“It’s
official: “bizarro” world is the new norm … now deal with it!”
I
get to my screen today, a few minutes before the European open at 08:00, and
what do I see? “Wait … what? Range’s that
can’t even make it to the teens … twelve something in EURGBP, and teens EURUSD,
with Cable in the low 20’s … seriously, we’ve sunk to this level now”? And
for 2 -3 solid hours, I thought at varying times my internet connection was
down, cuz nothing was moving. Now, I know that you know what I’m thinkin’,
which is, “from which direction does the
C4 explosion come from, how bad is it gonna be, are reversals, double reversals,
or the “Flying Wedge of Death” gonna be a part of today as a result of this, and
how do I sidestep the complete “shit show” I know is coming at some point”?
Last
night, after some trade analysis and some Homer Simpson “deep thoughts”, it
finally sinks in that the trading environment we find ourselves in has been
renamed to “Costanzaville”, and that the norms, strategies, & trade
executions have to be thought of in terms of how George Costanza would handle
it and screw it up beyond recognition [your basic FUBAR]. I can simply think of
no better analogy, than George, of what not to do at crunch time … and so
George came to the conclusion during an episode of “Seinfeld”, that his entire
life up to that instant had been “by the book” with all due manly logic applied
… and nothing had worked out right for him ever … but what if, he says, I do
exactly what I never have done and it works out beautifully? Well …
And
if you need a trading day to become the “poster child” of everything wrong with
trading, this day is it … round up the usual suspects, but what’s really going
on is nothing more than “GBPUSD terrorism”
… and quite frankly, it isn’t gonna stop anytime soon, given the nature of both
the U.K. & the E.U. via “Brexit”; it has become, and will be for many more
moons, a complete “shit show-a-rama”; “simply
put, it’s the C4 explosive you can’t see hidden in your car”. Every day,
rumors start either with large hedge funds, scumbag dealer LP banks, and/or
Government Apparatchiks paid under the table by the aforementioned hedge funds
and banks … first they start it, then they front run it, then the “rumor” is
floated to corporate types who need orders filled, then the scumbag LP banks start
“jacking” GBPUSD into stops, then the corporate orders are filled and the
people who did the front running fill the other side, and then the market dies …
until the next time, some indeterminate minutes later, when it all starts again
with the usual “rinse & repeat” cycle in play.
Today
sees Cable get “Thelma & Louise-d” on more “Brexit” BS … apparently,
yesterday’s delusional strength forgot about this … the point being, that
everything … and I do mean everything … that Cable touches or is involved with
gets “torched” … bottom line, is that in Cable, we have nothing but euphoria or
panic; take your pick, cuz there isn’t anything in between. Of course, that
sends every cross with GBP in it, reeling to floor 1 from the penthouse, ‘sorry, no stops along the way for you to
get off … and when the sell stops are filled at or very near the bottom, thanks
for showing up and playing”.
There
simply is no way to quantify “panic”; every attempt you make will yield
unsatisfactory results; and in anything Cable related, your market trade
executions will get “butchered”, right along with your “limit orders” that don’t
get filled on the spikes; this FX pair is the Ebola virus of finance. I made
the decision last night, “if EURGBP can’t
get its head out of its ass and start moving somewhere in a coherent fashion, I
can’t sit here and watch “grass grow” while Cable figures out who to kill next.
It isn’t a EURGBP problem, it’s very much a GBPUSD problem; everything is vicious
large spikes that come out of nowhere, clean out stops, and then die on the
vine seconds to minutes later … and the problem is, there isn’t any way to
consistently trade this without risking exponentially more money in losses for
what your reward is if you are right … and after witnessing for the umpteen
time another blowup in Cable this morning cuz some Apparatchik in Europe says
negotiations going forward will be tough, I simply can’t take this pair any more
in its current state of complete insanity and wish it & George much
happiness in their new seemingly permanent residence in “Costanzaville” … and
so, goodbye Cable, see ya later”.
Now,
I want to emphasize this to avoid any confusion; this is the very reason I
instituted “The Magnificent Seven”; through the weeks, months, and years, pairs
go through stages. Sometimes they are good to trade, and sometimes they aren’t;
right now, anything that has GBPUSD in it, is an invitation to a sizable loss.
Sure, when all this “bat guano” Brexit crap is behind the market, it will probably
revert to its former self … which is somewhat insane, but without the C4
explosion gap spikes that are here now. I’m simply not willing to risk 2% - 5%
of capital ON EACH TRADE, cuz some Brexit rumor knocks us down with a 50+ PIP
spike in less than a second; it makes no sense pursuing that kind of strategy,
when that kind of risk is present every day. This is the reason pairs like
GBPJPY, GBPCHF, & GBPCAD are untradeable at the moment, without risking 50+
PIPS, cuz you have no shot whatsoever of sidestepping either the Cable rumor
mill or the spike that is coming your way in less than a millisecond because of
it … none, as in zero … so when I sit here trading GBPCAD for example, and
there is no news to account for it, what am I to think of a 60 PIP spike up in
one M1 candle, only to be followed by a 70 PIP down move in the next 3 M1’s?
Any idea what the collateral damage is from the stop? Well, this extends to
EURGBP as well, only the disaster gap spikes aren’t quite as bad on average,
but here the problem is how do you make it back if it hits you?
What
this means is that, as of now, there are only 2 pairs that don’t have Cable
influence; EURUSD & USDCAD. And while both pairs have been stellar
performers, the clear favorite for me is EURUSD, where the spread is usually
1/10th of a PIP to maybe 2/10th’s of a PIP, and sometimes
is zero as well. The amazing thing is, I was “half right” all along, cuz if you
go back and look, the way EURUSD trades now, it looks a lot like the way EURGBP
used to trade, before large spikes started to make everyday appearances.
Today,
I was looking at EURUSD from the get go, and took one algorithm trade … which
was a small winner … we got a signal, and it didn’t go very far before
reversing … today also saw a reversal in EURUSD, as the initial rally to a new
high faded and new lows were coming later in the day … not a very impressive
range, coming in around 52 PIPS so far … the main thing, though, is that the
trade is somewhat orderly, unlike Cable which is gapping lower on stops via the
rumor mill.
On
Sunday night, I’ll b posting the “Scalper’s Algorithm” for EURUSD & EURGBP
ONLY; right now, because of Cable, I’m not going to be doing EURGBP trades
anymore until Brexit completely goes away, therefore the examples in the manual
will be EURUSD. The manual is much smaller and compact, and there are only 2
critical rules for success; it’s an easy read, and it’s an incredibly easy
setup on the MT4. Today saw the algorithm call for approximately 11 buy signals
between 08:00 to about 15:00 server time, and after that it was all “sell side”;
I took one of them, and simply tracked the others to compare with USDCAD &
EURGBP during the same period since it’s Friday, and I’m never crazy about
trading on Friday afternoons. And most importantly, not only were all the
signals profitable, but they were significantly better than what was available
in the other 2 markets … this is good news and what I needed to know before I
start trading EURUSD in earnest on Monday. Get ready for a blizzard of trades, compared
to what’s been done lately, and while I’m not looking for 100% profitability on
every trade [would be nice, but not dreaming here], the market gives us what we
need in terms of “tradeability”, that we aren’t getting right now in anything Cable
related … all with the lowest spread in the biz. What’s not to like?
Today
saw one trade, as I explained above … the signal I took wasn’t a very good
signal, and I waited about 2 seconds to long to liquidate … nonetheless, it’s
profits and I don’t care how much, something EURGBP hasn’t been able to consistently
give me the way I want this week or last cuz of utter insanity in Cable. My job
is to make consistent money on a daily basis WITHOUT subjecting accounts to
high risk, and I will go to whatever market I have to towards achieving that end
goal. And while I got nothing against CAD, I think EURUSD is a better market
overall; either way, though, unless EURUSD puts in small “dojis” on the daily candlestick
day-in and day-out endlessly, there isn’t any way you don’t make money with the
algorithm … simple as that cuz it’s just not mathematically possible. I don’t
care what kind of games LP’s play, or how many FWD’s there are, or how many
reversals the market puts in, the math doesn’t lie … unless there are small
daily “doji’s”, the signals will produce profits … unless of course, the laws
and proven theorems of mathematics don’t exist in “Costanzaville”, but I’m not
goin’ there, and we aren’t trading there either!
So,
here we are today, looking at the big blow up of EURGBP, with all the big
spikes up, taking out stops left and right on its push to above 0.88500 … and
where is it now, after the dust settles, accounts are killed, and LP wallets
fattened? … right back in the 0.8820”s.
I
want people to understand, it isn’t that there aren’t large spikes that occur
in EURUSD, but the vast majority of the time they come on either E.U. or U.S.
economic news; the same can be said for general dollar strength or general
dollar weakness, and yes, you need to be aware of the daily and weekly
candlestick support and resistance areas, that if breached, can ignite stops
one way or the other … but this is simply “situational awareness”, nothing more
than you would do for any market.
I
simply can’t take anymore “sitting” around waiting for the market to put in a
signal while watching it move a bundle of PIPS, and then die, leaving me with
Mr. Jack Squat … those days are over … there will be plenty of signals in
EURUSD, and I plan to get our share of them in the bank. Onward & Upward!!
PAMM
spreadsheet directly below … until Sunday night mi amigos.
Have
a great weekend everybody!
-vegas
OUR TURNKEY FOREX “PAMM/MAM” IS NOW
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