LET THE PONY RUN!

 

“If I owned Secretariat, I’d have named him “CableYen” … yessiree!”

I said last night in my Sunday update post, that the algorithm I’m using for 

GBPJPY, shouldn’t be used in trading the U.S. Dollar pairs; first of all, they're

not consistently volatile enough … pick any USD pair; one day it has a 40 -50 

PIP range, and the next it’s 120 PIPS, and then it spends 10 days in a row 

hugging the 50 PIP level, before once again exploding … so, how the hell do 

you trade that? … cuz any trend following algorithm will chop you to bits, and 

if you go the way of selling the supposed highs and buying the supposed lows, 

the days it explodes your account gets hit big time … there aren’t any good 

choices here.

Second, though, is the fact that the M30 candlestick charts act & behave 

differently then FX crosses … crosses tend to run “pure”, while dollar pairs 

are filled with fake outs, stop hunts, and reversals galore if the daily ranges are 

small enough.

Which brings me to today’s abysmal GBPJPY trading action … yes, the daily 

range is OK, coming in right around 110 PIPS, and all of it seen in our 12 hour 

window of 06:00 - 18:00 server time. But the problems today are twofold; 1) it’s 

a “no news” Monday, with tomorrow, Wednesday, & Thursday loaded for bear 

in both Japan & the U.K. in the economic reports department, so the FX 

markets lack direction, especially with the Syria news gone for now, and 

2) almost the entire 12 hours of our day, USDJPY was in an approximate 

15 - 17 PIP range … it wasn’t until late in the day, somebody made a run 

lower for the stops, so the range expanded a bit to about 30 PIPS … “Oh, big 

whoop”! ...  in what was one of the lightest volume and price movement days 

I’ve seen in a while.

And the significance of this, is that trading GBPJPY today, you were really 

trading GBPUSD, cuz that was the only thing moving … and you know how 

the scumbag LP banks love to “jack” Cable around. What this means, is that 

the GBPJPY M30’s today acted more like Cable M30’s than the cross. In total, 

during our 12 hour window, we’ve got 24 M30’s … today saw 11 trend changes 

in the algorithm, out of the 24 available… ELEVEN! … a quick glance at the 

M30’s, and you’ll see that those M30’s accounted for approximately 180 PIPS, 

where once it was in buy mode, all it did was go down, and when it was in sell 

mode, all it did was go up. If you took every trade based off of the breach of the 

M30, you got killed today … as it was, using the 5 & 9 signal generator on the 

M1, very few of those M30’s that saw a trend change got the appropriate 

buy/sell signal to make a trade … and there were 4 M30’s today where the 

trend changed TWICE during the 30 minutes [an “outside” candlestick], a 

 ‘double whammy” if you will.

When it’s all said and done, what you’re left with is not only utter confusion, 

but very few M30’s to actually trade and get some decent buy signals, in a 

market that for the first 10 hours all it did outside the first hour was go up in 

spurts, leaving the plum / yellow crossover to do its thing about 500 times there 

were so many of them … and the first hour reversal accounted for about 40% 

of the day’s range. Not a lot here to cheer about.

Quite a few trades today … PAMM down about $60, or 0.1%.

Quite frankly, I’m pleased with today’s trading, and the fills I got … some 

minor slippage on some of them for a tenth or two PIPS, but that is to be 

expected, and isn’t any big deal in this market. The major problem today were 

the M30’s cuz it was only GBPUSD that was moving … USDJPY was literally 

dead 90% of the day. And when the M30 says sell, and all it’s doing is slowly 

climbing in price, or when the M30 says buy, and all it’s doing is melting like 

ice cream sitting in the sun, the signal generator on the M1 is on the wrong side 

of the market, and you’re literally forced to wait and see how it plays out … you 

can’t fade the algorithm, cuz if you do, it’s only a matter of time until you get 

caught in a run against you that you can’t recover from … and this market can 

go anywhere and put in M30 ranges that will blow your mind, so doing ‘stupid 

shit” isn’t an option if you want to be here a while.

My normal volumes here will be usually 200,000 - 300,000 notional, but today 

cuz of the nature of the “no news” Monday, I dropped it down to 100,000 per 

trade … and while I never like to lose a single cent trading, going forward, 

anything ± about $150 is basically a scratch. This stuff moves, and the volumes 

I’m doing lend itself to small losses and much larger winners … I said at the 

beginning of the year, that making or losing a few bucks a day was coming to 

an end … I thought EURUSD could provide us with the necessary volatility, 

but the last 10 weeks or so, stuck in an approximate 150 PIP range with days 

that frequently see 40 PIP ranges, isn’t gonna cut it … and neither is 15 - 40 

index point slippage in the DOW30, where all common sense is out the window 

in dealing with the scumbag LP’s, where anytime the index moves, the 

HAL9000 is programmed to widen the spread and “jack” the slippage to eye 

watering levels, cuz you know, “market conditions, duh”.

GBPJPY is a “pony” that can and will run, and losing $60 in here isn’t 

something that has my “big girl” panties all bunched up … we got plenty of 

big moving days ahead of us, stating tomorrow where Japan reports balance of 

trade numbers, and the U.K. has their employment data out … we’ll see what 

happens … I’m outta here … until tomorrow mi amigos 

… Onward & Upward!!

UPDATE: PAMM spreadsheet posted 6:00 P.M. EST. 

 

Have a great day everybody!

-vegas

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