trade strategies

Give In To Mother Market – She Always Wins

Forex Kong 5 Comments

To tell you the truth – I’m a little frustrated with you. Ya’ know…….

I’ve written the articles. I’ve posted the charts.  I’ve outlined the underlaying factors, and have even gone as far as to suggest effective methods of protection – should things go South.

But you don’t listen. You don’t care.

You’ve got it in your head that “everything’s gonna be fine” and “scoff” at suggestion to the contrary.

You refuse to consider the fact that you’re not in control, you don’t have the answers, it’s bigger than you, stronger than you, wider than you. You can’t accept the fact that if you don’t make a decision fast……this thing is gonna crush you like a bug.

Well……news for you my friend….welcome to the club!

You don’t think I feel the same? You don’t think I question the same?

Give in to mother market ma man….. cuz she always wins. ……….She always wins!

Best advice I could give…………get to cash.

Stop worrying about the “returns you’re getting”. Aleve the pressure and do some math. Consider 6 months to a year with no exposure to the market –  and the amount of money you’d of made…..or more importantly ……the amount of money you’d have lost. It’s just not worth it.

This is a top not a bottom. I can assure you – you won’t miss a thing.

Discipline – The Trade That Got Away

Forex Kong 4 Comments

I want to continue with my trades long JPY.

I want to place these trades (a few short pips underneath current price action) in currency pairs such as EUR/JPY and GBP/JPY. I want to get short NZD/JPY as well AUD/JPY not to mention CAD/JPY. I want to push a bunch of buttons. I want to enter a bunch of orders. I want to do it right this second! Right here! Right now! My god let’s do it! Do it! DO IT!

But no……….I can’t.

I’ve got patience. I’ve got trade rules. I’ve got plans.

I’ve got millions of trade opportunities in front of me, and a lifetime of trades –  lying in wait.

Most importantly of all. I’ve got discipline.

I’ll sit tight here a while longer and see how things shape up come London open. Frankly, I’m not satisfied with this correction in Nikkei and JPY and still feel there is further downside in risk. I still have reservations about taking positions of any reasonable size so will stick to my guns….and stay on the sidelines.

 

Going Short – A Difficult Trade

Forex Kong 9 Comments

I have been struggling with “going short” all week. Not in the conventional manner as in “selling a stock short” – but more so with consideration to “getting short” on risk.

For the most part “long trades” are considered bullish and are taken when traders feel that markets (and risk) are going to move higher – where as “short trades” are bearish and are taken when traders feel markets are making a turn to the downside. There are many ways to play it – through inverse or bearish ETF’s or possibly through the purchase of instruments that perform well in times of risk aversion (many feel that gold is a good play in this instance).

Via currencies I have chosen to “buy JPY” as it is considered a safe haven currency – and is generally bought during times of risk aversion. Any way you cut it, the idea being that investors would be seeking safety – and that “going short” would be the trade of choice.

This has not been easy.

Markets have traded within a very tight range (sideways) for nearly two full weeks! And regardless of some great intra day trades and profits (which I’ve had to work very hard at) it’s been near impossible to hold on to any position of size for more than a couple of hours or so – before it’s either back to break even, or worse – going against me.

My indicators ( and my gut ) keep me on the short side regardless. I will endure this mornings barrage of U.S based news and evaluate from there.

I’ve layered in to a couple of long JPY trades here over the past 24 hours that will either make me a great deal of money or (at the worst) cost me 2% of my account (not bad considering I’m up over 4% on the week anyway) so…..

Stay tuned for some fireworks.

Getting short…and “staying short” – is a very, very difficult trade.

Take Profits – There Is Always A Trade

Forex Kong 9 Comments

If I didn’t take profits as often as I do – I seriously doubt I’d be this far ahead. There are few worse feelings than seeing a trade go well into profit, waking up the next morning to see – that not only has the profit evaporated, but the trade has actually gone against you. Volatility in forex trading  can be an absolute killer (not to mention greed) – so when profits are sitting on the table…..you’ve got to learn to take them.

Take the long JPY trades over the past 24 hours for example. I went short CAD/JPY (so…looking for JPY to gain strength against CAD) and caught a 100 pip move over a 4 hour period. That’s what I call a really nice trade.

Seeing the “waterfall” type selling pressure in the pair, I knew from experience that this type of market behavior doesn’t “last forever” and would likely be followed with a bounce in the opposite direction. I exited the trade with a full 100 pips profit with absolutely no concern as to “what I might miss” in further downside movement – if I’d remained in the trade.

Here we are a full 24 hours later – and the pair has 100% completely retraced the entire 100 pips from yesterday.

Take Profits Often When Trading Forex

Take Profits Often When Trading Forex

You can never go wrong taking profits – never. As well, by keeping yourself relatively nimble you are also equipped to take additional trades or (such as in this case) re-enter the same trade at even better levels.

Learning to distinguish “when/where” to do this does take practice, but if you keep in mind that you are continually growing your account balance as well as limiting your exposure in the markets – taking profits often (very often) should become a regular part of your daily trading.

I rarely leave money sitting on the table – as there is always another trade. Take the money – call it a trade ( a good trade ) and get back out there with a little more gas in the tank.

Filter The News – Find What Matters

Forex Kong 6 Comments

You people have been reading here long enough to know – I am a fundamental trader at heart. My success – rooted in my general interests in the global economy (not some little piddly lil stock market) and my ability to discern “WTF is going on” at any given time. Filtering the news plays a big part.

Day in and day out, we are inundated with more headlines and news flashes than we know what to do with – not to mention the fact that much of this news is conflicting, bias, or outright nonsense. What’s a trader to do when faced with such a barrage of misleading and conflicting information? You need to find the story – “behind the story”.

Take Cyprus for example. Most of you likely hadn’t heard “jack squat” of this tiny little country until a few short days ago. It’s GDP is ant sized, and its influence on the global stage – a speck.

Did you consider it’s relationship with Russia? Did you consider the implications of an EU country being supported and even “bailed out” by a sovereign country outside the EU Zone? A country with considerable interests in the massive offshore gas reserves of Cyprus, a country with direct ties with not only China – but also Iran? – likely not.

The real story here, is the same ol story of “east vs west” – not of EU Zone meltdown (although this is currently in progress as well) – and as the news would have many racing to short EUR/USD – I’d be  more inclined to take the other side of that trade.

previous article: “Long EUR/USD At 1.3170 – Watch Me”

We’ll see how things unfold here this evening as the Cyprus deal hits its deadline. I’m certainly in no rush to touch EUR as I generally stay away from this POS all together. EUR/USD traders need to keep in mind – it’s a forex broker’s dream, with promise of low spreads, easy trending characteristics etc….as every newbie on the block takes a crack at it.

Kong Hits 100% Cash Target

Forex Kong Got something to say?

I’ve done it.

Overnight I took a number of smaller trades looking to fill gaps in many of the JPY’s charts. A number of those paid off and I’ve also sold my remaining  “short USD”  trades for a small profit this morning as well. The point being – I have moved to 100% cash as per my trade plan, and am exactly where I want to be for the coming days.

To an active trader the feeling of being 100% cash is truly , TRULY remarkable….as you’ve “officially” extracted “x number of dollars” from that devil of a market, and are able to put your feet up a day or two and relax. I’m really not much for that  – but in this case, will certainly take a day to re-evaluate and not worry about open positions.

From a completely psychological perspective, the opportunity to step away from the market is a welcome gift. I would encourage anyone who is struggling or confused, or perhaps those who are  underwater in a position or two – to take the time to get away from it all…if only for a day or two.

In my case – a time for celebration, as to have survived yet another  – trading adventure.

Kong………..gone.

Xi Jinping – The President Of China

Forex Kong 2 Comments

Xi Jinping ( born 15 June 1953) is the General Secretary of the Communist Party of China and the Chairman of the Party Central Military Commission. He is also the President of the People’s Republic of China and the Chairman of the State Central Military Commission, and is the first-ranked member of the Politburo Standing Committee (PSC), China’s de facto top power organization. Xi is now the leader of the Communist Party of China’s fifth generation of leadership.

Xi is considered to be one of the most successful members of the Crown Prince Party, a quasi-clique of politicians who are descendants of early Chinese revolutionaries. Senior leaders consider Xi to be an emerging figure that is open to serious dialogue about deep-seated market economic reforms and even political reform, although Xi’s personal political views are relatively murky. He is generally popular with foreign dignitaries, who are intrigued by his openness and pragmatism.

He will rule over one fifth of the world’s population for the next ten years, if all goes to the Communist Party’s plan. 

His challenges are numerous: a strong but slowing economy with growing resentment over corruption, an urban-rural wealth gap, continued calls for wholesale political reform and countrywide worries stemming from countless environmental scandals.

I thought it might be worth getting to know this fellow a bit – considering he’ll be the man for the next 10 years. I was hoping to find some indication of his  plans moving forward and ironically – found “tackling corruption” sits at the top his……………”to do list”.

 

GBP Buying – Good For A Trade

Forex Kong 12 Comments

The Great British Pound has really taken a beating over the past few months. I’m seeing relative strength in the currency  across the board meaning – the GBP is making solid headway against a majority of other currencies. Looking for possible reversals against USD, CAD as well CHF could result in some decent trades.

I do caution however – the GBP is a wopper. It moves extremely fast and furious at times and demands tremendous respect. My suggestion would be to consider these trades with a very small position size – and allow for considerable volatility.

GBP Counter Trend Rally

GBP Counter Trend Rally

All short USD trades are performing nicely here as of this morning, and I will look for further in USD/CHF as the day progresses. Otherwise I am nearly 100% out of JPY trades with a few small ones still hanging in profit.

I rarely trade GBP but do see it as an opportunity and will approach it purely as “a trade”.

 

Trade Alert! – JPY Sell Strategy

Forex Kong 11 Comments

I don’t usually do this – but as it stands I feel it’s worth noting that the Yen is in serious trouble here

The selling pressure appears to be significant which would again add credence to the idea that “risk” is on the verge of bursting higher.

From what I get of U.S media – it also appears that the “get in while you still can” propaganda is in full effect as stocks break higher and higher.

Should the USD FINALLY ROLL OVER HERE – we would see the usual correlation of “safe havens” being sold and risk currencies being bought. As well stocks moving higher.

My current strategy in many pairs “short JPY” is holding existing positions – and adding buy orders in AUD, CAD, NZD, EUR, GBP as well USD and CHF well ABOVE the current price level. I repeat WELL ABOVE THE CURRENT PRICE LEVELS.

Should risk on continue and the JPY take the substantial hit I envision – my orders will be picked up IN THE DIRECTION OF MOMENTUM. If not, then the market is free to go against me – as I will not be involved with price action in the “opposite direction”. You see how this works? – Let the market come to you!

 

 

Buy USD and Sell Stocks – Soon

Forex Kong 11 Comments

I expect the USD to turn downward here in the coming week for a final swing  – and then resume its upward direction.

As difficult as it is to understand/accept (as  the USD is still the world’s reserve currency – and commodities are priced in US Dollars) when money flows out of “risk” and into “safety” – the USD generally takes top spot.

This time around should be interesting though, as this will be the first “genuine risk off behavior” we’ll have seen since the currency wars took their toll on several of the majors (obviously the Yen)- so the landscape has changed considerably. It will also be interesting to see if perhaps gold and the precious metals find their legs here as well – again… if only as a flight to safety. On a purely fundamental level it pains me dearly to consider getting long USD – but with emotions and opinions sidelined a trader needs to look at the situation at hand, and trade accordingly.

Timeline wise I had suggested mid March as a time to consider “getting safe” – and it looks like I’ll be close, as this could very well bump around up here for a week or two before any large-scale damage is done. The “blow off top” is most certainly in play here as well – as the last to the party will look at this as a pullback…. and buy.

Stay on your toes everyone – and for the most part, I would look for any and all strength in stocks / equities as a last stop chance to sell.