Greetings from Nova Scotia, Canada.
In a very perky mood for October, which has absolutely nothing to do with Halloween... yet, but this was the month my 2021 pip target of +15,480 net pips was beaten. The FX market may be nothing more than a chop fest of late, but “Count Your Wins” another year when I have surpassed my pip objective, so happy days for me and my existing subscribers whether solo or part of a trading group.
So, for those of you thinking, I want a piece of that for 2022, I am offering a “7 DAY ONLY” SPECIAL SUBSCRIPTION for those who want to generate at least +10,000 net pips next year (2022 targets not yet set).
Obviously, there are no free lunches and there are no guarantees of performance but given that since 2014 when I first launched my subscription service THE PREMIUM SERVICE now re-branded THE WEEKLY FX PREMIUM, I have never failed to meet my annual pip target (see below).
So, what is the SPECIAL SUBSCRIPTION that is available?
- Available from now until 23:59 Sunday November 7th 2021, New York time.
- Anyone who signs up via my website https://www.weeklyfxdrivethru.com
for a 12 month PLATINUM SUBSCRIPTION at CAD$ 1,500.00, will not only receive all the usual benefits of a PLANTINUM subscription of reduced annual second year subscriptions etc., but they will also receive for this special offer only an extension of the 12 month subscription to complete on 31stDecember 2022. - This means from now to the end of 2021 you can get familiar with my website etc. and take advantage of any set ups I have through to the end of 2021 as a bonus.
- Just sign up before the November 7th The joining instructions emailed to you will reflect the extended bonus subscription period through to 31st December 2022.
This is a great offer to get yourself in position to hit the ground running in 2022.
Moving on....
The final monthly pip totals were as follows: -
OCTOBER 2021:
Total net pips = +2,152 pips
YEAR TO DATE 2021:
Total net pips = +16,155 pips
(104.36% of my 2021 objective of +15,480 net pips)
1: THE WEEKLY FX PREMIUM – OCTOBER 2021 PERFORMANCE:
1.1: MONTHLY TRADE STYLE PERFORAMNCE:
Basically, referring to the spreadsheet above, this reports on potential income for single-lot trades and for simplicity I have valued Micro lots at USD$0.10 per trade, Mini lots at USD$1.00 per trade and finally Standard lots at USD$10.00 per trade.
Obviously, you trade your position size to the levels you can comfortably trade your broker account without creating margin calls etc.
Therefore, on the spreadsheet using the highlighted reference points: -:
A: - This represents at USD$1.00 (Mini Lots) per trade a USD$ income of $2,152.00 which, correlates to my reporting of net pips for the month of +2,152 pips.
B: - Costs trade reflects the fact that 35 Mini lot trades in total were undertaken at a cost of 35 x USD1.00 = USD$35.00.
C: - When subtracting B from A this gives a net income total based on single Mini lot trades of USD$2,117.00.
To generate over 2,000 pips in a month represents a great return and from an investment perspective a great return on the capital employed.
It’s NOT all plain sailing. Trading at the moment as we head into a major FED announcement on future Monetary Policy is fraught with danger. Behind these numbers I was also very deliberate to reduce my RISK exposure heading into a cluster of Central Bank announcements (BOC, BOJ and ECB), so all things considered, I am obviously delighted to have such a pip return in October.
All three of my trade styles produced a positive result, which has been an awkward objective this year, so this is a result that I had been aiming for, for some time.
1.2: MONTHLY TRADE BY TRADE REVIEW:
2: THE WEEKLY FX PREMIUM – YEAR TO DATE 2021 PERFORMANCE:
2.1: YEAR TO DATE TRADE STYLE PERFORMANCE
Basically, referring to the spreadsheet above, this reports on potential income for single-lot trades and for simplicity I have valued Micro lots at USD$0.10 per trade, Micro lots at USD$1.00 per trade and finally Standard lots at USD$10.00 per trade.
Obviously, you trade your position size to the levels you can comfortably trade your broker account without creating margin calls etc.
Referring to the year-to-date spreadsheet above and using the highlighted reference points: -
D: - The gross year to date income from all three trade styles is USD$16,155.00. This is based upon single Mini lot trades valued at USD$1.00 which, correlates with my reporting of net pips year to date of +16,155 pips.
E: - Costs trade reflects the fact that 407 Mini lot trades in total have completed so far this year at a cost of 407 x USD1.00 = USD$407.00.
F: - When subtracting B from A this gives a net income total based on single Mini lot trades of USD$15,748.00.
G: - An annual WEEKLY FX PREMIUM subscription costs CAD$1,500.00, which is approximately USD$1,200.00.
H: - After the annual subscription cost is deducted, the net income after all costs is USD$14,548.00 based off single Mini lot trades.
There is a huge amount of additional monthly and year to date trading information and reports available on my website https://www.weeklyfxdrivethru.com This can be found on my home / landing page under the tab at the top of the page titled HISTORY / PERFORMANCE, scroll down to “This year’s Performance”.
3: THE SOAPBOX:
FOR NOW... THE CENTRAL BANK DIVERGENCE TRADE IS ON
JUST WAITING ON THE FED
Last week saw a lot of peripheral news, and by saying that I do NOT want you to think the news and data released last week was not of importance because it was.
Last week we had press conferences from both the ECB and Bank of Canada. These were really important as they highlighted the differences between a relatively small economy (Canada) versus a mammoth, highly complex by comparison economy (European Union).
THE BANK OF CANADA: Highly aggressive shift to normalisation. The BOC ended its QE asset purchases immediately and brought forward its guidance regarding the first rate increases to mid-2022.
THE ECB: From a rather lacklustre view on inflation during the summer of 2021, we heard Christine Lagarde (ECB President) say that the main thrust of the ECB meeting was on three topics; INFLATION, INFLATION, and INFLATION. Lagarde, admitted that the previously TRANSITORY stance was way too optimistic. However, she spoke of the supply chain getting fixed in 2022. How on earth can she say this. There is absolutely nothing at all any Central Bank can do to fix the supply chain issues and frankly it’s all hearsay without substance.
Looking ahead the ECB will replace PEPP (The Pandemic Emergency Purchase Programme) in March 2022 with another anacronym. A supportive monetary policy will remain in place through to Q2 2023 when the first window for a possible interest rate increase looks a possibility.
Just a comparison on the brief highlights above is enough to show divergence.
As we all know, Central Banks are like “Brontosaurs from the Jurassic Period”, very slow in movement and very slow to change direction. If you prefer a modern-day analogy; Central Banks are like modern-day Ultra Large Crude Oil tankers that can carry about USD$100 million of oil when at full capacity, and they are about 400 metres (1,300 feet) long. For these ships to stop and turn 180 degrees takes miles and miles of ocean.
OK... what’s my point?
Very simple; Central Banks are very slow to change direction and when Monetary Policy is changed as an FX trader irrespective of whether you believe the reasons, you must take note, failure to do so you is to do so is at your peril.
This coming week we have the FOMC meeting outcome with its Monetary Policy Statement and Jerome Powell (Fed Chair), Press Conference on 3rd November.
The BOC, BOE, RBNZ and NORGES Banks are HAWKISH.
The BOJ, RBA, RIKSBANK, SNB and ECB remain DOVISH.
Having the FED positioned on one side or the other is the final piece in my CENTRAL BANK DIVERGENCE jigsaw.
It’s well baked in now that QE will end by the end of H1 2022. It is widely expected that Jerome Powell will announce the start and end date of QE TAPERING this week.
The question then moves to interest rate normalisation.
Will the FED meet the markets expectation of two rate hikes in 2022, or will the FED stick to the median average from FOMC voting members who do not see an interest rate increase via the latest “Dot Plot” until H1 2023?
What concerns me is the backdrop to the FED announcement. Running parallel to the FED we have a lame duck President in Joe Biden, who frankly cannot create harmony within his own Democratic Party never mind muster cross party support to get any meaningful policy through both houses.
The “Biden” Infrastructure Bill is watered down in both $$$ and impact and the Social Investment Bill, if it ever gets through, will be interesting to see what it looks like compared to all the hype it was given all those months ago.
Looking at the U.S. economy, there are issues.
- Inflation pressures are rising, there are NOT many left who support TRANSITORY.
- Labour Costs are rising at an alarming rate. This increases the inflation stresses and lands more pressure on the FED regarding “normalising” monetary policy. Employment costs rose 1.3% in Q3 2021.
- By December it is expected that headline CPi will break 6% and the core CPi to break above 5%.CPi inflation places increasing pressure on the FED to TAPER faster and act in line with the markets and raise rates in H2 2022. Remember, at the moment the FED dot plot shows the median for an interest rate rise in 2023.
- Last week the U.S. economy showed growth of only 2% in Q3 2021, which was the weakest growth since Q2 2020 the “Global” pandemic shutdown quarter. If you recall that was when GDP in the U.S. fell a momentous -31.2%. The polled number this quarter was 2.8%, which was a significant move lower from the prior quarter, so to miss a lower number by such a gap is huge.Supply chain issues were blamed for the miss.
NOTE: the FED can do NOTHING to improve SUPPLY CHAIN ISSUES.
So, a “lame duck” President and a real mixed bag of economic data and the FED are up sh*t creek without a paddle. I just cannot see Jerome Powell talking up interest rate hikes at all. There is just way too much uncertainty for a DOVISH FED to make the first move to normalisation beyond TAPERING in my opinion.
From a CENTRAL BANK DIVERGENCE trade perspective this is music to my ears if Powell procrastinates.
There are / will be plenty of scope for trades...
As always if you want to know what I am thinking, or what I am doing you will have to subscribe to the WEEKLY FX PREMIUM. For the next 7 days to celebrate my achieving my 2021 pip target there is a special promotion in place (see the opening section of this blog).
4: THE MACRO / FUNDAMENTAL VIEW:
This short section of the blog looks forward. I share my macro / fundamental thoughts and views for the coming 3-6 months on factors to consider from my Macro, Fundamental and Geo-Political perspective.
Look, as I see it, we are really in a holding pattern pending the November 3rd FOMC Monetary Policy Statement. Whilst this announcement in isolation does NOT change all my market views and thoughts moving forward, the FED does to 80% dictate how the other G10 Central Banks respond through their subsequent statements through to the end of 2021 and maybe intro Q1 2022.
The bottom line is that the FED is the major influencer of the markets and that is a fact we all must accept.
Now the FED announces this week. The bullet point list below, is relevant today and will most probably be as relevant next weekend as well, as I cannot see too much changing.
Let me just ask a question and then you will be fully aware of where I am coming from: -
“How can the FED fix supply chain issues?”
The fact is they cannot. Therefore, many of what is listed below will remain in place irrespective of what the FED announce or what Jerome Powell says in the Press Conference.
- Supply Chain issues
- Shortages risks
- Inflation risks
- Stagflation
- Energy Crisis
- Zero Growth
- Credit Default risks
- Debt issues
- Unemployment / Jobs
- Pandemic cases numbers rising
- Pandemic death rates
- ICU Beds in shorter supply
and - The Chinese Property Market looks screwed....
In addition...
Job vacancies are at all-time highs around the globe as social changes take effect, lower paid jobs which in particular are harder to fill, especially in the hospitality industry so to attract workers’ wages offered have been increased. This is wage inflation at the base level and wage inflation is NOT transitory.
If you resonate with my long-term MACRO THOUGHTS and want to get into the trades with me as I develop positions, you will need to subscribe to the WEEKLY FX PREMIUM at https://www.weeklyfxdrivethru.com
5: TRADING PSYCHOLOGY:
For me, TRADING PSYCHOLOGY is a very important key aspect of trading that is often misunderstood or just ignored. How we use our conscious and unconscious minds when trading is crucial to our longer-term trading successes.
Over the coming weeks, it is my intention to cover areas and aspects of trading that may be new to many readers. Sometimes things can be right in front of us, and we cannot see it.
HEAD MANAGEMENT and HEAD MANAGEMENT strategies for consistent success in trading is crucial to long-term success.
DANGERS OF HOPE
Hope is the first step on the road to disappointment. Of course, hope is a natural thing, and none of us can avoid hoping that we’ll achieve good profits, but this is one emotion that has to be carefully monitored and controlled.
While FEAR and GREED are obviously dangerous, hope can seem like a positive, beneficial emotion. Look, don’t fall for any of that. When it comes to trading, there really is no such thing as a beneficial emotion, your goal should always be to act as rationally as possible.
High hopes obscure perspective of the real state of the markets. It can cause you to keep losing positions open for too long, and hope, can also encourage you to place trades on account of unfounded optimism.
Our human desire to see something happen has a way of making us forget about much more concrete factors. This emotional reaction can give us traders a false sense of confidence, and frankly at times that’s the last thing you need.
Often times, keeping hope in check can be quite a difficult task. None of us like to admit that we’ve made a mistake, but the false sense of security that hope can give you won’t pay your bills. Remember, hope is NOT an investment strategy.
Hope will not save you from any losses.
As with everything in trading the best strategy is to PLAN YOUR TRADES and TRADE your PLAN.
6: CLOSING THOUGHTS:
6.1: THE WEEKLY FX PREMIUM – SUBSCRIPTION INFORMATION
If you like my approach to the market and are wondering what my trades are like from, a live perspective and what is the WEEKLY FX PREMIUM all about, check out my website https://wwww.weeklyfxdrivethru.com
The WEEKLY FX PREMIUM is my subscriber-based FX support option, which offers, subscribers’ full access to my suggested trade set-ups and my market commentaries via Twitter, TwitLonger and ZOOM.
Further information about how to subscribe to the WEEKLY FX PREMIUM is also located at the top of my welcome page at https://www.weeklyfxdrivethru.com under the “SUBSCRIBE” tab.
6.2: THE LAST DROP
Finally,
Always remember longevity in Forex trading can only be achieved through trading with a good MINDSET, RISK, TRADE and HEAD MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility. Trade with a TRADE PLAN, basically, plan your trades and Trade your Plan.
Finally, be GRATEFUL for your wins and COUNT THEM. Keep a POSITIVE MINDSET in play at all times, regardless of the market conditions.
Scott Pickering
The Pip Accumulator
Twitter: @pipaccumulator
https://weeklyfxdrivethru.com/disclaimer/
BLOG VERSION: #429 FREE NEWSLETTER
DATE: 31st October 2021
THE WEEKLY FX PREMIUM: FEBRUARY 2021
INFLATION, INFLATION and INFLATION