Sails Up

↓ EUR/$

Good CCI divergence on the charts.  The economic calendar shows good numbers on the GBP.  I expect a DXY pullback.  However the economic calendar lists pirate activity this week so will keep my position size 33% of normal with a wide stop.

Update:  position open, currently below the 1.185 stop-loss

Position stopped out;  risk capped at -7.6% of equity

↓ EUR/NOK

Daily high-test and double top off the 50 ema.  I expect the GBP and USD to apply downward pressure on the Euro.  NOK is a commodity currency.  Position sizing will be halved due to correlation with EUR/$ short.

Update:  position open, currently below the 9.366 stop-loss

Position closed, 08-24-2017:  closed out on 200 ema bounce; gain on trade +23.1% of required margin.

↓AUD/¥

Update:  took a minor short on AUD/JPY at 87.3;  closed position early due to change in retail positioning; gain on trade +15.4% of required margin.

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Confluence

Preparations are key.

Preparations

Would you cast off the lines before checking for foul weather?  How about leaving port without a radio check?  Ever been at sea without a storm anchor?  Would you enter the harbor without checking the tide?   Only if you’re an Oscar.

To navigate the sea of emotion and fear in the markets, you must be able to asses the waves, weather and readiness of the ship.  All in conjunction with one another.

Some refer to this as “stacking confluence:”

  • Market Condition:  check charts, avoid indecision and choppy waters.
  • Market Phase: enter when the tide pulls back.
  • S/R: go long from support lines & short off resistance lines.
  • Indicators: If you use a compass,  understand its underlying principle.  
  • Price Patterns: Look for one of the primary price patterns.
  • Candlestick Patterns: keep an eye out for deceleration in price.

Any less than four given factors and I tie-off to starboard, sails down.

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Sails Up

Apply risk management to your alternative investments.

Short AUD/JPY

I expect the easterly winds to push down the AUD/JPY this week.  The Reserve Bank of Australia  (recent dovish rhetoric) did not hike rates recently.  Also the Chinese slowdown is putting overall downward pressure on commodity currencies.

However, I always rely on charts for navigable water, such as:

  • a weekly high-test with cci divergence
  • daily decelleration with cci divergence
  • top of a head & shoulders pattern on the daily chart

The Japenese Yen, a safe-haven (funding) currency, may rise above the AUD a bit this week to offset the expected decrease in the DXY.  I will be on the lookout for an updraft to the DXY to signal a flattening or decreasing of the Yen.

Use wide stops, in this case above JPY89.  Cap risk at a predetermined limit that does not change unless something outside of emotion justifies the change.  My target holding period is no more than 10 days, depending on the Winds.

trade closed:  stopped out at JPY89.2   risk capped at -1.9% of  equity.

Short NZD/USD

High probabilility of the DXY  rebounding off 93, good probability of weekend gap in price action to fall, good CCI divergence on daily & weekly.  Conservative lot size and wide stop due to Fed meeting this week.  Stop loss set above USD00.75

trade closed:  stopped out at USD.755  risk capped at -1.1% of  equity.

Read up on the Sintra Accord.

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fairweather & following seas

Underway

___________________

Thank you for visiting my web log.  Although this blog is centered around alternative investments, foreign currency exchange & risk managment,  you will not see graphs nor price charts scattered about.  You will not see any news summaries, news articles or other such rehashed fear & confusion.  I have spent an immense amount of time, energy and sleepless nights (i.e. life) studying charts, analyzing price movement, spotting trends, memorizing formulas, determining correlations and pouring over grueling finance books.  What for? For why? Well, to decipher the code, navigate the matrix and predict the future, of course.

That is the past.

This blog reflects process.  And right now, the process is refined, the models are in place and the Mind is set.  God is in the Winds.  And when the Winds gust, the simple truth is that either your sails are up or your sails are down.  Make preparations before the storm.  Here, I will tell you when I hoist the Mainsail, why I lower it, or if I’m just reducing sail to prevent taking on too much risk.

In the sidebar, you will only find links to those resources that I personally use or have personally contributed to.  If the quality or status of the resource has diminished, the link will be promptly removed.

Good sailors know the ocean is unforgiving, relentless and beautiful; they always signal other ships when a storm is coming and when the coast is clear, so that is what I will do for you  …there is enough of God’s blue ocean for everyone to enjoy.

 

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