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.

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

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 III

                                            Trading Is Life

I want to begin with the premise that some decent amount of volatility will be present in the marketplace; without it, why even trade? One look at the weekly candlestick chart of WTI Crude Oil CFD should convince you that, yes indeed, it is there.

By the same token, we don’t want to see much of this on a weekly candlestick chart:

Now, if both the high and low “spindles” are at least 150 – 175 pips apart, we still have a high probability of profit for the week. Only if this type of spindle is small [125 pips or smaller] are we going to see the probability of loss increase dramatically. Since the start of 2010, this has occurred 1 time in 194 weeks; add in the very high volatile period from 2005 – 2009 and you have 1 time in about 8 years. If this doesn’t excite you as a trader, I don’t know what will.

But, as the old saying goes, “you don’t get somethin’ for nothin”. When it comes to trading Forex and/or CFD’s, you can never have an algorithm that makes money under all trading circumstances; you have to give up something [potential losses] in order to have the possibility of making money.

What we “give up” is a low volatility trading environment over the course of a trading week. Sure, we care about price because that is the benchmark for making money; but what we are really trading, and what we should really care about is intra-week volatility.

We start the week on Monday at the open [Forex-Metal server time 00:00; 6:00 P.M Sunday night Chicago time in Daylight Savings Time, 5:00 P.M Central Daylight Time the rest of the year]. We then place the horizontal line [choose your color] on this open, and it will remain there for the current week [delete and change for new week] as a visual reminder of higher price [green candles] and lower price [red candles] values for the week.

When the market is in a range of +35 pips to -35 pips from this horizontal line [open] we do nothing and are not in the market. The majority of the time at the start of the week, unless there is some news driven event, the oil market will most likely do nothing in price terms until the European open [around Midnight – 1 A.M. Chicago time].

When the market rallies over the +35 pips from the open we establish long positions; when the market breaks under -35 pips from the open we establish short positions.

After establishing a new position, we then follow the yellow and plum lines [5M EMA LOW VALUES – 3 PERIOD FOR PLUM, 9 PERIOD FOR YELLOW], and also the exhaustion levels [AQUA AND RED LINES], to determine when the market may be changing short [or even long] term direction.

However, instead of liquidating out position, we HEDGE it with an offsetting position, until we are given a new signal, at which point we take off the hedge.

Since we are highly confident [over 90% to be exact] that at some point the high or low of the week will be AT LEAST 200 pips, when we reach that level from our position, we can ring the register and stop for the week, or continue trading from the signals for a higher pip amount.

[Note: When you trade online through a brokerage house, they use multiple market makers and/or banks as liquidity providers for every market. They usually use between 5 to as many as 10 banks; the bid / offer you see on your MT4 screen is the highest bid from somebody and the lowest offer from probably somebody else.

When you open a position it is with some bank [say bank A]; in order to liquidate this position, you have to specifically close it with this bank [bank A], otherwise some other bank [say bank B] will be on the other side, and instead of being out of the market you will have offsetting positions [a hedge].

This is what is meant by “hedging”.]

Of course from these basic rules of the algorithm, you can adjust things to your own individual risk profile, and tailor your trading.

Next post I will be profiling specific trading examples and how I would trade them for the week. I will show how to hedge and use the yellow/plum lines as well as the aqua/red exhaustion line. To be sure, I’ll go over reversal weeks and other types of action that you can expect in the marketplace.

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