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.