Raise Cash – Don't Be A Hero

I’ve touched on this a couple of times before.

When trading ahead of what we in the biz refer to as a “risk event”, you’ve seriously got to question “why” you’d look to take on any additional risk in “getting it wrong”. The fact of the matter is – you’ve got absolutely no clue how it’s going to pan out, and you’ve got no good reason to “trade it” if not looking at it as a complete and total “roll of the dice”. You want to gamble – fine. Take a small percentage of your account, have fun with it, take your chances and hope for the best.

That’s “NOT” how I roll.

This Wednesday’s Fed meeting, and expected announcement of reduced stimulus,  is undoubtedly the most highly anticipated and potentially dangerous “risk event” we will have seen in markets in at least the last couple years.

You cannot afford to be on the wrong side of it.

Reading/researching over the weekend , I’ve come to the conclusion that the bond market has clearly priced in the news, but that U.S equities haven’t moved a muscle, and that forex markets are hanging in wait.

I will look for any “and every” opportunity over the next 72 hours to eliminate exposure, take profits, reduce positions, sell into strength etc in order to “ideally” be as close to 100% cash for Wednesday afternoon’s announcement.

This is trading not “fortune-telling”, and I don’t give a rat’s ass which way the market decides to go “post Bernanke” – only that I’m going along with it.

We’ve got fron Sunday night til Wednesday afternoon. Raise cash – don’t be a hero.

17 Responses

  1. devilyell September 15, 2013 / 2:41 pm

    Terrific observations and advice Kong!

    Stocks have been the enigma of the whole picture. Up, in light of all the storm clouds?!
    Of course, those storm clouds are hidden from anyone not willing to do their homework or face the facts.

    • Forex Kong September 15, 2013 / 3:20 pm

      As I’ve come to understand….stocks are always the last to go, and with the amount of manipulation / bullish / slosh of Fed money currently in play – it’s really no surprise.

      Personally…I feel markets topped back in April / May and that this last “gasp” has been primarily a “distribution event” as newbies rush in at the top.

      An investor could have easily sat out the entire past 4 months and find themselves in exactly the same spot ( or likely worse considering the “bath” Appl and a host of others have taken).

      The divergence in strength across the board has this last rally on fumes….but I won’t be surprised at all to see it take another lil push. That’s the idea right? catch as many people as you can leaning the wrong way.

      Tops are a “process” not an event. You know that. I know that.

      cheers Dev…..I’ve got a hurricane rollin around a lil north of me, and hope my internet connection holds.

  2. TheTrueHeir September 15, 2013 / 3:57 pm

    What are your thoughts on the whole Larry Summers debacle? I’m planning to fade the gap on AUD/USD, unless you advise otherwise.

    • Forex Kong September 15, 2013 / 4:01 pm

      It s big news…….I was just about to post on it.

      I’m gonna need at least an hour, but off the top of my head……WOW!

      Literally every possible “curve” being thrown ahead of Wednesday….this is setting up to rinse anyone and everyone “gambling” on it.

  3. schmederling September 15, 2013 / 4:03 pm

    GAP opens NICE it’s starting already…. LOL buckle up!!

    • Forex Kong September 15, 2013 / 4:05 pm

      Craaaaaaazy gap too!

      I’m on it…as 100 pip gaps in USD pairs can’t be ignored…..in all……..they “should” get filled so………….

      • schmederling September 15, 2013 / 4:25 pm

        Yeah they very well may…. however I have fires in USD/CAD in the 30min…. ( Neg fire but in this pair positive for CAD) tracking the 1hr, 2hr & even the 4hr with the 8hr squeezing in for a set-up as well…. this could turn out to be one final ride… catch the tide before the meeting Wed’s….. :0)

        Cheers Schmed…

        • Forex Kong September 15, 2013 / 4:29 pm

          I’ve got nothin else to do tonight so…..I may just look to scalp this gap / trade a bit for fun.

          I’m as close to cash as can be so……aside from the usual day to day here – it’s kinda fun seeing the volatility / move underway.

          I’m still staying on the sideline for the most part…but love short term trading too …..

          Beats watching shitty T.V as well no?

  4. schmederling September 15, 2013 / 4:33 pm

    you bet Dr. Kong….. it’s worth a couple dinners & night outs at the very least…. have a good one!!

  5. David September 15, 2013 / 5:21 pm

    Wow, I’m salivating over these Gaps. Although I know you don’t like AUD/CAD and NZD/CAD trades Kong, I prefers these shorts to fill on the gap over USD, but will bite on that a little too. Should be a great start to the week. I’ll also be adding to my GBP short. Good luck to everyone on their gap fills, and let’s see if this “easy money” plays out before Wednesday.

    • Forex Kong September 15, 2013 / 5:32 pm

      He he he….nice work David – you are clearly “on top of things”.

      For me…..gaps are like this…

      It’s not “if” they get filled ( especially in the order of 100 pips pr more ) but “when”.

      I’ve seen gaps sit open….and price “jet off” some 2 – 300 pips over days / even weeks….before getting filled.

      Again…..conviction in your trading, and you’ll do juuuuuust fine.

  6. robert September 15, 2013 / 5:21 pm

    Just amazing… equities going crazy just on a larry summers news?

  7. schmederling September 15, 2013 / 5:46 pm

    WOW… DXY taking a little tumble here….. do we get out move now? weird timed indeed!!

  8. schmederling September 15, 2013 / 10:58 pm

    My 30min squeeze fire off nice for CAD…. along with the 1hr….. the 2hrs is next on the chopping block here & right on the cliff…. should continue to move lower in this pair! The 8hr TF is just entering a set-up ….. should the earlier TF fire positive for CAD then the 8hr will set-up nice & should run in a sideways state until fire…. Still looking/tracking the weekly squeeze which has been running for ever….. This fire will create the final move in the pair I believe unless is excessive triggering the monthly which goes WAY back running something like 2 years…. that will be the gravy profit zone…. be we are not there yet to consider this long TF…

    Cheers Schemd,

  9. schmederling September 15, 2013 / 11:41 pm

    confirmed neg FIRE on the USD/CAD pair… she is going lower… Now I will look for the 4hr TF to fire Neg driving CAD higher here….. we should rest after that…..

  10. schmederling September 15, 2013 / 11:42 pm

    Sorry confirmed fire on the 2hr TF…. a little quick on the typing this morning… 🙂

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