Keep in mind everyone – this is a blog that requires “eyeballs” in order to be of any use to anyone so…..please forgive the occasional shameless plug. It’s a dog eat dog world out here in the “financial blogosphere” where “catchy headlines and the promise of riches” go head to head with good ol straight up “honest advice” on a daily basis.
Snake oil salesmen run rampid through these jungles, though few of them wearing the proper footwear.
So…..what are you looking at Kong? What makes the difference from one day to the next, that has you enter a trade or not? How do you know “when” to push the button? And how is it that ( more often than not ) you appear to enter markets at almost the “exact” right time?
Truth is……aside from my custom technology “The Kongdicator” which essentially tracks pure price action ( providing signals when a very specific set of criteria has been met ) the largest contributing factor is really just straight up old fashion patience, coupled with a solid grasp on “each currencies role” in the grand scheme of things.
The one thing the Kongdicator “can’t do” is rule out the amount of time that a particular asset will trade sideways / flat. This is where conviction and knowledge come into play as….you’ve got the level ( or around about the right level/price ) but can’t really know “how long” price may remain there.
Take this week for example where many forex pairs have literally – “barely budged”. Does this mean your trade entry was wrong? Not at all! Only that the amount of “sideways / churn” was near impossible to account for.
This also lends credence to the idea of ” trading in smaller orders around the horn” as…..you tie up less capital on your initial entry, you’ve resigned yourself to the fact that it “may not be perfect”, you’ve kept plenty of gasoline in the tank and you’re able to sleep through days and days of the dreaded “sideways” – without really getting to worked up about it.
You then plan to “add” to your position as things move in your favor, and have far less concern if things “don’t” – as your original position is relatively small.
Fine tuned entries as best you can – sure…….but “small entries over time” is equally a fantastic addition to your trade arsenal, keeping you in the game longer, allowing the market to “do its thing” and hopefully allowing you to sleep at night.
Hope it helps.
All entires looking good here as of this early morning so…unless something “incredible” changes here this afternoon – these trades will again be “added to” as they move further into my favor.
Ya sideways chop has been such a thing to contend with over the past few months and stiff unexpected retracements…so if you are positioned too heavy and light on patience its game over. Totally something I have done in the past. Much better these days because well I don’t really enjoy putting in tons of time and not getting paid for it. Without the two working together…patience and proper positioning you have no real hope of getting paid for your fundamental work and analysis…at least in any consistent way. I personally will not put up with that anymore because time and returns should be fought for…not frittered
Great post Kong, a must read for any trader new or old.
Boy, I like long GBP/CAD (pretty much long GBP/anything), but a 300 pip up move from this morning, I’m gonna nibble at a fade and see what FOMC brings, better additional fade entries later or quick profits, I’m fine either way with the outcome.
A clean break and hold of mid 1.85’s will be interesting, as that was some good resistance when we were shorting it last month. I’ll have to Reevaluate if that occurs today/tomorrow and look to close out on a shallow pullback but plan to add a heavy short down the road if/when GBP/USD can near 1.70 and USD/CAD ideally silmultaneously hits 1.12 (that’s gonna be a monster short in my opinon; salivating just thinking about it).
Gbp/usd will reach 1.69 soon (before june?)
Hey Dr. Kong…. Nice call on the long USD/CAD position….. I was taken to the wood-shed on this trade – still holding down some 120 pips currently but added to my shorts….
Same with Tesla & FB but as with all or most of my trades – these are in options which have sufficient time to play out…. added puts to both Tesla & FB today even before earning for Tesla…. this one IMO is ready to POP & head lower…. we will see over the next little while….
PM’s & diggers playing out as expected on this pullback…. there could be a little bounce tonight & tomorrow until Friday am where I suspect we will have one final pullback into options exp…. will play/trade this movement should it play out as outlined…. reloading heavy into option late Friday or Monday….
As for Nat Gas which I have been talking about for weeks now – finally made its move over the $6 target – this is break-even price for producers – Again here expect option exp to provide an interesting set-up….. right here I would be looking for profit taking & then a final burst to the $7 range as a extreme top…. but anyone involved since the last pullback to the $4.80 range last week has done very well….
Cheers for now Schemd
I also think that stocks are in a ” Dead Cat Bounce” currently & unlike the majority of people thinking this will start to roll-over Thursday or Friday….. Looking at Puts in DIA & Calls in VXX tomorrow morning….:)
Cheers Schmed,
Yo Schmed….site is all good – just that I’ve not been here at home, and there where a number of comments in the que.
What can anyone say about USD/CAD? as …..being on the right side of it was / is a crap shoot really.I only saw that USD was due for a move, and hadn’t accounted for poor data out of Canada. Long is good here but this pair never really moves “too far” from the mean so…..hang in there or dump.
You may not want to hear this….but I’m already “short” Nat Gas as it’s as overbought as I think it’s ever been.
Late Feb now…..Nat Gas gonna get pounded in my view.
I’m excited for the pullback in miners…..I hope it’s deeper / more severe as this will be buy opp of the year.
Supposedly some of the CAD weakness yesterday was related to Canadian Natural Resources buying around $2.8bn of US natural gas assets via Devon Energy, which is said to be selling up various parts to focus on shale.
I try to keep these bigger deals in mind when I run across them as I found that they can prop up or momentarily slam a currency.
With that in mind, some upcoming GBP strength could be due to the Vodafone / Verizon deal, which should prompt some support for GBP/USD near-term. GBP did take a nice quick hit last night though, which was perfect for me to dump the GBP/CAD short (as I really wanted out of that “day-trade” before the CAD data comes out tomorrow morning).
Looks like yen consolidation is going to lead upward. I’m sure we will see the usual pump job tomorrow. I’m happy I’ve already got great profits but will hesitate to get too excited till I see tomorrow late morning. Although now that we are all so used to it going back up it’ll probably just go straight down haha
Dr. Kong…. have some posting issues….. anything wrong with the site?
Hey kong,
Wish all your trades make huge profits!
Aud/jpy taken profit twice this week. Markets is getting more interesting. Good luck everyone 😉
Wash rinse repeat! If you take a look at the DX either 6 months daily or year even weekly there is still the argument that we just saw an attempt to retest the low and now a meaningful rally will persist. It’s really slow and grindy but if stocks churn down and taper holds the rally could continue. I’m still long USDCAD
I’m still holding too, but when we see 4 or 5 days USD strength…..I dunno.
Ill look at it then.
I’ve little faith in a sustained rally.
Yup. I’m just trying to keep an open mind. With stocks up this high and a few correction inducing factors coming out I feel I need to stay open to anything. A strong dx rally, yen rally would be amazing for new set ups but ya I’ll not fall in love with anything.
I don’t know that I’ve every been “less exited” about forex than I am here now.
These past 2 weeks day in, day out – grind, grind etc…
The price action is “worse” than watching paint dry, and with the continued “mixed views” on the Fed’s next move, it makes little sense to get to attached to “anything” exactly.
I am pleased to see the miners / silver breaking out. This next pullback should provide for some knock out entries across the board.
I’m looking to take advantage of that while currencies figure out what’s what.
Yup I’ll be buying gold and oil futures fairly soon. Oil has been coiled for years now and should make a mean break to the upside this summer. Unless the landscape changes I’ll take a pretty aggressive position in the next 2 to 4 weeks
Forex trading is actually an art of making money