Money Flow Trading Method along with Risk Management

https://ci5.googleusercontent.com/pr...d=wavatar&r=PG
QUOTE OF THE DAY
by Administrator
“The human brain is capable of 1016 processes per second, which makes it far more powerful than any computer currently in existence. But that doesn’t mean our brains don’t have major limitations. The lowly calculator can do math thousands of times better than we can, and our memories are often less than useless — plus, we’re subject to cognitive biases, those annoying glitches in our thinking that cause us to make questionable decisions and reach erroneous conclusions."
George Dvorsky

After a horrendous 2015, the first half of 2016 was gangbusters, a year that a number of us veteran gold/silver bulls had been waiting for. But, most of it fell apart during the second half of 2016. This fade, in which 60% to 70% of the gains for the year were lost, was especially disappointing as it came after 4+ down years... and has been in stark contrast to a U.S. stock market which has suddenly soared.


That blatant dichotomy between the precious metals and the DOW went into steroid mode following Donald Trump's unexpected presidential victory. Before the vote, the futures markets had the DOW tanking and the price of gold taking off on any hint there was a possibility of a Trump win. As everyone knows, all that changed immediately after it was learned that Donald Trump had pulled off the upset. Here's my two cents on what is going on:

*A number in the GATA camp believed the U.S. economy was in far worse shape than being portrayed by the establishment and financial markets before our presidential election.

*As mentioned, while Clinton was heavily favored to win the election, any prior signs of a Trump win quickly sent gold up and the stock market down in the futures markets.

*The financial markets were caught by surprise following Brexit. The Plunge Protection Team and Gold were prepared to not make that mistake again.

*Petrified of losing control of the markets, THEY went into action shortly after the Trump win was announced. Their goal was to make sure that PRICE ACTION
WOULD CHANGE MARKET COMMENTARY. The PPT drove our stock market higher. The Gold Cartel drove gold lower. It was a one way street trade and been that way until the last few days.

*NO ONE in the financial world predicted such market responses prior to the election.

*Their tactics have worked brilliantly.
Which leads to my take for next year concerning gold, silver and the shares:

*The establishment believes the only way to save the system is to inflate the system. They know that gold and silver are going SHARPLY higher as a result ... something similar to the late 1970's.

*Before these extraordinary moves higher begin, The Gold Cartel continues to exit their short positions. The gold/silver open interests on the Comex have collapsed, as have the cabal's short positions.

*Based on the precious metals price action and the constant negative commentary, the bullish sentiment has dropped to the lowest levels in memory.

*Many of us in the GATA camp have been asking for some time what the end game of The Gold Cartel might be ... as they go through so much physical supply to keep gold and silver at such artificially low levels. It seems to me we are finally witnessing that end game in process, right now.

*Very few in the investment world are thinking this way. If correct, gold is going to challenge all-time highs next year, while silver takes out $50 on its way to $100.

The risk/reward ratio for gold/silver investments, especially compared to other assets, is as good as it gets. My role is to stay on top of this potentially explosive opportunity and lay it out to you on a daily basis as it unfolds.

Comments from Benjaminis: We do not have FREE MARKETS at the Moment. Money Flow gives us the BEST insight as to what is happening at that moment in time.

SNIPPET REPEATED :
*Petrified of losing control of the markets, THEY went into action shortly after the Trump win was announced. Their goal was to make sure that PRICE ACTION
WOULD CHANGE MARKET COMMENTARY. The PPT drove our stock market higher. The Gold Cartel drove gold lower. It was a one way street trade and been that way until the last few days.


Http://www.lemetropolecafe.com

http://www.gold-eagle.com/article/ec...ect-gold-price

Snippet One:
The purpose of this article is to look at the economic consequences of Modis action. Initial estimates by western macroeconomists of the effect on GDP seems to be benigni. It could be because their contacts in India are typically the more highly-paid city bourgeoisie, who rarely spend cash except for tips, using bank and credit cards more normally for everyday purchases. These people would almost certainly welcome moves to bring illegal trading under control and extend the income tax base, playing down the negatives. However, the cash immediately removed amounts to about 2.5% of GDP, eventually to be replaced at an unspecified time in the future by the new notes bearing a portrait of the Mahatma. But while these notes are shortly to become available, it could take months to convert ATMs and ensure their widespread availability.

If the long-term consequences will be to bring unrecorded transactions into the GDP statistic, some western macroeconomists postulate recorded GDP could end up rising faster than anyone expected before Modis action. This misses the point. Banning high denomination notes worth as little as $7.50 equivalent to be replaced by the new Ghandi notes has been a major disruption in most Indians lives, particularly for the rural population. Removing everyday money is like trying to run an engine without any oil in it. It seizes up, which is what the Indian economy is certain to do. Indias economy is therefore likely to face a short-term slump, which government economists will counter by reflating, in other words by increasing the quantity of money. It will do the economy no good, but nominal GDP, which is not the same thing, will eventually rise, to the satisfaction of the central planners.

Snippet Two:
Behind the Indian authorities’ poor grasp of the economic consequences of their actions are misconceptions common with establishment economists everywhere. However, it is likely that central bankers in India and elsewhere are at least vaguely aware of the long-term danger of increasing price inflation. But the consensus in banking circles is that more money and credit may be required to stave off recession, and even systemic risk. And in the case of systemic risk, cash is a danger because it allows the public to expose a bank’s insolvency. If only cash was somehow replaced, there could perhaps be greater control over economic and systemic outcomes.

All the signs of this loose thinking are there. We keep on hearing of central banks planning to do away with cash, and Modi’s action is consistent with this standpoint. His government is not only trying to eliminate black markets, but it is also brutally trying to eliminate economic dependence on physical cash. It rhymes with the direction of travel for central bank policy in the advanced economies as well as in the emerging.

Doubtless, for this reason, central banks everywhere will be watching the Indian experiment closely. But we can easily guess what their analysis will conclude. If the experiment succeeds, it will encourage them to proceed with their own plans to digitize money and dispense with the folding sort. If it doesn’t, failure will be deemed to be due to the peculiarities of the Indian economy and the failure of the Reserve Bank to implement policy effectively, so they will proceed with their plans anyway.

Snippet Three:
However, hopes that the elimination of cash will give central banks greater control over inflationary outcomes appear to be badly misplaced. Not only does history tell us the exact opposite is the case, and that the reality is central banks have no control over price outcomes, but subjective price theory also confirms. The pricing power of money is not and never has been in the control of central banks; it is a matter only for the users of money in their day-to-day transactions. Money’s use as money is wholly down to its public acceptance as money, as experience proves, and central banks’ abuse of this trust is ultimately dangerous, as so often demonstrated. For example, despite government diktats and heavy-handed enforcement, Zimbabwe’s currency has become at best, to put it politely, a replacement for another form of paper whose vital supply has been disrupted. The digital version has even less value, because it has no alternative use.

Snippet Four:
The central banking community, headed by the Bank for International Settlements, was concerned at Indian gold demand increasing at a time when Chinese citizens were absorbing most of the world’s free supply of newly-mined and scrap gold. It is almost certain that the appointment of Raghuram Rajan in September 2013 as Governor of the Reserve Bank of India had much to do with the urgency to bring Indian demand for gold under control, because he was and still is the BIS’s establishment man. He has generally failed in this mission, and his tenure was not renewed for reasons unknown, other than he preferred to return to the calmer pastures of academe and his Vice-Chairmanship of the Bank for International Settlements.

This is not characteristic of a career central banker at the height of his powers and influence. Perhaps Rajan realised his attempt to manage gold demand would never work, and Modi was proving too dangerous for his own legacy at the Reserve Bank to survive unblemished. He was recently quoted as saying that the RBI’s ability to say no to the government must be protected, some months after he declined the opportunity to serve a second term. Was this a reflection of something that happened?

In conclusion, the surprise money-grab by the Indian authorities intensifies the public’s perception of a corrupt, overly-bureaucratic, and ineffective government. The public’s suspicion that government paper money is ultimately worthless will have, in its collective mind at least, gained immeasurable credence. An accelerating decline in the purchasing power of the rupee is the most likely economic consequence of Mr Modi, ultimately destabilising for both the country and his government.


See HSBC’s initial take on likely outcomes: http://www.forbes.com/sites/timworstall/2016/11/20/hsbc-says-demonetisat...

This will be my last post for the day and the most important one that I can share here on Forex Factory.

http://www.gold-eagle.com/article/ma...ar-still-looms

Adam Hamilton is one of the Top Three Analysts that I have been learning from over the last 15 plus years.

I like and respect him and have subscribed to his services from time to time. What makes him stand out from others is that he is very analytical and has very little bias in his views. He is his own Contrarian. I will post three Snippets from this article and I encourage everyone to take the time to read the entire article.

I also encourage everyone reading this thread to subscribe to it and even if you do not register with Forex Factory in order to share your thoughts and ask questions to myself and others here, keep yourself informed and knowledgeable as to the TRUTH not what the FALSE PERCEPTIONS are. When REALITY strikes the markets always adjusts.

Snippet One:
The US stock markets spectacularly defied the odds in 2016, soaring after both the UK’s Brexit vote and US presidential election. Both actual outcomes were universally feared as very bearish for stocks before the events. These contrary stock rallies have left traders feeling euphoric, convinced stock markets are impregnable. But with stock valuations hitting bubble levels in an exceedingly-old bull, a major bear still looms.

Though you wouldn’t know it in recent years, stock markets are forever cyclical. They rise and fall, flow and ebb, in great valuation-driven cycles. Bull markets always eventually give way to bears, and vice versa. Stocks can’t and don’t rise or fall forever, extreme popular greed or fear never last for long. The history of stock markets looks like a great sine wave, an endlessly-alternating series of bulls and bears.

Stock-price levels are ultimately dependent on underlying corporate profits, truly their sole fundamental foundation. Profits tend to rise gradually over time in fairly-linear fashion. But bulls and bears, fueled by widespread greed and fear respectively, temporarily drag stock prices away from their righteous fair values derived from earnings. These emotional distortions never last, as stocks always revert to mean valuations.

Today stock euphoria is rampant deep in the second-longest bull market in US history. And the driving catalyst couldn’t be stranger, Donald Trump’s surprise win of the US presidency. Leading up to early November’s election, stock markets sold off every time Trump’s odds of winning seemed to rise. Then on election night as Trump’s Florida lead mounted, stock-index futures plummeted limit-down to 5% losses!

Yet within hours after it became clear the election results wouldn’t be contested, stock traders’ sentiment turned on a dime. Instead of fearing Trump the unknown loose cannon, they whole-heartedly embraced his policy agenda. The prospects of huge corporate-income-tax and personal-income-tax cuts, on top of massive new infrastructure spending, left stock traders salivating at potential much-higher future profits.

So they rushed to buy stocks in the wake of Trump’s surprise victory, catapulting the stock markets to a series of new all-time record highs. These naturally ignited widespread popular greed and euphoria. As 2016 ends, investors expect nothing but blue skies coming. But the near-bubble valuations stocks were trading at even before the election argues the opposite that dark storm clouds are building ready to unleash hell.

Rather ironically Trump himself, stock traders’ newly-crowned savior of the stock markets, often warned about these dangerous stock markets during his campaign. Trump spoke to his biggest audience ever back in late September during the first US presidential debate, and he couldn’t have made his outlook on the stock markets any clearer. Trump admonished, “Believe me, we are in a bubble right now...”
“…and the only thing that looks good is the stock market, but if you raise interest rates even a little bit, that’s going to come crashing down. We are in a big, fat, ugly bubble.” And valuations now in the wake of the post-election euphoria are even more extreme than they were several months ago when Trump somberly warned American voters about the stock-market dangers! Stocks are an accident waiting to happen.

Snippet Two:
This amazing stock bull was born way back in March 2009 in the wake of the first true stock panic since 1907. After such an epic maelstrom of fear fueled such an extreme plummet to climax a bear market, a new bull was indeed overdue despite rampant bearishness and pessimism. The very trading day before the SPX bottomed, I wrote a hardcore contrarian essay explaining why a major new bull market was being born.

Back in early 2009 stock-market valuations were so low after the panic that a new bull was fully justified fundamentally. And its first four years or so played out perfectly normally. Between early 2009 and late 2012, this bull market’s trajectory was normal. It rocketed higher initially out of deep bear lows, but those gains moderated as this bull matured. And its upside progress was punctuated by healthy major corrections.

Stock-market selloffs are generally defined in set ranges. Anything under 4% isn’t worth classifying, it is just normal market noise. Then from 4% to 10%, selloffs become pullbacks. Beyond that in the 10%-to-20% range are corrections. Selloffs greater than 20% are formally considered new bear markets. In both 2010 and 2011 the SPX suffered major corrections in the upper teens, which are essential to rebalance sentiment.


As bull markets power higher, greed naturally grows among investors and speculators. They start to get very complacent and expect higher stocks indefinitely. Eventually this metastasizes into euphoria and even hubris. Major corrections, big and sharp mid-bull selloffs, rekindle fear to offset excessive greed and keep bulls healthy. Interestingly even in 2010 and 2011 the Fed played a key role in stock-market timing.

Those early bull years’ major corrections coincided exactly with the ends of the Fed’s first and second quantitative-easing campaigns. QE is an extreme monetary-policy measure central banks can use after they force interest rates, their normal tool, down to zero. The Fed’s zero-interest-rate policy went live in mid-December 2008 in response to that first stock panic in a century, and QE1 and QE2 soon followed.

Quantitative easing involves creating new money out of thin air to buy up bonds, effectively monetizing debt. While QE1 and QE2 certainly caused market distortions, both campaigns had predetermined sizes and durations. When traders knew a particular QE campaign was nearing its end, they started selling stocks which drove the major corrections. So the Fed decided to change tactics when it launched QE3.

As the SPX approached 1450 in late 2012, that normal stock-market bull was topping due to expensive valuations. After peaking in April, stock markets started rolling over heading into that year’s presidential election. Stock-market fortunes in the final several months leading into elections can greatly sway their outcomes. So in mid-September 2012 less than 8 weeks before the election, a hyper-political Fed birthed QE3.

QE3 was radically different from QE1 and QE2 in that it was totally open-ended. Unlike its predecessors, QE3 had no predetermined size or duration! So stock traders couldn’t anticipate when QE3 would end or how big it would get. Stock markets surged on QE3’s announcement and subsequent expansion a few months later. Fed officials started to deftly use QE3’s inherent ambiguity to herd stock traders’ psychology.

Whenever the stock markets started to sell off, Fed officials would rush to their microphones to reassure traders that QE3 could be expanded anytime if necessary. Those implicit promises of central-bank intervention quickly truncated all nascent selloffs before they could reach correction territory. Traders realized that the Fed was effectively backstopping the stock markets! So greed flourished unchecked by corrections.

This stock bull went from normal between 2009 and 2012 to literally central-bank conjured from 2013 on! The Fed’s QE3-expansion promises so enthralled traders that the SPX went an astounding 3.6 years without a correction between late 2011 and mid-2015, one of the longest-such spans ever. With the Fed jawboning negating healthy sentiment-rebalancing corrections, sentiment grew ever more greedy and complacent.

QE3 was finally wound down in late 2014, leading to the Fed-conjured stock bull stalling out. Without central-bank money printing behind it, the stock-market levitation between 2013 and 2015 never would have happened! One of the most-damning charts of recent years shows the SPX perfectly tracking the growth in the Fed’s balance sheet as its monetized bonds accumulated there. This stock bull is largely fake.


Without the Fed’s QE firehose blasting new money into the system, stock-market corrections resumed in mid-2015 and early 2016. After topping in May 2015 not much higher than QE3-ending levels, the SPX drifted sideways to lower for fully 13.7 months. That too should’ve proven this artificially-extended bull’s top, giving way to the overdue subsequent bear. But that was miraculously short-circuited by the Brexit vote.

Snippet Three:
valuations ought to terrify investors.

http://www.gold-eagle.com/sites/defa...on123016-2.gif

Unfortunately today corporate earnings are intentionally obscured by Wall Street to mask the dangerous overvaluation that is rampant. Analysts make up blatant fictions including forward earnings, which are literally guesses about what companies will earn in the coming year. These almost always prove wildly optimistic. Analysts also look at adjusted earnings, another Pollyannaish farce where companies ignore expenses.


Wall Street also plays a deceptive estimate game to make quarterly-earnings results look way better than they really are. Instead of comparing actual hard quarterly profits with the same quarter a year earlier, they intentionally lowball estimates so companies beat regardless of their actual earnings trend.

Investors are being bamboozled, with the only honest way of measuring corporate profits buried and forgotten.

That is based on generally-accepted accounting principles (GAAP) which are required when companies actually report to regulators. The only righteous way to measure price-to-earnings ratios is using the last four quarters of GAAP profits, or trailing twelve months. Those numbers are hard, established in the real world based on real sales and real expenses. They are not mere estimates like totally-bogus forward earnings.

Every month at Zeal we look at the TTM P/Es of all 500 SPX companies. At the end of November, the simple average of all SPX companies actually earning profits so they can have P/Es was an astounding 28.1x! That is formally in bubble territory, just as Trump warned about during the campaign. 14x earnings is the historical fair value over a century and a quarter, and double that at 28x is where bubble levels start.

If you study the history of the stock markets, stock prices never do well starting from bubble valuations. Such extreme stock prices relative to underlying corporate earnings streams actually herald the birth of major new bear markets. Again they usually cut stock prices in half. So buying stocks here, late in an old bull market artificially levitated by the Fed, is the height of folly. Massive losses are inevitably coming.


Remember stock markets perpetually meander through alternating bull-bear cycles. Back in late 2012 before the Fed stepped in to try and brazenly short-circuit these valuation-driven cycles, valuations were actually in a secular-bear downtrend. After secular bulls drive valuations to bubble extremes, with greed forcing stock prices far beyond underlying corporate earnings, secular bears emerge to reverse these excesses.

During secular bears, stock prices grind sideways on balance for long enough for earnings to catch up with lofty stock prices. Before QE3 temporarily broke stock-market cycles, that process had been happening as normal between 2000 and 2012. Secular bears don’t end until valuations get to half fair value, 7x earnings. So instead of being near bubble levels, valuations would normally be between 7x to 10x today.

That’s the massive downside risk stocks face due to their Fed-conjured bubble valuations! While the red line above shows the actual SPX, the white line shows where it would be trading at 14x fair value. Even that is way down around 1207 today, roughly half current levels. But mean reversions from extremes nearly always overshoot in the opposite direction, so the potential SPX bear-market bottom is much lower.

Sadly Wall Street will never bother telling investors that valuations matter. Stock-market history proves beyond all doubt that buying stocks high in valuation terms nearly always leads to considerable-to-huge losses. All the financial industry cares about is keeping people fully invested no matter what, since that maximizes their fees derived from percentages of assets under management. Talk about a conflict of interest!


The more expensive stocks are in valuation terms when they are purchased, the worse the subsequent returns will be. And no matter how awesome Trump’s policies may ultimately prove, they aren’t going to rescue corporate profits anytime soon. Even if everything miraculously goes perfectly, the major tax cuts being discussed aren’t coming until 2018 at best. Even infrastructure spending takes some time to ramp up.

In the meantime, corporate profits face major headwinds in the coming quarters that are likely to leave stock valuations even more extreme. Part of the Trumphoria after the election catapulted the US Dollar Index to lofty new 14.0-year secular highs. About half of the revenues for the 500 SPX companies as a whole come from overseas, so overall profits are going to get hit hard starting in Q4’16 due to the strong dollar.

High US-dollar levels make the products and services US companies are selling in foreign countries a lot more expensive, retarding sales. And then the resulting foreign profits are hit again on translation back into US dollars. So the imminent Q4’16 earnings season isn’t likely to look good at all, although Wall Street will try to mask that as usual with expectations games instead of hard year-over-year analysis.

The stock markets’ lofty valuations before the Trumpgasm and bubble valuations since are a very serious problem that can only be resolved by an overdue major bear market. Only that will drag stock prices low enough to where existing and future corporate earnings will support reasonable valuations again. Realize as well that the Republicans now dominating government have every incentive to let stocks fall in 2017.


As Trump often pointed out, they know stocks are dangerously overpriced due to their artificial levitation by the Fed in recent years. The sooner the inevitable stock bear to fix this begins, the sooner it will end. There is a narrow window here where the stock bear can still be blamed on Obama’s policies. There’s no doubt the Republicans in power want it out of the way before the 2018 elections and especially the 2020 ones.

Early in new presidencies is the best time politically, the least damaging, to see weak stock markets. As Republicans now control the majorities in both the Senate and House as well as the presidency, they have huge incentives to get the overdue stock bear out of the way as soon as possible. That way they can ride the subsequent bull into the next elections. So Washington’s support of this fake bull is likely finished.

Investors really need to lighten up on their stock-heavy portfolios, or put stop losses in place, to protect themselves from the coming valuation mean reversion in the form of a major new stock bear. Cash is king in bear markets, as its buying power increases as stock prices fall. Investors who hold cash during a 50% bear market can double their stock holdings at the bottom by buying back their stocks at half price!


Put options on the leading SPY S&P 500 ETF can be used to hedge downside risks. They are cheap now with euphoria rampant, but their prices will surge quickly when stocks start selling off materially. Even better than cash and SPY puts is gold, the anti-stock trade. Gold is a rare asset that tends to move counter to stock markets, leading to soaring investment demand for portfolio diversification when stocks fall.

Gold surged nearly 30% higher in the first half of 2016 in a new bull run that was initially sparked by the last major correction in stock markets early this year. If the stock markets indeed roll over into a new bear in 2017, gold’s gains next year should be much greater. And they will be dwarfed by those of the best gold miners’ stocks, whose profits leverage gold’s gains. Gold stocks rocketed 182% higher in 2016’s first half!

Comments from Benjaminis: Once again , Happy New Year 2017 , EVERYONE !!!

Morning Thoughts - Daily

Today is the first day of the rest of our lives so along that line of thought, the first thing that I will address in my morning thoughts is an email that I received yesterday from one of our "piphunting" Forex Factory traders.

My real name is Benjamin however some here post under the names they choose to be seen as here so unless I have permission from them I always use the name that is shown on Forex Factory.

Now to the email which allows me to answer the questions and comments made to me.

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 9 Forex Traders using the $50,000 US Funds Demo account with FXCM UK 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 Benjamin

A very good insight and explanation of thought process and methodology in respect to money flow ....thankyou

Mrmkg01

Thank you for your reply Mrmkg01

Let Us ALL work together as we are and make (Earn) plenty of money this year and have much fun doing it !!!

I hope to hear from many people over the next few days and we all will be ready to Rock and Roll in 2017.

The more questions the better so we can all learn from each other. I am off for breakfast and will return in a few hours. Thanks !!!


Benjaminis

Thanks for subscribing mclon

Please feel free to post any questions that you might have or just share with us anything that you care to. We all are here to help each other and that is what has happened since I started this thread on December 3, 2016.

Welcome to our Thread.


Benjaminis

http://www.gold-eagle.com/article/re...-junior-miners

Snippet:
Jeb Handwerger
December 30, 2016

Summary
The Trump presidential election win has pushed capital into a major risk on rally, benefiting stocks, energy and the US Dollar.

Interest rates are soaring in line with the Dow Index breaking 20k indicating major inflationary pressures.

Commodities such as industrial metals, copper and oil are also rallying.

The junior gold miners could be on the verge of breaking a six-month downtrend.
A few weeks ago in an article titled, Seasonality Favors Precious Metals And Junior Miners Going Into Year End , I attached the following chart.

http://www.gold-eagle.com/sites/defa...eb123016-1.png


In the article, I wrote "The precious metals are very oversold and ripe for a reversal as they usually bottom at year-end then have massive rallies in the new year. This seasonal pattern has been strong even during this bear market."

Comments from Benjaminis: I am going to use a new approach so everyone will know why I link a particular article. This morning before my breakfast I printed out this article by Jeb Handwerger and read it while having my breakfast. I link it here so everyone can understand what it contains that needs to be understood. The Snippet that I posted contains his views and his pointing out of facts about Asset Classes and Money Flow. That is what WE need to know as well.

Snippet:
Now two weeks later, it appears gold may have bounced off its support and is making some bullish reversals as shown on the charts. I am closely following to see if the junior miners can break the recent downtrend and regain the 200-day moving average in the New Year confirming a new bull market rally.

This could set up for its next bull rally like it did in 2016. Despite this downward correction, the junior gold miners are outperforming stocks (NYSEARCA:SPY) and bonds (NYSEARCA:TLT) on the year.

The markets are pricing in inflation following the Trump presidential election win and that should benefit metals. U.S. stocks are soaring to record highs and the Dow is on the verge of breaking 20k, a major psychological level. Investors should be prepared for volatility as President Trump will counteract a lot of Obama's moves over the past eight years, which could accelerate moves in many markets.

Notice already that U.S. bonds are breaking down, as capital is flowing to riskier assets, most notably stocks, copper (NYSEARCA:JJC) and energy (NYSEARCA:XLE). To me, this signals inflation, rising interest rates, and major policy changes, which is already having dramatic effects on portfolios.

I am amazed that the US dollar (NYSEARCA:UUP) is still rising despite many bonds crashing. All fiat currencies except the US dollar are crashing. There are even some places around the globe experiencing hyperinflation, most notably Venezuela and India. Investors are dumping their foreign stocks and paper in favor of U.S. Stocks and US dollars.

An artificially high US dollar could stress borrowers who have to pay back loans. Most notably affected could be the US Federal Government, who is already in record debt.

Comments from Benjaminis: This Snippet deals with Money Flow and Psychological Matters !!! So we just need to note the issues pointed out so that we can be aware of it. You will not read about this in The Main Street Media or have it discussed too much on CNBC because in many cases THEY are too close to the Forest to EVEN see the Trees. We look at the Forest !!!

Snippet:
I expect Trump will do whatever he can to stimulate spending and growth to make America great again, maybe by putting capital into infrastructure. This should benefit the domestic steel (NYSEARCA:SLX), copper (NYSEARCA:COPX) and energy sector.

Attention should be paid to the lithium sector (NYSEARCA:LIT), as well, since Tesla (NASDAQ:TSLA), that recently announced a deal with Panasonic (OTCPKCRFY) to manufacture solar cells to be used with the Lithium Ion PowerWalls. This could be the sector which "trumps" the rest over the next decade, bringing thousands of jobs back to the US.

In addition, Trump loves nuclear, and I expect major investments will be made to update and expand our nuclear fleet of reactors. He has already caused a major bounce in the sector after a couple of tweets promoting nuclear energy.

Investors should look to gain exposure to the Uranium Mining ETF (NYSEARCA:URA) as Trump may look to build our domestic nuclear sector since we can no longer rely on imports (especially when we have millions of pounds of uranium in the Southwest). There have been many small uranium miners raising money after the Trump win, which may auger a bottom.

I suggest to continue to follow the tensions in the South China Seas, with the potential theft of a U.S. military drone. Could China have taken that drone to see what rare earths the U.S. was using to power and guide the advanced drones? All the metals which China has control of should be watched closely. Focus on rare earths (NYSEARCA:REMX), graphite, and other strategic battery technology metals such as scandium and cobalt.

Trump has hired Peter Navarro as China trade advisor, and the Chinese are already threatening a trade showdown. Hopefully, Trump will move fast to help secure our own supply chain of critical metals, as that is how the Chinese can squeeze the West.

Take a look at some recent developments in this sector, some of which should be looked at for 2017. Remember that there is no current U.S. production of flake graphite used in high tech batteries. Smart money wants some exposure to fertilizer stocks as inflation increases.

Comments from Benjaminis: This Snippet is about PERCEPTION and REALITY. Look at the perception of the writer who is an excellent one. Look at what has happened to Bonds of ALL Countries and the Rise in the Equities markets. IT IS ALL ON PERCEPTION AND SURELY NOT ON IMMEDIATE REALITY.

I mentioned in my morning thoughts why it is CRITICAL to be informed so that as a Forex Trader you are aware that eventually the PERCEPTION will be changed to REALITY and then of course the Money Flow will change directions. Our 4 Trade Plans were based on this knowledge.

For the rest of the article please read it yourself and please post any thoughts or questions that you have here on our Thread. We only learn when we communicate and understand. I have made improvements mainly because of comments shared with me by others here.

Thank You...


Benjaminis

<Мое настоящее имя Benjamin однако некоторые> BenjaminIs, Please forgive mistakes in the spelling of the name. My translator from English not work correctly

It is all good. Just work hard and make money and have fun and do not worry about the translation. Have a great day and be happy !!!


Benjamin or Benjaminis

http://seekingalpha.com/article/4033...ed-big-picture

Snippet:

Summary
Do yourself a favor: spend a little less time on localized trades and a little more time thinking about systemic factors.

An overly narrow approach to investing leads directly to a narrow understanding of the big picture.

Here's an outline of what I believe has been the most important dynamic driving credit and equity markets over the past three years.

I talk (and think) quite a bit about trends, themes, and market dynamics. In other words, I like to focus on the big picture.

Put simply, I want to understand what's going on at the systemic level. Why? Because that's how one can identify systemic risk factors. And identifying systemic risk factors ahead of the moment when they conspire to bring down entire markets is a great way to make a lot of money. Just ask Michael Burry.


Still, most investors seem to live and die by a series of largely vacuous investment axioms that essentially serve to perpetuate the myth that you too can generate steady or even outsized returns if only you're willing to "do your homework" and "stay disciplined", etc.

The truth is, the vast majority of the "guidance" you'll get from "professionals" is pure drivel.

No one knows where company XYZ's shares are going to be next week, next month, or next year and I hate to tell you this, but "doing your homework" is overrated. Does that mean you should just buy (or sell) on a whim? Well obviously not, but there are factors beyond your control that will dictate where assets trade and you'll be in a better position to understand those factors if you spend a little more time thinking on a systemic level and a little less time trying to run your own homemade DCF model.


Indeed, even the most respected market mavens make assumptions that are dubious. For instance, pick up any beginner's guide to stocks, mutual funds, and equity ETFs and within the first dozen or so pages, you'll probably get a quote from someone like John Bogle telling you that over time, stocks return an average of ~9%. But that's just how things have played out over the past century or so. Nothing at all says that's how things have to play out going forward.

Some tectonic shift could forever change the way we think about portfolio strategy. And that's precisely why I care so much about systemic risk - because it's systemic risk that has the potential to upend conventional wisdom.


Of course not every trend or theme will end up playing a role in some kind of dramatic market transformation. But at the end of the day, I think about it like this: It's always useful to know how things work. If I know how a car works, I'll be in a better position to spot problems early on. If all I know about cars is how to change a tire, I probably won't be any better at diagnosing mechanical problems than the next guy.

The same goes for markets. I may be an expert on Amazon, but if I don't spend any time learning about how everything fits together, I'll be in no shape to predict, say, an overnight devaluation of the RMB, let alone what the ramifications of such an FX bombshell might ultimately be.


With all of that in mind, I want to talk about the interplay between central bank liquidity, credit, leverage, and equity prices, as I think the relationship between them has been perhaps the most important dynamic driving markets over the past three years.


First, let me summarize how this works. Central bank flows (liquidity) have artificially suppressed rates (NYSEARCA:TLT), leaving investors with very few options in terms of sourcing high quality assets with an acceptable return. The ensuing hunt for yield drove investors further down the quality ladder, creating demand for corporate credit, first in IG (NYSEARCA:LQD), then in HY (NYSEARCA:HYG) along the way. Companies took advantage of that demand by issuing debt.

Corporate management teams then used the proceeds from debt sales to fund buybacks. Those buybacks boosted stock (NYSEARCA:SPY) prices despite a dearth of revenue growth.


Let's visualize things, shall we? We'll start with companies sweeping topline deterioration under the rug with buybacks...
https://staticseekingalpha.a.ssl.fas...3005165062.png
(Charts: Citi)
... which are of course funded with debt:
https://staticseekingalpha.a.ssl.fas...3143444728.png
(Charts: Citi)
That should give investors pause. Instead, spreads have actually come in thanks presumably to the perpetual hunt for yield - even as interest coverage declines:

And for those who insist on having the ramifications spelled out for them, I'll leave you with one last chart from Citi:
https://staticseekingalpha.a.ssl.fas...0950058572.png
(Chart: Citi)
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Follow this author and get email alerts

Comments from Benjaminis: Please take the few minutes to read the rest of this GREAT ARTICLE and The Theme is "THE BIG PICTURE"

My theme and point that I share with everyone here is to understand the dynamics of the markets that you are trading. You do not need to find these articles as I read at least three hours each day. I decide what is relevant and what is not. These posts today hopefully will make it easier to learn. We all can learn including myself.

One of my sayings is "When You Think That You Know Everything , Then You Know Nothing"

I learn everyday and I make changes if facts warrant that. I observe and always want to understand.

I want everyone to do good so now it is up to you to program yourself and move away from the way that the masses think which is usually wrong.


Benjaminis

Hello MRMKG01

I put your name alias in Capitals. I want to know if you understand the one position that you now have on of Short US30 and what additional Forex trades you might take when the Forex markets resume. Please post and let me know. As for everyone else where are you ? I know enjoying a Turkey Dinner with your family and friends. Myself I am alone finishing off the sparkling wine I started yesterday and keeping busy. I have more interest in watching the College Bowls games tomorrow then the NFL today. Whatever you do to get away from Forex is good. It lets you start with a clear head and a Positive Mental Attitude.

I am very excited with the week ahead of us. I started this Thread on December 3, 2016 , 29 days ago and I am more than satisfied with all the cooperation from everyone posting here and especially our 9 Forex traders using the FXCM UK Demo Platform with $50,000 US Dollars available to trade with.

This is our current list of 9 Forex Traders.

(1) David RP
(2) dttsomh
(3) Dildubai
(4) KeepCalmfx
(5) Rockey007 (Rockey007) has withdrawn and hopefully he will reconsider. I personally think that he could become a very good and profitable Forex Trader.
(6) raveon
(7) wayfarer
(8) Maximus
(9) MRMKG01

From my ORIGINAL LIST WITH THE PROPER CAPITALIZATION'S !!! AND User Numbers !!!

I am going to list those in order of signing up for the demo accounts with FXCM UK.

I am wondering if everyone is in favor of all on this list of Forex traders to try to post here at least once each day.


(1) DavidRP D102728560001

(2) dttsomh D102731143001

(3) Dildubai D102731452001

(4) KeepCalmfx D102742634001

(5) Rockey007 D25557124001

(6) raveon D102742734001

(7) wayfarer D102743041001

These are the 7 that have signed up. However Rockey007 has since dropped out.

Welcome Maximus2005

(8) Maximus2005 D102746118001

I would consider adding three more Forex traders to make it an even dozen. If you are interested please post here to let me know and then follow the clear instructions to open your FXCM UK Demo Account.

Now back to the rest of my Sparkling Wine.


Benjaminis

From post 628

Hi Benjamin.

Thank you for the responds, it is much clearer now.

"Here are the four Trade Plans in order of importance and likelihood.

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

THAT IS IT NOTHING ELSE FOR NOW."

If we short the US30 and USDJPY together, would that not increase our risk as most of the time they go in the same direction?
Or because of your strict risk management, it does not matter.





Hello KeepCalmfx

With regard to trades and correlation concerning US30 and USD/JPY since these two Trade Plans are different in the way that it relates to each other because of the Money Flow Factor. Look at two charts of US30 and USD/JPY of say the last 6 months and they should go in the same direction. You are correct in saying that the risk is increased. However EVERY Trade Plan has the MAXIMUM RISK of 6%.

The difference between trading Long Silver and Long Gold and the US30 and USD/JPY is the Money Flow and again that is where our EDGE comes in. I hope that I made it clear and please give me feedback as it is important that you always understand the strategy. One other way to look at it is WE cannot say 100% for sure when US30 will go down however WHEN IT DOES , then so should USD/JPY get stronger as Money Flows into the Yen and out of the US Dollar.


Benjaminis

 

1. Post 629
2. Cleanup
3. Quote
4. Dec 30, 2016 5:45am

1. BenjaminIs
2. Joined Dec 2014 | Status: Member | 659 Posts | Online Now

Quoting BenjaminIs
{quote} Great Questions KeepCalmfx I will paste your questions here and put my answers below your questions. Please feel free to ask any Follow Up questions. What is the average time you stay in a trade? ANSWER from Benjaminis: It can be as quickly as 15 minutes to one hour or in cases where I have a DRAWDOWN longer !!! However just as I did this morning I closed 2 of my 3 Long Silver Positions to lock in my profits. I had profits yesterday however there is carrying costs for holding Silver LONG so I closed them with a NET PROFIT !!! I will post...
From 549

Quoting KeepCalmfx
Hi Benjamin What is the average time you stay in a trade? I know there is some variables, like news ect. But say your last 10 trades you had and closed, what was the average period you had them before they or hit profit or you closed them manually? 24hours or 2-3 days or do you sometimes also have trades running for weeks or few hours? What is the average amount of trades you take/place a month? Do you have like a ratio, say 6 our of the 10 trades for instance you place you close in profit or hit profit? Do you ever move a stop loss to breakeven?...
Great Questions KeepCalmfx

I will paste your questions here and put my answers below your questions. Please feel free to ask any Follow Up questions.

What is the average time you stay in a trade?

ANSWER from Benjaminis: It can be as quickly as 15 minutes to one hour or in cases where I have a DRAWDOWN longer !!!
However just as I did this morning I closed 2 of my 3 Long Silver Positions to lock in my profits. I had profits yesterday however there is carrying costs for holding Silver LONG so I closed them with a NET PROFIT !!! I will post a report this afternoon. Bottom LINE !!! If and when you have a nice profit you should close your position if there are certain unknowns ahead. ALSO as I have said in the past. You can NEVER lose taking a profit.


But say your last 10 trades you had and closed, what was the average period you had them before they or hit profit or you closed them manually?

ANSWER from Benjaminis: I answered that I think however when I post all my Demo trades from December 20, 2016, when will see the times in and times out !!!

24hours or 2-3 days or do you sometimes also have trades running for weeks or few hours?

ANSWER from Benjaminis: When I first started trading Real Funds during 2006, I had a client that deposited $25.000 US with his account at Trade Freedom.

I purchased for him under my LPOA (Limited Power of Attorney) $1,000,000 US Dollars of EUR/USD. A few days after I did that, former FED Chairman Ben Bernake went on TV and based on what he said EUR/USD went down 300 PIPS or so. Fortunately when I purchased the $1,000,000 US EUR/USD , I had already made realized profits of approximately $25,000 US Dollars so the Capital was around $50,000 US Dollars. I had a DRAW DOWN of approximately $25,000 US Dollars so I waited around 5 or 6 weeks and finally I was able to sell the $1,000,000 US Dollars EUR/USD contracts at a SMALL NET PROFIT !!!

That is when I CHANGED my Strategy to SCALE IN MY POSITIONS in Units of 100 or $100,000 US a currency contract.

I hope this gave you good background on how and why I changed my STRATEGY !!!

What is the average amount of trades you take/place a month?

ANSWER from Benjaminis: For every $50,000 US Dollars REAL FUNDS that I have under management, I make around 25 Forex Trades a day. Around 500 a month. I also earn PIP REBATES of $10.00 a trade from my Forex Broker because I always have traded in the past as an Introducing Broker. At present time I am an Introducing Broker with Ava Trade in Ireland through my Federally Chartered Canadian Corporation.

Do you have like a ratio, say 6 our of the 10 trades for instance you place you close in profit or hit profit?

ANSWER from Benjaminis: My RECORDS will show with PROOF that I win a MINIMUM of 75% of ALL my Forex Trades. That guarantees my ability to produce a Return on Investment of at least 10% each month that I trade Forex consistently year after year. Starting in 2012, I decided to expand my business by teaching traders as well as just trading Forex. Some of the VERY PROFESSIONAL Mentors around offer similar services however not with the Hands On that I do and at prices that can be in the Thousands of Dollars. My maximum charge for subscription users will be $50.00 US each month with NO CONTRACTS needed. I also will have free content as well.

Do you ever move a stop loss to breakeven?

ANSWER from Benjaminis: At times trading MANUALLY, as I am in Profits what I do is move my STOP LOSS to lock in profits no matter what, so if the Trend reverses then, I am out with a profit and if it continues in my direction every 25 PIPS , I move my STOP LOSS. Your QUESTION is an excellent one and it shows me that you have a very good grasp of what I am teaching here. Thank You !!!

The DOW and JPY is having a nice run down the past hour, when will you think to put your second position on the DOW or on a trade plan?

ANSWER from Benjaminis: When you see that the Momentum has started just enter a second trade. At times you do not need to enter a Third Position. The strategy of Three Positions is more often used when the Trade moves against you as I have already explained to everyone in the last few days.

It looks like the DOW is ranging with 50 pips between 19970 & 19920

From post 648

I subscribe to Barclay Hedge Ranking Report for Currency Trading Advisers and I want to give you a flavor and show you to do 5% ROI (Return On Investment)
is not easily achieved except for the best. Imagine if you actually can earn wit real funds 5% a month then that would amount to 60% a year !!!

Barclay Hedge ranking report YTD

September 2016

For Accredited Investors Only

Current YTD Return Trading Advisors
Last 12-Mo. Return
Sharpe Ratio
Annualized Std Mo. ROR
Worst Draw Down
Money Under Mgmt.
For the period from 10/1/2015 to 9/30/2016. Includes only CTAs managing at least $10 million as of 9/30/2016 Top 10 Managed FuTures perForMers 2016 *



1 24FX Global Advisors 67.06% 67.00% 2.49 26.81% 5.40% 78.7M

The TOP advisor has averaged 67,06% Year To Date and is managing 78.7 Million Dollars US. That is under 6% a month. 6 times 12 months is 72%.

2 Quantitative Invest. Mgmt (Gl. 3X) 36.76% 48.09% 1.84 26.03% 9.38% 230.5M

The next BEST advisor over the last 12 months has earned 48.09 % and manages 230.5 Million US Dollars. That is around 4% a month average.

3 GAIA Capital Mgmt (GAIA FX+) 35.67% 43.35% 4.66 9.25% 1.90% 11.9M

4 Amplitude Capital (Klassik) 27.49% 10.10% 0.54 18.25% 13.64% 924.4M

5 HonTe Advisors (Prop) 22.00% 15.16% 0.51 29.42% 12.54% 64.0M

I point this out so that you know that what WE can accomplish will be amazing if you can do that for say three months in a row using the FXCM UK Demo Account and what will your balance be as of March 31, 2017 ?

Not to sell you dreams , you do have an opportunity to show YOURSELF how good you can become with desire and hard work.


Benjaminis

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5

5 Minute Chart from Finviz on USD/JPY

We have some small activity in Japan and the FXCM UK Demo Platform is not active. It is still New Years Day in North America.


I just finished Les Truffles Laurent Chaumet. I rarely drink just had the bottle for New Years Eve !!!

Benjaminis

HEADS UP FOR ALL FOREX TRADERS !!!

The 5 Minute Chart of US30 from Finviz

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

Please KEEP IN MIND that even though the Dow 30 Markets are NOT OPEN using this particular FXCM UK Platform you can trade now. The FXCM UK Platform is now active though with very light volume as Japan is now open.

Anyone around please check in so I know you are around and I can interact with you !!!

P.S. EVERYONE of the 9 Forex Traders should have at least ONE Position of SHORT US30 on of 100 Units entering your STOP LOSS and LIMIT OUT once your order is filled. Hello maximus 2005 !!! Your last suggestions were very useful. Any others would be appreciated !!!

I would suggest you use a Risk Reward Ratio of 1 to 3 for your First Position of $100,000 US Dollars (100 Units) So your STOP LOSS would be $1000 US Dollars above your entry price and your LIMIT OUT at $3000 US Dollars from your Entry Price.


Benjaminis

I am with you Benjamain and i will try to put some trade this week...I am still at the mine and working night shift... :-)

At maximus2005 with your permission I can enter the position for you. Since I see that you are not online now I will do it and when you have a moment look at your FXCM UK Demo Platform. Be safe. Please bring back some Gold from the Mine !!!

OOPS cannot execute the Trade so assume it will start back up sometime tomorrow morning near the Europe open.


Benjaminis

Yes no problem log in my account please...Sorry I am working in a diamond mine so I will try to bring for all of you diamonds... :-)