Monday, November 14, 2011

Creeping Back

Wow, it has been a long time...  since June, huh?  To make a long story short, I've been losing my shirt and more by relying on expert advisors and the like.  Changed strategies for the month of October and profited a bit over 19% on my FinFx account.  Went back to expert advisors in November and they blew up my account.  Something like $23 left on it. 

The big $10k account that was posting double digit profits at the end of 2010 was down to $1,873 Monday morning.  How do we turn $1.8k back to $10k in seven months?  Stay tuned to find out.

Friday, June 3, 2011

May 30 - June 3: What Goes Around Comes Around

We got nailed last week and then this week we did the nailing.  By taking profits every 100 pips and moving our stop loss we were able to pull a profit of 9.19% this week.   Right now our account stands at $3,576.73, which is 10.57% lower than it was in April.  Let's see if we can make up that difference before June is over.

I want to spend more time talking about the account I discussed in my last post.  The $5k account opened with FinFx at 1:200 leverage and allowing hedging.  Trading this account this week was the roller coaster of my life.  At one point early in the week, my open trades were losing so much money that my equity eventually was about 35% of my original investment.  Going from $5k to less than $2k in a matter of hours will clear your arteries...  and your bowels, too. 

To prevent a margin call and the resulting total meltdown, I closed my biggest loser and tailored down the positions opened throughout the rest of the week to not incur so much margin.  The trade I closed lost me a bit over $1k.  That's 20% of my account lost in three days.  I let the remaining trades ride out to see what happened.  Some of them went as far down as an additional $1k and others remained between $300 to $800 down.  At the same time, I made a few profitable trades that increased my breathing room a bit.

I know it sounds irresponsible, letting the accumulating losses ride out and increase the loss.  However, I thought back to last week.  Monday the market turned against us big time, we closed out our trades with big losses and the market turned back around. After looking at upcoming news, I concluded that, like last week, the market would again turn around.  I decided to put my money where my mouth is and so kept the losing trades open in the expectation that the market would turn around and either put those trades back in the green or at least let me close them for a smaller loss.

The market did turn around although not with the intensity I desired.  At market close today, I still have eight open trades.  Five of those trades are in the red although only two of those are of the original trades that brought my equity down to 35%.  The rest recovered and closed for a profit.  At market close, the equity in my account was at $6,219.53.  Not only did we recover that $1k loss from early in the week, we still managed to make a profit of 24.39%.

Returns of 24.39% in a week are incredible.  However, if trading this account next week will be as harrowing as it was this week, I will need to readjust the seatbelt in my wheelchair and get a prescription for Valium.  I don't know that I can otherwise handle the excitement.

Sunday, May 29, 2011

May 23- 27: Giving It All Back, Again...

Wow, what a crappy Monday!  Woke up Monday morning to discover I had gotten stopped out of a bunch of trades and the technicals had changed in a bunch of other trades.  Thus, started the week giving back all my profit and incurring a slight loss.

All that changed Wednesday.  We went long on the AudUsd, EurUsd and the GbpUsd, and shorted the UsdJpy.  I guess my opinion on the US Dollar is pretty clear as I just bet against it almost every which way I could.  Following my strategy of taking profit every 100 pips and moving the stop loss, by Friday we had already recouped our loss and were in fact about 0.1% in profit not counting our open trades, which are right now up an additional 0.54%.  Small steps, lets see where they take us.

On Thursday evening I started trading a new account funded with $5k.  I opened it with FinFx in Finland.  Contrary to stateside brokers who limit the leverage in your account to 1:50 and do not allow hedging, FinFx gives 1:200 leverage and allows hedging.  Just like I did for Turbo Forex Morning Trade, I will open a new page in the log for this account that I will trade very aggressively.

Finally, I know I've been slacking on the tweets this week.  I'll try to be more diligent this week.

Sunday, May 22, 2011

May 16 - The Week In Review

Not much to tell since we've been tweeting our transactions in real time.  Basically, we made an additional 2.62% this week.  After getting used to making 10-20% per week, this slow going takes getting used to.  However, if it can save us from the nukes that come with double digit weekly profits then it might work  just as well or even better in the long run.

I do want to comment on a trade I just closed for a loss.  Some weeks ago I shorted 4 micro lots of the EurUsd at 1.43654.  When we were 150 pips in profit, we closed 1 micro lot and moved the stop loss to break even.  Then last week I got a signal to go long on the Lindencourt Daily strategy.  I went long 3 micro lots and figured it would act as a hedge.  At one point, we were over 100 pips in profit.  At that point I usually take some profits off the table and move the stop loss to break even.  However, since I was thinking of using at as a hedge instead of following my usual strategy, I kept the trade open.  On Friday the EurUsd dropped over 150 pips, so I closed the trade tonight for a loss of 101.3 pips. 

Conclusion: the moment you deviate from your rules, that's when the trade that will nail you will show its colors.  If I'd followed my rules, on Thursday I would have closed 1 micro lot for a profit of 100 pips and moved my stop loss to break even.  The end result would have been a small profit as the bulk of my position got stopped out at break even.  Instead, my full position got closed at a big 101.3 pips loss.

This also ties into the recommended strategy of not risking more than 2% of your total account per trade.  Because of my current balance, I can trade 4 micro lots with a stop loss of 150 pips and risk 2% or less of my account balance.  Trading like this gives your account resilience, as it gives you less exposure to huge drawdowns and more opportunities to make back the money lost.

Finally, the week starting tonight is going to be very tough for me.  It is starting with two big losses.  The EurUsd loss I explained above and a 53.2 pips loss on my full 4 micro lots of the EurGbp.  Between those two losses, I lost almost as much as I made last week.  I will be very lucky if I can break even this week.

Monday, May 16, 2011

Taking Some Profits Off The Table

We had a profitable week, although it was a bit less than 1%.  Still, that is always better than a loss.

Last week I mentioned that I was selling 4 micro lots of the EurUsd based on a combination of the Parabolic SAR and SuperTrend indicators.  Before the close of the week, we were 150 pips in the money so we closed 25% of our position and moved our stop loss to break even.  This means that we are now guaranteed a profit in this trade even if the EurUsd changes direction.  After this partial close, the EurUsd changed direction.  Relying on our SAR/SuperTrend long term outlook and bollinger bands on a shorter time frame chart, we sold 4 micro lots of the EurUsd at 1.42272 and closed that trade 22 hours later for another 150 pips profit.  Right now, we still hold 3 micro lots of the original short sale at 1.43654.  They are roughly 282 pips in profit as I write this.

On the AudUsd, we were watching stochastics for a possible entry on the short side.  We got our entry signal on Thursday, May 12, and shorted 4 micro lots at 1.06528.  As I write this, this trade is 93 pips in profit.  I think this trade has about two days of steam left in it.  I do not think we'll get to 150 pips, but I'll be closing 25% of our position and moving our stop loss to break even if we do.  In any event, we'll keep a close eye on the daily chart and get out of the trade when the market tells us to.

I opened a new trade tonight.  I sold 4 micro lots of the GbpChf (British Pound/Swiss Franc) at 1.4406.  I got in the trade about an hour and 45 minutes later than I would have liked simply because I was busy with other stuff.  The trade is down 4.6 pips right now but I am not too worried.  After all, the spread is 8.5 pips so it has basically moved 4 pips in my favor since I placed my trade.

Our two remaining positions are a 4 micro lot short of the GbpJpy, which is currently 46 pips in profit and a 4 micro lot short of the UsdChf, which is losing me 89.4 pips.  I placed a 150 pip stop loss on this trade but may close it before we reach the full stop loss depending on what happens from now until 5:00 p.m.  The UsdChf is currently trading below its 100 EMA, appears to be overbought and the fast stochasitc is barely below the slow one.  I'd like to see the UsdChf lose some price today to feel more comfortable about this trade.

What I am watching: I am currently watching the UsdJpy.  It is up since the open at 5:00 p.m.  However, a move down during the day may be just what that pair needs to start heading down again.  Therefore, depending on price movement today, I may be shorting the UsdJpy.

Monday, May 9, 2011

Giving Back Our Profit

Last week's AudUsd and EurUsd corrections hurt our account but not as much as having an expert advisor named Autopipbot.  About 60% of our profit was lost in three consecutive trades by this EA.  Needless to say, it is no longer in use.  The rest was given back in the correction.  Fortunately, we had been taking profits throughout the last two weeks, so we really did not give back all our profit, just most of it.  Still, we made a little profit where many people got burnt.

Between May 3 - 5, the AudUsd gave back some 462 pips from its highest point that week.  This pair is still trading above its 100 EMA.  Stochastics are such that if the AudUsd closes today anywhere near its current level, we may have the making of a Lindencourt daily trade.  If so, I will be going long at the open of Tuesday's market - that would be today at 5:00 p.m.

The EurUsd gave back roughly 686 pips in three days.  Although it is up some 70+ pips since then, I believe there's some downside left in that pair and I in fact shorted it last night at about 6:00 p.m. based on Parabolic SAR and SuperTrend indicators, as well as Greece's credit rating being cut to B from BB-.  I am not 100% convinced on this trade, as the SAR can produce false signals if the pair starts ranging instead of trending, so we bought about 4 micro lots with a 150 pip stop loss.

Sunday, May 1, 2011

AUD/USD - Closing 1/3 of Our Position

We got a couple of things coming down the pipe in Australia...  House Price Index in about 45 minutes...  Index of Commodity Prices at 2:30 a.m., the R.B.A.'s interest rate statement on Tuesday at 12:30 a.m., building approvals and retail sales on Wednesday...  I decided that I will lower my exposure to these upcoming events.  I just closed about a third of my position in the AudUsd for a gain of 236 pips.  If I am awake when those statements are announced, I'll have some free margin to play them.  If I am not, at least I do not risk waking up to a big loss in my portfolio.

Friday, April 29, 2011

April 24 - The Week in Review

I really was not looking to have as good a week as the one before but at the very least I wanted to make some pips.  Breaking even is no longer acceptable.  In the end, I think we did pretty good.

After last week's 11.7% gain, our account started this week at $3,662.92.  This week we closed several trades for a profit of $368.09.  That's a 10.04% return in one week.  Two double digit weeks in a row, awesome!  Even nicer, we have four open trades for an additional $667.45.  That would put this week's profit at $1,035.54 or 28.27%.  However, since we haven't closed those trades I will not count them for my official weekly profit.  Thus, for the week of April 24 I am recording a profit of 10.04% with our account standing at $4,031.01

We were able to produce this awesome result by using a mix of short and long term strategies using Bollinger Bands and Ichimoku Kinko Hyo, as well as playing the F.O.M.C. announcement.  Can we have another 24% week again?  Not likely.  Well, maybe.  A big part of our profit came from playing the F.O.M.C. Statement and interest rate announcement.  This release occurs every quarter so maybe three months from now we can do it again.  On Monday, the Institute for Supply Management releases the Purchasing Manager's Index.  I wonder if we can make a similar play with this announcement.

Thursday, April 28, 2011

Aussie C.P.I. and British G.D.P.: UPDATE

The Australian C.P.I. increased by 1.6%, exceeding the 1.2% forecast.  During the Aussie's upward climb, we cleared some profits from the table.  We closed 26% of our position on the AudUsd netting 100 pips in a position we held for three days.  This was a low risk transaction that netted us 3% of our portfolio value.  If only I could average 1% profits daily...

As to the Pound, you may recall that my plan was to "close my position on the GbpJpy for about 30 pips in 16 hours and half of my position on the GbpChf for about 80 pips in 3 hours.  I'm also going to move my stop loss on the GbpChf to break even."  By the time I posted that entry, the Gbp had tanked and the scenario changed drastically.  I was up 30 pips on the GbpJpy when I started writing that blog entry.  When I finished it and turned to my trading platform, my 30 pip profit had turned into an 83 pip loss.  My GbpChf profit of 80 pips had turned into a 67 pip profit.  Lesson learned?  From now on I'll write about what I did and not about what I plan to do.  I think there's a saying about this kind of stuff.  Something about not counting your chickens before you lead a horse to water...

Yesterday's F.O.M.C. Statement and interest rate releases proved a fun and profitable event.  After the announcement, we went long 3 mini lots on the EurUsd.  We closed one third of that position 13.5 hours later for a profit of 156.3 pips.  That's a profit of 4.73% of our total portfolio value in a bit over half a day.  This makes 1% daily profit look like crap!  The remaining position is up 140 pips.  Although the EurUsd is trading near resistance levels, I think that it will set new highs within the next two weeks.

I'll post a an account update after the close tomorrow.  We might not match last week's 11.7% gain but I am pretty sure we'll be profitable.

Tuesday, April 26, 2011

Australian C.P.I. And British G.D.P.

Two Mondays ago, when I returned to my blogging and investing, my account was at $3.2k.  Right now it is sitting at $4.1k.  That's a bit less than 30% in a week and two days. Of that roughly $900 gain, $320 are still in open trades.  This is where things get dicey...

At 9:30 p.m., the Australian C.P.I. will be released.  Although this data is pretty late in comparison with inflation data from other countries, it is still likely to to create hefty market movement.  The past three quarters, the C.P.I. has failed to meet expectations and has sent the Australian dollar ("Aussie") reeling.  After the price movement the past 2 weeks, I'd expect a positive release.  Otherwise, the Aussie could be giving back a lot of room.  Why do we care care about this?  Our currency portfolio is heavily invested in the Aussie.  70% of our portfolio is long on the Aussie, which explains why we gained 30% in just 9 days.  I'll be up at this time of the evening.  Therefore I'll close or keep my positions open depending on the news.

At 4:30 a.m., April 27, the British Preliminary G.D.P. will be released.  Since the Preliminary is the earliest of the three releases (the Revised and Final each follow a month apart) it also tends to have the most impact.  While reports from Bloomberg suggest that Britain will meet the 0.5% forecast, sentiment in British media is that this could be the beginning of the recession.  Also released at 4:30 a.m. will be the BBA's Mortgage Approvals and the Index of Services.  Why do we care about this?  Guess where the remaining 30% of our portfolio is at.  Yep, we are short on the British Pound split evenly between the GbpJpy and the GbpChf.  Price movement in the past three days would suggest bad news for the Sterling Pound but I am not so sure.  Therefore, I am going to close my position on the GbpJpy for about 30 pips in 16 hours and half of my position on the GbpChf for about 80 pips in 3 hours.  I'm also going to move my stop loss on the GbpChf to break even.  That way, I can still let some profits run if he GbpUsd tanks.  As for our FMT robot, I'll lower our risk by half so that w do not get burnt too badly if volatility throws our EA for a loop.

Hopefully, I'll be awake by 12:30 p.m., when the U.S. F.O.M.C. releases its Statement and Interest Rate.  I'm sure we'll find more than one way to enjoy part of the roller coaster that the release should produce.

Monday, April 25, 2011

Forex Morning Trade

Forex Morning Trade is an expert advisor that looks quite promising.  After reading multiple reviews from real users who swear by it, I decided to take the plunge and buy it.  I also bought the more advanced Turbo Forex Morning Trade.  I have 60 days to try them both out and can return them for a full refund for any reason, no questions asked.  I decided to purchase the Turbo version because it offers a plethora  of options to handle different profit targets, tracking trailing stop losses by actual pips or a combination of ATRs and much more.  All these options are a dream come true for a geek like me.

The way FMT works is quite different from most EAs.  It is designed to trade only one currency pair, the GbpUsd, and only during a brief period at the opening of the London session.  For example, I have set Turbo FMT to operate from 6:15 a.m. to 6:30 a.m. London time, or 1:15 a.m. to 1:30 a.m. EST.  The EA may or may not generate a signal during that 15 minute period.  If generated, it automatically places an order in accordance with the signal.  If the order isn't executed before 6:30 a.m., then it is cancelled and we try again tomorrow.

I opened two $500 demo account with FinFx.  One is running FMT with the settings recommended by its creator Mark Fric.  The other is running Turbo FMT with setting customized by myself.  Although it was recommended to not trade today, I decided to go ahead and put the system to the test.  FMT did not generate any signals, but Turbo FMT generated a buy signal.  It purchased 0.17 lots of the GbpUsd.  Several hours later the trade was closed at break even.  At one point, we were 27 pips in profit, a bit over $45.90.  The market turned on us and we got stopped out at our entry price.  When I last checked, the GbpUsd was down 49 pips or a bit over $84.00.  So, we didn't make any profit but we also did not suffer that huge loss (almost 17% in just one trade).

I will make a new page to track the performance of this EA.  I think it will be quite exiting in the long run.

Saturday, April 23, 2011

Back After Huge Losses

Ever since the Middle East unrest, I've been losing money non-stop to the point that my big test account dropped from over $11k to a bit over $3.2k.  I am back to rebuilding it in a hurry.  My goal is to recover the almost 63.37% I lost and make a profit before the year is over.  As I write this, the account is at $3,662.92, with an additional $109.03 in open trades.  To recover the money lost and get back to breakeven, I need to make 273% profits.  Nice challenge!

I will be using a mix of expert advisors and manual trading.  I will also be testing a bunch of other indicators, advisors and strategies in other demo accounts.  If they prove profitable, I'll look to incorporating them into the live account.

A full statement of the account can be found in this link.  It shows every single deposit, trade, etc.  You can also filter the results by week and other time frames.  For example, if you click on "stats", it will show you that we are averaging -4.1% weekly return and a -16.2% monthly return since we started this on November 2010.  Total failure!  However, if you filter it by week, you will see that we did 11.7% profit this week. Let's see if we can repeat that performance a few more times...  like 27 more times.

That's it for tonight.  I'll update you all next week.  Hopefully, it will be good news.

Tuesday, February 1, 2011

Thoughts: 11:10 A.M.

After finding resistance at its 2-month high of 1.3776, the Eur/Usd made a substantial move higher.  I got a clear signal using my aggressive strategy and entered a trade while the Eur/Usd was at 1.3765.  I think the next resistance level will be around 1.3820.  If the Eur/Usd brakes that level, I can see it going to 1.3973 before the month is over.  Just in case, I am running a trailing stop loss of 38 pips.

Now, I didn't get any clear signal in my conservative strategy.  There was a possible signal about 7 hours before the one I got in my aggressive strategy and which would have been incredibly profitable.  However, that was at 5:00 a.m. where I live and I was sleeping.  In any event, I think I can make the conservative strategy more profitable by increasing the trailing stop loss.  Currently, I am setting it pursuant to an ATR(10) on the hourly chart.  I will continue trading on the hourly chart but will now use the ATR(10) on the 4-hour chart to calculate my trailing stop.

Week 1: Both Strategies Up

Week 1 encompassed from January 24 through January 28.  Our conservative strategy started the week at $10,427.53 and closed the week at $11,418.41.  That's a profit of $990.88 or 9.50%.  I missed my target of 11.74% but I cannot complain about an almost 10% profit in a week.  If we could achieve $990.99 every week we could generate a nice income of $42,905.10 in a year, and that's taking two months off from trading. 

Our aggressive strategy did surprisingly better.  Of course, it is easy to be this aggressive when you are dealing with only $137.86.  We closed the week at $175.09.  That's a profit of $37.26 or 27.03%.  Would I try this strategy if I had $10,000?  I don't know, but I do hope I get the chance to find out.

As it stands, our strategies and the markets performed as follows:

DJIA:  Down 0.42%
NASDAQ:  Down 0.23%
SP500:  Down 0.53%

Conservative:  Up 9.50%
Aggressive:  Up 27.03%

Caveat: On Thursday we took long positions on the Eur/Usd, which closed down Friday some 134 pips.  Since these trades will close on Week 2, their profit/loss will be accounted therein.

Monday, January 24, 2011

2011: New Year, New Strategy

Traditionally, many people stop trading the Forex from about December 15 to about January 15.  The reason is that the volatility during this period is quite unpredictable and irrational.  I basically took off the month of December and pretty much most of January, too.

Today I dive back into the Forex.  This time I am managing an account with a balance of $10,427.53.  Since it is not my money, I will be using a much more conservative approach than what I was using for my own money last year.  I will keep working my aggressive strategy with my own $137.83, but I will update the status of that experiment on a quarterly basis only and not weekly.

Catch you all next week, when I will post the results of this week's trading.