PUMP & DUMP FRIDAY EDITION

                                  You Did What In The Euro?

I came into today’s trading extremely risk averse; A) it’s Friday, B) the U.S. has 4 day weekend with Memorial Day Holiday, and C) Greece and Spain are imploding. Just about every cross-current you can think of was in play today. To say the markets are nervous is a vast understatement.

Today I lost a #6 meal at McDonald’s. I gave it a couple of shots in the EURUSD and the market just wouldn’t go on the algorithm signal. If I had waited and given the trades more room [read more risk] they would have made us a little money, but at the expense of a much higher threshold for loss. Sorry, not today, and not this Friday. I’ll get the meal back next week. No biggee.

The algorithm actually performed very well in this Friday mess; at the bottom today in the EURUSD it gave a nice buy signal that I chose to ignore because of the weekend risk. But again, the risk in my view wasn’t worth the potential gain. I don’t like trades that are asymmetrically skewed against me.

For those of you who are relatively new to trading [5 years or less], I want to impress upon you the degree to which trading, these last couple of months, has evolved into. I often mention the “Flying Wedge of Death” [FWD], for the simple reason it is a big account killer. Double and triple reversal days, with large ranges, are simply a version of the FWD where the back side just keeps going instead of stopping; so, the “W” at the end is taller/lower.

I can remember years where you didn’t see 2 double reversals the whole year, and as I stated the other day I don’t think I’ve seen 5 triple reversals in 30+ years of trading; they are that rare in gold and currency trading. Now, in the agricultural and food commodities sphere, you see these all the time, but not in the financials.

As a professional trader, I know that my top priority is to avoid these FWD and be aware of reversal days; nothing kills an account greater than these two. We have seen an inordinate number of these over the last few months; in fact more in the last 2 – 4 months than in the last 5 years total. This has been the single biggest reason I have scaled back my leverage and become cautious in my approach.

OK, so I take a couple of extra months making you a millionaire; so what?

With my most recent update and revision to the algorithm [The Vegas Multi Time Algorithm, which is the newest version of the old BFSG Algorithm and not available to the public – only PAMM clients], by definition we can’t get hurt by these developments. We might not make much money when they occur, but any losses are insignificant to our goal.

Next week will be our last full week of trading at HotForex. If you would like more information on becoming a PAMM client at our new brokerage house, drop me an email at vegasxau@ymail.com and I will send details.

Have a good weekend everyone.

-vegas