Weekly Forex Trading Calendar for August 26, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of August 26, 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 calendar082619

Excel version of calendar082619

Weekly Forex Trading Calendar for August 19, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of August 19, 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.a

PDF version of calendar081919

Excel version of calendar081919

Weekly Forex Trading Calendar for August 12, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of August 12, 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.a

PDF version of calendar081219

Excel version of calendar081219

In Trading the Power of Old and New

Boris Schlossberg

This week at the Chicago Traders Expo I was accosted by a group of young forex traders who peppered me with questions for a good have an hour and it was the best time I had all year.

The energy and curiosity of youth is intoxicating and it revved up my own enthusiasm for trading and sent me back to New York a better, more focused trader. One of the great side benefits of prepping for Chicago was going through my archive of strategies.

I am notorious for writing strategies and then abandoning them for the next great thing. But this time I actually applied a critical eye to my past ideas and was able to improve them by adding some current knowledge gained from the school of hard knocks. The net result was that I revived an old BK Flow strategy by applying filters from our current research and created a dynamite new day trading setup that we’ve been using all week long in the chat room. I am actually so excited about it that I think it will the core strategy in my day trading channel.

Looking at old ideas with fresh eyes can be incredibly valuable. One of my older concepts was to Trade Tiny. The idea was to trade the smallest possible size of 0.01 units on all your trades even if you had a five or six-figure account and could afford much larger positions. My argument at the time -- and I still think it’s absolutely true -- is that Trading Tiny eliminates almost all bad trading behavior. It allows you to trade much larger time frames with massive 200-300 pip stops because a loss on any given trade is only $20-$30.

In the realm of academia and logic size should not matter. It should simply be relative to your account. But in real life where psychology controls all size is everything. Regardless of your account size, it’s still easier to lose $40 on $1000 then $3000 on $100,000 even though proportionally the latter is a smaller loss.

But of course, we don’t think in proportions or probabilities. We think in absolutes. So when we trade a strategy that is 80% accurate and hit 3 or 4 losers in a row we are ready to ditch it the way Kendall Jenner dumps boyfriends. That’s why pain in trading need to be kept at an absolute minimum and Trading Tiny is the best solution.

But having developed scores of strategies since the time I first proposed that idea, I realized that now I can have the best of both worlds. I can keep my individual trade risk very small ensuring that I won’t pull stops or revenge trade or average down needlessly, but I can also generate a meaningful return even on a larger account by trading a variety of configurations for each strategy I have, diversifying by currency pair, timeframe and risk parameters.

By dividing up my capital by ten or even twenty slices I can create a very powerful portfolio of trades that will aggregate to a meaningful return while taking tiny individual trade risk.

This is a very cool idea and I would have never thought about it that way if I hadn’t looked at my past work and applied the lessons from my current research. In trading as in life getting young and old together can work marvels.

In Trading – It’s Never About YOU.

Boris Schlossberg

Here is the one question you need to ask before you push the trade button -- Is there anything going on that will make other people trade? If the answer is no, then the result for you will almost always be negative.

Like little children whose sense of narcissism is absolute we as traders always think that markets are about us. What can I do in the market today? How many pips can I bank?

The answer very often is nothing and none.

That’s because the markets are not about you, but about others. And if there is little reason for other people to trade price action will be nonexistent and so will most profit opportunities.

We think that the market is like a 24 hour -- 5-day week machine. But it’s not. It’s a social construct. It’s much more like a bar or a nightclub rather than the factory floor robot and if it’s 10 o’clock on a Monday morning you can be pretty sure that the bar or nightclub will be barren.

We are of course in the middle of our “Monday morning” moment in FX. Every summer, in July and August, most the people that matter to the market are off to St. Tropez or the Hamptons or Jackson Hole. The summer doldrums can be a maddening time for the retail trader, but they can also be the best time to learn what not to do -- namely force trades into the black holes of low volatility. This is a time when market makers love nothing more than to create false breakouts and breakdowns, sucker retail in and then flip the market on them.

With no major institutional order flow around, market makers can pretty much do as they please and that creates sinkhole sized traps for retail who are fooled into chasing price.

This week, I started my live day trading feed and one of the best decisions I made was to choose only one or two setups each day. Keeping it rare and keeping it tight by laying off risk as quickly as possible allowed me to surf the dangerous waters of the market without getting run over by market maker action.

The last trade of the week was particularly telling. All the funda data at the end of the week was pointing to a strong USDJPY tilt. CPI, PPI and even Fed talk by the end of the week was sounding more hawkish than dovish yet USDJPY could not push past 108.50. After the hotter PPI print, the pair just lay there unable to muster even a ten pip rally. One of my cardinal rules is that when the funda is positive but the price action is negative always go with the price because you are not seeing something critical in the market. What was it? I still don’t know. It could have just been market maker games at the end of the week. It could have been some large counterparty laying on massive risk-off positions because EURCHF was down by more than 2 standard deviations as well. Whatever it was, drove prices lower and I, fortunately, followed the flow to the downside -- because in trading it’s never about you -- it’s about what others are doing.

Weekly Forex Trading Calendar for July 8, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of July 8, 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 CALENDAR070819

Excel Version of CALENDAR070819

Trading Both Sides of the Market

Boris Schlossberg

Last weekend I was in Madrid for David Aranzabal’s annual Forex Day conference and as always it’s my favorite trip of the year. I love the food. I love the people. I love the city. I love the casual elegance of European way of life. But mostly I love hanging around traders talking markets.

Two of my colleagues Asharf Laidi and Rob Booker were presenting as well. In the heyday of retail FX growth before the GFC we were on the road always and used to see each all the time. Now we are all older, settled with kids and don’t around as much anymore. So it was a pure pleasure to catch up.

Each one of us trades in a radically different style. Each one of us has seen almost every imaginable market possible. And I think it is fair to say that as we grew older, each one of us has become much more humble in our approach to trading. That humility was evident when we sat down for coffee to discuss our specific techniques and discovered that we all do the same thing -- trade both sides of the market.

Ashraf is a classic techno-fundamentalist macro trader who can hold positions for months at a time. Such tactics require not only patience but the ability to withstand being wrong for hundreds of pips until your thesis plays out in the market. Ashraf noted that unlike in his younger days when he would stubbornly hold his view through long periods of drawdown, now he fully accepts being wrong in the near term and actually scalps ⅓ to ½ of his position in the opposite direction. This way he constantly reduces his cost basis on the initial idea making it even profitable when the market finally turns his way.

Robbie has a completely different approach essentially trading mean reversion with tiny, tiny size and a portfolio approach that often puts him on the opposite side of the market with similar pairs. He does not use stops and lets the offsetting trades net out to a positive return. He also does something very clever. He always makes sure that he is on the positive side of the carry. He told us a story of a short EURTRY trade that took 2 YEARS to resolve. During that time he lost 2,000 pips on the position as the lira disintegrated, but at the same time collected 3,000 pips in swap making the net position profitable in the end.

Unlike Asharf and Rob, I am much more of a classic algo-driven trader with exact entry and exit rules. And since I have the attention span of an ADD-addled 5-year-old, I generally never hold my trades more than 24-48 hours so my algos operate on a much shorter time frame. Yet, I too often find myself on both sides of the market. At least once or twice a week, one of my algos will open a long in some pair and when the price action goes against me will open a short in the same pair in a different account. This freaks BK members out as they can’t understand why I do that -- but the fact of the matter is that algos have picked up the signal that market conditions may have changed and while my “wrong” trade will most likely be stopped out -- my offset trade will take some of the string out of the loss by banking pips the other way. This by the way not only works on a granular level but on the portfolio level as well as sometimes Kathy’s strategies will take the opposite side of mine and will mitigate losses as well. It is, I think, the primary reason why the retooled BK service has been so successful lately making 1300 pips in past four weeks as contravening positions keep drawdown to a minimum and overall return positive.

They say that a true sign of intelligence is to be able to hold two contradictory concepts at the same time. There is no doubt that that principle holds true in trading as well where mental flexibility and psychological humility are the two key factors in long term success.