trade strategies

Forex Repositioning – Booking Profits

Forex Kong 12 Comments

I’ve cleared the deck for a return of just over 600 pips since the posted trades some days ago.

Please keep in mind that several of those trades where held for almost an entire month  – through “this entire mess”. To realize profits / gains such as these during a time of such “market madness” takes considerable confidence in one’s market view and longer term ideas.

Mind you – holding several of these for the duration was no easy task, but as you recall – I was postioned for “risk off” several days “before” we saw the slide. Now a full 10 days down in SP/ U.S equities.

Where do we go from here?

It’s not looking good for “risk in general” – but of course “these days” markets celebrate when the U.S dodges bullets so….the outcome here “could just as easily” go either way right?

The uncertainty surrounding this shut down / debt ceiling talks etc leading up to Oct 17th is beyond and kind of standard “market analysis”, but I’m leaning towards “the longer this goes on – the worse it’s gonna get”.

How am I positioning?

Nearly 100% cash now, after taking full advantage of all long JPY trades, as well several other “risk off”related trades – I am now eyeing the U.S Dollar for the face ripper.

As we know “nothing moves in a straight line for long” in forex markets – what’s the worse case looking at smaller orders across the board with a “Long USD” theme.

EUR as well GBP looking ripe by the day….as the commods flounder around somewhere in the middle.

USD Face Ripper – Caution Ahead

Forex Kong 11 Comments

I’m not sure how “or why” I came up with it. Perhaps something in a dream or maybe something I read – I can’t remember.

Face Ripper ( as per Kong ) : A ridiculous move in the price of a given asset, when the complete and total “opposite” move is expected.

I know it sounds gross. And….essentially “it is” gross but…….. at least it gets the point across.

One day you’re making a trade, and feeling good, confident , “safe”. Next day – Boom….No face.

Wether or not it happens in a day or a week…or a month for that matter – this thing is setting up for an epic move. The overall complacency in markets is downright irresponsible, and reflects an investment environment that is so far “up in the in clouds” that a “trip back to Earth” is most certainly in the cards.

USD WILL RIP YOUR FACE OFF.

As most traders don’t truly understand the larger “macro” reasons as to why the U.S Dollar “rises” when things look to be at their worst….this is most certainly the case. Every penny that has been invested in assets / converted to other currencies in emerging markets ( as to make larger returns / gains ) comes flooding back into USD on the “slightest indication” that the party is over.

USD WILL RIP YOUR FACE OFF.

Enough said. This “gov shut down circus” is only the first act….as we’ve got several more to go.

CAUTION AHEAD.

Massive Divergence in GBP – The British Pound

Forex Kong 4 Comments

I see massive divergence in the recent move “upward” in GBP ( The Great British Pound ).

Fueled by talk of a “possible rate hike” out of the U.K coming “before” any kind of hike in the U.S, the currency pair GBP/USD has skyrocketed in “price” – yet floundered with respect to “strength”.

Coupled with the over all weakness in USD over the past few days, the combination of factors has pushed the pound ( guess where?) yup!  Right into a long-term area of overhead resistance.

How much higher can it go?

A better question might be “how much lower” as nothing “forex wise” moves in a straight line for long, and we are pretty  stretched here as it is.

I will patiently wait for “at least” a turn on a number of smaller time frames, as well “Kongdication” but in all – it really doesn’t matter. I will get short GBP soon.

After a move of over 1,400 pips ( so in nominal terms the pound has gained 14 cents on USD ) since July – what are the odds it gains another nickel before “retracing” a portion of this massive move?

Slim to none.

Talk about a decent short-term investment return no?

Who cares what the DOW did.

Currency Trading – Everything Is Relative

Forex Kong 2 Comments

When trading Forex one has to keep in mind – everything is relative.

Weakness in a particular currency is only “seen” when that currency is compared / traded against another “specific currency” where the “relative” difference / change in value can be compared.

Hence the reason why forex is always traded in “pairs”.

Often we see the pair EUR/USD ( the Euro compared to the US Dollar ) and generally assume “dollar weakness or strength” based on this pair – and this pair alone, yet the dollar’s performance vs AUD ( The Australian Dollar) for example “could” be an entirely different story depending on specifics affecting AUD.

To “generalize” or to “assume” a given currencies direction without viewing it “specifically” against each and every individual currency would be naive , lazy – and likely quite costly.

The US Dollar has taken a considerable down turn “again” this morning – or has it?

Against the EUR sure ( as these two will always “see – saw” being the two most widely held reserve currencies on the planet ) but in all……….USD has barely budged against a pile of others.

The one thing that has moved here this morning is volatility. Volatility is up , up , up and away.

Spend the time ( it might actually take 5 minutes a day ) to get familiar with currencies, oil , stocks , gold etc  in a “relative manner” and before long – you’ll be seeing things much more clearly.

Oh My…..Just A Couple Of Trades Paying Off

Forex Kong 8 Comments

Oh my……….

It would appear that the recent “tweaks” to the Kongdictator have been…….AWESOME!

EVERY SINGLE TRADE SUGGESTED / ENTERED VIA MY SHORT TERM TECH IS CURRENTLY “WELL” IN PROFIT.

These things can turn on a dime fine…..( although forex wise – not so much )…but that ‘s 8/8 as per the “real-time updates” at the beginning of last week.

Read ’em n weep sucka’s ( for those following from Forex Factory).

Tequila time for Kong!

 

Forex Strategies For Investors – Timing

Forex Kong 4 Comments

I can’t help but say….I’m a little choked.

We’ve been over a number of key points here, when considering “taking a trade”, and now turn our focus to “making an investment” as essentially – a completely separate topic.

Anyone care to hazard a guess,  at one of the most important factors affecting each?

Hey! You got it!

Timing! Timing! Timing!

You can have all the fundamental knowledge in the world, as well possess the “ultimate technical know how” yet, if your timing sucks……………….sorry to say – you are sh/#&t outta luck.

Anyone making an “investment decision” without (at least ) “some” understanding or awareness of the “possible downside or risk” might as well just sign their account over to the brokerage and wait for the call – letting you know your account has been reduced to zero!

Have you lost your mind? With absolutely “no plan” for the “downside” what you are essentially saying to me is ” I bought a stock, and expect it to go up, up , up , and continue going up forever”.

Or at least….that’s what your broker told you, and believe me – he won’t be calling you to let you know anything otherwise.

Again – have you lost your mind?

This “isn’t investing” as clearly – the landscape has changed. Your broker and your bank are your enemy, and will stop at nothing to see you and your hard-earned nest egg “parted” as readily as possible.

This is 2013 people! You have the entire planet’s libraries at the push of a button!

If you can’t make an investment decision based in your “own knowledge” of a given asset’s performance over time ( and in turn “some idea” of its peaks and valleys / areas of support and resistance) then WTF?

How can you see an area to take profits? How would you know an area to “cut your losses” should things go “that far” against you?

How can you honestly say you’ve got “any idea at all” as to what you’re even involved with – short of putting your entire “nest egg/investment dollars etc ” into the hands of an institution whose soul goal is to extract it from you?

GRRRRRRRRRRR………..

More on timing next…………

Forex Strategies For Investors – Not Traders

Forex Kong 10 Comments

I’ve spent the past week “out in the trenches”. Pulling back the curtain “just a bit” and hopefully providing short-term traders with a couple of ideas  – and the chance to make a quick buck.

For the most part this area of forex trading is extremely difficult, time-consuming , stressful , annoying and for those with little experience  – truly a fool’s game.

What I’d like to do now, is take a complete 180 degree turn and take a look at forex strategies and concepts geared more so for the investor.

Let me throw out a quick scenario.

What if I told you that your Canadian dollar exchange to Mexican Pesos is 12.79 ( simply consider a dollar being worth approx 1.27 here ) Not bad eh?

Ok…..so now what if I told you that the “base savings rate” at any of the excellent banks here in Mexico was 3.75% – You starting to get the message?

So what if you could go to the bank in Canada tomorrow and get a loan for 100k ( at near 0% ) Then take “said loan” and convert it to Pesos – and put it in a bank account at 3.75% – with absolutely no risk.

Boom! Forex as investment.

It’s what your local banks are doing hand over fist. It’s called the “Carry Trade”.

It’s not “new” it’s not “sketchy” – It’s a major , MAJOR driver of profit for banks across the planet.

More over the weekend……

 

written by F Kong

Risk Off In AUD – JPY Moved Higher

Forex Kong 4 Comments

As markets continue to “flirt” with a real move / turn – I’ve taken a couple additional trades over night.

Short AUD/JPY as well long GBP/AUD. Both well into profits with prior trades ( see previous post ) all moving even further into profit. ( The Insanity Trades are well…..insane.)

The Australian Dollar (AUD) is showing considerable weakness across the board, as our old friend the Japanese Yen (JPY) continues to move higher.

I’m pleased to report that fewer signals were offered last night, and that the latest tweaks to the Kongdicator has kept me out of sideways action in USD related pairs, while hitting home runs in others. This is the plan.

I won’t bore those who are here reading on macro market analysis / fundamentals much longer with this “technical stuff” a day longer – and appreciate those who have followed along so far.

Markets are “teetering” here – and it’s nuts out there. Trade safe, and we’ll get back to some “overview” during the weekend.

Anyone who isn’t already following on Twitter – I tend to post “real-time stuff” there, as opposed to putting out an additional blog post so….

 

Kongdicator Alert! – Free Trade Signal

Forex Kong 8 Comments

It’s really no suprise that “The Kongdicator” has now tripped, and will produce entry signals within the next 24 – 36 hours.

I’ve done some tweaking here over the past few weeks in that – I’ve been “a touch early” with the initiation of new trades recently, and want to get this dialed right in.

As the system is “forward looking” I plan to post / alert to the exact trades that the Kongdicator suggests in real time during the trading day tomorrow.

I will outline each specific pair, as well perhaps a couple of stocks / indexes ( as I run it on /ES SP 500 futures  as well) so that you can get a real look at some specific entry levels – and follow along with a couple of trades.

The Kongdicator always suggests / places trades “above / below” the signal as these trades are then picked up “if/when” momentum moves in their favor.

I hope to get some feedback on this ( hopefully constructive ) as we move closer to making the indicator available to all.

Across the board I have a number of currency pairs signalling a trade, but each with it’s specific time / price so……I’ll plan to tweet as well post several times if need be, so that we can get a look at this in real time.

Thanks everyone.

Kong.

The Seinfeld Post – All About Nothing

Forex Kong 3 Comments

Sitting here wracking my brain for a compelling headline ( an absolute “must” in financial blogging circles) suddenly it came to me! Seinfeld! The show about “nothing”.

Well……as the entire planet continues to sit watching “in awe” as the U.S Government stumbles around in the dark “yet again” , hoping to put a square peg in a round hole. What’s there to say?

Nothing.

At least with Seinfeld you got a good laugh out of it. This isn’t funny in the slightest.

Now hearing talk about “leaked information” seconds before the Fed’s announcement last week? Now that’s funny. Like the gang at Goldman and Ben’s “other buddies” had no clue they weren’t gonna taper!

I mean seriously….it came as an absolute “shock and surprise” to the big boys, and now  blamed on the media? Gimme a break.

Nothing to see here today that’s for sure.

Disgust. Revolt. Shame. Sickness. Loathing .Nausea.

Risk continues to sell off here “despite any kind of green arrows seen in U.S equities” today. The illusion continues to play out, as commodity currencies get wacked overnight, and the safe haven play for JPY makes considerable headway.