TYPICAL FRIDAY TRADING

                                    Some Things Never Change

I made a couple of trades today; one in gold the other in EURUSD, and we added about a 0.1% gain. Once again, everything was pretty much in Asia and at the start of Europe and very little in the U.S. session. Asia is becoming either totally active or totally dead and not much in between. Remember just a few short days ago when Asia & Europe combined had a $4 range in gold?

Trading in gold is becoming a nightmare as slippage and microsecond moves just skew everything. Add up slippage on both sides of my trade today and you got about a $1.60 the dealer just pockets. Going forward, here at HotForex for sure and most likely at our new PAMM location, trading in gold I will use limit orders to get in a trade and floating stops to get out. I’m not willing to play the slippage game any longer.

Once we get into next week I believe you will see fund performance improve as I do more currency trades and less gold.

One has to wonder; can EURUSD and AUDUSD hold any kind of rally going forward before we go much lower? It very much looked and felt like a reversal day in both pairs was in the cards from around the start of Europe. Here’s the problem: gold is up $85 / oz in about 35 hours and EURUSD is down a few pips, but AUDUSD is down about 60 pips or so. Well, if gold rallies $85 and AUD is still lower, what’s it gonna take to get it higher?

AUD is down 12 out of the last 15 days, 6 days in a row, and so you would think with gold screaming up AUDUSD short covering would kick in and take it at least 100 pips higher. “Errrrrrr, no.”

Europe of course has its own problems, and more likely than ever, looks to go lower. It appears today EUR will close higher and we will see what the weekend brings, but rallies higher next week I will definitely sell.

At some point AUD will rally and more than likely it will be a sell there also. The problems in Europe and China really impact AUD and its economy. The fact that it can’t rally when gold rallies $85 in a very short period of time tells you all you need to know as AUD is considered a “commodity” currency.

The history of AUD will show that this currency pair can really run when there is a real change in the AUD economy. 1200 – 1500 pip [and more] straight runs have a common occurrence throughout the last 10 years of price action. Looking to buy AUD just because it’s been down 6 or 7 days in a row is dangerous.

Like Euro, I’m looking to sell any and all rallies here in AUD. It very much looks and feels it has a long way to go before it bottoms; and if China slows down [probable] and Europe implodes [highly likely] this pair could be sub 90 in no time flat. Looking at all the currency pairs, this looks to be the most overvalued pair I can see.

As most of you know I hate Friday trading; it has become the last hour of trading back before the internet took over and pit trading ruled. I refuse to get stuck in something that I can’t get out of and then have to hold over the weekend; this isn’t gonna ever happen. I’ll trade early and into the U.S. session, but before Europe closes I will at some point decide not to open any new positions.

I have been notified by our new brokerage house that some of you have opened new accounts and these accounts are awaiting funding. By the end of next week I am assuming some current PAMM clients will have accounts funded in the new PAMM. Sometime during the last week in May [starting the 28^th] I hope to start trading the new PAMM.

For new prospective clients to the new PAMM, send me an email if you are interested and I will send details.

Have a good weekend everybody.

-vegas

Update 3:15PM Chicago Time

In case you were wondering why I have Friday rules, I present EURUSD as prima facie evidence of what the Central Planners can do when conditions are thin and stops are on the plate. At 2:00 P.M. we had a melt up stop hunt in the EURUSD of about 60 pips within a few minutes on zero news.

Whatever can make your weekend can destroy your weekend. I wonder how many Euro traders are crying in beer as I write; only it won’t just last a few minutes, it will be there all weekend into the open on Sunday night. Been there done that once in 1980; ain’t ever happened since.

Sometimes it may seem to those who are new to trading and creating wealth that my methods can be restrictive and that I may miss some profit opportunities for no apparent reason. Lesson #1; first do no harm, then make money. I rest my case.

The Dow 30 closed near the lows of the day as FaceBook closed at $38. Another pump and dump scam Ma & Pa Kettle will eventually lose money.

Over the weekend [probably Sunday] I’ll have a special post. Tune in for details.

I WANT TO SCREAM

                                         I Might Just Do It

Go ahead, ask me how mad I am?

“How mad are you?”

“Don’t ask.”

There are days in this business that frustrate you so badly you want to permanently work in a feedlot picking up cow chips.

I went to buy gold in the 1550’s, and lo and behold what do I find? “Sorry, order invalid.”

They did it again to us – as if the prior two times wasn’t enough – they shut our access to the servers for trading. I don't know if it was a human that did it, or it was computer generated because we are US based and it shut the access; but I've been told on 2 prior occassions that it was fixed and there would not be a problem going forward. Try cashing that check at the bank. OK, they finally got it corrected – yea, like 50 minutes later when gold was then in the 1570’s. I so can’t wait to get rid of HotForex and get to a platform that is reliable and trustworthy.

So, if you were wondering why there were no trades today, you now know why; just your average $41 range, in which over half of it came in 15 minutes and we were shut down. Go ahead, ask me how mad I am?

On the bright side [if there is one], both AUD and EUR were locked into the currency version of the “Flying Wedge of Death” and I didn’t get involved in either of them. Maybe I could have made a couple of pips, but really it’s a coin flip to whether or not I would have profited. When gold flew out of the box, the currency pairs rallied but quickly lost that gain when gold backed off even by a slight amount.

Both pairs went back and forth from the highs back to the lows; no breakout, just some chop. So, lack of access to the platform was no big deal for the currency trade.

It takes a lot to really get me angry, and I understand the issues that plague this industry; but this borders on complete incompetence, and it isn’t something I suffer very easily. But since we are on are way out the door, nobody there really gives a hoot.

I got to go run 10 miles.

Have a good day everyone.

-vegas

THE WORLD IS ON FIRE

                                         Hit When Necessary

More than a few people hit the shiny red button today. In a Centrally Planned trading environment their goal is to get you coming and going, reacting to every bit of news they choose to release.

I stayed away from gold all day today, instead focusing on EURUSD and AUDUSD where we gained about 0.2%. Like the last few days, most of the action came in Asia, where the “Lemmings in Asia” have discovered the “sell at a loss” mode. News flows out of Europe continues to hurt the currencies against the dollar.

Below is a table I want everyone to see. In it are selective hedge fund performance results for April 2012 and for YTD [year to date]. Most of the names on this list are famous hedge funds whose managers are considered “best in breed” or “cream of the crop”. I wanted to bring this up to give everybody a sense of perspective as we move to our new home and begin trading with another house.

So far in 2012 I’m up about 1.5%. A lot of things have happened in the last few months that have changed the trading environment and I have dealt with them accordingly. What needs to be remembered is that my risk tolerances are far lower than most, if not all, of the money managers on the list.

There have been challenging 2 – 4 month periods in the past; Spring of 1987 comes to mind, Summer of 2005 was very slow, and there are a few others over my 30+ year trading career. My goal is simple; approach each trading day with rigorous risk management and make at least 0.5% + on monies under management [hopefully a lot more].

The algorithm has been revised and updated to the new paradigm I have talked about in my other posts. Our new PAMM home has a faster MT4 trading platform with almost no slippage and better prices means more profits. In addition to that, I am focusing more on the currency pairs and less on gold as the latter has become a trading mess. This means more stable and consistent returns.

With interest rates near zero, I fully comprehend the enormity of my responsibility to produce above average yields for my clients without taking above average risk. Any chimp can shove chips into the poker pot; managing risk properly is a whole other kettle of fish.

If you are in the PAMM and haven’t requested my help file for the transition to the new brokerage house, email me with your PAMM investor account number and I will send it to you. If you are interested in becoming a new client of our new PAMM, email me for details.

Have a good day everyone.

-vegas

NEWS FLOW DOMINATES TRADE

                                      The Stream Never Stops

A major stop hunt overnight in gold, as the 1550 area got briefly breached around midnight Chicago time. After that it was off to the races as the market raced to the 1560 area. From there, really nothing of note trading wise until the U.S. opened and then things got crazy [imagine that?].

News out of Europe, specifically Greece, were hot and heavy all morning; first one bombshell, then another. Gold got buffeted around pretty good as the EURUSD came under some good pressure to the down side.

I got long 2 times today, and both times got decent fills on entry. The first long got stopped out on a major mystery tick near the low of the move. I reentered the trade and took profits at 1557 on a limit order to sell. Not much net when it was all over as I had to make back the first loss. So, an incremental gain.

With everything that has happened in the last 48 hours, it feels like some money flows are supporting gold around the 1550 area for now. Market efforts to get price lower down near this area were very short-lived today. Unless Greece actually defaults, or officially leaves the Euro currency, it feels like we are basing for some kind of bounce in gold and the currency pairs.

The EURUSD is oversold, but that doesn’t mean it can’t get more so. At some point here, we should get some kind of blistering short covering rally where we can get a sell signal. We’ll see what happens.

Our new PAMM is ready for us, and if you currently have a PAMM investor account at HotForex and haven’t received my help file [for the easiest transition possible], email me and I will send it to you. Everyone should be now starting the paperwork for the change.

If you aren’t currently a PAMM investor, but want to be, email me and I will give you the necessary details of our new location and what to do to get started.

Have a good day everyone.

-vegas

 Update

Looks like somebody got really nervous going into tomorrow as gold has broken $16 after the Comex close; now under $1550 down at 1542 - 1543. Stock market weakness [especially the darling of hedge funds AAPL] has seen the SP500 slip 12 full index points in the last hour of trading. Some currency weakness [dollar strength] but nothing like stocks and gold. Are we looking at a test of 1500 in the next day or two, and what will the "Lemmings in Asia" do tonight seeing this weakness?

"Oyyyyyy."

FIRE SALE IN PROGRESS

                                  Europe Today; U.S. Tomorrow

It started in Asia and just never stopped. The news over the weekend, and then later coming out of Europe, were the catalyst for lower prices.

I had wanted to sell EURUSD at the open in Asia, but as seems totally consistent with providing the worst customer service possible, the HotForex trading platform was down for over an hour at the open. When it finally came on, EURUSD was 30 pips lower from where I had wanted to sell. Thank you Hotforex.

As trading moved forward in Asia, there was nothing but steady selling. Nothing dramatic, just a steady erosion in prices. After what I saw over night, it looked like a volatile day was in store for us.

“Sorry, ain’t gonna happen.”

I’m surprised there isn’t more volatility in the currency pairs given the news of the day. We are seeing daily ranges in the 50 – 75 pip area which is very low; normally you could expect 85 – 120 pip ranges. Here near the end of the day, things are pretty much where they were 12 hours ago. A little down, a little up; not much going on in the U.S. session to speak of in relation to gold or the currency pairs in terms of action. The U.S. session has seen gold in about a $6 - $7 range with some wicked action caught between the edges.

I got long gold on an algorithm buy signal [not the first, but the second], but as has happened lately, the market just languished around an area [1562 – 1564] before breaking lower again. I tried to buy at 1562.18 and got filled at 1563.03. Liquidating got me the price I wanted at 1563.79, but the buy still upsets me; more slippage eating into profits.  Of course complaining does no good as we are now forgotten and unwanted customers.

A few minutes ago I sent the help file to all those in the PAMM that have contacted me with their PAMM investor account number. If you still haven’t done so, now would be a good time. It will take a couple of days to get the paperwork done, and then a few days to get your money out of HotForex, into the bank, and then into the new brokerage house. I’m looking to be ready to trade the new PAMM in 10 days to 2 weeks time from now.

Please read the help file carefully. It has information you will need to make the transition easy.

For those of you that would like to be in the new PAMM, but are not current clients, please email me for further details.

As always, if anyone has any questions, please contact me via email at vegasxau@ymail.com.

Have a good day everyone.

-vegas