Month: January 2014

There It Is! – Profit Taking All Around!

Forex Kong 19 Comments

Finally! After a pretty grueling couple of days, bobbing in and out, hovering around my trade terminal like a spy drone…There it is! Nearly every single pair / trade well in profit and time to take profits.

You’ll need to pull up charts on many, many pairs to see the end result of trades entered ( then re entered etc ) in NZD/USD, AUD/USD, EUR/USD, GBP/USD, USD/CHF,AUD/JPY,CAD/JPY and a big winner in EUR/NZD to name a few.

Forex_Kong_Blue_Hole_Belize

Forex_Kong_Blue_Hole_Belize

I will plan to take the majority off the table here either this morning, or let a couple of run through the day but……in all – I now look at monthly charts to see just what’s happened here over the past few days and the message is clear.

This is very likely only the “first leg” down in what will shape up to be a “much larger correction” ( as suggested previously ) running into late March – right around the time I expect “full-scale panic” and the printing pressed to start-up again.

Japan already knows it’s in very deep trouble ( and has been forever ) with effects of QE very quickly dissolving. I don’t think they “or” the U.S will have any choice but to kick things into high gear “printing wise that is” come late March.

Trade wise….I’m taking the weekend off, and booking /planning next weekend’s trip to the tiny broken islands off the coast of Belize ( The “Blue Hole” and Ambergris Caye – please google them) as the “math and theory” is already complete for the coming weeks.

These trades and several others will simply be “re entered” at various points along the way as……we’ve finally come over the crest, and find ourselves on the “other side” of the mountain.

A painful and extremely frustrating process but….the next “peaks” are certain to be sold.

Hope everyone else made out OK too!

Kong……..”more than” gone!

And The The Next Leg Lower…….

Forex Kong 9 Comments

I’d pull up a chart of the SP 500 pretty damn quick if I was you, and consider how far we’ve fallen and “how fast”.

Today’s move upward doesn’t come CLOSE to being considered a “reversal” as we’ve barely even “bounced” – with respect to the near term technical damage done over the last couple of days. Even now the index looking weak moving into the late afternoon.

I usually don’t make short-term calls on U.S Equities but as I see things from a purely “technical perspective” you might expect another day, or even another day or two – before we roll over and take the next leg lower.

That’s right “the next leg” lower.

Long USD trades turned out fantastic, although I’m not at happy with the way I traded it. Another 1% added here with short EUR and CHF providing most of the juice. Now leaning pretty heavy on the short NZD trade moving forward. JPY pairs still suggesting more JPY strength to come so….beware! The ol SP “risk o meter” is still very much so pointed – lower.

 

 

Forex Chart Survival – Short Term

Forex Kong 8 Comments

Short term trading in forex.

You all want to learn how to do it. You all like the action, the excitement, and maybe even (as I do) the challenge. It’s most likely that most  of you continue “trying this” in attempt to make fast money, leveraged to the hilt and looking for that “big trade”. Well….you won’t find it trading short-term smaller time frames, let me tell you that.

The big trades are found on the long-term charts when a move is caught on weekly and monthly turns. Trouble is, you get stopped out on a 50 -100 pip move against you trying to “nail it on a 15 minute chart” – before you’ve even given the trade a chance.

In my view, if your account/trade can’t absorb a loss of an “entire candle” on the time frame “above” the one you are trading ( so a measure of ATR which is the “average true range” to get an idea ) you’ve really got no business trading it.

So for example….you see on a 4 H chart where an average candle might be 160 pips, and you’re trying to trade with a -25 pip stop? No chance. You will be ground to a pulp time and time again.

Everyone has to do this math on their own as everyone’s account size is different, but it cannot be overlooked. You need to trade significantly smaller with much wider stops to even survive the daily noise on 15 minute charts and lower. That’s just to stay in the game over a 24 hour period!

I can go on and on about this, and “do plan to” at a later date ( possibly through a series of videos I’m working on) but as it stands…and considering the volatility these days – the best possible advice I can give today is:

Trade smaller and trade wider. You might just survive.

Forex Market Madness – U.S Labor Force Declines

Forex Kong 5 Comments

Well if trading through yesterday (with hopes of seeing much for profits) wasn’t “pain in the ass enough” – we’ve now got the “every so significant” U.S data out at 8:30 here Thursday morning.

Sure we saw the U.S Dollar “finally pop” late last night as expected, and yes the trades in EUR,GBP, as well CHF and even NZD all came away fine,but depending on exactly “when” you entered and what kind of position size you had in each – a little strength in AUD and you’d likely of just  broken even.

I jumped around like a mad man well into the night, grabbing a piddly 2% and frankly – am not impressed. The forex market is an absolute mess at the moment, with charts looking more like “abstract works of art” – from a classroom full of pre schoolers.

It’s an absolute mess out there, and I can’t really imagine this mornings ” artificial employment data” helping much. We get to hear “once again” some ridiculous number reflecting “improvement”…he.he..he… have you seen what’s happened to the participation rate? Now hovering around the lowest levels since 1978?

Have a look:

Labor Force Participation Rate_1

Labor Force Participation Rate_1

“Real employment” – sadly on a steady decline, as more and more people are simply “giving up” and not even bothering to “look” for a new job.

Labor Force Participation_0

Labor Force Participation_0

How is “this data” being incorporated into the weekly “employment figures” that are supposedly showing an improvement?

News flash – it’s not.

I’ve held a couple, and taken profits on a couple. I’ve re entered a couple and I’m in the red on a couple. The US Dollar most certainly “moved higher” so I hope you all caught some of that, with the biggest gains seen vs the Euro, Pound and Suisse, but in all – the cross winds across multiple currency pairs has chopped / flopped me around pretty good. I’ll see what comes of today, and will likely consider “closing up shop” early as…..staring at this for more that 18 hours in a row can be very hazardous to both your health, and you account!

Fed Announcement – Time To Face The Music

Forex Kong 41 Comments

As you all know, The U.S Federal Reserve Meeting winds up this afternoon with the announcement due out around 2 p.m.

Speculation as to “what the Fed will do or say” is pretty much a fools game at this point as they’ve thrown investors for a loop a couple of times already, having “said they where going to do one thing”….then doing the complete opposite.

I really can’t imagine them “pulling the taper” before the taper has “officially” even started ( as meaningless as the amount is ) but will be on the lookout for any “language” that might suggest the possibility down the road.

My medium term trade plans would see things continue lower through February and into March, before the Fed might “flip the switch” along with the Bank of Japan increasing it’s QE – should things get too wildly out of control.

As if things aren’t getting wildly out of control already…we’ll really want to watch this correction closely as it “should” mark a significant turning point, with respect to the rest of the world’s expectations, and interest rates “planet wide”.

If the Fed is truly going to commit to “turning off the spigot” of free money / liquidity (which again I have a very difficult time believing) then it would appear that the party is over, and many, many countries ( including the U.S ) may quickly find themselves  – facing the music.

The obvious trade is still “long USD” if indeed the Fed continues in the same direction as stated last month. Should the Fed pull another fast one here ( with perhaps some “tricky language” or a “taper” of the “tapering” ) I will literally drop every open trade in a heartbeat, then re evaluate.

It’s painful “being held hostage” (yoJSkogs!) yet again with the Fed’s movements essentially dictating market direction but……this is the world we live in now, and trader’s just have to accept it, adapt and continue to find strategies that work.

Pull Up A Map – Turkey In The News?

Forex Kong 14 Comments

I want to give you readers the benefit of the doubt….

But seriously……

Pull up a world map and please, please tell me ( after everything you’ve read here )…..

Tell me you know at least “3” of the countries that share a border with Turkey??

I’ll give you a hint……no ! 2 hints!

Syria and Iran! ( let alone Iraq as well )

Heads back in the sand please as ya….I guess you can’t google it from under there.

Seriously.

 

A Petrodollar For Your Thoughts

Forex Kong 17 Comments

With greater “macro factors” affecting the U.S Dollar, it becomes increasingly more difficult day to day to project it’s movement, or at least via the usual correlations.

A Petrodollar is a United States dollar earned by a country through the sale of its petroleum (oil) to another country

Trade agreement put in place world wide “circumventing exchange in USD” being the largest over riding factor with China now trading with the Brits, Russians, Swiss, Australians, Mexicans, And even the European Union – outside the use of American Dollars.

I believe the list of countries now trading with China “outside the use of USD” is now upward of 23 – 25 deep. For the life of me I can’t locate the list on the Internet.

If you can even fathom the loss of revenue to the United States when you consider that “previously” every single transaction between these countries “included” use and exchange of U.S Dollars – the picture begins to take shape.

A tremendous loss, and most certainly not a popular news story on American television, being completely outside the usual day-to-day facade/sham of the “recovering” U.S economy.

I guess if you ran a business of your own, it would be kind of like telling your staff “everything is fine” there at your physical location – having just found out you’ve lost your top 25 wholesale accounts. Keep smiling, and keep your local clients happy as…..they don’t really need to know “about that”. Until of course the “going out of business sign” is hanging in the window.

I imagine by the time we catch wind of “more and more oil trade occurring via the Middle East” and that trade being “outside the U.S Dollar” we’ll also be hearing of the next war the U.S will be instigating in order to squash the deal, with the sole intention of saving the “petrodollar”.

I’m getting smoked on my first few entries ( again a touch early ) long USD as markets are doing all they can to “take in the money”. The US Dollar has “swung low” and along with that has also been volatile / taking out trades. I remain long USD and will just be looking to add on any further weakness moving into the Fed meeting announcement tomorrow afternoon. In this case “please don’t prove me right” and “pull the tapering just yet” ( before it’s even begun ) or I’ll dump these trades in a heartbeat.

 

 

So Now You're Interested – A Little Late no?

Forex Kong 1 Comment

Wow…..And equally hilarious.

Now the blog traffic “blows off the roof” after what? You’ve lost another 5%?

Hilarious.

What you continually fail to understand is that…by the time you’ve heard the television tell you things might not look “so pretty” – your account is already in the red and you are scrambling to find answers from completely anonymous people on the internet.

Great strategy.

Wow.That’s what I call an informed investor.Smart.

Ya…let’s wait until half our “years profits” have been absorbed in a matter of hours…and better yet….lets call our broker or banker to ask for advice. Can you imagine in a million years they would ever suggest that now is a time to sell??

Brilliant.

I do my best to keep you “in the know” but frankly….at this point…..screw it – you’re on your own.

I’ve done all I can.

Buy the dip people…….and let me know when you “sell ” with all your profits – exactly at the top.

Gimme a break.

It’s “account liquidation time”. Ya that’s right…….”your account”.

 

 

 

Blame The Emerging Markets – Right!

Forex Kong 5 Comments

The emerging markets are more or less a product of the massive money printing that has been taking place in both the U.S as well Japan.

The reason “emerging markets” are falling is that “funny money” printed in the U.S has previously been “invested” in these emerging countries where one might actually expect a “reasonable return” – as opposed to investment directly in the U.S ( where one can expect “0” return ).

Big American banks take the “funny money” from Ben, and opposed to lending it to hard-working Americans, the money is used to invest in “other countries” where the likelihood of return is much higher.

What we are seeing is the harsh reality ( well I doubt it ) that the “free money” is coming to an end, and large investors are repatriating their “previously invested U.S funny money” back to their bank accounts in the U.S – in a “flight to safety”. It’s the Fed’s doing – not the emerging markets.

Here is my original post from back in September: http://forexkong.com/2013/09/23/emerging-markets-effect-of-qe/

You’ve had plenty of prior warning.

Forex Food – Breakfast Of Champions

Forex Kong 3 Comments

I was up around 4.a.m – so I guess you really can’t call it breakfast.

Finishing up my “early morning analysis” today, I found myself rummaging through the kitchen looking for something “new” to eat, and even more so – “something new to do”.

The world hadn’t yet ended, I had little to do otherwise so I thought I’d take a walk over to the local ” pescaderia (fish market) to see if any lazy fisherman had bothered to get up as early as I.

Bought these little babies. Rock prawns.

Forex_Kong_Food_Breakfast

Forex_Kong_Food_Breakfast

Apply named, as the shell is literally “hard as rock” – these little beauties more closely resemble tiny lobster than a traditional soft shell or spotted prawn, with a much sweeter meat and firmer texture.

I butterflied these and will be grilling momentarily, with garlic butter, white wine a squeeze of lime, cilantro, and of course…….an accompanying cold beer after all…….it’s gotta be 5 o’clock somewhere. He he he…..

Grinding action here this morning / mid day as USD sits flat, and markets continue to flounder. Nikkei falling “further” through support and looking extremely weak with tonnes of trades setting up very nicely.