Let’s face it – the markets have become increasingly more difficult to navigate. For the most part, anyone sitting idle for anything more than a week or two max, has likely come out on the receiving end of a “good swift kick in the account” – if you know what I mean. Hedge funds drying up, blogs offering “financial advice” dropping like flies, and the majority of investors left wondering “what the hell to do” next. Well……………….
It’s only going to get worse.
I’m not looking to scare anyone ( as you should already be completely petrified no?) but I see 2013 -14 as likely the most difficult / volatile / dynamic / screwed up / challenging / trading environment I will have faced in my entire career. The number of variables are staggering, and the new “forces that be” (now being the majority of central banks on this planet) are not only locked and loaded – but have more chips than well…..they’ve got a lot of chips.
You can’t be a bull. You can’t be a bear. Anyone sitting on one side of the fence or the other (for any considerable length of time) will be liquidated like butta. You are going to have to learn to trade like a gorilla – or you will surely be left with “less” – if you currently have anything at all.
I should explain…….
I have no bias. I trade in one direction or the other (avoiding “sideways” at all costs) with 100% conviction. I have absolutely no concern where the market is going – only in that, I am going with it. I don’t cling to any idea what so ever that the “world is a beautiful place” or opposite “the apocalypse is upon us” – zip , nada , zero as it pertains to my account balance.
This is trading like a gorilla.
You will have to evaluate/ re-evaluate your current “animal character” very soon in that – whatever you’ve been doing has likely not been working….and whatever anyone else is “telling you to do” is suggestive that what “they are doing” – isn’t working either.
I expect to enjoy these last few weeks of 2012 – and possibly the first few of 2013 before things really start to get complicated. With the printing presses of both Europe and the U.S cranking away and the conflicts in the Middle East broiling, it’s going to take a lot hard work to squeeze out those dollars in 2013 – 14.
I imagine some bulls will make money…. and some bears……..but we gorillas will make more.
Where do you think things are headed in the coming year?
I suspect your view point to the coming action in the markets including currency to be accurate, most likely by the end of Q1 – 2013 things will take a large turn.
Quick & nimble as you have described will be the new… new even more then it is today. With the increased global intervention & manipulation all around will definitely increase the volatility & whipsaw everyone until they give up.
I still think one will be able to time longer trades but timing will need to be “ Perfect” and one will need to be patient & a strong capital base to survive the drawdowns as they will be steep & painful. ( nothing like we have seen to-date)
Agree with your comments on market trends either to the bull or bear side – there will be lots of opportunity still to make money in the next 2 years but will require ones complete conviction and mental strength to survive.
Other than that I am looking actually forward to this times as they will present a wonderful opportunity to elevate ones trading experience to much higher levels. I think the key “ ONE “ key to a successful season will be money management or risk control. If one has already mastered this skill, the following 2 years will be much easier over ones who still struggles the fundamental need for PF management…. They will most likely be wiped out or just leave the industry and give up.
I agree on all fronts – and as well am looking forward to the challenge!
I think that my position size will come down around that time in order to “safely” get a feel for how bumpy the ride may be. I absolutely hate sidways price action but may look to work on a few “range trade” techniques, and see if I too can take advantage of the bouncing around.
Any way you cut it – the year ahead “should” do a good job of keeping everyone on their toes!
Since 2009 I have been blogging on the start of one huge massive Liquidity bubble lead by copper, LME topped copper in Feb 2011, but central banks kept it going. Most of Europe is in recession, Global PMI’s are horrible. China is going into their slow period, plus new govt is left with big corruption mess and bad loans. This week we find out if we have bullets, but IMHO, we don’t..neither does ECB, BoE is done shooting for now, RBA is pissed over the rally after their cut, and IMHO won’t wait until official Feb meeting. Japanese elections will probably result in more stimulus to try and get out of deflation cycle, so everyone buys USD. Big Mess…all bubbles pop at some point. Happy 2013..BTW I have my own Trading Diary too..stop by if you have a chance.
I love Bjork and your icon…..that dress – wow.
Go ahead and shoot the link over to your blog/diary – I’d love to have a look.
When I first posted at Ibank, Jake G said I looked like Bjork, (lol, don’t see it), anyway, had to switch to advatar, so a white swan seemed logical..plus have to keep Jake Gint happy. I started in mid 2007 learning about the markets..amazing journey so far. Central Bank Analysis is my weakest area of analysis. The comment section is where I keep random notes…the NYSE advance-decline volume is a modification of work that I came up with based off the work of the late great Terry Laundry, Pitbulls Mentor. Total learning process of mine. You caught the short squeeze off the Aussie rate cut before it happened last week, that is why I am here to watch you play the FOMC meeting. tradingnymphtradingdiary.com use to practice law, this is now my ahh addiction.
Well……please be careful in looking to “watch me play” anything as short term as a silly FOMC meeting – A am a fundamental trader at the root of the plan, with a very accurate shorter term technical system at work. I’ve already been short the buck against a basket of currencies since like…last week (even earlier actually) – but tend to bank profits and then re enter on the shorter term time frames.
As for the ol AUD – I didn’t “catch” anything I can assure you of that…as fundamentals guide my macro trade strategy.If you care to read back well…since I’ve been writing – I’m a big fan of the commods vs the safe havens as a broad/macro strategy.
The day to day squiggles are of no concern to me – short of seeing strong areas of S/P to hop on or off. For what it’s worth – Ill be long the AUD, NZD, CAD til mid January likely…..but will turn on a dime as market conditions require.
I’ve already partial postions in the commods vs both U.S and Yen as we type/speak…and will look to add throughout the week – no matter what the outcome of the FOMC crap is.
Used to practice law?? now this! – wow!
Many great traders have practiced law, lot of cross over and a love of analysis. Good luck with the global growth/risk on trade.
I kind of get the impression you’ve got a different outlook on the coming weeks – please feel free to share.
I have absolutely no doubt the world is (financially speaking) headed for certain doom – but I don’t let the macro view inhibit me from “banking coin” in the here and now. These central bankers want to inflate inflate infalte – so….it’s really hard to argue with that…let alone fight it.
Trading with the big boys makes sense to me – in whichever direction the big money is flowing.
I see you are up to watching the europe session open..Oil should be fading after Fed meeting is over, imho. Just waiting for ZEW data to post at the moment.
I don’t really sleep….http://wp.me/p2QNT5-4c gives u some idea of my schedule.
Always interesting to hear others views – as oil appears to be sitting at a pretty solid level of support….85.30 ish.
I live in Mexico so I get out most of the late afternoons.
84.59 ish is what I just wrote in my Trading Diary, lol. Opec keeping levels the same, which is way too much oil for global demand. Iran is playing nicer and Buzzard back open..don’t see buyers coming in with the QE trade to run up Oil leading into seasonal slowdown..Container Ships are even cutting some of their routes fwiw. I will go check out your sleeping schedule…I sleep during amature hour, lol, I sooo dislike the US open, lol.
Disagree about Asian Session being dull. I am a bit of a junkie, not money motivated..this is my passion. Can’t pick your passion.
I’ve had a quick little read over at your blog – quite a body of work. Listen – I have a question as to what you meant by ” a tipping point”? As per our prior conversations – I mentioned my “short dollar” bias based on my observation of currency markets – and fundamentals (Global QE in full effect) as reasoning, but you seemed sceptical. Generally speaking it sounds like you have a somewhat “bearish bias” – and are missing out on the upward movement. If thats even the case -I’ve had similar issues (when I started out) clinging to one ideal and hell bent on seeing it happen – only to get crushed time and time again as things went against me. In the back of my mind – I’m bearish as hell! But can’t let that manifest in my day to day trading as things (even when I can’t beleive my eyes) still keep going up.
Anyway – thought I’d just see about pulling you back in over here – and perhaps kick around further ideas.
Commodities flowing from the former common wealth countries to Asia will be strong which will bode well for CAD / AUS / NZ As the USA keeps Q3 going for 2 years with no limit expect the USD to get weaker. Expect Gold to hit $ 2K per oz market is going to be volatile as the EU continues to have challenges. I agree with Kong on the assessment of who cares about the swings just be on the right side of the swing when it happens. I don’t trade YET, getting ready to join in AFTER much learning and zen practice of planning the work and working the plan.
Right on Tim.
I wish I would have had a bit more “direction” before I started trading – but the trial by fire didn’t hurt too bad (ouch yes it did!).
Getting your bearings, and a general lay of the land – is a fantastic place to start. It appears that we are attracting some more sophisticated traders here as of late so……I hope this area will provide much learning for all!
Tim – if I can recommend anything it’s start off slow and manage your account/risk… the longer you’re in the game the more strikes you get at pulling money out of the game. Just some thoughts one may consider when getting their feet wet for the first little while. As your account grows so can your positions sizes/entries – if you lose a little back-track and re-group. The worst thing one can do is to start trying to chase losses…. cheers and best of luck…. Schmed
“You can’t be a bull. You can’t be a bear.”
Damned if you do and damned if you don’t. The game is now so rigged that even if you do win you won’t be able to hang on to what gains you may happen to make. This is an intentional global herd thinning — a major morality shift — the root cause is Xtrevilism.
Deception is the strongest political force on the planet.
Well said Warren….it is a mine field out there – hence the “gorilla theme” here.
There certainly is a “transfer of wealth” going on – and again as you’ve suggested – it’s happening weather you like it or not!
I’ve been trading for 8 years now and every year the market has felt “harder” to trade than the year before, and every year I keep reading comments from traders saying it’s the “toughest market they’ve ever seen”. But is this really true? I can’t help but wonder whether we all have a recency bias … whether ‘in the moment’ of trying to navigate a tough market we forget how hard it used to be in prior years.
Has 2012 been tougher than the crisis days of 2007? Of 2008? The QE1 and QE2 days of 2009 and 2010? The endless Euro summiteering of 2010-12? I don’t know … when I consciously think back to all those period, the last 12 months don’t seem all that bad.
As for forecasting the coming year – I have no idea what’s going to happen in the markets, but from a macro view, I expect “more of the same” from central bankers and politicians. I actually would rather like if next year was a lot like this year – I’m heading off on a 6-month round the world trip in Feb and the less time I need to spend with my laptop trying to “figure things out”, the better! 🙂
And actually….when you do step back and put it in perspective – well said…this year was definitely better than 2008 – 2009. Again as you’ve suggested – perhaps our expectations are higher (and maybe we are a little lazier!) and the “fun” we had learning has well and since passed.
6 Months isn’t a lot of time to explore the world – I hope you can fit it all in. I’ve lived in 7 countries over the past 12 or so years..and feel that’ve Ive barely scratched the surface!
He he…I truly hope you get that time away from the laptop!
Well …It could very easily go longer than 6 months … I’m just trying to contain my (and more importantly, my partner’s) expectations at this stage! We are spending a month in each of: Buenos Aires, Rio de Janeiro, Seville (Spain) and Barcelona, with some exploring / sightseeing in between each of those. Then will probably move onto Asia, but who knows. I just can’t wait to get out of this Eastern Australian timezone that I live in (Melbourne)… it has to be THE suckiest timezone on the planet from which to trade the currency markets. All the fun happens when you’re meant to be sleeping!
Well….it all sounds great – I love South America, and both Seville and Barcelona are beautiful (not particularily friendly but…)- what a great holiday! And yes…even better – a chance to hit another “more productive” time zone.
I am not a FOREX trader (i.e. don’t have a FOREX account). If I wanted to long AUD/USD, I assume I can buy FXA in my US trading acccount. But how can I play AUY/JPY (i.e. is there a similar ETF?)
I just pulled up the charts side by side and they are practically identical so – Yes…the ETF tracks AUD/USD great (just a lil pricy though).
Otherwise….hmmm….fxy gives you Yen – but not specifically against AUD so…that’s kind out.
I could also point out that some (not me) use gold as a proxy for AUD – and gold/gold related stocks also look to be turning in favor of risk on.
Gold – Of course! You know me from SMT and so I have been a cycles/precious metals fan for many years.
But the last year has really grinded some of us Cycles/gold fans out (as you said this bull has been hard to ride *recently*) and I guess I was looking to dabble in FOREX to get an upper hand.
I know many others in Gold space sound worn out.
Hey, maybe, this is a sign the gold ICL or bottom is finally! 🙂
Of course….sorry. I didn’t realize off the top you where trying to “get away” from Gold – as it has been a real grind.
I think you are very close to outta the woods now however – I do think its wise of you to be looking to branch out into ohter assets as well.
That is one sloooooow road with only holding/trading gold and the miners. Perhaps consider getting started with a demo forex account to start. There will be manny many opportunities moving forward.