THE “WHOOOOOOSH” SYNDROME

 

“Some things are meant for each other!”

And another couple of things that go together; “the whooooosh syndrome” & 

Cable trading, cuz when trading Cable, you never know when the next shoe to 

drop is gonna hit you right in the face. In “floor culture”, all it took was one 

disgusting look from another trader, who simply was expressing his total 

exasperation from a trade or series of trades, to know what the problem was 

… he got caught in the “whoooooosh”, and it sometimes really left a mark.

And simply, it goes like this; you stay long or short for what seems like forever, 

fighting the move against you and trying to keep your nose above the water line 

… finally, you throw the proverbial towel in, and anywhere from 1 second to a 

few minutes later it screams in your “ex” profit position … and nowhere does 

this manifest more than GBPUSD among the major FX pairs.

Yesterday was a clusterfark from the get go, and I got nobody to blame but 

myself … Cable algorithm worked to perfection, wishing only I could say the 

same about myself … after reviewing my trades last night, there’s no doubt I 

did “stupid shit” by trying to chase the market down … if I had simply done 

what I was supposed to, I’d have been backing the Brinks truck up to haul the 

money away, and telling the driver I think we’re gonna need two trips to get it 

all … and, I wouldn’t be telling the Mrs. it was the dogs fault [“bad dog, bad”!] 

… I “effed” up worse than a high school kid on his first big date … worse than 

the first day of class and I got a pimple the size of a golf ball on my forehead 

… I looked worse than a guy talking to a babe in the mall, and then realizing 

my zipper is all the way down … I felt like “Flounder” from “Animal House” 

… getting a general idea how badly I screwed up?

So, I can put on my “big girl” panties and own up to it … look into the mirror 

and tell myself what a Schmuck I was in FUBAR-ing that one up … Ok, time 

to refocus and make sure it’s a “one off” … back on the horse, in the saddle, 

time to ride. “I ain’t afraid of the horses”!

But, the secret to “screwing up”, is if two things come out of it that are positive; 

1) don’t make a habit of it, and 2) keep the loss as low as possible … this sage 

advice I got early and often in my floor trading career. In fact, after sitting 

back last night reflecting on my trading “prowess” yesterday, with the dog 

laughing hysterically right next to me, it came back to me why I developed the 

Cable algorithm in the first place; “which is to avoid massive whiplash on 

market direction, and attempt to be on the side of the trade that has the highest 

probability of success, cuz as we all know, this stuff can move and create riches or 

it can do some real damage … the riches come, the damages can make everything 

go “buh bye”, and nobody wants to say hello to the Pudding Business anymore 

than the next person”.

Turning to today’s GBPUSD market … “well, that escalated quickly to the 

upside out of the 06:00 server time open, didn’t it”? … and of course, it meant 

being long, something I’m not real crazy about early in the day, in this market 

environment of being down 800 PIPS in 12 trading days … and as I stated in an 

earlier blog, trying to sell the highs as it goes up can be very risky business. 

Today’s rally produced 8 new highs and then a double top high, so even if you 

got the price right the first 8 times, and gave it 5 PIPS of loss, your down 40 

PIPS on the 9th trip up … and if you sold it, you needed that break otherwise 

you’d have been “toast” … all above the “blue box” zone for being long or short 

… even back in the day, I don’t want to be in a position of “prayer” for any 

position, cuz at some point the trading Gods ignore your pleas and you find 

yourself in big, big trouble.

Directly below, the GBPUSD algorithm M15 chart for today.

 

FED rate decision out … mostly a nothing burger. Cable so oversold at the 

moment, looking like some short covering after the announcement. And once 

again, the “wisdom” of the algorithm shows its mettle, cuz it doesn’t call for 

being short unless the bottom blue box boundary is violated and the market 

stays below that level. Next up for Cable is tomorrow’s U.K. services PMI at 

08:30 server time … that, in my opinion, more important than today’s FED 

announcement. Anything can still happen, of course, but it looks like another 

“doji” type day for Cable, albeit one with a slightly larger range than more 

normal “doji” patterns.

Three trades today … PAMM up slightly about half of 0.1%. Not much here 

today, and I have no desire to trade after the FED with no time left in the day.

My three long trades today all came early, and it wasn’t one of your typical  

“blow the roof off” the top short covering affairs … yes, the first half hour was, 

but after that, it was like watching the fattest kid in school climb stairs; it 

eventually gets there, but it was tough sledding. And all the while, I’m thinking, 

when does the “whooooosh” come, and how much on the downside? Well, we 

found out later, and it’s these early rallies, with NO REVERSAL pattern after 

almost straight down 800 PIPS, that had me scalping out of long positions every 

time they got threatened … simply not willing to hang on without some kind of 

retracement to the downside, which we finally got, but being long in that into 

the FED announcement is a very tough way to trade and not expecting disaster 

on the horizon.

I think the upside could have produced a better range high, if we had started 

out and gone lower some before the ramp higher … cuz we opened, went down 

a few PIPS, and then blew the lid off … a move down to the 1.35500 - 1.35600

level would have been ideal. These type of small reversals have great power, as 

they tell the market that the initial direction has failed, and it’s time to go the 

other way. Remember, approximately 64% of the time, GBPUSD makes some 

kind of reversal off the first M30, and over these last few days, all we’ve gotten 

is straight shots out of the starting gate … a little weird, but not out of the 

ordinary either.

Tomorrow’s another day, and that report at 08:30 for Cable will most likely set 

the direction for the day … we’ll see. I don’t think, though, that even if it beats 

expectations, you’ll see Cable take off to the upside … it’s gonna take a while to 

undo the chart damage the last week has inflicted on this market, and what I’ll 

be looking for from the short side are higher 06:00 - 06:30 opens, that go slightly 

higher, and then reverse lower, setting the tone for moves down. Not much we 

can do on FED days, they’re somewhat tricky … although we got the rally the

 algorithm called for on an upper boundary breach, the action was horrible 

… it looked and felt very much like the proverbial “dead cat bounce”, and 

staying long as it rolled over wasn’t an option.

Obviously, I would have liked to make more today, but the setup was all wrong 

… you don’t want to see early rallies, if you want this stuff to go up, you want to 

see the lower price first, and then the reversal. But, anything on the plus side is 

better than the FUBAR I laid out and participated in yesterday … on to better 

trading … and with that, I’m outta here … until tomorrow mi amigos 

… Onward & Upward!!

PAMM spreadsheet is down again, and I have another tech support chat with 

Google in about 2 hours … after it gets fixed, I’ll update and post after 

tomorrow’s trading.

Have a great day everybody!

-vegas

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