Limit Orders – How To Effectively Sell Short

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.

 

 

 

Fade To Back – Then Get Short Again

If the sideways trading hasn’t been enough to drive you insane “yet” well……..you’re one the few. I’ve had nothing to trade, and in turn nothing to “say” until today.

It looks as though we are back on track for another short entry in risk, as both The SP 500 as well $USD are signalling – downside ahead. You don’t see it? How about 2095 as a good place to start?

I’m looking for today’s high in “both” as a level to look at “getting short” – again.

Keep in mind….the levels are the levels…but the turns often take time. Get a couple orders in “underneath the action” – and you’ll do just fine.

This works short SPY, short USD/JPY , as well most everything vs JPY ( yes again and again! ) with smaller orders long GBP/USD.

Picking currency pairs is getting trickier these days….so you’ve got to stick to some of the larger concepts ie…..Risk off = JPY UP.

Watch for this to fade here this afternoon..

 

Biotech Already Showed You – GDP Dismal

The US Dollar has FINALLY broken below its previous daily cycle low to confirm the beginning of the long await “intermediate decline”.

A few days bounce may be in the cards, but what is most important to understand is that the cycle of higher highs and high lowers has finally come to an end –  with a “lower low” now in place.

Larger implications?

I assume gold, silver and the related mining companies are about to see  strong move upward, and it will be interesting to see if the price of oil related names move higher – in the face of a weaker U.S Dollar.

The ol adage to “sell in May and go away” looks to be taking hold this year, so I would caution you sleepy , passive , complacent traders and investors to consider “once again” to bank those profits here, as this extended topping process finally comes home to roost.

Short USD trades have performed wonderfully, and we’ve got the JPY related pairs on deck next.

CNBC has now moved to a shitty little office in San Francisco, because t’s all they can afford. Look for the network / channel to likely disappear from the airwaves late this year.

Yesterday’s “trade of the day” posted on Twitter was a smashing success, as will be today’s and the next days and the next….

The Fed has your back here this afternoon. U.S GDP craters lower “again” and the world is a happy shiny place “financially speaking”. Lol.

Keep drinkin the watered down, luke warm kool-aid here today. Ahh screw it….just go back to bed.

IBB_Forex_Kong

IBB_Forex_Kong

 

 

 

 

Dow Futures Down -225 – China Crashing

Chinese stock futures are now down almost 7% – the 2nd biggest drop in 7 years.

Down futures down -225 Completely erasing April before you even get out of bed, and get a chance to have a look.

You see what I’m saying here? This thing will not give you “half a chance” to get out with your skin intact if you don’t have the foresight to consider  “ringing the bell” and “taking some off the table” BEFORE IT HAPPENS.

You “powerbulls” can take one on the chin this morning – and you deserve it.

I don’t have alot to say these days, as you know where I stand on the global economy in general, and this puff ball/hot air balloon you call a market.

Looks like you’ve ignored the last two posts…..and the “50 points lower” is “- 250 points lower” before the days has even begun.

Good luck with that, I’m off shopping for a new boat.

Ring The Bell – I Marvel At The Greed

Are you dense?

Let me ask you…….What “will it take” for you to call your broker and ring the bell on your top 5 winners? That one account….the one that has performed “sooooo well” and is just sitting there “dripping with profit”.

What’s it gonna take? 5 points higher? 10 points higher?

How about 50 points lower? Ya……that’s what I figured. Sell on red – as retail will always do.

I remember a wise man telling me once “you buy low ( on red ) and you sell high ( on green ).

It’s simply amazing to me that retail investors continue to “define themselves” by doing the complete opposite so consistently that an entire industry ( the financial industry ) has grown to the mammoth that it is…..simply laying in wait.

Retail will do as retail will do. Make a change. Do something different today.

Bank “a few” of your winners and go for a nice long walk. You’ll feel good.

And you won’t miss a thing.

I remain short USD.

Long Trades Sink – Kong Waits On Private Island

If you’ve heard me say it once – I’ve said it a million times. A strong U.S Dollar will not be tolerated, as it represents a “red-hot poker to the eye” of both the corporate American “and” The U.S Fed.

You can fire up with all the fancy economic bullshit you can rustle from the countless “pro risk/pro USD/pro economic recovery loser blogs” out there ( and I hope you do ) and it won’t make a stitch of difference.

This thing will be cut off at the knees as U.S earnings plummet to the depth of an ocean.

Lets just call it the “Sea of Recession”.

You’ve heard of it but have no f*^*king clue where it is…..perhaps try looking in your backyard.

Short USD trades are once again “up and running” as we prepare to snap up all those long trades – soon going overboard.

I’d take a look at U.S Equities as well and consider that when BOTH the U.S Dollar AND Stocks start dropping like a rock….the big boys will have already taken the life rafts to shore.

I’ll already be on my private island – scanning my beaches for washed up traders and radio shack suits.

Do you think New Yorker’s can even swim?

I doubt it.

Forex Kong Goes Dark – Markets Go Nowhere

Recent travels have taken me to the far reaches of the planet…..far far away from these pesky markets, deep into the darkest flora and fauna this world has to offer.

I am literally in the middle of nowhere…..and loving every minute of it, short of the “pancake sized” blisters on the back of my heels from having to actually wear shoes / boots. It’s slowed me down a touch….but I’m on the mend now.

No Internet. No Television and barely a scrape of food for miles, let alone a crisp cold beer. I freeze my ass off at night and am now as white as a ghost, blending in the best I can with “wonderful savages” who inhabit this land.

I speak nothing of markets as I am now deeply entrenched in far more “pressing matters” the likes of which I’m not at liberty to discuss – at least for today that is. ut I can tell you this: Something big is about to happen.

Cryptic as it may be, there is no question in my mind that “change is in the air” and considering how stagnant things have been – it’s about freakin time.

I will be back on top of markets as I am now this “mountain we call life” from this afternoon on.

I appreciate your patience but hey……did you really even miss me?

Singapore Survives – Global Growth Tanks

Readers / visitors from Singapore have now overtaken the total number of visitors to Forex Kong from all North American countries combined.

A recent study has found that the number of households with investable assets of US$1 million (S$1.26 million) or more rose 14 per cent to 188,000 last year. That means 17.1 per cent of households – or one in six – are millionaires ( this data may be a full year old ).

Wow.

That’s like sitting down for dinner at your local McDonald’s and knowing that there is “at least one millionaire” sitting at the 4 or 5 tables surrounding you – although I don’t imagine many of them are “actually sitting at McDonald’s”.

Some other interesting facts about Singapore:

  • Singapore is the fourth-largest foreign currency trading center in the world, according to the Bank for International Settlements.
  • Singapore is the fourth-strongest financial market in the world. The World Economic Forum praised the country for its high degree of financial stability, bank efficiency, and commercial access to capital.
  • Singapore could overtake Switzerland as the world’s largest offshore wealth hub by 2020, according to WealthInsight, a London-based research firm.
  • There are more than 500 players in the asset management industry in Singapore, with total assets under management of more than S$1.4 trillion.

Obviously something must be going right for these “astute investors” and I’m very pleased to see their numbers growing.

Perhaps a couple of them may have managed to “push through the my sarcasm and disdain” – and taken precaution to protect their profits / exit the markets some months ago – I dunno but……I’ll be hard pressed to hear of any “American Bulls” that have survived January thus far. Impossible.

I expect a “slight bounce” here, providing a last chance opportunity to re-evaluate your current holdings before the real fun begins. As per charts/banter going back some weeks. Global risk has clearly topped.

I’ve seen plenty of waterfalls in my days ( those of  Costa Rica the finest ) but have visions of “this one” topping all.

A shout out to Singapore and good luck to all!

 

 

 

 

 

 

Japan Enters Recession – Stocks At The Highs

It sounds completely and totally ridiculous doesn’t it?

Japan has now “officially” entered recession – last night posting it’s second straight quarter of negative GDP growth, while Japanese stock hang near 5 year highs.

You must see the hypocracy in it all.

You understand that Japan’s QE program has been “triple that of The U.S Fed” over the past year, and just last week was increased “even further” with The BOJ now buying 100% of newly issued bonds. Not just “a few of the bonds issued” – but every single one.

This literally equates to Japan sitting in their basement with some fancy printers and xerox machines and “point-blank” printing / counterfeiting Yen all day “every day”to pay off their debts. No different “in any capacity” to a petty criminal organization doing the exact same thing ( counterfeiting and passing artificial money ) – although obviously….risking years in the slammer.

If it where you or I – we’d be tracked down, handcuffed and whisked away to a maximum security federal prison – never to see the light of day again. You can’t just “print fake money”!

Now get this…..Japan raised it’s sales tax from 5% to 8% back in April, and there have been plans in the works to “further raise the sales tax” to 10% early next year! ( Although in light of the current economic disaster they “might” put this on hold). Can you see where I’m going with this?

If that doesn’t amount to “slavery” I don’t know what does.

Imagine yourself heading for the grocery store tomorrow, and seeing a 23% increase in the price of goods ( as your currency has been so dramatically devalued ) then “on top of that” and additional 3 to 5% increase in the tax!

Where you suddenly offered a 25% increase in your salary? Had you recently planted a small grove of “money trees” in your back yard just to stay afloat?

Where are all the new parks / bridges / roads and infrastructure that you “assume” your tax dollars go to ? Where are all the benefits to citizens ( as I know for a fact the people of a country such as Canada “expect” when taxes rise )?

How can the common man “not” see this as essentially being enslaved? You go to work for the same old pay, with rapidly devaluing currency in your hand – in an environment where taxes are going up!

You don’t work for yourself – you work for the bank!

There is no possible way the average person ( in an economic climate of “slowing global growth” ) stands a fighting chance. You used to live in a house, now you and your family live in a one bedroom apartment.

You used to eat the occasional bit of chicken or steak – but it’s “all rice” now.

QE is a complete and total disaster for the people of Japan, and unfortunately the same rings true for those of The United States.

Japan has thrown “everything but the kitchen sink” into devaluing their currency ( as The U.S is also attempting to do ) and has now “brilliantly” entered recession.

Get ready for “QE 4, 5 and 6” coming soon to The U.S – and get ready to start buying rice in bulk.

Trading The Week Ahead – Fed Speak Looms

The raft of geopolitical concerns out there ( in particular Ukraine ) are finally starting to influence markets. The largest “current concern” now being what effect Russia and it’s supply of natural gas ( or “lack there of” – should things continue down this road ) will have on The European Economy, which is in a sad enough state of affairs as it is.

This isn’t going away anytime soon, and will likely be the catalyst ( or at least via the main stream media ) where blame can simply be placed on Russia for all problems in Western Economies wherein these problems have just been papered over – having been there all along.

My original post back in February “U.S Wants Ukraine – No Matter What” on the subject.

Of particular interest as it pertains to our trading here, take note of any “1 Hour Chart” containing JPY ( AUD/JPY for example ) from Friday, and see the “blatant and obvious” currency move on news that Ukraine attacked a Russian military convoy.

Japanese Yen is going to absolutely “explode higher” given any type of “black swan event” aside from its continued strengthening on safe haven flows.

Trading The Week Ahead

Our charts for both The SP 500 as well Nikkei have played out almost literally “to the letter” – having taken the anticipated bounce and now looking like they are ready to roll back over.

For more detailed trading, real time trade alerts and daily commentary please consider the Members Area as September is setting up for some of the largest opportunities we’ll have seen over the past several months.