how to trade forex

EUR And USD – How To Trade Them

Forex Kong 2 Comments

It´s simple. Very simple.

The EUR and The U.S Dollar are simply the two most widely held currencies on the planet. This being said….you can usually generalize that weakness in one suggests strength in the other ¨regardless¨ of the news. Seriously…….all news aside you can generally just look at EUR and USD as ïnterchangeable¨ – trading nearly 100% correlated. Tit for tat.

So……..with further consideration that USD has now reached a major inflection point ( and is headed decidedly lower ) we can also assume that EUR is set to bottom. Fair assumption?

Now you start looking at EUR pairs specifically and ask yourself……which currencies will I see the largest moves in against EUR?? Well…….we can also assume that commodity related currencies take a hit when risk appetite subsides right? Currencies like AUD and NZD ( Australian and New Zealand ) generally  fall when risk appetite wains so……long EUR and short AUD?

EUR_and_AUD_When_Risk_Comes_Off

EUR_and_AUD_When_Risk_Comes_Off

I’m watching exotic pairs such as EUR/AUD ( which also falls into my ¨faceripper¨ category, being that this thing is extremely volatile, and ready to blow up in your face at any moment ). You can’t trade this thing…..but you can sit on the sidelines and observe.

I´m watching this pair as of today…..not trading it – YET!

Facerippers are nuts. These currency pairs will clean out your account without a moments notice so please – do not try this at home! Watch this pair……watch for the coorelation to ¨risk on vs risk off¨.

USD Tanks – The Decisive Break Lower Arrives

Forex Kong 4 Comments

There’s little more to be said here this morning – as The U.S Dollar plummets nearly a full 1%, down a full 100 points from 96.00.

Absolute Dollar devastation as both GBP as well EUR make 100 point gains, USD/JPY hit’s resistance and dumps….and our little gaggle of gold and silver miners now up 7-9% since entry.

I’m obviously short as “sh&%t”…and very well positioned ahead of the move. So what could you have done better perhaps?

  • You “could” have plotted areas of support and resistance on your charts “long before this move was made”, and have been fully prepared with your orders
  •  You “could” have created 3 small orders and “legged in” over the previous 3-5 days, ensuring and average price and not betting the farm on a single entry.
  •  You “could” have shut of your T.V, eliminated the noise, and gotten back to your charting…where you would have clearly seen the set up coming.
  • You “could” have opened your mind to the “other side of the trade” ( vs the general main stream media ) and taken advantage of some pretty early indications ( here at the blog ) that things where about to turn.
Forex_Kong_Ashamed

Forex_Kong_Ashamed

There it is…..likely the best possible entry / trade tip / suggestion that you’ve seen laid out for you over the last several days…no stress….no pressure. No chasing markets in panic…no text marathon’s with your broker…just proper planning and execution. A very well placed trade, looking to become a very VERY profitable trade.

So what are you gonna do now? Seriously………..what are you gonna do now?

Currency Markets Move – Just Slower Than U Think

Forex Kong 8 Comments

As I’m sure you’ve been following the “bold call” earlier this week..our dear friend U.S Dollar “has indeed reached the 96.00 level”, and as suggested – has clearly been rejected.

On has to appreciate not only the timing and levels, but the “patience required” in planning your trades, then executing properly.

This trade “short USD” was outlined back on Monday.

The_Next_U.S_Dollar_short

The_Next_U.S_Dollar_short

This is the key difference in “planning a trade” as opposed to waking up early one morning, and “impulsively taking a trade” cuz of something you’ve heard / seen on the T.V. This generally has you “chasing markets” and usually ends in a loss.

Broadstroke……this has USD headed lower as expected. and will also likely mark a “daily cycle low” for both Gold and Silver ( have you bought your few small mining companies yet? ) providing these with several days upside to follow.

Perhaps consider a shot at EXK and / or GPL for some silver plays ( fun ones…….very  cheap ).

Have at it people. If this hasn’t put you in a decent spot to make a buck er two shit……..what else do you need?

 

 

USD – Major Inflection Point At 96.00

Forex Kong 1 Comment

Whatever…….

Call it 96.50 or 97.00 – I mean seriously. We are talking about 1/100th of a cent difference in the value of the currency so…..take your decimal points and go blow it. Its far bigger than that.

Forex is highly leveraged, and great deals of money can be made on even the smallest of moves but…..thats not the reason I trade forex.

I trade forex because it’s the ¨window to our world¨. Economically. Geo politically. Nothing goes on in any other market, any other asset class that isn’t first reflected in the currency market.

The trick is only to understand it.

Forex trades 24 hours a day…no pre market bullshit….no after market earnings announcements ( ever wonder why they do that? ). You don´t wake up in the morning to find out your stock has traded down 23 bucks during the hours that you´ve been sleeping….laying there – powerless.

You can stay in the game – out on the field 24 hours a day!

I like that as…….I like to play…and I´m very good at it.

USD in the 96.00 area suggests a serious inflection point. I won´t get into the fine details….just sticking to the plan.

You lining up any trades?

Thought not.

 

Forex_Kong_Finger

              Forex_Kong_Finger

 

Oooh! The Anticipation – Kong Buys IMG

Forex Kong 1 Comment

You can play “short USD” in any number of ways….and when considering “diversification” ( as any knowledgeable trader / investor should! ) why not throw a couple of bux towards those good ol gold and silver mining stocks.

As a “token” of my current plans moving forward “as planned”….I am placing the first of many orders “long gold and silver” ( inverse to short U.S Dollar ) here today.

Long IMG at 5.00 Even.

Gold_and_Silver_Long_Entry

Gold_and_Silver_Long_Entry

The currency side of things plays out pretty simply.

USD goes down and the largest gains are seen in pairs such as short USD/JPY and long GBP/USD, EUR/USD.

When risk comes off “in general” ( which will also happen for a time here ) even bigger gains are found in getting long JPY against AUD, NZD and CAD.

I expect U.S Equity markets to fall “along side” USD as well so – there’s a head scratcher for ya! Kong ! I thought that if U.S Equities get “sold” then money should just pour back into the U.S Dollar no???

No.

The big boys are already out of their “long dollar trades” and it will be JPY that rises as U.S Equity markets sell off.

JPY is the funding currency for this gong show, and you will see it hit the stratosphere when equities are sold.

The U.S Dollar – Here’s What Happens Next

Forex Kong 14 Comments

You know it’s funny…..human beings have become so lazy these days…so passive so….sedentary – they really just want to be told whats what. What’s going to happen. What to think. What to do.

Just lay it out for me in a couple of bold headlines and perhaps a small snippet of information please ( as anything more would simply be “just too much”. ) No need to get into any “great detail” – just tell me what to do so I cam make lots of money, and most importantly…think about very little.

Don’t raise any controversy, don’t rock the boat…don’t make me “question anything”. I only want sound, actionable information….and it MUST make me money while I do “as close to nothing” as humanly possible.

This is what is going to happen to the U.S Dollar, and this is what I am doing about it.

The_Next_U.S_Dollar_short

The_Next_U.S_Dollar_short

So there it is.

About as straight up / straight forward as it gets these days….right down to the levels, and the days. Is This gonna work for you, or would you also prefer that I push the buy and sell buttons for you too?

The last little “spike” in USD offers is yet another fantastic opportunity to “sell the rips” not “buy the dips” as we are in a very solid and confirmed daily downtrend.

USD Trend is down – the trade is short. This is a rip t be sold.

Do it. Make cash.

Kong On Fire – A Look At Weeks Past

Forex Kong 2 Comments

I’d been sitting on the sidelines for quite some time ( as markets continued to astound ) until just recently taking aim at a couple nice set ups. Here’s a look back a couple of weeks. Let’s see how ‘l Kong made out.

Short USD: August 1st – CHECK

The Wait Is Over – USD Rejected at 200 SMA

 

Crude Oil Bottom: August 3rd Post – CHECK

Crude Oil – Reverse Head And Shoulders

USD/JPY To Parity – Nasdaq Double Top – CHECK

U.S Stocks Pull Back – Watch Nasdaq, USD/JPY

Patience always the key when trading. You really need to plan your attack and not get caught chasing markets. In any case…pleased to be back in action. Looking forward  to my next adventure. Stay tuned folks, and if there is anyone here from Chile ( Yes the country of Chile…in South America yes ) please drop me a line.

Stock Market Trickery – Don’t Be Fooled

Forex Kong 2 Comments

The chart says it all, as many a reader still has this illusion that “stock market highs = economic prosperity”.

Count your blessings if you’ve made out well….watch for post election mayhem.

Stock_Market_Trickery_-__Don't_Be_Fooled

Stock_Market_Trickery_-__Don’t_Be_Fooled

The current “gong show” playing out in U.S politics simply cannot be ignored ( as much as I’d love to just see this go away) as the economic “shit storm” brewing underneath continues to gather steam. I implore you..can any of you find a single “legit argument” that the price of U.S Equities will continue to climb past November?

As suggested in the previous post. It’s time to start making a plan. It’s time to batten down the hatches and consider “what the hell you are going to do with your current portfolio” as “E Day” ( election day ) draws near.

Any solid arguments that Clinton can improve/save it? How bout Trump?

From the jungle side looking in……I can’t see any good coming from either but….so we shall see.

Opinions and views more than welcome.

 

Limit Orders – How To Effectively Sell Short

Forex Kong 1 Comment

I’ve done my best to explain this on several occasions…”oh how I’ve tried to explain this!”

But you humans….crazy humans – so anxious to “hit those buttons” so “spurred by emotion” compelled to “buy buy buy” or “sell sell sell” on a moments notice. If only for a minute you could learn to slow things down, you’d quickly realize – you’ve missed nothing, there is no rush, the markets move far slower than you think. Everything will be O.K, and “even better” –  if you could just manage to control your emotions.

If you are considering placing an order on a particular asset “short” (with hopes that it will fall in value) there are most certainly ways to go about this without “losing the farm”.

You need to understand how/why to place “limit orders”.

Limit Orders – How To Use Limit Orders

Limit_Sell_Orders_-_How_To

Limit_Sell_Orders_-_How_To

A limit order is an order to buy or sell a set number of shares at a specified price or better. A limit order guarantees price, but not an execution.

So for example…..If I see a particular stock priced at $108 per share, and I have some idea that said stock is likely to fall in value. I don’t just “sell short”! I look to place a “limit order” to sell at a set price LOWER than the current value of $108!

If in fact the stock price falls ( lets say my order was to “limit sell” at 107.50 ) then great! I get my order picked at 107.50 and am well on my way! If the stock shoots for the moon and I was totally wrong in looking to go short…..my “limit order” does not get picked up….I am not in the trade….the stock rockets to $120.00 and I am left with no trade…..but a perfect example of “no trade….being a great trade”.

Limit orders allow you to “take your shot” – but only on momentum moving your way. If price doesn’t move in your direction – you don’t get picked up!

Use ’em –  I know I do.

Several of’em currently lying in wait.

 

 

 

U.S Stocks Pull Back – Watch Nasdaq, USD/JPY

Forex Kong Got something to say?

These days it makes little sense contemplating every single “little move” in any number of currencies, as forex markets are more or less flat / stagnant. Sure the Brexit did it’s thing and the pound (GBP) got hammered, and sure the Japanese Yen (JPY ) has been on a tear since big banks and large-scale traders have clearly been ditching their Carry Trades – in preparation for a larger scale fall in risk assets ( likely to follow post U.S Election ).

So what’s a trader to do?

Many have been suggesting that the long-term “double top” in Tech stocks / Nasdaq could very well be what markets are shooting for, prior to pulling back….and it looks like we are just about there.

 

Nasdaq_Weekly_-_Double_Top

Nasdaq_Weekly_-_Double_Top

What might throw a number of you for a loop, will be to keep a close eye on USD as U.S Equities pullback.

Traditional thinking would have the U.S Dollar rise ( as U.S Equities are sold and “cash is then raised” ) but we’re not much for traditional thinking ’round these parts. Nothing has changed with respect to the longer term idea that USD is set for a much larger fall.

I would take a very serious look at “any currency” Vs JPY on the smallest indication that “risk aversion” rears its ugly head as…..money is gonna pour back into the primary funding currency of this charade ( that being Japanese Yen ).

Not USD.