BACK TO BASICS

                                                   It’s Time

After some analysis and discussion with the staff, as well as input from many readers of the blog, I decided Monday night that it is indeed time to move exclusively back into the gold market. 

We all know this market is manipulated by The Fed [and the BIS on behalf of The Fed] and my main trading concern over these last months has been not only how to profit from the manipulation, but how to avoid getting hurt from being on the wrong side at the wrong time.

I feel comfortable that the long term algo achieves these 2 main priorities. Our threshold for positions is approximately $5 from the Monday open. I have linked the VBB Gold mq4 file in the “downloads section” for your convenience. If you have any problems getting any of the mq4 files from www.4shared.com just email me and I will send any/all files to you.

I want to emphasize that WTI crude oil and EURAUD are the other 2 markets that are very good to trade, and I have no problem recommending them to the public. I feel that gold [specifically XAUUSD] fits the logic and trading philosophy of the long term algo better than the other markets.

I prefer XAUUSD @ Forex-Metal over futures contracts because of flexibility. Trading is done in 10 OZ increments instead of 100 OZ contracts, and the spread is usually between $0.40 - $0.50. Margin is also smaller [with no commissions], therefore allowing bigger positions when warranted.

In the days ahead, I’ll have more information on strategies [lose with 1 lots, win with multiple lots], Excel spreadsheet analysis with details, and appropriate leverage. The final analysis is pretty simple; we can profit from the manipulation and take advantage of the greater volatility that is in this market. When the market gets a little ‘crazy” [usually on the downside], the algo does a fantastic job in positioning us for the move. The profit potential is enormous and more than any market traded today, if we are positioned correctly, you simply can’t find a better trading instrument with approximate $0.40 - $0.50 spreads.

To help you through the logic and philosophy of the "Long Term -vegas Big Bang Algorithm", I created PDF's for 3 of my favorite trading/finance books that provide excellent background information that can help you. They are "Fooled by Randomness", The Black Swan" [both by Taleb], and finally "Tunnel Through The Air" by W.D. Gann. They are all excellent reads and will give you a lot to think about for a very long time. 

If you would like any/all of these books, simply send me an email and I will send.

Have a great day everyone.

-vegas

P.S.

I'm still working on the prior weeks backlog of emails. If I haven't answered you yet, my response will be there shortly. I have about 120 emails to work through, and I answer them all with care and thought. Thanks for your patience.

IT’S ALL ABOUT CHOICES

                                            Life In Amerika

If you are relatively young, maybe your ice cube is a little bigger than the old folks, but it doesn’t mean your financial survival is any more secure. Every demographic in Chalky’s Amerika faces a very difficult road ahead and it is going to get much worse than it is now.

Older Amerikans who have played by the rules their entire lives, who have saved money for their later years, wake up each day to the criminal enterprise known as The Fed. They have no place to safely place their funds because interest rates are near zero. If this describes you, your government has sacrificed your life’s work for a socialized national debt that pays little interest so they can subsidize their “takers” voter base at your expense. You are forced to search for yield in an environment you know very little about.

Young people, who were totally lied to about college and sold a defective and corrupt educational system bill of goods, face no job prospects upon graduation and staggering student loan debt that will keep them indentured government slaves for most of their adult lives. It’s great to live in Mom and Dad’s basement isn’t it?

And just wait until Chalky’s Soviet style medicine hits in the weeks to come; how do you live any kind of life with high taxes [federal, state, and maybe even local], FICA [the ponzi scheme known as Social Security], sky high health premiums and deductibles, rent, food, and car payment [because how can you afford to pay cash for a $40k car]?

“Ummmm ….. excuse me …..  where’s the disposable income for a life and a future?”

Do you believe in magic or math?

For all of you who think you can achieve your goals and dreams through your labor, I’ve got bad news for you; it ain’t gonna happen. There aren’t enough hours in a day, week, or month to come even close. Choose to believe me or not, but your entire life has been an exercise [by government and big corporations] to train you as a worker bee. 

Money lives one way, you live the other way. [Guess who lives better?]

If you treat trading as an entrepreneurial business, there is no reason you can’t escape the tyranny of government and corporate Amerika. There simply is no other business venture that comes even close to funding your dreams of a FREE, secure, and better financial future; I could literally spend the next 6 months posting all the advantages. The disadvantages; sorry, I don’t see any.

However, you do need to master 2 extremely important items; 1) a money making algorithm, and 2) a business structure that makes you invisible and immune from government and lawyers.

                               The World’s Smartest Businessman

This past week saw WTI Crude Oil post numbers that put the week in “tail risk” territory. Six months from now somebody will look at the weekly candlestick charts and say about last week, “kind of a small spindle here, it must have been a loser week”. No, it wasn’t.

While you probably wouldn’t have achieved your goal of 200+ pips for the week, if you followed the algorithm, you would most likely have made in excess of 100 pips for the week before it ended on Friday. And yes, there are a few weeks that take trading into Friday; not every week can be a 3 day workweek.

But my point here is that even with a “tail risk” week [6% of all trading weeks], where 94% of the time it doesn’t happen, the algorithm still made you money. You literally have to have a small spindle where the high value for the week is below 80 pips for the probability of loss to grow. And how often has that happened in the last 8 years? NONE. ZIP. ZERO. NADA.

The one question I got all through September, when I had some speaking engagements, was, “How much do I need in an account to make a decent living from this”?

On average, you will need a minimum of $3,000 in your account to make about $1,000 per week. Obviously, if you can deposit more that is better and gives you more breathing room. Now, I don’t pull this number out of thin air; it is supported by the historical data.

So, the first item I got covered for you either through your OWN trading AND/OR via Replitrader at Forex-Metal.

I’m not here to give tax and/or estate planning advice. Everybody is different and has different objectives and risk tolerance. There are literally thousands of places you can incorporate offshore and use IBC’s [International Business Company], Trusts, and PIF’s [Private Interest Foundations] to your advantage.

The current Treasury Secretary of the U.S. [Jack Lew] has “offshore entities” [he has reported on his government disclosure documents] in the Cayman Islands. So, for you uninformed socialists, who think this is somehow illegal or immoral, guess again. If it’s good enough for government officials who have money, then somebody explain to me how it’s not for you [chirp…. chirp ….. chirp].

I would encourage all of you to do internet research [through the Hide My Ass proxy of course] and check out the offshore links I have on this blogsite. One way or another, you’ll find what’s right for you and your family.

So, the second item I have you pointed in the right direction.

You can either stay in the “pudding business” or do something about it. So you can make intelligent decisions, if you have questions or concerns about trading [or the algo], I encourage you to contact me via email at vegasalgo@yahoo.com and tell me what’s on your mind. I reply to each email I get [as fast as I can] and respond honestly to what you tell me.

Have a great day everyone.

-vegas

FED = INSANITY

                                 Go Ahead, Figure Out The Fed

“Fed Says Economy EXPANDING MODERATELY.”

“What planet are you guys living on?”

Seriously, from missing on about 90% of all economic data in the last few months, I wonder with my mouth wide open which economy they are talking about. That these guys live in the bubble of Chalkyville [Washington, D.C.] there can be no doubt.

Moving on to gold, complete confusion always takes center stage when Weimar Ben opens his mouth and waxes eloquent about the economy. Not to disappoint, gold gapped lower $10 on the Fed release, thus raping stops below the earlier day low of about 1635. Central Planners I’m sure had a lot do to do with that move, and a few seconds later backed away and let the hedge fund community do its schtick.

But once people with brains gave it some thought, gold rallied sharply in seconds. Out the window on the way down; up elevator on the way up. Take stops out on the downside then go back and get the buy stops from the old high; move back a few bucks from that and now you have in 3…. 2…. 1…. zzzzzzzzzzzzzzzz  into the close.

For cryin’ out loud, [as I write] we still don’t have but about a $20 range!

“Hey anybody still want to trade? C’mon guys, you can still make those losses back.

Easy Peezee!”

Think anybody got hurt today in this Fed induced trading mess? Exactly as planned.

Think for a minute about what I said in an earlier post about the 3 main goals of market manipulation; 1) keep gold out of the news [especially on news days], 2) hurt all speculators as many times as possible [long and/or short], and 3) make other market participants do your bidding so the real fingerprints of manipulation are absent.

Again today, they did it in spades.

Have a good day everyone.

-vegas

REMOVING THE CURTAIN FROM OZ

                  Keep Your Daughter Away From The Metals Dealer

“We’re off to see the Wizard, the wonderful Wizard of Oz, because because because because [pause and take a deeeeeep breath] for all the wonderful things he does, la la de de la la ……”

The only thing that would make today perfect poetic justice would be if George Orwell wrote “The Wizard of Oz”. While most people think the movie was just a kiddy flick starring Judy Garland, actually it was meant to be a scathing indictment of The Fed, FDR, and the confiscation of gold by Big Brother in the 1930”s. [Go ahead, think about that for a minute.]

So today, while Europe’s elites rejoice because they are spinning a successful Spanish 10 year note auction, the European bond market has ripped the curtain off its hinges and told Europe what they really think.

Not to be outdone and wanting very much to be a part of the action, the Central Bank Gold Cartel [with the altruistic help of the front-running JPM prop desk to be sure] were out in force early today selling the gold market down into the low 1630”s. When they backed off, all it took was 55 minutes for the real market to send gold prices $17 higher into a new high.

While I have a certain amount of “Schadenfruede” in seeing them get their butts handed to them, the thing to remember is that they don’t care about profits and/or losses. They aren’t traders, they are manipulators. If they can get you to lose money, or stop you out of a position, they win.

But that doesn’t mean they go away; it’s too late for that and they have gone “all in”. If you buy the upside breakouts, they are going to win.

When you pull the curtain back and see where market reality is, you can take advantage of their arrogance, their methods, and ultimately their sheer stupidity of the history of gold.

Meanwhile, in Socialist Amerika…….

                             Patronizing The Kool-Aid Drinkers

In the last 48 hours Chalky’s minions have made much ado about Mitt Romney’s dog Seamus, who he allowed to ride on the top of the family car in a kennel cage. Chalky’s operatives have been trying [unsuccessfully] to paint Mitt as a dog abuser.

But finding out that Chalky actually ate dog as a kid by his own admission has kind of turned things around.

In the spirit of “fairness”, I present the following:

                                          Please Just Pet Me

Have a good day everyone.

-vegas

GOLD MEETS STUPID

                                          I Bet He Trades Gold

It’s Friday, so that means something stupid [at least once, probably more] will definitely happen in the marketplace sometime today. OK, in 3…2…1…

How about that $5 dive at 10:55 A.M. [Chicago time]?  Twenty minutes later what $5 drop? Was your sell stop in there from yesterday? I expected this stop hunt next week, but alas you can’t stop the central planners when they get an idea.

“Errrr, hang on a sec there vegas, what makes you think we’re done yet?”

“Well, you really can’t keep them planners from planning now can you?”

And just when you think it’s safe to swim in the water -  KABOOOOM! Nice drop over the Noon hour to the low. If you’re long what’s another $10 / oz on the downside? OK, not enough punishment for ya today and you say you need more?

“Sure, c’mon in and get long some more; how about a move down to 1649?”

Welcome to Friday trouble;  we have your reservation and we’ve been waiting for you.

Back in the day, I hated trading in the last 90 minutes of the session; just too much can happen that gets you in trouble. Today, that distinction goes to Friday in our 24/5 trading environment. Spikes, drops, more spikes, etc., etc. I saw more $1 moves in 15 seconds today than I have seen in all the other days combined. So, make whatever, and take the next train to Clarksville.

The official version of the day’s events, by the financial press who don’t have a clue, will be that China GDP [reported last night] came in a bit soft of expectations and that led to softness in gold. Really? How about it’s Friday and the stuff is up about $40 / oz. and you got bills to pay and a significant other that wants some money for something? You decide. [Well, it was up $40.]

Of course, as today proves in spades, we always have to be mindful of the IBC owned by the Fed, traded at the JPM prop desk, that can put spot gold anywhere they want, anytime they want over the course of a day. Not so great over the long run, but any given day? Sure.

That’s why you always have to trade with stops. I know, I know, I can hear your screams of anguish as I write; but the God awful truth is you can’t trade without ‘em. Because as stupid as you might feel about getting your stop hit today at 1662 or 1654 or 1649, imagine the nausea of pushing the button at 1620. Now you’re really talking stupid.

Over at my PAMM website [ http://vegaspamm.blogspot.com ] I’ve put up the daily Fib cycle charts for XAUUSD, EURJPY, and AUDUSD. I’ll be doing this every Friday to try and give you a current count of where each market is at; this way you don’t have to waste time going back to see where we were [de nada] or wonder where we are at now.

Have a good weekend everyone.

-vegas

THE WEASELS ARE IN CHARGE

                                   Add Dealers & Hedge Funds

If you have enough money, or more importantly can borrow any amount  you want from  the Fed at close to 0%, then you have not only the initiative but the means to shove markets wherever you want them.

At times you get caught the wrong way and get stung a little, but overall it’s a game that makes amounts of money an ordinary person would find unbelievable.

“Errr that shiny finance degree don’t mean crap here kid.”

“Sir, do you want me to do some kind of fundamental analysis on industrial demand and mine production?”

“What?? Hell no, we wouldn’t even know where to start. Sit back Jr. and watch me shove a pile of money into some stops!!”

“What’s a stop?”

And there you have it; in a nutshell that is the state of gold trading today.

Granted, there are the “Lemmings in Asia” who will buy every night of every day because they are super gold bugs, but for us traders the dealers, hedge funds, and banks are our greatest impediments to accumulating wealth.

The scam is easy to understand; you simply throw money at a market enough for it to move until you get it at a place where you reverse course. Rinse & repeat; count the money and pay bonuses.

The problem the gold market poses for a trader today is that you have no reference points for risk management. Since the melt-up on January 25, 2012, gold has lost its bearings as far as range and stop placement is concerned.

Add to this the continued criminal behavior of dealers, who jack spreads literally instantaneously and huge slippage if your order isn’t done right, and you have a trading scenario where nothing you use to gauge the market will make sense.

Elevator up; out the window on the way down. If your stop gets hit on the way so much the better. Having fun yet?

And what do you suppose the main purpose of Centrally Planned gold trading is?

Why of course it is to punish you for having the audacity of questioning the power elite by trying to take advantage of their disastrous monetary and fiscal policies.

And what better way to punish you than by having dozens of spikes/drops, $10 / oz. moves in 5 – 10 minutes, stop hunts, and reversals?

Most retail traders are like fish in a lake; bait the hook and throw it in the water and they will bite!

I’m not happy about these market conditions at the moment, but I know how to deal with it effectively. Have a plan, pick your spot [or spots], lower your volume to give you more flexibility, don’t place your stop where everybody else does, make your trade a “free trade” when available, and lastly at the very first sign of price reversal click the button and take the money.

Make them pay you, not the other way around.

Have a good weekend everyone.

-vegas