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

WHAT HAPPENS NOW?

                                                Oyyyyyyy !!

Today we saw trading in EURUSD and AUDUSD that very few will ever see; [near] triple reversal days. I can’t remember 5 times I have ever seen this in 30+ years of trading currency pairs. Wow. Seriously, WOW!

We made a little money today trading EURUSD, where the algorithm did a good job of picking entry points. If price had gone another 6 pips on the high, we would have gotten a great short position, but it missed by only that much.

Gold is a complete mess; there is no way I’m trading it in its present market condition. There simply is no way to gauge risk in a position. $3 - $5 stops are a joke; you would be lucky to get your stop in before it went $3 - $5 either way, that’s how random price change has become. $10 breaks/rallies don’t mean anything. Throw into the equation dealer spreads and slippage and there is no way. Sure, you can get lucky, but your losses will be killer to your account.

The algorithm, after some very recent revisions and updates, is performing very well in the currency pairs. I have intentionally been using low leverage in the past couple of days to trade given current market conditions to verify the recent changes as profitable; simple as that. I don’t optimize data and turning points when updating the algorithm; I care about now, not 5 years ago. I make changes based on theoretical and philosophical trading ideas and then incorporate them into the algorithm.

Leverage is ample and risk can be optimally controlled with the changes I have made. So, look for my leverage [and profits] to increase in EURUSD and AUDUSD as we go forward here.

As I mentioned yesterday, if you are a current PAMM client or interested in being in the new PAMM at our new brokerage house, contact me for details on how to make the transition. If you have any questions email me at vegasxau@ymail.com

Have a good day everyone.

-vegas

FALLING DOWN

                    Nothing Goes Down Faster & Better Than Gold

Unbelievable.

We are at the point in gold where, unless you are willing to commit account destruction to be right, every trade has no risk management. Needless to say, you can count me out when conditions get like this.

We made a few dollars today, trading both EURUSD and AUDUSD. The algorithm did very well in the currency pairs; gold was a complete mess.

As I stated earlier, because of the way gold is trading, the currency pairs are doing better with the algorithm and are producing more stable profits. Expect more trading in AUD and EUR.

News flow out of Europe continues to dominate, and it’s only a matter of time until Greece leaves the Euro and markets get really roiled. The EURUSD has broken down too fast to allow the big money to exit gracefully. Expect every short covering rally to be sold aggressively. Ultimately, I’m thinking with a Greece exit we could see EURUSD sub 1.10. We’ll see, but I’m pretty sure it would happen over a weekend; this would give some time to banks.

If you haven’t started the paperwork for the new PAMM, send me an email and I will send details of our transition to our new brokerage house. Some of you should be in the process of getting monies into the new brokerage house. If anyone has any questions or problems please let me know via email at vegasxau@ymail.com.

Have a good day everyone.

-vegas

NICKEL & DIMED

                                 Now This Is Having A Bad Day

This entire day was just ugly; gold, currencies, stocks, take your pick. All night and day I just got nickeled and dimed the whole time. We had the dreaded “Flying Wedge of Death” in gold today, wrapped around $20 down, $18 up, and then $22 down with the obligatory $5 rally into the close to trap some shorts once again. I managed to avoid most of it, and the few bucks we did lose came about via slippage on fills [something that will hopefully end when we leave HotForex].

The money lost today isn’t much in dollar terms; a few large pizzas. What bothers me is the price action; long stretches of nothing and then quick violent bursts. You are either in the train, or you are left standing at the station; nothing in between. Up or down, it didn’t make any difference, as they both came out of nowhere at different times in today’s trading session.

Currency pairs weren’t much better; just ugly action on both sides.

What can I say really; the algorithm gave the signals and we got our trades. When the market turned it went so fast that the small profits we had on the trades were losers within a second. You just hope when you hit the button the dealer isn’t going to take you out back and shoot you.

 Tomorrow’s another day.

Have a good day everyone.

-vegas

A NOTHING DAY

                                He Doesn’t Want To Play Either

There was some good activity in Early Asia that led to a vicious short covering rally in EURUSD; concurrently with that gold rallied up to 1599. But after that trading activity died down in gold until the U.S. session where we got about 2 hours of trading before things stabilized around the 1590 area.

Outside of the various dealer and Central Planner stop hunts it was a dead day. Gold especially was tight with only a $14 range for the day and only one move really in the U.S session that was of any significance. The algorithm caught that trade pretty well.

The good trade in gold was offset by a loss in the EURUSD. I gave AUDUSD a shot also, with a small trade, but it just wouldn’t move so it was basically a scratch trade for nothing. Net for the day was a loss of a few bucks, nothing of any significance, but it is frustrating watching these markets just sit and chop. Outside of the stop hunt in Early Asia, the ranges in everything were very poor today.

Have a good day everyone.

-vegas