how to trade forex

Crude Oil – Reverse Head And Shoulders

Forex Kong 2 Comments

For those of you that looooooove technical patterns and set ups –  crude oil is starting to look good.

If we’ve established that The U.S Dollar is set for a solid turn lower ( which we have! ) then it only makes sense that commodities “priced in USD” should be shaping up to make the inverse move higher.

Crude Oil Set To Move Higher

Crude_Oil_Entry

Crude_Oil_Entry

Considering this incredibly long period of consolidation / distribution in most asset classes, it looks like we are finally going to see a number of “standard correlations” come back into effect.

A large move lower in USD being the key factor, as these assets priced in U.S Dollars begin to move higher.

I’m simply ignoring “any and all” other news  with respect to inventory / consumer demand etc as oil will take a sizable jump on further USD weakness.

 

Back On The Big Short – The U.S Dollar

Forex Kong 4 Comments

Knowledge is power right? Or so they say….

So…..if you’ve only got a view of oh…let’s say just a small portion of the market ( maybe a couple of blue chips, gold) and perhaps the U.S Dollar “against” your own local currency well…..one might suggest adding a couple more “market indicators” to the pile.

I know you may find this incredibly hard to believe, maybe even IMPOSSIBLE to believe but….The U.S Dollar “spike” here in the wake of Brexit market madness will soon provide one of the greatest “short opportunities” of our time ( slight exaggeration perhaps ).

While you’re all drooling over the massive moves “upward” against both the EUR and GBP ( no kidding right? As the vast majority of traders got “wacked” by Brexit ) The U.S Dollar “continues to sink” against its arch rival ( or at times good buddy ) the Japanese Yen (JPY).

The two are now almost at par.

Now….for those with near term memory loss – do you remember the continued explanation here at Kong with respect to money flows on this planet? The safe havens / funding currencies such as JPY going absolutely “parabolic” during times of “risk aversion”? The money that comes “flooding back” to these this currency as large-scale “carry trades” are wound down? Well……if you think the U.S Dollar is strong right now……why is it getting its ass kicked by the Yen? Why is USD losing all support / falling like a rock against JPY?

That’s what I call JPY stength. That’s what I call “risk off”.

The U.S Dollar will soon follow….providing for large scale gains SHORT USD against any number of currencies.

I will again be waiting for a daily “swing high” in USD ( likely within the next 3-4 days tops ) for another joyous ride “back on the big short” – USD.

Pack yer bags…this could be a loooong journey.

Stop And Reverse – Day 3 Already

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Why not take a quick second to blow my own horn right? I mean…….why not!

Day 3 of the full “stop and reverse” on The U.S Dollar – timed exactly,faultlessly, superbly, superlatively, excellently, flawlessly, to perfection, without fault, ideally, inimitably, incomparably, impeccably, immaculately, exquisitely, consummately. Bang! After week s of pure profit on the short side….3 days straight up long. Job well done for those of you that actually trade.

In any case…..always a great feeling when you nail one….or two – maybe 3 in a row, as it certainly makes up for the couple that you get 100% completely wrong.

By the strength of the move in USD I think it’s fair to say we’ve got ourselves an intermediate bottom, a fantastic entry and many more days of upside so it’s unlikely I’ll be changing my tune over the next few weeks. Mind you….I will be there for the next turn lower…you can count on that.

This is a great time to get those gold and silver miners back on your radar, and start zooming in to find solid areas of support. I hope these little babies fall hard, as the longer term reversal is now so…. major weakness will provide buying opportunities.

Rock n roll people.

Hope you’ve managed to make a buck er two. I’m back on the beach.

 

Forex_Kong_Beach

Trading Is Art – Filter Out The Noise

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The U.S Dollar likely has a few more days of downside before petering out and completing this last leg lower, so you can feel free to hang on – at least another couple of days short.

HOWEVER!

It’s  quite possible that this last leg down may mark “the end” of an intermediate down trend, where in the bounce ( and possible trend change ) could be quite dramatic.

Myself…..I’m going to close my few open positions over the next day er so…..then consider “mission accomplished” short / medium term shorting USD.

If indeed we see an intermediate cycle complete –  a full stop and reversal in USD related trades could soon provide another “easy trade” in catching it so early. Obviously pairs such as EUR/USD as well GBP/USD will provide fantastic vehicles here, as well as long USD/CAD and USD/JPY ( but I’d be sure to really wait on these ).

So you see? This is traaaaaaading. Trading yes. Not beating down on The U.S Dollar like I give a rat’s ass about one particular currency or another. This is making money in a market “regardless of direction”. This is charting, this is macro economic analysis, this is timing – this is art, not some bullshit rhetoric aimed at keeping you invested and ultimately cleaned out.

You can do it…….you’ve just got to turn your biases off. You’ve got to learn to think for yourself, and filter through the noise.

Kathy Lien – Completely Wrong About USD

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Another CNBC talking head pushing her latest headline: Fed Statement Is Good News For U.S. Dollar

How do these “supposed” industry analysts get this stuff so completely and totally wrong?? While a simple off planet ape keeps getting it right?

Kathy Lien Managing Director of FX Strategy for BK Asset Management is obviously just another cog in the media wheel, sputtering out mindless garb aimed at keeping you trusting, keeping you in belief that the financial systems are stable and working in your favor.

Overnight here in the jungle, The U.S Dollar has finally broken support – after trading sideways for essentially the entire month, and things look very ugly in Japan. The Nikkei is now down -630 ( 3.6 % ) and USD has absolutely dive bomb a full 300 pips vs JPY. The short USD trade will finally pay “the big one” allowing me to finally purchase the magnets and nuclear material I need to get back home.

The profits are staggering. Thank you Kathy –  for selling the retail trading community “exactly what I needed” to catch the vast majority of them on the wrong side of the trade. I will be closing these trades immediately ( as many will just now look to get in ) and continue to place smaller trades “under the action”.

It will be interesting to see how the next couple trading days go there in the U.S. That ol saying ( however cliché ) Sell in May – Go away. I don’t really buy it. So we’ll see.

Future_Kong_Nuclear

Future_Kong_Nuclear

The U.S Dollar – Back On The Downside

Forex Kong 2 Comments

Did you enjoy the tiny gains made “long USD” some days ago?

I didn’t think so.

I’m getting back on the “short train” with USD as the “6 day long suggestion” has obviously run it’s course.

This daily cycle looks to have rolled over as early as day “3” so once again we are looking at a left translated cycle – following the previous failed daily cycle so…….down we go.

It might be a touch late to jump into pairs such as GBP/USD or EUR/USD so I would suggest waiting for a small intra day pullback “or” placing limit buy orders “above” today’s action and waiting to get picked up on momentum.

Are you still hanging long? Why would you do that?

The next leg lower has lots of room to fall.

I like when things fall, as fear is far more motivating than greed. I’m here to trade, and that usually works out best when people start getting scared.

But you’re not worried about anything are you?

 

 

USD Cycle – New Daily Cycle Begins

Forex Kong 6 Comments

The short USD Trade has been all too kind.

Have a peak at some “marketing timing” as a new daily cycle now begins for USD. I’m obviously 100% completely cash.

For the brave at heart – full reversal trade here….feel free to take a couple of days on the long side if you like.

Not for me….as I trade with the trend, but I’m sure you’ll squeeze a couple of days ( maybe as many as 6 ) long here if ya like. Have at it.

I’m hitting the oysters hard. No plans to trade for at least the coming week.

 

 

USD Devastation – USD/JPY Over The Edge

Forex Kong 2 Comments

Absolutely incredible.

Silly people clinging to their television sets, clinging to their currency – still clinging to the ridiculous notion that “everything is going well”.

Straight up…..anyone suggesting that you “buy” is likely a banker, a broker or some dumb ass blogger with a single strategy ( or total lack of strategy ) appealing to you on the only level they can.

The notion that “bears are negative” and bulls are “positive” is completely and totally ridiculous as this is a “market” that trades in both directions. If you can’t develop strategies for the “red candles” how on earth do you possibly think you can be successful? Just buy and hold? Just “buy” cuz you are “optimistic about the future”? Dumb.

I’m as optimistic as it gets. Building my spaceship, saving my pennies for the liver transplant I expect to get somewhere down the road..plotting my investments in Graphene and spending my spare time plugging away at the latest developments in physics. The future looks amazing! But what the f#@k does that have to do with making money in the markets?

Blind optimism has no place here. It’s actually pretty irresponsible.

Since the vast majority of you don’t even trade Forex, it’s very likely that you lack proper context. If you dig back into the blog, you’ll find countless references to the fact that “currency markets lead all other markets”. Pretty straight forward considering that you need “money” to buy stocks so…….there it is. If you’re watching the money – you will always be one step ahead.

So what’s the deal with my USD Short Trade?

The deal is – it’s been 8 straight days since entry, and the trade has been amazing.

The US Dollar has absolutely cratered against it’s “printing partner/funding currency” the Japanese Yen. Didn’t hear too much about it in the news? Not surprising.

USD/JPY has fallen 1700 pips ( yes that’s right – 1700 pips! ) since markets topped out some months ago., and is quickly approaching “intervention territory” as far as The Bank of Japan goes. The huge move in Japanese Yen – a Tsunami for the Japanese economy.

USD-JPY_April

USD-JPY_April

 

I’m banking profits, as well letting a couple of these trades run with a tight stop as the money has already been made on this recent “leg lower in USD” but don’t be mistaken.

 

There will be another one coming. Bank on it.

 

 

 

Apple At 200 SMA – Approach From Below

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I don’t spend too much time trading high priced U.S stocks but see that good ol Apple has now touched the 200 SMA from below.

Take a quick look here:

Aapl - April 4th

Aapl – April 4th

 

Strategy wise this is pretty straight forward – placing “limit sell orders” under 110 – 109.00 and just let the market do her thing.

You’ll get picked up with momentum….otherwise you are safely tucked away should Apple shoot for the starts…but I find that highly unlikely.

Many believe that Apple is a pretty good indicator of “markets as a whole” so it bears consideration. A turn lower here at the 200 SMA looks quite probable.

Japan Turns First – You Know What That Means

Forex Kong 6 Comments

It’s funny really….well perhaps not, as there is real money at stake but…

Placing a human being in front of a computer, loading it full of money ( leverged money ) with a big red “sell button” in one hand and a big green “buy button” in the other.

An interesting experiment to observe. Throw the T.V and main stream media into the mix and you’ve got your self a real recipe for disaster. Or not depending on your ability to control fear….and greed.

Japan making the expected turn here first ( Down -600 points here over night ) so you all know what that means.

Whatcha gonna do? You pressing the big red button yet? Maybe greed has got you by the tail – who knows.

You’re only human right?