Gladiator and FalconFx

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Posted by Capital3X | Posted on 30-04-2012

Category : Think Tank

Tags: , ,

Am going to devote some time to put some charts out there but this time from our very own staple.

It has been over 10 months since we began and I think we are now for the second time going to introduce a major forex product (unavailable anywhere on retail and available to some few hedge funds). The first major product has been of course our FX portfolio which has constantly beaten any relative signal providers but most importantly has made money for subscriber in absolute sense.

Capital3x was always a special place (that was what kate told me when I was hired) and it truly has been. Capital3x performance has been doubted many times but mostly without evidence or with out a leg to stand on. But there are enough die-hard subscribers of Capital3x who have stood up for us at various times during our short existence. It has been our policy that we will not defend ourselves to anyone. We dont need to as quality will stand out on its own.

It was in February when I first decided that we have to get the knowledge that Kate and traders brought out to retail in any possible way. We did try various channels but the problem was that there the code and the model was in @#@@#$ archaic stone age un-readable format which needed a special software to run. But it was not until April that we finally met a Capital3x subscriber who had the adequate coding knowledge to help us with this product. Given that he has helped us to keep costs much lower than expected, am going to pass on the benefits to subscribers (You still have to pay but its negligible). Dont you dare unsubscribe before I get this out :) Am not going to let your sorry @#$ any chance of getting in cheap again. Ok am am just kidding. But yes once you are out, you will have the retail prices to pay which are not going to be as cheap. I am not wanting too many crowding us.

Enough rambling, lets begin with a few charts. Am sure you will pardon me for couple of days as I am in the middle of testing the products. So updates will be thin and much lower on quality. (I know you have been addicted to too many charts and analysis. Time to give your brains a bit of a breather).


The EU FalconFx is in a state where its wait and watch. The EU FalconFx differs from other FalconFx in that it derives it curve of peripheral bonds and EUR/USD own price action. Now am sure you finally have an indicator that encapsulates those crazy PIIGS bonds into one stable indicator and at the same time, not lose out the power of EUR/USD own price action.


One the of key reasons why Gladiator stands out from any other indicator (and when I say any other, I do really mean it) is cause it is only indicator which works on the inter market relation of over 5 instruments (sometimes 8 instruments) spread across bond markets and risk markets. While this may be revolutionary to retail, it is probably one of the popular indicators used by hedge funds esp Arb desks who rely on correlation snapping back. The indicator has been clearly in the long zone all through Friday breaking above neutrality and then getting into long zone on friday as ES broke above 1390.

No more do you need to keep asking on where do I look for Bunds and US 10 year yields. Why is EUR/USD not falling on a day when risk aversion is so high? These are some of the sample questions I have been receiving over email. Needless to say I have never ever not replied but at the same time nothing like putting it all out there.

The FalconFx EUR.JPY is an extremely powerful and versatile fx indicator which again has never been tried on the poor retail side who are left with the indicators like average and exponential and log functions of price action.

Finally USDCAD made a strong move to day highs of .9880. The loyal FalconFx was there to alert of the move that was coming. .9812 was where the Falcon raised its head over +1. Rest is history.

Enuf said, we plan to get both the powerful Gladiator and FalconFx out to you soon. Stay tuned.

Needless to say all my existing subs will get a very sweet deal (dont worry its not going to be expensive). But It is going to be dirt cheap if you are yearly with us.

More updates soon on Gladiator and FalconFx.

Thanks
Mark.

Performance week of 28 April 2012: Have the bears lost the battle?

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Posted by Capital3X | Posted on 28-04-2012

Category : Performance Page

Tags: , , , ,

Last week performance can be seen here

All performance can be seen here.

For the week ended 28 April, Capital3x portfolio made +207 pips over 27 trading calls. 14 Trading calls hits target while rest were either closed cutting losses or were stopped out.

For the month of April, an overall 136 trading calls have been issued with 82 trading calls hitting targets while 54 being closed or stopped out. For the month of April, a cumulative +1975 pips have been achieved over the 136 trading calls. The weighted success ratio was 79%.

After some phenomenally poor PMI data from EU and inflation which has shown no signs of bucking down, Apple declared stellar results reporting over $100 bn of raw cash, it was sweet revenge for the bulls who tore back to weekly highs above 1400 late Friday. The low of the week was 1355 which for the third time held in as many tests in the last month. As I see it, the bears on S&P have lost a golden opportunity to take S&P down below 1355. Had they succeeded, the rewards would have been worth the risk but to the credit of bulls, they held the baton. What makes this even more sweet is that risk rallied during the week even with poor macro data which has now become a norm where markets overlook key economic data. Who ever said markets priced risk.

The week also saw the breakout of Bunds to all time highs. EU Schatz closed above 110.50 levels and UST2 year in real risk of forming a double top at 110’102. We have discussed these issues in detail in the Capital3x Live Trade Room.

There are still open trading positions standing over the weekend with our latest biases. Of course that is only visible to our subs.

A quick update on getting the two major indicators which C3X uses: Gladiator and the FalconFx (also known as Rfx) are going to be made available. The project and the charts are in its final stages of testing.

Thanks for all the recos.

Happy weekend and see you all in Asia.
——————-
Mark
Capital3x.com

Bund auction Notes

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Posted by Capital3X | Posted on 27-04-2012

Category : Think Tank

Tags: , ,

IT EUR 3.75-6.25bln combined 4.75% May’17, 5.50% Sep’22, 3.75% Apr’16 & 4.25% Feb’19 BTP Auctions
The Italian Treasury is conducting its 4.75% 01-May-17, 5.50% 01-Sep-22, 3.75% 15-Apr-16 & 4.25% 01-Feb-19 BTP auctions, where it expects to raise an amount of between approximately…..

You need to be a member with us to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio. 

  1. The April Live Trade Sheet
  2. The April Live Trade Room
  3. C3X Performance FX portfolio
  4. Key economic data and speaker list for this week can be found here:Economic calendar
  5. The Bond auction schedule can be found here: Bond schedule

    
   

You need to be a premium member to see the rest of the post and the above charts

                

Intraday trading Update (ES Charts added)

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Posted by Capital3X | Posted on 27-04-2012

Category : Think Tank

Tags: , ,

So where do we stand. 6 hours into trading on a Friday after FOMC and BoJ, things look slimy and bit skidy (I know there is no such word but then EURUSD too is at an unexplained level)

In news till now:

Time to take a look at a few charts.


BTP opens with massive red candle to 100. The straight correlation is that EUR/USD has made a mockery of its recent strength above 1.32 as it pulls down 1.318. With Stochastics and vortex in bearish zone, it does look like the first signs of friday selloff is being written in the bond markets.
You need to be a member with us to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio.

You need to be a premium member to see the rest of the post and the above charts

  1. The April Live Trade Sheet
  2. The April Live Trade Room
  3. C3X Performance FX portfolio
  4. Key economic data and speaker list for this week can be found here:Economic calendar
  5. The Bond auction schedule can be found here: Bond schedule

Is German and US inflation projecting the biggest bond market move yet to come?

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Posted by Capital3X | Posted on 26-04-2012

Category : Featured, Think Tank

According to the preliminary figures from the German statistical office, consumer prices rose 0.1% month-on-month in April as expected. In April, German consumers once again had to pay more for petrol than in March. In contrast, heating oil prices declined slightly, as oil prices have recently fallen somewhat (see chart). A stronger increase in consumer prices was prevented by the abolishment of university tuition fees in the federal state of Baden-Württemberg. As a result, the rate of inflation drops to 2% in April (March: 2.1%) – its lowest level since January 2011. As the revolutions in the Middle East considerably drove up oil prices in April 2011, energy prices rose by less than 6% year-on-year for the first time since autumn 2010. The core rate, which excludes energy and food prices, comes in at 1.3%.


The rate of inflation is likely to remain above 2% in the next months. Overall, we expect consumer prices to rise by 2.2% this year. Growing capacity utilisation and the resultant, higher wage settlements increase the risk that consumer prices will continue to rise by more than 2% year-on-year in the medium term. As the ECB is unlikely to respond to these risks in Germany in view of the peripherals’ problems, inflation will probably be higher in the long run than during the past decade.

The higher global inflation also means we are witnessing the last leg of the bond market parabolic run. This is the sucker wave as Bunds crash 142 and EU Schatz are at all highs. They may keep running but the next drop below 135 for Bunds will be fatal. The long picture for bonds look bleak the least to say but having said that there may be a few more days/weeks to run for bonds before the whole sovereign pyramid comes crashing down. You have been warned.

You need to be a premium member to see the rest of the post and the above charts

You need to be a member with us to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio.

  1. The April Live Trade Sheet
  2. The April Live Trade Room
  3. C3X Performance FX portfolio
  4. Key economic data and speaker list for this week can be found here:Economic calendar
  5. The Bond auction schedule can be found here: Bond schedule

Endless possibilities: Tech analysis update

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Posted by Capital3X | Posted on 26-04-2012

Category : Featured, Think Tank

I have been working on getting some great stuff out to you guys. Working with thanks to a sub (name am not disclosing as have not taken his approval) on getting our internal MATLAB and prop trading system language coded indicator(s) to a more retail friendly charts, have been a bit slack with updates and charts but hopefully you have been following my updates in the Live trade room.

Today’s updates will focus on key charts and analysis from bond markets and over to forex setups.


ES continues to find support at lower end of BB on the hourly at that crucial level of 1380. Some days back, I did mention of that massive volume black hole at this level. Volume holes once in the vicinity are often magnetic forces which attract volume which is what has been happening over the last few weeks as prices fluctuate +- 1380 though with a lower bias. The vortex on the daily is well positioned for bearish bias but having said that do not be surprised for a squeeze move above 1390. Nothing is written in stone when it comes to the markets. Be nimble be flexible.

You need to be a member with us to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio.


That is it for now.

You need to be a premium member to see the rest of the post and the above charts

  1. The April Live Trade Sheet
  2. The April Live Trade Room
  3. C3X Performance FX portfolio
  4. Key economic data and speaker list for this week can be found here:Economic calendar
  5. The Bond auction schedule can be found here: Bond schedule

Ranges and Ranges

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Posted by Capital3X | Posted on 24-04-2012

Category : Think Tank

Tags: , ,

The move in risk trades is once again off a critical level on ES at 1355/57. Each time it has bounced off this level, it has been to a lesser extent. The fundamental data as stressed yesterday is deteriorating. FOMC minutes may not hold much and hence the probability of a slippage below 1355 look increasingly likely now. How ever 1373 on the upside holds the key for ES. Acceleration above that to 1382 could well be expected on the upside.


SCHATZ eased off its record highs (understandably so) as it tests the weaker hands at 110.5. This level really needs to hold for the breakout to be valid.

You need to be a member with us to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio.


You need to be a premium member to see the rest of the post and the above charts

  1. The April Live Trade Sheet
  2. The April Live Trade Room
  3. C3X Performance FX portfolio
  4. Key economic data and speaker list for this week can be found here:Economic calendar
  5. The Bond auction schedule can be found here: Bond schedule

Bravo: Technical analysis and Update 23 April 2012

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Posted by Capital3X | Posted on 23-04-2012

Category : Featured, Think Tank

Tags: , ,

The Capital3x Performance till April 20 2012 is visible here: 1700 pips in April

You must realize that you are swimming in shark infested waters if you are trading forex. Its a dangerous place and my endeavors over the last few months with my subs has been to protect their backside before loading in on the winners. They are not easy to come by but when they do, you must have enough dry powder to shoot. There is a reason why we differ from the all “mom and pop” signal service who can in all their effort can only come up with something like: “Buy EURUSD with stop at xxx and target at yyy” with not the slightest effort to explain. Some will make some feeble effort. They are there to take your money. Am sure my subs will appreciate, we are a different league.

We have always differentiated by not just the performance but also clear cut analysis which are often ahead of the price action. In fact running a live trade room and monitoring fundamental data and cross asset price action is not a kids game. It is demanding and I will request the same dedication from my subs. This is not a free lunch where you can just copy a few signals and make it work.

To survive in shark infested waters, you at least need to feign to be a shark (which in itself is hard work) otherwise sooner than later you are meat.

Fundamentally things are falling in place to explain the price action. In the case of EU, prices have not yet fallen but the reason for that is not anything else but the inherent fear factor of SNB coming into buy EUR/CHF which is close to break down the barrier at 1.2 My gut call is that they will defend it and then pull it up to 1.25.

Risk aversion is back on the table. The much defended weekly support 1366 is gone and albeit a late rally to test it, we are headed lower. My update here may look a bit repetitive given the number of times I have repeated these things in the Live Trade room. The German auction today once again ratified that money still found those yields attractive and safe enough to take down the entire amount rather than chase high yield assets. The French auction continued its disastrous performance and sooner than later rating agencies are going to take note. The PMI data was another nail in the coffin. If you were short SPX (like we suggested at 1373) then those numbers would have been sweet music to your ears. The dutch PM resignation is another dance in the show.

So to my loyal and understanding subs, here are a few charts and setups. Kept a few to be free for the free-riders and those who have been desperate to take a peek into Capital3x. Capital3x is not for everyone and its definitely not for the casual visitors so hopefully the free riders will take a look at some of the analysis and the drivers of forex moves and may be introspect on what they are missing.


The Italian German 10 year spread is widening. The BTP futures fell below the 100 mark again but once again managed to pull back above 100 at the time of writing. It must be noted, that BTP looks weak and a close below 100 will spell further downside for EUR/USD. The situation on the Italian bonds is worsening with yields well above 5.5% and widening with respect to the German yield. The Spainish 10 year yield is closing in on the 6% mark.


With Bunds stretching to all time highs, BTP breaking down and Spainish yields closing in on the 6% market
the EU SCHATZ has broken 110.50 level. This was exact reason why Capital3x shorted EUR/JPY at 107.8
and AUDJPY at 84.7. Our trades are not a coincincdence but carefully planned and researched. Of course
you may still choose to go your own way. Read what we said last week “If a sustained break of 110.5 happens, all yen pairs can be shorted”

This is what we said on friday:
“USDJPY has made a run for 81.5 but UST2year prices have barely nudged. If UST2Y stays above 110’07 expect USDJPY to make late climbdown as it dissappoints traders who thought it would bounce aftre a fall like that. ”

Look where USDJPY trades today. A solid 70 pips below friday high. USDJPY prices are determined by UST2Y and not by some airy fairy tales of resistances and supports. Tonnes of analysts including analysts who have never traded forex were on record (check their twitter feed) talking about how EUR.JPY was headed 108.3 and USDJPY headed 81.8 and 82.5.

The breakout on UST2 is very real. Take note. There is clear flow of capital on the short end of the curve and the long end of the curve. So money is flowing on both ends of the yield curve. They are questioning the short term and long term thesis of equity marekts.


With bond markets constantly fading the equity rally of last week, it was only a matter of days if not hours, for the dumb money to lose it on the risk assets. Not only the bond markets, but even the laggards of commodity markets (CRB index, copper) had faded the rally and even accumulated short positions. The ES is trading at 1361 and broken down key levels at 1366. The next support comes in at 1357 and then it is free fall. Take note of the volume hole at 1330 which is where we target the next move down. Capital3x has been short SPX Emini futures from 1373 on our portfolio. An alert was sent well in time to load the short in ES.
You need to be a member with us to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio.

Forex Setups
And finally to my favorite section (Kept this section for freeriders for today)

There is no point of all the above analysis and charts if you cannot apply them to real trading. If you are trading forex (As we are) then we share a few setups derived primarily from our internal model, indicators and mostly from the bond market analysis.

AUD.JPY

The setup was beautiful. The level to watch was 84.7 and we waited till second half of NY session on Friday to see if we see a casual break of 84.7. They didnt have the guts. Therefore we zoned in on the trade with a stop just above. What a clean trade as it trades nearly 120 pips below our entry. Ok sorry for the pat on my shoulder but I cant forgive you for not listening to me.

EUR/JPY

The setup on EURJPY was not easy as AUD/JPY. EUR/JPY had a real potential to run up to 108.28/.30. But we waited to see if it could take out 108 levels. We waited for hours. And finally on friday we took the trade to short it at 107.8 with clear instructions on the reasons. The whole rally of EUR/JPY to 108 was bear flag rally as SCHATZ was breaking its 2 month range at 110.50. You never question a trade when it is in the same direction as the bond markets. The bond yields were falling in Germany and US. And to make things more interesting it was the short end that was deflating. A clear sign that yen was about to strengthen as early as monday. Well now that we are in this trade, we will wait to see the action around 106.8 if it does retrace else we are headed much lower (sub 105). You can check the the Live Trade Sheet at Capital3x to see the exact stops and targets.

USD/CAD

USD/CAD threatened 0.99 on friday NY once again but very quickly came back up to .9930 and closed to make higher low. The case for CAD has weakened significantly after the release of Central bank minutes and inflation data all of which makes the Carney look and absolute duffer when he reiterated his hawkish position. Either he is dumb or he is an insider to some funds who are paying him to make hawkish statements to manage their own entries. The latest USD/CAD trade can be seen in the live trade sheet.

You need to be a premium member to see the rest of the post and the above charts

  1. The April Live Trade Sheet
  2. The April Live Trade Room
  3. C3X Performance FX portfolio
  4. Key economic data and speaker list for this week can be found here:Economic calendar
  5. The Bond auction schedule can be found here: Bond schedule

Trading Psychology: Part 4 The capital3x rules in trading

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Posted by Capital3X | Posted on 21-04-2012

Category : Featured, Think Tank

Tags: , , , , , ,

Continuing our Part series on Trading Psychology, we cover trading rules found in the book by WD Gann “45 Years in Wall Street”. But before we go over to Gann trading rules (some of which are outdated), Capital3x has its own set of trading rules which a new subscriber is often affliated and ingrained with during interactions in our live trade room.

Capital3x has its own set of rules derived in years of trading on bond floors and forex inter bank markets:

  1. Focus on a few pairs at a time. Forex markets at any point of time is about one currency. For example at any given point of time, markets are primarily focused on selling or buying of one currency. It could be CAD against every other pair and it is the cross currency movement that affect all other pairs.
  2. Always scale into positions slowly rather than taking one big order at a specific time. If your initial trade is in the right direction, move stops to breakeven and scale in with another equally weighted order in the direction of trend
  3. Be clear in your mind on how to determine trends. Just cause a pair moves 100 pips in one direction may not constitute a trend
  4. Once you have decided that the trade is a wrong trade, get out of it. Do not wait to see if it is going to give you some profits. When in doubt, get out.
  5. Your overall leverage should not be more than 3 to 5 times. If you make abnormal profits in your first few forex trades, rest assured that it is sigma event. You are not the next gifted Soros out there.
  6. While News don’t matter, it still can whip your positions around to take down your stops. So it does matter for retail traders with tight stops. Make sure you are very aware of the days calendar and bond schedule.
  7. Forex moves are “fundamentally” driven off bond markets. It is yield spreads that move forex as capital flows from one pair to another pair of higher yield.
  8. Safety and risk premium determine sovereign bond moves.
  9. Currencies at various points of time can attach itself to different drivers. This is important to understand. There cannot be a static set of rules which determine forex moves. For example widening spread in Spainish yield to German yields may be the primary mover of euro on a specific day whereas the very next day it may be Irish yields that are determining its moves. So if you do have an algo, make sure it is dynamic.
  10. Dynamic Stop management is important to understand. The stops have to move to break even once the pair has moved up above key resistance levels. The effort should always be to protect capital and then aim for returns.
  11. Do not over trade. The definition of overtrade can differ but you should get to know your ability to concentrate via a demo account. Once your stamina limits to concentrate are reached, you must not trade. It is normal to trade 1-3 trades a day. It is considered an achievement to trade more that 10 trades a day and yet be profitable on a monthly basis.

The above are the rules we follow at Capital3x.

In addition we would also like to provide the trading rules by W D Gann. According to W D Gann there are 24 rules that stood by him during his most successful years om Wall Street.

Here are the 24 rules:

  1. Amount of capital to use: Divide your capital into 10 equal parts and never risk more than one-tenth of your capital on any one trade.
  2. Use stop loss orders. Always protect a trade.
  3. Never overtrade. This would be violating your capital rules.
  4. Never let a profit run into a loss. After you once have a profit raise your stop loss order so that you will have no loss of capital.
  5. Do not buck the trend. Never buy or sell if you are not sure of the trend according to your charts and rules.
  6. When in doubt, get out and don’t get in when in doubt.
  7. Trade only in active markets. Keep out of slow, dead ones.
  8. Equal distribution of risk. Trade in two or three different commodities if possible. Avoid tying up all your capital in any one commodity.
  9. Never limit your orders or fix a buying or selling price.
  10. Don’t close your trades without a good reason. Follow up with a stop loss order to protect your profits.
  11. Accumulate a surplus. After you have made a series of successful trades, put some money into a surplus account to be used only in emergency or in times of panic.
  12. Never buy or sell just to get a scalping profit.
  13. Never average a loss. This is one of the worst mistakes a trader can make.
  14. Never get out of the market just because you have lost patience or get into the market because you are anxious from waiting.
  15. Avoid taking small profits and big losses.
  16. Never cancel a stop loss order after you have placed it at the time you make a trade.
  17. Avoid getting in and out of the market too often.
  18. Be just as willing to sell short as you are to buy. Let your object be to keep with the trend and make money.
  19. Never buy just because the price of a commodity is low or sell short just because the price is high.
  20. Be careful about pyramiding at the wrong time. Wait until the commodity is very active and has crossed resistance levels before buying more, and until it has broken out of the zone of distribution before selling more.
  21. Select the commodities that show strong uptrend to pyramid on the buying side and the ones that show definite downtrend to sell short.
  22. Never hedge. If you are long one commodity and it starts to go down, do not sell another commodity short to hedge it. Get out at the market: Take your loss and wait for another opportunity.
  23. Never change your position in the market without a good reason. When you make a trade, let it be for some good reason, or according to some definite rule; then do not get out without a definite indication of a change in trend.
  24. Avoid increasing your trading after a long period of success or a period of profitable trades.

 

 

Thank you and see you in our Live Trade Room on monday morning Asia session

 

Mark – Capital3x.com

Performance week of 20 April 2012: Capital3x FX Portfolio

2

Posted by Capital3X | Posted on 20-04-2012

Category : Performance Page, Think Tank

Tags: , ,

Last week performance can be seen here.

All performance can be seen here.

For the week ended 20 April, Capital3x portfolio made +635 pips over 37 trading calls. 22 Trading calls hits target while rest were either closed cutting losses or were stopped out.

For the month of April, an overall 109 trading calls have been issued with 68 trading calls hitting targets while 41 being closed or stopped out. For the month of April, a cumulative +1768 pips have been achieved over the 109 trading calls. The weighted success ratio was 82%.

The detailed list of calls are as follows:

Markets this week opened with gap down on risk assets on Monday (April 16) in Asia. Capital3x mentioned the possibility of such an event on Friday (April 13) which is why were carrying over 5 position all of which hit their targets. In the next 48 hours after that, we were buzy re aligning our portfolio to take advantage of any counter trades and we were right on the buck as we saw EUR/JPY, AUD/JPY stage a remarkable come back to nearly 50% of their falls from their recent peaks. Our FX indicator has been serving us well over the last few weeks.

The week also saw the breakout of Bunds to all time highs. EU Schatz flipped at 110.50 levels with spikes over that level but it still dipped back into the trading range of 110.45 to 110.5 which allowed SPX to counter rally from 1355 to 1388 twice in the same week. The UST2Y closes well above key level of 110’06 all of which is sending us clear signals of what is to come. We have discussed these issues in detail in the Capital3x Live Trade Room.

There are still open trading positions standing over the weekend with our latest biases. Of course that is only visible to our subs.

Thanks for all the recos.

Happy weekend and see you all in Asia.

Mark
Capital3x.com

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