m banging my head against the wall going up against commercial dealers, and that’s why I have been pretty quick on the trigger liquidating long positions.

From where I sit right now, though, it’s going to take another Lehman Bros. moment from Europe and/or Japan, or a major sell off in the SP500 to get gold going significantly on the upside; subtract that out of the price equation for whatever reasons, and with yet again the FED on the November/December horizon with potential rate hikes, somebody tell me how gold vaults above the “bullion wall” of commercial sellers starting from the 1340’s all the way to the 1370’s? Don’t get me wrong, I’d love to see it, but even the idiots in the Pacific Rim have stopped buying gold out of the gate each day, and daily ranges have remained very tight with little interest.

All in all, a “messy” trade where you absolutely must follow algorithm rules to make money; I’ll say it again, “patience & discipline are your greatest allies in making ‘escape to success’ a reality”. In other words, don’t do stupid shit [“and yes, I know who you are!”].

And, of course, it’s that time of day again; “Master, is it time? … Yessssssss!!” Got the Vitamin C on ice, the dog is going ballistic with joy, and I got one foot out the door to the beach as I write. What can I say, it’s not easy being me. I’m soooooo outta here … until tomorrow.

Have a great day everybody!

-vegas

OPEN A DEMO AND/OR LIVE ACCOUNT AT THE LMFX LINK IN THE “DOWNLOAD LINKS” SECTION OF THE WEBSITE TITLED “OPEN TRADING ACCOUNT – DO IT NOW!”

PATTERN RECOGNITION & WHY IT MATTERS

KNOWING THE HOW/WHY/WHEN/WHERE TO ACT SO REALITY DOESN’T BITE YOU IN THE ASS!

I’m going to skip today’s action because I’m travelling today to another part of Paradise; I’m posting early today, so I want to highlight a key feature of the algorithm so there is no confusion among any of you. I’ll be back tomorrow after travelling to talk about the day’s action and how it played out vis-à-vis the gold volatility algorithm.

To be sure, no two or more moves are exactly the same, so trading becomes a study in “pattern recognition”. Remember this if nothing else; throughout the history of trading [any market but especially gold], the same collective group behavior among retail traders [that’s you Bunky] has/is/and always will be the same. Over the years/decades/centuries only THE NAMES CHANGE; everything else remains the same.

For you “Newbies” out there, and I know you’re sitting there wondering if you have it in you to do this, the 2 most important qualities you have to have to make consistent money trading gold is 1) discipline, and 2) patience. Both are free and you don’t need to have a PhD. to get them; what you do need is to ask yourself if trading is about “making money” or is trading something your wife wants you to do because it’s cheaper than a babysitter. Seriously, which is it?

Remember, if this was “easy”, everybody including your deadbeat cousin would be doing it; so what makes it “not easy” for Newbies? Easy Peezee; 1) lack of an algorithm that works [you got no excuse; download it now], 2) inability to take a small loss when necessary, and 3) lack of recognizing the proper patterns for a trade when they emerge and then immediately acting upon it.

Directly below is a fairly typical blast down move from 7/14/2016 which I am highlighting. First chart is the HR1 coming into the day; what we know here is that already we have a $25+ daily range and the New York day hasn’t even started yet! So, what are the probabilities this range gets expanded even larger? Short answer; NOT GOOD! History says there is less than a 2% chance it goes past $28.

Ok, so now what I’M LOOKING FOR is some kind of move down that lasts at least 8-10 minutes [and hopefully longer] that culminates in a larger than normal spike down since the inception [or start] of the move in question. When I see it, I’m now looking for the first green M1 that shows up to give me a buy signal; hint, it won’t take long for that to happen, trust me.

Ok, so now let’s move onto the M1 which is directly below with appropriate commentary.

 

These large spikes down, especially after a move down that has been going on at least 8-10 minutes are one of the best short term buy signals you ever get in gold; while not all the time an “exhaustion move”, they are nonetheless very good indicators of bottoms. Oh, and by the way, they are very difficult mentally to get used to buying because the overwhelming sentiment along with traditional indicators suggest continued selling and lower prices.

But, contrary to what you’re feeling in your gut that the market may never rally ever again, there is a very high probability a bottom [short term at least] is close at hand and it’s time to buy; spend some time on a demo account and see what I mean. You’ll be surprised at how fast this stuff can come off of a bottom; and of course, what that means for you is profits! Until tomorrow…

Have a great day everybody!

-vegas

OPEN A DEMO AND/OR LIVE ACCOUNT AT THE LMFX LINK IN THE “DOWNLOAD LINKS” SECTION OF THE WEBSITE TITLED “OPEN TRADING ACCOUNT – DO IT NOW!”

OUR LMFX GOLD TRADING PAMM WILL BE READY AS SOON AS LMFX GETS THROUGH WITH UPGRADES TO ITS PAMM SOFTWARE! WE ARE VERY CLOSE; OPEN YOUR LIVE TRADING ACCOUNT TODAY, FUND IT, AND BE READY TO PARTICIPATE!