TIME TO PROSPER

                                    The Right Trading Mindset

As if I need one more thing added to my proverbial plate, I’ve just found out that Assets FX has initiated a signal service for accounts held at the brokerage house; meaning of course that since I have a real account and make trades, anybody else that has an account at Assets FX can have my trades “copied” into their account. [When I asked about this very subject 3 weeks ago, nobody knew anything. Now all of a sudden it’s here; go figure.]

I don’t have all the details, and I need to talk with someone at the brokerage house about some issues that seem to plague these kinds of “services” everywhere you go. Since it is late Friday on the European continent, getting somebody now who knows anything about this is impossible. It’s Friday afternoon just after New Years Day; as you would expect, the “B” and/or “C” team is running things, and anything but the simplest of questions will have to wait until next week.

If I like what I see, then this would be a great compliment to what we have implemented. This doesn’t change anything at C2. With the added benefit of Assets FX, I still need C2 for 2 important services; 1) verifiable independent third party track record of the algorithm signals, and 2) a place for managed funds to go that might not wish to trade at Assets FX. For whatever the reason, everyone has different choices they can make that suits their individual style of trading.

If this works out, then I don’t know how we can get any more flexible in giving traders what they want from trading; every base will pretty much be covered.

From the information I was provided it is a straightforward enough proposition; I register my account and other accounts sign up for my trades. If I wish to charge for this I can, but like I said, I have questions about leverage, spreads, any brokerage house fees, etc. that need to be answered first. Ahh well, something to do next week besides trade.

When I have all the details, and can make an informed decision, I will of course let everyone know my plans and course of action. I want to be thorough and not have any surprises if we in fact do this.

I don’t see anything on the near-term, intermediate, or long-term horizon that should impact volatility in 2014 regarding the AUD and/or JPY crosses. With both Japan and China in flux [and make no mistake, whatever happens in China greatly affects AUD]; both pairs in the denominator of any of the crosses you choose; volatility should offer us many trading opportunities for profit over the coming year and beyond.

Both the Long-Term and Scalper algorithms will catch these moves when they happen; if it moves the algorithm will be on it like white on rice. If you haven’t done so already, I urge you to 1) install the proper MQ4 file onto the appropriate charts so you have the algorithms operational, and 2) spend some time scrolling back and looking at prior signals so you can see for yourself the power of the algorithms.

I stress again for you Newbies out there reading this; download the demo [Assets FX or any other place you choose] and make your first mistakes with play money. I don’t care who you are or what “pedigree” you think you belong; if you are new to this, you’re gonna make mistakes!

I fully realize that the longer I post, and the number of posts rise along with people visiting the site for the first time, that if you are new here it seems a daunting task to “get up to speed”. Not to worry; if you have any questions simply email me at vegasalgo@yahoo.com and I will get to your post personally ASAP.

Most of the time I reply quickly to reader inquiries, but there are times when I get “blasted” and it might take a few days. Rest assured, I will take the time to respond to you personally. Only I answer emails; the staff [Chief of Staff Milton Waddums, -vegas Jr., and Cousin It] has enough to do with the stuff I give them.

I’m here to help you make money without reaching for your wallet. [Pocket change accepted of course.]

Have a great day everyone.

-vegas

WELCOME ZOMBIE EUROPEAN BANKS

                                    I Would Say Definitely Not

“We got a margin call? You mean the ECB wants more collateral against our worthless soverign debt crap government securities?”

“Duhhhhhhhh - I guess we’ll just sell our gold!”

As www.zerohedge.com  has so importantly pointed out, “the ECB has increased its margin calls on European banks by EUR162 million this week…”

So, just where do you think these illiquid, bankrupt banks are going to find the scratch to cover this? [Hint: sell gold.]

In addition to this zombie mentality, while everyone is focused on the sell off, USDJPY is quietly rallying quite strongly, thus hammering the Yen against the U.S. Dollar and causing all kinds of problems in the cross trade in the Pacific Rim; especially China.

Did somebody just say China??

Yea, I did and its implication is maybe the growth won’t be there like everyone thinks going forward. Can you say weakness in precious metals? How about AUDUSD?

Right now, we are less than $75 / oz. from being lower on the year. Gold has been higher 11 years in a row. I raised this issue in a previous post about the possible effects of the ETF GLD; what happens when millions of people hit the sell button and redeem their GLD shares thus forcing the fund to sell spot gold in a hurry (2 day settlement)?

If you think having a bunch of banks sell gold to the tune of a few hundred million Euros can “rock the bullish boat” in gold, what do you think happens if hundreds of metric tones hit the market in a matter of days? [Hint: it won’t be pretty.]

Don’t get me wrong, I’m not predicting here; what I am doing is trying to point out that every market has 2 sides and to not get pig-headed and think gold can only and forever go higher each and every day.

The irrefutable financial fact is that Chalky Soetero continues to run the U.S. economy in to the ground while running record monthly, quarterly, and yearly budget deficits. Weimar Ben is printing money like there is no tomorrow; hell bent on keeping the stock market from declining so as to make you feel “prosperous”.

 This is centrally planned trading.

We all know governments all over the world hate gold. It prevents them from debasing currency and thus buying votes and promoting crony capitalism.

So, welcome zombie banks to the selling spree in gold. What history will eventually show is that you sold the wrong asset. Some people just won’t listen.

Have a good day everyone.

-vegas

REALITY BITES

                                                   Uh Oh.

Sooner or later, you are going to face a market [or group of markets] that slows down and frustrates you to no end. You will want it to be like it was and not alter or change your trading strategy for fear of missing something.

After Reagan was elected president in 1980, the gold market was about to undergo a major shift in volatility and pricing. It went from daily ranges of $25 - $50 every day to $3 ranges per day within 3 years. For the next 20 years gold was for all trading purposes dead.

Now, do not misunderstand what I’m saying here; I’m not predicting this is going to happen. I don’t think there is even a 5% chance of this happening anytime soon. World political and economic events seem likely to keep gold volatile.

The point I want to emphasize is that you have to be vigilant in keeping track of volatility and shifting trading trends within a market. How is it trading? How are the highs and lows being put in? What hours is it active? Are we getting the necessary intra day volatility I need to make nice money? How are the banks [or in the case of metals the dealers] making a market; are the spreads good or are they deteriorating?

I knew many traders that got absolutely destroyed trading gold from about 1982 through the 1990’s through their individual lack of underestimating volatility in assessing a market. Your brain isn’t going to be enough to get you through.

One of the biggest problems people have is the continuing belief that a market will come back and be just like it was before when they made money. “If I just give it a little more time, it will come back – yea, things are OK.”

Errrrrrr no, they ain’t OK.

I saw once savvy market pros give back all they made during the heady days of gold trading in 1979 – 1981 and then some believing things would get better soon. It didn’t and they suffered mightily.

Basically, they kept buying the highs and selling the lows looking for breakouts in the range that never came. You have no idea how much money can be lost in a $4 daily range in gold.

The reason I bring all this to your attention is that my algorithm needs normal or above normal intra day volatility to be highly profitable and effective. Low volatility will not produce the results that I want as a trader.  Sure, we can usually make at least $1.50 / oz per day [on average], but that’s a minimum, not a goal.

I keep a very close eye on gold volatility to make sure my efforts are in the right place at the right time. When volatility is normal or above normal, there is no better market to make money. But, I won’t hesitate to move to other markets if gold starts to go “dead”.

Right now, I’m looking at my favorite currency pair AUDUSD, which trades the algorithm very well. Volatility in AUDUSD has remained at above normal levels versus historical norms for a while now. So, don’t be surprised if you see some AUD trades in the PAMM or if I have some comments regarding AUDUSD in the near future.

Vegas is not a one-trick pony.

Have a good day everyone!

-vegas

STOP THE PRESSES!! VEGAS ALGO LOSES MONEY?

                                        World Awaits Update

To those who do not have the algorithm in their possession, and who know we were long all of last week with good result, it is only natural for them to conclude that we would come into today’s action with a similar long bias.

Well, they would be wrong.

Mid to late Friday, and in the Asian session earlier today, the algorithm gave a triple confirmation top in our longer term indicator. It came within a few hours of giving a fourth confirmation, but that never materialized as gold sold off.

Since November 22 at 4:00 AM [Chicago time] our longer term indicator has been in buy mode. That ended last night in the Asian session at 8:00 PM [Chicago time]. Those with the algo on their screens can clearly see these two events. This created, and then ended,  a long bias to initiate new long positions when warranted. Now, in the manual and in Appendix III, I clearly state when this longer indicator is no longer in buy mode. Those conditions were hit on Friday and today, not once, twice, but three times.

As we started trading today [midnight Chicago time] I received many emails from new algo traders wanting to confirm with me that in fact “buy mode” was off. Since we are not in either buy mode or sell mode, we simply wait for the algo to tell us whether to buy or sell. At the moment we are neutral; neither buying or selling. Sitting.

For those who have the algorithm on their computer screens, you can see the various buy and sell signals on your screen and the somewhat chaotic nature of today’s trade. This is further confirmation of the algorithm’s power in keeping you out of trouble. It’s telling you that, for today, trading is not only tricky but risky.

Now, I’m sure that in their haste to trade, some very new algo traders still bought the signals from this morning that led to early small losses. Later, a rally would have made you money, so even if you screwed up, you still would have profited on the day from the buy signals. However, even if you somehow lost money, which I don’t see how you could, consider it small tuition. You have to be able to follow the algorithm rules. RTFM.

I also realize that some newer algo traders post their results on other websites, in order to help other traders who have not yet seen the light. While this is noble, and I have no problem with it, when they make mistakes or read the signals wrong, there is a possibility some people will get the wrong impression.

                                                Thank You

I want to give a BIG shout out to all my friends over at TF Metals Report. In all sincerity, thanks for directing traffic to my site, as well as the DOZENS of members who have opened accounts and now have “The Vegas BFSG Algorithm” in their hands. I couldn’t have done it without you.

                                       Only In Their Dreams

However, among any group you have a small minority of trolls (and you know who you are) that just can’t play nice with the other kids in the sandbox. You can never please them, no matter what you do. It’s their sandbox, and you can’t have any sand.

Well fellas, I’m sure you were up late last night creating new voodoo incantations or praying that the algorithm would lose money today, thereby inciting mass hysteria. While the algorithm does lose money on some trading days [it has too, otherwise it would be perfect, and that is impossible], I’m sorry today isn’t one of them. Dream it for some other day.

In the spirit of helping you though, may I suggest kicking the dog from a different angle, create some new beef jerky recipes, and try sticking some pins in that blow-up doll you have in the closet. I’m sure one of these, if not all, may just be the combination of events that cause the algorithm to lose money and set your hearts fluttering.

                                  This Is What Always Happens

But seriously, when you eventually want the algorithm, you really don’t have to have your cousin sign up so you can see it. I’m here ready and willing to help everyone.

Today’s Action & Wrap Up

As I stated above, the algorithm is neutral awaiting a buy or sell signal. So, no trades resulting in $ 0 / oz.

In other markets though, the algorithm has done a very good job of producing profits. Financial markets today have decoupled, and nice gains in stock indices and oil have produced good profits. One of my favorite currency pairs AUDUSD has also done well.

Have a good day everyone.

-vegas