July 2010: Profit Target Exceeded

You recall from my last post that I am looking for an average of 4% growth per week.  Compounding this growth, I'd be making 16.99% per month depending on the number of trading days in the month.  I started the month of July with a mere $1,267.62, so my target for the end of the month is $1,483.05 or a profit of $215.43.

At the close of the market today, the account was sitting at $2,014.08.  That's a profit of $746.36 or 58.87%.  The DJIA also did very well, gaining an astounding 733.41 points or 7.54%.  After such a great month in the markets and in my account, where do we go next?

Well, I am going to start by clearing a little bit of profits from the table.  I'll probably transfer $100.00 from my investment account to my regular checking account.  Its roughly 8% profits and should be enough for me to go to Burger King and buy me a triple Angry Onion Whopper with an extra large chocolate shake, onion rings, fries and a hot apple pie.  Who knows, my next post may come from a bed in the ICU of a local hospital as I recover from a triple bypass surgery to unclog the arteries blocked by all the fat, grease  and all around poisons in my planned meal.

Seriously, in all likelihood I may never again have a month as profitable as July.  So, I am looking to do 4% to 6% per week during August.  Since the account will have roughly $1,914.08 my target for August 31, 2010 is $2,275.03.  That's a profit of $360.95 or 18.86% in one month.  However, if you compare the $2,275.03 target with our initial $1,267.72 investment, we're talking about a profit of $1,007.31 or 79.46% in two months.  Of course, this awesome performance is the result of mucho luck in July.  I think it will be a cold day in Hell before I again see profits of 58% in one month.

Going Conservative And Doubling My Money... WTF?

After June's wipe out, I decided to stop trying to get rich in one month.  Why not try something more conservative?  Something safer?  After all, profits of 4% to 6% per week are not that bad and not really hard to get.  Compound my weekly profits and...  let's see...

The wipe out left me with only $1,267.72... 

At 4% per week for eleven months... 

Compounding my weekly profits... 

Holy Crap!!  That's $8,329.59!!  That's 550% in one year.  I'm still laughing at the ridiculous amounts that a spreadsheet will gladly ejaculate for you if teased with enough numbers for a long enough time. 

We are only a few days away from the end of July.  Assuming a compounded growth of 4% per week, by 4:00 p.m. Friday my account balance should be $1,483.05.  That's 16.99%.  It sounds easy if you think about it in terms of 4% profit per week.  However, the actual meaning of 16.99% per month is a bit hard to swallow.  Let's see if I'll be choking this Friday.

Trade No. 3: Wipeout

If I'd known then what I know now...

So I didn't sell on the 14th or the 16th, so I wiped out on the 17th for a loss of $5,581.50.  That amount is higher than our initial investment, leaving me with roughly $1,400.00.  Since then I've tailored down my risk and incorporated other EA's.  More on that later.

Trade No. 3: Update 2

So Monday I told you that I'd start getting worried when the EurUsd closed above the 21-day EMA. On Tuesday, the EurUsd closed at 1.2332. That's 57 pips above the 21-day EMA. My plan was to sell at Wednesday's close if the close was again above the 21-day EMA. On Wednesday the EurUsd closed at 1.2309. Again above the 21-day EMA, this time by 31 pips. I didn't sell.

You will notice that the EurUsd closed down some 26 pips. I thought that the EurUsd's steam was probably running out and that the downtrend would continue. Maybe I am looking for excuses to not close this trade and not have to deal with the huge loss. Maybe the steam is running out. Only one way to find out...

I trade the 5-minute chart. The EurUsd seemed to be running out of steam there, so I looked to a few higher time frames for confirmation. While they didn't scream "short the Euro", they did suggest that this 90 pip gain per day is slowing down. Thus, I am holding to a position currently down 346 pips.

Trade No. 3: Update 1

Last week was a bad one as the EurUsd started correcting from the spiral of death. As I write this, the account is down $3,358.50 or 51.80% from the close of the week before last one.

I did not stop the loss sooner, nor have I stopped it yet, because I want to test something. Right now I am using the 21-day EMA as a resistance level for the EurUsd. The last time the EurUsd tested the 21-day EMA was on May 3, 2010 at 1.3376. At that time, the EurUsd was on a steady rise since April 28, 2010, when it opened at 1.3173. After almost testing this 1.3376 resistance level, the EurUsd then plummeted to a low of 1.2521 before attempting another correction on May 7, 2010. It eventually went as high as 1.3093 but before it reached resistance at 1.3150 it dropped to a low of 1.2160 on May 18, 2010. The cycle then repeated itself, three days of gains, reaching a high of 1.2671 on May 21, 2010 before tumbling back down to a low of 1.1876 on June 7, 2010.

On June 8, 2010, the EurUsd started what I hope will be another of its short-lived corrections before it tumbles down a few more hundred points. It opened at 1.1992 and on Monday hit a high of 1.2298. Also on Monday, the EurUsd broke through the 21-day EMA resistance level of 1.2270. However, it failed to close above this resistance level. Had the EurUsd closed above 1.2270, and it still may, I would have been very worried.

On Tuesday, the EurUsd opened at 1.2221 and has already hit 1.2231. The 21-day EMA is at 1.2265, so the EurUsd's current price range is a bit too close for comfort. I am also worried because prior corrections lasted for two or three days. This one has been going on for five days. Maybe the EurUsd has seen its lowest levels and will start ranging for a while before starting a steady climb upwards. So, am holding my breath and making frequent visits to the bathroom as I watch the price action these next two days.

Open Trade No. 3

Our third trade was opened on June 7 at about 3:20 a.m. We sold 1.17 lots of the EurUsd at 1.1927. This is highly aggressive and will surely blow up in my face shortly. Considering the value of our account when we opened this trade was roughly $6.9k, we should have limited this trade to about 0.70 lots.

As I write this, the EurUsd is trading at 1.1954. This means we're currently losing around $328.20.

Close Trade No. 2

Our second trade closed out this morning at 5:02 a.m., for a profit of $720.00 or 13.08% in about two days and eleven hours.

I have further modified my strategy and this will be the subject of an upcoming entry. Since I implemented these setting changes before our trade closed, the EA opened a third trade for 0.35 lots at 1.2164. I modified it to close with the previously opened orders instead of at 1.2064. This netted us an additional $94.50 or 1.72% in about twelve hours. Considering that as I write this the EurUsd is at 1.2048, maybe that wasn't a good move. I would have made $350.00 instead.

I really have to stop kicking my self for stuff like this. Profits of 13.08% in two days is good. You can't squeeze every single cent out of any market.