CABLE: WHERE VOLATILITY GOES TO DIE

 

“If you trade Cable, you’ve had this look alot the last 5 weeks!”

Is anybody surprised, that the Friday before Memorial Day Monday is a bust 

and complete waste of time? … once the U.K. GDP numbers “yawned” the 

market to sleep at 4:30 A.M. EST., what else is left but some “stop hunting” via 

spikes up & down, shit fills, and a market that can’t move? “Well, welcome to 

Cable”.

Directly below, today’s GBPUSD M5 candlestick chart with algorithm.

 

Take away a couple of M5 candles, and what you’re looking at is a complete 

trading mess … no volumes, no liquidity, volatility compressed to the point 

where I don’t think it can get much lower intraday, ranges that are a minimum 

of 50% lower than normal in our 12 hour window of trading, and most 

importantly while watching the trade, is the fact that the HAL9000 has been 

programmed for max slippage. 

The algorithm needs and demands a minimum of volatility to be effective 

… well, this ain’t it, where everything is a coin flip, and every trade you make is 

at risk for a 5 - 7 PIP blast in your face in seconds, and with max slippage in 

force, the reward / risk ratios suck … throw in 30 - 40 PIP ranges in 12 hours,

and it’s a nightmare … hopefully, this shit ends soon, and the market can get 

back to normal, cuz this “tail risk” low volatility creates all kinds of unintended 

consequences for traders, and none of them are good. So, another day of 

“dullsville” and treading water, while we wait for normalcy to return.

Two trades today … PAMM up slightly, about $17 bucks and some change 

… when it won’t go, I got no choice but to liquidate and cover or risk getting it 

shoved up my nose on a spike from nowhere.

So, it’s the same story we’ve faced since May 2 … rallies on vapors or “Brexit” 

bullshit sprinkled in at the appropriate time when the scumbag LP bank’s find 

themselves long , with an occasional spike higher like we had with retail sales 

… and when that “supernova” explodes on pure short covering, the market 

then dies and starts the grind lower one drop of blood at a time, making 

staying short painful at best. And, this comes amid dwindling volatility which 

makes everything worse, cuz if you’re wrong it’s very difficult to get the losses 

back.

Volatility is the lifeblood of trading … without it, you tread water until it 

returns, simple as that. So, we wait it out, keep the powder dry, don’t do  

“stupid shit” [like chase price higher/lower], and take whatever the market 

offers until volatility returns … which, trust me, it will, and most likely uncoil 

some truly unreal ranges in the process, and kill a few folks.

Monday is a Holiday, of course, in the U.S., but Europe will ignore it … so, 

we’ll see what happens Monday … I’ll post Monday, so until then mi amigos, 

I’m outta here … time for a cold one … Onward & Upward!!

PAMM Spreadsheet directly below.

 

Have a great Holiday weekend everybody!

-vegas

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