currency trading

2014 – You Will Never Trade It

Forex Kong 6 Comments

Ironically ( and in light of yesterday’s post “seen here first” ) overnight, both China and Japan have now publicly warned that the U.S better get its act together pronto.

As well (and again, I’ve got no crystal ball down here….only Mayan Shamans) The IMF (The International Monetary Fund) has now released the following:

“World growth will be slower than expected this year and next, and will take another big hit if the U.S. fails to resolve its debt drama, the International Monetary Fund warned Tuesday”.

“The IMF cut its 2013 global growth forecast by 0.3% to 2.9%.”

In other news ( not like you’ll see it on your local T.V ) China’s growth forecasts “specifically” have also been reduced.

Getting the message anyone????

Are you getting the message?

Zoom out and take a look at the next couple years, pull out your tin foil hats and get your shopping carts tuned up. 5 years worth of incessant money printing / stimulus, stocks “inflated beyond belief” and NO RECOVERY!

The normal business cycle ( which has been the same for generations ) has been stretched ,pulled , manipulated , extended “past” what we’d normally call “normal” and it’s time my friends……it’s time to get real.

I’m open to discussion as to “what the hell” to do about it, but the bottom line is – silver clouds / hope / faith / positivity / good attitude doesn’t pay the bills.

Start thinking “seriously” as to where you can look to tighten.

For your reading pleasure: https://forexkong.com/2013/01/31/2013-you-will-never-trade-it/

Get The Trades Via Twitter – And Comments

Forex Kong 10 Comments

A really nice spike in the U.S dollar today ( considering I’ve been long for days now ) with several trades paying off well. As well (specifically) foreseen weakness in GBP coming to fruition here overnight. I invite anyone who isn’t already following on twitter or “the comments section” here at the blog to join/follow as there are lots of great info from other traders here as well.

It’s been interesting to see this move higher in USD in line with “risk on” activity in markets today but then again not so unusual. We’ve seen equities and USD running in tandem several times over the past few months as hot money from Japan is converted in / and out of US in order to buy and sell stocks.

THERE HAS STILL BEEN NO REAL MOVE TOWARDS SAFETY.

Glad it’s the weekend here as I’ll be diving / snorkeling. Have a great weekend everyone!

Trading October – Through Gorilla Eyes

Forex Kong 8 Comments

It was meant in jest as last Sunday’s post may have pissed a couple of people off.

Now in retrospect – 8 straight days “down in risk” and the “warning” doesn’t look half bad no?. In any case…..we’re smack dab in the middle of “yet another” challenging scenario for both bulls and bears alike.

It’s hard to get “overly optimistic” when the U.S Government can’t “govern” a sack of wet mice let alone themselves…let alone the largest consumer economy on the planet. Yet there’s still “Uncle Ben” lurking in the shadows, printing press in hand, there to “save the day” should things get “too far off track”. Talk about a gong show – and an extremely difficult environment to evaluate / makes sense of…let alone trade.

Every fundamental bone in your body itching to “short this thing into the ground” – while every Central Bank on the planet keep stacking their chips higher, higher and higher.

One thing we can say with certainty is that “this thing is gonna end really, really badly for a lot of people” as we are so far off the reservation now – there’s absolutely no chance of a happy ending. No chance.

What’s October looking like from a gorilla’s perspective?

I don’t waffle, and I don’t make “safe market calls” in order to stay credible. Frankly I generally don’t muck around “much” with intermediate type market calls” as I’m both macro – and micro.

What happens “in the middle” under the current market conditions is exactly what is “supposed to happen” when a significant turn / area has been reached. Confusion , indecision , sideways , churn , chop , grind. Call it what you want – it’s “by design” that accounts get blasted, nerves stretch, blood pressures rise – and traders / investors are pushed to the limit.

We need to look at the dollar (obviously) as well stocks and gold. Bonds fit in there too don’t forget so…..a look at “all things relevant” to follow – through gorilla eyes.

USD Face Ripper – Caution Ahead

Forex Kong 11 Comments

I’m not sure how “or why” I came up with it. Perhaps something in a dream or maybe something I read – I can’t remember.

Face Ripper ( as per Kong ) : A ridiculous move in the price of a given asset, when the complete and total “opposite” move is expected.

I know it sounds gross. And….essentially “it is” gross but…….. at least it gets the point across.

One day you’re making a trade, and feeling good, confident , “safe”. Next day – Boom….No face.

Wether or not it happens in a day or a week…or a month for that matter – this thing is setting up for an epic move. The overall complacency in markets is downright irresponsible, and reflects an investment environment that is so far “up in the in clouds” that a “trip back to Earth” is most certainly in the cards.

USD WILL RIP YOUR FACE OFF.

As most traders don’t truly understand the larger “macro” reasons as to why the U.S Dollar “rises” when things look to be at their worst….this is most certainly the case. Every penny that has been invested in assets / converted to other currencies in emerging markets ( as to make larger returns / gains ) comes flooding back into USD on the “slightest indication” that the party is over.

USD WILL RIP YOUR FACE OFF.

Enough said. This “gov shut down circus” is only the first act….as we’ve got several more to go.

CAUTION AHEAD.

Massive Divergence in GBP – The British Pound

Forex Kong 4 Comments

I see massive divergence in the recent move “upward” in GBP ( The Great British Pound ).

Fueled by talk of a “possible rate hike” out of the U.K coming “before” any kind of hike in the U.S, the currency pair GBP/USD has skyrocketed in “price” – yet floundered with respect to “strength”.

Coupled with the over all weakness in USD over the past few days, the combination of factors has pushed the pound ( guess where?) yup!  Right into a long-term area of overhead resistance.

How much higher can it go?

A better question might be “how much lower” as nothing “forex wise” moves in a straight line for long, and we are pretty  stretched here as it is.

I will patiently wait for “at least” a turn on a number of smaller time frames, as well “Kongdication” but in all – it really doesn’t matter. I will get short GBP soon.

After a move of over 1,400 pips ( so in nominal terms the pound has gained 14 cents on USD ) since July – what are the odds it gains another nickel before “retracing” a portion of this massive move?

Slim to none.

Talk about a decent short-term investment return no?

Who cares what the DOW did.

Currency Trading – Everything Is Relative

Forex Kong 2 Comments

When trading Forex one has to keep in mind – everything is relative.

Weakness in a particular currency is only “seen” when that currency is compared / traded against another “specific currency” where the “relative” difference / change in value can be compared.

Hence the reason why forex is always traded in “pairs”.

Often we see the pair EUR/USD ( the Euro compared to the US Dollar ) and generally assume “dollar weakness or strength” based on this pair – and this pair alone, yet the dollar’s performance vs AUD ( The Australian Dollar) for example “could” be an entirely different story depending on specifics affecting AUD.

To “generalize” or to “assume” a given currencies direction without viewing it “specifically” against each and every individual currency would be naive , lazy – and likely quite costly.

The US Dollar has taken a considerable down turn “again” this morning – or has it?

Against the EUR sure ( as these two will always “see – saw” being the two most widely held reserve currencies on the planet ) but in all……….USD has barely budged against a pile of others.

The one thing that has moved here this morning is volatility. Volatility is up , up , up and away.

Spend the time ( it might actually take 5 minutes a day ) to get familiar with currencies, oil , stocks , gold etc  in a “relative manner” and before long – you’ll be seeing things much more clearly.

Oh My…..Just A Couple Of Trades Paying Off

Forex Kong 8 Comments

Oh my……….

It would appear that the recent “tweaks” to the Kongdictator have been…….AWESOME!

EVERY SINGLE TRADE SUGGESTED / ENTERED VIA MY SHORT TERM TECH IS CURRENTLY “WELL” IN PROFIT.

These things can turn on a dime fine…..( although forex wise – not so much )…but that ‘s 8/8 as per the “real-time updates” at the beginning of last week.

Read ’em n weep sucka’s ( for those following from Forex Factory).

Tequila time for Kong!

 

Forex Strategies For Investors – Timing

Forex Kong 4 Comments

I can’t help but say….I’m a little choked.

We’ve been over a number of key points here, when considering “taking a trade”, and now turn our focus to “making an investment” as essentially – a completely separate topic.

Anyone care to hazard a guess,  at one of the most important factors affecting each?

Hey! You got it!

Timing! Timing! Timing!

You can have all the fundamental knowledge in the world, as well possess the “ultimate technical know how” yet, if your timing sucks……………….sorry to say – you are sh/#&t outta luck.

Anyone making an “investment decision” without (at least ) “some” understanding or awareness of the “possible downside or risk” might as well just sign their account over to the brokerage and wait for the call – letting you know your account has been reduced to zero!

Have you lost your mind? With absolutely “no plan” for the “downside” what you are essentially saying to me is ” I bought a stock, and expect it to go up, up , up , and continue going up forever”.

Or at least….that’s what your broker told you, and believe me – he won’t be calling you to let you know anything otherwise.

Again – have you lost your mind?

This “isn’t investing” as clearly – the landscape has changed. Your broker and your bank are your enemy, and will stop at nothing to see you and your hard-earned nest egg “parted” as readily as possible.

This is 2013 people! You have the entire planet’s libraries at the push of a button!

If you can’t make an investment decision based in your “own knowledge” of a given asset’s performance over time ( and in turn “some idea” of its peaks and valleys / areas of support and resistance) then WTF?

How can you see an area to take profits? How would you know an area to “cut your losses” should things go “that far” against you?

How can you honestly say you’ve got “any idea at all” as to what you’re even involved with – short of putting your entire “nest egg/investment dollars etc ” into the hands of an institution whose soul goal is to extract it from you?

GRRRRRRRRRRR………..

More on timing next…………

Forex Strategies For Investors – Not Traders

Forex Kong 10 Comments

I’ve spent the past week “out in the trenches”. Pulling back the curtain “just a bit” and hopefully providing short-term traders with a couple of ideas  – and the chance to make a quick buck.

For the most part this area of forex trading is extremely difficult, time-consuming , stressful , annoying and for those with little experience  – truly a fool’s game.

What I’d like to do now, is take a complete 180 degree turn and take a look at forex strategies and concepts geared more so for the investor.

Let me throw out a quick scenario.

What if I told you that your Canadian dollar exchange to Mexican Pesos is 12.79 ( simply consider a dollar being worth approx 1.27 here ) Not bad eh?

Ok…..so now what if I told you that the “base savings rate” at any of the excellent banks here in Mexico was 3.75% – You starting to get the message?

So what if you could go to the bank in Canada tomorrow and get a loan for 100k ( at near 0% ) Then take “said loan” and convert it to Pesos – and put it in a bank account at 3.75% – with absolutely no risk.

Boom! Forex as investment.

It’s what your local banks are doing hand over fist. It’s called the “Carry Trade”.

It’s not “new” it’s not “sketchy” – It’s a major , MAJOR driver of profit for banks across the planet.

More over the weekend……

 

written by F Kong

Risk Off In AUD – JPY Moved Higher

Forex Kong 4 Comments

As markets continue to “flirt” with a real move / turn – I’ve taken a couple additional trades over night.

Short AUD/JPY as well long GBP/AUD. Both well into profits with prior trades ( see previous post ) all moving even further into profit. ( The Insanity Trades are well…..insane.)

The Australian Dollar (AUD) is showing considerable weakness across the board, as our old friend the Japanese Yen (JPY) continues to move higher.

I’m pleased to report that fewer signals were offered last night, and that the latest tweaks to the Kongdicator has kept me out of sideways action in USD related pairs, while hitting home runs in others. This is the plan.

I won’t bore those who are here reading on macro market analysis / fundamentals much longer with this “technical stuff” a day longer – and appreciate those who have followed along so far.

Markets are “teetering” here – and it’s nuts out there. Trade safe, and we’ll get back to some “overview” during the weekend.

Anyone who isn’t already following on Twitter – I tend to post “real-time stuff” there, as opposed to putting out an additional blog post so….