Tuesday, November 30, 2010

Test Results Week 7: Up 20.07%

Test Week 7 started on November 24 and ended on November 30, 2010.  I placed 6 trades, with no losers.  Can't say I traded with 100% accuracy, though.  One of my trades just resulted in getting stopped out at my entry price.  Still, that is always better than a loss.  My goal was to make $29.00 or 12.33% of the amount I started Test Week 7 with.  Instead I made $47.20 or 20.07%.

Test Week 7 was a little unusual in that there was a day that I did not trade even though the market was open.  That day was Thursday, November 25.  I was invited to an awesome Thanksgiving dinner on the island's east coast, so I left home early and came back late.  I do not think I even turned on the computer that day so I cannot even talk about missed trading opportunities...  and with 20% profits in one week, who cares about missed trading opportunities?

In my last post I talked about changing the way in which I was reading my indicators.  I know that this change saved me from what would have been  a big wipe out trade this week.  I think I am now getting less opportunities than before but I am hoping that they are more solid and with a higher probability of success than the previous signals.  It seemed to work out that way this past week.  Let's see what happens in the ongoing week.

Monday, November 29, 2010

Test Results Week 6: Up 9.86%

Test Week 6 started on November 17 and ended on November 23, 2010.  I placed 18 trades of which 4 were losers, so I traded with a 77.78% accuracy.  My goal was to make $25.00 or 11.68% of the amount I started Test Week 6 with.  Instead I made $21.10 or 9.86%.

During Test Week 6 I incurred huge losses that, when viewed against the fact that the week still ended profitably, only serve to emphasize how much money there is to be made in this market.  Test Week 6 started with $214.10.  Four days into the trade week, I lost $49.00 in one trade.  That's almost twice my profit target for the whole week and close to 23% of my account.  Yet, we managed to make up this huge loss and still end the week up almost 10%.  With better loss management, we could have made close to 30% in just this week.

For the last few weeks, the recurrent story has been profits between the high 20% and low 30% that end up being wiped out by one single trade.  There are several reasons for this.  First, the EurUsd has seen some weird and spiky fluctuations in the short term charts with all the Ireland, Greece, Portugal bail outs and rumors.  Second, this is a trading strategy that is in development and just last week I re-configured my indicators and the way of reading their signals.  I started with this new or improved strategy Wednesday last week.  Lets see how it works out.

Thursday, November 18, 2010

Test Week 5: Up 3.03%

Before I begin, I warn you that this will be a long post.  I don't know if I will finish it tonight.  In any event, first things first...

Test Week 5 started on November 10 and ended on November 16, 2010.  I placed 25 trades of which 2 were losers, so I traded with a 92.00% accuracy.  My goal was to make $25.00 which is 12.03% of the amount I started Test Week 5 with.  Instead I made $6.30 or 3.03%.

Early in the week, someone who desires to remain anonymous gave me a 5-figure amount and asked me to trade it for her.  I didn't feel comfortable playing with someone else's money so I decided to use a different and longer term strategy that I worked out a few months back.  I was surprised when I realized how well that strategy interacts with the one I've been trying in the past weeks.  We were doing incredibly well...  until the 'general consensus' announcement that Obama made in the early morning of Friday, November 12.  I will give you exact figures.

I started by looking at the trend in a long term chart.  The EurUsd was in a downtrend (since November 5, actually) so I only took trades shorting the EurUsd in my short term 15-minute chart.  Whenever the trade went in the red, I held on to it until it broke the resistance levels I had previously calculated and actually traded above the levels.  Invariably, it bounced back down and I would add to my position at or close to those resistance levels.  I then used the ATR to manage trailing stop loss levels once the trades were in the green.

In a day and a half, I had placed 12 trades, all profitable.  I was looking to make $10 in those two days and a total of $25 for the whole week.  A day and a half into my new strategy, I had already cleared $48.50 or 23.34%.  My next trade would break my heart.

I placed exactly the same trade I had placed 12 times before.  In less than one hour, the trade shot up to and through all the resistance levels I had plotted.  A day and a half to make $48.50, one hour to lose $69.00.  I went from being up 23.34% to down 9.87% in one hour.  President Obama had just announced a 'Hard Won Consensus' as the G-20 summit ended.  As explained by CNN, "[a]t the summit, they agreed to steps that include moving toward more market-determined exchange rate systems and refraining from the competitive devaluation of currencies."  My only thought... why must the world change its economic policies the moment I figure out how to milk them dry?   Lol...

So less than an hour after the EurUsd reverses on me and takes my profits with it, I get an email from the person who gave me the 5-figure amount to manage for her.  She expressed how excited she was after receiving Thursday's account statement by email and seeing we were up over 30% in just 3 days...  My response, take a valium or two before opening the statement you will receive this afternoon...

When all is said and done, I really can't complain about it.  On Friday I my account had a 9.87% loss and by Tuesday afternoon I had turned it into a 3.03% profit...  12.90% in three days is not bad either...

Wednesday, November 10, 2010

Test Month 1: Up 33.21%

Our first month is over.  It encompassed the period between October 12 and November 9, 2010.  Twenty days of trading during which we placed 46 trades and lost 18, for a 60.87% accuracy.  My original goal was to make $86.00 or 55.13% of my starting amount.  Instead I made $51.80 or 33.21%.

Test Month 1, in general, was an eye opening disappointment.  Don't get me wrong, I sure as Hell won't complain if I can make 33% every month.  However, my performance was way below my target.  Maybe my expectations were unreal or maybe my systems still needs some tweaking.  I am hoping it is the latter.  Let's see what the next 4 weeks bring.

Tuesday, November 9, 2010

Test Results Week 4: Up 0.14%

Test Week 4 started on November 3 and ended on November 9, 2010.  I placed 20 trades of which 8 were losers, so I traded with 60% accuracy.  My goal was to make $25.00, which is 12.05% of the amount I started Test Week 4.  Instead I made $0.30 or 0.14%.  I did make some extra money playing the QE2 announcement, but that is not counted for purposes of tracking my strategy's performance.

First thing I notice is that I am placing way too many trades.  When I look at our blog entry for Test Week 1, I notice that I only placed 10 trades and made 10.58%.  On Test Week 2, I only placed 5 trades and made 22.43%.  This means that I may not be following my strategy closely or maybe my strategy is still missing an additional discriminating factor to help me filter possible trades.

Another factor that I believe has been of utmost importance in the lackluster performance of these past two weeks is directly related to investor psychology.  I got set targets of the minimum amount I must make daily/weekly/monthly to meet my self-imposed goals.  I have noticed that the moment I fall behind, I start forcing trades and deviating from my strategy.  I feel that I am now playing catch up and must hurry up and get a profitable trade to calm myself.  It reminds me of the way I felt when I played basketball and was down 2 points with 10 seconds left on the clock.  This 'do or die' attitude is possibly the worst attitude you can have in this business.  However, this is something that cannot be remedied by looking at moving averages, oscillators or anything else.  This is a personal barrier and I must work hard to overcome it. 

I don't know how many times I heard it before and always thought it was bullshit.  I guess I was seriously mistaken.  It seems that, after all, our biggest hurdles on the path to success are really within ourselves.

Wednesday, November 3, 2010

Test Results Week 3: Down 1.75%

Test Week 3 started on October 27 and ended on November 2.  I placed 11 trades of which 6 were losers, so I traded with 45.45% accuracy.  My goal was to make $23.00, which is 10.89% of the amount I started Test Week 3.  Instead I lost $3.70, or 1.75%.  I did a few things that departed from my strategy and it cost me dearly. 

In the past few weeks, I noticed a recurring pattern in the price of the EurUsd.  From about 2:00 p.m. to 7:00 p.m., the price ranges without much fluctuation.  Sometime between 7:00 and 7:30 p.m., a clear trend starts emerging and you can ride it for good profit.  However, in the first two days of Test Week 3, the trend started developing at about 6:00 p.m.  On those two days, I didn't enter the trend at 6:00 p.m. believing it was the typical false signal.  I didn't enter at 7:30 p.m. either believing that the trend had already been going for an hour so it had little upside left.  Wrong on both counts.  So, on the third day I act upon the 6:00 p.m. signal thinking today I am getting in early on the trend.  Third count wrong.  Add to that a few trades placed without initial stop losses while I tried some new ideas and its is a wonder that I only lost 1.75% this week.

Actually, it is not a wonder.  I had three huge trades this week.  They were the result of creative stop loss management after the trades were in the green and two of them lasted over 24 hours, which is remarkable when you consider that most of my trades last less than one hour.

In conclusion, I am not really sure why the price behaved this way this week.  It might be tied to the FOM meeting and expected 100b to 200b quantitative easement expected.  I did draw these lessons, though: no more trades without a set stop loss at the time the trade is entered; no more trying to predict trend direction; and no more deviations from my strategy.

Wednesday, October 27, 2010

Test Results Week 2: Up 22.43%

Test Week 2 started on October 20 and ended on October 26.  I placed 5 trades of which 1 was a loser, so I traded with 80% accuracy.  My goal was to make $20, which is 11.59% of the amount I had when I started Test Week 2.  Instead I made $38.70, or 22.43%.  Since I had exceeded my profit target for the week by so much by the end of the fourth trading the day, I did not even look at my trading platform on the fifth trading day and spent all day playing computer games with my nephew.

During Test Week 2, I tried several different exit strategies instead of the exit strategy explained in my last update.  For trade #11, my first trade of the week, I bought 4 micro lots of the EurUsd but I did not place a take profit at my $4.00 target.  Instead, I checked the price every 15 minutes, more or less.  Thirty-seven minutes into the trade, my position was up 34 pips, or $13.60.  I closed half the position, or 2 micro lots, for a gain of $6.80 and allowed the other half to ride the trade until my indicators got me out of the trade.  This occurred 55 minutes after taking my initial profit.  At this time, my remaining position was up a total of 65 pips, or $13.00.  My total profit for this trade that lasted an hour and thirty-two minutes was $19.80.  That's $0.20 short of my target for the whole week! 

For trade #12 I tried a different and riskier strategy.  I shorted 4 micro lots of the EurUsd and, once again, I did not place a take profit at my $4.00 target.  However, this time I let the whole position ride the trade instead of clearing at least my target profit and letting the remaining position ride.  My indicators got me out of this trade 1 hour and 12 minutes later, when the position was up 39 pips or $15.60.  To put it in perspective, the strategy used in trade #11 would have profited us $6.80 when we closed the first half of the position at 34 pips of profit plus $6.90 when we closed the second half of the position at 39 pips of profit.  That would have been $13.70 versus the actual $15.60 we made.  By the same token, had we applied to trade #11 the exit strategy used in trade #12, we would have made $26.00 instead of $19.80.

So which strategy will I use in Test Week 3, which started today?  I'm not really sure.  Trade #12's exit strategy is certainly more profitable than trade #11's.  However, trade #11's exit strategy can guarantee that you will at least make your profit target in many circumstances where trade #12's exit strategy would result in a loss or a smaller gain.  Whenever I find myself in this crossroad, I revisit my post in On Greed: Part I.  Yep, now you know which strategy I will be using.

Friday, October 22, 2010

Test Results Week 1: Up 10.58%

I am stepping away from expert advisors and developing my own system.  After several less than spectacular attempts, I think I have come upon a trading system that is not too complicated and may be quite profitable.  I thought about trying it out on a demo account but my experience is that when you trade with fake money, you have no psychological investment in the account and its performance.  Thus, it is always easy to make clear headed decisions and pull the trigger.  It is also just as easy to miss the lessons you should learn from your losing trades.

Trade with real money, even if only $100, and the game changes drastically.  In fact, trading with only $100 in the account puts a lot of pressure on you to do things right.  With such a small amount of money, you have much less margin for error.  Improper risk/money management will wipe out your account really quickly.  Therefore, I started my experiment with $156.00.  This small amount forces me to exercise proper money management and puts enough psychological pressure to prepare me for trading bigger accounts.  After all, the difference between trading $156.00 and $15,600.00 is just the number of lots per trade.

My goal is to make 2.5% of my portfolio every day.  The size of my trade and the number of pips I aim to make in order for my trade to net me 2.5% will be determined by the ATR (Average True Range) indicator.  My stop loss will be twice the ATR at the moment I enter the trade and my take profit will be my entry price plus/minus (depending on whether I go long/short) one ATR.

My first week testing my sytem started on October 12 and ended on October 18.  I placed 10 trades of which 3 were losers, so I traded with 70% accuracy.  My expectation was to make 11.54%.  I fell short, I only made 10.58%.  Now, two explanations are in order.

Why 11.54% and not 13.14%?  Well, the spreadsheet I use to calculate my profit targets rounds numbers down.  If it rounded numbers upwards, eventually you would be required to trade amounts for which you did not have enough funds or margin.  Rounding downwards is usually unnoticeable, except when trading amounts this small.

Just 10.58% in 5 days?  Again, this goes to investor psychology.  On at least the first 8 trades, the spreadsheet suggested I trade between 3 to 5 micro lots.  I chickened out of it and only traded 1 micro lot.  Even though I traded between 1/5 to 1/3 of the amount I should have traded, I almost met my target.

Although I fell short of expectations, I am nonetheless very happy with the results of Week 1.  I certainly wouldn't mind making 10% every week!  Next week I'll post the numbers for Week 2, which should end on Tuesday, October 26, unless I forget to trade one of those days.  I'll also post more information on my new trading system.

Monday, October 4, 2010

September 2010: Uber Failsauce!

After two years buying, testing and returning for a full refund several tens of expert advisors for MetaTrader 4, I've come to one simple conclusion: 99% of them do not work consistently.  Sooner or later - usually sooner than later - they will nuke your account.  The one percent that actually work do not trade often enough to provide a reliable stream of income.  You can rely on them to trade profitably, but they won't trade more than once or thrice a month.  If you already knew this, then you will not be surprised to learn that my account got seriously wiped out during September.  I'll explain it this way.  When September started, I had $1,774.64.  After the wipe out, I had $500.

Like every other cloud, this one has a silver lining, too.  Heck, it may prove to be a golden lining.  It forced me to develop my own system for trading the forex and to stop my reliance on other people's custom indicators, strategies, expert advisors, etc.  I started testing this new strategy early in September in a demo account, as the wipe out occurred pretty early into my trading month.  My plan was to test it until December.  If it passed muster, I'd put some money in it and trade it through 2011.

The test account was doing so well that I decided to bypass my test period and to trade it with some actual money...  and what better than the $500 I had left?  I went ahead, bit the bullet and started placing real trades.  While it is not a perfect system, it certainly is profitable.  Eight days later my account was up 31.82%.  I was more than pleased as I was only looking to make 20.90%.  So, I turned $500 into $659.10 in eight days.  Wish I'd had $10k instead of just $500, lol...

Unfortunately, my account has less than half that amount right now.  You probably are wondering what happened, but you will have to wait for my next update.  It will be adequately titled something along the lines of...  Friends Don't Let Friends Trade Drunk.  Maybe I'll be a bit more accurate and will switch the Friend for Cousin.

Sunday, August 29, 2010

New Chart Settings

The Performance Chart has been modified to make it easier to know at a glance whether we are meeting our 4% - 6% profits per week target.  You will now see two red lines moving away from each other.  The bottom red line tracks where we should be if we were making 4% profits per week.  The upper red line tracks where we should be if we were making 6% profits per week.  We want to be above the lower red line always.  Right now we are between the two lines so we are exceeding our 4% profits per week target but not yet reaching 6% profits per week.

August 2010: Failed to Meet Target

We started the month with $1,914.08.  At 4% per week, we expected to end this period with a balance of $2,275.03.  However, three margin calls later... maybe four...  its a blurry hazy recollection right now...  anyway, the end balance was $1,774.64.  Our account is still up 47.87% from inception July 2010 while the DJIA is up 4.30%.  More important, however, is what lessons were learned this month.  I don't mind losing some money as long as I don't lose the lesson.

One of the first things learned is to try and not leave trades open over the weekend.  You never know what newsworthy event will occur between Friday afternoon and Sunday afternoon that will cause your open trade to shift drastically for the worse.  This ties with the second thing learned: don't trade Sundays.  All this makes perfect sense now.  All my margin calls came either Monday or Tuesday and were caused by trades left open over the weekend that shifted on me after weekend events.  One or two of those calls also had to do with trades opened on Sunday before a reliable trend was established.  So, for the next trading period: (i) try to close all trades by Friday, and (ii) don't trade Sundays.

Unfortunately, I could not close my EurUsd trade Friday so it carried over the weekend.  Fortunately, no major news means no erratic movements to push the trade against me.  The same cannot be said for a UsdChf short trade also left open during the weekend.  It has gone from a 90 pip profit to a 35 pip profit as I write this.  Hopefully, they'll close profitably before Friday.

Another planned change is to further tailor down my use of margin.  I will go pretty close to baby steps and then try to build on that.  This means I may not achieve my 4% profit per week target for now but hopefully we'll come up with a way to consistently make those profits.

So, as far as targets for September is concerned, we want to finish the month with $2,158.43.  This would be five straight weeks of 4% profits per week.

Wednesday, August 18, 2010

Noet Z'Hin Lil'Avinsin

"Boldly stride the doomed."  -  Drizzt Do'Urden

Ok, time to confess to some hypocrisy.  I know I am shooting for 4% to 6% weekly, but I got so excited with last month's 58% performance that I really wanted to do it again.  However, increased volatility and two margin calls in two weeks are making it real easy for me to come back to my senses and to the realm of reasonable expectations.  Is striding boldly, instead of cautiously, into August dooming my account?

Early in this month's first week, a margin call put me down 15%.  By the end of the second week, I had recovered the 15% loss and was actually up another 14%.  I figured if I could repeat this in the upcoming and last two weeks of August, I would post another incredible 50%+ performance in one month.  However, this past Tuesday I got a second margin call that erased last week's profits and put me up just a mere 0.28% for the month of August.

I modified my strategy.  Up until last Tuesday I was dipping into probably four times the margin I should be using for the size of my account.  Also, I think I may have failed to properly calculate the trading range of the EurUsd for this week.  Hence, ran out of margin before turning a profit.  As of Tuesday, I am only dipping into three times the amount of margin I should be using.  Are these bold or foolish strides?  Is there a difference when they both lead to the same destination?

Guess we'll find out Friday at 4:00 p.m.

Friday, August 6, 2010

On Greed: Part I

"...  greed, for lack of a better word, is good."
  -  Gordon Gekko

I decided to learn about investing when I was in my second year of law school.  I read everything I could get my hands on that could teach me anything about market fundamentals, company evaluation, etc.  As of today I've been trading stocks for about eighteen years, options on equities for about thirteen and currencies for roughly two.  My brief experience has taught me that greed can be very good, but it can also break you in half, make you despondent and even make you doubt whether you have what it takes to be a successful investor.  Greed by itself, for lack of a better qualifier, is not good.  Managed or rational greed, however, is good.  I'll try to explain myself.

This true story dates back the to the year when the tech bubble finally burst.  I was a novice investor - still am - filled with awe and jealousy of Warren Buffet's 22% average profit per year.  Imagine my surprise when I started making an average of 16% profit per month trading option spreads on tech stocks.  Greed drove me onwards and I started buying calls on everyone's favorite stock at the time: Yahoo.  Calls were tripling almost monthly and before long I had turned $5,000 into a little bit over $300,000 thanks to the magic of margin and compounding.

To reach this performance in a span of roughly six months I started doing everything I learned you should never do.  I traded spreads based mostly on the Black-Scholes mathematical model - this is good.  However, as I got greedier I kept lowering my probability of success and increasing my risk in the expectation of a higher profit, and it was working.  Whenever a trade went against me and I got the assignment on the put contracts I had sold, instead of selling the stock and limiting my loss, I would hold the stock for the three days I had to settle the transaction.  Because we were in a bubble market about to burst, the stock would go back up, and I would make a double profit.  I would profit the premium on the put contracts sold plus the profit on the stock assigned.  Life was sweet and I knew more than anyone.  I was God's gift to the investment world.  I must be!  Imagine, less than five years trading experience and making these incredible profits...  Had I any clue to what I was doing, I would have realized that this erratic market behavior was the clearest signal that the economy was due for a correction, at the least, and quite possibly a meltdown.

The economy melted down...

I lost $300,000 in two days...

I am not kidding when I say that I spent almost two weeks in shock.

I was not yet thirty years old and had over $300,000 sitting in an account.  Less than a week before the meltdown I was considering withdrawing all that money and placing it in bonds.  Yet, unfettered greed drove me onwards... and downwards.  Every so often I wonder where I'd be now if I had acted on my instincts and withdrawn that money.  How much easier, more filled with conveniences, would my life be right now... or the life of the people I care for, if not mine.  I will never be able to stop my pondering, and I will never be able to know the answer.

Greed, for lack of a better word, will tear you to pieces.

To be continued.

Friday, July 30, 2010

July 2010: Profit Target Exceeded

You recall from my last post that I am looking for an average of 4% growth per week.  Compounding this growth, I'd be making 16.99% per month depending on the number of trading days in the month.  I started the month of July with a mere $1,267.62, so my target for the end of the month is $1,483.05 or a profit of $215.43.

At the close of the market today, the account was sitting at $2,014.08.  That's a profit of $746.36 or 58.87%.  The DJIA also did very well, gaining an astounding 733.41 points or 7.54%.  After such a great month in the markets and in my account, where do we go next?

Well, I am going to start by clearing a little bit of profits from the table.  I'll probably transfer $100.00 from my investment account to my regular checking account.  Its roughly 8% profits and should be enough for me to go to Burger King and buy me a triple Angry Onion Whopper with an extra large chocolate shake, onion rings, fries and a hot apple pie.  Who knows, my next post may come from a bed in the ICU of a local hospital as I recover from a triple bypass surgery to unclog the arteries blocked by all the fat, grease  and all around poisons in my planned meal.

Seriously, in all likelihood I may never again have a month as profitable as July.  So, I am looking to do 4% to 6% per week during August.  Since the account will have roughly $1,914.08 my target for August 31, 2010 is $2,275.03.  That's a profit of $360.95 or 18.86% in one month.  However, if you compare the $2,275.03 target with our initial $1,267.72 investment, we're talking about a profit of $1,007.31 or 79.46% in two months.  Of course, this awesome performance is the result of mucho luck in July.  I think it will be a cold day in Hell before I again see profits of 58% in one month.

Wednesday, July 28, 2010

Going Conservative And Doubling My Money... WTF?

After June's wipe out, I decided to stop trying to get rich in one month.  Why not try something more conservative?  Something safer?  After all, profits of 4% to 6% per week are not that bad and not really hard to get.  Compound my weekly profits and...  let's see...

The wipe out left me with only $1,267.72... 

At 4% per week for eleven months... 

Compounding my weekly profits... 

Holy Crap!!  That's $8,329.59!!  That's 550% in one year.  I'm still laughing at the ridiculous amounts that a spreadsheet will gladly ejaculate for you if teased with enough numbers for a long enough time. 

We are only a few days away from the end of July.  Assuming a compounded growth of 4% per week, by 4:00 p.m. Friday my account balance should be $1,483.05.  That's 16.99%.  It sounds easy if you think about it in terms of 4% profit per week.  However, the actual meaning of 16.99% per month is a bit hard to swallow.  Let's see if I'll be choking this Friday.

Tuesday, June 29, 2010

Trade No. 3: Wipeout

If I'd known then what I know now...

So I didn't sell on the 14th or the 16th, so I wiped out on the 17th for a loss of $5,581.50.  That amount is higher than our initial investment, leaving me with roughly $1,400.00.  Since then I've tailored down my risk and incorporated other EA's.  More on that later.

Wednesday, June 16, 2010

Trade No. 3: Update 2

So Monday I told you that I'd start getting worried when the EurUsd closed above the 21-day EMA. On Tuesday, the EurUsd closed at 1.2332. That's 57 pips above the 21-day EMA. My plan was to sell at Wednesday's close if the close was again above the 21-day EMA. On Wednesday the EurUsd closed at 1.2309. Again above the 21-day EMA, this time by 31 pips. I didn't sell.

You will notice that the EurUsd closed down some 26 pips. I thought that the EurUsd's steam was probably running out and that the downtrend would continue. Maybe I am looking for excuses to not close this trade and not have to deal with the huge loss. Maybe the steam is running out. Only one way to find out...

I trade the 5-minute chart. The EurUsd seemed to be running out of steam there, so I looked to a few higher time frames for confirmation. While they didn't scream "short the Euro", they did suggest that this 90 pip gain per day is slowing down. Thus, I am holding to a position currently down 346 pips.

Monday, June 14, 2010

Trade No. 3: Update 1

Last week was a bad one as the EurUsd started correcting from the spiral of death. As I write this, the account is down $3,358.50 or 51.80% from the close of the week before last one.

I did not stop the loss sooner, nor have I stopped it yet, because I want to test something. Right now I am using the 21-day EMA as a resistance level for the EurUsd. The last time the EurUsd tested the 21-day EMA was on May 3, 2010 at 1.3376. At that time, the EurUsd was on a steady rise since April 28, 2010, when it opened at 1.3173. After almost testing this 1.3376 resistance level, the EurUsd then plummeted to a low of 1.2521 before attempting another correction on May 7, 2010. It eventually went as high as 1.3093 but before it reached resistance at 1.3150 it dropped to a low of 1.2160 on May 18, 2010. The cycle then repeated itself, three days of gains, reaching a high of 1.2671 on May 21, 2010 before tumbling back down to a low of 1.1876 on June 7, 2010.

On June 8, 2010, the EurUsd started what I hope will be another of its short-lived corrections before it tumbles down a few more hundred points. It opened at 1.1992 and on Monday hit a high of 1.2298. Also on Monday, the EurUsd broke through the 21-day EMA resistance level of 1.2270. However, it failed to close above this resistance level. Had the EurUsd closed above 1.2270, and it still may, I would have been very worried.

On Tuesday, the EurUsd opened at 1.2221 and has already hit 1.2231. The 21-day EMA is at 1.2265, so the EurUsd's current price range is a bit too close for comfort. I am also worried because prior corrections lasted for two or three days. This one has been going on for five days. Maybe the EurUsd has seen its lowest levels and will start ranging for a while before starting a steady climb upwards. So, am holding my breath and making frequent visits to the bathroom as I watch the price action these next two days.

Monday, June 7, 2010

Open Trade No. 3

Our third trade was opened on June 7 at about 3:20 a.m. We sold 1.17 lots of the EurUsd at 1.1927. This is highly aggressive and will surely blow up in my face shortly. Considering the value of our account when we opened this trade was roughly $6.9k, we should have limited this trade to about 0.70 lots.

As I write this, the EurUsd is trading at 1.1954. This means we're currently losing around $328.20.

Friday, June 4, 2010

Close Trade No. 2

Our second trade closed out this morning at 5:02 a.m., for a profit of $720.00 or 13.08% in about two days and eleven hours.

I have further modified my strategy and this will be the subject of an upcoming entry. Since I implemented these setting changes before our trade closed, the EA opened a third trade for 0.35 lots at 1.2164. I modified it to close with the previously opened orders instead of at 1.2064. This netted us an additional $94.50 or 1.72% in about twelve hours. Considering that as I write this the EurUsd is at 1.2048, maybe that wasn't a good move. I would have made $350.00 instead.

I really have to stop kicking my self for stuff like this. Profits of 13.08% in two days is good. You can't squeeze every single cent out of any market.

Wednesday, June 2, 2010

Open Trade No. 2

On June 1, at 10:05 p.m., we sold 0.72 lots of the EurUsd at 1.2238. As I write this, the EurUsd is down 28 pips. That's about $205.30. However, we're looking for 100 pips of profit before closing the trade.

Tuesday, June 1, 2010

Close of Trade No. 1

At 3:24 a.m. this morning, we closed our first trade for $650.00 or 11.81%. I wonder how often we can do this...

Monday, May 31, 2010

Pro Forex Robot Gives The Pole to 1000 Buyers... AND 96%+ LUVED IT!

I bought the Pro Forex Robot and am testing it out on another live account. I'll give it about 45 days of live trades before I decide to keep it or return it. In any event, yesterday I got an email from the PFR people. Where relevant, it states that:

We can confidently say this as we have poled 1000 PFR members and had a 96%+ positive rating.

As I understand it, and I must confess English is my second language, when you give a poll to a group of people, you have polled them. When you give the shaft, when you nail or when you give the pole to a group of people, you have poled them.

To the extent that 96%+ of PFR members enjoyed getting the pole from the PFR people, I'll be the first in line when PFR puts out its version of the Kama Sutra.

Trade No. 1

We opened our first trade on Sunday at 8:47 p.m. Forex Invincible sold 0.65 lots of the EurUsd at 1.2797. The EurUsd has been going up since then, which is not good.

Sunday, May 30, 2010

A New Beginning

I purchased the Forex Invincible EA, which was upgraded to version 1.21 not long ago. After some brief and probably inadequate backtesting, I came upon a custom set of parameters that should have proven very profitable in the past. I will be testing it out on a small account that has a bit more than $5,000.Forex Invincible will be the only EA trading in that account. I'll use this blog to track the performance of the account. At the end of every month, I'll backtest the month just ended to compare the backtest with the actual performance for that month. I am betting that the backtest results will bear no relationship to the actual results for the month backtested.