Money Flow Trading Method along with Risk Management

http://www.actionforex.com/action-in...0170117279307/


Daily Report: Pound Recovers, But Remains Vulnerable on PM May's Speech on Brexit


Sterling recovers mildly today but remains the weakest major currency for the week. Prime minister Theresa May's speech on Brexit is the main focus and could trigger more volatility in the pound. It's reported that May will reject the idea of "partial" EU member in return for a full control of UK's border. The trade relationship that May would like to push through is unknown. But EU leaders have already made it clear that UK cannot "cherry pick" access to the single markets.

The pound could stay under pressure after May's speech. Technically, Sterling is staying bearish against Dollar, Euro and Yen in near term and we'd expect more downside ahead.


Theresa May is scheduled to speak before audience at Lancaster House, Westminster, including ambassadors from across the world, today.

As the Guardian noted, May is expected to say in her speech that "we seek a new and equal partnership between an independent, self-governing, global Britain and our friends and allies in the EU. Not partial membership of the European Union, associate membership of the European Union or anything that leaves us half-in, half-out... We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave. The United Kingdom is leaving the European Union. My job is to get the right deal for Britain as we do".


Separately, BoE governor Mark Carney talked down recent moves in the exchange rate and said that "value of the pound will go up and down." He acknowledged "signs of continued solid consumer momentum domestically and a stronger growth outlook globally", noting that "the tension between consumer strength on the one hand and the more pessimistic expectations of markets on the other will be resolved". However, firstly, he still expected growth to "remain below past averages for the next few years". And, "one corroborating indicator of this potential deceleration is that the UK expansion is increasingly consumption-led."


On the data front, Australia home loans rose 0.9% in November. Japan industrial production was finalized at 1.5% mom in November. UK will release CPI and PPI. Eurozone will release ZEW economic sentiment. US will release Empire state manufacturing later in US session.


GBP/USD Daily Outlook
Daily Pivots: (S1) 1.1990; (P) 1.2037; (R1) 1.2089; More...
GBP/USD recovers after hitting as low as 1.1986. But near term outlook stays cautiously bearish as long as 1.2316 resistance holds. Decisive break of 1.1946 low will confirm larger down trend resumption. Next near term target is 61.8% projection of 1.3444 to 1.1946 from 1.2774 at 1.1848 and then 100% projection at 1.1276. However, above 1.2316 will turn focus back to 1.2432 resistance. Break there will invalidate our bearish view and extend the consolidation from 1.1946 with another rise before down trend resumption.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term bottoming yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.
http://www.actionforex.com/images/st...20170117a1.png
http://www.actionforex.com/images/st...20170117a2.png

Economic Indicators Update

GMTCcyEventsActualConsensusPreviousRevised
0:30AUDHome Loans Nov0.90%0.00%-0.80%-0.60%
4:30JPYIndustrial Production M/M Nov F1.50%1.50%1.50%
9:30GBPCPI M/M Dec0.30%0.20%
9:30GBPCPI Y/Y Dec1.40%1.20%
9:30GBPRPI M/M Dec0.40%0.30%
9:30GBPRPI Y/Y Dec2.30%2.20%
9:30GBPPPI Input M/M Dec2.40%-1.10%
9:30GBPPPI Input Y/Y Dec15.50%12.90%
9:30GBPPPI Output M/M Dec0.40%0.00%
9:30GBPPPI Output Y/Y Dec2.90%2.30%
9:30GBPPPI Output Core M/M Dec0.20%0.00%
9:30GBPPPI Output Core Y/Y Dec2.20%2.20%
9:30GBPHouse Price Index Y/Y Nov6.10%6.90%
10:00EURGerman ZEW (Economic Sentiment) Jan18.413.8
10:00EUREurozone ZEW Survey (Economic Sentiment) Jan24.218.1
10:00EURGerman ZEW (Current Situation) Jan6563.5
13:30USDEmpire State Manufacturing Jan 8.5 9.0

http://finviz.com/news.ashx

Please read headlines for articles that interest us !!!

This one is IMPORTANT !!!

http://www.marketwatch.com/story/nik...teid=rss&rss=1


Asian shares were broadly lower Tuesday, ahead of a crucial speech by U.K. Prime Minister Theresa May, who is set to announce a clean break from the European Union.


The Nikkei Stock Average NIK, -1.48% was down 0.8%, while Australia’s S&P/ASX 200 XJO, -0.85% was off 0.9% and Singapore’s Straits Times Index was off 0.2%.


May will double down on comments she made last week, saying that Britain doesn’t want “partial membership” in the EU, according to excerpts of a speech released by her office on Monday.


http://cloud-video.unrulymedia.com/n...43.42191269554



The comments reinforce expectations that she will prioritize border and immigration control over access to the common European market. That sent the British pound down over 1% against the U.S. dollar late Monday, though it recovered slightly in early Asian trade Tuesday.

Markets would have been resilient to May’s speech on its own, but the fact that the speech comes so close to Donald Trump ‘s inauguration as U.S. president makes investors anxious, said Gary Huxtable, a client adviser at Atlantic Pacific Securities.

“Investors are sitting on pretty healthy profits and any sign of anxiety is an incentive to sell,” he said.

In China, the nation’s key domestic stock markets were down further on Tuesday, after shares suffered their biggest daily drop in over a month on Monday. This was weighed by a sharp correction in the last trading hour amid concerns of fast-rising supply of new shares, with technology stocks igniting the selloff.
“Sentiment was affected by the slew of (initial public offerings) with a majority of them concentrated on the technology board with valuations not being supportive,” said Caroline Yu Maurer, who heads Greater China equities at BNP Paribas Investment Partners. Chinese markets remain dominated by retail investors who trade mostly on sentiment, she said.

“Investors are sitting on pretty healthy profits and any sign of anxiety is an incentive to sell.”
— Gary Huxtable, Atlantic Pacific Securities.

At the midday break, the Shenzhen Composite Index 399106, +1.17% was down 0.7%, following Monday’s 3.6% decline, while the Shanghai Composite IndexSHCOMP, +0.17% was off 0.5%, adding to Monday’s 0.3% loss. The Shanghai Composite was off as much as 1% after the lunch break.
Meanwhile, rising political uncertainties, such as upcoming elections in France and Germany, as well as Trump’s unpredictability, weighed on stocks across the region, particularly in the banking sector.


Among banking shares in Japan, Sumitomo Mitsui 8316, -1.36% fell 1.2%, Mizuho8411, -1.61% dropped 1.5%, and Mitsubishi UFJ 8306, -1.54% declined 1.4%, tracking declines in the stocks of their European counterparts over Brexit concerns.

The yen USDJPY, -0.84% was last up 0.5% against the U.S. dollar, making exports from the country more expensive. That added to the gloom over automobile stocks there with Honda, Mazda and Toyota all in the red. On Sunday, Trump had criticized German car makers, exhorting them to manufacture in the U.S. in order to sell cars there.

Read: German minister to Trump after tax threat: ‘The U.S. needs to build better cars’
Meanwhile, Brent crude LCOH7, -0.13% , the international oil benchmark, was down 0.3% at $55.78 a barrel ahead of crucial data this week that could show whether the cuts announced by the Organization of the Petroleum Exporting Countries have worked.

Saudi Minister of Energy and Industry Khalid Al-Falih Monday said these cuts may not be needed beyond the middle of the year.
“Falih’s comments are consistent with the Saudi message throughout 2016 that the market was moving back into balance. That in itself is bullish for prices going forward,” said Greg McKenna, chief market strategist at Axitrader.



Benjaminis

Back to bed for 2 hours or so. May speaks at 6:45 AM EST (GMT + 5) EVENT RISK - Be Aware - Watch 5 Minute and 15 Minute charts and Pivot Points and Support and Resistance.

See you all later.

DAVOS opens and is open now !!!


Benjaminis

Just before going to sleep.

Great Chart on EUR/USD

http://www.forexfactory.com/attachme...1&d=1484564063

Where will it really go ?

Answer , Where the MONEY FLOW TAKES IT !!!


Benjaminis

Looks like we are going see haircut #GOLD
Where the trade flow and capital flow TAKES IT let's watch
Too much going on this week, Trump decision making process leaves us confused.

Insightful articles, thank you BenjaminIs & wayfarer
I was technical junkies but not anymore.

The yield on short-term bonds falls, the smart money flow in the asylum (the yen, gold). As Benjamin wrote, "the money is going to where they are taken."

wayfarer thank your for clarification.
I'm a visual learner that's why I use ton of picture please don't mind.
Seem like you are correct.

Hello Rocky007

I had my few hours sleep and I am going to post the 5 Minute Chart on 10 Year US Bonds and you and everyone else can see where the money is going and of course we know why.

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

I will now monitor the speech of Prime Minister May.

It should be an excellent Forex trading day and we have the EDGE. Trade with the Money Flow.

In honor of Carrie Fisher , May The Force Be With You. The Force of the Money Flow.


Benjaminis

Thanks wayfarer

Things are going well and you are improving each day. I am looking forward to your Forex trading results to continue to improve which they will because you are one of the first here to have learned because of your desire and your work ethic and your DISCIPLINE.


Benjaminis

http://seekingalpha.com/news/3235387...-brexit-speech


Futures slip ahead of earnings, Brexit speech

Jan. 17, 2017 7:09 AM ET|By: Yoel Minkoff, SA News Editor

Following a mixed session across the globe, U.S. stock index futures are all down 0.5% ahead of another round of Q4 earnings and Theresa May's Brexit speech.


She's likely to outline her 12 priorities for upcoming divorce talks with the bloc, including leaving the EU's single market and regaining full control of Britain's borders.

Oil is up 1.3% at $53.07/bbl, gold is 1.8% higher at $1217/ounce and the 10-year Treasury yield is down 5 bps to 2.32%.


PLEASE CLICK ON THIS LINK.

http://finviz.com/news.ashx


http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Here are the highlights:

1. MAY: WE WILL NOT SEEK PARTIAL OR ASSOCIATE MEMBERSHIP OF EU
2. MAY: UK LEAVING EU, I WILL SEEK BEST DEAL FOR UK
3. MAY: GOVERNMENT WILL PUT THE FINAL BREXIT DEAL TO A VOTE IN BOTH HOUSES OF PARLIAMENT
4. MAY: DO NOT SEEK TO ADOPT MODEL ALREADY USED BY OTHER COUNTRIES
5. MAY: WILL REMAIN WILLING PARTNERS, ALLIES TRADING PARTNERS
6. MAY: DECISION TO LEAVE EU WAS NOT AN ATTEMPT TO HARM EU OR ITS MEMBER STATES
7. MAY: VOTE NO LEAVE NO REJECTION OF SHARED VALUES
8. MAY: OVERWHELMINGLY IN UK INTEREST THAT EU SUCCEEDS
9. MAY: JUNE 23 A MOMENT WE CHOSE TO BUILD 'TRULY GLOBAL BRITAIN'
10. MAY: EUROPEANS WILL STILL BE WELCOME IN BRITAIN AND HOPE BRITONS WILL BE WELCOME IN EU NATIONS
11. MAY: PRESERVATION OF UK UNION AT HEART OF PLANS

And in an unexpected twist, May also said that she will put the final Brexit deal to a vote in both houses of parliament:

1. MAY: WILL PUT THE FINAL BREXIT DEAL TO A VOTE IN BOTH HOUSES OF PARLIAMENT

Cable is soaring on the news, as suddenly there is a possibiliy Brexit may not happen at all.

5 Minute Chart on GBP/USD from Finviz

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


Benjaminis

Cable is soaring on the news, as suddenly there is a possibiliy Brexit may not happen at all. (that would be 2016 best jock Brexit)

Here is a update on charts for visual. Crazy busy at work. Will keep my eye on charts while Treasury Sec Lew Speaks.
I took off my positions earlier with small loss. All in money now.

I am sitting on my hands until Treasury Sec Lew Speaks.

I am looking to enter after the news after price confirmation at the zones in blue. Lets see if it gets there before the news.

Last night I found this very interesting post from many years ago. It is very significant for me. My original post is 1275.

When those reading this post in which I have copied the first 11 Myths, have about 15 minutes to read my original post of last night , then please read and share with me your impressions now that you have an excellent understanding of how to make trading Forex a real business instead of a hobby of sorts.

Thank you for your assistance with this request.


Benjaminis

Twenty-five widely believed forex myths

I would have saved myself a significant amount of time and money if I'd understood the following, when I first started out:


Myth # 1. That inverting the signals in a losing strategy must necessarily make it a winning one.
Any strategy that fails to exploit a real market inefficiency is effectively generating random signals. Inverting a random signal generator will only create yet another random signal generator, which will therefore be equally ineffective. Explained in more detail here (Part 1 and Part 2).


Myth # 2. That MM (and sizing variations, nedging, scaling in/out, etc) in itself can provide a winning edge.
Varying position size is effective only if the larger sizes coincide with winning trades, to achieve which one must already have an edge. All other forms of MM merely re-balance return and risk, and/or redistribute wins and losses; they do not alter expectancy. No negative expectancy game can be beaten solely by using MM. The attached XLS can be used to demonstrate all of this; PipMeUp has posted a mathematical proof here. Expectancy is improved only by better timed entries and/or exits.

Grid systems use arbitrary levels that have no technical basis. Martingale variants (see myth #12) merely accelerate risk of ruin without improving expectancy. Averaging down is justified only to the extent that, in the situations it is used, there is increased probability (commensurate with the increase in exposure) of price reversing with each new entry. Scaling in/out are averaging processes that can smooth a trader's income, but in themselves do not alter expectancy; single entry/exit point methods, if applied consistently over a long enough period of time, provide a similar kind of averaging.

'Recovery' type systems make no sense because (everything else being equal) recent losses have no greater effect on eventual bottom line than any other losses. Moreover, mentally grouping any set of trades as a single entity is merely an arbitrary process that has no bearing on subsequent market behavior or probabilities; each component position creates its own P/L, and must therefore be profitable in its own right to be justifiable. More on rescue/recovery trading here.

Nedging ('locking', or 'hedging' buy and sell positions in the same pair) in itself is impotent because every nedge can be replicated by a single net position, and nedging incurs greater transaction costs (swap + spread). The same logic applies to triangular and circular hedges, or 'baskets', which similarly resolve themselves into simpler net positions. More on same-pair hedging here and here.

The primary goals of MM should be (1) preservation of capital, and (2) an even distribution/diversification of risk (i.e. avoiding the possibility of one loss wiping out the gains made by several smaller wins).


Myth # 3. That merely being unconventional in one's approach improves one's chances of success.
Only an understanding of underlying market drivers, or at least the chart patterns they produce, can provide any kind of edge. Whether that is 'conventional' or 'unconventional' is moot.


Myth # 4. That entries are more important than exits, or vice versa.
Entries and exits are nothing more than vehicles to adjust net position, and are therefore equally important. At any point a trader is either net long, short or flat. All that ultimately matters is how frequently (and heavily) he is net long while price is rising, and net short while it's falling.


Myth # 5. That it's impossible to forecast price direction.
Every trading decision (e.g. entry, exit) ultimately reflects an implicit forecast, or at least a forecast on the basis of probability. The more accurate a trader is at adjusting his position relative to market turns, the more pips he banks. An edge is ultimately the result of ascertaining directional bias, or at least some kind of behavioral bias, at certain occasions in the market, and timing one's entries and/or exits accordingly.

Knowledge and experience in 'reading' the market (in deciding when to enter/exit) is key for a discretionary trader. With a mechanical trader, the 'forecasting' is implicit within his entry/exit rules, that he has already tested, and proven profitable to the point of statistical validity.

Some traders say "I don't make predictions, I simply follow price". "Following price" merely represents an implicit forecast that the current move (as perceived by the trader) will continue. Nonetheless, the current move must end at some future point.


Myth # 6. That taking high RR trades will in itself guarantee success.
Myth #6a. That a high win rate in itself will guarantee success (thanks to tashkent for pointing this out)
Everything else being equal, RR (aka payoff ratio, or avg net win to loss size) and win rate operate in inverse proportion to each other, i.e. shooting for higher RR trades will decrease your win rate commensurately, and vice versa. If price movement was a completely random walk, this inverse proportion would be exact and inviolable, and (ignoring costs) ALL trading systems would have a long term expectancy of zero, and consequently their P/L would be nothing more than fortuitous. Hence it's necessary to find an inefficiency a directional or behavioral bias in price movement to break this inherent equilibrium, and create a genuine 'edge'.

A strategy of 'cutting losses short' and 'letting profits run' is effective only to whatever extent markets 'trend' (in the situations that it's used). More detail here.

If success was as simple as taking high RR trades, then writing a winning EA would be child's play, and everybody would run one and effortlessly become a trading millionaire.


Myth # 7. That unrealized (floating) P/L is less important than realized (already banked) P/L.
It's easy to show that they're equally important. If you close the floating trade, profit is immediately realized, and you can always open a trade of the same direction and size, after which apart from the additional spread cost your entire situation (account equity; exposure to risk; available margin) is identical.

Here's another way of looking at it: no matter what the current P/L of a trade is, then (everything else being equal) approx 50% of the time you'll benefit from keeping the trade open (because your P/L subsequently improves) and 50% of the time you'll benefit from closing it (because your P/L would have subsequently worsened). Hence over a great number of trades, you'll be better off 50% of the time, and worse off 50% of the time, regardless of whether you realize the P/L or not.

It's both fallacious, and dangerous, to believe that a loss is not a loss until an order is closed. That is akin to believing that every trade, if left open for long enough, must eventually yield a profit, which is true only if one has infinite time and capital. If, in the interim, a margin call occurs, all unrealized losses suddenly become very real! Moreover, the money in your account that's available to you at any given time includes floating P/L. (And let's not forget that one of the biggest causes of the current global crisis was banks' ignoring paper losses).

Whether your current position is (say) +100 or -100 shouldn't have any effect on your strategy. The past can't be re-lived, hence the only thing that matters now is what will happen subsequently, and your trading decision(s) should reflect that. Market behavior and probabilities are not going to change because of the P/L of one insignificant retail trader.


Myth # 8. That 'casino based' MM doesn't apply to trading.
MM (bet/position sizing) is pure math, and applies to any speculative activity that generates a distribution of wins and losses. As indeed trading does.

MM can not provide an edge, unless you can establish serial correlation (i.e. the outcomes of consecutive trades are causally dependent), or otherwise find a way of getting the larger positions to coincide with winning trades. See myth #2. The edge can come only from the 'gameplay' that generates the win/loss distribution (in trading that is entries+exits). MM can then be applied to this distribution.


Myth # 9. That using prior profit to offset proposed risk in pyramiding is, in itself, a winning strategy.
You can't use this strategy to beat a casino, and since MM is pure math (see myth #8), it likewise provides no mathematical edge in trading. Pyramiding can work profitably because forex prices trend in a qualitatively different manner to (for example) 'trends' of blacks and reds at roulette, i.e. any edge necessarily lies beyond the MM. This is similar to the 'scaling in' illusion that was addressed earlier: for the subsequent position(s) to be justifiable, they must be on-balance profitable in their own right, otherwise they reduce eventual bottom line, regardless of whether they're being 'funded' by prior wins (the "market's money") or not.

If you see unbanked profit as being expendable (the "market's money"), then you're effectively trading to achieve breakeven, rather than attempting to maximize your profits.


Myth # 10. That exiting either a trade, a session, or a period (e.g. week, month, year) because one is ahead, P/L-wise, will improve one's eventual bottom line.
Unless there's statistical proof that market probabilities are about to become less favorable, quitting merely because you're ahead (to avoid "pushing your luck") is necessarily based on superstitious fear. Everything else being equal, there's a 50/50 probability of your gain increasing or decreasing, just as there is at any other time. Again, market behavior and probabilities are not going to change merely because one insignificant retail trader has had a recent winning or losing streak. Unless serial correlation has been proven statistically, each situation represents either an independently valid opportunity or not regardless of the P/L of recent trades.


Myth # 11. That a simple ('KISS') strategy is more likely to be profitable than a more complex one.
To be fair, it depends what is meant by 'simple'. Many simple strategies can be coded as EAs, yet very few EAs are long-term profitable. The decisions made by many expert (discretionary) traders are context-specific, and take a large number of factors into account, and are therefore not necessarily 'simple'.

To state the obvious, how simple or complex a strategy might be, is irrelevant. Profit is the ultimate, and universally accepted, goal.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Hi Wayfarer, just have a look at your Silver’s position size when entering a trade, I think you have added 100 units?

Comment from Benjamin, not sure in which post it was, I think it was at +/- post 499.

“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.”

I have not traded Gold and Silver as yet.
Benjamin, can you just confirm if this entry would be right. (Screenshot)

That is correct however hold off on Gold and Silver or at least exercise caution because COMEX still has power to bring it down. See WWW.GATA.ORG to understand this better. For the moment the two best and safest Forex Trades are SHORT US 30 and SHORT USD/JPY however be careful because if China makes a MAJOR move then not sure as yet the effect on USD/JPY.


Benjaminis

http://www.zerohedge.com/news/2017-0...ops+to+zero%29


Trumphoria Fades As Empire Fed Manufacturing Survey Signals More Stagflation
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden


Jan 17, 2017 8:36 AM


Having spiked exuberantly in November and December following Trump's election, Empire Fed's manufacturing survey limped lower in January, missing expectations, and was revised lower as Trumphoria fades.
Jan Empoire Fed printed 6.5 (missing expectations of 8.5) from a revised lower Dec at 7.6 (from 9.0)
http://www.zerohedge.com/sites/defau...0117_emp_0.jpg

More worrisome still is the spike in prices paid (from 22.6 to 36.1) and tumble in new orders (from 10.4 to 3.1)...
http://www.zerohedge.com/sites/defau...117_emp1_0.jpg
Once again suggesting stagflationary forces are simmering just beneath the surface of equity market exuberance.

http://www.cnbc.com/2017/01/17/feds-...r|breakingnews

The U.S. Federal Reserve is unlikely to take actions that would "snuff out" the current economic expansion anytime soon because inflation is "simply not a problem," Federal Reserve Bank of New York President William Dudley said Tuesday.
Dudley, in a speech to a gathering of the National Retail Federation in New York, said he is optimistic the current expansion will continue even though it is "long in the tooth" by historical standards.


5 Minute Chart from Finviz on US Dollar Index

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