WINNING BY “DEFAULT”

“You lost the second she walked in the door; you never saw it coming, did you?”

The new “Scalper’s Algorithm” having been posted yesterday, it should dawn on readers the overriding premise; using the algorithm you “win” by default. Wait … what? It’s really that simple, cuz in the final analysis, after you read it, think about it, and then come to understand it, all of the trades have as their common thread, lowering risk to the utmost possible [potential loss], while at the same time initiating a position for the highest possible reward [potential profit], in the shortest time possible.

So, the main premise of the “Scalper’s Algorithm” is to avoid risk, cuz if it can do that, all that’s left is profit … we don’t know how much, it could be a PIP or two, or it could be a whole lot more; point is, initially it’s going in our profit direction, and that places us in the enviable position of being “up” on a trade right from the start … now, we are in the “driver’s seat”, and have a whole lot more flexibility than everybody else in the market. “I simply don’t spend my time thinking about where the “big move” is; I spend my time following the algorithm and looking for the “setups” that give me the highest profit with the lowest risk, cuz that is where my advantage lies. All the elements in the manual will allow you to do this, if you can follow them and then implement the trade. Will it always work? Of course not, nothing is 100% in trading, but I like my chances on each and every trade cuz of the very high statistical probability of potential profit built into the position. I make money cuz I focus on risk … I let the actual profit take care of itself”!

Does that mean every turn in the market the algorithm captures? “No, our parameters have to “setup” correctly, so as to give us the highest probability of potential profit in the trade … NEWS FLASH: not all trades are equal, or have the same probability of success. Why take marginal positions when throughout the day we will more than likely get numerous valid signals”? This doesn’t mean, that every trading day I back the “Brinks truck” up to the backdoor to haul away all the money … trading does not produce linear results … slow days [like today] & “doji days can present headaches at times, but the signals will still be there. You have to accept what the market gives you, and not try and “force” your will on it … that you will never do and succeed”.

Bottom line is this: up and until the daily candlesticks in any of the 5 recommended markets starts to look like this directly below, the algorithm will produce consistent, profitable signals.

Here, in this “doji” example of daily candlesticks, is where our greatest “tail risk” lies on the “normal distribution” probability bell curve, simply cuz the 121 & 183 EMA’s will be flat and on top of each other, and M1 signals will result from spikes more often than not; both not conducive to profits. And while the daily candlestick doesn’t have to look exactly like the “picture perfect” doji at the end of the day, all it really takes is for the 121 & 183 EMA’s to be “flat”, and about 2/3 of the time all the signals generated by the M1 will come on sharp spikes that go literally nowhere minutes later; you’ll need the “ones that work” just to pay off the 2/3 that don’t, simply to “breakeven”. “Well hell, if my objective is to breakeven, after a whole bunch of trades are made when the 121 & 183 are flat, then I can do that just by sitting here and doing nothing with zero risk”.

Turning to today’s market … looking over news flows last night, it’s a very, very light reporting schedule today through Wednesday in Cable, and then Thursday sees “Brexit” talks with a presser [could be interesting], and then Friday, the proverbial economic “data dump”, with a whole host of stats being released that should “shake things up” in Cable going into the weekend … looks very much like we might see dull trading until Thursday … not much for the U.S either. Cable below 1.30600 and the market has got some potential, real sell stop problems facing it down to 1.30 and below… be very careful getting long below that level this week, until stops are cleared out … bounces up could be met with some “nasty” selling, if it plays out.

Coming in from Asia early this A.M., very small daily ranges throughout the entire complex, except for USDJPY, where President Trump is visiting and commenting all things China, N.Korea, S. Korea, and of course Japanese trade; other than that, it’s a “snooze-fest” … nonetheless, some slight upward slopes to the 121 & 183 to get us long on a couple of trades … neither really went anywhere, directly below the 2 trades from early today.

 I’m in the first trade 5 minutes, and then cable puts in the tiniest M1 I think I’ve ever seen during the European session; this is a giant “red flag” to liquidate, which I did. Second trade is simply the market moving higher, plum very slightly rising over yellow, expanding the day’s range through the old high, and I’m looking for some kind of spike to either 1) fail, or 2) take out the previous week’s high at 1.31330. Sure enough, we get the first, and I liquidate on the spike up.

What I want you to focus on today are 2 very critical components of the algorithm, that did their job perfectly today; 1) it was a slightly “up” morning”, and the 2 moves higher both had mini-blow off spikes up, which if you happened to be long, you had to liquidate, cuz THAT’S WHAT WE DO ON SPIKES IN OUR PROFIT DIRECTION, and 2) when the 121 & 183 EMA’s go flat, “just back away Skippy and come back when there are slopes”, cuz this means more than 2/3 of the M1 signals will come on spikes that go nowhere. [And I know what some of you are thinkin’: “well, I think I’m good enough to see the SHARP retracements coming and get out before they happen”. MY RESPONSE: “hahahaha”.

One other thing; my volumes today were very light. That stems from almost “zero” happening in the Asian session into the European open; these very tiny ranges are “ripe pickings” for reversals, double reversals, and worse, the infamous account killer, the “Flying Wedge of Death” [FWD]. Specifically, in GBPUSD, you really have to be alert to these phenomena when the daily range is under 35 PIPS coming into the European session [it was in the 20’s today] … with normal trade volumes, getting “cut up” early, with little prospects for making it back if things continue, it behooves you to cut your leverage. Don’t worry, things will be “heating up” on the leverage front soon enough … why waste dry gun-powder on “nothing ranges”?

As we approached the last 90 minutes of the European session today, I don’t know whether it was because of the FED Pie Hole speaking, or just general Dollar weakness, that managed to rally pretty much every pair higher … what I do know, is that as Europe closes, with no news to speak of anywhere that I can see, there isn’t any way I get stuck in Cable in the New York afternoon … that is a recipe for disaster, cuz what I know and the algorithm doesn’t, is that time is in short supply and ticking lower, and if you get hit with a loser, you got no way of getting it back today … at this point in the day, I don’t care what the 121 & 183 EMA’s are doing cuz I have no position … I can see already the market is slowing to a crawl, so whatever algo signal you get, I’m saying you got no time and no fuel for any gain of significance … sure, I could be wrong, and sometimes you get surprise moves in the afternoon New York session… 90%+ of the time, you don’t get Mr. Jack Squat. Very tiny profits today … just taking what the market gives us in the European session.

Really a strange day, though, when you consider the entire Asian session and about 80% of the European session don’t do anything … and then boom! … everybody starts hitting the buy button within the last 90 minutes … and now New York? … you’ll be lucky to see a 10 PIP range by the close at 8 P.M. This type of trading activity is rare, but eventually, even the dumbest of moves shows up and manifests itself.

PAMM spreadsheet is back, directly below … starting a new ledger from today on, as I’m now using the Scalper’s Algorithm going forward. Until tomorrow … I’m outta here … Onward & Upward!

Have a great day everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND OPERATIONAL; SEE “PAMM/MAM MONEY PROGRAM” IN “DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND START YOUR JOURNEY FROM WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!