trade strategies

Small Trades Initiated – Smaller Expectations

Forex Kong 6 Comments

I’ve stepped into the market with a handful of trades, keeping positions very small – with relatively tight “mental stops”.

Seeing the commodity currencies stall early yesterday, I’ve got to keep pushing in order to continually pull money out of this “labyrinth” we currently call a market.

Not having the “larger time frame stars aligned ” in situations like these,  often what I will do is jump down to the smaller time frame charts “regardless” and apply the same technical know how / skill – only with far smaller expectations, far smaller position size ( if that’s even possible these days ) and with a set % of risk, all-knowing I’m not in the “absolutely best place to place a trade”.

Often these “feelers” turn into fantastic starter positions as I generally “buy around the horn” but….one has to keep an open mind – considering the current market conditions.

That being – nothing is for certain.

USD continues lower, but fairly “unconvincingly” as JPY has shown the “tiniest bit of strength” although again – with little conviction. The commodity currencies are weak, but still hanging in there, creating an overall trading environment fraught with indecision.

I’ve entered long GBP/AUD as well GBP/USD , as well a couple “shots” at commods vs yen.

Global QE – Currency Wars 2.0

Forex Kong 19 Comments

The Japanese stock market has ripped higher the past two consecutive days – pushing through overhead resistance and seemingly broken out, on the back of Janet Yellen’s last two days testimony ( I’m not holding my breath but very often these “inital moves” are the “fake out” only to be reversed days later ).

As the new chairman of the Federal Reserve, Mrs Yellen made it “all too clear” that she is indeed the “dove” everyone was expecting – and that further monetary stimulus was most certainly her “tool of choice” in the ongoing battle to right the U.S economy.

I am even more confident now that the Fed will “increase” its QE programs in the new year, and that further destruction of the U.S Dollar is all but a given. Simply put “those of us in the biz” know pretty much for fact that Japan is planning to increase its stimulus come April, and it now looks like “only a matter of time” before the European Central Bank throws their hat in the ring as well.

Given these circumstances, and the continued unemployment numbers and poor data coming out of the U.S – any idea of tapering is ridiculous, as “if anything” the Fed will need to “step it up” in order to remain competitive with the currency wars now headed for the next level.

With such an “unprecedented scenario” playing out over the coming months / year it’s pretty fair to say we’re going to see more of the same – this being the most hated “risk rally” in history. A difficult situation for “fundamental traders” as clearly the fundamentals play no role with the continued “pump of liquidity” so……..we take it day by day – rely on our technical no how , patience and experience to navigate the waves and continue to profit.

Having my longer term views yes…I could care less which way this thing goes short-term as…..which ever direction the money goes – I’ll be going there too.

I’m sticking to my guns here through the weekend and into next week, still looking at this as an excellent area to start looking “short”. The Naz short still in play, the weak USD considerations still in play, and the “inevitable turn” in JPY has only gotten juicier here as….when it does make it’s turn – its’ gonna be a whopper.

 

A Quick Look At Oil – USD Correlation

Forex Kong 13 Comments

In case you hadn’t noticed – the price of oil has been falling precipitously since September.

With the simple mechanics of supply and demand, larger U.S stock piles have been reported while U.S drivers (feeling the pinch of still “lofty prices at the pump”) are driving less. As of late we’ve also seen a strong U.S Dollar so that hasn’t helped much either.

I don’t feel we’ve got much further to go until oil reverses, and reverse hard.Perhaps another dollar or two max – with reversal coming in a matter of days.

Refiners may have already made moves on this  – with symbols such as “WNR” already popping huge over the past week.

Forex_Kong_Oil_Refiners

Forex_Kong_Oil_Refiners

I’d expect that “this time around” we’ll likely see the price of crude reverse here around 91.70 – 92.00 dollar area, with the usual correlating weaker USD.

I’m going to start running short term technicals on stocks here soon, as well hope to offer those of you who “don’t trade forex directly” additional options and trading opportunities.

Dig up “oil related stocks” over the weekend and plan to get long.

Trade Alert! – USD "Almost" Swings High

Forex Kong 18 Comments

As per usual – you can take it for what it’s worth but..( I’m sure by now you’ve followed long enough ) The U.S Dollar is literally ” a single point ” from its swing high – and subsequent reversal lower to follow.

The U.S Dollar without question “is now being sold along side of risk” as opposed to taking inflows as a safe haven. THIS HAS CONSIDERABLE LONGER TERM IMPLICATIONS.

Risk off related trades are well within reach here as several including GBP/AUD entered yesterday morning – have already started taking off.

This will further validate the “short Nazdaq” signal issued here on Friday, with the holiday and low volumes of Monday and Tuesday – the entry is still very much “right on the money”.

I suggest getting in front of your screens over the next couple hours, as I feel we are on the cusp of another “reasonable sized move” here as of this morning.

Markets Standing Still – Forex, Commodity Recap

Forex Kong Got something to say?

You can’t “make” this stuff move any faster.

As much as I wish I had a “new signal” every couple of hours – unfortunately that’s not the way it works. Here we are “yet again” looking at for a catalyst, with nearly every single thing under the sun – trading “oh so perfectly flat”.

  • Gold is currently trading at the same price as it was back in July (1270.area) once again touching the low-end of the range – 5 months running.
  • Pull up any forex chart involving the Yen / JPY and see that for the most part “they too” are currently at the same price going back as far as May! – 6 months later……same price today.
  • Oil has taken a trip over the past 6 months alright…up from around 92.00 back in May to 110 – and now? 92.00 again.

If you’d have been abducted by aliens in May, and not been returned back to Earth until this morning – you’d not have missed a single thing. As a trader it’s been a grind,  as an investor it’s been “time travel” of the worst kind, with 6 months spent going absolutely no where.

For anyone who has managed to squeeze a “single penny” out of this thing over the past 6 months – you should certainly count yourself as having some skills. I congratulate you – as you must be doing something right.

If this is what it means to have “markets screaming to all time highs” then I’m not entirely sure we’re all looking at the same things. Looks like flat to down to me.

 

Trade Safe – Sometimes You Get Lucky

Forex Kong 2 Comments

A visual lesson in trading safe.

This guy ( and this truck ) went off the road up in the far right corner of the photo – where the people are standing around.Travelling from left to right he flipped “end over end” across the culvert, then up onto the other side – where you see the truck now.

Let’s apply this to a “newbie” trader moving too fast with blatant disregard for his surroundings – oblivious to the potential dangers.

Forex_Kong_Trade_Safe_1

Some times you just get lucky.

Now have a peak at the picture below.

Forex_Kong_Trade_Safe_2

Trade safe as…..you really don’t know how lucky you might be.

Enough said.

Fantastic entries here this morning some 40 – 50 pips into profit at the push of a button . Playing safe on some smaller short USD’s with nice moves in GBP. If you miss some of the real time stuff – I generally post via twitter.

Take The Trade – When Stars Align

Forex Kong 9 Comments

Patience is paying off quite well here “again” this week, as markets have been more or less at a stand still since last Friday. As tempting as it is at times, to just ” get on in there” – maintaining that “extra little level of patience” can really make the difference.

It’s difficult to get your mind wrapped around it but….for the most part ( at least in forex markets ) you can usually just “let the move happen first” and find your entry later.In fact – I’d say about 95% of the time that the “initial move” ( the move that got your attention / signal / indicator ) is retraced considerably before anything “really big” happens.

I mean think about it……you’ve been watching a currency or stock pull back into an area where you’d be interested in entering on a “daily time frame” – then plan your trade / get your signals on an “hourly time frame” – man…..Even if you waited 8 hours “after”, you’d still not miss a thing really. Imagine looking at a “weekly candle / chart” some weeks later and being worried about “missing a couple of hours”. Drops in a bucket.

As traders we love to be “razor sharp accurate” – as part of the challenge more than anything else. Putting it in perspective it really doesn’t make a lot of difference, if of course you’ve got a sense / idea of where you think things are headed in the longer term.

These days “longer term” may only be 4 or 5 days…..but that’s lots of time to catch some serious movement and make some serious money.

When stars align – take the trade.

I really like what I’m seeing here this morning – across the board in nearly every pair / asset class / indicator etc…with particular attention on the Yen. Pairs such as EUR/JPY have really popped for those looking to “re short” as well USD looks to be running into solid resistance, and could most certainly take a step lower.

I’m close here, but will continue to wait – as we see what “The Americans” are up to this morning.

Signals For Correction – What Do I See?

Forex Kong 13 Comments

With more than a handful of general indicators already suggesting “a top”  – it’s important for investors to understand what “exactly” is happening. And I don’t mean with the “price” of U.S stocks” – I mean with investor sentiment and physcology.

You don’t really want to hear this from me….(not here…not now – with your neighbor and half the guys you know down at the pub all “ranting n raving” about how much money they’re making in the market) as the temptation to “jump in with reckless abandon” is near impossible to resist.

They “say” they’ve been making money but the sad fact is…..mindless bulls are now dropping like flies, with nothing more to go on that “the Fed’s got your back”. Hot shot stock traders caught flat footed, completely oblivious to the movements in currency markets are “feeling some serious pain” as “the grind across the top” takes no prisoners.

It won’t be long now, as everything I track “other” than the misguided euphoria playing out in U.S equities already has me on the move.

If you “don’t know” what I’m looking at by now “from a currency perspective”  – I encourage you to give it a shot. It’s all here.

What do I see – that perhaps you don’t?

China Leaders Meet – Huge Reforms Expected

Forex Kong 7 Comments

President Xi Jinping is expected to unveil a new economic framework for the country after the “The Third Plenum” (simply the third time that Xi Jinping will meet with his top brass in his role as the party chairman) wrapping up on the 12th.

Traditionally reforms are expected at the Third Plenum, with new leaders  having had time to consolidate power. A senior Chinese official has already promised “unprecedented” reforms.

Xi Jinping is under tremendous pressure from many parts of Chinese society to unveil radical changes so  – alot rides on the outcome.

We all know how significant a role China currently plays on the world stage with respect to it’s economic importance and influence on the U.S.A. Large reforms in the banking sector or increased suggestion of “tightening” can and “will” have significant impact on global markets so…..whatever you “think” you hear next week on CNN don’t be fooled.

China will move the markets, as continued coverage of “locker room bullying” takes a back seat.

Shoot me now,  as I’m not sure if I can hang on another day. CNN has the “battle of the burgers” and “locker room bullying” rounding out the top stories of the day.

Trade Alert! – Tech Signals Short

Forex Kong 20 Comments

Trade Alert For Monday November 11, 2013

I want to thank Gary and the group at Dumb Money Tracker for the consistant flow of new users / followers here at Forex Kong! Hopefully some of you still maintain a small chance of “seeing the light” or possibly even making some money with some sound trade suggestions!

Thanks guys!

The Kongdicator has “finally” issued a formal signal on the Nazdaq that would have entry approx 4 hours from now so…..Monday will certainly do.

The entry signal is “short” people, so to be clear – I will consider “selling” not “buying”. This is fantastic news really, as this “melt up” has been a long and drawn out affair, and has kept alot of people “out of the trade”.

I will be looking for significant strength in JPY as well as we “should” likely see “risk” sell – along with tech stocks. When risk sells off money floods back into Yen as we’ve discussed here a million times over.

There are plenty of ways for stock traders to take advantage of this also….and perhaps over the weekend “we can all chip in” and post / comment to put some creative ideas on the table.

I generally don’t enter markets on Sunday night / Monday morning so…take my advice…let this play out through the day Monday and have a look at the close.

Getting ahead on this and doing some solid research over the weekend could be a very valuable exercise for many of you, as you already know…

“I’m very often early…and rarely ever late.”