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.
Tuesday, February 1, 2011
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.
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.
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.
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.
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.
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...
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.
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.
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