intraday trading

Global Market Insight – CNBC Is Dead

Forex Kong 5 Comments

With nearly 60% of Forex Kong traffic / readership coming from outside the U.S, we are a truly international bunch. I take tremendous pride in this, as the broad scope of  information shared here from “people in the know” and “on the ground” in their native land’s holds tremendous value. When our man in Australia pounds out some solid numbers on housing, or the current sentiment on China etc – you can generally take this stuff to the bank.

I want to thank each and every one of you (this means you Schmed!) who have taken the time to contribute here – and encourage you to continue doing so. Considering the absolute nonsense being spilled out of the U.S daily – we are truly “an oasis” in a sea of misinformation and deceit. Something we can all be proud of.

On that note, I occasionally tune in to “CNBC” to get a quick read on the current “news stories/headlines” being peddled to the general American populus – and can usually bare it for 10 maybe 15 minutes tops. They actually state that sound investment principles would have you buying stocks on the sole basis that “Bernanke has got your back”.

“Bernanke has got your back”. That’s the investment thesis. That’s the plan. That’s the “right thing to do”. I can honestly say that I have never in my life heard something so absolutely absurd. Brilliant! A single man working for a private bank, systematically destroying a currency is the “hot investment strategy” of the day. I may now be sick.

CNBC viewership has imploded recently to it’s absolute lowest level since 2005, with really no end in sight – so perhaps there is some hope that people are looking for “legit information” elsewhere. We can only hope.

This from our friends at ZeroHedge:

Kong_On_CNBC

Kong_On_CNBC

Let’s keep things global people – CNBC is dead.

Forex Trading In India – Rupee!

Forex Kong 6 Comments

India is about 1/3 the size of the United States, yet it is the second most populous country in the world, with a population of 1,166,079,217 – (wow that is packed). India is the largest democracy in the world.

The Indian Rupee has recently taken a considerable hit vs USD and looks to be setting up for a bit of a rebound.

I don’t trade it ( in fact my broker doesn’t offer the pair ) but I did find it interesting , to pull up a chart of USD/INR which does look very overbought.

There has been alot of talk that “forex trading” is actually illegal in India, but after doing some looking around I’ve come to learn that the actual “trading activity” isn’t illegal as such –  but that there are considerable restrictions on “how much” money can deposited and traded.

Apparently it “is” illegal to take Rupee out of India, but this is only loosely enforced.

For anyone out there that “does” have an opportunity to trade Rupee………Rupee!

 

 

 

Taper Talk – Believe It Or Not

Forex Kong 1 Comment

Doesn’t it always seem to go like this.

Just when you feel you’ve got things ironed out, and have put some larger plans in motion – sure enough (it never fails) something pops up that starts to get you thinking again – wait a minute….have I got this right?”

The Fed’s “taper talks” have certainly been working their magic in that regard, as the Internet now buzzes with new analysis on the U.S Dollar, fancy charts with arrow pointing up , up , up and suddenly (practically overnight) the U.S data is “all positive” and most certainly the Fed will begin “making its exit” in September. Done deal. As simple as that.

Ok – well…….what does that mean to the average investor?  Wasn’t it just last week that “more QE” is what the street was looking for? This being a “fed sponsored rally” does that mean the rally is ending? Or is “tapering” a good thing for markets?

The orchestration is truly brilliant in its design, and if you stopped to ask 10 different people on the street what it actually means to them – I’m sure the answers would be a resounding “I have no frickin idea” right across the board. Keep people confused. Keep things cloudy, and let the market do what it’s designed to do.

At this point it’s really a matter of “if you actually believe the talk or not” and how you would then go about positioning yourself. I for one am quite confident that it’s actually the opposite which is soon to take place – and the Fed will be introducing additional measures to keep interest rates from rising, and to keep the dollar tamed.

“QE 5” I’m calling it.

Either way you cut it – “Taper talk” is the current riddle to decode.

I wonder what’s next?

Trading The Week Ahead – Forex, Gold , Stocks

Forex Kong 32 Comments

This is going to be a huge week and you’ll need to be ready.

Regardless of which asset class you’re currently trading or holding – I strongly suggest that you’ve got your eyes open and your “fingers on the button” as my expectations for the coming week include fireworks, tidal waves , meteorites and circus clowns.

As early as Tuesday, I’ve got it that things are going hard in one direction or another, and at break neck speed may clean out your accounts or make you filthy rich. If the week goes by trading flat – I will post video of myself eating an entire handful of raw Habanero peppers, and subsequently dieing shortly there afterwards.

The most significant concern will be that of the “existing correlations” and weather or not this “proposed turn” will have them turn on their heads – or continue as they have recently.

Let’s have a look.

  • USD is going to turn lower here, the question is “will stocks turn lower along side USD”?
  • USD is going to turn lower here, and another question is “will that in turn have JPY move higher”?
  • USD is going to turn lower here, and yet another question is “will gold finally find support and move higher”?

I think you’ve gather how I feel about the U.S Dollar – as I have absolutely no question at all that it will head lower, but am concerned that the “flipside” of this move “could” go like this as well:

  • USD down and US stocks up ( if a “true” risk rally develops then we’d also see commod currencies head for the moon too.)
  • USD down AND JPY down ( if a “true” risk rally develops then BOTH safe haven currencies will be sold and again the commods will head for the moon.)
  • USD and Gold up ( in this case if a “true” risk rally develops then the normal correlation as to the value of gold in dollar terms may finally make a showing.)

So – all eyes on the U.S Dollar here as everything else will quickly come into focus as soon as we see the turn.

Frankly, I’m on the fence about it and can’t say for certain which way things are going to go – but will be watching very, very closely and will post / tweet literally at the very second that I confirm the move.

 

 

Sideways Trading – How To Survive

Forex Kong Got something to say?

You can pull up a chart of virtually any JPY cross but lets look specifically at USD/JPY on a 1 hour time frame.

Looking back from  June 20 to present ( so lets say 5 or 6 full trading days ) you can clearly see that price has ranged “sideways” within a very small range of around 100 pips. If you’d have been lucky enough to “short” at the exact top of the range….or gone “long” at the exact bottom  – you may have been able to squeeze off a decent trade depending on your TP ( take profits) and who know’s maybe you grabbed 25 – 50 pips somewhere in there. Great.

What most likely happened ( as with any most trade systems ) is that you got confirmation to enter about 25 pips late on either side, and ended up entering either long or short dead smack in the middle – and have now spent a full week wondering daily – “Is this thing going up or down?”.

For the new comer there really is no easy answer here. The smaller time frames will grind both your emotions and your account to dust. The absolute best suggestion I can make is again -TRADE SMALL.

Now pull up a daily of USD/JPY – Is “that” trading sideways?

Here you’ve got alot more information to go on – a downward sloping trend line, horizontal lines of support and resistance, you’ve got lots of historical price action to look at, as well all the  longer term moving averages and indicators you may also have on your screen.

Trade small over time and look to the larger time frames for direction –  and ideally you WILL survive the dreaded “sideways”.

Short Term Trade Tip – Horizontal Lines

Forex Kong 9 Comments

Obviously my short-term trade set up is a thing of beauty, and relatively soon – will be made available to the rest of you. But aside from that, I want to pass along a simple little tip – that could provide you an “edge” here in the meantime.

When you drill down to smaller time frames such as a 1H chart (1 hour candle formations) or even a 15 minute, or 5 minute – take out your crayola crayon (and not your laser pointer) and draw a line THROUGH THE MIDDLE OF THE CONGESTION/SQUIGGLES. It will be this “price level” that is currently at play – and not the “highs and lows” of the given time frame.

For the most part anything smaller than a 1 Hour chart is frankly just “noise” so the highs n lows are really not as significant as the middle ground where price is centered. Once these lines have been drawn – a trader can then focus on a “realistic price” to consider for entry or even stops etc, as the volatility short-term will spike/fall and give you all kinds of levels – not exactly relevant to your trading. On a 1 hour Chart 30 – 50 pips on either side of this “central price” is completely normal, and isn’t enough to even get my heart beating – in consideration of dumping a trade.

If you don’t understand the given volatility on the time frame you are viewing – you will get killed.

Take out a crayon and not a laser pointer – and plot the “middle of the squiggle “.

As simple as it seems – this can easily be the difference in catching many, many more pips in any given trade, based on the fact that you have not skewed your lines of S/R to reflect the highs and lows of smaller time frames….but the center – where price is currently fluctuating.

Thanks Kong!

Intermarket Analysis – Watch These Too

Forex Kong 2 Comments

So far we’ve seen that obviously I take a concentrated look at the major currency pairs, and look to find trends / movements within. The other “futures market symbols” listed yesterday give me the goods on the major commodities such as oil, gold and silver – as well a good look at what I refer to as my “risk barometer” being the SP 500 and the Dow.

Other Things I Monitor:

  • APPL (As a market leader – I always keep an eye on movement here).
  • XLK, XLE, XLV, XLB, XLI  and the entire family of U.S Market Sector ETF’s in this series.
  • EWA,EWC,EWD,EWZ  and the entire family of MSCI Ishares ETF’s in this series.
  • $TRAN – I watch the transports.
  • FTSE – I watch the London Exchange.
  • TLT – Ishares 20 Year Bond Fund.

Considering that I use two separate charting  platforms (one for currency trading and another for stocks and options) this is pretty simple to follow  – as the majority of these are listed in separate “watch lists” within the Think or Swim platform. A quick “click and a glance” and one can easily see movement across a wide range of asset classes.

I spend the majority of my time with the currencies on Metatrader 4, but this is the full list of most “anything and everything else” I make sure to keep an eye on day-to-day.

Next we can have a quick look at how to put some of this information together in order to formulate a reasonable idea of where the market is at – and possibly going next.

 

 

Japanese Candle Formations – Excellent Signs

Forex Kong 17 Comments

If you haven’t already looked into japanese candle formations – you need to. I use my knowledge of this type af analysis literally every single day – day in day out on all time frames – everywhere and always.

Looking at the symbol $DXY this morning – one can clearly see a very tall “wick” on the daily chart – with a teeny tiny little body right at the very bottom. Known as an “inverted hammer” or possibly a ” shooting star” – this type of candle formation indicates that “price” (was at one point) at the top of the candles wick, but over the course of only one day ( and in this case even less time) selling pressure has taken price all the way down to the bottom of the formation. This is a very bearish formation – indicating that buying interest has all but dried up , and that the “bears” have more than likely  – taken over. Commonly, traders will wait for the formation of the “next day’s” candle for some form of confirmation but for those of us who are already in the trade (short the dollar) this type of candle serves as indication that “perhaps we where a touch early” but that good things are likely soon to follow.

I would consider –  that the dollar is finally, and I do say finally – as this has been a “grueling correction” to say the least….finally ready to roll over – paving the way for a myriad of trade opportunities including “long” NZD/USD, AUD/USD , EUR/USD, GBP/USD – as well “short” USD/CAD, USD/CHF.

I am currently in all pairs mentioned above as well as holding my “short” JPY’s against everything under the sun.

More Of The Usual – NY Jungle Fleecing

Forex Kong 5 Comments

You know…I really feel sorry for anyone looking to get into this game from scratch – right here…right now….under the current market conditions…this “jungle” we call a market.

I climb down from my nest in the dark of early morn…grab a bamboo shoot er two, sit down at my computer and look to plan my assault.

Pow! I book any and all profits from the overnight – go 100% cash – sit back and watch the same ol scenario play out – as it has, time and time again.

The entire days move (for the most part) happens before the open! – and for the entire day – poor “hopefuls” plop down their hard earned (or borrowed?) cash – lucky to see a penny of it left as the day comes to an end.

Left confused and likely scared half to death  – the following day is then filled with panic selling (ironically) as the market screams higher…and higher….then higher! Huh?

Following currency markets – allows a trader to monitor trends / price action 24 hours a day….and not fall prey to the usual “NY Jungle Fleecing.”

Ill look to reload tonight  – as the monkeys in London wipe the sleep from their eyes, and reach for the bananas.