The News Is Full of Attention Whores

It’s a slow FX day so how about a random thought?

The News

Seriously, I don’t know how many of you do it. Watching all these clowns on T.V. spewing their opinions. It seems who talks the loudest get’s the most attention.

Look at me! Listen to me! That guy is a jackass! He’s wrong! No, you’re wrong! How does anyone devise any understanding of anything listening to bull and bear argue with each other day in and day out? It makes me want to sit in my garage, door closed, with the car running.

What you’re watching on the “news” really isn’t news at all. It’s opinion and counter opinion. As a trader the best thing you can do, in my opinion (pun intended), is to close your eyes and your ears and remain as objective as possible. people lie, quite a bit more often than price.

A timeless classic. Enjoy.

I was driving home tonight and as I did so my losing GBPUSD trade was still haunting me. It’s been haunting me all day. Why? Why did I lose? I mean, yeah, we all lose sometimes, but losing is particularly something that never sits well with me.

You may or may not have heard of or know the art deemed “trading supply and demand”. If you’re interested you can find many recorded webinars here to watch. The webinars are a good start, but they are not the whole picture when it comes to using supply and demand successfully. I’ve never taken a course on supply and demand analysis. Better yet I should say I’ve never paid for a course on supply and demand analysis. I have seen the course material, exactly where it came from will remain my secret. There are plenty of threads on the subject at ForexFactory, but many of them over complicate the entire thing to the point that it’s just flat out difficult for anyone to understand.

There are certain rules to determining areas of supply and demand. With my GBPUSD trade I in fact broke one of the fundamental rules. The minute I realized this I felt the immediate need to get out of my car and lay on some train tracks as punishment for forgetting this golden rule. What caused me to completely erase this rule from memory? More or less the answer to that question is GREED. I saw a potential opportunity to hop on a long term, seemingly very profitable trade, in the beginning stages of it. Needless to say those beginning stages never materialized and I was punished with a 103 pip loss today.

Supply and demand trading takes patience, and it is about as accurate as an Army sniper if you follow the rules. All of them.

While we may pull back a bit from here, know that there is still room to move higher. Note the USD Index. Also take note of the EURUSD, which tends to move with the DJIA at times, often leading or lagging by a number of days.

The supply level I was leery of earlier has been smashed to pieces . Our next potential turning point is 1.4380-ish as stated here, however, have a look…

$74.75-ish  looks to be our level of demand. Supply, which it’s coming off of now has been eaten away roughly by 35-45 percent. We may be approaching a bottom in the USD, or at least it appears that way as of now. As you know, things change all the time. If the dollar continues it’s forceful decline into demand there’s a very good chance it will be met with an equally or more forceful rise out of demand.

“Some call it idiocy, I call it innovation.” – Unknown

I see many calling for how stupid the market is for going up and how stupid the EU bailout plan is, even calling for it’s eventual grand and splendor demise in the future. What most of these people are doing, in my opinion, is fighting the tape. Not that I’ve never fought the tape myself, I have. We all do from time to time.

What’s important is that you realize you are in fact fighting the tape. Maybe even more important than this is realizing you’re not going to win that fight. Your opponent is bigger, tougher, and believe it or not, smarter than you. If you were all of those things you’d be the one on the winning side, wouldn’t you? Saying “The market is retarded” and then justifying your statement weeks later when the market has swung back in your favor is well, retarded. The market didn’t swing back into your favor because everyone realized how stupid they were and just how smart you are.

Do yourself and your bottom line a favor. Try not to fight the tape, no matter how insane it may seem at the time….

Supply & Demand of Dow Futures. The previous down swing was forceful, taking out the fractal low before it, making this a good short opportunity as long as we do not get new demand right below our supply side.

– 103 pips

My GBPUSD trade is now in drawdown, with my 2ed short order not being triggered yet. I’ve opted to be patient, even if it means a loss. That’s the funny thing about FX. One minute you’re on top of the world, the next minute you’re being handed lightning bolts to the face from the FX gods. Such is life in the Foreign Exchange. I’m coming off of several recent win’s, should this be a loser, i’ll just eat my peas and move on.

With the EU on the minds of many I thought i’d provide a little analysis. As far as the long term outlook goes, we have untouched supply in the 1.5000’s. Personally I don’t think we’re headed there anytime soon. So if I’m correct and we are in fact not headed upward, there lies the question “Where is demand?”. Let’s answer that with the next chart…

So, where is demand? Looking at a close up view of the chart above we can see that the only level of significant demand, demand that has been untouched, lies in the range of 1.1800 to 1.2525. This also aligns with a recent bank target released publicly some weeks ago. Unfortunately I don’t remember which bank it came from so I can not provide a link to the report.

If we look to the daily chart, supply levels are revealed for potential short positions (Red Lines). This is in fact why I stated that I wanted nothing to do with going long the EURUSD today, and to be honest the first short prospect doesn’t look all that great either considering the consolidation we’re getting right below it. This can often mean the impending death of a supply or demand level. The best advice I can provide, just sit back and watch the show. A better opportunity will arise sooner or later.

For as long as I’ve been alive, I’m sure people have bitched about the way our system functions here in the USA. Prophecies of doom and gloom have clogged the airwaves and print media year after year, decade after decade. Yet these prophecies never seem to actually materialize.  Hmm.. odd, no? Call it bullshit, even call it accounting fraud, but know that it works.

Visit this link. Many of you will not be capable of wrapping your brain around what is presented here, and in fact, your head will explode… Splattering tea(party) all over your nice rug.