One of the things that can go horribly wrong, is not recognizing that volatilities
and trading personalities across pairs can be totally distinct and different … and
just when you think it’s safe to go into the water, it ain’t … what I’ve outlined in
the trading algorithm so far pertains to dollar pairs, and if you use the very same
criteria in crosses, prepare to be unpleasantly surprised … I’m finished with the
version 3 trading algorithm for dollar pairs, but as a bonus I’m adding FX crosses,
specifically YEN crosses cuz they have the lowest spreads … right now, leading
the pack are EURJPY & AUDJPY, [maybe NZDJPY if your at a house with a good
spread] as GBPJPY has fallen off the wagon with dramatically increased bid/offer
spreads at Turnkey … from less than 1 PIP to over 2 PIPS, and that ain’t
gonna cut it.
However, it can be any cross, so long as the spread is at or below about 1.3 PIPS
… go any higher than that, and the “Trading Ratio” [TR] is going to be impacted
severely, and your profitability goes down the drain … looking at the spectrum of
markets on the MT4, it ain’t a pretty picture for scalpers … “Stock Bellies”, crude
oil, precious metals, and most FX crosses literally STINK when it comes to
bid/offer spreads, not to mention the all too familiar HORRENDOUS SLIPPAGE
cuz they can, and most if not all of these markets become untradeable
rather quickly.
Given the “lay of the land” going forward, it’s gonna be hard for GBPJPY to get
back under 1 PIP … I don’t see it happening anytime soon, so I’m not expecting
to trade it … as far as 20 Day Range MA’s go, EURJPY = 167.9 PIPS,
AUDJPY = 134.8 PIPS, & NZDJPY = 102.4 … FOR BOTH the AUD & NZD crosses,
it really depends on what your cost to trade it is, otherwise EURJPY is the clear
VIX winner … this is quite the week for EURUSD, as Friday is “D-Day” for the
E.U., especially Germany & France, as we’ll see if Vlad turns the Natty Gas back
on via Nordstream 1, or finds a reason not to … Friday could be one for the
record books in terms of VIX and range for EURJPY, not to mention the fact that
the day before the Morons at the ECB give their interest rate decision, which is
highly likely to see rates rise … wouldn’t it be something if they raise rates, and
then within 24 hours Vlad decides, “nah, you don’t get shit”! … what now ECB
Apparatchiks?
Quite frankly, I am not at all happy with the way dollar pairs are being traded,
and I don’t mean just for a day or two, but for weeks now … it’s like there’s 3
separate markets, divided between the world’s 3 trading sessions, and it’s
becoming increasingly uncomfortable to see the onslaught of DOUBLE &
TRIPLE REVERSALS becoming a popular mainstay, with the attendant “speed of
light … crickets” bullshit instituted by the scumbag LP banks … and the problem
is, if you get caught in one of these, there’s almost no way they let you make it
back cuz the dollar pair goes “sleepytime” … that’s not something you see on
the charts of the crosses.
We have two potentially explosive pairs in EURJPY … certainly USDJPY has seen
heightened VIX these last months, and I don’t expect that to subside materially
anytime soon … then there’s EURUSD with it’s 1) fragmentation problems with
the PIGS [Portugal, Italy, Greece, & Spain] and their bond yields, and
2) geopolitical problems tied to energy, specifically Natty Gas & the Ruskies
… throw into the mix the ongoing, never ending Proxy war of Russia / Ukraine,
and the bullshit emanating from that clusterfark and its effect on European
economies, and I don’t see how anyone can think EURUSD is gonna go into a
“VIX Shell” and stay there … mix it all up, and it’s one Helluva FX cocktail of VIX
staring us in the face … so, I’m going back to EURJPY for the PAMM.
Yes, I’m somewhat concerned about conditions, but I’m also concerned about
sitting here twiddling my thumbs watching paint dry in EURUSD, only to see any
explosion I can’t capture cuz it happens like a lightning strike … AS I SAID
BEFORE, different pairs have different attendant trading styles & personalities,
and you can’t take the dollar pair algorithm over into the cross or bad things are
gonna happen … they may happen anyway, but you don’t need to add to the
problem! … there are different parameters and guidelines for the YEN crosses
[the only ones that have the proper spread requirements for trading], and I’ll be
explaining those in next Sunday’s blog update when I release version 3.0 of the
trading algorithm … so, if you wanna trade crosses, keep your big girl panties
on and the manual will be here come next Sunday.
As for those who may be trading dollar pairs and using Netdania, sometimes
“simpler” is better, and I’m changing the 15s EURUSD [or other pairs] indicators
to ONLY TEMA [7, 0.09], AND EMA [40, CLOSE] … quite frankly, ALMA at lower
TR levels is “disappointing”, with too many “false positives” for my liking … just
the simple crossover of TEMA OVER EMA to get long at the appropriate time is
excellent … “I’d normally know this, but you have to remember we don’t have
history with the sub M1 chart times, so I have to study and analyze this stuff in
real time to get proper parameter settings”.
YEN has the potential to be a very big problem in the cross [meaning the
spread + slippage could get out of hand], circa a lot like 2008, but the difference
now versus then, is that interest rate differentials are a lot smaller AND the YEN
carry trades outstanding are far lower … so that’s gonna mute any big
“Thelma & Louise” slide over the quarry cliff into the bottomless pit below [if it
happens] from the world’s spec community … only a worldwide depression can
save the YEN and get it to rally with any legs, otherwise there’s no end to the
upside in the pair over the short / medium / and especially long term … Japan is
a basket case of fiscal irresponsibility on steroids [not that the ECB is that much
better.].
Directly below, this week’s 20 Day Range MA’s for selected pairs.
So, onto the wild week at hand … this one is gonna be interesting … outta here
… “The future’s so bright I need 2 pairs of sunglasses 😎😎, and my own Brinks
armored truck” 💓!! … Onward & Upward!!
-vegas
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