Economic Data Calls for July 3, 2019

Weekly Calendar Calls

Here’s what we are looking for in tomorrow’s economic reports (July 3, 2019) — Good Luck Trading!

1. AU PMI Services + Trade Balance (18:30 ET) Bearish AUD — Potential downside risk given weaker manufacturing activity and dovish RBA

2. EZ PMI Services Revisions (03:55 ET) No trade — Revisions are difficult to predict but changes will be market moving

3. UK PMI Services (04:30 ET) Bearish GBP — Potential downside surprise given weaker manufacturing activity and consumer confidence

4. US ADP and Trade Balance (08:15 ET) No Trade — Manufacturing activity is slower so trade balance should be weaker but ADP is a tougher call

5. CAD Trade Balance (08:30 ET) Bullish CAD — Possibly of strength given improved internals of IVEY PMI

6. US ISM Non-Manufacturing (10:00 ET) Bullish USD — Improvements in manufacturing activity and likely uptick in job growth should lead to stronger service sector activity

Weekly Forex Trading Calendar for June 3, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of May 27, 2019. You can download the pdf and excel file by clicking on the Read More Link. These are soft biases on economic data and not trades that we directly trade or track like BK Swing and News.

PDF version of calendar060319

Excel version of calendar060319

Economic Data Calls for June 3, 2019

Weekly Calendar Calls

Here’s what we are looking for in tomorrow’s economic reports (June 3, 2019) — Good Luck Trading!

1. AIG PMI Manufacturing (18:30 ET) Bearish AUD -- Likely to be weaker given dovishness of RBA and China slowdown

2. EZ PMI Revisions (03:55 ET) No Trade -- Revisions are difficult to predict but changes are market moving

3. UK PMI Manufacturing (04:30 ET) Bearish GBP -- Potential downside surprise given drop in CBI Index

4. US ISM Manufacturing (10:00 ET) Bullish USD -- Potential upside surprise given stronger manufacturing activity in NY, Philadelphia and Richmond regions

Economic Data Calls for May 3, 2019

Weekly Calendar Calls

Here’s what we are looking for in tomorrow’s economic reports (May 3, 2019) — Good Luck Trading!

1. AU PMI Services (18:30 ET) Bullish AUD -- Potential upside surprise given stronger manufacturing activity

2. UK PMI Services (04:30 ET) Bearish GBP -- Potential downside surprise given lower manufacturing activity

3. EZ CPI Estimate (05:00 ET) Bearish EUR -- Potential downside surprise given lower PPIs

4. US Non-Farm Payrolls (08:30 ET) No Trade -- Likely to be dollar positive but NFPs are best traded reactively

*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