A VERY HAPPY EASTER hols to all of you.
I’ll be taking off the Hong Kong holidays. The next entry will be on Tuesday, April 18,
A warning from my good friend, Joshua Fong:
“How’s it going?
BarroMetric Views: Presentations
My blog publication schedule may be disrupted March 22 to April 2.
I’ll be in Singapore for two presentations.
“How to Leave the 90% Who Lose Money and Join the Winning 10%”!
At UOB, we’ll be looking to provide:
Also, there will also be some great giveaways:
Needless to say, I expect the event to be highly successful. It’s certainly the case if our registrations are anything to go by. The auditorium holds 100, and we are more than half-full – we started the marketing just today!
If you’d like to attend, register at
BarroMetrics Views: Learning from History?
Is the mainstream press willing to learn from history? Judging from the Dutch and forecasts for the French elections, I don’t think so.
In the Dutch elections, the press was all agog about Wildes winning. Yet, in the polls, he was a long way behind; and if you surmised anything about Dutch electors, the probability of Wildes winning, on this occasion, was remote. After the result, the press proclaimed that sanity had been preserved and forecasted a similar result for the French.
Wait a minute guys and gals, didn’t Wildes’ party become the second largest party, netting 26 seats? I wouldn’t be writing off Le Pen on that outcome.
Turning to the French – first round April 23 and the second May 7.
The mainstream pundits are predicting a Le Pen-Macron win on April 23 and have all but written Le Pen off for the May 7 run-off (Google ‘who will win the French elections’ and you’ll see what I mean).
For the May 7 round, the Betfair Exchange has Macron odds-on to win at 20-21, with Le Pen at 13-5 (2.6-1).
The French polls remind me of Brexit and US elections all over again. The focus is off tangent. They seem to ignore the strong undercurrent of French sentiment against current French immigration policies. Le Pen is all for exiting the Schengen border-free zone while Macron is for keeping it. This is the most critical difference in their policies.
If Le Pen wins on April 23 and is at 2-1 or more for the May 7 elections, I’ll be tempted to have a friendly bet. At those prices, she is under the odds.
BarroMetrics Views: Overcoming Bias 2
Yesterday we saw how I have acquired a bias for the short side in the GBPUSD. By the way, this is inevitable once we form a view of the side that is likely to produce a low-risk, high probability profitable trade.
At this point, I analyse the pair with of my Trader’s Timeframe lenses.
The first step is to list my observations, then categorise them as ‘bull, bear, or neutral’. Following that, I look to integrate the information and assess the probability that the downtrend is likely to continue or change.
Before I move on to the next item in the analysis stage, ‘zone’ (where will I take the trade), I consciously look for information against the bias. This step seeks to ensure I am not suppressing information or falling prey to the heuristics that have proven to be my Achilles’ heel: representativeness, anchoring, framing and confirmation.
Let’s look at the ideas in action. (My trader’s timeframe is the 18-day swing).
In the GBPUSD, I have assessed a downtrend that is likely to continue to in the higher timeframes. Figure 1 shows the 18-day (red line), and 13-week (black line) and 12-month (green line) daily equivalents. They swing lines show the trends: monthly, quarterly and yearly respectively.
At first glance, the 18-day downtrend seems intact. If that were the case, my strategy would be to go long in the sell zone around the current swing highs, or upon a break of the most recent swing low.
But, when I actively looked for ‘long’ info, I saw:
So, by looking for ‘non-confirmatory’ clues, I have changed my initial views of where to take trades and the likelihood of an 18-d trend change. (A rally to the PSZ at 1.3434 to 1.3210 would break previous 18-d swing highs and thus negate the 18-d downtrend).
The process may seem complicated. But, as with most habits, it’s only difficult at the beginning. Once internalised it becomes second-nature – though I still use a check-list to ensure I consciously cover all bases.
We’ll never totally eliminate the biases occasioned by our mind’s unconscious reasoning – nor would we want to because they serve an invaluable function. But, by being self-aware, we can reduce their adverse influences when their use would lead us astray.
So, over to you: what are you common biases?
(By the way: ECB rate decision announced tonight at 16:30 HK time – may stimulate an increase in the ranges [at least of the majors and European crosses])
FIGURE 1 GPUSD 18-day and higher swings
FIGURE 2 GBPUSD 18-day swing
One of the most important functions we have as traders is finding a broker that we can rely on and feel confident in: that we won’t lose our hard-earned if they close.
For retail traders, there are only two jurisdictions I like: Singapore and Switzerland.
I am not commenting on London’s FCA registrations because I have no experience with them. In the US and Australia, clients of failing brokers have lost some or all of their deposits. It’s true that in these situations, the brokers had failed to place funds in segregated accounts, in breach of regulations (e.g. MF Global), but the net result is the clients lost money.
Here is a link to an excellent article by Forex Peace Army on the subject:
BarroMetrics Views: Broker Going Under?
On Monday, Feb 6, the news came out that the CFTC had fined FXCM USD7M and barred the broker from continuing business in the US. The CFTC alleged that FXCM had defrauded its retail FX clients by advertising itself as a ‘No Dealing Desk’. The has paid the fine and settled charges with the CFTC.
Yesterday Gain Capital announced it had bought FXCM’s US client base.
So what now for FXCM non-US clients?
Finance Magnates provided an excellent analysis of FXCM’s situation in “Analysis: Is Leucadia Willing to save FXCM Again? What’s clear from the article is if I were an FXCM client, I’d be moving my funds to another broker.
Sure Leucadia could come to the rescue or FXCM may find a buyer for its ex-US operations. The average daily volume generated by US clients of FXCM was reported to be around USD 2.4 billion – not exactly chicken feed. Its other operations should at least match that sum.
On the other, if I had money with FXCM why run the risk? Better to be safe than sorry. Cut and run would be my motto.
BarroMetrics Views: Rule of Law
This post has little to do with markets; instead, it’s a comment on my view of Trump’s executive order banning entries to the US from Iran, Libya, Syria, Somalia, Sudan, and Yemen.
So, if you have no interest in this world event, tomorrow’s entry is the blog for you.
I understand why the executive order was made. If we examine where known terrorists have hailed from, we’ll find they were predominantly from the seven countries. And, if we view the European experiences, the ban seems to make sense.
But, there is a world of difference between the US and Europe.
In the US, those being held for deportation are holding legally valid visas – legally obtained; while in Europe, there is a policy of free passage within the EU. With a stroke of his pen, Trump turned valid visas into invalid ones.
It’s no wonder that four judges have suspended the enforcement of the order. But, here’s the worrying thing: according to a news item on Fox, Homeland Security has issued a statement that the executive order is in force despite the rulings.
This is a worrying development. If the US abandons the rule of law for ‘reasons of national security’ we are seeing, possibly, the first steps to a move to a much less free USA. A slide to authoritarianism has always been the danger that Trump would bring to the White House.
Hopefully, the news event was incorrect; or if correct, an erroneous statement.
I’m in Sydney for a cataract operation and to organise a date for my hip replacement.
I had forgotten how much time it takes to get to an appointment and to return. And since I arrived, all I seem to be doing is going from one doctor to another.
My last appointment is on Friday, November 18. So next week, I’ll again be posting regularly.
Apologies for the break in posting.
BarroMetrics Views: Breakthrough Strategies of Wall Street Traders
A few months ago, Bill Brodi interviewed me. He has now included that interview in his new book, “Breakthrough Strategies of Wall Street Traders: 17 Remarkable Traders Reveal Their Top Performing Investment Strategies.”
In the book, Bill interviews both market professionals and ordinary people who have made it big by trading the markets. Some started with just $10,000 and went on to make millions.
Now, if you thought this is just another “Market Wizards” type book, you’d be mistaken because……
…..in Breakthrough, trader-investors reveal the exact buying and selling rules they employ for trading the markets via stocks, options or futures, and they are clear enough that you can try them out to duplicate their techniques.
The book covers the spectrum of:
And I have mentioned only some of the areas covered by the interviews!
In short, there is something for everyone.
By the way, you may wonder why I would recommend a book that covers instruments, timeframes and methods that I don’t trade or use.
Well, I am particularly interested in reading about how others invest-trade. I’m always open to learning something new. My best ideas have come from areas unrelated to my field of expertise and student questions.
If you read my interview, you’ll see what I mean. There is an entire chapter devoted to my trading techniques and system rules (with all the do’s and dont’s).
The interview ran about an hour and a half. The interview contains all the lessons I privately tell people about trading and investing, including the life lessons I’ve learned along the way to get to where I am today.
Both newcomers to trading-investing and seasoned pros will find a lot of information that will make you a more profitable trader-investor in this book.
So where do you find the book? Here is the link: http://amzn.to/2d7cgwZ
Oh, almost forget Some of you may not have heard of Brodi. So, here’s a short description:
Bill used to work on Wall Street as a research analyst and knows his stuff as to what works, what doesn’t and what to ask.