forex trading

The current framework has been performing well. We’ve had several days “short” USD while the majority of market participants are “just now” starting to see the weakness in USD, as well the big jump in Gold down around 1180.00 ( we saw that too ).

We’ve banked several hundred pips just over the past few days in a number of currency pairs.

Volatility is certainly “back in town” so I’ve been more inclined to “take profits fast” and then look to re-enter trades on pullbacks or momentum – depending on the timing.

Today has again provided opportunity to “bank profits” and look to re-enter on any kind of bounce, perhaps “after” the U.S data comes out.

A quick look at AUD/USD with identification of the current “channel” on a 1H.

AUD_1H_Forex_Kong

You can see that taking profits at the “top of the channel” ( just within the last hour or so ) makes total sense, but then of course you have the difficult job of “re-entry“.

Depending on the “angle of the trade channel” as well the “width” ( this one being around 120 pips! ) you’ve got a couple of choices.

1. Put in orders “above” the recent high and catch “momentum” ( only that you leave some 75-80 pips of potential movement).

2. Wait for price to find an MA that you generally see it turn / follow along from prior price action ( in this example the blue 200 SMA may serve this purpose ), or wait until price comes “all the way” to the lowest part of the channel, and try to pick it up “on the cheap”.

I’ll often look to do both. or follow price action very closely and look for a reasonable “swing low” on perhaps a 15 minute chart ( although this could occur “several times” within a 12 hour period and isn’t so reliable ) still attempting to put my orders “a few pips above price action” to catch things only when they start moving my way again.

I wanted to get this out early enough for it to be relevant to today’s action / taking profits etc….and will plan to re post again here mid day.

Remember…I’m here and available “most of the day” for any questions or more “real-time discussion“.

You’ve really got to love the media.

The following headlines captured here this morning:

• Japan’s Nikkei 225 Posts 7-Year High on Weaker Yen
• Nikkei 225 – Offers Great Breakout Pullback Setup, Bullish Bias
• Nikkei 225 Set for Further Gains

I guess we’ll see about that now won’t we?

Think hard, then ask yourself – what possible  reason would there be to buy anything “Japanese” as the stream of economic data continues to go from bad to worse, then to even worse? Oh ya……then there’s Fukushima. Oh ya that….just the largest “human disaster” in recorded  history….ya that. We’ll thats no big  deal or at least……that’s what they say on CNN.

Puke.Gag.Choke.

Please.

We’ve got our “lower high” in Nikkei, and the current framework ( however long and drawn out) remains intact. All exactly according to plan – short of taking “forever”.

We could “literally” be hours away, as USD tops out, Nikkei rolls over, Yen pops and U.S equities turn lower.

Thursday’s generally seeing the pivot/move, so no trades for today but I encourage all to “man their battle stations”.

We should see some action here soon.

I’m starting to run the risk of being called a “top caller” as the Alibaba I.P.O stirs further “bullish euphoria” across markets here this morning.I can live with that – if people are willing to consider this a ” 7 month topping process”.

The fundamentals clearly suggest global growth is set for a significant downturn moving forward, and it’s impossible to argue that. Trading is trading and investing is investing. You make your own choices.

I’ve traded through it as we all have – with some fantastic wins, a couple of losses but most importantly with caution. The time to step on the gas will come, and even while “pumping the break” 400 pips  short AUD there and ( just over the last 48 hours really ) another 300  or so long GBP/USD as suggested some days ago.

**real time trade alerts are available via email to members only**

Obviously another day with markets at all time highs, and the media blast right along with it. Buy,buy  – you must buy now!

I’m not buying it. You know this by now.

The Japanese Yen is a “hair away from bottoming” as USD soon looks to take its “intermediate journey” lower, and there along side it will be U.S  equites. It “is what it is” for another day here with very few irons in the fire, patiently plugging away and taking the trades that come.

Re entry  ( or your first ) here long GBP / USD around 163.00 looks fantastic, as USD slooooowly runs out of gas.

More in the weekly report  Sunday evening, and via “real time market commentary” during every trading day at www.forexkong.net/register

You gotta love the headline, and I can see it now…..

Every “kool-aid drinkin Fed head” on the planet convinced The U.S Dollar is “on the rise” due to  strong U.S economic data – biting my head off here in days to come.

How dare you suggest The U.S Dollar is going down hard! How dare you Kong! How dare you!

Well…….

I’m actually amazed that The Fed and U.S Gov have allowed the thing ( USD ) to get this far out of the basement as it is so……..yes I’m saying it – I think a whole lot of USD bulls are about to get taken down the river.

The boat looks about as loaded as need be.

Let’s tip this thing.