About

Welcome to Kangarootail.com! I’ve created this site to share my thoughts, opinions, and predictions on the markets that I’m actively trading and following – forex and commodities. I also wanted this site to help others to get started in forex trading.

My analysis style is mostly technical, but within a fundamental context. I am not a day trader, but not an “investor” either. The time frame for most of my trades stretches over several days, sometimes even a few weeks. I am using a handful of well-proven indicators and technical analysis tools to make my trading decisions. Check out my trading plan for details.

But my favorite way of reading the markets and figuring out what they will do next is by using what I call “comparative chart pattern analysis”. To me, it is sort of like taking basic chart pattern analysis to another level. Many technical traders use basic chart patterns, such as the head and shoulders pattern, triangles, flags, etc. Over the years of trading and following a variety of markets, I’ve compiled a list of more “esoteric” patterns that often look quite complex, but can be observed in almost all markets over and over again. And just like all basic patterns, they too have a psychological background that makes them a graphical representation of the two basic emotions that govern all financial markets – greed and fear. I’ve spent countless hours studying historical charts and refining my understanding of these patterns.

I enjoy sharing what I’ve learned, hoping to get some feedback from others that will help me to improve my own trading. This site is essentially my trading log, along with predictions, position tracking, and trade review. Deciding to publish my daily trading log online did something else I only realized after starting to post. It helps me to better adhere to my own trading plan by making my trading more accountable. One of my big weaknesses in the past has been impulsive trading, and the best way to counteract that is by strict adherence to a plan.

Over time, I have reduced the number of markets that I’m tracking more and more, and found that this has greatly increased my success. Focusing on just a few markets works better for me, especially with my style of trading. At this point, I almost exclusively focus on the EURUSD currency pair, gold, and the gold mining stock index HUI (or GDX, its tradable equivalent).  Occasionally I will post about the oil market or energy stocks, about silver and other precious metals, or about the stock markets in the US, Europe, and Asia.

By the way, you will see me making bold predictions on market movements daily. And guess what: I will be wrong plenty of times. :) Just remember: successful trading is not about being right all the time, it’s about making money. Recognizing early when the market moves against you and cutting your losses short, while giving your winning trades time to unfold is absolute key. Sounds simple, but it’s often not an easy thing to do.

Okay, so why Kangarootail.com? A kangaroo tail is actually a pattern that could almost be called a classic chart pattern, it’s not something I came up with. The first time I came across this pattern was in a book by Alexander Elder, “Come into my trading room”, an excellent book, btw. The kangaroo tail pattern is a reversal pattern that shows up as a single bar or candle sticking out far beyond the normal price range. In a daily chart, for instance, it is a one-day spike in the direction of the trend, followed by a reversal. The market tests a new level, and rejects it, leading to a stab-and-recoil behavior. I love kangaroo tail patterns. They are one of the most reliable reversal patterns I know, especially when confirmed by and intersecting with other indicators.

Here’s a good example of a kangaroo tail that just happened a few days before this writing. It’s a snapshot of the daily chart of the EURUSD pair. I circled the kangaroo tail that was left on the charts when the market hit 1.39 and rebounded sharply:

Please feel free to leave comments, or email me at info@kangarootail.com. I’m happy to share my knowledge and insights and would love to hear what others think.

Happy and Successful Trading!

Carsten Mundt, Ph.D.

info@kangarootail.com