I want to show you guys exactly what has happened to my account over the last week. I’m pretty sure a lot of you have been waiting to hear what has happened to my $50,000 account. Without further ado, let’s jump right in!
Welcome! If you’re new to the channel, my name is Matt Jimenez. I’m an entrepreneur who has worked with the greatest minds in finance over the last several years, and I’m here to impart to you guys everything that is important to me.
In this video, I want to show you everything that has transpired over the last week or so, the results of these events, and where my account is currently sitting. The account I’m speaking about is the $50,000 Fed Bot account. If you don’t know anything about it, hit this link above; it’ll bring you to the playlist. The point of this journey is not the destination.
Now, enough rambling – let’s get straight to the nitty-gritty. Here is my Fed 50k account, which I’ve been tracking since the end of October or early November 2023, has been completely desolated. The account, since it started, was up over 30% and gave me about $188,000 in unrealized profits. The reason I say “unrealized” is because I didn’t pull any of the profits out. If you notice in the deposits, you’ll see $100,000 there. The reason being is that I have another $50,000 that will be deployed to continue this journey. Like I said, this is a journey, not a destination, and the goal hasn’t been accomplished yet. The goal is to turn $50,000 into $100,000. So, until that happens, the journey continues.
Now, what has caused this dramatic move that wiped out my account? First, let’s take a look at this pair right here: AUD/JPY. This is the Australian dollar against the Yen (AUD/JPY). You’re probably wondering what all these fancy lines are, which I’ll get into in just a moment. But what I want you to pay close attention to is what I’m about to highlight here.
I just grabbed my measuring tool. If I go to the height of this move, you can see it plummeted quite hard. I’ll just drop this measurement there and bring it down to the lows. This is a 10% drop—almost an 11% drop in the last 3 to 4 weeks. But the more interesting part about it is that the majority of that move happened on a single candle. This candle here, which was July 2024, if I drop my measuring tool there all the way down to the bottom of this candle, it shows a single candle was over a 6% move, which is quite dramatic.
If we drop down to a daily chart to look at this, you can see it’s just been a complete bloodbath since this news occurred. Yes, I said “news.” But before I do that, I just want to finish up on the technicals with you guys to show you how crazy of a move this is and how technicals often line up with fundamental analysis.
If I go over here and grab this tool right here – this is the Fibonacci retracement tool – the reason why I like to use this tool is that it allows me to see how far a retracement can happen after a very extended move. As you can see, from here to here, it’s a clear uptrend. Along uptrends, you have pullbacks, and this Fibonacci tool allows me to measure each pullback that is occurring. If I anchor it right there and bring it to the height of this move, we have currently had a 23% retrace. As you can see, this is the 23%. It was a very overextended move, but it is quite dramatic—more dramatic than I ever anticipated it to be.
Another thing I look for when there is going to be a massive swing is how far we move away from these two lines here. These two lines are moving averages. Typically, whenever we have an extended move in any direction, over time, you always have a correction back to those averages. You can see this gigantic impulsive move to the upside had a drawn-out move straight back to the moving averages. Again, we had a long run of just upward pressure, and as you can see, it had to be corrected. I didn’t expect the correction to be this dramatic. I had a trendline drawn to see where we would find some type of bounce. I was hoping it would only come down to this area, but you cannot predict markets. All you can do is track and position yourself best in any circumstance.
As you can see, we’re getting pretty close to this moving average. This one here is the 50 moving average. Now, enough of the technical stuff – let’s go straight to the news that caused this big move.
Before I go into the actual Forex Factory news that shows the CPI (which measures inflation), what really caused the majority of this move to be priced in and reflected in markets is actually the interest rate hike. Here I have the Bank of Japan interest rate shown on my screen. As you can see, we have had a current rate hike from -0.10 to 1%. The crazy thing here is Japan has not raised their rates since 2007, which is when they first raised their rates. Before that, it was during World War II. Historically, Japan has always had low interest rates, but for them to raise them now is a very big sign showing Yen strength coming in, which obviously reflected on the chart. That’s number one.
This is an extremely big deal for Japan to raise their rates, and I believe this will have a bigger effect throughout markets entirely – even into US equities and many other things. I’ll get into that in another video. I believe it’s the Yen carry trade unwinding. Basically, a lot of investors are very interested in low interest rates to get a lot of a certain currency, then deploy that currency into other currencies with higher interest rates so they can pocket the difference. That’s it in a nutshell. I’ll go into a video explaining it a bit deeper, but this here is monumental right now, and I believe there will be other rate hikes in the future for the Yen this year. So expect a very strong Yen going into 2025, and probably for the majority of 2025.
The next thing I wanted to get into is the CPI. But before I do that, just understand this: the interest rate is used to help control inflation. The CPI measures inflation. With the CPI number coming up a bit higher than usual, as you can see, the rate hike that they did reflected in the CPI number that just came out. I’m going to get into that right here in just a moment. But understanding that the interest rate has risen in Japan is the most important thing to understand for the rest of this video because that is essentially the most powerful thing that can happen for a currency. If you want a currency to be stronger or weaker, you move the rates.
As you can see, across the board, the Yen has been strengthening and will continue to strengthen, I believe, throughout the remainder of this year.
Here we are on Forex Factory. The first thing I want to pull up is these two things here. Over here are the G20 meetings. If you don’t know what the G20 meetings are, it’s basically when a lot of global powers get together and talk about global things. Typically, you can experience some type of volatility around this, and a lot of the discussions are stuff that we’ll never really know about. So there’s no data that I could actually pull from this. Beneath this is the Tokyo core CPI. This is the inflation rate of Tokyo, obviously affecting the Yen. The core is important because it’s taking out a lot of the nonsense fees or expenses that come into day-to-day life. In the middle is the forecast, and to the far right is what it was previously.
Now, what’s very strange about this is what was forecasted: a 2.2%, which is only a 0.1% increase for the currency. The reason why this is important is that typically, when you have a forecast and the actual comes back close to or on par with the forecast, you don’t really expect the volatility to be so wild. But the fact that this is an inflation metric means it will impact the currency very drastically.
Popping up Bloomberg, inflation in Tokyo accelerated for the third month in July, keeping the door open to a possible interest rate hike when the central bank’s policy board meets next week. Consumer prices, excluding fresh food, rose 2.2% in the capital, the Internal Affairs Ministry reported Friday. In this whole article, if you want to read it, I will link it in the description down below. But the main thing you need to know is that they’re raising rates as they see inflation rising rapidly. One of the things that really caught my eye was this: on August 29th, I believe there is another potential rate hike for the Yen, which will have a dramatic effect across the board. If this news comes out again in August and they do another hike, I will probably be a bit more conservative when it comes to the Yen pairs on my trading accounts.
Popping over to the next piece of news I want to highlight: core inflation in Japan’s capital perks up. This came out on July 25th, around the time when this move started to really ramp up and take effect. Again, they just go over a lot of the metrics in the CPI reading and how much is possibly anticipated throughout the year. Rising Tokyo core CPI matches forecast. This is what I was saying in Forex Factory: you have the forecast and the actual, so they were pretty on par with the exact numbers they predicted. The premise of this whole article, again, just emphasizes the point that Bloomberg made: they are actually trying to slow the rate of inflation by increasing their interest rates.
Here, quoted by the Asia-Pacific Capital of Economics, the sharp slowdown in inflation excluding fresh food energy in Tokyo this month reduces the likelihood that the Bank of Japan will raise interest rates next week, though we’re sticking to the forecast of a rate hike in its policy rate to 0.3%. Now, while that may not seem like much, 0.3% is actually quite a lot, especially when we are speaking in terms of controlling a currency. Another economist at Nomura Research Institute (I hope I’m saying that right) said inflation may look high on the surface due to the boost to import prices for a weak Yen, but actual underlying inflation isn’t very strong in Japan. Many market players expect the BoJ to hike rates this year, though they are divided on whether such a move could come next week or later this year.
Now, let’s get into the reason why I actually messed up.
Knowing all this after the fact, there were tons of warning signs that I ignored coming from Nurp, which I should have taken action on to avoid these massive losses. When it comes to trading, you can’t 100% eliminate losses, but you can eliminate how much you lose. That is something I didn’t do. On July 22nd, Abhay from the product department for Nurp dropped this video talking about upcoming volatility, and I got this in my email. The most important thing he said was about lot sizes, and he was speaking specifically on these pairs. Ironically, the Yen is there. He was saying that we should actually lower the lot sizing position to these pairs by 75%, 75%, and 50% for the CHF/JPY.
If I had listened to this then, I probably would still be in good standing right now. But there’s more. I got another email from Brandon Gonzalez, and he went ahead and offered more hours of service to the community on July 22nd. Now remember, all this data that I shared with you on this move is all happening around the 24th, and it really got ramped up around the 25th. So here I am on the 22nd, ignoring all the signs. That’s sign one.
This is sign two: Brandon was offering more hours, and if I had paid more attention to this, I probably would have joined one of the Zoom meetings and asked questions about what I should do with these pairs – primarily the ones that Abhay was talking about. I saw Forex Factory having a CPI release, which I ignored. Then, during the move, Abhay, who is on the product side, went through a very extensive deep dive on a lot of the pairs that actually made my account bust. AUD/JPY was the exact pair that caused the majority of the losses for me.
Now, while I saw the emails, I don’t even know if I truthfully opened them or looked at them thoroughly enough to actually alarm myself. That is my fault. I should have been more attentive to the emails, especially when I see emails regarding volatility coming up in the market, knowing that I have an algorithm that’s trading in this volatile market. Instead, I sat there and watched the algorithm trade and continue to trade, and got excited that it was being volatile. In fact, I took videos on…
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