Author: Forex Kong

A Traders Edge – Look To The Bigger Picture

Forex Kong Got something to say?

This came up in the comments area and I wanted to post this for everyone – as I believe  it to be an important point.

I see “risk on” for commodities from a couple different angles – and yes…..at times it is difficult (especially these days) to discern which direction things are headed with so much information, and so much of it conflicting.

  • From a purely fundamental view – world populations are growing, and resources are diminishing (things we all need/use are getting harder to find) = commodities up
  • The simple fact that as the world’s current reserve currency (the U.S dollar) is firmly being targeted for devaluation, the cost of these “things we need” should rise – as they are priced in U.S dollars. Dollar worth less = commodities up
  • From a currency point of view – long term trends in AUD and NZD (like..a weekly chart at least) are clearly in very well defined up trends despite recent volatility and the daily action. Commod currencies up = commodities up

Zooming out to a larger picture often helps frame shorter term trade decisions (or at least provides a solid background) when the day to day volatility gets difficult to handle. The “edge” can be found here – in having the confidence in your decisions, knowing you are trading in the right direction from a larger point of view – and not letting the “daily squiggles” bump you out of your trade.

A quick chart of the  “$CRB Commodities Index”  and the likely direction of “all things commodity” coming soon to a theatre near you.

The Commodities Index - $CRB

Commodities set to move higher

A Race For The Bottom – Who Cares Who Wins

Forex Kong 3 Comments

There will be no discussion of the “potencial outcomes and implications” of the U.S elections results here….short of this. Obama wins hands down, and the entire planet breathes a huge sigh of relief  that the U.S didn’t revert back to the previous policies/leadership that put them in this position in the first place. Trust me, political views aside (myself being Canadian and now living in Mexico – go figure) global financial markets are not interested in ” upsetting the apple cart” of continued money printing and easing – now being adopted worldwide.

Nothing will change regardless of the outcome – as the wheels are now set in motion for the endless printing of dollars ( and Euro…and Yen etc..) as the global  “race for the bottom”  – begins to pick up speed.

At risk of sounding like a broken record – as the value of the U.S dollar continues to fall – gold/silver ( and the commodity related currencies ) stand to be the largest benefactors – as money gets cheaper……..and “things” become more expensive.

Last I looked  – I believe its called inflation.

Watch for real time trading here  – via the twitter feed on the right hand column. I expect the week to be “profitable”….. to say the least.

Kong……..gone.

Open your Eyes – Take Comfort In Commodities

Forex Kong 8 Comments

If you only follow one asset class…ie…gold or bonds…or stocks via the SP 500 or Dow – you really need to consider opening your eyes a little wider to get a true understanding of where things are going. The financial blogoshpere is ablaze this morning with freaked out investors and traders –  crying the blues that gold has “fallen off a cliff”  and that the dollar is headed for the moon. This couldn’t be further from the truth.

Indeed gold has taken a dip ( and for many…30 bucks may seem more like a crater) but looking at a daily chart, and drawing a simple trendline – one finds that this is as normal a pullback as any, and that the up trend in gold is very much intact.

Currency wise – the commodity related currencies  (or CommDolls..including AUD, NZD and CAD) are more than holding their own, and continue to gain ground against the dollar – as oil likely finds support here as well. The only “real loser” here today is the EURO – and even at that, is no lower vs the dollar than it was  a month ago.

Looking at the larger picture across several asset classes, this looks like a buying opportunity to me, and as much as I understand how difficult it may be – you really do need to open your eyes ( and possibly hold your nose) “buy the blood” and take comfort in commodities.

Sitting on my Hands – Ankle Deep In Green

Forex Kong 2 Comments

Full time trading is hard.

There is no question about that. Pretty much everything you’ve ever heard about the psychological strains, the isolation, the pressure, the stress – is true. Not to mention the time invested, the knowledge needed, the discipline required, and the hard cold fact that each and every day – you are essentially “going to war” against the worlds fastest computers, and some of the highest paid, and most intelligent people on earth.

Oh ya….and all you’ve got is a handful of your own money, a cheap laptop, and if you’re lucky – an internet connection that won’t crap out on you while you’re watching the market crash on CNN Español.

So…….when things go in your favor – and your hard efforts have been rewarded with your trades safely “deep in green” I guess its ok to just…..sit on your hands.

Markets look poised to move higher.

Don't Get Fooled Again – EUR Is Going North

Forex Kong 4 Comments

Listen……….

The $dxy (or symbol:$usd) tracks/charts the U.S dollar against a “basket of currencies” where 57% of that basket is weighted EUR – and the remaining percentage is broken down as follows:

http://www.fxtrademaker.com/usdx.htm

Often… traders will watch this symbol, and make assumptions as to the dollars strength or weakness based on its movement.

BUT……………..

When looking at individual currencies independently – “against the U.S Dollar” one can see that this is by no means accurate – and in my opinion…..extremely misleading.

I see the $dxy at 80.05 presently ( up +0.14) – which would suggest dollar strength – right?………RIGHT?

Then why is my screen “so deep in the green” when I am short the U.S Dollar?

HMMMMMM……………

BECAUSE I AM SHORT THE DOLLAR AGAINST EVERYTHING UNDER THEN SUN….”OTHER” THAN THE EURO!

AUD  killin it……NZD killin it………CAD killin it.

So….You get it?

Don’t get fooled…the dollar is goin down….down……down.

More Of The Usual – NY Jungle Fleecing

Forex Kong 5 Comments

You know…I really feel sorry for anyone looking to get into this game from scratch – right here…right now….under the current market conditions…this “jungle” we call a market.

I climb down from my nest in the dark of early morn…grab a bamboo shoot er two, sit down at my computer and look to plan my assault.

Pow! I book any and all profits from the overnight – go 100% cash – sit back and watch the same ol scenario play out – as it has, time and time again.

The entire days move (for the most part) happens before the open! – and for the entire day – poor “hopefuls” plop down their hard earned (or borrowed?) cash – lucky to see a penny of it left as the day comes to an end.

Left confused and likely scared half to death  – the following day is then filled with panic selling (ironically) as the market screams higher…and higher….then higher! Huh?

Following currency markets – allows a trader to monitor trends / price action 24 hours a day….and not fall prey to the usual “NY Jungle Fleecing.”

Ill look to reload tonight  – as the monkeys in London wipe the sleep from their eyes, and reach for the bananas.

A Flood of Dollars – And Golden Rain

Forex Kong 3 Comments

As the mighty Hudson River swelled and unleashed its fury on the Jersey Shore – so too it appears that The U.S Federal  Reserves “flood of dollars” is set to break the levees in global markets.

The dollar looks to continue its turn downward – and this gorilla is calling for rain……………..”golden rain”!

Overnight gold has popped 8 or 9 bucks and is certainly looking ready for a fast break to the upside.

My accounts as well popped an additional 2% – and (if you can believe it) have already taken profits – looking to re enter here mid day / this afternoon after the usual “morning shenanigans” play out.

I never EVER worry about missing a trade after taking profits and looking to re enter in that:

  • One has to be thankful when things go their way so early on.
  • It always feels “amazing” sitting 100% in cash (especially when there is more of it than the day before.)
  • There are a million trades – and no “train is gonna leave the station” in a 24 hour period – without a large percentage of retracement / opportunity to jump back on board.

Things are looking good across the board for continued “Risk On” in markets – and the same strategy is currently in play – Short the U.S Dollar and Yen against the Commods – as well long n strong EUR/JPY.

I might pick up another couple pairs here today (long GBP/JPY,CHF/JPY) with small orders and wide stops as these can rip your head off without a moments notice.

All Green On My Screen – As Dollar Tops Out

Forex Kong 13 Comments

As suggested over the last two days – it appears that the dollar has finally completed its last push higher – and is looking to roll over. There may be a day left, or perhaps a quick spike in this evenings trading –  but I expect any further upside to be “limited” at best.

All trades entered as of last night are sitting in  profit – and the plan moving forward is shaping up – right on track.

I am currently short both the U.S Dollar and the Japanese Yen against the Commods – as well as long EUR/JPY.

Depending on overnight action, I will be adding to these positions rather aggressively here at the turn – as to maximize profits and catch this next leg “up in risk” – staying short the safe haven’s – and getting long the commods.

This is a rather significant turn here, as the dollar is unlikely to gather much support (thanks to Ben’s QE to the moon!). One would have to expect that “inverse” to the dollar moving lower – gold, silver and related stocks are set to fly.

I would not suggest missing this entry in gold and related stocks – as the gold bull is incredibly difficult to ride. The pullbacks are deep – so deep in fact that most traders dump at the bottom – and then get beat up trying to chase it.

There are only a few times a year ( if that ) when buying gold is a no brainer – this is one of those times.

Weather as a Weapon – Ever Heard of H.A.A.R.P?

Forex Kong 2 Comments

I’m no conspiracy theorist  ( well……sort of ) – and this is a stretch to say the least.

But……….with the incredible significance attached, to the  outcome of the coming U.S Presidential Elections – could you imagine if one of these bozos had the keys to this:

HAARP – This acronym stands for High-frequency Active Aurol Research Project.

HAARP- and  is a secret undertaking that is not unlike the Manhattan Project which gave us the atomic bomb.

HAARP irradiates the atmosphere with enormous levels of ELF radio waves. In addition to altering weather patterns and creating storms, HAARP is also known to change the way in which the human mind operates and lower our resistance to disease.

HAARP towers look much like regular antenna towers but they specialize in ELF radio waves. While these types of towers are located in many parts of the world, America has constructed the largest array of towers in the world in Gakona, Alaska. These HAARP towers cover 40 acres, and are connected directly to a gas field, thus giving uninterrupted and cheap power to these fields. HAARP was fully functional in early 1993.

HAARP provides the ability to put unprecedented amounts of power in the Earth’s atmosphere at strategic locations and to maintain the power injection level, particularly if random pulsing is employed, in a manner far more precise and better controlled than the detonation of nuclear devices.

Could Obama or Romney “create a hurricane”?

HAARP is the largest ionospheric heater in the world, and its location in  Alaska provides just the right location on Earth for such an ionospheric heater to be used to control and manipulate the global weather as a weapon.

NYSE now flooded for the first time since like……the early 1800′s.

Go Ahead BOJ – Make My Day!

Forex Kong Got something to say?

There is considerable expectation that with tonight’s monetary policy announcement – The Bank of Japan will be adding to its current easing program – and continue to expand its balance sheets.

What does this mean to me as a trader?

It will likely contribute to further Yen weakness if indeed further easing is announced……and provide for some excellent trading opportunities.

Regardless…..as money generally  flows “out” of safe haven currencies (such as the Yen and the U.S dollar)  and “in” to risk related currencies (such as the AUD and NZD) I see fantastic trade opportunities developing in pairs such as AUD/JPY, NZD/JPY as well as CAD/JPY.

The Australian , New Zealand and Canadian currencies  are often referred to as the “CommDolls” in that these countries are large producers and exporters of such commodities as gold, silver, and oil.

So…..What would anyone consider the Yen a safe haven?