Money Flow Trading Method along with Risk Management

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4. Feb 24, 2018 8:14pm

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,645 Posts | Online Now

Understand Market Psychology And Reality ...
http://www.gold-eagle.com/editorials...iff082208.html

Snippet:

This recent correction saw the most dramatic change in sentiment that I have ever witnessed. But the head fake that caused the market to commit was in fact not worthy of a high school benchwarmer. With absolutely no significant developments that could explain either a top in the dollar, or a bottom in commodities, investors placed their faith in price moments alone. Once the numbers started to show some retrograde motion, everyone simply assumed that a real change had taken place, and the momentum buying and selling began. The rapid movement reveals how clueless participants in these trades had become. Even those fund managers that seem to understand the fundamentals were fooled by the sharp price movements and the rhetoric they spawned.

Lacking any real change in fundamentals, such abrupt changes in sentiment following extreme price swings are as bullish a sign as I have ever seen. There is absolutely no basis for a significant dollar rally, or further weakness in gold, oil, or other commodities.


The U.S. is the focal point of the world’s financial turmoil. We convinced creditors around the globe into loaning us trillions of dollars. Now that it’s becoming increasingly apparent we cannot pay the money back, Wall Street has concocted a scenario where our shell shocked creditors respond by loaning us even more. More alarming is that many brain dead investors see this as a likely development.


End Of Copy And Paste ...

In my 5 years in this amazing business I have NEVER experienced anything like has happened in the change of perception that saw the market see a return to a stronger US Dollar.

The above article pretty well confirms my view of what happened. I honestly did not understand why it happened at the time but it is now clear.

The writer of the article said in the first line of the snippet that I included here that he NEVER saw such a DRAMATIC change in sentiment ever.

I personally have no doubts that my own analysis of the fundamentals is correct. This ensures that my future FX trading will be successful since fundamentally I will not be head faked out of my views.

As a fundamental trader this is essential to winning in FX. I hope everyone reading this will have enough of an open mind to understand this.

It is the same as going to a horse race and knowing who the loser will be. Would you bet on the losing horse. Of course not so why bet on the US Dollar ? In case anyone thinks that these remarks are against anything they believe in it is only about the cold hard uncaring facts.

You either trade FX to win money or you are in the wrong business.

Gold WILL go up. That is a 100% surety. Oil will continue to hold over $100.00 and for the time being that is almost a surety. Those Trillions of US Dollars in losses have to be absorbed by someone. That is a 100% surety.

So who takes the losses guarantees the results. If as seems to be the case now with the FED effectively backing the losses with the acceptance of Congress then the LOSER is the US Dollar.

Why ? Understand what causes monetary INFLATION and you will see that is the TRUTH. There never has been a FIAT currency since the beginning of FIAT currencies that still exists today other than the current ones. The only 100% proven store of Wealth since the start of commerce in our World has been GOLD and Silver. Why will it change now ? It surely will not.

We are ALL living in extraordinary times. 25 Years ago none of us would have known each other like this. The INTERNET will go down in History 100 years from now as the one FORCE that changed the World. The Automobile and the Airplane and The Radio and Television all have one thing in common. They move people and information around HOWEVER they all have a form of CONTROL attached to it. If you are very poor you will not drive around or fly around much. Radio informs you but also can control you with misinformation. As for Newspapers and Television we ended UP with not only 9/11 but the most INSANE war ever in my personal opinion. I understand now why it had to happen but that is much too deep and off topic for Forex Factory.

The difference with the INTERNET is that SO FAR No Government in the World has figured out how to CONTROL it so the free exchange of information between normal intelligent individuals educates those that want to be educated. It also allows those that want to stay ignorant to waste the whole day chatting on MSN or Facebook or wherever they choose.

KNOWLEDGE IS POWER only if the KNOWLEDGE learned is applied.

I trade FX for the CHALLENGE of being the BEST there is. That is my NATURE and the Money that I make or lose is just keeping score on how I am doing.

5 Years of incredible energy and time spend and FX traded and Dollars Won and Dollars lost have not been in VAIN. I have paid my DUES and I still pay them everyday that I trade.

There is NO EASY way to succeed in FX or in Life because they are just ONE and the SAME.

The ABOVE was NOT a COPY and PASTE... (SMILE)

Have A Great Saturday Evening if in North America and Good Morning in China and Japan. The Olympics are ending. September is arriving and the Closing Fireworks in China will be nothing compared to the Financial Fireworks probably starting in September right after Labor Day and the end of the Year when I turn 65 on December 31, 2008.

The MOST IMPORTANT Election that America has EVER had in my personal opinion is about to happen on the 2ND Tuesday in November 2008.

We are ALL part of History. Enjoy the Ride and Be A Winner !

G-D Bless All !

A Post From The Past However The Psychology of Forex Trading Always Stays The Same.

Benjaminis

 

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4. Feb 24, 2018 8:20pm

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,645 Posts | Online Now

The Most Profitable Traders
I thought I would post this here due to the value behind it, as I believe there are a lot of traders out there that could benefit from basic info such as this. I've posted it elsewhere in ForexFactory as well.

The below list comprises a number of different observations of myself and others through experience working with traders of all shapes and sizes, and is equally relevant to all. Some of the information is rehashed and/or might sound cliche, but here it is:

They are experienced – Probably the most horrifying and worst myth shot out to anyone considering trading for a living is that you will compound millions in an extremely short amount of time. The only true way to make every day profitable comes through experience, and countless hours learning is crucial to longevity of success.

They know the damage they are capable of – Notice I didn’t say potential or profits here. The best traders I know of understand their limits, and seem to focus more on what can go wrong than what can go right. They are not easily convinced of lucrative outcomes, and have a very high sense of self-awareness.

They trade to make money, not to be right – They understand the strengths and possible pitfalls of what it is they do for a living, and use that knowledge to curb their emotional output.

They have an edge and know how to use it – They understand that without it they wouldn’t last long

They have a gameplan, and follow it explicitly – Each trade is planned and opportunities are scouted for before any trading takes place. They steer away from the killer of all killers: overtrading.

They manage risk – Regardless of how much conviction they have on a trade, they will still do what they can to avoid the potential of any losses and understand rule #1 about trading: anything can happen.

They work obsessively – They follow each turn, each piece of info that comes out in regards to their trade, and follow any underlying information relevant to failure or success.

They only access the best information – Information rules in trading, and having some of the best translates to money. Using the wrong information leads to failure.

They think about the trade, not the money behind it - Focusing on money can destroy your means to objectively assess the trade itself.

They are constantly learning - Just when you think you know it all about trading, a new curveball gets thrown your way, not to mention there are continued means and methods to be learned about making money. Even the most highly successful trader I ever knew, a multi-billion dollar portfolio manager, has a team of fundamentalists and technicians come in to train and retrain himself and his traders.

They are active – Activity sparks creativity, a very crucial part of trading.

They have patience – They understand that the money will come, but everything needs to be in place, first.

NOTE: Not my information however excellent points so I share it here on this quiet Saturday night.

Regards,


Benjaminis

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4. Feb 4, 2018 11:32am

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,646 Posts | Online Now

I first want to talk about having an EDGE. Fundamentals by themselves is not an EDGE. However using Money Flow between Asset Classes from here on I will include in my basket of 100% of what a winning Forex Trader needs. I will not refer to it as a fundamental anymore since new people coming to this thread put my method as including Money Flow as a fundamental which it actually is however not in the same way as most people understand Fundamentals.

This week we will get to see Non Farm Payroll (N F P) and as any experienced Fundamental Forex Trader knows it usually is a fantasy number created by the BLS however next to a FED rate announcement it is the one number that can move markets hundreds of PIPS in seconds and minutes.

Whatever the number Trillions of Fiat Currencies and other Asset Classes will start to change values as we "SEE" the Money Flow. That is why I call it my EDGE and once you know it and understand it well then it becomes your EDGE as well.

Here are the 5 important things that any Forex Trader that belongs to the minority of constant profitable Forex Traders , which I have named , The 5% Club needs to have. Of course in my opinion, I would think that very few Professional Forex Traders use the EDGE. Of course when you know about it then anyone can use it.

Each of the following five important things which I have given a weighting of 20% to each makes up what a profitable Forex Trader needs to have in order of IMPORTANCE.

(1) The ability of the Forex Trader to control their FEAR and their GREED and their EGO. Perhaps the last one is the most important of the three since the MARKET is always right. Using Money Flow puts you with the Market instead of against it as your Forex Account keeps losing the value in it.

The reason that I teach Forex Traders whether experienced or new to Forex trading with a $50,000 US Dollars Demo Account is because that is how I learned my trade starting during 2003. By learning to trade with $50,000 US Dollars in Demo Funds, then I had no FEAR or GREED. However after 3 years of Forex Demo Trading I surely had EGO since month in and month out my Return On Investment (ROI) was constantly over 10% a month or 120% a year.

(2) Money Flow. I have now explained why.

(3) Risk Management. That is next to Money Flow the KEY element of my Forex Trading since when you blow your account whether you are trading with too little capital as the majority of Retail Traders are or because of a Black Swan event such as Brexit or Europe banking issue such as we have in Italy at the moment or the Swiss Central Bank as they did a few years ago say one thing and then next moment announce a major change in their policy and 500 PIP movements happen in seconds. The absolute MINIMUM Forex Account that I would and could trade with would be $10,000 US Dollars. I would be glad to answer questions as to why although most will understand. What if you do not have $10,000 US Dollars trade with ? Prove to yourself that you have the skills and the knowledge to trade with profits then you will have no problems finding funds to trade Forex with. After my 3 years of Forex Demo Trading, I went out and found 6 clients that first deposited initially $50,000 US Dollars and within 3 months along with the profits that I was generating in my first three months of Forex trading from March 2006 to June 2006, I was managing well over $100,000 US Dollars.

(4) Technical Indicators which includes all parts of it whether Support and Resistance or Supply and Demand or Pivot Points. I use when I do daily trades the 5 Minute Charts along with the 15 Minute Charts and 30 Minute Charts to go along with the 4 Hour Charts. When you toss a rock in the river the first ripple is the 5 Minute Chart and then on to the 30 Minute and the two others. I use other indicators aside from the standard ones which are SAR and Fractal and Awesome Oscillator. The most important one that I look at when I enter into a Forex Trade is Support and Resistance so if I am going long or short I enter either at the TOP or BOTTOM of the Chart that I am using. Of course my Risk Management protects me from Human Errors or EGO.

(5) Fundamentals. I am fairly sure most of those reading my words today or whenever they read it might be surprised how a Forex Trader such as myself who posts a tremendous amount of research can list fundamentals as number (5) in order of importance. It is the research that allows me to clearly understand the difference between PERCEPTION (Markets) and REALITY (Research) Then I know what will most likely happen in the future and I am better prepared to deal with it.

I hope that this post of my daily Morning Thoughts answers some of your questions both for the 12 Forex Traders using the $50,000 US Funds Demo account with FXCMUK or anyone else. There is no reason that an experienced trader reading this thread or anyone else to not open a $50,000 US Dollars FXCM UK account so they can use the knowledge that we share here to learn new things and try them without having any FEAR of LOSS !!!

As always , I look forward to feedback and thoughts and anything that you care to share with us on our Thread.

Benjaminis

Hi BenjaminIs,

I am in the process of setting up the 50K demo account with FXCM-UK. As soon as I have my log on details I will send them to you via PM.

At the moment I am not sure how to further proceed. I hope you can point me towards the right websites and blogs that I should read going forward. I have seen you were referencing Kathy Lien and Boris..so will sign up with their newsfeed. Anything else? Should I watch investing.com or bloomberg for good news and articles?
Would also appreciate if you could tell me - via PM or here in the thread - you are structuring the learning process.

Best wishes

Jester

Good Evening Jester

Each Forex trading day I start reviewing around 5:00 AM New York Time if the day will bring RISK ON or RISK OFF.

Tomorrow morning I will post around 5:00 AM to 6:00 AM to see where the Futures are at that moment and review what happened overnight in Asia. We have Europe opening in Frankfurt , Germany at 2:00 AM New York Time and by 3:00 AM the MONEY FLOW starts with the open of the DAX and the CAC and the FTSE.

I look ahead to see what news releases are scheduled for 8:30 AM , New York Time and 10:00 AM.

Once the North American Equity Markets open at 9:30 AM New York Time we have MAXIMUM Money Flow until 11:30 AM New York Time when Europe closes for the day only with regard to the DAX , CAC and FTSE.

There can be trading opportunity here as positions are closed for the day in some instances both in the Equity Markets however MORE IMPORTANT in the Forex Markets as the large Forex Trading houses also go home for the day.

I will post during the morning so that you can see my thinking in LIVE TIME as I look for Trade Opportunities based on our 6 Forex Trading Plans.


Benjaminis

Good Morning

https://s3-us-west-2.amazonaws.com/m...YEC05lwbatT_eA

Since I am a fundamental Forex trader using both fundamentals such as REAL NEWS not FAKE NEWS which in the past I have called REALITY VS PERCEPTION.

I am going to link the rest of the article and make a few comments.

https://www.themaven.net/mishtalk/ec...q0Gdfl7USPIAbA

SNIPPET:
https://www.ft.com/content/35d7be08-...8-569c3d7ab0a7

After so many years of anaemic growth and low wages, it might seem unreasonable to suggest that the next economic downswing could be lurking just around the corner. It is true that unemployment rates have dropped dramatically and wages have picked up a touch in a number of countries, and both are useful “end-of-cycle” indicators. On the other hand, interest rates are mostly low, President Donald Trump is offering fiscal stimulus in the US, the eurozone is more dynamic than it has been in many years and earlier fears regarding a Chinese economic meltdown now look absurd. Why, then, worry about the next downswing? Simply put, alarm bells should start ringing precisely when so many countries are performing so well simultaneously. Starting with the 1994 bond market crash, through to the 1997 Asian crisis, and from the 2000 Nasdaq collapse through to the 2008 global financial crisis, history shows that periods when many countries are simultaneously growing above their long-run trends are associated with financial and economic upheavals.

The only exception to this rule is the aftermath of recessions, most obviously in 2004 (following the dotcom bubble and 9/11) and in 2010 (after the global financial crisis). Synchronized growth creates an “adding up” problem. What might be possible for one country to achieve economically when others are relatively weak may become more difficult to sustain when others are stronger. This might seem counter-intuitive — after all, export prospects are better when others are doing well — but the evidence suggests that economists and policymakers too often fail to recognize the three main “costs” of global economic success.

The first, more widely recognized since the financial crisis, is excessive risk taking. Put simply, the good times don’t tend to last because we collectively start to do stupid things that bring them to an end. Until the equity market wobbles in early February, most investors appeared to be as complacent about potential risk as they had been ahead of the global financial crisis.

The second cost is simple: as the world economy strengthens, so does demand for commodities and capital. That brings unpleasant side effects, such as rising oil prices and higher bond yields. The third is an inevitable consequence of the first and second. Periods of synchronized growth tend to be associated with unexpectedly rapid monetary tightening. Since the 1994 bond market collapse, the US Federal Reserve has boosted interest rates faster than economists or investors expected in only seven years. Those seven episodes correspond almost perfectly with periods of synchronized global growth.

SNIPPET:

Economic pleasant surprises are in the past, as is the buildup of the balance sheet. The future is deleveraging.
Alarm bells are ringing. No one cares. By now, everyone knows stock only go up.
For those in tune with other ideas, Financial Times writer Stephen King suggests the Global Economy is Due for a Downswing.

Jim Bianco at Bianco Research comments on synchronized growth in his report Concerted Economic Growth is in Jeopardy of Ending.

Summary
Less than 50% of the world’s economies are now producing economic data surprises. Realized economic data following suit in the months to come would remove the tailwind of ‘concerted economic growth’ for risk assets and central banks. Emerging markets may be first on the list to experience higher volatility.

Comment
We have all been discussing ‘concerted global economic growth’ since early 2017 as a tailwind to risk assets and central bank policies. The chart below shows the percentage of the world’s economies producing economic data surprises (orange line) and above-average data changes (blue line) since 2004.

Over 90% of economies were indeed posting realized data changes at above-average growth rates in mid-2017. However, reported data has slowed its ascent over the past month led by the Eurozone and Canada. The percentage of economies with upside surprises has fallen to 44%, which has been a leading indicator for actual data changes like payrolls, industrial production, and durable goods orders. Above-average data changes have also rolled over to 67%. A break below 50% would mean ‘concerted economic growth’ should no longer be proclaimed.

SNIPPET:
Optimistic View

Compared to me, John Hussman, GMO, and a handful of others, Bianco presents an optimistic view. Then again, I am not watching the next 3-4 months. I am concerned about the next seven years.

What most caught my eye is Bianco's view on the MSCI World Index and US treasuries.

Typically, rot starts at the periphery, the spreads to the core. Anyone remember subprime? Eventually, it all became subprime.
It's going to happen again.

Arithmetic of Risk
Stocks are tremendously overvalued. In Sucker Traps and the Arithmetic of Risk I noted that some expect equities to decline as much as 67% from here.

SNIPPET:
I think we are somewhere in the box as shown.

PLEASE LOOK AT THIS GRAPHIC AGAIN !!!

https://s3-us-west-2.amazonaws.com/m...YEC05lwbatT_eA


Unlike Bianco, I won't put a timeframe on much of anything. But note his big winner: 10-year US treasuries.

This is at a time when most of the rest of the world is screaming inflation.

My view is that Inflation is in the Rear-View Mirror.

Debt-deflation is on the way and gold will be the beneficiary. If you disagree, please read the above article before moaning.

My definition of inflation may not be the same as yours. Mine is based on real-world economics, and we are in for a world of hurt.

Mike "Mish" Shedlock

For Jester and other serious Forex Traders:

A Must Read - I share it for all of you that come here to my thread.

http://icecapassetmanagement.com/wp-...-Outlook-1.pdf

Please read the following February Report and when you finish please post your comments and questions here so that I can explain more fully where I am going with this post.

The TREND is your Friend is a COMMON SAYING AND IT WORKS.

So we must determine the trend and it is NOT UP !!!


Benjaminis

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4. Dec 13, 2016 10:28am | Edited at 10:52am

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,649 Posts | Online Now

Good Morning again Traders

I am going to post a series of links to important fundamental information from my research sources so you will have a better understanding of the important issues that affect my Money Flow Method and for education purposes.

Here is the link that I will start with. http://schiffgold.com/commentaries/make-money-great/

Snippet:
The United States of America was founded on the principals of limited government and sound money. Today we have neither. The growth of the former has largely been a function of its ability to abolish the latter. A dollar was original defined as a specific weight of gold or silver, and the Constitution limited the power of the states to make anything other than gold or silver legal tender. As the Federal Government was given no power to make anything legal tender, and since the Federal Government only has those powers expressly granted to it by the Constitution, gold and silver are still the only Constitutional forms of money authorized in the United States.
http://1mo0o3e03f7c59k045fwasgbz.wpe...feat-Image.jpg
For years all commerce in the United States was transacted in either gold or silver, with smaller transaction completed using copper or nickel. Private banks issued notes backed by their gold and silver deposits, which also circulated as note currency, along with actual money. These money substitutes were often more convenient to use than money itself, especially for larger transactions.

Eventually the Federal Reserve was created with its notes replacing the various bank notes that had previously been in circulation. They were originally backed by, and redeemable in lawful money, dollars made of gold or silver. But that changed in 1971 when this connection was severed, leaving the notes backed solely by government debt and redeemable in nothing. Since then the purchasing power of Federal Reserve Notes has steadily declined.

Yet despite their obvious shortcomings, citizens continue to use Federal Reserve Notes rather than actual dollars made of gold or silver. Although the courts have declared that Federal Reserve Notes are legal tender (disregarding the Constitution in the process), and government requires that they be used to pay taxes, the main reasons that people have chosen to use the notes have been convenience and the ability to earn interest. Paying with paper, or accessing a bank deposit by check or debit card is much easier then lugging around a bunch of metal. And while gold bars stored in your basement earned no interest and could potentially be stolen, funds deposited in banks have been federally insured and traditionally paid significant interest.

But in recent years much of that has changed. All major U.S. banks are basically insolvent, and the government has insufficient reserves to bail any one of them out should it fail. In addition bank deposits pay zero interest, while inflation steadily erodes away purchasing power. In fact, while the Federal Reserves stated mission used to be the maintenance of price stability and the purchasing power of its notes, its current mission is to ensure that prices rise and that its notes lose value over time. Given how much value the notes have lost when the Feds goal was to preserve purchasing power, imagine how much faster value will erode now that depreciation is actually their stated objective!

http://schiffgold.com/videos/rickard...ing-recession/

Snippet:
Economist and author Jim Rickards and former presidential contender Ron Paul appeared on RT television recently to discuss their 2017 economic and political predictions. Rickards laid out his idea of Trump’s administration forming a “cabinet government,” that might work to decentralize executive power, which has become more concentrated over the last 15 years. Paul looked to another inevitable US recession fueled by runaway inflation and the bursting of economic bubbles artificially propped up by failed monetary policies.

Here are the time codes for each interview: Jim Rickards: 6:17-11:02; Ron Paul: 13:24-21:30.
Rickards said he sees Trump’s cabinet selection process will be driven by a business mentality rather than promises made or past relationships. It’s a style of governing Rickards compares to past US administrations of the 1950s and 1960s or within other countries today like the UK, Australian, and Canada.
“What I expect is that Trump will name a strong cabinet…I think Trump will wear his CEO hat since he’s not a traditional politician but a CEO. Good CEOs are delegators. They hire good teams. They put them in charge of different divisions. If they do well, they get promoted. If they don’t do well, they may get fired … So we might see something like cabinet government instead of highly centralized power. I think it’s very healthy.”

Paul explains how economic bubbles in the bond, housing, and other markets have been expanded by the Fed’s monetary policies. Such bubbles will burst over-valued assets, leading to an “inevitable correction” by the market.

The former Texas Representative also points out an obvious, but often overlooked, part of quantitative easing and low interest rates: increasing the money supply can’t ensure that supply is allocated to the best ends. “The Fed can create money and credit,” Paul states, “But it can’t control where it goes. It goes in bonds, it goes in stocks, it goes in housing … it goes in different places.” One of the major downfalls of a monetary policy that stifles free market impulses is that it distorts investments by removing risk.

“The recession will come,” Paul says. “The conditions have already been established for the recession … Since it’s all artificial, with interest rates sending the wrong messages, there’ve been a lot of investments made and prices made that have been artificial … if it’s artificial, it sets the stage of the inevitable correction for the mistakes. They can’t prevent it … but all they can do is build up more debt and more mal-investment, which eventually makes the bursting of the bubble that much worse.”

http://schiffgold.com/key-gold-news/...ssion-deniers/

Snippet:
Across the world this week, many different political strains were generating economic challenges. Venezuela is producing a cautionary tale about hyperinflation, while Italy began expressing its own populist movement. Meanwhile, the Fed has begun nervously testing the waters of the future Trump administration.
Venezuela Issuing 20,000 Bolivar Notes to Combat Worthless Currency

Venezuela’s Runaway Inflation is continuing to force policy makers to come up alternatives. One of the alternatives is the issuing of six new bills, which includes a new 20,000 bolivar. The super note will be worth 200 times more than the cash-heavy country’s current highest denomination.
<Venezuela’s inflation is expected to triple in 2017. Currently, 4,400 bolivars will get you one US dollar. There seems to be no end in sight for the free-fall currency, which is creating shortages in food and medicine.

http://1mo0o3e03f7c59k045fwasgbz.wpe...-up-friday.jpg
Trump Economic Advisor wants Fed to Get out of Economic Driver’s Seat
Judy Shelton, co-director of the Sound Money Project and Trump economic advisor wants the Fed to take a back seat to the economy, according to an interview with CNBC. Shelton said she thinks effective growth will come from increased productivity and tax reform, rather than the Fed’s failed monetary policies.
Markets seem to be buying into the game plan with asset prices continuing to climb, but there’s little thought being given to the effects of Trump’s planned fiscal stimulus, which would increase the deficit during an increase in interest rates. Still, Shelton doesn’t believe that the expected small rate hike next week will derail the rally.

5 Things to Watch for at the Fed’s December Meeting Next Week
As the December Fed meeting looms next week, the unanimous consensus is that we will have a new, higher rate at the end of it. But why the hike now? The main reasons could be the recent uptick in the markets, as well as investors’ positive outlook for Trump’s policies. Bloomberg columnist and chief economic advisor at Allianz SE Mohamed A. El-Erian created a useful article of the five key things to look for at the meeting.
Fed’s Recession Denial Making Them Nervous about Trump

The Fed may have backed the economy into the corner, but they still don’t see it. In a recent Fortune article, one Fed official stated “The economy is not in recession today,” despite mounting evidence to the contrary. The Fed is in denial of America’s addiction to easy credit and the bubbles their policies have created.

Peter Schiff put it best: “The problems haven’t been solved, and they can’t be solved unless we’re willing to bite the bullet and allow a painful economic restructuring that is going to be necessary for to pave the way for real economic growth.”

http://schiffgold.com/commentaries/c...pha-predicted/

Snippet:
This article was submitted by Shubhendu Pathak, a finance professional working in the Bay Area. Past: Capital One Shubhendu earned his Bachelors (B.Tech) and Masters (M.Tech) from IIT Delhi, and MBA with a concentration in Finance from Emory University.
Seeking Alpha published my two articles Will India Be The First Domino To Fall? and You Can’t Just Invest On Hope in which I predicted a currency crisis in India. On November 08, 2016, Prime Minister Narendra Modi announced the demonetization of 500 ($7.5) and 1,000 ($15) rupee notes, which constitute more than 85% of the currency in circulation. These notes ceased to exist as legal tenders on the night of the announcement. People can deposit them in their bank accounts before December 30, but cannot withdraw more than $350 in a week.
http://1mo0o3e03f7c59k045fwasgbz.wpe...471817-001.jpg

The purported object behind this step is to get rid of high denomination currency notes that the government believes are hoarded by tax evaders and corrupt government bureaucrats. This might be a little difficult to digest for an economist. For one, the corrupt might not be smart but they are not nave to simply sit on piles of cash that don’t yield any return; it doesn’t take a rocket scientist to diversify. Secondly, there is a simpler explanation that an economist might relate to better, and which is backed by data (read my two articles); the government run banks in India have run out of money and this is a bank holiday.

Here is an excerpt from my first article published on August 17, 2015.
The crisis has begun and there are only two ways forward for the banks; they can either take money printing to yet another level or announce a bank holiday and force the depositors to take a haircut on their deposits. The former route, although more harmful for the economy in the long run, is more likely to be the choice of the government as it will prefer to maintain the pretense of payment (via money printing) and not have social unrest in the short run.
What I did not anticipate back in 2015 was that the government will choose the latter route. What is happening in India is worse than a bank holiday. In a bank holiday, one at least gets to keep the cash he has. Under demonetization, people in India have been forced to deposit the cash they won’t be able to withdraw. The government has not clearly communicated when it will lift the cash withdrawal restriction and is encouraging people to use mobile banking instead.

Since my articles were published last year, assets under default in Indian banks have increased by about 100% to more than $98 billion dollars. This does not include loans that were recently restructured to make the bank balance sheets look good. It also does not include money lent to the government which it cannot pay back with legitimate means i.e. taxation; neither the socialist mindset of the government nor the worsening fiscal situation is promising.

https://lh3.googleusercontent.com/9T...Hq36qQS7d70=s0

One might wonder why the government needs all the cash when Prime Minister Modi promised minimum-government maximum-governance. The NDA government is no less socialist than the preceding UPA government. It needs the cash to fund centrally planned schemes such as MUDRA where the same government run banks, that are on the brink of collapse, are lending to sectors determined as high priority by bureaucrats sitting in Delhi. The seventh pay commission by the Ministry of Finance further increased the salaries of millions of government officials earlier this year.

Abolishing the planning commission, one of the first steps taken by the government that came to power in 2014, is proving to be merely symbolic. The government is unable to look beyond central planning and government control. Every scheme launched in the last two and half years, including Skill India, Clean India, Start Up India, Make In India, Jan Dhan Yojna, buying millions of LED bulbs, distributing LPG cylinders to the poor, has central planning written all over.

Banks run by the government control more than 75% of the market in India. These banks don’t have money to fund these populist schemes of the government and this is the reason they are confiscating cash from people, and in the process draining private investment, and further weakening the fundamentals of the economy.

Let us look at the latest numbers published by the Ministry of Finance on October 13, 2016. The gap between revenue and expenditures of center and state governments has continued to widen from $135 billion in 2015 to $140 billion in 2016.
http://1mo0o3e03f7c59k045fwasgbz.wpe.../2016/12/2.jpg
Interest payments, the biggest line item in expenditures, have increased by 11% from $88 billion in 2015 to $98 billion in 2016. None of the major expenditures including Pension and Retirement Benefits, Social Security and Welfare, Food Subsidy and Fertilizer Subsidy have gone down under the new government.
http://1mo0o3e03f7c59k045fwasgbz.wpe.../2016/12/3.jpg
The government’s reliance on indirect taxes has increased. When oil prices declined from $100 in 2014 to $30 in 2016, retail price of oil in India did not drop. The government simply started collecting more tax. That cushion is getting thinner now with the OPEC reaching a deal to cut production.
http://1mo0o3e03f7c59k045fwasgbz.wpe.../2016/12/5.jpg
This stage is set for another fiscal crisis for the government. This crisis will approach much faster now that the private investments have taken another severe hit. This time, the government will be forced to use money printing to deal with it, as not making good on its promises might not be politically feasible at the time.

To understand in detail and in layman’s terms how the toxic mix of socialist governments and nationalized banks in India has ruined the Indian economy in recent years, I would encourage you to read the following two articles Republic of Ghaziabad – Part I and Republic of Ghaziabad – Part II. I have written these articles for people who do not understand complex terminologies of economics.

Two Booster Rockets For Gold
India is the second largest consumer of gold. The majority of the precious metal transactions in India is bought with cash and demonetization has left the consumers cash-strapped. When people eventually get hold of their money in cash, they are more likely to buy gold, which cannot be made worthless overnight by the government with an announcement.

The second rocket is made in the US. The probability of a rate hike by the Federal Reserve in December currently stands at more than 90%. This has strengthened the dollar and further suppressed the price of gold. The fiscal situation of the US government is not hidden from anybody, and Donald Trump has already announced his plans of spending — big. China is continuing to dump the US.treasuries, and Japan, the second-largest foreign creditor, reduced its holding by 0.7% to $1.14 trillion in September alone. With tax cuts Donald Trump has promised, only a huge QE4 can finance the new government’s spending plans.

I believe that both these booster rockets might take the price of gold to a record high within one year. You may consider buying physical gold or mining stocks such as Goldcorp (NYSE:GG), Randgold (NASDAQ:GOLD) and Newmont Mining Corp (NYSE:NEM).
Further, Citibank (NYSE: C) has significant exposure to India. Shorting the bank might not be a bad option.
http://1mo0o3e03f7c59k045fwasgbz.wpe.../2016/12/4.jpg

Comments from Benjaminis: Today in my morning thoughts report, I discussed in a philosophical way the great complexities in our world however while my focus was on the financial world what happens there affects everything in our daily lives. The articles that I linked on this page give the details of many associated issues with great detail and insight. You do not need to understand all of it however by not being aware of it you lessen your chance of awareness that you will most likely not read about in the mainstream media. I am passing part of my day doing this important research since all the markets are on hold until we see the FED decision on rates tomorrow at 2:00 PM.

I hope for those that have the interest and can find the time to read and understand that these information sources broaden your education while trading Forex and of course whether you trade or not you should understand what the TRUTH is and prepare yourself for the future. The FUTURE starts tomorrow at 2:00 PM and from all the events following that.

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4. Dec 13, 2016 3:32pm

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,650 Posts | Online Now

http://www.jsmineset.com/

I WILL POST THIS ARTICLE IN THE FULL BECAUSE OF THE IMPORTANCE OF IT !! I will have my comments after the end of the article.

Posted December 13th, 2016 at 12:06 PM (CST) by Bill Holter & filed under Bill Holter.

Jim and I have received many panicked calls and e-mails regarding Martin Armstrong’s latest article. In it he again claims gold will collapse to below $1,000 per ounce and thus the fearful communications.

In this very short article, Armstrong questions whether India will begin gold confiscation suggesting door to door searches for “tax evaders”. He suggests if a gold confiscation is undertaken, the Indians will switch to purchasing silver …something the BIS has not thought about yet. The logic of a switch to silver is a good one, surprising considering some of what he has opined in the past…

We posted two articles late last year refuting his poor logic and efforts at rewriting history. In the first one, we refuted his claims that markets are not manipulated. Since then of course we have had many settlements by large banks for just that…MANIPULATING MARKETS. Last week saw Deutsche Bank admit to manipulating the gold market and agree to pay a $60 million fine (peanuts) and offer some seriously damaging evidence in the form of captured communications. As they have turned state’s evidence and squealed on others, this will become very interesting no doubt! we would simply ask, are banks in the business of handing out “free money” in the form of $billions if they’ve done nothing wrong? JP Morgan, Citi, DB and many others have coughed up large fines. Was this “largesse” or was it to head off the decapitating legal procedure called discovery?

Then a week or so after the first article, we were forced to pen another one,. Mr. Armstrong truly erred when he made the statement gold was “devalued” against the dollar in 1934. It was no slip of the pen or tongue, he actually tried to rationalize and “explain” how gold was devalued versus the dollar. The fact is, gold was REVALUED over 70% higher versus the dollar in 1934. The claim that “the dollar” was the best performing asset during the Great Depression is outright bogus and why we give zero credence to anything the man now says. We write this today because so many readers have again had the wits scared out of them.

The “timing” is peculiar. India’s (Modi’s) timing of their boondoggle by demonetizing 86% of their paper currency cannot be a coincidence. The action came right on top of India’s wedding season where their international gold purchases are seasonally strongest. It was our opinion right from the start, the action was directly taken to cut off and mute their physical demand and offtake from world markets. The only problem is that it backfired miserably as reports of physical gold changing hands internally within India at $3,000 per ounce and more.

Who couldn’t have seen this one coming? When you cut off supply …and autonomously tell people their “savings” in paper currency have been ostensibly wiped out, what would you expect to happen? Supply and demand still works, price rose as supply has been cut and true demand has had a fire lit under it. If you wanted proof that gold is still seen as a safe haven in the midst of turmoil, here it is! Meanwhile, India’s real economy has crashed unlike nearly anything seen in modern history. Giant Foxconn is eliminating 25% of their workforce due to the monetary insanity. Trucks are littering the sides of the road as the cash does not exist to purchase fuel. The disaster is just beginning, coming days and weeks will surely see “hunger riots”.

A similar question was raised about China over the weekend by Yra Harris regarding an article Kitco ran. What will happen if China decides to stop their importations of gold? Jim and I talked at length about this and then spoke with Yra to get his take on our conclusion should this happen. Wouldn’t the ban of imports cause a huge drop in paper gold prices but not necessarily cash price? The answer is yes, no, and we may well see the “mechanism” to reset global markets if we do.

Looking at China following India’s lead was an interesting thought process if you follow it through to the end. The fear of crashing price by “cutting off demand” is logical only if you stop the process before finishing the to the final answer. You see, were China to preclude gold imports, the immediate reactions by COMEX and LBMA would most probably be a crash …maybe even a $500 crash! Would that matter? Again, yes and no but stay with me to the end. “Price” in the West may crash, but “what” exactly is it the price “of”?

Paper prices may very well crash …while price for real gold within China goes to the moon. We are already seeing large spreads existing between Shanghai and COMEX, these would only get larger and expose one market as …not really a market. Will the Chinese look at COMEX prices and shun physical or in the ground gold? Or will they look at what real gold is changing hands at inside of China and decide to “arbitrage” it out of the ground (and from Western vaults) and into their own market?

This is the crux of what we theorized. Yes, it is certainly possible to see paper prices collapse from here and possibly sparked by China banning imports (temporarily). Set in motion would be paper prices dropping and physical markets rising (something I have written about since 2007 and spoke of since early 2000′s). China (official state) would then “purchase” and demand delivery of ridiculously cheap gold (while there is still inventory left to deliver). As Jim put it during our last weekend interview, “you could see COMEX gold at $10 offered and no bid with Chinese cash markets $5,000 bid and no offer”.

China (Russia and India) will ultimately “make price” as they are the physical markets and collectively have more gold than the West (please don’t reply with GFMS or World Gold Council numbers as they are laughable). A “reset” of global finance is certainly coming, the only questions are how, when and how much? We believe the event will be very rapid, probably over a weekend but China could force a reset via Mother Nature and arbitrage in a slower manner. Real gold will find its way into India (and China should they ban imports) simply due to the human characteristic of profit motive and black markets. Once Western vaults are emptied, who do think will “make price”? Those who don’t have it but suddenly want it, or those who have it and always wanted it? If we were running China, this is the exact mechanism we would use to remonetize gold and silver …and remonetizing metal is exactly what we believe they have wanted to do for many, many years!

To finish, Martin Armstrong was wrong about gold during the Great Depression even with the benefit of recorded history. Now, he could possibly be correct regarding the direction of his invention of derivative contracts … but we believe he is entirely wrong about the underlying physical product. He most likely has correct reasoning about a huge move into silver as he aligns with Mother Nature’ views the man made 70 to 1 g/s ratio as incompatible with her own at 10 to 1. One thing is certain, should the current paper versus physical pricing spread continue and expand, Netjets will become a great investment as a freight carrier for arbitrage!

Standing watch,
Bill Holter,
Holter-Sinclair collaboration

Comments from Benjaminis: I have the most respect in the world for Mr Sinclair. He has NEVER been wrong once when it comes to Gold and the markets. His new associate Bill Holter has great analytical skills and they make a great team together. I strongly recommend that every few days you visit their website to keep up to date on financial matters in the world. They have NO SPIN and are not selling anything.

On the other hand Martin Armstrong has amazing skills as well and most of the time I have learned much from him however this time I completely agree with JSmineset. We will not have long to wait and my call for Gold during 2017 is for a price over $1500 US.

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1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,651 Posts | Online Now

http://www.caseyresearch.com/article...all-your-bonds

Snippet:

Editor’s note: If you read the Dispatch often, you know we like to share insights from Casey Research founder Doug Casey as much as we can. Doug sees the world differently than most people, especially “trained” economists. He’s also a superb writer, highly entertaining, and not afraid to speak his mind.
In the past, we’ve shared essays where Doug discusses everything from the European migrant crisis…to why democracy is uncivilized…to recent corruptions of the English language. Today, we have something different to share with you.
In the essay below, Doug explains what President-elect Donald Trump could mean for your personal finances, specifically bonds, real estate, stocks, and commodities like gold.

In other words, we’re sharing advice from Doug that could make you a lot of money over the next four years. We hope you find this essay as useful as we did.
[The following essay originally appeared in this month’s issue of The Casey Report.]

So, Trump has won the election. Of course anything can happen between now and his presumed inauguration on January 20. Maybe the Swamp Creatures will succeed in causing a recount in so-called Purple States that could change the number of electors in Hillary’s favor. Maybe they’ll somehow influence Trump electors to vote for Hillary. None of this would have been an issue if Baby Bush II, Jeb, had been the Republican nominee, as was supposed to have happened. It all just shows what a transparent (a word these people love to use) fraud “democracy” has become.
Let the hoi polloi cast a meaningless vote, so they have the illusion of being in control. Instead of seeing themselves as subjects, they’ll think they’re “we the people,” who actually have some say in what happens. That way they’ll pay their taxes willingly, enthusiastically sign on to aggressive wars on the other side of the world against people they know nothing about, and generally do as they’re told. Because it’s supposed to be patriotic. “Democracy” is a much more effective scam for controlling the plebs than kingship or dictatorship.

That said, the Establishment, the Deep State, was genuinely shocked and appalled by Trump’s victory. As Baby Bush the First would have said, they misunderestimated how angry the average voter was. That’s because the Coastal Democratic Elite are totally out of touch with the common man. But they needn’t fret too much. They’ll be re-installed, with a vengeance, in four years.
That will likely be true for two reasons:

 

1. Simple demographics. The groups that vote Democrat (e.g., blacks, Hispanics, urban dwellers, immigrants, Millennials) are growing in numbers faster than those who vote Republican. Republicans are older people, and the Boomers (born 1946–1966) and the Silent Generation (1926–1946) are dying off. More people are moving to the cities, and that influences them to vote Democratic. More people (still, idiotically) are pursuing higher education, and that also influences them to vote Democrat.
2. The Greater Depression. One definition of a depression is a period of time when distortions and misallocations of capital are liquidated. A time when bubbles caused by monetary expansion are popped. A time when unsound businesses fail. I re-emphasize this because the party on whose watch it happens is automatically kicked out. So, the Democrats actually got quite lucky not to be in office when the time bomb goes off. Trump could easily go down as Herbert Hoover II.

What could change things? A serious war, much bigger than the sport wars the US is currently engaged in, is the biggest danger. That’s much less likely with Trump than Hillary, but these things have a life of their own. My guess for the next president is either a left-wing general (because Americans love and trust their military), or a left-wing populist, like Elizabeth Warren.

But that’s crystal balling at this point. Let’s proceed on the assumption Trump is actually going to be the president for at least the next four years. Although problematical, he’s a vast improvement over Hillary. What will it mean for the US and the world? More importantly, what will it mean for your personal finances and freedom? Let’s look at the possibilities.

Bonds—With bonds, we’re at the peak of the biggest financial bubble in world history. This is a very big deal.
Interest rates move in very long cycles. They went up from the mid-1940s to the early ’80s, when long-term government bonds peaked at close to 16%, and T-Bills at over 16%. I thought they hit bottom years ago, but the cycle overshot.
My guess is that they’re headed up in earnest now. And Trump, as someone who understands business (even though he doesn’t understand economics), will likely (I think…) do what he can to send them higher. Why? He understands the country needs to save, to rebuild capital. And higher rates will encourage saving and discourage debt.

The risk is that, with all the debt that’s been put on in the last decade, debtors will be hard-pressed to service it. That includes the USG with $20 trillion of on-balance-sheet debt, and a lot more in the way of off-balance-sheet debt, guarantees, and contingent liabilities. Much of it will be activated if higher rates cause a lot of defaults.

What should you do? Sell all your bonds.

Real Estate—Property, at least in the English-speaking world, floats on a sea of debt. Interest rates go up, real estate prices go down. The economy goes down, so do property prices. Add to that the aging US population, which isn’t good for property; as people age, they downsize. Add to that the fact we’re in another real estate bubble, similar to what we saw in the mid-oughts. After bonds, property is likely the worst place to be. In fact, I’ll go so far as to say the great post–World War II property boom is at an end—but that’s a subject for another time. There’s not much that Trump can do to fix this.
What should you do? Lighten up on property. Make sure any mortgages you keep are at fixed rates.

Stocks—If Trump only follows through with his promise to cut taxes, and eliminate two old regulations for every new one, it would be wonderful for the economy. But the economy and the stock market are two different things; they only correlate over the long run. I suppose he’ll follow through with his promise to build lots of new infrastructure. Government deficits will soar, and only the Fed will be on hand to buy all that new debt.

Infrastructure companies will get a fat slug of the newly printed money. But I find it hard to get enthusiastic for the stock market. In terms of dividends, P/E ratios, or book value, it’s already at one of the highest levels ever. Bear in mind that well-selected stocks can still go up, even if the market as a whole goes down.

That said, I feel more comfortable with shorts than longs at this point.

Gold and Commodities—Frankly, where do you put your money when almost everything is overpriced? Commodities are coming out of a five-year-long bear market. They’re about the only thing that’s cheap. That’s true relative to their cost of production (farmers, ranchers, and miners are breaking even, at best, all over the world). And it’s true relative to their history (they’re down 50% from the peak of 2011).

In other words, commodities are a much safer place for your capital than stocks, bonds, or real estate (excepting agricultural property) for the foreseeable future. The problem is that it’s hard to hold a carload of wheat or ten tonnes of sugar.

Remember that gold and other commodities aren’t “investments.” An investment is something that acts to create new wealth. They’re simply assets. Sometimes they can be excellent speculations. Gold, however, is money, and will remain so long after the US destroys its currency.
I recommend, therefore, that you accumulate gold and silver instead of plunging into conventional investments. Check with the dealers we list in The Gold Book to see who you prefer to work with. [Editor's note: The Gold Book is exclusive to readers of The Casey Report, which you can sign up for at the end of today's essay.] But if you don’t have a significant position in the metals already, please get going.

A final thought. It’s usually a mistake to count on any head of state to make things in a country better. It can certainly happen—as with Erhard in Germany after WW2, Pinochet in Chile, Thatcher in Britain, or even Reagan in the US. Maybe it will be true of Trump. He’s got a much stronger personality than Reagan, for openers. But the bigger and older a State gets, the harder it is to change. It’s comparable to trying to stop a fully loaded supertanker.

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4. Dec 15, 2016 7:50pm

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,652 Posts | Online Now

https://dailyreckoning.com/trump-fed...y+Reckoning%29

Snippet:
The most decisive factor in the implementation of the Trump economic plan is the reaction of the Federal Reserve. While a Fed rate hike in December was basically a certainty, the path of rates in 2017 following the December hike will be dispositive with regard to the success or failure of Trump’s plans.
The Fed can choose to be highly accommodative in the face of Trump’s larger deficits. In effect, the Fed will not anticipate inflation, but will wait until it actually emerges. Actual inflation is still well below the Fed’s target inflation rate of 2%. Since the Fed is targeting average inflation of 2%, it could allow inflation to run above 2% for a while, which would be consistent with 2% average inflation, given today’s lower level.

The Fed also seeks negative real rates as a kind of stimulus measure. Negative real rates exist when the rate of inflation is higher than the nominal interest rate. This condition can exist at any level of nominal rates. For example, inflation of 3% with nominal rates of 2.5% produces a negative real rate of 0.5%.
Likewise, inflation of 4% with nominal rates of 3.5% produces the same negative real rate of 0.5%. No doubt the Fed does not want inflation of 3.5%. However, they can achieve negative real rates at any level by using financial repression to put a lid on nominal interest rates.

This is done by forcing banks to buy Treasury notes even if the Fed’s balance sheet is stretched. It amounts to a kind of “shadow QE” using the bank balance sheets to park bonds instead of the Fed’s balance sheet.

This kind of accommodation to higher deficits is also called “fiscal dominance,” an idea sketched by former Fed governor Rick Mishkin and his colleagues in academic literature. The idea is that Fed independence is mostly a mirage and the Fed will do what is needed to facilitate the fiscal wishes of Congress despite protests to the contrary.

Under fiscal dominance, low inflation is allowed to persist for an extended period of time. It will gradually erode the real value of the dollar and dollar-denominated Treasury debt. This is how the U.S. reduced its debt-to-GDP ratio from 1946 to 1970.

The problem with this “high pressure” approach is that inflation is not purely a monetary phenomenon, but it is also a behavioral phenomenon. Money printing alone does not produce inflation. The money printing must be combined with the willingness of individuals to borrow, spend and invest.

Such willingness is largely psychological — dependent on Keynes’ animal spirits. However, once expectations shift from deflationary to inflationary scenarios, they are hard to shift back again. This could lead to a situation in which inflation expectations shift from 1% to 3%, but then shift quickly to 5% or higher.
The Fed assumes they can dial-down inflationary expectations from, say, 3% to 2%. But that may be wishful thinking. Any effort to raise rates to deal with higher inflation expectations may have the opposite of the intended effect as consumers view higher rates as a validation that inflation is getting out of control.

This is exactly what happened in 1974–81. The Fed started out behind the curve and stayed there until sitting Fed Chairman Paul Volcker’s extreme measures in 1980–81.

Alternatively, the Fed could choose to lean into prospective inflation from Trump’s policies by aggressively raising rates in 2017. This policy would be based on Janet Yellen’s reading of the Phillips Curve and the well-accepted notion that monetary policy acts with a lag.

With unemployment at post-recession lows and initial claims for unemployment benefits at all-time lows, Yellen’s analysis is that inflationary pressures from increasing wage demands are just a matter of time. Since monetary tightening works with a six-to-twelve month lag, it’s important to raise rates now to keep ahead of that inflation.

Independent of the state of the labor markets today, the Fed is desperate to raise rates as much as possible. This should allow it to have some dry powder available for rate cuts in the next recession.

By Fed reckoning, the euphoria in the stock market after the election of Trump counts as an easing of financial conditions. Such easing is the perfect cover for an offsetting tightening by the Fed. The Fed will pursue a delicate balance between easing (from stocks) and tightening (from rates) that will allow it to achieve its rate normalization goal without putting the economy into a recession.

The last wild card in this mix is the dollar. A tightening cycle by the Fed will make the dollar stronger. This is deflationary because the U.S. is a net importer and a stronger dollar makes imported goods cheaper for U.S. consumers and other participants in the global supply chain.

http://wolfstreet.com/2016/12/15/for...-never-before/

Snippet:
Bloodletting in one of the most conservative investments.

All kinds of things are now happening in the world of bonds that havent happened before. For example, authorities in China today halted trading for the first time ever in futures contracts of government bonds, after prices had swooned, with the 10-year yield hitting 3.4%. Trading didnt resume until after the Peoples Bank of China injected $22 billion into the short-term money market.

What does this turmoil have to do with US Treasurys? China has been dumping them to stave off problems in its own house.
The US Treasury Department released its Treasury International Capital data for October, and what it said about the dynamics of Treasury securities is a doozie of historic proportions.

Net acquisitions of Treasury bonds & notes by private investors amounted to a negative $18.3 billion in October, according to the TIC data. In other words, private foreign investors sold $18.3 billion more than they bought. And official foreign investors, which include central banks, dumped a net $45.3 billion in Treasury bonds and notes. Combined, they unloaded $63.5 billion in October.

In September, these foreign entities had already dumped a record $76.6 billion. They have now dumped Treasury paper for seven months in a row. Over the past 12 months through October, they unloaded $318.2 billion:
http://wolfstreet.com/wp-content/upl...15_10-2016.png
A 12-month selling spree in this magnitude has never occurred before. There have been a few months of timid net selling in 2012, and some in 2013, and a few in 2014, but no big deal because the Fed was buying under its QE programs. But then, with QE tapered out of the way, the selling picked up in 2015, and has sharply accelerated in 2016.



This chart (via Trading Economics), going back to the early 1980s, shows just how historic this wholesale dumping (circled in red) of US Treasury bonds and notes by foreign entities has been:
http://wolfstreet.com/wp-content/upl...80_10-2016.png
The chart is particularly telling: It shows in brutal clarity that foreign buyers funded the $1 trillion-and-over annual deficits during and after the Financial Crisis, with net purchases in several months exceeding $100 billion. The other big buyer was the Fed.

But since last year, the world has changed. China, once the largest holder of US Treasurys, has been busy trying to keep a lid on its own financial problems that are threatening to boil over. Its trying to prop up the yuan. Its trying furiously to stem rampant capital flight. Its trying to keep its asset bubbles, particularly in the property sector, from getting bigger and from imploding all at the same time. And in doing so, it has been selling foreign exchange reserves hand over fist.

According to the TIC data (market price adjusted), China was the largest seller in October, unloading $41 billion. Over the last six months, it unloaded $128 billion. This slashed its holdings of Treasury securities to $1.116 trillion, below the holdings of Japan. Japan, now the largest holder of Treasury securities, reduced its holdings by $4.5 billion in October to $1.132 trillion.

Japan and China are by far the largest two creditors of the US the US still owes them $2.25 trillion and theyre cutting back their lending.
But whos buying this paper? For every seller, there must be a buyer. But when demand sags, sellers have to offer a better deal. So they have to cut the price for buyers, it means that the yield rises and becomes more attractive. The yield of the 10-year Treasury has nearly doubled since July this year, settling today at 2.60%:
http://wolfstreet.com/wp-content/upl...2016-12-15.png
At this yield, Treasurys found buyers today. But the remaining buyers now that the biggest holders have turned into sellers may demand even higher yields in the future. This comes on top of a lot of new supply: Over the last 24 months, the US gross national debt has ballooned by $1.85 trillion, or by about $925 billion per 12-month period (using the two-year average eliminates the distortions of the debt ceiling fight). Soon, the US gross national debt will hit $20 trillion.

And given President Elect Trumps ambitious deficit-spending and tax-cut programs, a lot more debt may soon wash over the market. But this time, neither China nor Japan, nor the other major foreign entities may be willing and able to bail out the US, as theyve done during and after the Financial Crisis. The bond market sees this too. Hence, the bloodletting in Treasurys, considered among the most conservative investments in the world.
But the death of the dollar will have to be rescheduled. Read Currency Armageddon? A Word about the Hated Dollar

Comments from Benjaminis: I am posting in full the information from the above link. Currency Armagedden ? I will explain after why this is extremely important information as it relates to the future values of all the Asset Classes and how as the Money Flows from one to another you have an EDGE in knowing where the TREND will take the pair that you are trading.

The “death of the dollar” will have to be rescheduled.
Sharply higher yields on Treasury securities and the prospect of more rate hikes by the Fed – in a world where other major central banks are still stewing innocent bystanders in the juices of NIRP, negative yields, and “punishment interest” – sent the hated dollar, whose death has been promised for a long time, soaring.
It soared against the euro. Or, seen from the other side, the euro plunged against the dollar, to $1.039, the lowest level since January 2003; down 35% from its peak of $1.60 during the Financial Crisis; down 10% from its 52-week high in March of $1.16; and down 2.7% from $1.068 yesterday before the Fed announcement.
Pundits are once again declaring that the euro will fall to “parity” with the dollar, as the ECB has been wishing for a long time, though it cannot admit officially that it is trying to crush the euro to give member states an export advantage. That would be “currency manipulation,” which is frowned upon in other countries. But a big wave of “money printing” and forcing yields below zero “to stimulate the economy,” whereby the currency gets crushed as a side effect, is OK.
Tourist destinations and flagship retailers in the US watch out: for your euro tourist customers, things are getting very expensive in the US, and some may choose to buy less or travel to cheaper countries.
The yen plunged 3% since the Fed announcement to 118.4 to the dollar. It’s down 15% since September. But it’s still higher than it had been in mid-2015, when it had sunk as low as 123 to the dollar.
By comparison, the Canadian dollar has been relatively well behaved, after the Bank of Canada systematically crushed the bejesus out of it from 2013 through 2015, sending it to a low of C$1.46 to the US dollar in January 2016. But with the partial recovery of the price of oil, and an admission by the BOC that the loonie had dropped enough, it has since zigzagged higher though it too lost nearly 2% since the Fed announcement. But at C$1.34 to the US dollar, it is still nearly 9% higher than it had been at end of the multi-year rout early this year.
And the British pound has dropped 2.5% since the Fed announcement, but at $1.24 currently, the pound is still higher than its end-of-the-world post-Brexit low of $1.18 in early October.



So the dollar index (DXY) shot to 103.5 currently, above 103 for the first time since January 6, 2003. The index measures the movement of the dollar against a basket of these currencies:

 

1. Euro (57.6% weight)
2. Yen (13.6% weight)
3. Pound sterling (11.9% weight)
4. Canadian dollar (9.1% weight)
5. Swedish krona (4.2% weight)
6. Swiss franc (3.6% weight)

This is not an ideal currency basket for the US, given the trade relationships of the US. Most notably, it does not include the Chinese yuan and the Mexican peso, though China and Mexico are among the top trading partners of the US, along with Canada and the Eurozone.
Here is the DXY since yesterday morning. It shows how the dollar jumped instantly upon the Fed’s announcement and has since continued higher (via TradingView):
http://wolfstreet.com/wp-content/upl...6-12-14_15.png
But a longer-term perspective – “longer-term” being half a year these days – shows just how much the dollar has soared, with the moves since the Fed announcement, while big, just adding some extra fuel to the fire: the index has jumped over 11% since June, from 93 to 103.5 now (via TradingView):
http://wolfstreet.com/wp-content/upl...6-06_12-15.png
Currency moves like this tend to balance out over time within a trading range, unless … inflation kicks in lopsidedly and eats up the value of just one currency. Then that currency gets crushed permanently, both in terms of its purchasing power at home and against other currencies (see Venezuela). Inflation has once again kicked off in the US. But it’s a slow process. And the “death of the dollar” will have to be rescheduled.
The 7th week of US Government debt “carnage” continues unabated. Read… Yellen Speaks, Yields Spike, Mortgage Rates Jump, Oil Plunges: But Why?

Comments from Benjaminis: Please look at the following chart and you will start to understand the MAJOR problem that a High US Dollar causes.

http://www.tradingeconomics.com/china/currency

Snippet:
The USDCNY increased 0.0281 or 0.40% to 6.9612 on Friday December 16 from 6.9331 in the previous trading session. Historically, the Chinese Yuan reached an all time high of 8.73 in January of 1994 and a record low of 1.53 in January of 1981.

1. Intraday
2. Historical
3. Forecast
4. Alerts
5. Data
6. API

China MarketsLastPreviousHighestLowestUnit
Currency6.966.938.731.53[+]
Stock Market3122.983117.686092.0699.98points[+]
Government Bond 10Y3.423.254.852.51percent[+]



Chinese Yuan Notes
The USDCNY exchange rate is a reference rate not used in actual currency trading. When investors or entities want to exchange dollars for the Chinese currency, they do so using the USDCNH exchange rate set in Hong Kong. The People's Bank of China sets the yuan's mid-point rate and the onshore yuan (USDCNY) is allowed to trade 2% higher or lower than the PBoC’s central reference rate. The offshore yuan (USDCNH) which trades outside the mainland is not controlled. The USDCNY and the USDCNH are not very different and usually trade less than a few cents apart. China's Foreign Exchange Trade System published a new yuan index, on December 11th, 2015 . The CFETS RMB Index measures the value of yuan against a basket of 13 major currencies, with weights based on international trade and has an end-2014 base year. The USD accounts for the largest share (26.4 percent), followed by the euro (accounting for 21.4 percent) and the yen (14.7 percent). The index also includes the currencies of Hong Kong, UK, Australia, New Zealand, Singapore, Switzerland, Canada, Malaysia, Russia and Thailand. This page provides - Chinese Yuan - actual values, historical data, forecast, chart, statistics, economic calendar and news. Chinese Yuan - actual data, historical chart and calendar of releases - was last updated on December of 2016.

Summary by Benjaminis what all of this means and why is it important to know.

There is a saying in any kind of trading that the "Trend Is Your Friend"

When we know the TREND then we can plan better how to trade. That then leads to your Trade Plan.

My three TOP Trade Plans for 2017 will be to Short US30 and Short USD/JPY and go LONG Gold and Silver. This is WHY my Money Flow Method with Risk Management works.

(Fig. 4: Sector performances. Source: Bespoke Investment Group)
There's a lot of talk about the Dow rising to 20,000. As an investor, you should avoid participating in exuberant buying activity. Times like these bring about negative behaviors and habits. Chasing performance and betting on today's winners without doing proper due diligence is not a sound investment strategy. Research high-quality, proven businesses with healthy balance sheets and consistent cash flow that are poised for growth. Make sure a competent management team runs the business that understands how to allocate capital efficiently and effectively. Lastly, buy the stock at a reasonable price. Do your homework!

Everyone is subject to behavioral biases, but don't let it be you.

Stay tuned and please post any questions that you surely must have here and if you are not registered to post then please register with Forex Factory. Have a GREAT WEEKEND !!

Summary by Benjaminis what all of this means and why is it important to know.

There is a saying in any kind of trading that the "Trend Is Your Friend"

When we know the TREND then we can plan better how to trade. That then leads to your Trade Plan.

My three TOP Trade Plans for 2017 will be to Short US30 and Short USD/JPY and go LONG Gold and Silver. This is WHY my Money Flow Method with Risk Management works.

(Fig. 4: Sector performances. Source: Bespoke Investment Group)
There's a lot of talk about the Dow rising to 20,000. As an investor, you should avoid participating in exuberant buying activity. Times like these bring about negative behaviors and habits. Chasing performance and betting on today's winners without doing proper due diligence is not a sound investment strategy. Research high-quality, proven businesses with healthy balance sheets and consistent cash flow that are poised for growth. Make sure a competent management team runs the business that understands how to allocate capital efficiently and effectively. Lastly, buy the stock at a reasonable price. Do your homework!

Everyone is subject to behavioral biases, but don't let it be you.

Stay tuned and please post any questions that you surely must have here and if you are not registered to post then please register with Forex Factory. Have a GREAT WEEKEND !!

COMMENTS FROM BENJAMINIS: This will start and bring you up to date concerning past posts and FUNDAMENTAL ANALYSIS.

I will now FOCUS on today's markets and looking at CNBC now I see that we have RISK ON for the moment.

Dow Futures are UP at 112 and SP Futures are UP as well. So now we look at FINVIZ to get an overview of where ALL the Asset Classes are.

https://finviz.com/futures.ashx

https://finviz.com/futures_charts.ashx?p=d1&t=YM

https://finviz.com/futures_charts.ashx?p=d1&t=DX


NOW FOR ALL THE NEWS OUT THERE SECOND BY SECOND !!!


https://finviz.com/news.ashx?v=2

Hi BenjaminIs,

I am reading this and it is very interesting. I will continue read this during the day

Cheers

Marco

http://traderfeed.blogspot.ca/2018/0...r-traders.html

SATURDAY, MARCH 10, 2018
How Fast is the Learning Curve for Traders?
https://4.bp.blogspot.com/-OR71ixJJ2.../Education.jpg
Trading is one of the most challenging, stimulating, and potentially rewarding careers I can think of. Every day is a new challenge. Every day pushes us to overcome the biases and tendencies that get in the way of sound decision-making. Like all great performance activities, trading rewards our self-development.

But what are reasonable expectations for a learning curve for traders? Some years ago, I looked at research concerning the success rates of day tradersand the numbers were sobering. Over 80% of traders were unprofitable in the study and, after expenses, only a small proportion were profitable. Not surprisingly, the smallest traders tended to be the least successful. The larger ones, of course, were large precisely because they had accumulated some degree of success.

This is not only true of day traders. Research by Barber and Odean finds that individual investors consistently underperform the market and fall prey to trading biases. Recent research finds that the average active trader not only loses money, but persists in trading after being unprofitable.

That's the part that trading educators, coaches, brokerage firms, and others don't like to emphasize. Just like in acting, just like in music, just like in athletics: many are called, few are chosen. The proportion of people who can make their living from golf, chess, football, or car racing is a fraction of the people who participate in those activities.

What that means is that any developing trader has to approach their learning curves with eyes wide open and ask the questions, "Am I on track? Is this where I'm going to find my success?" It's nice to dream of trading success, but it's important to understand the realities of making it as a trader.

Bella at SMB recently wrote about a trader who was now earning a nice paycheck after 18 months of trading. I happen to know this trader personally and heartily agree that he has a bright future. I also know that we had recognized his potential during his first year of trading. Still, it has taken a while to bring home that paycheck. In his admirably honest post, Bella notes that it typically takes 18 months to two years for a trader to achieve significant profitability (i.e., to make a living from their trading). And that is with considerable mentoring, support, education, and coaching.

In an earlier post on the failure rate of prop traders, Bella notes that every developing trader needs to anticipate 6-8 months of hard work and study when they start out. My experience is that it is during that initial 6-8 month period that we see the shape of learning curves. During the first year, the trader develops his or her style of trading, builds a playbook of opportunities, and displays growing consistency in following and profiting from that playbook.

During the second year, the trader builds on that consistency to take more risk, manage that risk well, and find new sources of opportunity. It is after the first year of trading better that the trader becomes bigger, and that's when the paychecks start. If traders are still struggling to find consistency and their own style after a year of effort, the conditional probabilities of meaningful success go way down. When innate talents fuel skill acquisition, learning curves are quicker and steeper. I have found that success in year one is highly predictive of longer term success.

And so it is in all performance fields. If, by your junior year of college, you are only able to make the second team of your school's basketball squad, you probably should be planning alternatives to an NBA career. That doesn't mean you can't enjoy basketball as an avocation, and it doesn't mean that your accomplishment is meaningless. It just means that your greatest career success will be found elsewhere.

This month alone I have heard from several traders who have spent years--and all their family's money--pursuing one trading strategy after another. They are broken people, and they have hurt their families in the process. They could not let go of the dream, and it became a nightmare.

If you're a developing trader, pour yourself into learning. Find yourself mentors and colleagues you can learn from. Work as hard on your trading outside of market hours as when you are trading. And then gauge your progress. Have the courage to let your dreams become realities, and have the wisdom to not allow them to become nightmares.
Upcoming Webinar on Trading Psychology Techniques


Posted by Brett Steenbarger, Ph.D.at 7:09 AM

https://www.theburningplatform.com/2...e/#more-172427

SNIPPET:
There is No “Free Trade”–There Is Only the Darwinian Game of Trade

March 12, 2018
Rising income and wealth inequality is causally linked to globalization and the expansion of Darwinian trade and capital flows.
Stripped of lofty-sounding abstractions such as comparative advantage, trade boils down to four Darwinian goals:

1. Find foreign markets to absorb excess production, i.e. where excess production can be dumped.
2. Extract foreign resources at low prices.
3. Deny geopolitical rivals access to these resources.
4. Open foreign markets to domestic capital and credit so domestic capital can buy up all the productive assets and resources, a dynamic I explained last week in Forget “Free Trade”–It’s All About Capital Flows.


All the blather about “free trade” is window dressing and propaganda. Nobody believes in risking completely free trade; to do so would be to open the doors to foreign domination of key resources, assets and markets.


Trade is all about securing advantages in a Darwinian struggle to achieve or maintain dominance. As I pointed out back in 2005, the savings accrued by consumers due to opening trade with China were estimated at $100 billion over 27 years (1978 to 2005), while corporate profits expanded by trillions of dollars.
China Trade Surplus: Gusher Profits for U.S. Corporations (August 13, 2005)


In other words, consumers got a nickel of savings while corporations banked a dollar of pure profit as sticker prices barely budged while input costs plummeted.

Corporations pocketed the difference, not consumers.

As longtime correspondent Chad D. noted in response to my essay on capital flows, restricting trade may be one of the few ways smaller nations have to avoid their resources and assets being swallowed up by mobile capital flowing out of nations with virtually unlimited credit (the US, the EU, China and Japan).

Protecting fragile domestic industries with tariffs has a long history, including in the US, but the real action isn’t in tariffs: it’s in the bureaucratic tools to limit trade and the soft and hard power plays that secure cheap resources while denying access to those resources to geopolitical rivals.

The bureaucratic means of restricting imports have been raised to an art in Japan and other export-dependent nations: there may not be any visible tariffs, just bureaucratic sinkholes that tie up imports in red tape.

Then there’s currency manipulation, for example, China’s peg to the US dollar. What’s the “free market” price of Chinese goods in the US? Nobody knows because the peg protects China from its own currency being too strong or too weak to benefit its export-dependent economy.


Those bleating about “free trade” are simply pushing a Darwinian strategy that benefits them above everyone else. US corporate profits have quadrupled since China entered the WTO; is this mere coincidence? No: global corporations arbitraged labor, credit, taxes, environmental/regulatory and currency inputs to dramatically lower their costs (and the quality of the goods they sold credit-dependent consumers) and thus boost profits four-fold in a mere 15 years while tossing the hapless consumers a few nickels of “lower prices always” (and lower quality always, too).


The Neoliberal Agenda trumpets “free trade” because “free trade” is a cover for “free capital flows.” Once capital is free to flow from central-bank fueled global corporations, no domestic bidder can outbid foreign mobile capital, as those closest to the central bank credit spigots can borrow essentially unlimited sums at near-zero rates–an unmatched advantage when it comes to snapping up resources and assets.

COMMENTS FROM BENJAMINIS: As I get ready for my Forex Trading day with the open of the North America Equity Markets at 9:30 AM New York Time , I am constantly reading and looking for information that expands my understanding of REALITY and PERCEPTION.

We need to understand GEOPOLITICAL ISSUES and such topics as this one. Brexit was not an accident and the election of President Trump goes to the same issues. We can see the people rising up all over the world.

BlockChain is a new Technology just like the Internet was and still is.

Think about it !!!


Rising income and wealth inequality is causally linked to globalization and the expansion of Darwinian trade and capital flows: the winners are few and the losers are many. Tariffs will not solve the larger problems of reduced employment, stagnant wages and rising income inequality. To make a dent in those issues, we’ll need to tackle central bank and central-state policies that have pushed financial speculation to supremacy over the productive economy.

Now what I need you to do is to set up the 16 currencies pairs that we use. If you have any questions just post them here and if need be I will access your platform and help you. For the moment we are standing clear until the dust settles. One of my TOP Trade Plans is to short US 30.

When your pairs are in place please post here and I will suggest your first Trade Plan. Each Trade Plan is using in groups of three positions so when I give the green light to SHORT US30 (Dow) then your first position will be scaled in and you will enter a STOP LOSS of $1000 US so you know your MAXIMUM LOSS and if you were to lose your DEMO FUNDS on your 3 positions YOU KNOW in advance your MAXIMUM LOSS is $3000 US which is 6% of your Total Trading Capital.

Of course we do not need to be greedy so once your position is entered you enter a Limit Out and then go enjoy your day instead of sitting in front of your monitors 8 hours a day.

Here is the 5 Minute chart on the US30 (Dow) from Finviz

http://finviz.com/futures_charts.ashx?t=YM&p=m5


Benjaminis

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4. Dec 18, 2016 7:32pm

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,658 Posts | Online Now

FROM AVA TRADE

Introduction to Fundamental Analysis

There are two main approaches to analyse the market during trading sessions, and both are popular among traders. One is called Technical Analysis, and predicts changes in the market based on past occurrences, market tendencies and behavior. Another one is Fundamental Analysis, which focuses on current events very closely, in order to try and predict how the market will turn.

When doing fundamental analysis, a trader studies the overall state of the economy, concentrating mainly on elements closely related to his trade. The research focuses on financial events including those that are remotely related but yet could affect the trade. Political, social and general events can all have a significant influence on the markets.

Why Conduct Fundamental Analysis

This type of analysis is for traders who wish to dig deeper into the financial world. It takes a little more time than some traders are willing and able to invest, but should have positive outcomes if done properly. What stands behind any type of analysis is the wish to avoid surprises that might jeopardize the trader’s money. Therefore the deeper the research and analysis, the lower the chances to be taken by surprise. Some of the world’s top traders, who regularly appear on top rich lists employ fundamental analysis. This is defiantly a good track to follow.

We must emphasize that even when conducting a thorough fundamental analysis, there is no guarantee the trade will be successful. The nature of trading any instrument is its relationship to external factors that can impact it, and the fact that the market can dramatically change within minutes, flipping our speculations and changing the fate of our trades.

How to Start Fundamental Analysis

Once you have decided on fundamental analysis as your course of action, we recommend starting by familiarizing yourself with the instrument you wish to trade. All frequent events that can impact your instrument should be taken into account. You should find the right sources to get daily news and make sure to follow them by subscribing to their newsletter and logging on regularly.

One of the main tools of fundamental analysis is to closely follow the economic calendar. It is crucial for a trader to familiarize himself with upcoming financial events involving influential players in the financial arena, such as treasuries, banks etc. One should learn which events are relevant to his trading market, and then detect how to prepare for those events.

An example to the importance of fundamental analysis can be found with the monthly US unemployed report, called the Non-Farm Payroll (NFP). The NFP usually affects the USD rate, which may lead to changes in the value of other instruments, such as gold, crude oil and others. Before the NFP is announced by the Bureau of Labor Statistics, traders speculate on the content of the declaration, and based on that calculate their trades. This is called fundamental analysis.

To begin employing fundamental analysis, every trader should find a number of informative sources, which will provide him with knowledge that will help him with fundamental analysis, thus assisting and improving his trades. We invite you to check out our blog, which updates on a daily basis with crucial data relevant to all instruments.


COMMENTS FROM Benjaminis: NOTE !!!

My Fundamental Analysis uses all of the above HOWEVER My Money Flow Method takes FUNDAMENTAL ANALYSIS to a New Level and THUS gives me an EDGE in my Forex Trading. I can teach you that EDGE and as explained many times in this Money Flow Method and Risk Management thread the MOVEMENTS of FUNDS in the Trillions of Dollars each day causes the values of each of the Asset Classes to change and knowing how one Asset Class changing in VALUE affects another Asset Class gives you the Trend. "The Trend Is Your Friend"

1. Post 247
2. Cleanup
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4. Dec 19, 2016 1:21pm

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,659 Posts | Online Now

Closing Comments from Benjaminis: Many if not most reading my research will perhaps say that there is too much information to read and understand and you are probably right HOWEVER the reason that I have put all of this here in case anyone wants to understand the main reason is to show how my Trade Plan has developed and what has changed over the last week. In any Trade Plan it is important to continually review NEW FACTS to verify that the Trade Plan still has a realistic chance to happen. The DECISION by the FED on December 14, 2016 only 5 days ago added to the PERCEPTION and the REALITY being two vastly different things and that is why the Dow continued towards 20,000 and the USD/JPY turned again and headed towards 120.00.

Please post any questions that you surely must have here and I will do my best to answer them. In summary my THREE Major Trade Plans for 2017 are as follows;

(1) Go Short the US 30

http://finviz.com/futures_charts.ashx?p=d1&t=YM

(2) Go Short USD/JPY

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=d1

(3) Go Long Gold and Silver

http://finviz.com/futures_charts.ashx?p=d1&t=GC
Have a GREAT TRADING DAY !!!

Comments from Benjaminis: I am now only going short 100 units of US30 because WE need to see what the Bank of Japan will do early Tuesday morning at the next meeting to announce their monetary policy so my trade on short USD/JPY is on hold since I need to see what the Dow does and GEOPOLITICAL RISK is on now, because of Electoral College results and other events, I am not yet ready today to go Long Gold and Silver.

When I go LONG Gold I purchase 100 OZ and for Silver LONG 5000 OZ.

Get involved and let me show you how to make money trading Forex if you have the DISCIPLINE and INTEREST to do things that will make you MONEY !!!

1. Post 284
2. Cleanup
3. Quote
4. Dec 20, 2016 11:31am

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,660 Posts | Online Now

Quoting dttsomh
{quote} Can you elaborate on which ones are actually relevant and which ones will just confuse us beginners more than needed? Is Price Action enough if we don't rely on indicators for entries? I'm taking my time to re-read everything at least 2-3 times because FUNDAMENTALS are very new for me, all I did before was looking at technicals and didn't even focused much on price action (as I should)
I am taking a few minutes to answer your questions. It is very very important for anyone interested in learning how to make money trading Forex to ask questions. I again encourage all traders viewing this thread called Money Flow Method and Risk Management that I started on December 3, 2016 which was 17 days ago to ask questions in order to learn. There is no such thing as a stupid or dumb question. Asking questions is the only way that we can learn.

Now to dttsomh and his question.

Can you elaborate on which ones are actually relevant and which ones will just confuse us beginners more than needed?

Benjaminis: First we establish which currency pairs are in our Trade Plan. In previous posts I have stated the only 3 currency pairs are in my Trade Plans. They are as follows;

(1) Short US30
(2) Short USD/JPY
(3) Long Gold and Long Silver

We short $100,000 US of US30 or 100 units. We short $100,000 US of USD/JPY or 100 units. We go long 100 OZ of Gold and we go long 5000 OZ of Silver.

That is it !!! For the next three months we trade NO OTHER CURRENCY PAIRS.

Is Price Action enough if we don't rely on indicators for entries?

Benjaminis: The reason that most Forex traders lose is because they only rely on Price Action and Technical Indicators the odds are that you will not get to the level of the 5% winners. I do not say that Price Action and Technical Indicators are not needed.

On a scale of 100 here is what you need to have in order to become part of the exclusive 5% Forex Trading Club.

25 - Human Psychology (If You do not have the discipline to control your FEAR and your Greed and your EGO just forget about trading anything because those three emotions will always win.

25 Fundamental Knowledge (This is my Money Flow Method and it is different from just normal fundamental knowledge)

25 Fundamental Knowledge (As an example of this what happens in the next 11 days with the oldest bank in Italy (MSP) which is now on life support is a very important fundamental as it has the possibility to cause MAJOR DAMAGE to EUR/USD and the Eurozone.

25 Skills in using Price Action and Technical Indicators



I'm taking my time to re-read everything at least 2-3 times because FUNDAMENTALS are very new for me, all I did before was looking at technicals and didn't even focused much on price action (as I should)

Benjaminis: I hope that I answered all your questions and as long as you put in the time and effort as you have done the odds are good that you will have the opportunity to join the Forex 5% Club.

I might not post again until later this afternoon after the North American Markets close. Thank you for your interest and cooperation.


Benjaminis

https://seekingalpha.com/article/414...t-totis-porcis

The following is an excerpt from Barton Bigg's book, Hedgehogging, where he relates a conversation with "Tim," a successful macro investor (emphasis mine).


Tim works out of a quiet, spacious office filled with antique furniture, exquisite oriental rugs, and porcelain in a leafy suburb of London with only a secretary. My guess is he runs more than $1 billion, probably half of which is his. On his beautiful Chippendale desk sits a small plaque, which says totis porcis-the whole hog. There is also a small porcelain pig, which reads, "It takes Courage to be a Pig." I think Stan Druckenmiller, who coined the phrase, gave him the pig.


To get really big long-term returns, you have to be a pig and ride your winners… When he lacks conviction, he reduces his leverage and takes off his bets. He describes this as "staying close to shore… When I asked him how he got his investment ideas, at first he was at a loss. Then, after thinking about it, he said that the trick was to accumulate over time a knowledge base. Then, out of the blue, some event or new piece of information triggers a thought process, and suddenly you have discovered an investment opportunity. You can't force it. You have to be patient and wait for the light to go on. If it doesn't go on, "Stay close to shore."


What separates the great traders from those who are just good?

The answer is knowing when to size up and eat the whole hog.

Let me explain.

To become a good trader you have to master risk management. Managing risk is the foundation of successful speculation. It's the core of ensuring your long-term survival.

After risk, there's trade and portfolio management. These are not wholly separate from managing risk. But they have the added complexity of things like thinking about when to take profits on a trade or how the drivers of your book correlate across positions, etc…

Risk and trade management are absolute critical skills to becoming a goodtrader. All good traders are masters in these two areas.

But the thing that makes great traders head and shoulders above the rest, is the skill in knowing when to go for the jugular. In sizing up and aggressively going for Totis Porcis, the full hog.

Great traders know how to exploit fat tail events - the large mispricings that only come around once in a blue moon. They swing for the fences when fat pitches come across their plate.

Examples of this are Livermore making a fortune shorting the 29' crash. PTJdoing the same in the 87' rout and the Nikkei fallout in 1990. Druck and Soros when they took down the Bank of England in 92'. Buffett, who is a master of exploiting fat tails, did it when he put nearly half his capital into AXP when it was selling for dirt cheap prices.

This is something we at MO call FET which is just short for Fat-tail Exploitation Theory.
Markets and investor returns follow a power law. Similar to Pareto's law, returns adhere to an extreme distribution of 90/10. This means, that amongst great traders and investors, 90% of their profits on average come from only 10% or less of their trades.

Let's look at the following from Ken Grant (who's worked with traders such as Cohen, PTJ et al.) in his book Trading Risk (emphasis mine):
Some years ago in my observation of P/L patterns, I noticed the following interesting trend: For virtually every account I encountered, the overwhelming majority of profitability was concentrated in a handful of trades. Once this pattern became clear to me, I decided to test the hypothesis across a large sample of portfolio managers for whom transactions-level data was available. Specifically, I took each transaction in every account and ranked them in descending order by profitability. I then went to the top of the list of trades and started adding the profits for each transaction until the total was equal to the overall profitability of the account.


What I found reinforced this hypothesis in surprisingly unambiguous terms. For nearly every account in our sample, the top 10% of all transactions ranked by profitability accounted for 100% or more of the P/L for the account. In many cases, the 100% threshold was crossed at 5% or lower. Moreover, this pattern repeated itself consistently across trading styles, asset classes, instrument classes, and market conditions. This is an important concept that has far reaching implications for portfolio management, many of which I will attempt to address here.


To begin with, if we accept the notion that the entire profitability of your account will be captured in, say, the top 10% of your trades, then it follows by definition that the other 90% are a break-even proposition. Think about this for a moment: Literally 9 out of every 10 of your trades are likely to aggregate to produce profits of exactly zero.

This power law for investment returns is ironclad. Like Grant notes, it's consistent "across trading styles, asset classes, instrument classes, and market conditions."

And here's where we get to the crux of the matter. Good traders don't know how to harness this power law while great traders do. They exploit it, using it to their full advantage.

Here's Druckenmiller on the subject (emphasis mine):
The first thing I heard when I got in the business, from my mentor, was bulls make money, bears make money, and pigs get slaughtered.

I'm here to tell you I was a pig.

And I strongly believe the only way to make long-term returns in our business that are superior is by being a pig. I think diversification and all the stuff they're teaching at business school today is probably the most misguided concept everywhere. And if you look at all the great investors that are as different as Warren Buffett, Carl Icahn, Ken Langone, they tend to be very, very concentrated bets.

They see something, they bet it, and they bet the ranch on it. And that's kind of the way my philosophy evolved, which was if you see - only maybe one or two times a year do you see something that really, really excites you… The mistake I'd say 98% of money managers and individuals make is they feel like they got to be playing in a bunch of stuff. And if you really see it, put all your eggs in one basket and then watch the basket very carefully.


But how can one be a pig while still being a good manager of risk. It kind of seems like a paradoxical statement, doesn't it?

Here's how.

Your average trader picks trades that have symmetrical potential outcomes. This means that the market pricing is on average, correct. It's efficient. And the distribution of returns for these trades will fall randomly within the cone of future possibilities.
On average, these trades don't produce alpha.
https://static.seekingalpha.com/uplo...one_thumb1.jpg
Using trade and risk management, a good trader can take this symmetric futures cone and produce positive returns by reducing the downside of return outcomes through trade structure and stop losses. But their upside is limited to the average distribution of outcomes.

But great traders and investors are different. They are skilled at identifying highly asymmetric outcomes.
These trades have the potential to massively reprice in their favor. The distribution of future outcomes for these trades looks more like this.
https://static.seekingalpha.com/uplo...ve-Outcome.jpg
And not only are they skilled at identifying these skewed setups but when all the stars align they go for the whole hog and exploit the market's error. They know that these rare asymmetric opportunities don't come around often.

Great traders have this ability not because they are any better at predicting the future. Prediction is a fool's errand.


It's because they have built up a store of knowledge and context and pattern recognition skills. This allows them to more effectively assess the range of possibilities for an outcome set and identify ones that are highly skewed to the upside.


They have the experience base that allows them to aggressively size up while at the same time properly manage their risk. Simply put, they've earned the right to have conviction. And the vast majority of good traders haven't earned this right. So they're better off sticking with consistent and manageable bet sizing.


Tim from Hedgehogging stated it perfectly in saying that "the trick was to accumulate over time a knowledge base. Then, out of the blue, some event or new piece of information triggers a thought process, and suddenly you have discovered an investment opportunity."


The evolutionary process of a trader should be to focus on mastering risk management. Then trade management - riding winners to their full potential. All the while building up a library of experience and useful context that will give them tools to identify asymmetric opportunities down the road. And once they've earned the right to have conviction, they can go for Totis Porcis.

Until then, "stay close to shore."

Some final words from Druckenmiller.

The way to build superior long-term returns is through preservation of capital and home runs…When you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig.

Sorry BenjaminIs,

I appreciate all your effort and help but please please please send out what you want in a clear and precise manner. You are referring to 16 pairs. Which ones. I cannot read through hundreds of lines. I need to focus