Daily Activity 9/23

This week I've been continuing the focus on building my trading toolbox. After a few days of watching my moving average cross idea it became apparent that I need a way to discern between valid breaks and small retracements. Remembering something that Mack from Blue Point's trading room had said about using two sets of bolinger bands I decided to add that to my charts and see what transpired. Over the past three days I've attempted to trade the AUDUSD using two sets of bolinger bands and 2 moving averages. The bolinger bands are set at 2 and .8 standard deviations respectively, and the moving averages are the 50 and 200 period. I watch the 10 minute and 1 hour charts and look at both for entries and exits. So far I've had mixed results but not due to a poor trading strategy, but rather because I find myself going against the strategy too often. Today for example after being away from the markets for almost 3 hours I took a short trade after only looking at the charts for a few minutes. My entry was based on the price being at the top band on the 10 minute and having moved sideways for the past 2-3 bars could be rolling over. However, I completely missed that the 200ma had just been broken and i was shorting into it. I got stopped out quite quickly. This is the type of mistake that is keeping me from being more profitable. The day did turn out to be profitable because I shorted the AUDUSD after the big pop from the Federal Reserve announcement at 2:15pm. I exited the trade at the lowest bolinger band on the 1 hour chart, which turned out to be just a pause as the pair continued down quite a bit further. 56 pips is not bad at all and there is no reason to be greedy and try to get top or bottom tick. The man who introduced me to the markets 7 years ago used to say "Pigs get fat, hogs get slaughtered".

Weekly wrap

Last week was ok. I made a tactical error by opening a short two days before the SNB rate announcement, and then closing it the morning of the announcement for a loss. Also, I missed an opportunity to close my long position for a nice profit immediately after the news. My errors resulted from having a bias going into the move that something of substance would be said and the pair would react accordingly. This was incorrect. If I would have thought about the strong moves over the past 6 months it would have been obvious that they come at a much lower price than the pair was trading at the time. I was positioned well for a capitulation, having both a long and short open at the time. However, my bias prevented me from taking advantage of my positions.
Going forward I see the pair trading in a range until something important happens so my plan is to short at or close to 1.5180 and buy at or under 1.5150.
I am still working on the EUR/USD moving average cross trade. More development is needed and I will keep refining my entry and exit strategy while trading mini lots. While on Blue Point's trading room another member that goes by the handle "Mack" shared with me some techniques for using long term moving averages and bolinger bands on the AUD/USD pair. I've been watching this pair recently and will try to incorporate his tactics, possibly taking mini lot trades this week. Basically, I'm still working on my trading toolbox to better maximize the assets of time and money.

Daily activity 9/16

Started the day reviewing some video and written posts by Don Miller, a pro e-mini trader. He doen't really discuss tradings tactics, but rather talks about trials and triumphs. I find myself drawn more towards this type of topic lately. I pay as much attention as possible to the musings of both Don Miller and Dr. Steenbarger. No trades were taken in the EURCHF so I'm holding 1 short and 1 long going into the SNB policy announcement at 8AM EST tomorrow morning. I did take 2 EURUSD moving average cross trades this morning and both were closed at 10+ pips profit. Wednesdays I drive to Ann Arbor for class so unfortunately I missed a good trade while on the road but that can't be avoided. The rest of the afternoon session was tame so that was all the trading activity for the day. While on campus I usually get to use a Bloomberg terminal which does seem to put my mind at ease as far as news goes. The charting isn't anything special, and I still have to have my laptop to run the trading system software for FXSolutions and DBFX. However, the immediacy of the news and ability to look up an immense amount of data is quite nice. While I was trading the sounds from the e-mini s&p pit were playing through Kurtosis' site, and I sat on Blue's trading room.

Daily Activity 9/15

I spent the day on Blue Point and Kurtosis' trading rooms. Also, I watched a video from the OrderFlow blog about his trading on Monday. This concept of Market Profile is very interesting and warrants further investigation. The EURCHF was biased to the long side all day and I closed 2 long positions in profit. To capture some quick pullback action I initiated a short position but set my profit target to low and it was missed in the overnight consolidation. Now I am holding 1 long and 1 short EURCHF. My 5 EURUSD trades resulted in 3 losers, 1 break even, and 1 for profit. The break even trade could have been my biggest winner of the day but I was looking for more based on a news rumor which made me keep the position open too long. Lesson learned don't trade the news/rumor, trade the price action.

Daily Activity 9/14

Yesterday I spent the majority of the day sitting in with both Blue Point and Kurtosis' trading rooms. The market was in a range and no EURCHF trades were opened or closed. So far I've initiated 2 EURUSD trades based on the moving average cross, 2 losers and 1 break even. Some of these initial results have to do more with exit strategy than trade viability. The break even trade went my direction almost right away and I moved my stop to break even when the price reached 1:1 reward to risk, then immediately retraced back to my stop. The entry still appears to be sound, but much more development is needed on handling the exit. Richard Regan of ProTradingCourse.com says that entries are a science, while exits are an art form.

Daily activity 9/11

Today I listened in on Blue Point's trading stream. The EURCHF was quite muted throughout the day so no trades were opened or closed. Having watched Kurtosis' Trading stream for a few days I've noticed his combination of moving averages can act as a signal of sorts on a 15 minute EURUSD chart. After doing some quick visual backtesting of this idea I've decided to move foward with a small live forward test. My plan is to look for 15 minute bars that start above or below all of the EMAs, and then moves through all of them. I am not going to wait for that bar to close, rather I will enter as soon as the farthest EMA is crossed. My stop loss will start at the opposite EMA, with a target of twice the pips risked. I'm only trading 1k lots @ $.10/pip, but I feel that the live trading will shorten the learning curve.

Daily activity 9/10

The day started off quite well. I closed my short and opened a long which hit my profit target withing a couple hours. The first lesson learned is to have my computer up and running at 9:30AM EST, because if I had then my old long position would have been closed for a nice 40+ pip profit. Live and learn. The rest of the morning was spent opening a couple more long positions and starting the Bloomberg Certification process. Its a series of videos you watch and then take a quiz over the contents. So far I've completed the introductory series but am planning on going through the equity, forex, and fixed income series as well. As I become more familiar with that product it is apparent how valuable it can be to the right person.

Daily activity 9/9

Today's market didn't produce any trades. Also, I didn't open any demo trades with the Fibo's I wrote about yesterday. This morning I started out watching a video on OrderFlow posted to a blog that I follow. I did, however, spend hours starting to learn new software. Through my mba program I have access to a vurtual trading room a couple days a week. They have quite a few different software packages available, but today I only looked into 3. There was ESignal Pro, FactSet (I think thats the name, but I'll check tomorrow and update this if not), and finally Bloomberg. Each has different strengths, weaknesses, and applications. My intention is to become proficient at all three.

Daily activity 9/8

Today was less active in the market than I expected. No trades were opened or closed. I watched the StockTwits Brunch show from Saturday with RatioTrader where he showed how to apply Fibonacci ratios to many different markets. It was quite informative and helped me to create some preliminary rules for a new forex trading strategy. It appears to me that there are two primary ways to trades based on these ratios. First, RatioTrader looks at whether the 38.2%, 50%, or 61.8% retracement level works as support. If so, a break of the swing high can go to the -23.6% level or beyond. This is the first setup I'm looking for. The second is to take the retracement as soon as its confirmed. I draw the Fibo from the swing high/low to the current high/low. When the next bar opens I watch to see if it breaks the line drawn by more than 5 pips. If not I'll look to enter the trade as a short term reversal. I look at 1 hour charts, set my stop loss for 10 pips beyond the recent high/low, and am watching the following pairs: eur/usd, gbp/usd, usd/chf, aud/usd, usd/cad, usd/jpy, eur/chf, eur/gbp, eur/jpy, and gbp/jpy. I want to keep a 2:1 or higher reward to risk ratio and only risk .50% of my account balance per trade.

9/4 learning

I spent the beginning of the day watching a UStream broadcast by Blue-Point-Trading. This is a site I found earlier in the week where a trader in France streams his desktop, CNBC news, and talks about what is going on in the market. There is a chat room where anyone can share there opinions or ideas and have a conversation with Blue and others. Blue trades the following e-mini futures contracts: ES (s&p 500), 6E (EUR/USD), ZB (30yr U.S. Treasury bond), and others including the AUD/USD.

Later in the day I sat in on a webinar by RatioTrading.com, where they were showing the wide ranging applications of fibonacci retracements. It was very interesting but as usual with these webinars their main goal was to pitch their training program, for $2K+. I think I'll be looking into this more on my own.

As the day started to wind down I left Blue's stream and went over to another one on UStream by DayTradingRadio. This one is more of a pure daytrading stream where the host talks about stocks that are in play for the moment.

Trading log/diary

When I started this blog my intention was to use it as a tool to hold myself accountable for my trading. There have been posts about news stories, trades, and the like. However, I realized this morning that I'm missing some of the benefits by limiting my posts to issues directly related to trading the EURCHF. The truth is that I spend most of my time focused on other aspects of trading.

Roughly a month ago I started to look at my fledgling trading business, because that is what trading for real money is, and realized that the size of my trading account is not my only asset. Instead, my time is an asset that was essentially being squandered watching 1 chart and taking 1-4 trades a week. That discovery sent me on a mission to increase my trading toolbox. It is my belief that in order to maximize the use of the assets I have at my disposal I need to become more than a one trick pony. As such, I have been sitting in on webinars and trading rooms to learn as much as possible. Going forward it is my intention to regularly document this learning process here.

Weekly wrap up

This week was confined in a tight range between 1.5187 and 1.5124, which is quite strange. Even with the 100+ pip move in the EURUSD earlier today, the action was very limited. I did book 3 short trades for profit, making the best of a slow week. There are two open positions going into the long holiday weekend, 1 long and 1 short. I'm comfortable holding each individually and both together so no worries there. It will be interesting to see how the Asian session opens on Sunday night since that 100+ pip move in the Euro happened right after the London close. There could be a quick move down to close what they will see as a gap. As such I'll be paying attention and have a limit order setup to take profit on my short position if we get that type of move.

Trading update 9/4

Short @ 1.5170

EURCHF trading/news update

Prepared by: FX Solutions, LLC Saddle River Executive Centre, One Route 17 South, Suite 260, Saddle River, NJ 07458

1 of 1

EURO-SWISS: Hedge fund demand noted for the cross this morning though

for now the rate holds in the middle of the day`s range. 200-day moving

average seen as key support still on a closing basis coming in at

Chf1.5128 today after a marginal break below on Wednesday. Note also

expiry interest in reasonable size at Chf1.5180 today.

9/3/2009 5:10:08 AM

Morning EUR/CHF news updates

Prepared by: FX Solutions, LLC Saddle River Executive Centre, One Route 17 South, Suite 260, Saddle River, NJ 07458

1 of 1

EURO-SWISS: Slipped to a Chf1.5125 low in the NY session Wednesday

lowest levels in nearly two-months with some stops hit on the break of

the 200-day moving average though the move lacked follow-through with

the market still sensitive to the persistent SNB intervention threat.

Trade on the day has so far been contained between Chf1.5129/49.

Speculation now that the SNB support level would be at Chf1.5110/00 in

line with the July lows though the 200-day still holds on a closing

basis coming in at Chf1.5128 today. Some chatter also in the market

that the surprisingly strong Swiss Q2 GDP data this week may allow the

SNB to adopt a more relaxed policy for the franc.

9/3/2009 2:46:32 AM

07:40 EUR/CHF: Swiss Name Buying, No Sign Of Official Interest - Yet London, September 3. Swiss name buying of EUR/CHF has reportedly helped the closely watched cross to the recent 1.5156 highs. However, all are still watching for signals of official interest. To date there has been no sign of such intervention linked flows but this will do little to stem the torrent of speculation on this topic. Matthew.Foster-Smith@ThomsonReuters.Com /PS

EURCHF trading/news update

Prepared by: FX Solutions, LLC Saddle River Executive Centre, One Route 17 South, Suite 260, Saddle River, NJ 07458

1 of 1

EURO-SWISS: Still holding steady around the Chf1.5150 area after plenty

of speculation in the European morning that the SNB could be getting

ready to intervene again coming on the back of reports that they were

seen buying US Treasuries yesterday and today. Swiss on a trade weighted

basis still trading close to its highs while techs point to the 200-day

moving average as key at Chf1.5130. Euro-Swiss has traded above the

200-day since the big upmove seen on June 24 with some speculation now

that this will be a line in the sand for the SNB.

Trading update 9/2

Closed short for +23 pips.

EURCHF trading/news update

08:02 FX OPTIONS: More Short Date EURCHF Demand Should Underpin Spot London, September 2. Further to recent comments regarding large EUR/CHF 1.5180 expiries today and talk of SNB intervention, there are reports that another US name bought a chunk of Friday atmf vol yesterday at 7.5 - talk around 300mln there, with similar size having traded on the overnight vol (1.5180 expiry today) at 7.5. If EUR/CHF fails to get a lift from this SNB hype, then at least expect some underlying support from those long these strikes in the upper 1.51"s over the rest of the week.

EURCHF trading/news update

SWISS: Traders also noting a buyer of euro-chf o/n at-the-money strikes

this morning at 7.5 vols adding to speculation in the market that

intervention could be on the cards. Furthermore traders note pressure

on the SNB has risen thanks to dollar-Swiss and sterling-Swiss trading

lower pushing the trade-weighted value of the Swiss franc higher.

EURCHF trading/news update

Traders noting sovereign demand for US Treasuries this morning

with the suggestion being this is potentially a pre-cursor to

intervention in the Chf. Cross said to retain a bid tone on dips with

key support seen as the 200-day moving average at Chf1.5130.

Trading update 9/2

Short EURCHF 1.5181.

EURCHF trading/news update

19:30 EUR/CHF: Swiss Gets Default Nod in Nervous Market New York, September
1st. With the notable exceptions of the USD and JPY, the CHF has been a strong
performer today in the midst of substantial stock market selling and other
indications of risk reduction across asset classes. EUR/CHF is thus far holding
to tight ranges and above the Aug 21 swing low and 200-day MA by 1.5135; last at
1.5154. With Swiss PMI beating EUR PMI today and, as a result, perhaps less
concern by the SNB about the CHF"s strength at this point, there could be scope
for a modest extension to the downside, but it is not clear the SNB will allow
the pairing too much room on the downside until Swiss CPI begins to trend higher
again. It would seem reasonable to assume they will defend 1.5000 should it come
into play again soon.
On the topside, offers remain at 1.5185, with more offers in the 1.5215-20
and 45 vicinities.

Trading update 9/1

Closed short position at 1.5155.

Trading update 9/1

Opened short position at 1.5172.

Trading update 9/1

Closed short for 22 pips.