(binned per thread starter's request) The big... IF

Up and down again this last week, but a bit more up than down.

My long AudUsd position finally came back to profit, so I closed it for 50 pips - what an idiot!

Don't have the numbers to hand, but last week finished 2 steps back again.

Shortly after the Lehman bros. crisis I had some fantastic results, posting a huge gain. It has puzzled me for some time as to why I have been unable to replicate that success and I came up with the following:
- first the PA was wandering around aimlessly, and I tuned into it!
- second I was making a 4:1 win:lose rate with average pips per trade about 25.

I had one or two big winners at 100 ~ 150 pips, and I had one or two big losers of the same size. However the stats say that during November I made 82 winning trades at just over 24 pips average, and 21 losing trades at nearly 31 pips on average.

So.... armed with this encouragement I am going to stay focused on PA. At the moment there is no way that PA is going to wander around the way it did, so play for smaller numbers; and take my winning pips off the table a bit sooner sometimes. Recently there have been a few instances where I did not take 15 pips and then had a trade turn into a loser.

I was doing alright until an hour ago......

There are some news items which I try to trade, and most which I try to avoid, and a large number which are mostly irrelevant but are worthy of note in case they are hugely away from anticipated numbers. By which I mean that I will try to be out of the market when major news breaks, and there are some events which I will try to ride to some profit, here is how...

First, you will need a broker who remains useful during high market volatility. The broker I use allegedly is an ECN and lets me buy in both directions at the same time, and merge the trades afterwards, which is equivalent to closure when you merge a long and a short. Second you need a reliable internet connection, and a plan for what to do if there are problems. Third you must decide on your trade size and accept that you might lose.

The principle I use behind trading some market movements such as the FOMC statement is that PA makes wild movements which retrace, and the retracements are where the money is made. The moves have to be big enough to expect some recoil - so at least 30 pips and preferably more than 50 pips. There is also a little time to think about the ultimate direction PA might take whilst contemplating entry and exit points. Below is Thursday's EurUsd market at the moment Draghi gave a press conference after the ECB rate statement, and coincident with US unemployment claims. TBH the market movement was only just enough to tempt me in, another 20 or 30 pips would have been preferable.

In the past I have said that I watch the 5-minute chart, and this remains true, but I am wondering if there is not as much to be gained from watching the 1-minute chart. The red mark signifies my short entry when PA seemed to be losing steam. Price came back down and then continued up, but then fell back again. I exited after about 14 minutes at the grey mark. Why here? Well PA had just dropped below the previous low of 10 minutes earlier, and I was also watching the PA of Cable and AudUsd which were both showing signs of not wanting to retrace to their starting points. So out for 9 pips.

In conjunction with the EU trade above I also got into a Cable short. On this day the market seems to have been a little tired because PA was not moving around as much as I had expected. Also from earlier examination I was of the opinion that Cable was generally heading south.

After opening a short as the initial up-surge lost momentum there was no real retracement. PA normally oscillates at least back to the starting point, and commonly overshoots in the opposite direction. My trade is shown as the red line on this chart. I had initially set a TP at 1.6122 but it became apparent that PA was not going back to that level any time soon, so finally I was out for about 3 green pips. Pretty disappointing really.

Trade size was 50k or 5 mini-lots, so about 10:1 trade leverage. The marks on the chart are post-event and the grey marks and dotted lines are an artifact of the trading platform due to placing conditional TP orders and then closing the trade manually. After placing a closing long position I had to clear the TP order before I could merge the remaining positions. In rapidly moving markets I have found this method to execute trades more reliably than issuing a close request.

The most notable thing about these trades is how lackluster the market was at the time. Even the NFP on the next day produced no excitement. TBH the NFP number came-in right on the estimate even though the unemployment rate figure showed distinct signs of being massaged. So no trades on the apathetic NFP either!

Drag-queen has another attempt on Tuesday, so hopefully he will say something unexpected.......

Account value is currently executing a flag pattern. This week I managed to retain my profits from earlier in the week, usually I dump them on Thursdays, and so squeaked slightly more than 2% for the week. This brings me slightly ahead of the e.o.September.

No particularly notable trades, just a collection of small wins and a bit more caution than usual.

For the last ten days I sat and just watched the charts. I really needed to collect my spirit after one or two hits that knocked me back. Particularly I did not keep faith in my original assessment a couple of weeks back and turned what would have been a nice winning position into a loser. Friday saw me take a small win in UJ, and so starting the week with a new frame of mind.

On a brighter note, last week I was also distracted by some necessary management of my stocks portfolio - which is doing considerably better than anything else. So far I am up about 20% on the year. Also my #2 forex account delivered a 300-pip win on UJ, but the position sizes are really small in that account so it makes only a small difference. Onward and upward....

Again last week I sat and watched the charts. Again one small winning trade for a few pips on UJ. There are a few attractions to trading UJ and I am therefore spending some time becoming familiar with the instrument. For one thing the commission charges are quite low on this pair, I haven't figured that out yet.... Also the spread is always narrow, and each pip yields about 20% more than a pip movement on EU. So for scalping UJ is a good pair. A few pips often (well quite a lot more often than once a week...) combined with lower trading costs and a better return on those few pips is attractive. Expect a few more trades as I become more comfortable.

On Monday last at around 12:30 GMT I missed a long entry at 82.04 using this (http://www.forexfactory.com/showthread.php?p=5885030#post5885030) entry method. I confess, I was not paying attention and so 10 ~ 15 pips were missed. Probably I would exit at the next doji, so around 8 pips not gained, ....and not lost either.

Well, my trade frequency is starting to increase and mostly with profit.
Way-hay! I just discovered how to do something that I have been wanting to know for months - how to embed a picture within the text instead of at the end!
I have maybe 2 weeks left this year before my family necessitate a trading shutdown, so I am continuing in the same vein.

There has been a change in my trading strategy precipitated by an honest appraisal of my trading performance.
My main trading account has been gradually losing capital over the past 7 months - so I am under-performing at best.
My secondary FX account has made about 5% over the same period - so I have things to learn from that.
My stock market investments have grown by more than 20% over the past year.

So here is the new plan.
I have moved almost all my risk capital into the stock market in order to capture the recovery opportunities that are currently available. This is the third recovery from crash scenario that I have exploited. After the Argentinian currency crisis and the collapse of the LTCM hedge fund I made about 80%. After the dot-com crash I made about 120% over 2 years. This time I expect to make at least 200% over 3 years....

I have also had my moments of pain in the stock market....

I have a small amount remaining in my secondary FX account, and that now joins the ranks of $1,000 to $1,000,000 eventually....
I started trading FX when I was unable to short stocks. The ordinary man can only buy stocks, and when the market is going down the ordinary man either loses or takes his money out into a bank or something. The ordinary man also has access to spread-betting accounts which should allow exploitation of falling markets, however these are recent offerings and I suspect one has to choose a broker very carefully. In my time trading FX I have learned about the futures and other trading mechanisms around. Most of these have become available to the ordinary over the past decade.

The US housing market is recovering. Do your own research and exploit this opportunity - and be careful.
Here's to a profitable 2013, and good trading to all!

Well, now that I am back trading beer money the whole experience is much less stressful.
This week, 3 trading days really, I made 1.75% using trade leverage of around 3:1.
Average pip count is greater than I was aiming for previously, finishing with 25 pips on UJ this evening.

It is early days in my new karma, so let's see what things look like in a few weeks.

Early days but the stock market is delivering nicely, at this rate I shall recover all my trading losses by the end of January!
Unfortunately life is never like that, but I can dream....

Back in FX the different numbers have definitely had an effect. When I adopt a sensible strategy (otherwise known as planning my trade entries and exits properly) I achieve some encouraging results. I have switched to mainly trading xxx/JPY on a time-basis and pulled 3% today. Which makes up a little for Friday's major screw-up when I unsuccessfully argued with the market...

Timed trading is where a position is opened at a particular time and in a particular direction.
A close can be either chosen from S/R lines, or after a timed expiry of anything from 30 minutes to a few hours.
....you still need an SL because you might be wrong...
Last night's long into JPY delivered only peanuts because I did not realize that Japan had a bank holiday until after I closed my trades; but they were positive peanuts.

Well the stock market behaved as expected; up 8%, then only 2.5%, then up and down a bit more finishing the month at +6.25%. Definitely time for some more QE, but also company results are out for two of my picks at the end of February and that is eagerly awaited.

Possibly my mojo is returning in FX. Patience and planning being the factors which needed more attention, using a longer time-frame has helped here. From 12th January until 31st January I was up 9.5%. A very satisfying performance. Unfortunately my account balance experienced a discontinuity on 11th January, also known as a cock-up. I dropped 14% over the day due to blindness. Yes I was ignoring the market signals, so down 4% on the month. Not being one to be knocked back I continue with fresh enthusiasm. Lets see what February brings.

I have changed my trading style. Now I watch the hourly charts and look to make 20 to 30 pips using roughly 5:1 trade leverage. That makes 1% when I succeed, and I have been having more success lately. I have also moved to trading the Yen crosses. These seem a little more predictable at the moment with poor trade and Abe-nomics driving the Yen down. I also have a couple of timed trade entries which I use quite profitably so far. I am being a bit coy about these because I have noticed that when any poster puts up a viable set of trade setups here on FF, the price action around the setups becomes very erratic. So when these timed trades become unreliable, or otherwise unrewarding, I will post here what I have been using.

I use two indicators, actually I mainly use one but have the second because it has always been on my charts and it is useful for dissuading me when my trade finger starts to itch. So RSI(14) sits at the bottom of the chart. The other indicator is/are the Bollinger bands. I use 50 for the averaging interval and 2.1 for the sidebar spread. Like all indicators one has to learn its significance and how to read it, I have some history with this indicator from a few years back and feel quite comfortable using it. Finally there are S/R lines or levels. I used to draw these on the chart, but now I just use the cross-hair cursor to check their positioning.

Well.... I did not make the best use of the Yen movements these past two days, but I did manage a good profit nonetheless. I have one small trade on the Dragon which is two thirds of the way to TP, and if I shut it now I will be up more than 4% on the month so far. However I am testing my resolve to execute a planned trade, and not close-out due to the temptation to secure the current pips. ....I will bring the SL up a bit to 40-pips behind the current price. I have recovered my screw-up of 3 weeks ago, now to build some more positive pips.

edit: I forgot to mention that TP is where the price will collide with the upper Bollinger band on M15.

The answer to that little poser above is that I should have left the SL where it was, 10 pips locked-in, and I would have collected the TP at 5am GMT. Instead the yield was about 40% of the TP....

If there is anybody I would like to thank today it is Shinzo Abe. He must be up there with Bernanke and Draghi for ability to drive his currency purely by speaking. The Yen printing process does not start until next year, allegedly, but it is sinking reliably and looks good for another 2 years. So, ever mindful of the sharks nearby, short the Yen seems broadly a no-brainer.

...and today's Yen shorting produced another bag of pips which not only recovers January's screw-up but also takes me to a new high for the year so far.

A frustrating week, but I finished ahead none the less.
Watched a couple of trades, well one particularly, run very negative over the week before coming back to me this afternoon.

Interestingly the low trade leverage and small money-value was helpful in waiting-out a position that became very negative. I don't know whether I could have waited-out a position that took my equity down by over 10% if I was trading my previous account with ten times as much money. However it appears that a low trade leverage around 3:1 and shooting at higher pip counts using the 1hr chart is delivering results. Also I have borrowed some of the philosophy from this thread (http://www.forexfactory.com/showthread.php?t=401818), and that has helped me with watching the negative trades; I hope he makes it back to the table.....

So done for the week, 9% up on the month so far and half of it still to trade.

Today my stock market portfolio, as funded by my previous forex account capital, was up 17%. I closed one of two positions for 19% profit. There is a limit buy to get back into that particular instrument and realize 5 of the 19%. Another 8% overall and I will have recovered all of last year's forex trading losses.

Back to my beer fund.... The account value misleadingly reads a 10.5% profit on the month - but it does not show the three short-Yen positions which have recovered half their draw-down so far this week. This afternoon the US ISM and consumer sentiment figures have propelled the dollar upward, and my UJ position might fire through its TP if Obama says the right things in his surprise speech dealing with the budget sequester. At 12:20 ET it is looking promising.....

Stocks are out into cash at the moment sitting at +16%. I'm waiting for a retracement before getting back in. Recent news about Greece might just provide the entry.

The beer fund closed two Yen-short positions at target for +2.4%. That was a long wait and shows that the entries were somewhat ill-conceived. Anyway, I scalped a few pips during the NFP thrashing on Friday and launched another couple of Yen-shorts. I'm trying to decide if there will be Yen strength when Tokyo opens in about half an hour and considering long Yen against the dollar for a couple of hours. It will be nice if Tokyo buys Sterling and Euros when they wake up...

Stocks are still out into cash, except that today I was in and out for 2% courtesy of the sovereign theft going on in Cyprus. I only bet half the account value so net increase only 1%. I'm happy.

The beer fund is currently up 5.5% on the month so far. I nearly closed out EJ for another 2% on Friday - but had my TP teased again, and then Cyprus! The good news is that the drawdown has receded today by 70% so far and UJ looks like it will blast through to 97.00 any time soon. That will give me about 3%. In contrast EJ still has 100 pips to go before it becomes less embarrassing, although it does seem to be trying at the moment.

The bad news is that my two longs entered on Sunday at market-open plus an hour-ish, one in EG and the other in EJ, both collected their trailing stops whilst I was asleep. The total damage was about 3 pips so not worth worrying about. The frustrating thing is that both longs were correct in the market, and the stops were too tight, so that is 150 pips I did not make on EJ and about 45 pips I did not make on EG.