Central Position Strategy - ALPHA Trading

Continued on CENTRAL POSITION STRATEGY: Napoleonic warfare applied to trading.

http://www.forexfactory.com/showthread.php?t=340862

I am currently ambushing the SGD/JPY. That is, I wait for a correction to go long the SGD (Singapore Dollar) and short JPY (Japanese Yen). Because the next correction (down) will show me how strong the SGD currently really is. I am bullish on Asia. And Singapore is one of the most reliable and business friendliest countries over there.

read more here:

http://www.jeffrey-investment.com/?p=1471

SHORT USD/NOK. ~14% of trading capital. Position trade (long term).

ps. I closed the SHORT GBP/USD position with a small loss (0.2% of trading capital; -0.5R) last Friday (20.01.2012) evening.

Cheerio,

http://www.jeffrey-investment.com/?p=1491

(opened this morning)

LONG CHF/JPY. However, for operational reasons I split this position up in:

LONG USD/JPY. ~14% of trading capital. Position trade (long term).
SHORT USD/CHF. ~6% of trading capital. Position trade (long term).

Cheerio,

http://www.jeffrey-investment.com/?p=1497

For clarification - you are risking 14% of your trading capital or allocating 14% of your trading capital towards the trade - if the latter - no stop-loss?

Hi Dave,

I have allocated 14% of my trading capital towards this specific trade. Risking 14% would be insane.. I would not recommend to risk (to lose) more than 1% per trade. (I take even less risk per trade).

Every trade of mine has a fixed stop loss and get's trailed after certain circumstances are met.

As I don't want my strategy to be copied, I don't publish certain quite important parts of my strategy. However, I decided to provide hints of what I am up to. I think this can still be helpful for other traders.

Kind regards

ps. by the way, at NZD/USD 0.81100 I took some profit (not all of it). I think that risk assets are overbought at the moment.

Closed the ElringKlinger stock position to take profit (+0.5R). The price is very close to a significant resistance line, which I do not want to fight in the current market environment.

Closed the Wacker Chemie stock position to cut the loss short (-0.84R). This position did perform badly so far and hit my stop loss level.

Many major stock indexes (DAX, NASDAQ 100…) are currently at critical levels. Although I reduced the risk exposure, the portfolio would be ready for a bullish breakout and is safely protected to the downside. Because most of my positions already have their stop loss trailed to the entry level.

Cheerio,

http://www.jeffrey-investment.com/?p=1508

Attention.. I think risk-on assets are overbought at the moment. However, we are at critical levels at most important indexes like the NASDAQ 100, DAX and so forth..

If the risk-on assets overpower the current resistance levels, it gets very bullish indeed. If not, we can expect a more or less big move in the other direction, reconfirming the prevailing sideways market.

Until now I do not see any confirmation (set-up) for one or the other side. To me, the current market moves are simple noise. I don’t trade that. I will go to the gym this afternoon.. recharging my batteries for the real showdown to come.

So, take it easy.. and have a beautiful day…

Cheerio,

http://www.jeffrey-investment.com/?p=1518

CLOSED (take profit) the LONG EUR/USD position at 1.31600. Position size was about 15% of trading capital. The return/risk ratio (R-multiple) is 2.28. (Opening prize was 1.27690).

CLOSED (stop loss) the SHORT EUR/USD position at 1.31500. Position size was about 11% of trading capital. The return/risk ratio (R-multiple) is -0.96. (Opening prize was 1.29200).

All in all, I am currently very happy with the development of my portfolio. The performance for this month so far is +1.4% and nearly no volatility. I strictly followed my strategy, stayed calm, and made no mistakes (expect one small one, which was a learning experience and luckily even made me money).

Cheerio,

http://www.jeffrey-investment.com/?p=1521

CLOSED (break even) the LONG USD/JPY position at 77.07. Position size was about 14% of trading capital. The return/risk ratio (R-multiple) is 0.13.

I will start sending out the weekly update of the whole portfolio composition and performance figures on Monday, as I receive the Friday NAV (net asset value) during the weekend.

In any case, I wish you a beautiful weekend

Cheerio,

http://www.jeffrey-investment.com/?p=1548

Start: 04.01.2012
Last Update: 27.01.2012
Return: +1.5%
Mean Weekly Return: +0.37%
Risk (Weekly Volatility): 0.44%

CENTRAL POSITION STRATEGY – Open Positions – Core: currency trading / Satellite: stock investments

Position trades (long term):

~13% LONG USD/JPY. Open since 05.01.2012, 77.200.
~7% LONG NZD/USD. Open since 09.01.2012, 0.78400. Stop loss trailed.
~14% SHORT USD/NOK. Open since 23.01.2012, 5.93900.
~6% SHORT USD/CHF. Open since 23.01.2012, 0.92900.
Total allocated: ~40%

Swing trades (medium term):

~13% LONG NZD/USD. Open since 13.01.2012, 0.79380. Stop loss trailed.
~11% LONG NZD/USD. Open since 20.01.2012, 0.80540.
Total allocated: ~24%

Intraday trades (short term):

Currently no open short term position.

Cheerio,

http://www.jeffrey-investment.com/?p=1562

I started to buy some individual stocks, applying very wide stop losses. That is, I am playing the strong hand now which would not get impressed by an intermediate big price correction against me. Of course, the very wide stop losses do not allow me to allocate high percentages of my capital. However, I will use setbacks to increase the position sizes.

The new positions are:

LONG ~3% Vestas Wind. Opening price 8.684
LONG ~2% Aixtron. Opening price 10.735
LONG ~3% Puma. Opening price 247.80

All the three positions are in EUR. Hence, I hedged the EUR/USD currency risk, for now at least.

Cheerio,

http://www.jeffrey-investment.com/?p=1573

Start: 04.01.2012
Last Update: 03.02.2012

Return: 2.38%
Mean Weekly Return: 0.47%
Risk (Weekly Volatility): 0.44%
Ratio (MR/R): 1.07

Annualized Return: 27.82%
Annualized Risk: 3.20%
Ratio (aMR/aR): 8.70

For more information see:
CPS – ALPHA Trading

CENTRAL POSITION STRATEGY – Core: currency trading / Satellite: stock investments

Position trades (long term):

~7% LONG NZD/USD. Open since 09.01.2012, 0.78400. Stop loss trailed.
~13% LONG NZD/USD. Open since 13.01.2012, 0.79380. Stop loss trailed.
~14% SHORT USD/NOK. Open since 23.01.2012, 5.93900.
~6% SHORT USD/CHF. Open since 23.01.2012, 0.92900.

~3% Vestas Wind (single stock). Open since 01.02.2012, EUR 8.684. EUR currency risk (against USD) is hedged at the moment (with an equivalent SHORT EUR/USD Position).

~2% Aixtron (single stock). Open since 01.02.2012, EUR 10.735. EUR currency risk (against USD) is hedged at the moment.

~3% Puma (single stock). Open since 02.02.2012, EUR 247.80. EUR currency risk (against USD) is hedged at the moment.
Total allocated: ~48%

ps. on 30.01.2012 I closed the 13% LONG USD/JPY position at 76.25. That is a -1.06 R-multiple loss. I just realized that I didn’t mention that so far.

Swing trades (medium term):

~11% LONG NZD/USD. Open since 20.01.2012, 0.80540.
Total allocated: ~11%

Intraday trades (short term):

Currently no open short term position.

Conclusion

The performance (return/risk) is developing very well so far. About 59% of the portfolio is currently allocated to risk-on assets (bullish). Many stop losses are trailed to the break-even level of the position. Furthermore, all the single stocks have a very wide stop loss – so called strong hand plays. No risk-off assets (bearish) at the moment.

All in all, the portfolio is ready for an increasingly likely correction against risk-on assets. The goal is to use the spare liquidity (and leverage) for further risk-on investments during coming corrections. And enjoy the current rally as long as it lasts. However, in case I find strong setups for risk-off trades, I naturally won’t hesitate to shoot in the other direction (that is, to go risk-off).

Cheerio,

http://www.jeffrey-investment.com/?p=1592