intraday trading

Forex Markets – A Disturbance In The Force

Forex Kong 33 Comments

Something is going on, and I don’t like it.

With the Nikkei down “another” -360 points here as of this morning, the Yen has barely budged, while the U.S Dollar has gotten absolutely hammered overnight as well!

What happened to the safe haven flows seen yesterday? Is this your “garden variety routing” where nearly everything you “expect to happen” doesn’t happen ( a very normal part of trading ) or perhaps indication of something larger?

The ECB has been “talking down” the EURO overnight, yet here again – the EUR as well GBP and even The Swiss Franc (CHF) have all surged higher in the face of a beaten down U.S Dollar!

I wish I could simply just look at it as a “ripple” or a normal day-to-day type thing, but I’ve been at this far too long. Something doesn’t look right – and I don’t like it. I don’t like it one bit.

An extra “zig” or and extra “zag” in our charts ( as well the every changing fundamental back drop ) can be expected in these times of unprecedented Central Bank intervention but when I see something “blatantly” out-of-place, a move “so contrary” to what I believe “should” be happening – I immediately switch up my thinking.

If I don’t know what’s going on, there’s only one place I choose to be ( at what ever costs ) – and that’s in cash, happily sitting on the sidelines, looking for a time when I “do” know.

Today being Thursday we can generally look for “a move” in markets, as the U.S Data hits the street here around 8:30 a.m.

I will be watching like a hawk. Or a dove, no wait…..a hawk….no dove.

No no no…..all gorilla here.

Stay tuned for an intra day update.

 

Reversal Across The Board – USD And JPY Back In Demand

Forex Kong 40 Comments

It’s a funny thing really.

You can make light of a particular currency pair’s price level (such as AUD/JPY yesterday afternoon), as well point out its general connection / relationship / correlation with “risk appetite”, and BAM!

Perhaps it’s a touch too early to say, but I’m seeing reversal’s in just about every single pair I track with respect to a reversal in “risk appetite” – with both USD as well JPY showing strength here overnight.

Did I need to wake up and check SP futures? or perhaps tune into my local financial news this morning to get an idea of where U.S stocks may be headed here today? Nope.

Obviously I’m short AUD/JPY from yesterday, and will be adding a couple more long JPY ideas here today. The long USD’s I’ve got will be added to as well.

I can’t imagine another “triple digit gain” here in the U.S today, as this counter trend rally peters out.

Forex_Kong_Face_Book

Forex_Kong_Face_Book

AUD/JPY And The 200 SMA – Just Can't Get Along

Forex Kong 9 Comments

So you’ve been pushed to your limits “technically” and the majority of you’ve been pushed off the field.

Hungry bears trading “too big too fast” crushed in the recent upswing and “right around now” eager bulls feeling that it’s “safe to buy the dip”.

Has anything changed?

AUD_JPY_200_Forex_Kong_Trading

AUD_JPY_200_Forex_Kong_Trading

Last time I looked ( 15 minutes ago ) this Yellen chick (now heading the U.S Federal Reserve) is sticking to the plan and the “taper talk” continues so……check your “fundamental heads”.

U.S equities “still” pulling the wool over your eyes perhaps?

The Australian Dollar ( which generally trades” along side risk” ) just had a brief meeting with its old friend the 200 Day Moving Average and guess what?

Same old story. These two just can’t get along,and yet again part ways – unhappy.

Things setting up for a nice lil “reversal” here if you ask me.

Technical Limits – A Fundamental Challenge

Forex Kong 19 Comments

There’s a pile of traders out there that feel “the fundamentals” are a complete waste of time. Following the charts day by day, minute to minute, hour by hour, “riding the waves” and trading the technicals –  with little or no regard for any such thing as a “fundamental”.

This works great of course…….until it doesn’t.

A “technical limit” provides a “fundamental challenge” in that eventually ( as markets will always push further in either direction than the average trader can bear) “all technicals” will be broken/shattered  creating further “fuel for the fire” in an industry “built” on the sale of technical analysis, and the promise of eternal wealth – while the fundamentals continue to lurk in the under current.

Can you consider making a living trading with “no concern” for the fundamentals, trading only the technicals?

I’ts my belief, that the answer to this question is no.

Eventually…..”all technicals” will be broken as the simple mechanics of the system “require” this to be the case.

Markets tell you to buy the RSI at level “x” and sell MACD at “y” as it “commands” – all-knowing the indicators / levels are meant to be breached, pushing “past” any extreme, essentially “snatching your dreams” with little concern for “anything you’ve learned” about technical analysis, time and time again as the fundamentals continue to hide in the shadows.

Do not leave your indicators set at the “pre defined” levels suggested to you in your trading platform! They are designed to be broken!

Learn to “compliment” your short-term trading with a “sprinkling” of the fundamentals as you really can’t survive without both.

Do I like coming home to “yet another day” of a counter trend rally? Absolutely not.

Am I at all worried about it?

What do you think?

Back in the game……nothing has changed.

Hold Or Fold – U.S Job Data To Disapoint

Forex Kong 15 Comments

I was going to wait until “after” the jobs report here this morning, to see if we get a better idea of direction moving forward. Why bother.

The number will be a disappointment as I expected, with the media suggesting that the poor employment numbers are largely due to “poor weather” (I don’t think I’ve ever heard “that one” before).

Markets continue to question “if indeed” Yellen will stick to the plan of tapering, or even as soon as next week – make suggestion otherwise. I’ve been hearing that The Fed feels they need to see “a little more data” before considering flipping the switch and “tapering the tapering”, so mid March still looks like a reasonable time frame to expect “something big”.

We’ve bounced a little bit here this week, with AUD also moving up with “risk appetite” as the ol standard correlation goes, but all in all, it still only looks like a “bit of a counter trend move” in a fairly well-defined down trend.

I’ll be off to Belize here this morning, currently holding several pairs and frankly not that thrilled about it. The entire week trading flat ( and I mean really flat ) generally puts me on edge, as I hate holding anything for too long. I’ll let the jobs data hit, then re-evaluate holding,or possibly dumping a number of positions before I head out on holidays.

Forex_Kong_Face_Book

Forex_Kong_Face_Book

 

Trade Entry – Which Time Of Day Is Best?

Forex Kong 12 Comments

These days placing a trade in the early morning of the U.S Equities session brings with it, a high percentage chance – of just getting your face blown off.

Understand that the vast majority of what the industry defines as “dumb money” refers to those trades placed “before the bell” – as well those placed within the first hour after.

The “smart money” is generally buying or selling during the final hour of trading.

Pulling this apart – it makes pretty good sense. Newbie traders driven purely by emotion, catch wind of a news story overnight, or perhaps on the early morning financial news and “rush to get in” with fear of missing the move. Like lambs to the slaughter more often than not, price drops out from under them, fear sets in, perhaps even panic, and shares are then dropped / sold – only to be picked up on the cheap by the “smart money/big boys” just moments before the close.

Wash.Rinse.Repeat – and so the market goes.

For the most part, I view the “entire trading day” during the U.S session, as being nothing more than a meat grinder for retail traders, who generally enter at the wrong time, and in turn – are easily shaken out of their positions.

  • Do you find it difficult to resist the urge to buy in the early morning?
  • Do you think you could learn to condition your behavior, and consider buying the close?

USD on day 3 in a row literally “flat as a pancake” as Thursday is now in sight. I’m “still” holding a number of pairs (10 pairs actually) with little concern – short of being bored to death. I’ll keep my eyes open late afternoon and have little expectation of “anything big” happening here today.

Forex_Kong_Face_Book

Forex_Kong_Face_Book

Clues To The Correction – A Graphic Tale

Forex Kong 9 Comments

Did it really matter if the economic data was “so so” these past 6 months – as the continued efforts by both The Fed and The Bank of Japan just kept pushing equity prices higher and higher regardless?

I don’t know how many times I pulled up charts, pointed out facts, figures, levels etc suggesting these last “several hundred” SP points where merely a “last-ditch effort” to keep the spin “positive”, and keep the story “believable” just a little while longer. Did it matter?

Absolutely not.

Regardless of any of the underlying “fundamental factors” suggesting slower global growth, until it’s “in the news” and the media machine, The Fed, and the Wall Street algorithms switch to “sell” – the data doesn’t matter one hill o’ beans.

The contraction phase has clearly begun, with the Fed sticking to its guns ( for now ) and stock price set to “re adjust” reflecting prices a little closer to those of us down on Earth.

If you didn’t know back “then”…………where in the graph below do you think we are “now”?

forex_kong_economic_cycle

forex_kong_economic_cycle

Remember this beauty?

US_Macro_Data

US_Macro_Data

And this one, with respect to the movement of supposed “smart money” ( the big boys) vs “dumb money” ( retail investors )….essentially suggesting “selling” the entire last year and a half.

Smart_Money_Forex_Kong

Smart_Money_Forex_Kong

It’s really no surprise at all that markets are finally making the “obvious turn” lower, considering everything we’ve learned / seen over the past couple of years.

When you consider they’ve had no business being this elevated in the first place.

If we aren’t on the other side of the mountain now ( after 5 straight years of Fed induced stock prices ) resulting in essentially “zero” new economic growth, and now entering a macro phase of “tightening and contraction” I really can’t wait to see what they pull out of their hats next.

Watch for the next “retail bounce” likely already here, and if I was doing anything ( other than trading currency ) I’d be using the opportunity to sell.

Forex Monthly Candle Sticks – Worth A Look

Forex Kong 40 Comments

Have you ever taken the time to “zoom out” on your charts, and have a look at things from a “monthly perspective”?

Same formations. Same patterns etc, only in that “each candle” represents an entire months trading information, as opposed to the 1 hour, 4 Hour ,daily or even weekly charts you may regularly peruse.

Monthly charts provide a “macro view” to say the least and are “extremely important” to take into consideration.

You’ve now come to understand “a reversal” formation, as well the “pin bar”, and can now likely pick out  a “swing high” or “swing low” in price action – at a moments glance. You’ve also come to recognize the “value” in identifying these “patterns of reversal” – as they provide for some pretty outstanding trade entries.

Now consider the implications when identifying such reversals on a “monthly time frame”.

Price action has moved higher in a “succession of higher highs and higher lows” for literally months, but now suggests reversal in a “monthly variance in price”. Imagine.

That’s huge, and the implications are vast.

When an asset has “swung high” or “reversed” on a monthly time frame, you can throw your hourly charts out the widow as…..the implications of the move to follow will be reflected in “months” of reversed price action, not merely in a couple of hours or even days.

Do you have the account balance to “hold” through a move like that? Do you “doubt” the reversal pattern? The same pattern you’ve come to rely on daily, hourly? (patterns, and areas of support and resistance become much “more reliable” the larger the time frame – not less.)

The SP 500 is “a hair” shy of “monthly reversal”.

That’s huge.

There It Is! – Profit Taking All Around!

Forex Kong 19 Comments

Finally! After a pretty grueling couple of days, bobbing in and out, hovering around my trade terminal like a spy drone…There it is! Nearly every single pair / trade well in profit and time to take profits.

You’ll need to pull up charts on many, many pairs to see the end result of trades entered ( then re entered etc ) in NZD/USD, AUD/USD, EUR/USD, GBP/USD, USD/CHF,AUD/JPY,CAD/JPY and a big winner in EUR/NZD to name a few.

Forex_Kong_Blue_Hole_Belize

Forex_Kong_Blue_Hole_Belize

I will plan to take the majority off the table here either this morning, or let a couple of run through the day but……in all – I now look at monthly charts to see just what’s happened here over the past few days and the message is clear.

This is very likely only the “first leg” down in what will shape up to be a “much larger correction” ( as suggested previously ) running into late March – right around the time I expect “full-scale panic” and the printing pressed to start-up again.

Japan already knows it’s in very deep trouble ( and has been forever ) with effects of QE very quickly dissolving. I don’t think they “or” the U.S will have any choice but to kick things into high gear “printing wise that is” come late March.

Trade wise….I’m taking the weekend off, and booking /planning next weekend’s trip to the tiny broken islands off the coast of Belize ( The “Blue Hole” and Ambergris Caye – please google them) as the “math and theory” is already complete for the coming weeks.

These trades and several others will simply be “re entered” at various points along the way as……we’ve finally come over the crest, and find ourselves on the “other side” of the mountain.

A painful and extremely frustrating process but….the next “peaks” are certain to be sold.

Hope everyone else made out OK too!

Kong……..”more than” gone!

Forex Food – Breakfast Of Champions

Forex Kong 3 Comments

I was up around 4.a.m – so I guess you really can’t call it breakfast.

Finishing up my “early morning analysis” today, I found myself rummaging through the kitchen looking for something “new” to eat, and even more so – “something new to do”.

The world hadn’t yet ended, I had little to do otherwise so I thought I’d take a walk over to the local ” pescaderia (fish market) to see if any lazy fisherman had bothered to get up as early as I.

Bought these little babies. Rock prawns.

Forex_Kong_Food_Breakfast

Forex_Kong_Food_Breakfast

Apply named, as the shell is literally “hard as rock” – these little beauties more closely resemble tiny lobster than a traditional soft shell or spotted prawn, with a much sweeter meat and firmer texture.

I butterflied these and will be grilling momentarily, with garlic butter, white wine a squeeze of lime, cilantro, and of course…….an accompanying cold beer after all…….it’s gotta be 5 o’clock somewhere. He he he…..

Grinding action here this morning / mid day as USD sits flat, and markets continue to flounder. Nikkei falling “further” through support and looking extremely weak with tonnes of trades setting up very nicely.