Trade Both Sides – Fear vs Greed

I’ve never been able to understand this “bulls vs bears” thing , and the sentiment / psychology that goes along with it. I thought this was called “trading”! How an individual can cling to a specific side of the market and essentially “turn a blind eye” to the other is beyond me. Trading currency , and having no bias what so ever allows a trader to take advantage of “any and all” market conditions, as currencies are always fluctuating relative to one another.

As things slowly go “to hell in a hand basket” or inversely “rocket to the moon” having a specific bias / preference can only hurt a trader’s performance ,  and place considerable limits on the availability of trades.

I’ve been told that it’s very difficult to make money “on the down side” or that “getting short” is a fools game.

Absolutely ridiculous. In fact – I’ve consistently done much better during times of “fear” than during times of “greed”, as the emotions related to “fear” drive much larger moves in markets.

Keeping an open mind and harnessing the ability to trade both sides of a market can only help you in the long run. No one can expect things to just “go up forever” or in turn “dive to the bottom of the ocean” never to be seen again.

If you expect to survive the next 18 months I strongly suggest you look into trading both sides.

I’ve banked another 4% in the past 24 hours with my short USD trades as well several long JPY’s. The USD is currently getting creamed (as suggested) as it’s been trading “alongside” U.S equities for some time now. Japan has sold off (as suggested) hard here and U.S stocks look to follow suit.

I expect further weakness across the board.


17 Responses

  1. TheTrueHeir August 7, 2013 / 12:35 pm

    “No one can expect things to just “go up forever” or in turn “dive to the bottom of the ocean” never to be seen again.”

    Obviously I am a bit biased here as I’m holding underwater UJ longs, but don’t you think a correction here is due? Since UJ plummeted from the 100 area 2 weeks ago to the high 97s, it had a decent correction last week in which it almost reached the 100 area again. Do you really think BOJ will stay sidelined tonight/tomorrow morning even though the Nikkei continues to get hammered?

    • Pot Stock Watch August 7, 2013 / 12:51 pm

      It’s a bit difficult for me to “manage a trade” for you, as this is always up to the individual BUT…

      I want to get long the pair ( and will get long the pair ) with any further decline – as it will present a fantastic buying opp moving forward with U.S interest rates set to rise long before Japan’s ( if they ever do in Japan! ) so…..this being said even if you are “underwater” holding long – can you manage to hang on and ride out a drawdown? If so – great.

      Otherwise…..picking a level here isn’t “really my thing” my short term tech just hits the turns, at whatever levels the arise BUT…

      If I was lucky enough to see USD/JPY around 94 area – I’d back up the truck.

      I don’t think the BOJ can say/do much to add to the current ( and overly exessive easing ) program, and I do see considerable room for the Nikkei to fall.

  2. tio August 7, 2013 / 12:54 pm

    i expect your contribution will not be in vain, great lesson : never have bias and just trade what you see. Me … feel lucky here .. Waiting intermarket techy indicator. Hope western union accepted

  3. PT August 7, 2013 / 5:24 pm

    Senor Kong,

    I know you have remarked on “Likes Money” from time to time.

    Today he outlined a substantial expectation for the dollar:

    Question is do you anticipate the DXY to see a substantial fall off as stated, “The dollar printed a yearly cycle low in June. August is month 2. As mentioned, the failed daily cycle signals the intermediate cycle decline, which should take us out to November. That takes the yearly cycle to month 5. So the yearly cycle will need at least one more failed intermediate cycle to take it to the yearly cycle low. Allowing for about 20 weeks takes the dollar to late February or early March, 2014. March, 2014 brings the current yearly cycle to month 9, which is in the timing band for a yearly cycle low.”

    Gracias, PT

    • Pot Stock Watch August 7, 2013 / 5:46 pm

      I do expect the USD to work lower yes.

      However I also expect a number of the counter trend “zigs” to be real “zingers” and the trading to be extremely volatile. You have to keep in mind that long term cycle type analysis doesn’t provide day to day trade signals. Stay cautious and vigilant.

      Taper talks and the idea of “rising interest rates” challenge this view, so the confusion / mixed messages coming out of the U.S will continue.

  4. Power Corrupts August 7, 2013 / 5:49 pm

    mr. kong! you are a rare talent indeed… paul tudor kong!

    • Pot Stock Watch August 7, 2013 / 6:02 pm

      Thank you kind sir.

      Now if we could just spread the word, and knock this blog thing up a notch er two.

      Suggestions anyone?

      • Jworthy August 8, 2013 / 9:58 am

        Well Kong… since you asked…

        Most of my personal-day-to-day cashflow needs are covered by digital marketing related activities. So depending on your goals maybe I could chip in to help you kick things up a bit. You teach me a lot each day here, so the opportunity to pay it back would be welcome.

        Now I’m not sure what you have in mind, but some ideas are starting to percolate in the back of my brain. And I’m certain there are some low hanging bananas you could easily grab.

        I’m not sure if you’re totally serious or what your time frame is. But I will start casually brainstorming in your direction. I’m sure your upcoming service will be useful and would be eager to help get the word out if you’re interested. Does that sound okay?

        Happy trading!

  5. PT August 7, 2013 / 6:06 pm

    Senor Kong,
    I should have properly linked LM’s post:
    For your fuller review. Yes, I know your forex trade is much more narrowly defined, but for someone with a separate job, do you think LM has it on the money here for longer-term commodity (especially beaten down metals and miners) entries?
    Nos vemos, PT

    • Pot Stock Watch August 7, 2013 / 6:14 pm


      The site doesn’t allow for external links – I’m sorry.

      The filters see any and all outbound links as spam/advertising.

      I do feel that entries long commods / metals are upon us yes, but can also envision further sideways churn. I suggest staggered orders over time and relatively low expectations for “immediate short term gains”. It’s an investment in my view…..not a trade.

  6. tio August 7, 2013 / 6:43 pm

    In financial markets, things always take longer to happen than you expect, but
    once they happen, events unfold much more quickly than you expect.

    • Pot Stock Watch August 7, 2013 / 9:09 pm


      What you thinking?

      I’m doing well with short USD trade as well long JPY’s.

      I think we see a big move here moving into Sept.

  7. Tio August 8, 2013 / 11:30 pm

    my 300% capital got blink in 3 days … GONE. Because my fault .. to big position and highly aggresive with too many currency pair (hard to keep my focus any good). I take rest a while and will start next month to trade currency market again. While waiting Kong Technology and following your blog in silence. You right .. the battle in thy self between greed and fear need more serious attention than anything else and almost nobody take great focus on improving this area. uh .. my greed, will it become my luck someday ? LESSON LEARNED

    • Pot Stock Watch August 9, 2013 / 12:02 am

      Hang in there Tio – It’s hard to get these emotions under control….very hard.

      Trading smaller is a great way to stay in the game, and continue working on your emotions – trading “too big” is always dangerous.

      Hopefully you’ll have a better week – next week.

      I feel for you buddy.

  8. timfrec August 9, 2013 / 2:24 am

    hope your Kong Multi Time Frame Airbus A380 service release soon .. or maybe your Intermarket Gulfstream 550 ‘signal’ … me … waiting .. here . Rambutan .. welcome

  9. devilyell August 9, 2013 / 9:03 am

    Hi Kongmandos,

    Power Corrupts wrote: “paul tudor kong!”

    Tio wrote: “GONE.”
    Sorry to hear that Tio. I still battle my sins even after so many years.
    The best I have done to overcome some of them is to control them better so they don’t do as much damage as before.
    Good luck!

    Jworthy: “digital marketing”
    That is very interesting. Certainly you’ve noticed a new batch of “gurus” pop up after every rain storm. They all sell the same old crap in a different wrapper. Kong is one of the few legit teachers so I expect his popularity will skyrocket. You’ve also seen how desperate newbs are on the forums.
    Will you keep us in the loop as things progress?

    Good weekend everyone.

    • Pot Stock Watch August 9, 2013 / 1:26 pm

      Yo Dev!

      Ya – too bad hearing of some loss there on Tio’s end. I sure hope things turn for ya Tio! I know you are working hard!

      I looked up this “Paul Tudor” character as I’d no idea who he is/was – and bang! A compliment! I’ll take it!

      Admittedly I’m guilty of “falling off the grid” as I take little to no interest in the “who’s who” of the U.S financial world, and even less of the blog space. It suuuuuuure looks like alot of “snake oil” sales to me indeed!

      I’m up in Canada fly fishing so have been a tad busy here these past few days.

      Good weekend to all as well!

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