trading tips

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.

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”.

 

Order Entry – Small Orders Over Time

Forex Kong 6 Comments

If I would have “bet the farm” on my short USD trades some days ago – I’d be fairly deep under water. The USD has continued to rise in the face of rising equity prices – and for the most part will likely have broken every “short USD” trade out there in the process. I don’t trade that way – I don’t “bet farms”.

Considering the weakness in JPY and the 9% account profits I’ve generated there – I can’t complain. Regardless….the point being – If you see a trade idea developing, and decide to get involved – place small orders in the direction of the momentum.

In the case of JPY for example – I had several orders waiting several pips “above” the current price action day-to-day. If indeed the momentum continued in my favor – more and more orders would be picked up – but more importantly – ONLY IN THE DIRECTION OF THE MOMENTUM. When looking to short USD I “had” several orders waiting underneath  day-to-day price action with “hopes” of getting filled. As the USD continued to move against me – no problem as I’ve got next to no “immediate exposure”.

I had posted /suggested getting long the EUR/USD pair at 1.3170 some time ago. Well……I’m not going to enter the market at that level IF PRICE IS IN A DOWNTREND – why get involved when a trade is moving opposite your interests? But I “may” decide to take the trade once price action has turned – and I see the same value of 1.3170 – BUT WHEN PRICE IS MOVING HIGHER!

So – In staggering your orders, you afford yourself additional time to evaluate the trade – and access your ideas….without commiting such resources that the trade “must move in your direction or you’re toast”. Sure you might miss a pip or two but that’s not the point. Why get involved with price – when price is still moving against you?

Small orders over time – will keep you in the game….betting the farm won’t.

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.

Read These Articles – Plan Ahead

Forex Kong 10 Comments

The G20 statements more or less give the continued currency war a big fat A O.K – so we can only imagine that the good ol Yen (JPY) will continue to take a pounding. As nothing moves in a straight line… I can’t help but ask “when will we see a counter trend rally?”  but all things considered  – it may not be quite yet. The trade implications could very well co inside with a couple of my previous posts:

Currency Wars – Japan Turns Up The Heat

Here I outlined the topside possibilities  in the pair AUD/JPY being as high as 1.05. As extreme as this may have sounded at the time, the AUD/JPY pair has provided me with some of the largest profits to date – and deserves another look.

Forex – Trade The Fundamentals First

Here I suggested that the long-term trend in the pair USD/JPY has indeed based… and in turn reversed. The trade here has been massive – and as suggested one of the best trade ideas of the coming year.

Blow Off  Top – Retail Bagholders

A caution to readers that we are nearing a near term “topping process” – and that often these moves present a massive “spike” as Wall Street hands the bag to the poor retail guys buying at the absolute top.

Now I can only do my best to put the pieces together as I see things happening in real-time – but should “all things Kong” play out as suggested well……..wouldn’t that be dandy? In all – my suggestion / plan to be 100% cash by mid March is soon upon us so…I will be watching closely and suggest you do the same.

The outcome here (whether it be next week …or a couple more weeks) “should” see a very large move UPWARD in USD ( as fear grips markets and safe havens are sought) as well JPY – coupled with a considerable correction in the U.S Stock Markets and “risk” in general.

As backward as it may seem (and almost “sick” in a sense) in the back of mind –  I am already formulating LONG USD IDEAS.

Kong Celebrates 100 Blog Posts!

Forex Kong 12 Comments

With the book deal inked, and most of the movie details pretty much squared away ( although I refuse to be played by Leonardo Dicaprio unless he agrees to lose at least 10 pounds first) I’m taking the rest of the weekend to celebate my small short-term goal of 100 posts here at Forex Kong.

It may not seem like much..to most of you (although I seriously doubt a single one of you will likely even try) but for me….the commitment and labor required to sit down day after day, and bang out a page or so – has been no simple /easy task. A lot of this stuff is pretty damn “dry” at times and believe me – there’s been more than a day or two I’ve sat here scratching my head thinking “what the hell am I gonna say about that?”

I’ve learned to curb my toungue…I’ve learned to respect my audience (to a certain extent) and I’ve proven to myself yet again that if only to try – generally sets you apart from the 99 out of 100 people – who’ll likely never try anything new another day of their lives…….let alone set sites on succeeding at it.

So I trade….I build spaceships….I cook……I play music…I fish/hike and swim………………………………..and now I blog.

Get used to it people – I’m not going anywhere.