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...