10.4 A Complete System

[jmdias]

An assessment by the European Commission says Cyprus must sell about 400m euros (£341m) worth of gold.

The country has already been forced to wind down one of its largest banks in order to qualify for a 10bn euro lifeline from international lenders.

Even with that bailout, it is predicted that the Cypriot economy will shrink by 8.7% this year.

Cyprus's total bullion reserves stood at 13.9 tonnes at the end of February, according to data from the World Gold Council.

At current prices, 400m euros' worth of gold amounts to about 10.36 tonnes of metal.

First they took the depositors money now the country's gold. Dang

Thats true Bob..strange day today...gold fall more than $150..sell of in the bourses...bombs in Boston..

[rebyte2]

More interesting stats on Governments stockpiling gold recently.......

Looks to me that they will now have a bigger financial interest in prices being this low.

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If you had to guess which country has stacked the most gold in its central bank in the last ten years - who would you pick?

The answer is in fact, Russia.

For the last ten years, Russia has been busily converting its oil revenue into gold. According to the IMF (International Monetary Fund), the Russian central bank has now stacked 570 tonnes of gold in its basement. This has seen the total jump by 147% in a decade, from just 388 tonnes, to 958 tonnes.

To put that in context, the world's biggest national government stash is the US holding of 8,134 tonnes.

So the Russians may have had a busy decade but they still have a way to go. Still - Russia is hot on the heels of China's official holdings, which had 1,054 tonnes at last count. I say 'last count' because it's coming up to four years since China updated the market. So they almost certainly have far more than 1,054 tonnes by now.

You only need to look at how much gold is pouring into China. Chinese gold imports from Hong Kong have soared in recent years from just a few tonnes a month in early 2011, to the interstellar pace of 114 tonnes in December of 2012.

This finished off a huge 2012 for Chinese gold imports, with a total of 834 tonnes going from Hong Kong to China - almost twice the figure for 2011.

Some of it will have gone to the central bank, but a large portion will go to the Chinese public. And as the Chinese get wealthier, they buy more gold.

The same is also true for India. The two countries buy around 40% of the annual (mined and recycled) gold supply between them, so it's no surprise that as China and India have seen strong economic growth, the gold price has moved up in line with them.

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[slowkey]

It would seem that the yen pairs have retested support but there seems to be a major Fib level or SRP level that seems to holding on each pair. So hopefully we will see some nice movement and not a sideways market.

[nicoacademia]

i'm reminded what Martin/Marty "Buzzy" Schwartz said in his book.

"Also, don’t increase your position size until you have doubled or tripled your capital. Most people make the mistake of increasing their bets as soon as they start making money. That is a quick way to get wiped out."

his style is more day trading fast n furious style so not as applicable to 10.4 but the emotions, the rollercoaster he goes through is valuable.

[nicoacademia]

i'll buy more EURJPY at the pivot at the test of the pin.

[Ingot54]

AUS and NZD were played HEAVY as buys selling YEN. Checkout the straight lines on the NZDJPY Chart. That ain't natural movement. So they are getting KILLED while the YEN trade retraces. Remember your CSS chart showing NZD as the strongest pair... We aren't the only ones looking at such things.

In addition we have AUD tied heavily to Gold. Which is also getting destroyed.

Plus AUD had medium bad news earlier which is an excuse to pummel it further.

We have a TON of weak longs in JPY pairs. Everyone was thinking FREE MONEY and needs to be reminded that nothing is for free. Charts like this with straight lines and parabolic moves ALWAYS correct. Macro view is still likely correct... just have to shake the tree a little and collect.

Two bits. But really there was only one trade last couple weeks it has all been Yen. It still is. They just added Gold to the mix.

Mike

Mike - this post should be made a sticky ... or at least the concept of what you posted should be enshrined in EVERY trader's head.

This is the single best post I have read in the past week.

Brilliant insight, and something to ponder ... and ponder ... next time a market moves this way.

Thanks for that post.

[nanningbob]

i'm reminded what Martin/Marty "Buzzy" Schwartz said in his book.

"Also, don’t increase your position size until you have doubled or tripled your capital. Most people make the mistake of increasing their bets as soon as they start making money. That is a quick way to get wiped out."

his style is more day trading fast n furious style so not as applicable to 10.4 but the emotions, the rollercoaster he goes through is valuable.

I　very much agree with this statement. Too many times I have done well and then increased lot size only to see my gains disappear quickly. This time I downsized my lot size by 25% the 2nd week of the move and then when the market started going sour I closed half the size of my lots in losses. In this way I did lose some money but not my profit or my account. I can now recover and gain back my losses over the next week or two. Martingaling or increase lot sizes does not work in the long run; decreasing or eliminating losses and then keeping your lot size does work if you use recovery techniques. My losing trades are now over 1/2 the size smaller than my winning trades of two weeks ago and half the size of last weeks trades. This is a very good concept to keep and retain profits and account. I'm learning, kind of stubborn, but I am learning. The more into a move you get the lower your lot sizes should be. I used to increase them, now I decease them. When this series of trades are over I can start over again with my regular lot sizes.

[Ingot54]

I appreciate the comments but people are selling gold and buying the JPY. Explain that to me. That makes absolutely no sense what so ever. Yes I can understand a correction but this is no correction. aud nzd going down makes some sense but bottom dropping out like this?? China numbers werent that bad 7.7 growth instead of 8.0 is not that bad. I have no idea what is going on here. The good news I guess will be when do we get to play JPY weakness again?

Perfect summary, Bob.

"Someone" is doing something with the markets, and it is "someone" with very deep pockets, or the ability to scare those with deep pockets.

We usually say that "No one can tell the market what it should do."

Well ... someone is.

Dang I need to quit giving advice. Good thing I trade small lots or I would have been wiped. aud/jpy reaching 240 line. Gold crashing--who would believe and predict that one. Biggest drops in over 40 years. Report at FF N. Korea to start military actions immediately: No other news on that. Two bombs went off in Boston at the marathon. Folks I have no idea what is going on out there and why. Indis are useless and I cant ever remember a monday like this. Back to bed.

I am standing aside for now, but watching.

I don't care if I miss the next leg up/down - someone is playing with us here, and I am not playing.

Punch me in the nose when my hands are down, and I will not play.

It's time for a vacation from the markets for me - going to spend time with family now.

[Ingot54]

I don't follow 10.4 strictly. I like parts of it but the 4H (240) is not sensitive enough for me. I don't know how to deal with 300+ swings. So I take pieces of them and let half ride to try and catch the runners. I trade supply and demand, naked, and like RSI2.

Mike

Mike - I guess you are aware of the 10.5 version for the 1H TF?

Should suit you to a "Tee" ... and Bob occasionally posts those trades here too.

Page 197 (http://www.stevehopwoodforex.com/phpBB3 ... 773#p47773) and 198 have test version of 10.5 scalping and update 10.4 info page

But I am certain you already know this.

I use the 10.5 template on 4H for my 10.4 trades.

[f451]

I appreciate the comments but people are selling gold and buying the JPY. Explain that to me. That makes absolutely no sense what so ever. Yes I can understand a correction but this is no correction. aud nzd going down makes some sense but bottom dropping out like this?? China numbers werent that bad 7.7 growth instead of 8.0 is not that bad. I have no idea what is going on here. The good news I guess will be when do we get to play JPY weakness again?

As a fundamental player, this makes sense.

As of last week, which instrument is a good hedge against inflation?
Yen.

Which instrument was a good hedge against inflation?
Gold

So if Funds are reevaluating their investments, what would be the most obvious choice to make?

I have to agree with this - my take is big players are unwinding their gold and commodity currency carry trades to shift to yen plays, it's either that the gold sell off has forced the unwind of AU/NU plays, or the opportunity in yen is shifting capital out of gold and causing AU and NU to fall - watch for CAD to fall too methinks depending on oil

I will be watching for trends arising from USD and JPY appreciation over this year