trade strategies

Limit Orders – How To Effectively Sell Short

Forex Kong 1 Comment

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.

 

 

 

U.S Stocks Pull Back – Watch Nasdaq, USD/JPY

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These days it makes little sense contemplating every single “little move” in any number of currencies, as forex markets are more or less flat / stagnant. Sure the Brexit did it’s thing and the pound (GBP) got hammered, and sure the Japanese Yen (JPY ) has been on a tear since big banks and large-scale traders have clearly been ditching their Carry Trades – in preparation for a larger scale fall in risk assets ( likely to follow post U.S Election ).

So what’s a trader to do?

Many have been suggesting that the long-term “double top” in Tech stocks / Nasdaq could very well be what markets are shooting for, prior to pulling back….and it looks like we are just about there.

 

Nasdaq_Weekly_-_Double_Top

Nasdaq_Weekly_-_Double_Top

What might throw a number of you for a loop, will be to keep a close eye on USD as U.S Equities pullback.

Traditional thinking would have the U.S Dollar rise ( as U.S Equities are sold and “cash is then raised” ) but we’re not much for traditional thinking ’round these parts. Nothing has changed with respect to the longer term idea that USD is set for a much larger fall.

I would take a very serious look at “any currency” Vs JPY on the smallest indication that “risk aversion” rears its ugly head as…..money is gonna pour back into the primary funding currency of this charade ( that being Japanese Yen ).

Not USD.

 

 

Rate Hike In The U.S.A – Total Bullshit

Forex Kong 10 Comments

I’m sure by now you are all well aware –  I can’t stand the mainstream media.

I cringe every time I see some “breaking news story” ( particularly in the U.S ) hinting of rate hikes, when in reality…..this is complete and total bullshit.

Let’s do a test.

Ask yourself if this mornings headlines such as “Fed rate hike odds jump on positive July employment report” didn’t bend your ear. Sounds pretty certain. Sounds like the odds of a rate hike are right around the corner.

You didn’t read the rest of the story. As you live in a world so full of information….your habits have changed, your DNA on the move. You don’t “read” anymore. You scan. Exposed to more information per day than people 20 years ago had available “per decade” –  you have no real idea what to believe, as there is so much bullshit out there….so much crap…you’ve morphed into a “scanner” and not a reader. Soon to be a tiny body with an oversized head, sitting in a chair of virtual reality – sipping some algae/protein/zanex based concoction – sold to you by Dupont.

U.S Rate Hike - Total Bullshit

U.S Rate Hike – Total Bullshit

The probability for a rate hike in September jumped to 18%, from the 12% registered prior to the data, according to CME Group’s FedWatch tool.

You getting this? a jump in probability from 12% to 18%…….and markets go wild. Kinda like a jump from “zeeeeeeero” to never….but the spin doctors got’choo.

Do yourself a favor……….stop watching cable. You are not yourself.

Note the bold text in this post.

Looks like I “got’choo” too. Rate hike impossible. Not gonna happen. Actually……an 82% change it’s not gonna happen.

Oooops……isn’t that what you read?

 

Crude Oil – Reverse Head And Shoulders

Forex Kong 2 Comments

For those of you that looooooove technical patterns and set ups –  crude oil is starting to look good.

If we’ve established that The U.S Dollar is set for a solid turn lower ( which we have! ) then it only makes sense that commodities “priced in USD” should be shaping up to make the inverse move higher.

Crude Oil Set To Move Higher

Crude_Oil_Entry

Crude_Oil_Entry

Considering this incredibly long period of consolidation / distribution in most asset classes, it looks like we are finally going to see a number of “standard correlations” come back into effect.

A large move lower in USD being the key factor, as these assets priced in U.S Dollars begin to move higher.

I’m simply ignoring “any and all” other news  with respect to inventory / consumer demand etc as oil will take a sizable jump on further USD weakness.

 

Back On The Big Short – The U.S Dollar

Forex Kong 4 Comments

Knowledge is power right? Or so they say….

So…..if you’ve only got a view of oh…let’s say just a small portion of the market ( maybe a couple of blue chips, gold) and perhaps the U.S Dollar “against” your own local currency well…..one might suggest adding a couple more “market indicators” to the pile.

I know you may find this incredibly hard to believe, maybe even IMPOSSIBLE to believe but….The U.S Dollar “spike” here in the wake of Brexit market madness will soon provide one of the greatest “short opportunities” of our time ( slight exaggeration perhaps ).

While you’re all drooling over the massive moves “upward” against both the EUR and GBP ( no kidding right? As the vast majority of traders got “wacked” by Brexit ) The U.S Dollar “continues to sink” against its arch rival ( or at times good buddy ) the Japanese Yen (JPY).

The two are now almost at par.

Now….for those with near term memory loss – do you remember the continued explanation here at Kong with respect to money flows on this planet? The safe havens / funding currencies such as JPY going absolutely “parabolic” during times of “risk aversion”? The money that comes “flooding back” to these this currency as large-scale “carry trades” are wound down? Well……if you think the U.S Dollar is strong right now……why is it getting its ass kicked by the Yen? Why is USD losing all support / falling like a rock against JPY?

That’s what I call JPY stength. That’s what I call “risk off”.

The U.S Dollar will soon follow….providing for large scale gains SHORT USD against any number of currencies.

I will again be waiting for a daily “swing high” in USD ( likely within the next 3-4 days tops ) for another joyous ride “back on the big short” – USD.

Pack yer bags…this could be a loooong journey.

Stop And Reverse – Day 3 Already

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Why not take a quick second to blow my own horn right? I mean…….why not!

Day 3 of the full “stop and reverse” on The U.S Dollar – timed exactly,faultlessly, superbly, superlatively, excellently, flawlessly, to perfection, without fault, ideally, inimitably, incomparably, impeccably, immaculately, exquisitely, consummately. Bang! After week s of pure profit on the short side….3 days straight up long. Job well done for those of you that actually trade.

In any case…..always a great feeling when you nail one….or two – maybe 3 in a row, as it certainly makes up for the couple that you get 100% completely wrong.

By the strength of the move in USD I think it’s fair to say we’ve got ourselves an intermediate bottom, a fantastic entry and many more days of upside so it’s unlikely I’ll be changing my tune over the next few weeks. Mind you….I will be there for the next turn lower…you can count on that.

This is a great time to get those gold and silver miners back on your radar, and start zooming in to find solid areas of support. I hope these little babies fall hard, as the longer term reversal is now so…. major weakness will provide buying opportunities.

Rock n roll people.

Hope you’ve managed to make a buck er two. I’m back on the beach.

 

Forex_Kong_Beach

Mind The Hammer – Japanese Candles Tell All

Forex Kong 2 Comments

Can you see the candle formation currently forming on $DXY – The U.S Dollar Index? That’s reversal shit there.

A hammer is a type of bullish reversal candlestick pattern, made up of just one candle, found in price charts of financial assets. The candle looks like a hammer, as it has a long lower wick and a short body at the top of the candlestick with little or no upper wick. In order for a candle to be a valid hammer most traders say the lower wick must be two times greater than the size of the body portion of the candle, and the body of the candle must be at the upper end of the trading range.

When you see the hammer form in a downtrend this is a sign of a potential reversal in the market as the long lower wick represents a period of trading where the sellers were initially in control but the buyers were able to reverse that control and drive prices back up to close near the high for the day, thus the short body at the top of the candle.

After seeing this chart pattern form in the market most traders will wait for the next period to open higher than the close of the previous period to confirm that the buyers are actually in control.

Two additional things that traders will look for to place more significance on the pattern are a long lower wick and an increase in volume for the time period that formed the hammer.

And here’s the kick in the face for those thinking this market is still properly correlated –  stocks taking a hit.

Complete and total gong show out there folks…..stick to what you know and don’t even try to understand it day to day.

I’m full stop and reversal on USD with orders sitting above and below. Japan may well have more to show us this evening….but we’ll just have to wait til then.

When gold and silver mining companies pull back here ( on USD strength ) BOOM! – Entry of a lifetime coming very soon. I shall keep you posted.

 

270_Place_Holder

Trading Is Art – Filter Out The Noise

Forex Kong Got something to say?

The U.S Dollar likely has a few more days of downside before petering out and completing this last leg lower, so you can feel free to hang on – at least another couple of days short.

HOWEVER!

It’s  quite possible that this last leg down may mark “the end” of an intermediate down trend, where in the bounce ( and possible trend change ) could be quite dramatic.

Myself…..I’m going to close my few open positions over the next day er so…..then consider “mission accomplished” short / medium term shorting USD.

If indeed we see an intermediate cycle complete –  a full stop and reversal in USD related trades could soon provide another “easy trade” in catching it so early. Obviously pairs such as EUR/USD as well GBP/USD will provide fantastic vehicles here, as well as long USD/CAD and USD/JPY ( but I’d be sure to really wait on these ).

So you see? This is traaaaaaading. Trading yes. Not beating down on The U.S Dollar like I give a rat’s ass about one particular currency or another. This is making money in a market “regardless of direction”. This is charting, this is macro economic analysis, this is timing – this is art, not some bullshit rhetoric aimed at keeping you invested and ultimately cleaned out.

You can do it…….you’ve just got to turn your biases off. You’ve got to learn to think for yourself, and filter through the noise.

Kathy Lien – Completely Wrong About USD

Forex Kong Got something to say?

Another CNBC talking head pushing her latest headline: Fed Statement Is Good News For U.S. Dollar

How do these “supposed” industry analysts get this stuff so completely and totally wrong?? While a simple off planet ape keeps getting it right?

Kathy Lien Managing Director of FX Strategy for BK Asset Management is obviously just another cog in the media wheel, sputtering out mindless garb aimed at keeping you trusting, keeping you in belief that the financial systems are stable and working in your favor.

Overnight here in the jungle, The U.S Dollar has finally broken support – after trading sideways for essentially the entire month, and things look very ugly in Japan. The Nikkei is now down -630 ( 3.6 % ) and USD has absolutely dive bomb a full 300 pips vs JPY. The short USD trade will finally pay “the big one” allowing me to finally purchase the magnets and nuclear material I need to get back home.

The profits are staggering. Thank you Kathy –  for selling the retail trading community “exactly what I needed” to catch the vast majority of them on the wrong side of the trade. I will be closing these trades immediately ( as many will just now look to get in ) and continue to place smaller trades “under the action”.

It will be interesting to see how the next couple trading days go there in the U.S. That ol saying ( however cliché ) Sell in May – Go away. I don’t really buy it. So we’ll see.

Future_Kong_Nuclear

Future_Kong_Nuclear

Step Outside – Embrace Death – Start Living

Forex Kong 4 Comments

You think I could pull this off if I was scared?

I know you……..

Well…..I know some of you.

I know a handful of successful people who kick around here on occasion – likely getting  a bit of a charge out of good ol Kong as….these are people who have weathered their own storm, and can relate. People who’ve made sacrifice, people who’ve taken chances. People who’ve thrown “caution to the wind” to realize their dreams.

People that recognize you don’t get anything for free in this world, and that nothing…..and I mean NOTHING can stop you if you work hard and believe in yourself.

Is that you?

Or are you some “lurker” here fishing for a “free tip” –  hoping you’ve lucked into the “lotto blog” and your wildest hopes/dreams will be instantly realized in doing what I say…..no effort….no sacrifice……no “self belief”?

Have you lost your mind?

In any case……….

I’ve been invited to a party this evening. A friend here in Playa. A very successful gent from Holland running a very successful beach bar and club. A celebration of birth on a level you’ll likely never see in your life.

I’ll pass thank you.

This is how it works for me…….

I’m not much for “birth” as much as I am for dieing.

If I didn’t approach it this way –  how could I have lived this incredible life?

If I didn’t have complete and total belief / conviction that this “brief time in human form” was exactly that well….how could I possibly have done the things I’ve done? Imagine if I lived a life “in fear”?? How could I know what’s possible?

Do you know what’s possible? Do you know what you are capable of? Are you scared to die –  or perhaps scared of living? Do you think you know the difference?

Total bullshit.

The sooner you start thinking/believing  you are “eternal” and that this “brief stint as a werkin joe” is just a stop over – the sooner you and I start getting along.

Don’t do anything stupid ( short of the standard stupid shit we do ever day ) but seriously….

Step outside. Embrace death…….and you never know – you might just start living.

This blog is gonna change soon. I’m bored stiff with the simple math of  trading.

Psychology coming soon to a theatre near you.

Stay tuned er bug off.

Thoth

Thoth