2009 accomplishments

One of my goals for the year was to show people that the size of an investment should not deter one from participating and enjoying the potential rewards of such endeavor. Right out of the gate, I will tell all that I do manage money and have been doing so for a lot of years. part of my work allows for me to visit different countries and offers me the opportunity to see just how others can benefit from the markets. currencies have a great advantage over other investments. the flexibility of position size and volatility make for a good combination, not like standard size contracts or non- geared investments.
So, one of the things that i did was to establish a very small account with fxcm for the purpose of having the results of a 500 usd investment published. maybe in the first world 500 is not a lot of money, but in most of the world that is plenty to put aside. Unfortunately, i could not compete against the 400:1 positions, as i always start @ 2;1 gearing and work my way up from there. the top ten of this contest was my goal and although i did make a bit over 100%, 13th place didn't do much for the cause.
later in the year i was approached by a client who knows that i like to help poor children who do not have access to schooling and a plate of food, so he thought that the varengold contest, if i could make 1st place, would give me the ability to use the 250k to trade on behalf of the children. sadly enough, I only made it to 10th place.
For all of the people out there that maybe have not had such great results, giving up is not always the best choice, but maybe sharing how you analize the market could be helpful and for that i can always lend an ear.
Happy New Year!

I don't think i plan on writting , here, too much and so i will just add to this previous post.
For this month's NFP report, I have chosen to go short eur/usd and so that is why we bought a call on the euro's decline to the demand line ( 1.4280). We are already with some intrinsic value for this half of the trade and have every intention of using this profit as a cushion for a our sell stop, which if the report has any positive connotation, like the last one, should allow the dollar to climb a bit. The thing is that not only is the demand line for eurusd going to be above 1.4280, so if it toucehs there again, it will be a break of the demand line and consequently any and all longs established in these few days will have to be liquidated, giving the break an impressive impulse and letting us entertain a risk-free short trade. This is a temporary position stance, as i do still prefer the long euro trade, but cannot pass up an opportunity to trade the big report of the month.I will also be going long GBPJPY as soon as the price surpasses 150.00, with a stop @ 149.65-70, initially. We have waited quite a while for this level in cable vs yen and if the dow has a continued positive tone, we are ready to try to protect this level, as interest rate differentials should continue to drive and reward certain currencies. I am not saying that GBP deserves a reward, but it ids a mover and all we need is to enter long at a point that becomes support for a while. We've seen NZD and AUD and the nenefit they have received, so the third in the group cannot be that far behind, especially when the euro, cable correlation returns.
Good luck!
FXRE

The call EUR/USD ( 1.4280 strike ) is doing pretty well, yet spot has not been able to overcome the all important 1.4500 level. This puts us in a tough situation, where we must be vigilant to not let too much of the position value disipate, before friday's report. So, we are forced to treat our fx position as an overlay, already long the euro.So, at 1.4367 we will start to go short with a stop at 1.4410. This will surely eat away some of our value going into the report, but at least we will not have to worry about how to take a position at the critical moment.
It is important to mention that attempting to go long at 8:30-8:35 on friday, in my opinion carries a great risk, as the potential for a whipsaw is always increasing. If one wants to attempt to read a 10 sec chart, which would be the best approach at trying to see the turning point, there is no guarantee for a continuation in either direction. This is the reason for why we usually take a stance well before the actual report, as any profits that are accumulated prior to the data help us to control the risk. more importantly, since we maintain a moderate risk approach to any one currency pair, we can always create different hedges to help out a bad trade, especially during drawdown conditions that will be the determinant for the worst case scenario; take the stop and watch it go 50 pips in your original direction, but without you. That does get old and time will teach us that there are better ways to avoid that type of loss. All the preparation still doesn't guarantee me that i will not lose, but it does tend to slow down the effect, which allows for better decisions.

Short @ 1.4367 was hit, yesterday and exited at 1.4280. Though the price action did take this pair a little lower, we opted for covering the cost of the option and defending the demand line, which was slightly higher than 1.4280.
have taken a long eur/usd @ 1.4313 and currently has stop @ 1.4328, where spot is at 1.4393 ( 17;18 GMT ). Due to the fact that we have covered all the cost associated with the option and that we are long at a decent level, we will NOT take another short at the preious 1.4367, but just let the long , spot, position take the stop. We have achieved our goal, which is to have the ability to hedge our possible short eurusd , for friday, and at least cover the cost of the option.
I think that we are in good shape with the option. what spot does from here to friday is anybody's guess, but if usdchf doesn't stay under 1.0300 it will not be very pleasant for any newly established euro longs.

23:33 GMT
we are going to move stop on spot position to 1.4350. Not a major change, but will allow us to add another 22 pips to the pips this strategy has yielded, thus far.

I has been brought to my attention that there are some very eager to take a long USDJPY position on friday. Yes, I can see where the NFP histogram calls for a positive number and that could be enough bring down EURUSD, which is why we have opted for a call option on EURUSD and the still present long spot EURUSD, though the spot should hit the stop way before the report. currently that stop lies at 1.4350.
One has to admire the fact that USDJPY has not been able to overcome the supply line, even with all the reports on the chart that show a positive progression. Only one report actually caused a break ( false one at that ) and all of them made zero impact on the downtrend, but actually caused price to move away from the supply line. Now, we have a situation where supply and demand ( very short term demand ) are in a certain breakout condition. In my opinion, it would take a positive number on friday to stop what the continuation of sell rallies to supply.

Just a bit over 12 hrs to go for this week's main event. Though our spot trade did get stopped out, due to the fact that the euro could not make a case for staying above 1.4400, we did achieve our goal to establish one risk free trade.
So, we are long euros, in a manner of speaking, and we will be placing the order to sell eurusd ( spot trade ). I do not think this is a turning point for USD, so we may take our profit on a short, if hit, and then look for those lower levels to take a new long position. Ofcourse, that depends on the actual number for the report and revisions for the previous month, which were so close to a positive number, anyway.
Until now , the 1.4280 zone is holding nicely and doesn't bother me a bit. The demand line should serve as a good place to continue this up and down motion between 1.4300 and 1.4450.
One thing to note is where eurusd actually ends up before the report, so this evening's markets will be interesting to keep an eye on. If we manage to get to the upper extremes of this consolidation, we will place our hedge prior to report and in the event that any of you that are reading this pre NFP confusion, i will update any changes to the strategy. never have charged for advise, nor left anyone in suspense.

good luck!

FXRE

Well, NFP at least took the euro away from the support area for a time, but no real change to the already established range.We did have an order to buy euros@ 1.4345 and it did nicely, however it hit the stop ,as the euro could not hold above 1.4400, again. Our call option was certainly the way to go. Now, if it will yield any pips for our bottom line, i don't know. If it were not for the eurozone unemployment rate, i think it would have given enough pips as we challenge the 1.4480-1.4500 area. the nice thing is that we still have 7 days for the euro to challenge those levels , at no cost to us.

established a new long @ 1.4373 and have now set stop at 1.4389, while spot is around 1.4429. price should try to make new high for the week, if not, then this report really di not do much for euro uptrend.
USDJPY did get hit and will be looking to go short on sunday/monday, as it appears that nothing has changed with USDJPY's reaction to NFP and we are below supply line.

Sunday 1/10/2009
Start of the trading week has been positive for our euro trade, as spot is currently around 1.4476. One may recall that we established our latest long @ 1.4373,with a stop already in profit ( 1.4389 ). Also, we have a long call option that will expire this coming friday. The spot position is some 60 pips in profit, while our option has 100 pips of intrinsic value.
What we need to see is a break of preivoius range, which will take this pair above the 1.4500 level.

USDJPY is still favoring our negative bias that we forecasted prior to NFP and look for a break of the demand line to take a short position with an initial gearing of 5:1.

This morning we took a short usdjpy position @ 92.11 and have since moved our stop to BE. It will probably hit our stop, since we had a tough time getting thru 91.80 area.
We are still long the euro "call" and will be holding onto it for the duration of the week.
Next NFP report I will , again, walk all interested thru our strategy,which for the last two reports has been a combination of spot and option positions on the Euro.

Good luck.

FXRE