Tagged: psychology of trading
Stop And Reverse – Day 3 Already
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.
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Mind The Hammer – Japanese Candles Tell All
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.
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Trading Is Art – Filter Out The Noise
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.
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Step Outside – Embrace Death – Start Living
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
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Japanese Mud Slide – Forex Kong Kong!
Open Your Mind – Aud/Jpy Is Next To Fall
I sound like a broken record.
Simply put ( for the 10,000th time ) The Japanese Yen takes huge inflows when risk comes off…..and commodity related currencies such as The Australian Dollar sell off hard.
You’ve got the best of both ( no shit sunshine ) when trading the pair – AUD/JPY….taking advantage of large moves ( in opposite directions ) of BOTH currencies.
This is the kind of thing currency traders really look for.
Take a quick peak at AUD/JPY on a daily chart….and once again plot the beloved 200SMA.
See anything you like?
No brainer here “price wise” as this retracement in an obvious downtrend screams “sell”.
You have to keep in mind though……price and time are two different things. This is a great level to start thinking short the pair…….regardless of how long it bounces around at the 200.
Me? I’m getting under it with sell orders a full 100 pips below. If she screams higher ( doubtful ) then I’m not in the trade ( get it? ) – job well done.
When she falls…..I get picked up on momentum.
Eezy peezy.
You have to learn to let the market come to you…….stop chasing shit all over your screen.
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Investing Creatively – Get Outside The Box
I’m pretty sure most of you are a touch “confused” about what to do these days.
Markets “appear” to be moving along with little concern for the world around them, and complacency is literally – RAMPANT. You need perspective. You need to step back. You need to consider that longer term trends and normal market dynamics are still in play – however delayed via Central Bank intervention, money printing, media blitz etc..
And if you are still one of those that feels the media plays “no role” in influencing your investment decisions well…..you need to step out! You have fallen down the rabbit hole, and will eventually climb to the surface….with nothing.
Understand that in order for the machine to keep moving forward, your investment capital is essential. You will never answer the phone to hear your broker suggesting to sell. Never. Your capital paves the way for the bankers and MUST remain in the system for the system to work.
Have you fully come to realize what “negative interest rates” in the E.U really means?
The banks will hold your money at a – negative interest rate. That’s right – you pay “them” to keep your money.
Have you ever heard of anything more ridiculous? Seriously….”0″ interest is one thing….but negative rates?
All the while you line up to make deposits. You’ve lost your mind and don’t even know it, as your trust in the system has completely stifled your ability to “think creatively”.
And isn’t the what humans do? Don’t we make stuff? Don’t we build things? Don’t we reach further? Don’t we inherently create?
A “money eating machine” has been created…and you live inside it.
It doesn’t need to be this way.
Get outside the box.
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US Dollar Rinse Job – Now Complete
The U.S Dollar as well as U.S equities have failed to breach the highs from Fridays “Sell Risk” post.
Equity markets look to be rolling over here “again” at the 2040-2060 level, while USD takes out the last of the smaller traders.
One can assume that things are now “hanging in the balance” with respect to an outcome with the current “Greece situation” but in all….I really don’t think it matters.
The markets move on much larger time frames, and whatever is to become of Greece ( all will turn out fine in my view ) will just be another silly headline geared to moving the masses.
Greece is not leaving the EU Zone. It will continue to “hang in there” as well continue to keep you up at night – if you let it.
Countdown till the “real action” starts, as we are flat as a pancake “yet again”.
**FEBRUARY 12TH UPDATE – ALL TRADES HAVE NOW BEEN INITIATED!! PLEASE FOLLOW IN THE MEMBERS AREA:
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Watching Oil, USD – Earnings To Suck
Watching oil here – now exhibiting some “bottoming characteristics”. Still very early ( as thus far only the 1 minute, 5 minute and 15 minute charts have reversed ) but…….
What do we know about “the price of oil” and the “value of USD”?
Oil is priced in U.S Dollars right? A low in the price of oil could very well mark the high in USD no?
Both Gold and Silver ( including the miners ) look to have found some support these past days, regardless of USD poking a touch higher.
Looking at oil related currencies such as The Canadian Dollar as well The Mexican Peso we can also see USD weakness.
A flood of money coming into commodities in general would clearly suggest USD topping out “medium term”.
The SP 500 has now retraced a full 50% of the recent plunge ( now at 2035 ) so even a touch higher at 2051 would provide for a low risk entry – short.
Earnings season is gonna “suck” as there is not a U.S based multi-national company on the planet that can “honestly” report that they’ve increased bottom line profits in the face of the rising dollar, let alone the number of energy related companies that just got their asses kicked by falling oil.
It’s impossible.
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Fed Speak Today – Yellen To Make It Or Break It
Well you can never boil this down to a single days trading ( especially these days ) but as per our outline last week, this “relief rally” has played out to the letter.
As seen via Japan’s Nikkei Index ( $Nikk – the symbol I follow in case you want to add it to your watch lists etc.. ) we’ve seen our “correctional move higher” with this mornings over night action now down -175 points forming a potential “swing high” – suggesting we are ready for reversal.
The chart from last Sundays report:
Nikkei_August_17_Forex_Kong
All corresponding and related JPY pairs ( AUD/JPY, NZD/JPY, CAD/JPY, GBP/JPY as well EUR/JPY, CHF/JPY and USD/JPY ) have now put in bearish reversal type candles with their daily RSI’s all rolling – now pointing lower.
The movement of The Nikkei (lower) and JPY (higher) correlates near 100% these days so there is no rocket science here. It’s very easy to see and follow along. I’ve also suggested the correlation with Gold – being that both Gold and JPY should move higher when risk comes off.
European Indices are also trading down / in the red here as of this morning, leaving us with of course…U.S stocks, Bonds and the U.S Dollar firmly held in the hands of Janet Yellen and the statements / information expected today at the Jackson Hole Meeting.
If not for this risk event ( pure gambling if you think you’ve already got the markets reaction figured out ) the “long JPY trade’s we’ve been setting up for” are now in fantastic shape across the board.
Please get these on your screens and note these levels.
The Australian Dollar has obviously ( and expectedly ) rallied along side risk the entire week – now fading and looking weak.
Will markets take Yellens comments as full blown dovish ( suggesting all is well in “Fed land” ) and just continue to climb? Or will there be suggestion of “possible tightening” and a more hawkish view ( possible rate hike coming earlier than expected ) be the case?
You’ve only got a couple more hours to wait ( which I certainly suggest you do ) and find out.
Everything I track suggests we move lower next week, but one can’t discount the idea of an immediate “upward reaction” to Fed comments here this afternoon as “this is what the people want” right?
Still holding a couple of small “short USD trades” ( underwater at present ) and suggesting everyone just “stay out of the way” until this very large “risk event” passes.
Forex Trading with Kong 