100 Trades of Profit

Boris Schlossberg

The other day I stumbled across an amazing YouTube video. Two guys -- both skinny non-athletic nerds challenged themselves to do 100 pushups each day for 30 days straight. The rules did not require them to do 100 pushups consecutively -- just cumulatively -- as long as the total ended up to be 100 at the end of the day.

This was a fascinating experiment. Push-ups require no equipment and can be done anywhere (they did push-ups in parking lots, conference rooms, etc.) Push-ups take very little time and need almost no athletic skill. It is perhaps the simplest human exercise there is.

Their journey was eye-opening. Neither man was in good shape. Neither man was ever an athlete. During their first week of attempts, they could barely do 5 push ups consecutively. One of them failed to achieve the 100 goal until the 7th day of the experiment. Yet,l they persisted.


BK.Trend.09.25-29.2017

Here is the absolutely remarkable thing. After 30 days, both men were visibly stronger and more muscular. Each one had changed his diet to a much more healthy regime and their overall posture and presence was decidedly more confident. All of this was achieved through the lowliest, most humble of exercises simply because they set a modest goal and stuck to the plan.

The hundred push-up experiment made me realize that we can achieve the same type of radical improvement in trading if we adopt their methods. Let’s do a simple experiment. Let’s commit to making 100 profitable trades of 10 pips each over a period of 30 trading days. The only rule is that you must honor your stops (whatever they are). You cannot let losing trades float. The purpose of this experiment to not necessarily make you money (though that would be nice) but to get you to engage with the market in a proper way.

Why do most traders fail? Because they have no defined plan for how they will trade. In fact, most traders quit simply because they hit 3 losing trades in a row. Here is my prediction if you do this experiment. I predict that you will begin to realize what trades work and what trades don’t. I bet you will become a lot more selective in your entries. I predict that you will become a lot less greedy in your exits. I bet you will develop a healthy respect for risk. I bet you will begin to feel joy and then confidence at winning 5 and maybe even 10 trades in a row and will begin to understand how winning is possible.

If two nerdy guys can transform themselves into strong confident young men just by doing 100 pushups each day for a month, then we as traders can certainly improve our skills by focusing on making 100 profitable trades in 30 days. Give it a try and even if you are making 20 losers in a row, keep going. The lesson of the pushup experiment is that success lies in simply trying for a meaningfully long time.

How To Make Money Trading When You Are 100% Wrong

Boris Schlossberg

The past week has been a rollercoaster ride for us all. I am too exhausted for bon-mots of trading wisdom this week but I did want to show you how traders always need to trade what they see rather than what they want to see.

I walked into the US election armed with exit polling data that assured me Clinton was going to win. The markets had already rallied ahead of the result and frankly, I expected a boring night of little action. But about half and hour into the session real results started to deviate from the models and I made one fateful little move that saved the night for us and ballooned our P&L even as it deflated our spirits.

Watch.

screenshot-2016-11-11-18-12-30

Will USD/JPY Break 100?

Will USD/JPY Break 100?

Chart Of The Day

Will USD/JPY Break 100?

Fundamentally, we are long term dollar bulls but in the near term, there’s more downside than upside risk for USD/JPY. Stocks are trading heavy and the U.S. Presidential Debate could cause further weakness in U.S. equities. According to studies dating back to 1980, U.S. stocks trade lower the week after a debate 80% of the time with an average 1.5% loss for the S&P 500. And we know that if stocks fall, USD/JPY generally drops as well. Traditionally stocks rise when the current party wins and in this case, there’s so much uncertainty surrounding a Trump victory that if Clinton is crushed in the debate, the sell-off in stocks could be more severe than usual. Foreign investors in particular are extremely nervous about a Trump win and market participants have already sold dollars in fear of this possibility. Unfortunately the market hasn’t sufficiently priced in the possibility of Trump rising out of tonight’s debate victorious and for this reason, the larger reaction in currencies will be to a Clinton defeat. Also, it is estimated that Japanese life insurance companies and other similar institutions have only hedged 60% of their yen risk. If USD/JPY drops below its August low of 99.50, we could see that ratio rise to 80%, which would involve buying more yen.

Technically, the daily charts show USD/JPY rolling over with 100 likely to be tested. If 100 breaks it could be a quick drop to the August low of 99.54 and if that cracks as well, the pair will target the June low of 99.03. On the upside, a stronger recovery isn’t possible until we see a close above 101.25.

CAD/JPY Gunning for 100

CAD/JPY Gunning for 100

Chart Of The Day

CAD/JPY Gunning for 100

After dropping to a low of 91.75 in late January, CAD/JPY staged a dramatic recovery to trade all the way up to 100. The currency pair tested this level 4 times this month and is now itching for a break. While the rise has been largely driven by the turnaround in oil prices, in the long run, it is the improvement in economic data that will keep the Canadian dollar bid. The previous decline in oil prices hit Canada hard and now that prices are stabilizing, we should start to see positive economic surprises. In fact, the Bank of Canada already turned optimistic and is no longer looking to lower interest rates this year. Next week’s Canadian retail sales and consumer price reports will play a large role in determining whether CAD/JPY breaks this key psychological and technical level.

Taking a look at the charts, the last time CAD/JPY closed above 100 was in January but that was coming off a higher level. Back in October CAD/JPY surged from a low of 92.91 to a high above 106 and on the day it broke 100, CAD/JPY came close to testing 101, consolidated the day that followed and then began a powerful move higher. Given the recent consolidation in the pair, we believe that a similar move could occur especially given the tight consolidation right below these levels. If 100 is broken, the next level of resistance will be at 100.85, the 61.8% Fibonacci retracement of the December and January decline. If it fails to break this key level on a closing basis and drops below 99, it is most likely headed back to 98.

NZD/USD – 100 pip Reaction to Dairy Auction?

NZD/USD – 100 pip Reaction to Dairy Auction?

Chart Of The Day

Fundamentals

Tonight’s Dairy Auction in New Zealand could have a significant impact on NZD/USD. Over the past 2 months, dairy prices have fallen 20% and since milk represents 30% of New Zealand’s exports, the decline in prices is expected to restrict the country’s terms of trade and possibly even slow the central bank’s pace of tightening. The last time the auction took place on April 15th, NZD/USD reacted very negatively to lower prices and lower volume. Over a 72 hour period, the currency pair dropped from a high of 0.8690 to a low of 0.8560. A very similar reaction was seen after the April 1 auction, with NZD/USD dropping from 0.8670 to a low of 0.8515 on the back of lower prices. If tonight’s auction yields similarly disappointing results, it could reverse the rise in the New Zealand dollar and drive the currency pair below 86 cents. On Wednesday RBNZ Governor Wheeler will be speaking about “The Significance of Dairy to the NZ Economy” and there is a very good chance that he will use this forum to signal a slowdown in tightening. If we are right, there could be a nasty correction in NZD/USD. Of course if the results of the milk auction is strong, a relief rally in the currency could take it to new year to date highs.

Technicals

The NZD/USD chart highlights the currency pair’s move after recent dairy auctions. On a technical basis, higher lows and higher highs signal strength for the currency but 87 and 8750 are significant resistance levels for NZD/USD. If both levels are broken it should be clear sailing up to 8845 but if NZD/USD fails below 87 cents, a drop to 86 becomes likely.