Now, you must know that "trading the news" -- or any fast-paced, emotional, impulsive, speedy trading, for that matter -- is something that I oppose publicly. I think that news-trading is a great way to try to make a lot of money from an unpredictable, volatile market. It's also a way to increase one's expectations without increasing one's skills. For me, it's the epitome of the something-for-nothing attitude that so often pervades the self-help and especially investing How-To Web sites and books.
That said, we thought we'd spend some time looking at short term charts through the night and broadcast live during the entire process to document how it is that a trader could go about getting ready for such a thing as making money from the unpredictable news event of the month, the most influential economic report, and at a time when most currency dealers have poor execution, variable spreads, and overwhelmed customer service.
What we found was interesting: we first of all had a great time, as you can hear for yourself by listening to the archives by clicking here. We had phone calls from successful traders, bank analysts, as well as Boris Schlossberg, who is arguably the most articulate retail forex analyst in the world. We also had phone calls and analysis from a cast of characters that had no business talking about trading: Buford McGill, the man who thinks Ben Bernanke needs a spanking, Frankie and La Earl, Doctor Von Econowitz, and more.
More importantly, we found that some of the best trades can really be taken in the evening hours before the NFP is released -- when the market is easing off of taking positions and settling down before the big shock hits at 8:30 am EST.
Over 2,000 people came to listen overnight. We appreciate all of you who stopped by for a listen.
You can be sure that we'll do it again, and we'll do it bigger and better than ever.
I am going to do an audio summary of some of the best stuff that I learned while I was here. But you can see a great summary of the conference at this site below:
We just had a good time talking about trading. If you haven't gotten together with fellow traders for a while, do it. If you don't know any traders, jump online and go to the discussion boards and post an entry about getting together with traders in your area. There's something fantastic about sharing time and food with people who are positive, who are working hard to help each other, and who like to laugh.
Anyway, my favorite presentation at the Expo was from Boris Schlossberg. He gave a run-down of some of the most important things to remember when trading currency cross pairs (pairs that do not include the USD; for example, the GBP/JPY is a currency cross pair, as well as being a completely insane currency pair). Here are some highlights from what Boris said (and if you want a copy of his slides, you can write to him by clicking here and asking for his "currency cross" presentation):
1. He gave an overview of the dovishness (propensity to lower interest rates) to hawkishness (propensity to raise interest rates) from central banks. It's not surprising that the Bank of England ranks high on the scale towards hawkishness, with recent rate hikes and a strong economy. The US was somewhere in the middle. The Bank of Japan was about as dovish as you can get. He mentioned that there is a good possibility that the Swiss National Bank is going to have to raise rates in the near future.
2. He mentioned that there is possibly a mis-valuation of the AUD, especially as compared to the NZD. Australian economic news, he said, hasn't really been that hot recently and it appears that the AU economy just isn't as stellar as it was a year ago. Meanwhile, NZD is shipping all the lamb they can raise to China, among other things, and the New Zealand economy is on fire. Could mean that we see in the near future a drop in the AUD/NZD (but this was not a trade recommendation).
3. Boris gave one of the best overviews of the carry trade that I've seen from anywhere. He mentioned: London is becoming the center of the world's monetary deal flow -- tons of money from the middle east is flowing through London for investments all over the world; it's hard to imagine the carry trade exploding until the Bank of Japan signals it is willing to raise rates every 3 months instead of every 6 months; and that the EUR/JPY is an excellent proxy for understanding the world's appetite for risk (watch how the Dow Jones Industrial average and the EUR/JPY seem to be more correlated than ever).
All good stuff. For good measure, I also want to mention three things about FXCM, who does not pay me anything (in any way) to say any of this. I do appreciate the invitations to speak at the Expos, where I get to meet a ton of good people.
1. FXCM is giving free access to DailyFX Plus for the next week. It's a pretty cool service.
2. FXCM just launched its own Forum. I'm more interested in blogging these days than forums, for reasons that I will talk about later, but you might want to take a look.
3. FXCM moved just about everyone on their platform to a "no dealing desk" system.
The "stop loss" is the maximum that a trader is willing to lose. Not the minimum.It wasn't said exactly like that -- the words "stop loss" weren't used -- but the point was exactly the same.
What made the dinner even more enjoyable were the people. I ate dinner with the Saza Investment company's management team, as well as my friend Tomo and a new friend who is a professional trader in Tokyo. These people were the very best. I could probably write on and on, but I will simply say a few short words below after I post the link to the Saza (in Japanese) web page:
It is very rare indeed these days to find people who are primarily interested in the happiness and success of other people. Every single person at the dinner table last evening wanted to talk about only a few things:
1. How to help traders become more successful. 2. How to help traders through the challenge of acquiring discipline. 3. How to hold chopsticks.
Kofu-San, the president of Saza, told me: "We are a small trading firm right now. But we have made a specific decision that we will help people, one at a time. And if we do this, then the business will grow naturally."
Vancouver, BC, Canada
Ft. Lauderdale, Florida
Which means I'll be visiting each of these people for 3-5 days in these places to help them trade.
And coming soon:
Do you live near any of the above locations? I am going to do meet-and-greet receptions in each of these places, and a weeklong seminar in Vancouver, South Florida, and Australia. More details are coming soon, and I hope to meet you in person.
If you don't know what any of this is about, just jump on over to Harry Banes' Web site.
Here is the plan:
1. The first trade idea will be coming before Monday of next week. Thanks for being patient while I was not 100%.
2. The next chart school PDF for 1 on 1 students will come either today or tomorrow.
3. The next video will come on Monday or Tuesday of next week.
I spent a lot of time thinking while I was in the hospital. At one point I was totally hallucinating -- while I was being wheeled on a bed to the x-ray department, I was calling out to people to ask them if they wanted to join me for x-rays. I don't remember anything from Thursday the 2nd through Saturday the 4th. It's all a blur. For those of you wondering, I had a fever of 104 that wouldn't break and it caused a lot of other problems, as you can imagine. I appreciate all of your happy thoughts, prayers, cards, and well wishes.
Now, on to the rest of the story: part of my deep thinking had to do with the Non Farm Payroll report. I have, for some time now, believed that it sets the tone for the rest of the month. And I have discovered what I think are some very powerful insights on how to trade that report a few times a year for the very, very big moves. My intern Jacob and I have been working hard at this for months now, and I think that I had some "ah-ha" moments in the hospital.
I originally was going to present this information at my paid (for charity) presentation at the FXCM Las Vegas expo. But now (thanks to the kind people at FXCM) I am going to present it to everyone in the world (training students first) at the beginning of December, and as part of my free presentation at the expo, a new Web site, and a discussion forum at Forex Factory. I can't wait to share it all with you. Stay tuned.
I am happy to be back in the land of the living.
If so, I'd like to invite you to dinner on a first-come, first-served, basis.
Here are the details:
WHEN: Thursday, Sept. 7, 7:00pm or so
WHERE: Las Vegas (Restaurant TBA, but it will be near or on the Strip)
WHO: Me, You, and 9 other traders
To get an invite, you need to do the following, exactly as stated below:
1. Send me an email (click here for my email)
2. The subject line of the email MUST be "What I Eat in Vegas, Stays in Vegas"
3. In the email, give me your name, your phone number (cell, preferably) and a digital photo of yourself, and a description of the worst trade you ever made.
See you in Vegas!
The above link is about two weeks old, but many people still haven't seen it. A kind friend sent me the link today and asked me what I thought. Well, I think that, given the present circumstances, it is the very best that we could expect or hope for. Consider for a moment that it's possible for all of the RefcoFX accounts to be shut off, and that money lost, forever. Anything is better than that.
Could the outcome be more favorable? Certainly. FXCM offered to buy the assets and the deal fell through. That deal would have given traders access to their money more quickly. As it stands, it's good to know that we're near a conclusion on this sad situation.
This was a perfect week to be playing video games online, and avoiding trading in the short term. If you are a short term, EUR or NY session trader, it was a tough week. Maybe you ended the week profitable, but we simply didn't get the breakouts that we have been getting recently. There are reasonable explanations for all of this, but the point is really that some weeks are going to be better for trading than others.
Here's Danny's high score on the Biz-Nizzle Card Game:
Happy Trading! Next week should be much better. Watch for more USD strength in advance of the FOMC rate hike the last week this month.
The live seminars have been a big success in helping traders to get their charts set up right, to learn systems that are regularly profitable, and to meet people with whom they can stay in touch and trade with for a long time after the seminar is over. For more details on the Las Vegas seminar, click here.
The deal is still not done, but when FXCM buys the RefcoFX customer base, it does bring up the following thoughts:
There are two big things that we learn from this experience.