Back on the kurb blog in 2015 getting rollicking! Over to the promotions and cd dvd duplication soon enough, but not yet . . .
It’s forex strategy time as we get more and more refined – we’ve had some ups and downs and won out and been pushed to the brink and come back, so trading is increasingly part of what we do, even for a promotions company well at least we know how to turn a buck over and that’s what business is all about.
Spend a dollar, make a dollar, spend a dollar, make two. And hopefully have a blast doing it.
We haven’t been trading that long, but we still think about it and blog our thoughts, it’s all part of what we’re doing – more profits mean more opportunities to work with artists on more compelling stuff than . . . the price of money!
It’s all part of the vision!
FIRST UP: FOREX!
SO basically we’re back in 2015, the forex trading hasn’t been quite as robust as I’d hoped, and it may be some months before it has the strength to support bolder moves for kurb.
But I have actually been able to refine my technique, it’s now at the stage where I can’t refine unless I make a mistake, and if I make a mistake it could cost me dearly so any knowledge gained is paid for!
What I realised is that super trends that unfold over months are the most prevalent pattern in trading. Unless it’s holding, the direction it’s been going in is much more likely to continue to be the direction it’s going in, so as it’s going down, and you’re taking positions, each position is less than the last, that way each new position is actually telling you how long it’s been since it actually went up. that’s why when it goes up and you take a profit, you reset the position amount to the top of your range. If it drops down again, then you begin dropping the dose again slowly.
What if it goes up and then down and then up etc, so you have a holding pattern and you begin to make money, so you increase the dose, knowing that when it recedes, you will only be left with a couple of large positions, but would have made some decent takes.
the problem pattern of course is up down down up down down, repeat. We end up with a pattern with a sequence of large positions going down. Of course it would be freakish for such an ongoing sequence to appear. But of course once it happens twice or three times, we can add an instant sequence of small positions to be triggered to then be tiny.
When the currency begins it’s bullish run, you know can pushing in even larger positions than usual, once it falls back off that then you are slowly falling back into a receding position. if it goes up again from there you are set back to the mid level.
This even proposes that larger positions could be used at the top of a peak, because as the fall kicked in, lesser positions would litter down the way balancing up the last big position much in the way we are already doing with many of our trades due to our early inexperience.
If a currency is fading and all it has is little $500 positions spaced all down it as it recedes, sure you may be left with a dirty great $2000 position which loses 15% over a few months, and whats that when accounting for exchange rates, a few hundred dollars or more. Just like we already have right now. $1000 positions made 4 months ago that are costing me $200 a pop. But if those were followed with long chains of $500 positions that went on and on, with big gaps allowed to lie where they fall, as the bearish trend unfolds, you will not be collecting massive drops. When the swift short term reversals happen, no, you will not collect nice pay outs.
That is reserved for the long bullish rolls where not only do you sell your $500 positions as you roll up, but youre putting down $2000, $3000 positions as ou come, but get this. You’re not selling up those position behind you. you got to $2500, $3000, $3500, but what about the reversal that kills it all?
Perhaps the technique is to go to $2000, and then proceed to place them closer together.
Whichever, you sell hard at the first reversal. This may leave you with maybe even a few $2000 positions falling. Not ideal, yet only the same position as you’d be in if you’d been in a up down down loop. You have to take a breather on the next downs.
Of course when the trend turns back, you sell your greens as fast as possible, you’d be falling off a $2000, so if it got to $2, you kick in with your $500, and with each $500 you put down, you’re selling out a $2000 at the beginning of your run. that way the first time your $500 turns profitable, if it’s still got greens below it, then you kick straight in to a $2k, then youre in a position where you have a losing position about a much more profitable position.
What do you do? The same deal. for each $500 you put down, you sell a $2k.
What I fear here is a dramatic reversal that suddenly picks up speed. your $2k position at the top starts losing, then lightning strikes, your top positions tumble, losing some $50, but then another 3 positions at the bottom already carrying $50 are wiped out. On the other side, it is only the sparse $500 positions picking up the blow back. And yet, when a sudden shift occurs, money is made,
The reality is by riding the trend, in some circumstances we will squeeze a lot more profit out.
It will likely be some time until I can walk away from a number of green positions growing for hours, or even go to bed. But once a thing is well into it’s trend and holds a dozen green numbers, just think. a $2000 position that once would have scalped $2, would go on to make $100+ on it’s journey, so as we profit, we profit over more bases. As we lose, we also lose over more bases, it is unlikely that we wouldn’t trim a few positions if we were watching green numbers sink.
But when the $100 profit is struck by lightening, it sinks $50, and yet, we are still $48 richer than we would have been under the old system.
It is likely I will need a new strategy specifically for when swinging carnage hits the market and money is flying up and down.
It seems like this system is much more tuned because it allows for letting a profit run. At any one time, an old stalagmite of profit slowly edges up to $100. $2k’s are being laid on the way up. But $500 a being laid on the way down, and that will eat my margin up. Of course it’s different, because the margin is profitable but I reversal could see it swing the other way.
But it’s a system. Every time a $500 position is established, a $2k position is knocked out down below it. If it goes up 10 steps, then falls 4, and i only manage to sell 2, then I have 2 bad positions. It starts going up again, and rises another 2 positions, when it drops back down, that is where the most profitable position would be knocked out underneath just for our own insurance.
What is stopping us trialling it straight away on a lesser level? a $1000 like we mentioned, is only what we already have at the other end. When the swing is complete in a year or whatever, like the orbits, $1000 at the other end costing us $300 or more won’t kill us.
There are more notes to make. When heading down to the 4th quintile, receding positions could double, because it’s not too long before they’ll be back, a month or two at most really, and those positions won’t ever be so stretched as to carry much – only as much as the second quintile already does, and whats more you can be open to trends. The word maybe that its sinking big, so lay off. If it goes into cosolidation, you know you can have a fat party, because youre closer to the floor if you drop.
Also where you’re at in the range determines your bull roll. In the 4th quintile, coming alive $2 from the brink, then you can start throwing it down, very much aware of the trend, is the trend suggesting the rise will continue – it’s a straightforward call. If so yes, bring through those $3k throwdowns.
If a tactic is good one way then the reverse is good the other.
Dropping through the second quintile, should be sparse is bearish, if bearish it should always be sparse, but bearish in the second quintile is super sparse, so that these puppies arent costing us when we arrive at 4Q. Rising through the 2Q should be modest also, 2Q is just a sparse and modest place because you dont want to get caught there.
In fact the higher the bull roll goes, the more important it is to take off the head. in 4Q you might roll out a $4k throwdown on a big charge, but by 2Q thats only $2k because thats what youre left with when the tide goes out and it’s too far to fall booking a $4k position at the tope where it could lose 12%+ and cost at $800 on it’s
own in a couple of months, bad scene, no matter how many $111 positions trail after it.
The middle ground seems a fair enough place to loosen the belt yet not go crazy. $3k’s and $4k’s won’t fly about, but there won’t be too much judgement on where the $500’s and $1000’s go especially as one drops into 4Q their positions will be bigger while falling, and on the other hand, the one going to the 2Q will grow smaller while rising. mainly as the $111 is reintroduced in place of a $555, and that certainly no $4k crowns will appear.
The reason this system works is:
carrying the profit
reintroducing lost aspects of hedging
but is mainly about trends. The old system worked on random up down activity, which just wasn’t what we see. We can see whats going up. We can see whats going down, when we look at the month on month picture, we needed to factor that into our system so we can make smart choices.
What I mean by trends is not only being reactive to how the market is being read, but that the natural movement of the market is monthly. If a currency is going to be going up generally month on month, then you can lean in with big bets because as long as it keeps going up, you’ll only carry the weight of one bad decision unless it falls and continues to then rise but never return, however, this is an easy pattern to see forming and slowly i believe the new system will transform our range, so we don’t carry the debt we do now.
Our strategy is not based on waiting and hoping things will turn around. We surf the wave and we chase the storm.
But before, we made our money on swings that now I can see would take months to eventuate, while we carry the risk. Now the main money is being made by following the creep up. The creep down is always followed by far more modest offerings that just won’t leave us building dumb debt up.
Also the system will be easier to manage as I won’t be buying and selling so often we just leave our modest pegs down, $100 pegs everywhere, we only need be alerted when it’s profit time.
A currency thats slowly dropping and called bearish is not going to have me holding positions of deep profit, I’ll be out and taking those long $100 grabs.
If a currency has risen 4 weeks in a row to come halfway through the 4Q and the reads are all for bullishness, then there really is no reason not to rain $4k’s once we’re feeling good about it.
Take the USDAUD, rising and rising to the top, now falling off week on week into 2Q, yes it is still being called bullish, but otherwise this would be a classic situation to continue 500’s and 100’s through to the middle ground, because I am not wanting to carry all that debt down to the bottom.
However the long term prediction is still for it to rise so that rather negates it.
Also we must remember interest and currency value. The australian is a high interest, low value currency. Being stuck in australian does not hurt nearly as much as being stuck in euro which has low interest, and high value, so if it drops, I feel it in kiwi dollars.
But surely as the euro drops, the kiwi dollar rises, and the debt expressed in kiwi dollars is less?
One last idea I had for beginner interns was to make them buy a $100 position every minute, and then spend the rest of their time, selling any position worth 20c.