THE WEEKLY FX DRIVE THRU
I am pleased to say that the losses I incurred in January have now been erased and the PREMIUM SERVICE is positive on pips. In addition, 4 out of my 6 broker accounts are now in the black, although I must say that is to varying degrees for 2017.
I am still in my TRADE PLAN transition to have my CORE POSITION TRADES set up in time for the start of Q2. I have my TRADE PLAN in place, which is the most important aspect for me, and probably for you as well with your trading, but it is taking me a little longer than I expected to have all my trade set ups 100% in place. I suppose it’s no surprise given the current market conditions.
I have been hesitant in doing too much with placing my CORE TRADES over the past 7 days primarily for two reasons. Firstly, this was because I wanted to read the FOMC minutes from the last hawkish issued FED statement. Secondly, I wanted further data regarding the following: – BREXIT, FRENCH ELECTIONS, DUTCH ELECTIONS, OPEC and “THE DONALD” aka TRUMPANTICS.
Was it worth waiting?
Well it’s as clear as mud!
I hate to keep pushing out deadlines, but it does look like I will have to wait until after the FOMC March meeting before having everything in place.
Talking about the FED…
The Yellen lead FED does not want to mislead markets but from my perspective it creates uncertainties. When I worked in the corporate world, minutes of a management meeting were supposed to represent and reflect the meeting that took place. In fact, for my meetings, I abandoned minutes as they were viewed as useless propaganda and I replaced them with Action Items with responsibilities attached to attendees. Far more productive. The FOMC minutes are political.
The statement and the minutes should be very similar. The statement content is discussed and agreed, therefore the minutes should reflect this and the tone should be similar. The FOMC minutes and Statement very rarely tie in together. Add to this the commentary from committee members, in between both releases and, more often than not, this does not tie in either.
My thoughts are below, whether you give this validity or not is up to you…
As I have said many times, Yellen is a DOVE and as the boss, the minutes reflect more of her bias and, as a result they cannot be balanced. There is a great mix of hawks and doves on the committee and from my perspective the published minutes are therefore not an accurate reflection of the meeting. The various “FED SPEAK” that has followed the meeting was hawkish and even Yellen’s “Humphrey Hawkins testimony” was slanted hawkish, although on day two of her testimony the markets weakened the USD considerably.
Nonetheless there is in my mind a disconnect.
Over the past couple of weeks, I have stated that I would write in this blog my revised trading approach for 2017. I have not forgotten, but this will be a Q2 article after it is in place.
Other news during last week was as usual focused on the EUROZONE and BREXIT.
French scandals and fresh alliances are typical in the French Presidential campaigns. All we need this weekend are a couple of mistresses and rent boys added in and voila!
I couldn’t let this one pass by. The EUR rallied a bit early in the New York session based upon the fact that the EU and IMF had agreed a solution to the GREEK DEBT ongoing crisis; Debt forgiveness? My arse debt forgiveness… the rumoured solution is to extend repayments on a fixed interest basis to 2080.
WFT… FFS… HMOG and glaze my nipples and call Rita, that’s the solution. Kick the can down the road once again. In the name of sanity will EUROPEANS vote these people like Dijsselbloem out. What a pointless and useless bureaucrat, and as for Christine Lagarde of court appearance and IMF fame, she changes direction with the wind. If she lived in Galway, she would be the one at the end of the harbour doing pirouettes. What a shambolic and utter useless set of numpties.
The BREXIT rhetoric took a fresh leap last week with the legal costs of a BREXIT hitting the wires.
The Austrian Chancellor, Christian Kern was talking loose change of about €60 Billion. Obviously, the EU Commission Chief, Jean-Claude Junker chipped in to the commentary basically saying, “Divorce does not come cheap”.
The best response, and I could not have done it better myself, maybe a few fecks here and there, was from Tory Iain Duncan-Smith, who said in response to a “free lunch” jibe from the EU…” free lunch, we’ve paid so much into the EU over the past years we’ve already bought the damn restaurant”.
In addition to the IDS response, Theresa May also fought back with basically a “feck you”. I will make the UK a tax haven so you can stick your €60 billion invoice where the sun does not shine.
To place further stress on the UK leader, the “Celts” north of the border in bonnie Scotland, decided in the Edinburgh parliament that that they wanted to press for another Scotland Independent vote because in the BREXIT vote Scotland voted REMAIN by a huge margin. For reasons only known to the market cable ploughed higher on Thursday on the back of what I would call major uncertain news.
Bottom line is that “heels are being dug in” as it appears the UK and the EUROZONE cannot even agree on a BREXIT timetable for discussion. Nothing like a friendly, calm, peaceful and adult harmonized divorce.
Happy days ahead with BREXIT, I cannot wait, it is going to be just brilliant.
Think about all the market calls for BOE Carney to raise rates; Jesus, Mary and Joseph there is just as much of a chance of another rate cut.
The BREXIT is messy, it will get even more messy and frankly the trenches are being dug as I type.
With all the BREXIT news going to get very personal moving forward look out over the coming months for many inclusions in my blog of the following words and phrases: – feck, feck you, feck off, fecking idiots, fecking numpties, fecking feck, pass me that fecking pen, I am not signing that fecking paper and possibly you can stick that fecking pen up yer ar*e etc.
I have mentioned for the past couple of weeks that I was in transition with my trading approach this year given all the volatility and headwinds and my loss booked to the PREMIUM SERVICE in January.
This week as promised I share in “THE SOAPBOX” what I have done so far, the process I went through and why.
A little bit more…
THE WEEKLY FX DRIVE THRU – LIVE webinars.
Now up to #6 this Monday. The software still gives me the creeps at times but I am now more comfortable with the content and the time 30-35 minutes in length. This is long enough for me and probably too long for you guys with my Liverpool accent.
#6 is on Monday 27th February at 5:30PM
- To attend live – you need Google Chrome as a browser.
- You cannot view on smart phones or tablets, only Laptops and Desktops.
The “LIVE WEBINAR” link is below: –
If you cannot listen live you can check out my You Tube channel, Scott Pickering Weekly FX Drive Thru for a freshly posted copy of the webinar, usually, within a couple of hours of its completion.
Here is the link for my you tube channel, when I get too 100 subscribers (if I get there) I can have my own personalized shortened link. If you like the style of my webinar, please subscribe. The benefits are that as soon as a new webinar is posted you are emailed.: –
Finally, in this section…
If you would like to be in the monthly draw to win a “FREE 10-WEEK SUBSCRIPTION” to the PREMIUM SERVICE, valued at CAD$1,000.00, all you have to do is subscribe to receive this FREE NEWSLETTER on my website www.weeklyfxdrivethru.com On my welcome page just below my cube logo is where you complete your subscription.
THE FX MARKET PLACE – LOOKING FORWARD:
ECONOMIC DATA RELEASES:
MY THOUGHTS ON THE WEEK AHEAD:
Just a few of items catch my eye this week: –
- USD: Consumer Confidence and Manufacturing and Non-Manufacturing PMi data releases are due this week.Dare I mention it that the analysts will be out in force to claim appearance monies on CNBC and BLOOMBERG to place bets on a March rate hike based upon these numbers. Get ready and be prepared.
- CAD (BOC Rate Statement): No press conference this time around for Stephen Poloz to waffle his way through.I am expecting the CAD interest rates to be left alone but do not be surprised if the commentary is dovish reflecting Poloz’s comments after the last rate announcement.
A cut is on the cards but I am not convinced now would be the time. You never know. No press conference could be the best time for him to act ahead of a FED rate hike.
- GBP: Construction, Services and Manufacturing PMi’s this week. These will be watched closely. Last week CBi Retail Sales were higher. One piece of good news. Of late UK data has been weaker.
- USD: Janet Yellen speaks on Friday. There is no reason that I can see that if she mentions the economy that she can be nothing other than slightly hawkish.
- USD: “THE DONALD” addresses congress.What can I say?
It should be a campaign speech and if he’s clever he will refer to his pledges to his achievements so far in placing Executive orders on file. He should talk about involving “Buy ins” from big business on jobs, technology and tax.
He should lay out his timetable of events.
What he should not do is personalize the speech, with “he said it” and “she said that” and “I said it first” type of childish rhetoric.
I expect a non-traditional address with little factual content.
For the future’s sake of trying to unite the USA and stop all the stupid imploding style political rhetoric he should deliver goals and timetables. Key action item deadlines for success.
There is more chance of hell freezing over.
As always bear in mind it has been news rather than economic data moving the markets so check twitter for tweets from “THE DONALD” and be aware of the BREXIT and EUROZONE possibility to deliver geopolitical news at any time totally unannounced.
USD MAJORS – “IMMEDIATE” SUPPORT & RESISTANCE with TREND:
The charts below contain some commentary (my thoughts and views), they are the USD majors reflected on the excel spreadsheet above.
HOW I AM ADAPTING MY TRADING IN “LA LA LAND”
I could have made the title of the soapbox this week: –
FFS… THIS IS A BLOODY NONSENSE
Tempted as I was I decided to go with something more mainstream that Google would appreciate from an analytics perspective.
Let me just say, if you are trading anything other than 5-15 minute trades and you have your head above the water… congratulations. You deserve it. This market is at times about a useful as a chocolate teapot.
“THE DONALD” appears to be running a reality TV presidency. From my perspective at times politically TRUMP appears slightly right of Attila the Hun and he without doubt thrives on confrontation. The mainstream press won’t or can’t adjust to the new way in LA LA LAND. TRUMP is similar in purpose to my boy Labrador Ozzy, now 6 who is single mindedly focused on food. TRUMP is the Mr. Magoo of politics, he marches on leaving chaos and disorder behind him, and, he appears oblivious to this fact as he is surrounded with a team of yes people unfamiliar with the protocol in these situations and fearful to challenge TRUMP.
If the US press had brains they would plamause him and let him hang himself in the process. Regretfully, the likes of CNN, CNBC, NBC etc. cannot see beyond the next advertising cheque.
The effects of all this is a market driven by outrageous press conferences, tweets and a “he said / she said” mentality, better described as schoolyard, childish antics.
From a trading perspective at times impossible to trade it is tantamount to gambling. As I have said before if you start gambling go to Vegas or Macau.
On the other side of the pond, the EUROZONE bureaucrats have started with commentary which they know 100% is going to raise the blood pressure levels of your average Brit. Having already voted to leave the EUROPEAN UNION because of sovereignty issues and immigration issues, the EUROPEAN UNION is now focused on a BREXIT EXIT BILL of some €60 billion. No negotiations until this amount is recognized as the invoice to pay to leave.
I can just imagine the closed-door government conversations about this matter. I would say the commentary would be priceless.
On top of this we have the FRENCH ELECTIONS. Centre parties unite with candidates Francois Bayrou and Emmanuel Macron forming a coalition to beat both Francois Fillon and Marine Le Pen to form what is seen as a winning combination for the second round of voting in May assuming they pass the first round. Controversies and scandals galore, no mistresses yet as I mentioned earlier, or rent boys either…yet.
Take absolutely nothing for granted. The polls are no longer a true reflection, the voters play games with the TV companies and pollsters.
In HOLLAND, the far-right Party for Freedom (Anti-Islam) leader Geert Wilders is neck and neck in the polls for victory.
In GERMANY, Christian democrat leader Martin Schulz is now confirmed ahead of Angela Merkel in the polls.
Then we have GREECE…
Should Le Pen claim a victory along with Wilders that would be the end of the EUROPEAN UNION. If I was Theresa May I would delay the A50 trigger. What’s the point of wasting time negotiating over something that could be down the tubes faster than a tin of dog food down Ozzy’s throat…. and that is fast!!
Basically, at times both sides of the pond have their own versions of LA LA LAND and it’s not a pretty place to be as a trader if you are caught in the middle of the nonsense.
So; if you think it’s choppy now with all the above and much more of the same only probably worse on the horizon what do you do?
Here is what I am in the process of doing: –
Well, in January I booked a 793-pip loss as you know. This month it has been wiped away and the PREMIUM SERVICE is very nicely positive again. I have no doubts about my ability to adjust and fathom things out to make a profit. My goal is a clear 10,000 pips a year. It will be tough this year as I have never experienced anything like these headwinds across various currencies at the same time with a backdrop of central bank monetary policy divergence.
It’s all down to basics.
Look at your TRADE PLAN. Examine what trades were not working and why?
- Was it a specific trade style?
- Was it a specific currency pair or pairs?
- Are the poor trades emanating from specific trading sessions?
- Are my stops too tight?
- Are my stops too wide?
- Was I cutting corners?
- Was I over-trading the market?
I looked at all of this and decided to act, re-evaluate my TRADE PLAN to take effect from Q2.
Basically, the headwinds in the EUROZONE, BREXIT and TRUMP will dominate everything and the currencies relating to these event risk countries happen to be the most liquid.
As PREMIUM SERVICE subscribers would testify, most of my trades are focused around the USD majors. I have cut my reliance on the commodity pairs like, AUD/USD, NZD/USD and USD/CAD and the cross-rates for now, and, focused my attention on my fundamentals based around the EUR/USD and GBP/USD. Not actively trading the commodity pairs for me is weird, since I cannot recall a time for almost 5 years I have not had a USD / Commodity pair related trade live.
I gave myself until the end of Q1 to turn things around and exit some longer-term trades that I am just “sitting in” for want of a better phrase. I have these identified and on my RADAR to exit moving forward.
I work better to a plan and goals, being goal orientated for as long as I can remember. My accounts are in transition but I am already creating CORE POSITIONS.
A few years ago, I was taken to the woodshed and given a severe spanking by the JPY. Since that day, I have 99% of my time stayed away from it. As PREMIUM SERVICE subscribers know, I have moved back into the EUR/JPY for quite obvious reasons and so far, I have closed two positive trades, and have one more LIVE trade with 100 pips of profit already protected with two more LIMIT ORDERS in position to trigger.
My portfolio of trades will be around my core strengths. The big picture fundamentals, they trump (no pun intended) all. Technical trading has its place, but for me I am not by nature a 15-minute maximum scalper trader, it is just not in my DNA.
- Smaller position sizes.
- Wider stops offer great trade flexibility.
- At the same time manage RISK
- Plan your trades and Trade your plan.
The biggest difference I am making moving into Q2 was to concentrate on the currencies I understand most. This is NOT rocket science. How successful I will be will be determined at the end of 2017 if I reach my PREMIUM SERVICE 10,000 pip target. I still have work to do but I am structured, disciplined and timely to make it happen.
I am not sure if what I am doing resonates with any readers. Maybe you had a great start to 2017 unlike myself, and, none of this would therefore be required.
Always remember the ability to adapt, readily accept change and remain motivated are three key requisites of a Forex Trader.
Nothing more to add here, I have said enough except,
Always remember longevity in Forex trading can only be achieved through trading with good RISK and MONEY MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility.
Take care, have a great trading week.
The Pip Accumulator
BLOG VERSION: #51 FOREXTELL VERSION
DATE: 26th February 2017.