Good Morning. We have decided to help you guys get your brain warmed up in the morning, so from now on your can find riddles and quizzes in our daily emails. Scroll on down and you will find it, let me know how you get on.

-Jordon Mellor, Jonathan Kibbler, Shaun A

QUESTION

Would you prefer $100,000 in funding via a prop firm, or $20,000 in cash in your own brokerage account?

Reply to this email with your answer

MARKETS

How’s your favorite today?

Markets are starting to take a breather, and so are all traders. Although, the USD movement has remained consistent, stocks are chilling, currencies are not.

TRADER INSIGHTS

Are Typical 1:1 or 1:2 Trades Enough?

1:1 trades.. In this market? Yeah, good luck. Maybe that worked back when markets moved slower. But these days, with news bombs dropping every five minutes and price action swinging like a caffeinated squirrel, that math goes south, fast.

Your “safe” trade with tight stops isn’t safe at all. Volatility hits, and (boom) your stop’s gone before you’ve even finished your coffee.

Here is what I want you to do. Think bigger. Go for trades that can make 3, 4, even 5 times your risk. “But I’ll lose more often!” you say. Yep, but the wins pay for the losses, and then some. You don’t need to hit 50% winners, just a few big ones make it all shake out in your favor.

Gold during the tariff wars is a prime example. If you aimed for those fat $30-50 moves, you smiled while other traders got chewed up by the chop.

It is a strong take, but you gotta hold for those chunky wins, and that’s rough on the nerves. Watching price almost hit your target, then snap back is annoying as hell. But if you bail early, you’re basically throwing away your only real edge.

Short version: If you’re still clinging to boring old 1:1 setups, you’re getting left behind. -SA

NEWS

The Ticker Tape

📉 S&P 500 tanked 14% since January. That’s a faceplant not seen since the Great Depression. Tech stocks got smoked; Apple, Microsoft, Nvidia, you name it, ouch. Meanwhile, energy stocks and gold strutted off with gains because people love a good panic buy. Tariffs, trade war noise, and inflation have everyone running scared. Euro and Asian markets are chilling. US is… messy. Until someone in DC finds the “calm down” button, expect more drama. -JM

🛥️ A speedboat in Lake Havasu hit 200 mph, launched itself 30 feet in the air (like, full-on backward flip), and then crashed. Yeah, and the two racers inside just walked it off—“a little banged up.” Their busted boat still crossed the finish line and won…. Safety gear, quick divers, and maybe a dose of luck saved the day. The team posted a video, boat’s trashed but everyone’s okay. -JM

🚗 Trump’s playing nice (for now) with automakers. Trump’s cutting some auto tariffs so U.S. carmakers won’t get hammered by extra costs on foreign parts. It’s a little “thanks for keeping jobs at home” handshake. Car companies threw a fit about the 25% tariff, warning it’d jack up prices and wreck supply chains. The White House said, cool, we’ll give you a break (and maybe even a refund). Trump’s making it official during his Michigan trip, because where else would you announce a car thing? -JM

LEARN

Can We Build a Macro-Based Currency Strength Meter With AI?

Can we make a currency strength meter that’s fed by real macro data and a sprinkle of AI wizardry? You bet I’m trying.

I’m tired of the usual “all the lines, all the time” technical meters. I wanted something that actually pays attention to what moves these markets, interest rates, GDP, inflation, the whole freakin’ shopping cart. But here’s the hard part, every economy’s weird. (Seriously, ask New Zealand about their dairy obsession.)

Plugging in the same stats for every currency wont work. That’d be too easy (and boring). So, let’s see what the robot overlords (I mean, AI tools) suggest.

I tossed ChatGPT a softball: “If you’re a hardcore FX trader running on macro data, what do you watch?” Surprise! It hit me with all the things I already debate with myself: interest rates, central bank drama, inflation, growth data, trade flows, and positioning reports. It even broke down a USD/JPY trade for November 2024.

So, there you go. A real macro meter might actually work, if my brain survives the coding. Stay tuned while I turn caffeine into code. This is the stuff that keeps me hooked on trading. -JK

ANALYSIS

What Hedge Fund Extremes Mean for the Canadian Dollar

The Canadian dollar is riding the chaos train, folks. We’ve got political drama, trade beefs, and oil prices taking a dirt nap. Canadians are lining up at the polls, because apparently changing leaders is the new national sport. Trudeau’s gone, Carney’s in, Poilievre is swinging at red tape with one hand and promising referendums with the other. Still, both leaders are side-eyeing Trump, who’s on a tariff warpath because why not throw more fuel on the fire?

But let’s get to the real action: hedge funds are going wild on CAD. Last week, they dumped a pile of shorts and almost 17k contracts flipped long. That’s a big bet on the loonie. Déjà vu vibes here, these levels hit last fall, and what happened? CAD tanked 9%. Ouch.

Canada lives and dies by commodities, and oil’s been in the gutter. Not great for CAD. If either leader goes head-to-head with Trump, expect more market mood swings. The Bank of Canada is holding rates at 2.75%, but if tariff panic spreads, rate cuts could be next.

Personally, the case for betting against CAD is piling up. Hedge fund extremes look fishy, but price action isn’t screaming “turnaround” yet. Watch the USDCAD and maybe peek at NZDCAD for a twist. -JK

GAMES

Trading Riddle

Here is a good one for you, no cheating.

ANSWER

Green candle on an Heiken Ashi chart.

EXPLORE

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