TIRED LONGS VERSUS SCARED TO DEATH SHORTS

 

“Will the last FX Chucklehead turn the lights off when leaving?”

Quite frankly, this isn’t the kind of trading day you want to be around; scumbag LP’s ready to hand out bogus fills via slippage, volumes almost non-existent, no liquidity, second to last day before Christmas, and a market that has very tired long position holders fighting against shorts who are terrified of what can happen the next M1. What can possibly go wrong in this clusterfark?

As it stands while I write, it’s a “tail risk” doji day, with a muted range, and no matter what you choose to do, you’re risking 15 to make 2; and if you happen to get slightly whacked on that first or second trade, you got no hope of making it back. Welcome to Holiday trading.

There was one scenario that could have seen me take a position today; and that would have involved some kind of quick 3 – 8 minute selloff down to the 1.18300’s area on light sell stops … that’s about it. I’m not at all confident of the algorithm when it spends all day in a 20 PIP range and then “breaks out” … “break out to where exactly? There isn’t anybody or anything here, and the only thing you can count on are stops … and when those are over and done with, look out the other way”. And sure enough, looking at every move today, that’s how it basically played out. There just isn’t anything here to play for except NOT losing, and I can do that by sitting on my hands, unless I get what I want, which at the moment seems highly unlikely.

This is the kind of trading day back in “pit days”, where only idiots and those that need to make a rent payment within a couple of days are there trading, all trying to scalp each other for a tick. Only one year in my floor career did I ever stay and trade over the Holidays, and that was my first year. After that, I wouldn’t be caught dead in a pit where most were sitting on the floor doing crossword puzzles 30 minutes into the day. Leave it alone, come back later.

Today has seen EURUSD trade above the 50% line, then below the 50% line … back above, and again back below. The best moves of the day, which aren’t much, have been up moves below the 50% line, and down moves above the 50% line … the exact opposite of what we want. But if you stop and think about “Doji” days, and/or the “Flying Wedge of Death” [FWD], this is the telltale signature hallmark of those kinds of days; “the market is attempting to suck you in on a continuing expanding move, cuz so far it’s small … lots of room for more PIPS … only it isn’t gonna happen, and when it stops, it abruptly turns around and is 5 – 7 PIPS against you so fast it makes that sharp stick you sat on hurt your teeth”! Now, all that’s left is doubling, tripling, or quadrupling up losers followed by prayer … and all for what? If it works out maybe you make a PIP or maybe you scratch the whole thing and breakeven … now, you can breathe again … the brokerage house is happy cuz you traded a shipload of contracts, but what have you accomplished really? All you’re doing is insuring a future debacle.

So, when the legit algorithm signals aren’t working very well, and the ones that aren’t supposed to work well, are in fact doing very well, you have your answer to what kind of day it is … Oh, believe me, you’ll know early on that first turn, cuz after it corrects either it’s a trip to the other side or it’s a continuation of the trend … and a continuation of the trend expands the day’s range and makes you money.

Of course, you can’t rule out a normal day here … too many people make that mistake and get hurt. Just cuz it’s the Holidays doesn’t mean ranges are constricted … sure, it makes sense to assume that, but until it manifests itself and shows you, you can’t take that for granted. And it looked early like we might get down to the 1.18300’s, but the market never spiked down on stops … too much support at the 1.18500 area. And like I said, shorts are very nervous in this market … you look at those spikes up in very quick order, and the pain is very real as the market just keeps going higher … “He who panics first, gets to panic again later”.

I have no idea what tomorrow brings … a whole bunch of data gets released, but after that, I can’t imagine anybody gives a crap about trading once New York opens and 30 minutes goes by … no way are traders NOT going to take a 4 or 5 day weekend wrapped around Christmas … Jewish or not, they want the time off to do things with family and friends, and the last thing they need is to be nursing a position into Friday afternoon … so, once about 12:00 – 13:00 server time rolls around, don’t look for much if anything to happen the rest of the day.

No trades today, as there just isn’t anything to do in a no volume, range less mess, filled with slippage and price gaps … in other words, we side-stepped a “doji” day of nothing but trouble. I’ll see what tomorrow brings before wrapping the week up and post tomorrow as well. Meantime, I’m still working on getting my spreadsheet software to upgrade and work … I’ll have the PAMM spreadsheet up when I get it figured out … hopefully tonight or tomorrow. I’m outta here. Onward & Upward!!

Have a great day everybody!!

-vegas

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