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.