*Good morning/afternoon everyone!* The U.S. dollar is trading lower against most of the major currencies this morning as risk appetite improves after yesterday’s brutal selling. Stock futures are up, helping to bolster pairs like EUR/USD and USD/JPY. However as we begin the NY session, the decline in Treasury yields could also tip the scale and push USD/JPY lower. Yen crosses on the other hand will take their cue from stocks today. The currency most vulnerable to weakness is the Canadian dollar because oil prices are down more than 2% after President Trump tweeted that he hopes Saudi Arabia and OPEC will not cut oil production because he thinks oil prices should be much lower based on supply. Despite a softer Eurozone ZEW survey, EUR/USD is trading above 1.1250 on the hope that progress could be made on the Italian budget front. the expectations component of the ZEW surely also increased. The best performing currency this morning is sterling which is up on higher wages (despite a higher unemployment rate) and continued Brexit optimism. On the Brexit front, we are getting closer to a deal but with some counterproductive headlines, traders are still reluctant to overload sterling positions but when an announcement is made, we can almost be assured that there will be a strong followup rally. AUD and NZD are also up from yesterday but having risen strongly in Asian trade, they are mostly consolidating and even weakening slightly. We also have our eyes on the Swiss Franc which appears to be topping below 1.0130. *The MAIN THEMES I see today are* +EUR +CHF -CAD -JPY *Trading Biases* +EUR, +CHF, +GBP, -CAD, -JPY mildly +AUD, +NZD, -USD *Today’s Initial Trades* Here’s the summary – 1. Buy EURCAD at 1.4885, Stop at 1.4857, Target 1.4912 2. Buy EURUSD at 1.1247, Stop at 1.1219, Target 1.1275 3. Buy AUDCAD at .9531, Stop at .9503, target .9559 4. Sell AUDCHF at .7270, Stop at .7298, Target .7242

Swing

*Good morning/afternoon everyone!*

The U.S. dollar is trading lower against most of the major currencies this morning as risk appetite improves after yesterday’s brutal selling. Stock futures are up, helping to bolster pairs like EUR/USD and USD/JPY. However as we begin the NY session, the decline in Treasury yields could also tip the scale and push USD/JPY lower. Yen crosses on the other hand will take their cue from stocks today. The currency most vulnerable to weakness is the Canadian dollar because oil prices are down more than 2% after President Trump tweeted that he hopes Saudi Arabia and OPEC will not cut oil production because he thinks oil prices should be much lower based on supply. Despite a softer Eurozone ZEW survey, EUR/USD is trading above 1.1250 on the hope that progress could be made on the Italian budget front. the expectations component of the ZEW surely also increased. The best performing currency this morning is sterling which is up on higher wages (despite a higher unemployment rate) and continued Brexit optimism. On the Brexit front, we are getting closer to a deal but with some counterproductive headlines, traders are still reluctant to overload sterling positions but when an announcement is made, we can almost be assured that there will be a strong followup rally. AUD and NZD are also up from yesterday but having risen strongly in Asian trade, they are mostly consolidating and even weakening slightly. We also have our eyes on the Swiss Franc which appears to be topping below 1.0130.

*The MAIN THEMES I see today are*

+EUR
+CHF
-CAD
-JPY

*Trading Biases*

+EUR, +CHF, +GBP,
-CAD, -JPY
mildly +AUD, +NZD, -USD

*Today’s Initial Trades*

Here’s the summary --

1. Buy EURCAD at 1.4885, Stop at 1.4857, Target 1.4912
2. Buy EURUSD at 1.1247, Stop at 1.1219, Target 1.1275
3. Buy AUDCAD at .9531, Stop at .9503, target .9559
4. Sell AUDCHF at .7270, Stop at .7298, Target .7242

3 MT4 Mistakes We DON’T Have to Make

Boris Schlossberg

Speculating in the markets is hard. The psychological and intellectual challenges of producing good trades are immense. Unlike, blackjack, roulette, checkers or chess trading is an open-ended game, which, for now, is the only thing that gives us an edge over the machines.

As inimitable Matt Levine of Bloomberg notes, “The computers won: DeepMind built a program called AlphaZero that learned chess on its own by playing against itself without human input and was the best player in the world within 24 hours. For good measure, it also learned shogi and Go the same way. “The Age of the Centaur is *Over* Skynet Goes Live,” is Tyler Cowen’s headline: A computer is now better off learning these games on its own rather than working with humans.

You will continue to read articles about how Steven A. Cohen or Ray Dalio or other big famous investors are trying to program computers to think like them, but: Why? You wouldn’t program a chess computer to think like Magnus Carlsen; even if you succeeded perfectly, your Magnusbot would get demolished by AlphaZero. In domains like chess and Go, the computers can figure things out on their own, and the humans just get in the way.

Investing is, of course, different: It is not deterministic, market regimes evolve over time, humans need to provide the data, etc. AlphaZero is not going to go off and master the investing game in the next 24 hours, despite having “alpha” right in its name. Still, it feels like special pleading to say that just because markets change over time, only human intelligence can really master them. It’s not like humans have any obvious innate talent for spotting market inflection points or whatever. They have just played the game a lot and learned from their experience some rough ways of spotting patterns. That’s what the computers would do too, except maybe better.”

That may very well be the case, but profitable edges still exist, especially for relatively slow frequency, limited scale setups that retail traders tend to exploit. While the big players are engaged in an increasingly futile arms race, we as little guys like us can still collect crumbs off the table that can more than feed our needs.

Still, although retail traders now have access to extremely sophisticated technology for essentially no cost they use that technology badly and often the technical mistakes that retail traders make create bigger problems than poor analysis. I can’t count the number of times I hit the wrong button, resulting in a losing trade I never meant to make which in turn destroyed my focus and ushered in a vicious cycle of more losing trades as I tried to “make it back.”

So without much ado, here is my list of 3 stupid mistakes we don’t have to make in MT4.

1. Enable Auto-trading. 99% of all errors stem from just forgetting to turn the system ON! Make sure the button is green before running any EA on MT4

2. Make sure the buy/sell panel is set to the smallest size of 0.01. By Default, MT4 sets the size to 1.00 which is 100,000 units. There is no worse feeling for point-and-click trader than to click on bid or offer and realize that he has just bought/sold 100,000 units when he meant to only do 1000.00

3. DO NOT Close out your MT4 platform with any EAs still attached to the chart. Make sure that all the charts are wiped clean and set to your default view. If you don’t do this, the moment you re-open the program it will begin spitting out whatever buy/sell orders your EA has programmed and you will spend the next few minutes scrambling to close out unnecessary losses.

There are probably a million other rules that we should keep, but these are the three of the most egregious mistakes that yours truly has done, so learn from my mistakes and avoid the totally unnecessary losses.

3 Tips for Day Traders

Boris Schlossberg

1. Trade in 100 trade batches.
You need at least 100 trades to determine if a strategy works or not, but unfortunately most traders won’t even make past 10. We get bored. We get scared. We absolutely hate bleeding money NOW even it means making money LATER. Mostly we just love to tinker. No one is more guilty of that than yours truly who would be much better off if I just let my systems trade.

One piece of advice that may help. See what is the minimum amount of parameters that would make you leave the trade the f- alone and try to reduce your system to those factors. Then just trade win, lose or draw.

Remember if you don’t have 100 of the same trade -- you got nothing.

2. 4X 4 Forex
What’s the maximum lever factor you should use for forex? You are looking at it. Four times. Four times MAX. So if you are trading $10,000 of capital your maximum trade should be 40,000 units. This assumes that your maximum stop is 25 pips. If your stop is bigger than that then you are not day trading -- you are day praying.

Why 4X? At maximum size and maximum size you lose 1% per trade which is not going to bankrupt you even if you lose 10 times in a row.

Try this for the next 100 trades you will do with your system and I am pretty confident you will still be in the game when the experiment is over.

3. Don’t lift the stop -- Ever. Chip away at your losses.
Oh it’s soooo easy. The FX market is always whippy. Prices almost always reverse and that loss almost always turns to profit if you -- Just. Let. It. Float.

Except when it doesn’t. And you keep adding and adding until the account is gone and you don’t even know how you got to that point from one single, stupid trade. When losing it’s ALWAYS better to stop out. If you like the trade you can always get back in and you won’t be carrying dead inventory if you are wrong again.

Painful as it is to take a loss, it always better to chip away at it even one pip at a time. It took me 6 trades today to recover from a loss and it was worth every pip, both mentally and financially. Resolve to never lift a stop and you will always live to trade another day.

CAD/JPY Breaks 3 Key Support Levels

CAD/JPY Breaks 3 Key Support Levels

Chart Of The Day

CAD/JPY Breaks 3 Key Support Levels

We are currently short CAD/JPY on the premise that the Greek No vote will drive more volatility and risk aversion in the financial markets. Oil prices were hit hard today, falling as much as 6% and when combined with the slower acceleration in Canadian manufacturing activity, the vulnerabilities of Canada’s economy become abundantly clear. Later this week, Canada’s employment report is scheduled for release and given the drop in the employment component of IVEY PMI, we are looking for a downside surprise. Back to back to weakness in Canadian data coupled with the sell-off in oil spells big trouble for Canada’s economy and in turn the Canadian dollar. At the same time, the one clear and unambiguous impact of the Greek crisis is reduced expectations for Fed tightening. Between the decline in oil prices and global market uncertainty, U.S. policymakers may opt to delay liftoff to December. We are still months away from the September FOMC but for the time being, the potential for a delayed rate hike could keep USD/JPY and in turn under pressure and minimize the impact of positive U.S. economic reports.

Technically today’s break in CAD/JPY has taken the currency pair below 3 significant support levels. The first was the 100-day SMA, the second was the 38.2% Fibonacci retracement of January low to June high and the third was probably the most significant -- the 50% Fibonacci retracement of 2007 to 2009 decline. While CAD/JPY could bounce off support at 96.50, the charts signal an eventual move down to 95.35 as long as the pair remains below 97.60, the level at which the 38.2% Fib and 100-day SMA converge.

BK 3 Big Trades – EUR/JPY +87, AUD/USD +47, GBP/USD Stopped

Swing

**Update on 4/21 AUD/USD closed for +47

**Update on 4/20 AUD/USD Stop Moved to BE, banked 1/2 at +47

**Update on 4/17 GBP/USD Stopped

**Update on 4/16 -- Close EUR/JPY for at market -- currently 126.88 +87 on the trade

***Update on 4/15

1. GBP/USD First and Second Entry TRIGGERED for an average entry price of 1.4807

Stop at 1.5015

2. AUD/USD First Entry TRIGGERED

Order to Sell 1 Lot AUD/USD at 0.7655

Place Order to Sell 1 More Lot at 0.7815

Stop at 0.7950

3. EUR/JPY First Entry TRIGGERED

Place Order to Sell 1 Lot EUR/JPY at 127.75

Place Order to Sell 1 More Lot at 129.40

Stop at 130.50


***Update on 4/14 -- GBP/USD Trade TRIGGERED

3 New Big Trades

*Remember risk on big trades is large so positions should be small

1. Selling Euros through EUR/JPY

Place Order to Sell 1 Lot EUR/JPY at 127.75

Place Order to Sell 1 More Lot at 129.40

Stop at 130.50


2. Positioning for RBA Rate Cut through AUD/USD

Place Order to Sell 1 Lot AUD/USD at 0.7655

Place Order to Sell 1 More Lot at 0.7815

Stop at 0.7950

3. UK Election Mayhem Trade

Place Order to Sell 1 Lot GBP/USD 1.4740

Place Order to Sell 1 More Lot at 1.4875

Stop at 1.5015

We like the U.S. dollar and strongly believe that it will see further gains in the months ahead as market participants position for a summer rate hike. In the past few weeks, we have scaled in and out of the dollar, capturing parts of the dollar’s bull run. At this stage, we are still looking to join the dollar rally but given how quickly and significantly the dollar has rallied over the past few weeks, the risk to reward has become extremely undesirable. The dollar is due for a correction and while we are not sure if this will happen this week or next, we want to our orders out there when they do.

There are also a few additional core views that we want to position for:

1. Positioning for Ongoing Euro Weakness through EUR/JPY

Given how far EUR/USD has fallen, we believe that the best way to express our view for ongoing euro weakness is through EUR/JPY. We are long USD/JPY and we still like the trade but the Bank of Japan’s plans to keep monetary policy unchanged this year should slow the ascent of USD/JPY whereas the euro portion of the trade could experience greater momentum. Technically significant levels are also closer and more obvious, creating a more ideal risk to reward scenario:

Selling Euros through EUR/JPY

Place Order to Sell 1 Lot EUR/JPY at 127.75

Place Order to Sell 1 More Lot at 129.40

Stop at 130.50

BT_EURJPY_041515

2. Positioning for RBA Rate Cut

Between the horrific Chinese trade numbers and the sharp decline in iron ore prices, the Reserve Bank of Australia will need to cut interest rates in May. However selling AUD/USD right above the 75 cent support level is a bad idea especially since the People’s Bank of China could step in at anytime with a rate cut. So instead, we are looking to sell AUD/USD on a bounce to 0.7655 and add another lot if it bounces to 0.7815:

Positioning for RBA Rate Cut through AUD/USD

Place Order to Sell 1 Lot AUD/USD at 0.7655

Place Order to Sell 1 More Lot at 0.7815

Stop at 0.7950

BT_AUDUSD_41515

3. UK May Election Mayhem Trade

The U.K. general election is a month away but the impact on the British pound will be significant. This general election is filled with uncertainty and sterling has been under pressure because of the fear that the Conservative Party will fail to win enough seats. We expect the British pound to fall further in the weeks ahead with GBP/USD falling to a fresh 4 year low after the election. What makes this year’s election different from 2010 is the potential power grab by smaller parties that could lead to more difficulty in forming a coalition. If this leads to a hung parliament it will translate into more losses for the currency. Sterling 3 month option volatiles are at a 3-year high but it could rise even further like it did in 2010. Five years ago volatility jumped to 17% in the days after the election and not only did GBP/USD fall 400 pips on election day but it dropped another 500 pips in the 2 weeks that followed. To take advantage of this opportunity, we are laying out the following orders:

GBP/USD Orders

Place Order to Sell 1 Lot GBP/USD 1.4740

Place Order to Sell 1 More Lot at 1.4875

Stop at 1.5015

BT_GBPUSD_41515

BK Big Trades – Stopped out of NZD/CHF

Swing

BK Big Trades -- Stopped out of NZD/CHF

NZD/CHF Big Trade -- The Ultimate Carry Trade

The Trade:

NZD/CHF


Buy NZD/CHF at market (now 0.6715)

Stop for whole position at 0.6500

Targeting move to and above 70 cents

Risk on our BIG TRADES is large, so make sure your position is small.

We will manage the take profit dynamically and send out alerts on when to take profit and/or move your stop.

—--

We Like the New Zealand Dollar

A few weeks ago, we bought ourselves some NZD/CAD on the premise that dairy prices would bottom before oil. Today, oil prices are down 4% while dairy prices settled at higher levels for the third auction in a row. We traded the currency pair, taken money off the table and are now shifting our focus to the ultimate carry trade -- NZD/CHF.

Lets start with the New Zealand dollar. NZD fell sharply today on the back of a more modest increase in dairy prices. While it would have been nice to see dairy prices rise by a larger amount, the fact that prices increased at the last 3 auctions is GREAT news for New Zealand. Earlier this month, dairy prices rose 3.6% the biggest increase in 12 months -- matching that pace would have been unrealistic. Considering that dairy is New Zealand’s biggest export earner, accounting for approximately 30% by value, this increase will bolster the confidence of the RBNZ who meets next week.

The last time we heard from the central bank, they were surprisingly comfortable with the current level of monetary policy and while they felt that the New Zealand dollar value was unjustified and unsustainable, they also believed that further policy adjustment will be necessary after a period of assessment. In other words, they are still looking to raise interest rates -- eventually. Their hawkish monetary policy bias and 3.5% interest rate will prevent NZD from falling much further and instead lead to a recovery in the very near future especially if the ECB rolls out Quantitative Easing, forcing investors to look elsewhere for yield.

NZD/CHF -- The Ultimate Carry Trade

Buying the New Zealand dollar against the Swiss Franc is the ultimate carry trade. In addition to abandoning their 1.20 peg, the Swiss National Bank also deepened the negative rate environment by cutting rates 50 basis points to negative 0.75%. Last week, the SNB made the conscious decision to shift from exchange rate to interest rate driven monetary policy. If the recent appreciation in the Franc poses a major threat to the Swiss economy, they could lower interest rates further -- increasing the attractiveness of selling Francs. Even if they don’t and other central banks lower rates, NZD will become more attractive as a result. We also believe that most if not all of the long EUR/CHF trades have been flushed out with all stops already triggered.

Chart -- NZD/CHF Headed for 70 cents.

We think NZD/CAD is eventually headed for 0.70 or higher and our stop of 0.6500 is well below pre-SNB levels. Here’s the trade:

NZD/CHF

Buy NZD/CHF at market (now 0.6715)

Stop for whole position at 0.6500

Risk on our BIG TRADES is large, so make sure your position is small.

We will manage the take profit dynamically and send out alerts on when to take profit and/or move your stop.

BKSWING – 3 New Orders for 12.01.2014

Swing

It is a big week in the Forex market with 4 monetary policy announcements from the RBA, BoC, ECB and BoE along with employment reports from the US and Canada. In addition to these developments, we also have a number of U.S. policymakers speaking so there’s a strong possibility of big moves. We like to trade these opportunities through the Yen crosses -- AUD/JPY, NZD/JPY and GBP/JPY specifically:

Remember we are still long EUR/CHF


1. Buy GBP/JPY at 186.58

Stop at 185.98

Close 1/2 at 186.88

Close rest at 189.75

2. Buy NZD/JPY at 94.15

Stop at 93.55

Close 1/2 at 94.45

Close rest at 95.35

3. Sell AUD/JPY at 99.72

Stop at 100.32

Close 1/2 at 99.42

Close rest at 98.50

We still have the following pending orders on:

1.Sell EUR/USD at 1.2334

Stop at 1.2394

Close 1/2 at 1.2304

Close rest at 1.2175

2.Sell GBP/USD at 1.5565

Stop at 1.5625

Close 1/2 at 1.5535

Close rest at 1.5425

***Remember, if 2 orders trigger without one hitting T1 first, all other orders are canceled

BKSWING – 3 Trades for 08.27.14, Sell USD/CAD at Market

Swing

There has been quite a bit of action in the FX market this week and over the next 48 hours, we have a significant amount of Canadian and Eurozone data that could accelerate some of the moves in currencies and to take advantage of this opportunity, we are laying out 3 trades. The first is a TrendCatcher USD/CAD short trade. We like this trade because it has the momentum of the Burger King / Tim Horton deal and the catalyst of tomorrow’s Canadian current account balance and GDP report. This trade is taken at market. The second is a pending order to sell EUR/NZD on the belief that over the next 48 hours, EZ data will surprise to the downside. The third is also a pending order to Buy EUR/CHF on the belief that the SNB won’t allow the currency pair to drop below 1.20.

Here are the trades:

1. Sell USD/CAD at Market (now 1.0861)


Stop at 1.0926

Close 1/2 at 1.0811, move stop to breakeven

Close rest at 1.0666

2. Place order to Sell EUR/NZD at 1.5672
Stop at 1.5732
Close 1/2 at 1.5642, move stop to breakeven
Close rest at 1.5476

3. Place order to Buy EUR/CHF 1.2055

Stop at 1.1995

Close 1/2 at 1.2085, move stop to breakeven

Close rest at 1.2440

***Remember, if 2 orders trigger without one hitting T1 first, all other orders are canceled