Patience – A Day At The Beach

First off. There was some fantastic input on the subject of trading Eur/Usd the other day from many of you – thank you for that. I’ve been M.I.A a day here, as the allures of soft sandy beaches and warm blue waters are at times – difficult to resist.

I’ve only got a couple bucks in the market anyways – so the subject of “patience” has again come to mind.

Patience plays a huge roll when trading foreign exchange, as trends take considerable time to turn and develop. Unless you choose to drive yourself mad sitting infront of the computer for hours on end attempting to “make sense of it all” I strongly suggest getting away from it for a day or two.

If the larger trends have not been established – you can seriously go crazy “forcing trades” staring at candle pattern after pattern applying your short term technical trading – and still come up with a big fat zero.

I expect the dollar to roll over here tomorrow – so there will be several trades on the horizon.

Patience pays…………..and I expect it to pay handsomely.

Why do you trade Eur/Usd?

Seriously……we’ve got a comment section here underneath the posts – and I’d love to know.

Is it because you think you “should” trade this pair? Is because you’ve been hypnotized? Brainwashed? Perhaps influenced by strange voices in your head? What?

I don’t trade this pair…much if at all – in that, there is no real fundamentals behind it. As the two most widely held currencies on the planet ( yes I’ve said this before ) one goes up , the other goes down, then up , then down ,blah blah, blah – who freakin cares.

Fact of the matter is ( and likely unknown to most newbies ) this pair can easily move anywhere between 1.27 and 1.37 ( and even as far as 1.25 to 1.40 ) with little or no effect on global trade, a given countries economic outlook, import/export blah, blah, blah once again. Pull a 5 year weekly chart on the pair and do the best you can to “plot anything of real significance” short of it being in “normal range”.

To see bigger payoffs trading forex, you’ll want to pit the safe havens against the commodity related currencies, as opposed to trading the “two headed step child” Eur/Usd.

That being said – I may look long the pair in coming days.

Im often a touch early on trade entries – but rarely am I late. This being said, I don’t expect to nail it on the first shot – in fact  not at all ( as my entry strategy is always a scaled approach ). So when that first stiff jab or solid right cross “pops me in the face” –  I’m ready for it. I learn from it.

Considering the volatility in Forex in general  (let alone when things really get heated up) it is virtually impossible to nail an exact level, thus I have always suggested when drawing lines of support and resistance – use a crayola crayon not a laser pointer. You’ll take a shot here and there no question – but by keeping your original entry position relatively small, you’ll be able to get a better feel for your opponent, and have lots of gas in the tank for the knock out coming in round 3.

The important thing is not to “punch yourself out” early – and to be able to take a bit of pain, then get back out there.

These markets are ugly  and mean…..lots of pain coming.

You really do need to be a sniper in this kind of market environment. Any kind of “automatic” or random” spray fire” will only result in a quick bayonet to the knee….then death by infection.

I’ve looked to change position / re evaluate my battle plan a good 1000 times over the past 24 hours, and have come to the conclusion that it’s alot more work than I am currently interested in taking on.  Thus – I will enter “sniper mode”.

I’m dropping down to smaller time frames here, picking up my sniper rifle – and leaving my long term fundamental battle plans tightly rolled up under my bunk. Im taking with me a limited amount of ammunition with the mind set that I will be using it sparingly. Precision is what’s needed here. Deep breathing, and steady of hand.

I will be picking off the enemy at will, all be it – opportunities may be few and far between. They are well hidden and equipped with guns of their own – all too ready to blow my head off…. should I falter.

In my sights I see commodity currencies –  and a generally bearish backdrop.

As per the tweet last night – I went long several pairs with consideration of the large upward bounce in JPY and sell off in risk related currencies. AUD/JPY, NZD/JPY as well EUR/JPY CAD/JPY and CHF/JPY producing several hundred pips in profit overnight.

I will do this on occasion  – when I see an absolutely “puch you in the face” type trade opportunity. You may choose to follow – or not.

Again, based in the fundamentals – seeing yesterday’s AUD/JPY dip (around 4-500 pips) in the face of Japan’s massive QE program ( only just getting started ) it made perfect sense to get on the right side of that trade.

I’ve more than taken my 2% back from Japan after last weeks loss.

Kong feels better.

As one approaches the “event horizon” things start getting really strange, as the gravitational pull of the black hole exerts such force as to actually bend space and time. There is little explanation for what happens next short of the term “spaghettification” where you are essentially “stretched out” over time and space in a single stream – a single atom wide.

If you are looking for the usual set of intermarket correlations to give you any kind of guidance here on the outer edge of the black hole – I can assure you…..you’ll need to look again.

Interestingly the USD is still down as I’ve suggested, along with the Nikkei, Gold (seemingly already in the black hole), stocks etc…and aside from AUD and NZD taking dips on the China data, things are actually relatively calm.

The move in gold fits in nicely with our consideration of the FED’s further printing efforts continuing, to the degree that – at this point (when gold finally does take a bounce) USD will be free to fall ( as it will ) without getting everyone’s overalls in a knot. Nice move boys! -You’ve done it!

I’ve been considering a time where the USD may fall ALONG SIDE stocks ( as that correlation is also out the window), and day to day  – see that it as a likely possibility.

As it stands….Im still looking short USD.

Jack’s  not a double agent in an intergalactic spy ring, responsible for the toppling of several planetary governments – No.

He’s not a seven year old boy from Nebraska, courageously battling cancer – Nope that’s’ not him.

Jack’s not the lovable voice of “Kung Fu Panda” as well the lead actor in a personal favorite of mine…. “Nacho Libre” – No.

You don’t know Jack yet – but you will soon. In fact, I imagine sometime late Sunday evening or perhaps Monday morning ar the latest, your local media will likely give you a more “formal introduction”.

Poor Jack.

Jack has only just gotten started, and already – Jack has stepped in the mud.

Let’s see……lets see Jack run.

Ok…I’ve been following this for some time now, and understand there is “much debate” as to the price of gold, the future price of gold, and what the hell is going on with gold in general.

Lets get some answers.

First – Who on earth could believe the dollar’s exchange rate in relation to other currencies if the dollar was seen collapsing in value in relation to gold and silver?

This would completely defeat the money printing effort of the Fed – and undermind the entire “bong buying program”.

So……The Federal Reserve uses its dependent “bank buddies” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve is then able to drive the price of gold down.

Bullion prices take a big hit, bullishness subsides and the flow of dollars into bullion is stopped.

Ya?

Somebody correct me if I’ve got this wrong please……as I’ve just ordered a full case of “gold plated bongs” for redistribution and sale to Chinese and Russian tourists here in vacation.

I hope I’ve gotten a reasonable  price.

Wandering off from the computer late last night  I inadvertently left a couple chocolate covered “chapulines” on the table, and have awoke this morning to complete and total carnage here at the workstation. Apparently my dear friends “the ants” have developed a taste for these “crunchy crickets” as well, as all that remains….a tiny pile of empty husks.

So I sit here scratching my head – looking at how I can wrap this little tragedy up  in a witty and entertaining post. To draw some “trade parallel”, or some clever metaphor for the pile of “body husks” perhaps similar to those scattered ‘cross a trade room floor.

I got nothin.Zip. Nada.

Put your chocolate covered crickets away before you go to bed……..or wake to a tiny pile of husks?

Brilliant. Just brilliant.

I’ve booked a 1% overnight on short USD/CAD and long AUD/USD – out before the usual “morning shenanigans”….and will look to any type of intraday bounce to reload as I expect the USD weakness to continue. Hard.

I slice through you like watermelons.

Wisdom, precision, accuracy  and timing – just a few of the atributes you’ll find yourself desparately in need of  – should you choose to trade against me. You are watermelon. You are youthful…careless – you are soft.

Is it any wonder my girlfriend just downloaded the smash hit Ipad App – Fruit Ninja? We’ve been slicing shit all day!

But seriously…a valued reader expressed interest last night – in taking the trade “opposite Kong”. While I admire this and openly welcome discussion of trade ideas / concepts etc – I do caution.

You are watermelon.

This is not about being right or wrong.

Once you’ve completed your training…once you’ve become “one with your trading” ….once you’ve put aside the childish concerns of “who’s right and who’s wrong” – you too will be a “slicer of melons”.

For now perhaps………..just stick with Fruit Ninja.

USD rolling over as suggested.