“What the game looks like when volatility decides to leave!”
Mostly a completely dead Friday, except anything Cable related, as the
“shitshow circus” known as GBPUSD, currently in its 29th consecutive month
of “feed the mistress funds” via “Brexit” rumors, goes into full retard mode
right before the weeknd … “somewhere, you just know a buxom young lass will
walk into a Mercedes dealership and pay cash for a pretty red one”.
Which is why dear amigos, 1) I absolutely love NADEX derivative products,
especially “Call Spreads”, and 2) no matter where VIX is in any market or all
markets, the “pop & drop” signature characteristics of the “Dragon Trade”,
a/k/a GBPJPY, pretty much assures something happening somewhere in the
trade during the trading day, that allows a low risk trade to make money
… today no exception, as Cable screams higher 100 PIPS in 2 minutes on more
“Brexit” hopium & bullshit.
About three or four years ago, I published a piece about what market pairs
will ALWAYS allow you to make money, simply cuz the volatility in them made
it “Hoover Dam” near impossible for the market to sit … at that time, the
markets were GBPNZD & GBPAUD … I excluded GBPJPY, for the simple
reason Yen has a tendency to sit for long periods and do Mr. Jack Squat
… “well now, we got “Brexit”, and oh how the world changes quickly!” … and
since all of this was well before NADEX Call Spreads, the only thing you could
do was try and find an offshore brokerage house that 1) wasn’t a scam, and
2) had a relatively low spread that made trading them a possibility … that led
me to ASSETS FX [Finland], where since then they’ve decided any and all U.S.
accounts are verboten.
NADEX doesn’t support either GBPNZD or GBPAUD, but that doesn’t
matter cuz we now have the ability, which wasn’t there before, to drastically
cut risk … even if potential profits from GBPJPY are somewhat lower, it
doesn’t matter cuz are potential gains are made higher by cutting risk
exposure.
My point here is simple: “we now have the best of both worlds, which is
consistently high [relative to other markets] daily volatility, combined with
cutting risk exposure to acceptable levels in GBPJPY … overall, through thick
and thin, it will outperform every other market on the board hands down … cuz
I got news for the stock indices traders and oil traders, and that news is that
those markets go “boom & bust” quite often … sure, if VIX stayed high all the
time, they are great … unfortunately, they don’t, and both suffer long periods
where Mr. Jack Squat is in full control … check out again the 2018 20 Day
Range MA’s in both, and tell me what you do for the months when both are
dead? … this doesn’t happen in GBPJPY, and with the “Brexit” bullshit far
from over, and looking everyday like the idiotic Pols will stretch this puppy into
the future as far as the eye can see, the uncertainty & chaos in this pair will be
with us for a good long while at a minimum … that spells even higher relative
volatility versus historical norms well into the future … it’s like trading Soybeans
in late Spring, and everyday there’s drought conditions & rumors of no rain, and
the crop is gonna get destroyed”! As a trader, you couldn’t ask [nor get] for
anything better … well guess what? … we got it.
Which is why GBPJPY is easily my favorite market on NADEX, and the
market I check first from the open every night … yes, other markets come and
go and present us with favorable conditions & trades, as recent December
trades showed in RUT2000 & WTI Crude Oil … and if they’re there, we’ll
take ‘em! … they come just as quickly as they go … but over time, nothing
will beat GBPJPY on a consistent basis … nothing.
It’s unfortunate today’s price explosion in Cable came when it did … pricing
was OK, but “spacing” wasn’t … “spacing”? … “yes, the difference between
where the overlapping call spread is trading, and where it has to go to make up
the premium that is built into the pricing … if it has to travel too far to get to that
price, in what I consider too short of a time frame that has a high probability of
success, then it isn’t a good trade, no matter how low the pricing is … it isn’t
gonna work”. And the call spread pairs put out around 8 AM EST, with new
bands for floors & ceilings weren’t much better.
Another reason I like the three [3] volatile FX pairs [choose from GBPJPY,
GBPUSD, and/or EURJPY for your own trading account if you so desire], is
that they start the week at 6 PM EST on Sunday night, giving us a full 5 day
week … Crude oil, stock indices, and others [excluding other FX] start the
week at 3 AM EST on Monday morning, losing all of the Monday Asian
session and a tiny bit of the pre-European open … some days it doesn’t
matter, but for too many days it does.
This week, we’ve seen the air come out of the volatility balloons in other
markets, even though price premiums are still high … that makes these
markets even tougher to trade, cuz you aren’t gonna get the moves necessary
to make up for the premiums you pay for volatility and still get a profit
… meanwhile, you still got the risk, and watching premiums evaporate when
the market doesn’t move is torture … the vast majority of the time, this isn’t
going to happen in those 3 FX pairs.
Without that 2 minute “Brexit” rumor that turned trading into a complete
stop hunt and “shitshow circus” for 100 PIPS, we’d be lucky to have a 60 PIP
range today in GBPJPY. I don’t have a clue what the rest of New York
trading has in store for our markets, but pricing and spacing doesn’t look
very good at the moment … “I just don’t see anything with enough potential
reward for risk … so, I’m outta here early today … be back Sunday night".
No trades recommended today in the signals service for subscribers.
Sunday night sees the release of the tutorial on “NADEX Call Spreads”
… anybody has any questions / comments, just drop me a line via email … I
think all of my readers will learn something from my insights, and at the very
least pinpoint great trading strategies maybe they hadn’t given much thought
towards.
Have a great weekend everybody!
OUR NADEX SIGNALS SERVICE IS UP & RUNNING … DAILY
WTI CRUDE OIL SIGNALS & “VOLATILITY” STRATEGIES
IN 20 OTHER MARKETS, INCLUDING COMMODITIES, FX,
& STOCK INDICES! … “what on earth are you waiting for”?
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