THE FX CROSS

                                         My Game, My Rules

I have previously commented on the FX pairs GBPJPY, EURJPY, and EURAUD. Of the three, EURAUD is probably the better trade, but it really depends on your individual preferences.

When I sent the staff out to round up any/all Forex pairs for analysis, I made a cursory look at the MT4 platform to eyeball spreads. After all, who wants to trade anything in the FX arena that has a high spread [greater than 4 pips]; there is simply too much opportunity throughout the 60+ pairs to give money unnecessarily to the dealer community. Just 1 pip, after a year, can mean a couple of thousand bucks in your pocket you wouldn’t otherwise have to keep.

The one pair I missed, and am recommending now, is GBPAUD. The spread is about 3 pips [give or take a couple of 5^th digits] which make this a great instrument to trade. When you consider both AUDUSD and GBPUSD trade at about a 2 to 2 ½ pip spread against the US Dollar, the cross @ approximately 3 gives us 1 ½ pips on each side. Since both pairs move, this is an extremely good spread rate on a non-dollar cross. Observing the trade throughout the European and US trading sessions, I saw the spread between 1 ½ on the low side to 3.7 on the high side at different times; and most of the time the spread hovered between 2.8 and 3.2.

I want to approach the analysis of this pair from a slightly different angle than I did the 3 pairs listed above. I looked at the data since Forex-Metal came into the business around the start of 2006, which is approximately 400 weeks. The Excel spreadsheet below lists the 28 weeks of “tail risk” that I have identified from the data. This represents approximately 7% of all trading weeks. That means that approximately 93% of all trading weeks have moves of 200 pips or greater from the open to the high value. You shouldn’t have any problems making good money 93% of all trading weeks.

                                  [Click On Table To Enlarge]

Both the average and median levels for low value and high value, respectively, are very close to each other, indicating no great skewing of the data from a single data point. Simply put, our tail risk [when we come face-to-face with it] is a low value of about 66 pips and a high value of about 139 pips. The $64,000 question is can you make money in this tail risk?  With a 3 pip spread and an active trade in all 3 major world sessions, I think the answer is a definite yes; of course, not as much as in a “regular” week.

When I designed the original “-vegas Big Bang Algorithm”, and a short time later the “long term VBB Algorithm”, the FX markets [particularly the non-dollar crosses] were what I had in mind; above average volatility with tight spreads and excellent volume in the dealer community. There is no doubt in my mind that you can easily trade up to $10 million in any of these pairs without so much as creating a ripple in a teacup.

You need to be aware, though, of the rollover each day and the “vig” that is either paid out to you or the money you pay to hold the position. Right now, you are going to pay about 2.2 pips to be long through the rollover, and you are going to receive about 0.9 pips to be short through the rollover. This is due to the respective short term interest rate differentials between Cable [GBP] and the Aussie [AUD].

[Note for newbies to FX: “vig” is calculated three times each week; Monday, Tuesday, and Wednesday. Wednesday vig is calculated through the weekend to Monday, so if you forget to get out of a long position at the Wednesday rollover, you will pay 3 times the rate [6.6 pips] even if you get out 2 seconds into the new day.]

This has the potential of becoming an expensive proposition if done every day; I therefore recommend liquidating positions in this pair instead of hedging up on signals from the yellow/plum lines.

In my next post, I am going to go over some examples of the trade in GBPAUD and point out how I think best to trade this instrument. I will give specific rules to follow and show examples of their implementation. I will begin trading this on Monday, the start of the new week.

Have a great day everyone.

-vegas

MAKING TROUBLE PAY

                       Does The Market Know Your Middle Name?

Think of any market [Oil, FX, etc.] as an empty balloon. When the week starts on Monday, air starts to go into the balloon; as price starts moving up and down throughout the week, the new highs and new lows that are put in make the surface of the balloon expand and get bigger. The increase in surface area is volatility.

We know from the historical data what this probabilistic weekly volatility will be, and so we set out to capture it with the algorithm.

When I do speaking engagements I almost always bring up and ask attendees to give me a show of hands for those who started trading and then blew the account up when they got in trouble; and yes, there are a lot of hands in the air!

                                       Watching People Trade

The main premise of the “Long Term -vegas Big Bang Algorithm” is the singularity of the weekly open. If the algo is followed, there simply is no room for big “trouble”. All of the logic and mathematical “brain work” has been done; the probabilities calculated and analyzed; our risk defined; the MQ4 file visually plots [on the 5M candlestick chart] the exhaustion and yellow/plum lines respectively; it’s all there for you to see in real time.

Over many years, unless a market has a paradigm change that diminishes its usefulness as a viable financial derivative [e.g., short term interest rate futures because of the Fed’s ZIRP], its inherent volatility can be mapped and taken advantage of, IF [and this is a big if] you can reduce risk and stay out of big losing trades.

No matter how you want to characterize a markets personality, it really boils down to 2 states of being; normal and excitable. The yellow/plum lines and the crossover rules that apply to them in the algo really do a good job of mapping normal behavior; the aqua/red exhaustion lines guide us when price action goes into excitable mode.

Once a position is established [usually Sunday night or Monday morning], most often we are then guided by the behavior of the yellow/plum lines. How you choose to handle this “behavior” will ultimately effect your profit potential. No matter what you do, your action in this regard will fall into 1 [one] of 4 [four] courses of action; choose the one that best fits your risk tolerance, personality, and the time you can give the market to trade.

FIRST POSSIBLE COURSE OF ACTION

You do nothing. You know there is an approximate 94% probability of the week’s high/low being at least 200 pips from the open, and so when the 35 pip threshold is breached you take a position and stick with it and ignore everything else. 6% of the time you live with the consequences, whether that is a loss or smaller profits.

Personally [and this is just me and not necessarily you], I reject this option because I absolutely can’t sit there and watch a 150 pip profit turn into a breakeven [or losing] trade; I’d be climbing the walls looking to hang myself from the ceiling fan.

SECOND POSSIBLE COURSE OF ACTION

You hedge [or liquidate] on every crossover.

I personally reject this scenario because the Asian session for WTI is notoriously choppy when there is no oil related news in the marketplace; your account most likely is going to get “chopped” with a thousand paper cuts before anything of substance happens.

Last but certainly not least, let me know how staying up and alert to what the market is doing 24/5 works out for you. Send me a photo of yourself on Friday morning.

THIRD POSSIBLE COURSE OF ACTION

You are un-hedged and have open positions when the week’s high/low is expanding; the subsequent crossover of the yellow/plum lines you hedge and keep them on until the high/low continues to expand.

This is a conservative approach to the algo and limits your trading to those times when the week’s high/low is expanding to where we know it must go according to the historical data. However, you have to be there when that happens, so unless you are prepared to be in front of the computer screen for upwards of 16 hours a day until the week’s range is put in, when you miss a move it’s going to impact your weekly results.

FOURTH POSSIBLE COURSE OF ACTION

You choose the times you are un-hedged with open positions and follow the yellow/plum line crossovers during that time. If you miss a move so what? Opportunity is infinite!

This is the option I choose to trade my own account along with the Replitrader.

The aqua/red exhaustion lines are calculated using standard deviations from a time sensitive mean, in conjunction with Fibonacci numbers and ratios, to give us price areas [in real time] where the market has a high probability of stopping or reversing.

Currently, WTI Crude Oil CFD has a risk model [RM] of 1 on the 5M candlestick chart.

There are 4 RM’s in the algo; if you find market price continually breaching these lines on an intraday basis [aqua for slightly more conservative traders, and red for slightly more aggressive traders], simply adjust the RM from 1 to 4, or 4 to 1 depending on what action is taking place.

These exhaustion lines [aqua or red and any RM] are for hedging positions and NOT for reversing positions. The purpose of the lines is NOT to pick tops and bottoms; the purpose is to cover open positions and give us maximum profit potential via historical probability.

I want to be very clear here; neither my algorithm nor Vampire Squid’s HFT with 20 million lines of code can eliminate all potential losses from trading. I can’t eliminate all losses from the hedges, and not every yellow/plum line crossover is going to work.

Let market price = A, the yellow/plum line crossover = B; if the market makes a move up or down, you will absolutely get the proper appropriate crossover, so we can say with certainty that A = B.

However, we cannot say that B = A. Why? A crossover does not make a market move higher or lower. Markets are not mathematically commutative. So, we live with potential small losses to capture the volatility we know is there.

Big trouble is not for me, but for those who structure their trading activity ignoring probability and volatility in any market they choose to trade. There are no moral victories in trading.

Have a great day everyone.

-vegas

P.S.

I should have the Replitrader page up and going this week; I will link to it when it is finished.

YOU CAN’T LIVE WITHOUT FAITH

                            Faith & Happiness “In The Moment”

When someone starts trading they inevitably make one very important mistake; they concentrate all their energies on price.

A long time ago, in a galaxy far, far, ……… [wait a minute, that was something else.] When I first hit the trading floor many blue moons ago, with my shiny new badge and convinced I knew what I was doing [I didn’t], I would ask other veteran traders before the open where they thought “price” would go.

These were guys who had traded eggs and butter years before I showed up and were reading and thinking about markets when I was in 1rst grade hoping for recess. They would look at me and I could feel the contempt for me even being there.

“Hey rube, you want some free candy”?

It was my mentor Bert [a few years earlier], who had taught me the importance of volatility and the need to spend almost all of your time studying it and the effects it has on the market [s] you are trading.

Of course, since I was now a “member” of an important commodity exchange, and the fact I was still in my 20’s and knew everything, I thought all that stuff Bert taught me was BS. Wave your hands ….. Watch the price …. Buy and sell ….. Presto bango …. Money.

I initially struggled on the floor, until I put my pride aside and completely and fully embraced the principles of volatility that Bert had entrusted to me.

All of the previous versions of my algorithms released on the internet to the trading public [1 hour tunnel method to the present] have sought to take advantage of volatility to some extent. Previous versions had limitations that the market exploited and led to extended periods of time that either made little money or led to small losses. This is unacceptable to me.

The “Long Term –vegas Big Bang Algorithm” [especially in WTI Crude Oil] is the most powerful trading algorithm you will ever have in your possession as a retail trader. I challenge you to find anything even remotely close to the probabilities of success the algo provides. The fact that it’s FREE VERSUS the crap you can buy for $$thousands$$ should have you studying “The Data Has No Agenda” series in earnest after you read, reread, and study the “-vegas For Life” file.

The logic behind the long term algo is inescapable; either a market has average, little, or zero volatility for the week [0] OR a market has higher than average volatility for the week [1]. With these two outcomes and no other probabilistic events possible [i.e, a 0 or a 1 is the only outcome possible], we seek out any market that falls into the “1” category.

If you believe any market, or group of markets, is going back pre-1972 [a 0 event] then fade every algorithm signal for profit. Good luck with this scenario because not only is it unlikely, but I don’t think it is even possible given global trade.

So, what prevents the long term algo from being the “Holy Grail” of trading?

Easy; how you put your hedges “on and off” and the behavior of the plum/yellow line cross “overs” and “unders” when you are unhedged. If the volatility is there during the week it is impossible for the market to rise in price UNLESS the plum line is over the yellow line and it is impossible for the market to go lower in price UNLESS the plum line is under the yellow line.

This is the reason why I recommend taking hedges [when the plum/yellow lines cross] at or near the week’s high or low, and keeping them on UNTIL price again threatens to EXPAND THE HIGH OR LOW FOR THE WEEK [where incidentally your hedge price is]. When we take them off, the market is moving towards the high probability scenario we know will happen.

I am intentionally skipping all the other action [with the plum/yellow line cross] because a) I don’t want to get caught in either daily or weekly reversals, which by the way have a high probability and b) I want to place my FAITH [read my money] on expanding volatility probabilities THAT I KNOW EXIST FOR ANY WEEK!

Implement this logic with multiple lot winners and 1 lot losers [initially at or near the week’s high or low] and you almost have to want to lose to not make money. Your “tail risk” is a week with absolutely no movement and/or a week that goes back and forth between the week’s high and low making new high’s/low’s by a few pips before reversing.

This “tail risk” is real, and will eventually take place some weeks into the future, and is the reason I strongly recommend using part of your profits to establish a “rainy week fund”. If your goal is to make $2,000 per week [for example], over time save up 2-3 times your weekly goal and put it away for those “tail risk” weeks so that you can easily pay your bills and live life like nothing happened. Then it’s back to business as usual.

Trust me, when you start making money, everybody in your life will be looking at you like you are an ATM card. Nobody wants to hear there was no volatility this week – they want to see the moola.

Success for you will ultimately depend on your faith. Live and trade in the moment; forget last week [it’s over and doesn’t matter anymore]; forget next week [it’s not here yet and has no bearing on right now]; concentrate on what you need to do now or today. If you need to hedge, then hedge; if you need to add to your position, then add to your position. Concentrate your energies on what needs to be done based on the algorithm.

As for me, I’m putting my money [faith] where my mouth is, and I’m betting the world of trading isn’t going back to the 1950’s.

Have a great day everyone.

-vegas

THE DATA HAS NO AGENDA, PART V

                      So, You Gonna Go Pick Some Up Or What?

So far, everything has been on the “theory” side; now it’s time to turn our attention to the “practical” applications side so you can make some outrageous sums of money in the weeks, months, and years ahead.

In the last few weeks, as I have ended my speaking engagements, the most asked question I got was [in relation to Crude Oil WTI CFD (what I call the "energy currency") trading using the long term approach of the “-vegas Big Bang Algorithm], “How much can I expect to make each week, and what is my risk doing that?”

The most potential risk your trading account will face will be near the open of the week as we start trading based upon the algorithm. We always start with the minimum number of units of trading and then work from that position to add additional units at average prices THAT ALWAYS GIVES US POSITIONS WITH PROFIT!

I’ll show how this is done in a minute or two, but let’s now look at profit potential and get a rough idea of what you can expect.

Basically, your profit expectation is the sum of the probability expectations of the event. So, since I know from a long history [the Excel spreadsheet data] what those expectations are, I calculate as follows;

E(profit) = (0*0.20) + (0*0.27) + (60*0.53) + (115*0.06) + (135*0.17) + (210*0.25) + (310*0.52)

E(profit) is the expected profit you will achieve each week over a long period of time if you follow the algorithm.

The red numbers are from the low value of the week.

(0*0.20) is the product of the low value of 35 pips or less 20% of the time which = 0.

(0*0.27) is the product of the low value between 35 – 100 pips 27% of the time which = 0. [Note: Many times we will achieve profit before the market reverses for the week, but I exclude this positive outcome and assume we make nothing to be conservative.]

(60*0.53) is the product of the low value over 100 pips 53% of the time which = 32.

The blue numbers are from the high value of the week.

(115*0.06) is the product of the high value less than 175 pips 6% of the time which = 7. [Note: the average price below 175 pips for the week is about 155. Subtracting 40 pips because our positions are + or – 35 pips from the open and taking into account the spread of 5 pips gives us the correct calculation. I take the spread into account on all red and blue values.]

(135*0.17) is the product of the high value between 175 - 250 pips 17% of the time which = 23.

(210*0.25) is the product of the high value between 250 – 350 pips 25% of the time which = 52.

(310*52) is the product of the high value over 350 pips 52% of the time which = 161.

Therefore, E(profit) = 0+0+32+7+23+52+161 = 275.

Now, considering I took all of the lowest values between a range of probabilities, which lowers the overall expected value, achieving a 200 pip profit for the week is something you can definitely do over time. Naturally, you will have times where your hedges will lose some pips, so this approximate 30% slippage still makes achieving your goal of 200+ pips an achievable reality.

I’m going to use the following example to show how to trade volatility correctly. This is my preferred way to trade the data; obviously there are other ways as well that are more aggressive [like trading every plum/yellow line crossover for example].

Monday’s open starts trading for the week. The vast majority of the time the Asian session will produce no moves worth taking a position, unless there is oil related geo-political news.

At some point, the market will move either + or - 35 pips [bid price], from the open. Let’s assume [in this example] that the WTI Crude Oil CFD opened the week at 99.60 and moves higher in price. You would get long 1 unit at 100.00. We now follow the plum/yellow line for a signal. When the plum line crosses under the yellow line [or the aqua and red exhaustion lines are hit] we need to hedge our position.

Finally, the plum line crosses under the yellow line and the market is 100.70 bid; we sell at 100.70. We now have a long position of 100.00 and a short position at 100.70. The market falls back and fiddles around the 100.25 – 100.45 area.

We only take the short hedge off if the market goes back and approaches or breaches the hedge. If it does, then we close the short [maybe a few tick loss] hedge AND GET LONG ANOTHER UNIT. So, let’s assume we get long another unit at 100.80.

We are now long 2 units with an average price of 100.40 and the market is at 100.80; follow the plum/yellow line [or exhaustion lines] for your next signal.

Again, the cross under takes place at 101.35 some time later; you now sell 2 units to hedge at 101.35. Your long 2 units average price of 100.40 and short 2 units at 101.35. The market falls back and spends some time between 100.80 and 101.05.

On the upside, we do nothing until price threatens the price level of the hedge. If it does, we take off the hedge and get long another unit giving us another average price below the market and a long position in a rising market.

If the market reverses during the week and price loses 300 or 400+ pips, the long positions become your hedge to your short positions at higher prices. In this way, we NEVER have to worry about reversal, double reversal, or even triple reversal weeks.

We simply are playing the numbers according to the volatility data with hedges [putting them on and then taking them off] until we get our open unhedged positions 200+ pips for the week and then we stop and go live life; meaning of course that you will have a slew of 3 and 4 day weekends throughout your trading career.

If you are more aggressive and want to trade the whole week, that is fine except to note that at some point after you net 200+pips, the plum/yellow crossovers will most likely fail due to the fact the market has limits as to how much it usually goes up or down in a week. What we are taking out in profit, we know is going to happen with a very high degree of probability.

From this example you should be able to extrapolate long and short positions with the appropriate hedges. If you can’t watch the market from European open [about 1:00 AM Chicago time] through the afternoon U.S. session [about 2 or 3 PM Chicago time] then stay hedged until you can, If you miss a move, then live with the consequences. Remember, opportunity is infinite, losses are now.

Throughout the week, I would stay hedged through rollover [there are no fees (or vig) with CFD’s like there are with FX pairs] and the Asian session. Obviously, if there is news to warrant otherwise, I would consider taking off the hedges on a case-by-case analysis.

Most of the time [over 50%] you are going to see reversal weeks of some kind and duration: fine, it’s no problem for us. We simply use our initial positions [that we thought were going to be profit] and make them the hedges. In every case, when we add multiple units, we are in a position of profit. If we lose, we are not losing initial capital but profits gained during the current week. At some point, the market is going to move where the probabilities say it is going to go, and you are going to be there with an unhedged position larger than 1 unit to take profit. [Note: one other point needs mentioning; if you don’t have enough capital to do multiple units, don’t sweat it. Trade and build your account until you can.]

So, your winners will be on MULTIPLE UNITS and your losses will be on 1 unit. MAKE MULTIPLE THOUSANDS, LOSE HUNDREDS!

Obviously, you can build this kind of analysis with any other CFD [stock indices, spot gold, spot silver, etc.] or FX pair of your choice. The numbers aren’t nearly as good as WTI Crude, but I know some people just can’t handle more money, and convince themselves they are an expert in EURUSD [or pick anything else], so they go down that road.

This is a pretty straight forward conservative approach that captures the volatility I know is there for the taking; aggressive traders can up the ante, so to speak, by any number of various other factors like following every plum/yellow crossover while unhedged. I don’t think you need to do this, and take on more risk than necessary, but it’s up to you and the nature of your trading.

I always love to hear from readers, so I would really appreciate your feedback. Please send me any questions/comments at vegasalgo@yahoo.com.

Have a great day everyone.

-vegas

THE DATA HAS NO AGENDA, PART II

 

                                     The Real World At Work

I want to quickly go over some of the major reasons why the WTI Crude Oil CFD is a great instrument to trade besides the fact that the probability for profit is off the charts using the long term –vegas Big Bang Algorithm.

PROS

1)      Energy is an international asset class that the world depends on to run efficiently. Think of this CFD as the energy currency priced in dollars and cents.

2)      Unlike currency pairs that trade 24/5, and can move at any moment, the WTI Crude CFD, the vast majority of the time, will move 99% of the time during the European & U.S. trading sessions respectively. This trading window is from approximately Midnight – 1:00 A.M. [Chicago time] to about 2:00 P.M. – 3:00 P.M. [Chicago time]. Unless the market is news driven, the Asian session is most often very quiet.

3)      1 CFD = 100 barrels. While the futures contract is for 1,000 barrels per contract, the CFD offers much better flexibility in structuring positions throughout the week. If your account has less than $50K in it, this added flexibility is a great advantage.

4)      At rollover of each trading day, there is no swap fee for either long or short positions.

5)      The CFD does not expire like a futures contract.

6)      The ability to “hedge” positions at strategically important trade signals. This cannot be done with futures contracts.

7)      No commissions.

CONS

1)      Fixed margin of $500 per 1 CFD. Ideally, I wish I had greater leverage limits, but overall this is not that big of a liability. For some people this is probably a big asset, as it prevents over-leveraging and getting into big trouble should they ignore the algorithm signals [Gee, that never happens, right?].

2)      Spread of 5 pips. Ideally this would be at about 3 pips, but when you weigh all the positives, plus an offshore debit card, this is still a great deal.

Just for the record, and so everybody knows, trading hours are [Forex-Metal server time] Mon 00:00 – Friday 20:45; break at 21:15 – 22:00 Mon – Thursday; CME front month WTI delivery day [From the CME website: Trading in the current delivery month shall cease on the third business day prior to the twenty-fifth calendar day of the month preceding the delivery month.] close @ 19:30.

So, on the 3^rd trading day prior to the 25^th of each month, the CFD will close at 19:30 [instead of 21:15] on that day.

One of the big advantages of the long term algo is that we don’t have to adjust each trading day to the horizontal line and the necessary buffer of 30 pips. [With the weekly algo we use 35 pips just once.] Over the course of a week [5 days], this amounts to 150 pips. When markets are volatile [150+ pips from open to high or low of the day] this isn’t a problem. But take away a day or two or three of intraday volatility during the week, and now you start to have problems.

As the data proves in the WTI CFD, we do not have these problems with the weekly data. Our focus changes from daily profits to weekly profits. Target a fixed profit amount [e.g., 200 pips, or 250 pips, etc.] and then quit for the week, or follow the signals AND strategy suggestions for the entire week; it’s really up to you as you consider how much time you have and what your risk profile is.

The data proves this market will move during the week, and has done this consistently FOR YEARS to give us the necessary volatility that the daily algo can miss.

No matter what your risk profile is, or your profit objectives are, the WTI CFD can get you the kind of consistent weekly profits you are looking for; far easier than most currency pairs.

Over the next couple of posts I will be going over multiple strategy scenarios as well as some of the special rules the weekly algo requires.

Have a great day everyone.

-vegas

THE DATA HAS NO AGENDA

                                 What A Real ATM Looks Like

Instead of releasing a new file, I have decided to make the longer term “-vegas Big Bang Algorithm” available right here on the blog. The algo rules are exactly the same as found in the “-vegas For Life” file, with one major difference; instead of using the daily candlestick, we use a weekly candlestick chart.

The Monday opening is where the horizontal line is created and that is used for the entire weekly trade. For the 2 financial instruments I am going to recommend you trade [because they make you the most money], initial buy/sell positions are initiated at the +/- 35 PIPS from the horizontal opening line, respectively.

Strategy will be covered in the next few blog posts; the purpose of today is to introduce you to the data and get you to think about the bigger macro picture.

For some of you, this is going to come as a shock, but the absolute best market to trade for profitability is the CFD WTI Crude Oil. The best Forex pair is EURAUD, but it is not nearly as good as the WTI CFD. The probability of successful trading in WTI Crude Oil is simply astounding, if you follow the rules in the algo.

At Forex-Metal, 1 WTI Crude Oil CFD = 100 barrels; therefore each one cent move in the market = $1. Think of crude as THE ENERGY CURRENCY and each one cent move as a PIP.

The data I am presenting is from the start of 2010 through the week of September 15, 2013. This covers 194 weeks. If I had included the time period from approximately 2005 through the end of 2009, in the data, the results would have been EVEN BETTER than what I am going to show you. I took out this 5 year period because I didn’t want the run up to $150 oil, and subsequent fall, to skew the data in a favorable light.

If you would like the complete Microsoft Excel file used to generate the data, simply email me at vegasalgo@yahoo.com and I would be happy to send it to you [ditto for EURAUD as well].

Here is the data for WTI Crude Oil.

1)      The SHORTEST DISTANCE from the OPEN [in PIPS] to either the HIGH OR LOW of the WEEK IS LESS THAN 35 PIPS occurs approximately 20% of all weeks.

2)      The SHORTEST DISTANCE from the OPEN [in PIPS] to either the HIGH OR LOW of the WEEK IS BETWEEN  35 PIPS – 100 PIPS occurs approximately 27% of all weeks.

3)      The SHORTEST DISTANCE from the OPEN [in PIPS] to either the HIGH OR LOW of the WEEK IS GREATER THAN 100 PIPS occurs approximately 53% of all weeks.

4)      The GREATEST DISTANCE from the OPEN [in PIPS] to either the HIGH OR LOW of the WEEK IS LESS THAN 175  PIPS occurs approximately 6% of all weeks.

5)      The GREATEST DISTANCE from the OPEN [in PIPS] to either the HIGH OR LOW of the WEEK IS BETWEEN 175 PIPS – 250 PIPS occurs approximately 17% of all weeks.

6)      The GREATEST DISTANCE from the OPEN [in PIPS] to either the HIGH OR LOW of the WEEK IS BETWEEN 250 PIPS – 350 PIPS occurs approximately 25% of all weeks.

7)      The GREATEST DISTANCE from the OPEN [in PIPS] to either the HIGH OR LOW of the WEEK IS GREATER THAN 350 PIPS occurs approximately 52% of all weeks.

I also want to mention, as it pertains to #4 from above, that if the week has a high value less than 175 pips from either the high or low, it most likely will have a value of about 155 - 175 pips. There was only 1 week, out of 194 weeks, that this value was less than 140 pips.

I want to give you a couple of days to reflect on this data, as the information contained in it is explosive. The size of the pips and the high percentages should blow your mind; there isn’t another financial instrument that you can trade that comes close to these numbers.

Just as an example, to show you the difference in percentages, EURAUD [the best Forex pair according to the data] from the start of 2010 to the present, #7 value of greater than 300 pips [not 350] occurs approximately 23% of all weeks. Crude has about 2 ½ TIMES GREATER weeks AND a 50 PIP higher threshold!!

Starting next post, I’ll get into the strategy, and lay out the trading scenarios I think offer the very best approach to making money.

Until then, have a great day everyone.

-vegas

EYES WIDE SHUT

                                         Go Grab The Money

I’ve got all the data I need; my trusted staff burning the midnight oil to get the job done per my instructions. It’s now a matter of me putting it together in a file and making it available to you. I will try and get it released in the next couple of days, but it might be as long as a week. I’ve got a lot of information to show you.

This new file will be the “-vegas Big Bang Algorithm” utilizing a longer time frame than the original file in “-vegas For Life”. You can use this algo to trade any Forex pair or CFD's. I specifically lay out 2 trading instruments that offer the very best probabilities for profit and have done so for many years.

In the file, I will go into detail on one of these that I believe is the very best instrument you can trade and make money. The probabilities for profit should make your eyes water and the hair on your arms stand up.

Since we are utilizing a longer time frame for analysis, you can come to the market on your own time terms and trade with confidence. Obviously though the more time you are in front of your computer the better your results will be. The original algo pretty much requires you to be there at the open and act accordingly.

Now, I realize that some of you are resistant to change, or have your favorite pair to trade, and that even getting you to look at something besides EURUSD, or some exotic cross like South African Rand / Mexican Peso, is going to require me to open your eyes.

I know many of you are absolutely hungry for a way to make money in the marketplace, and that you have searched and searched, spent money on worthless crap, and are seriously skeptical that anything can help you. As I have said before, don’t trust me; take the time to look at the file and judge for yourself. The original algo will make you money; for many of you this longer time frame will be [for whatever reason] a better alternative.

But seriously, WHY ARE WE HERE?

I’ll trade dirt futures if that’s the place to be because for me IT’S ALL ABOUT THE MONEY. I want to make the most money, in the shortest time possible, with the highest probabilities for success that are in a liquid marketplace.

If you can follow directions [which is a big if], it is damn near impossible to lose money over time in the 2 instruments I highlight in this new file.

Ultimately, it’s up to you. Open an FX Replitrader account with Forex-Metal [no fees] or do it yourself; the choice is yours. But don’t sit there and do nothing; because if that is your choice, your eyes may be open, but they are in reality shut.

Have a good day everyone.

-vegas

GREAT REWARDS

                                Chief of Staff Milton Waddams

I had planned on getting to this in late October, but too many people [my overpaid staff included] have been pushing me to do this NOW!

Within the next 10 days or so, I’ll be releasing how to trade all currency pairs using the “-vegas Big Bang Algorithm” with a longer timeframe approach. Then, sometime in October I will release this method specifically for XAUUSD [spot gold].

Of course, all this will be made available for free in the downloads section when the files are finished.

This will give literally everyone what they need to successfully trade the Forex market depending on A) how much time they can devote to the markets of their choice, and B) what their individual risk profile is.

In the “-vegas For Life” file, the Big Bang Algorithm specifically targets EURJPY and GBPJPY using the daily and 5M candlestick charts respectively. The longer timeframe approach uses the weekly candlestick charts. Both are compatible with each other and can be used in conjunction when trading or used alone.

Just a reminder, for those that are interested in a Forex-Metal Replitrader account, I’ll be going full time starting the first full week of October.

My plate has been pretty full this month, and meeting so many great people has been a wonderful experience for me. Thanks for all the great discussions and questions regarding trading. With two more speaking engagements left before I get back to trading, I’m sure both will be equally rewarding. Thanks everyone.

Have a great day everyone.

-vegas

A CURRENCY PAIR WORTH TRADING

 

                                        It’s Why We Are Here

Over the last couple of weeks, I’ve gotten quite a lot of mail from people asking me about EURAUD. This currency pair, for you Newbies, is the Euro priced in Australian Dollars; so a quote of 1.42830 bid [sell] / 1.42860 ask [buy] gives you the sell/buy of how many Australian Dollars it takes to sell/buy 1 Euro.

This pair meets all of the important criteria I have set forth in the “-vegas Big Bang Algorithm” which is in the “-vegas For Life” file. Right now, I have my staff working on the Excel spreadsheet analysis that was done for EURJPY & GBPJPY.

                             Crunching Numbers @ $0.95 / Hour

I will release the analysis as soon as it is finished and then verified. I will then link it in the downloads section so you can download the entire Excel file if you wish.

Forex-Metal offers EURAUD for trade with a bid/offer spread of about 3 pips, which I consider to be very good to excellent. When you consider the spread on the EURUSD is about 1.5 – 2.0 and the spread on AUDUSD is about 2.5 – 3.0, you are getting the cross at about 1.5 pips on each side. At the retail level you will be hard-pressed to get a significantly lower spread.

Throughout my trading career, I have consciously remained vigilant NOT to be a “one-trick pony”. I’m not married to any currency pair or commodity. If it’s “hot” [above average volatility] I’m interested; if it slows down, it takes just a click of my mouse and I’m somewhere else.

What I [and you for that matter] need for success is constant above average volatility that we can capitalize on and profit. From a purely diversification standpoint, it also makes sense to include this pair to trade as it is removed from the Yen [USDJPY].

In any non Dollar cross, the important Dollar pair is the denominator. As long as the denominator moves, the cross will be volatile regardless of what the numerator does. A quick look at the daily charts shows that AUDUSD is just as volatile as USDJPY on most days.

So, as long as the spread is good, there’s no reason to ignore EURAUD.

Have a good day everyone.

-vegas

DESTRUCTIVE HERESIES

                               What Could Possibly Go Wrong?

Trading mirrors life. As every adult should know, all actions have at least one consequence. Sometimes the consequences take a while to manifest, but they are surely there waiting to find you and become reality.

Sadly, we live in a delusional society that at every level [personal, corporate, and government] has as its major goal the suspension of consequence.

Trading offers NO such convenience.

When you are “out of step” with the truth that the market is telling you, all that is left is account destruction. Sooner or later you will step into the abyss, and it is very hard indeed to come out again whole.

What is worse, many of you eagerly jump from one algorithm [system, method, trading plan, whatever you want to call it] to another with no thought or hesitation. When you lose money yet again for the nth time [please, pick a number that is appropriate], the cycle repeats until there are “no cookies left in the jar”.

                            ALWAYS Check The Pool Beforehand

What is it that you are missing? Quite frankly, you don’t understand the limitations of what you are doing. All trading algorithms have at least one major limitation [flaw] that will result in losing money. The vast majority have many more than one, and quite often the developers and traders that use it do not even understand what they are.

You are soooooo busy picking the color of your new Mercedes SL450 based on developer hype, you haven’t got time to think about unpleasant details.

Raise your hands NOW if I’m preaching to the choir!!

[Ruh Roh …….. that’s a lot of hands.]

As far as I know, and I’ve spent the better part of a solid year analyzing the trading logic [see “The Marble Game” file in the Downloads section for exact details on trading philosophy], the “-vegas Big Bang Algorithm” has only one limitation.

 

This Daily Chart Pattern Spells Potential Trouble

I call these patterns “spindles” but the proper candlestick terminology is the “Doji”. It doesn’t mean automatic losses, but the probability of losing is high.

If you have downloaded and read the “-vegas For Life” file, you should understand why this is so; in the Forex pairs I recommend TRADING, this type of daily chart pattern [over time]HAS THE LEAST PROBABILITY OF OCCURING [less than 5% of all trading days]. I have purposely designed the algorithm to maximize profit and minimize loss on all other trading days.

What it boils down to is this:

                                                 Yes Indeed

And what this means to me and my family is this:

Define and then find your dream. Take the words in the header of the website seriously; Read [Find the information you need and want]. Think [God gave you brains so use them.]. Study [Nothing comes easy in this world without some critical thought.]. Act [Unless you play, it’s impossible to win.]. Prosper [Live your dream and help others achieve theirs.]

Have a good day everyone. Any thoughts, questions, criticisms, and/or comments please send to vegasalgo@yahoo.com I will respond as quickly as I can.

-vegas