November wrap-up

The results speak for themselves, November was not a profitable month. However, it was not a bad month at all. My mistake was jumping into live trading with a new strategy without properly testing it on a demo account. All of my losses came from that mistake, with my original EURCHF trades still being profitable. Lesson learned. No use crying over spilled milk so its onwards and upwards trading live and demo at the same time. Increased skill is the goal and patience is the key.

Giving Thanks

Tuesday was another productive day. I didn't close any trades but did very well on the demo, which is quite encouraging. The rest of the week I will be trading a little during the London session if at all, because even traders need to take time off. I am thankful for the opportunity to be a trader. I am thankful for all of the people I have met around the world who are willing to share their knowledge and experience with me. I am thankful for all of our military personnel serving their country. I am thankful for my family's health. I am thankful for a million other things that need not be mentioned here. Without a better way to stay it, THANKS!

Today's wrap-up

Today was relatively uneventful for live trades, with only one entry taken on the EURCHF. However, it was still a very productive day. As I've mentioned before I am currently demoing a new trading strategy and that went very well today. The results were definitely encouraging, but the best part was my ability to stay within the plan throughout the day. Looking to repeat that performance every day for the rest of the year, and then possibly taking it live depending on what the results and progress have been at that point.

Weekly wrap up

This week was a success. It wasn't a success because I made a huge amount of profit, which I didn't. This week was a success because I followed my trading plan and exercised patience every day. Not every trade was perfect, but progress was made. Also, I started to demo trade a new strategy picked up from Blue on his stream. Continuous improvement is the plan and this week fit into that plan.

Discipline

A guy that goes by the handle T4 on blue-point-trading's stream was sharing yesterday that discipline is one of the key ingredients in successful trading. He said that what people commonly refer to as emotional challenges with trading just come down to discipline, doing only what your plan allows and nothing more or less regardless of what you may be feeling at the time. This is probably not the trading revelation of a lifetime, but is still very interesting way to look at things. Am I disciplined as a trader? Admittedly, not as much as I should be. What is discipline as a trader? It probably comes in many forms and all situations but here are a few that seem important at this moment. Am I only taking trades that specifically conform to my daily trading plan? Is each trade exactly the size it should be according to my plan, neither smaller or larger? Have I been managing active trades exactly as I should be? Was my computer screen configured the way it ought to be for me to trade? Was I watching the market and ready to trade when I should be? Did I update my trading journal and review my performance at the end of the day/week/month? Did I get the amount of sleep that is necessary to be productive today? These, and many other, questions will help me identify if I've been disciplined today or not. Finally, if I haven't been disciplined today what am I going to do tomorrow to fix that? Again, no revelations here. If you follow Dr. Steenbarger, SMB Capital, the Mind of a Trader podcasts, or any other relevant and qualified trading resource you've probably heard all of these things a million times. A next step for me is to ask myself these questions every day and act upon the answers if they are anything other than a resounding and disciplined yes.

Learning to trade

Blue, from blue-point-trading, made a comment this morning when I was on his trading room at 3am. He said something to the effect that it was evident that I'm a serious trader because I'm up and at my desk every morning ready to go. I responded that what I lack in skill, at this point, I am trying to make for with determination. The concept of trading being a skill set that can be learned is interesting to me. As I was leaving my last appointment of the day I was trying to compare learning to trade to another job, and electrician came to mind. It seems to me that learning to trade is like learning to be an electrician. You can jump right it head first and risk certain (financial in the case of trading) death from the simplest mistake. Some might survive this trial by fire but there probably isn't much learning going on and they are setting themselves up for a devastating blow later on. The difference between learning to trade and learning to be an electrician is the opportunities for learning itself. Electricians, as with every other skilled trade, can go find a company or union to teach them the basics and what not to do, whereas a trader has to find all of this out on their own. There are some trading training programs but their cost or location are usually prohibitive. So we are left to our own devices to learn this business. That's what made Blue's comment so interesting to me. It reminded that while many people have blessed me by sharing of their hard-earned knowledge and experience it is up to me to put forth the effort necessary to grow as a trader. Determination might not be the sexiest way to approach a venture, but its what I have so it'll have to do.

Still in a range day

Today came and went more quickly than I would have liked. My non-trading activities dominated my time today, but with the market in a fairly tight range it was a perfect day to be distracted. I did not initiate any trades today, but closed out a EURCHF long and a GBPUSD long for profit. Until we break out of this 2-3 day range on the broader index (S&P 500) I'll be even more cautious about taking trades. The market needs to decided if we're going farther up or if its time for a real run down, and I don't want to be on the other side of a trade when that happens. I've started keeping a trading journal based on some ideas from SMB Capital and Dr. Steenbarger. The spreadsheet is still in its infancy, but you have to start somewhere.

Decent day

Monday was a pretty slow day for me with only 1-2 signals all day. The first was a USDJPY short, but it didn't feel right so I passed. The second came after 3pm and was an AUDUSD short. I took this trade and booked a modest 18 pips in about 10 minutes. The trade ended up going quite a bit farther, but I was keeping my stop tight once it went positive. Added to my EURCHF longs, but those should start paying off soon. Overall it was a decent day. I was patient and waited for the exact setup I was looking for, took the trade, and managed it effectively. As a trader that is all I can ask for. Now I'm just looking for the next bus.

Weekly wrap up

What a week. I ended up slightly negative on the P&L for the week but consider it an overall success. I've been listening to 'Mind of a Trader' podcasts downloaded for free from iTunes, keeping an actual trading journal, setting a clear goal for each day, and being patient enough to almost completely avoid the 10min charts all together. Not too bad. This is a business and I am structuring my business in a way that I feel will lead me to success. The EURCHF trades are still working, they're just few and far between due to the extremely low volatility in that pair recently. My focus on the longer time period charts has slowed down my trading significantly, and I'm ok with that. I remember Richard Regan of Pro Trading Course saying that if he doesn't take a single trade all day, he's done his job well that day. Part of the 'job' or 'business' of being a trader is to protect your capital. If I'm vigilant and don't take a trade then that day was a success. Mack, from Blue-Point-Trading's stream likes to say that "there's always another bus". Dr. Steenbarger continues to be a great resource with his blog and I intend on reading all of his books as soon as I can free up some time.

Patience

Today marks the second day in a row that no trades were taken. Now, yesterday was only a partial day since I took most of the day off to celebrate Veteran's Day. However, it is still important to note this lack of trading activity? Have the markets been stagnant? No, I've just been much more selective about my trading plan for the past 2 days. I've decided that my string of recent losses reflects an incomplete understanding of what I was specifically looking for so the best idea seemed to be to slow everything way down and focus on one specific trade setup on one time frame. With the help of Mack from the Bluepoint trading stream the one hour chart has become my new best friend and I'm only looking for reversal candles that are the color of the direction I would be trading (red for a topping or green for a bottoming reversal). There have been a couple opportunities for this, most notably in the euro and aud yesterday morning, but I wasn't completely comfortable with either setup so no trade was initiated. Hindsight being 20/20 the euro trade would have been stopped out and the aud trade would have gone to my take profit point for a successful trade. Not taking these trades was a success in and of itself because the ability to walk away from a potential trade had escaped me over the recent weeks which I believe has contributed significantly to my recent drawdown. What tomorrow holds I do not know but my goal will be the same as it has been over the past 2 days, to only take trades with this specific setup. Once this becomes a habit I plan to slowly introduce other trades or time frames, but to remain patient and only take whatever setups I am committed to for that day.

Happy Veterans Day!

Only watched the markets until 8:30am and then went about my annual veterans day celebration rounds.

Learning Curve

My learning curve is still much steeper than I had hoped at this point. Yesterday I took a total of 3 trades, none of which were exceptional. The first was a valid signal but I miscalculated the entry point a little low, which had I done it correctly would have kept me out of a losing trade. The second was an emotional trade based on the entry to the first and my expectation of a dollar rally, the candle was the wrong color for its position but I entered anyway for another loser. The final trade of the day was the right color in the right position but the entry signal didn't come until 2+ bars later and ended up going the wrong way for a final loser. I'm becoming more patient but there is a lot left to learn, and my eurchf trades are not making up for these other loses so I'm staring down the barrel of posting my first negative month. Meanwhile I'm waiting for the next bus.

Better

Today my trading showed some signs of life with 2 of 4 trades being good. Actually, one of the good trades was a loser. How could that be? I've been spending quite a bit of time this week listening to podcasts about trading psychology. They make it very clear that if you only define your success as the dollars made that day you are setting yourself up for a self-worth roller coaster. Initially counterintuitive, it actually makes sense. My focus all week has been on making one good trade. This doesn't mean the trade resulted in profit. Rather it means that I followed my trading plan to the letter and set myself up for financial reward. Beyond that there is nothing else we can do as traders. We can't control where the market goes once we've opened the trade. We can manage it to the best of our abilities but the end result is quite out of our control. The trade in question was a short usd/jpy which, if you watched the market today, would almost half to be a loser since it went up all day along with the broader market. The reason I consider it a good trade is that the 1 hour chart was showing the pair in a downtrend with price staying between the inner and outer bolinger bands (i use 2 with different settings) for a few hours. There was a reversal candle, which I should have taken, on the 10 minute and the pair consolidated for a little while. Then there was a bearish reversal candle at the 50ma on the 10 minute chart. This was a signal that he current longer (1 hour) term down trend should resume so I entered a short position. The price only went down a few pips from there and a while later I was stopped out for a loss. I'll take that loss because more often than not the current trend will continue in that situation and the exact same trade would result in profit. Follow the trading plan? Check. Good trade. Not a great trade because there was an opportunity to cut my losses once a certain price had been achieved and I didn't manage accordingly, but a good trade nonetheless.

Tomorrow's plan, one good trade.

Greed is (not always) good

Today was a reminder that greed can be bad. There's a saying on the street that 'Pigs get fat and hogs get slaughtered'. This rang true for me today. I was long the AUDUSD pair with decent size, for me anyway, going into the FOMC rate announcement. Shortly before the announcement there was a small pop that could have given me a nice 30 pip gain on the trade. Instead of taking this profit and going on with my day I decided to stay in and look for more profits after the announcement. My eyes grew wide as the whip saw action took the pair up to a point that would have netted me over 120 pips on the trade, so I tried to close out and lock in the profits. Unfortunately I didn't get my close order filled all the way back down to break even where I decided it would be best to keep it open. The pit stop at break even was just that, a pit stop. The pair proceeded directly down and hit my stop loss turning a potential 100 pip gain into a 60 pip loss. Lessons are becoming abundant this week, and the most recent ones are to take a gain when you can, and don't count on being able to close out a trade during heavy market action.
Results for Wednesday: 1 good entry long gbpusd at a short-term reversal candle with the 1 hour trend, bad short eurusd against the trend, ok long audusd mentioned above, bad short audusd right after green long wick reversal candle. 1 for 4.

Questions

Tuesday was not the day I was looking for. My mission, as mentioned that morning, was to make one good trade. Unfortunately I made 2 ok trades and 4 bad ones. Not quite the performance I was planning. Now the question is why. Am I overtrading? Entering too early or late? Am I misreading or misinterpreting the market and/or my signals? Am I not managing the trade effectively and giving up profits? These are the questions that I must consider going forward. One Good Trade.

Poor results yesterday

Yesterday, as I posted on Twitter, was not one of my best days. Post losses of more than 80 pips is not a great way to start the week. However, my issue is fairly common and was an issue last week as well. It seems that I enter the week with nothing buy how much money I need/want to make this week in mind and start off trying to get to that goal. This is an attitude that served me well in my previous career, but is not suited for trading. Dr. Steenbarger and the guys over at SMB Capital focus a lot of effort around the concept of "One Good Trade". Their point is that all you should focus on is making that one good trade, and not on the money you are trying to make, have just made, or even just lost. I've been thinking about this concept since roughly noon yesterday and it has become my mission for today. My goal today is to make one good trade.

October wrap-up

This has been a challenging month. The challenge hasn't been from an excessively unpredictable market, but rather from my own personal challenge to grow as a trader. Trying new things always causes some level of discomfort and stress, but when you put money into the mix those results are magnified. I'd been practicing new trading tactics on a micro account and had mixed results. When I was patient and focused the results were positive, but when I got distracted from my plan things didn't go so well. This past week I decided it was time to move forward and start trading these new tactics in my regular account. Looking back on the week I'm glad I made that decision because I probably learned more this week than the previous 3 combined. Some pretty good trades were taken, and some really bad ones were taken as well. However, with each experience I've become more confident in what I'm trying to do and my ability to continue to grow as a trader. Thankfully some people in the chat room at www.blue-point-trading.blogspot.com have offered of themselves and their knowledge to help me grow. I'm very excited going forward at what the possibilities could be.

Weekly wrap-up

This past week went quite well. I booked some profits on the EURCHF and am holding 4 short positions over the weekend as the pair holds near 1.5200. Also, my newer trading strategy work well and I was able to recover half of my losses in that strategy from the past 3 weeks. It is becoming obvious to me that an area of my trading that needs development is the mental side. I find myself taking trades early at times, and also not booking profits when I should. My main area of focus this coming week is going to be taking some profits once the trade goes 10 pips my way and then moving the stop on what ever remains of my position to break even or 1 pip positive. My entries seemed to be getting more accurate towards the end of last week so hopefully that continues and I stop trying to hit home rums each time and take what the market is giving me. Richard Regan from ProTradingCourse.com says that "Entries are a science, and exits are an art." I think this is a great way of approaching trades.

September wrap-up

I've updated the results graphs for the month of September. Overall it was a good month as the volatility picked up towards the end. My learning activities have evolved quite a bit as I've found another way to trade that makes sense and focus much of my time on that plan. I'm only trading $.10/pip on that at this point but plan on increasing that as my skill set improves. The new trading style was negative for the month and is reflected in the posted results, but I see that as nothing more than the cost of experience and information. October is off to a good start and I'm looking forward to seeing where my trading goes from here.

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

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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

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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

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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.

Trading update 8/31

Opened 1 short position at 1.5179. Now holding 1 short and 1 long position.

Trading update 8/30

Opened long position at 1.5155. 1.5135 is still support and until we break that level I'll probably be a buyer here.

Trading update 8/28

Closed my short trade which makes me all cash going into the weekend. The performance charts have been updated as well.

Trading update 8/27

Closed last long position at 1.5233. Now holding 1 short position from yesterday.

Trading update 8/26

Closed 1 long position during this morning's opening bell pop. Entered short position at 1.5203. Now have 1 long and 1 short position open in the EURCHF.

Weekly wrap up

I opened two longs positions this week and am holding both going into the weekend. The trend seems to be decidedly down, but the pair couldn't seem to break through the 1.5150 mark with any force. Towards the end of the day today there was a nice move up on what could have been some short covering in the EUR/USD. I think this shows that traders are still on edge about intervention from the SNB and don't want to be short when something happens. This fear could come into play over the next few weeks and give the EUR/CHF a reason to rally on any good news.

Long positions open

Still holding 2 long positions in the EUR/CHF. The pair is having a tough time with the 1.5150 level, spending a few hours each day right there. A solid break below will probably lead down fairly quickly and present another long entry around 1.5100.

Trading Update 8/19

Entered 2nd long position @ 1.5158.

EUR/CHF udpate

EURO-SWISS: Trading lower now back under Chf1.5200 area amid light

flows and despite earlier remarks from SNB`s Jordan reiterating the

bank`s desire that the Chf not strengthen inordinately due to the

deflation risks that represents. Pair trading saw lows at Chf1.5185 a

short while ago retreating from Chf1.5215 area seen as Jordan remarks

were reported the pair back near the early European session lows.

SNB news update

FRANKFURT (MNI) - It is too early yet for the Swiss National Bank

to normalize its monetary policy and the bank will stick to its low

interest rate policy as well as its efforts to keep the franc from

appreciating SNB board member Thomas Jordan said in an interview

published Tuesday afternoon.

Asked by Swiss financial daily Handelszeitung whether the SNB was

preparing to normalize its monetary policy Jordan responded: "It is

still too early for that. The economic environment and the inflationary

outlook do not yet permit us to consider a normalization of monetary

policy."

He continued: "At the moment there are no indications that we need

to consider a change of monetary policy. We will stick for the time

being to our de facto zero interest rate policy as well as to our

extraordinary measures against an appreciation of the franc."

Jordan also warned that one should not assume that current low

interest rates are the norm.

"One should not forget that the interest rate could suddenly be

significantly higher" he said adding that households companies and

banks must act in a way that allows them to benefit from low interest

rates today without creating medium-term stability problems.

The SNB will continue to buy both covered and corporate bonds so as

to prevent a fresh rise of risk premia. "We will remain active" Jordan

said. "The time to stop or put a term on these measures has not come

yet."

"We do not make known our threshold for intervention" Jordan said

when pressed about the point at which the SNB intervenes to stop an

appreciation of the franc.

Further pushed as to whether the bank intervenes as soon as the

euro approaches Sfr 1.50 Jordan insisted "we decide situationally if

we want to intervene. The market here has up to now understood our

strategy well."

Swiss GDP is likely to contract by 2.5% to 3.0% in 2009 Jordan

said adding that the path to recovery will be slow.

"In mid-2010 Swiss GDP should return to positive territory. In the

first half we are likely still to see negative growth rates" Jordan

said. He also warned that one should not expect to see pre-crisis growth

rates for some time.

"We still cannot dismiss deflationary risks in Switzerland" Jordan

insisted. He explained that risks could emerge "if the world economy

does not recover as it should or if the franc were to strongly

appreciate."

Despite Switzerland`s expansive monetary policy "we consider

inflation risks in Switzerland to be low presently and also in the

medium-term" he said.

Nevertheless "we cannot completely exclude this risk. The

normalization of monetary policy will be a very difficult tightrope

walk. We will however do everything to secure price stability in

Switzerland in the future as well" he assured.

Jordan warned that some inflationary pressure could be imported.

"In certain countries inflationary risks are indeed clearly greater

than [in Switzerland]...There could be a certain inflationary pressure

coming from abroad."

Asked what would prompt the SNB to tighten its monetary policy

stance Jordan said that inflation forecasts exceeding the central

bank`s price stability target would be one motivation. "This is not the

case today."

Another reason to tighten monetary policy would be too low interest

rates distorting the Swiss economy Jordan said though he dismissed any

such tendency at the moment.

The inflationary fears of many investors in Switzerland were

exaggerated.

"For businesses it has certainly not become easier [to obtain

credit] but in general we do not have a credit crunch in Switzerland"

Jordan said.

Link to Zero Hedge blog post about the CHF

This is from the Zero Hedge blog which is always very interesting.

http://www.zerohedge.com/article/short-chf-banking-secrecy-dead

EUR/CHF news update

EUR/CHF: Rally Continues, 1.5230/50 Resistance-Zone Next Up London, August 18. 1.5222 hit as EUR/CHF continues/accelerates its morning appreciation following the stronger-than-expected August ZEW reading. EUR/USD might have failed to sustain its initial foray above 1.4150 but Euro crosses are looking more robust and locals suggest the 1.5230/50 resistance-zone is next up should the single currency continue to outpace the mountain unit.

Trading Update 8/17

Opened 1 long position at 1.5193.

Swiss retail sales results

Here is the news update about Swiss retail sales. Looks like they picked a similar area of resistance or the EUR/CHF and are bullish on both pairs mentioned above certain levels.

Swiss Retail Sales Recover Into Positive Territory London, August 17. Swiss Retail Sales data from June is currently being digested, with the latest numbers from the Federal Statistics Office showing a 0.9% rise on the year, coming against the previous decline of 1.4% in May. When adjusted for inflation and shopping days retail sales also read +0.9% Y/Y.
Macro players pressured the Franc into the release, with USD/CHF hitting a 1.0789 peak. This was aided by the EUR/CHF recovery to the 1.5240 highs, with locals once again jittery over official Swiss interests in the cross towards 1.5200. Offers into the 1.08-area will remain in focus following the release, as long as EUR/CHF continues to head higher. Look for a pop above the figure to generate fresh follow-through.

Next week's economic data releases

Monday 8/17 3:15AM EST Retail Sales CHF Previous: -1.4% Expected: +0.8%

Thursday 8/20 2:15AM EST Trade Balance CHF Previous: 1.57B Expected: 1.79B

Friday 8/21 10:00AM EST Fed Chairman Ben Bernanke Speaks

The actual economic data is not likely to have a significant impact on the currency markets, but we

need to be aware of what is going on in the countries we trade. I'm not sure where the Fed Chairman

is speaking but he can move markets so it might be wise to avoid certain trades around that time.

Account finally switched over

I haven't taken any trades for the past 2 weeks because I am switching my primary account from FXSolutions to DBFX. This process is now complete and I'll be up and running on Sunday. I'm really looking forward to getting back into the market, however the month of August can be lackluster when it comes to volume and volatility so we'll have to see what opportunities come up.

Article about how to gauge your success as a trader

The author has an agenda to pitch his own trading education program, but brings up some very valid points about tracking and analyzing performance beyond net profit.

http://www.moneyshow.com/trading/Tips_for_Traders.asp?aid=DAYTRADERS-17305

Euro-Swiss News Update

EURO-SWISS: BNP Paribas strategists note that channel support for
euro-Swiss (currently Chf1.5305) comes in at Chf1.5270. "A break of
Chf1.5270 opens downside potential downside potential to Chf1.5080"
they say. BNPP also notes scope for a new wave of risk aversion.
"Reports that NYSE volume remains at the lowest levels of the year have
raised fears that recent equity gains are vulnerable and were more
attributable to cutting of shorts than genuine demand" the strategists
say. Any larger stock sell-off would likely mean increased demand for
low yielding currencies (Swissy) they say. Volume on the Dow Jones
Industrial Average peaked at 9.098bn contracts on March 18 followed by
another peak of 9.12bn on May 7. Low volume was seen on Jan 2 (4.048bn)
and July 10 (3.912bn). In August volume has ranged from 5.4bn contracts
(Aug 10) to 6.8bn contracts (Aug 7)
8/13/2009 10:50:11 AM
EURO-SWISS
BNP Paribas strategists note that for....

Trading is like Chess

Great blog post that compares trading to playing chess, which is a very relevant analogy for me.

http://mu.stocktwits.com/annemarietrades/

Stockwtits TV

Stocktwits.tv Just found this site last week. While the name suggests a stock focus there is still a benefit to forex traders. MacroTwits with Gregor Macdonald is a very interesting weekly show about the overall macroeconomic situation for the U.S. During yesterday's show he mentioned that there is a possibility of the U.S. Dollar becoming a "funding currency" like the Yen has been for a while. I believe that he means the Greenback will have such a low interest rate for such a long time, like the Yen, that people will start doing a carry trade with it to fund other investments. Quite an interesting idea.

July month end wrap up

July was a much slower month for trading that June. This wasn't because there were fewer trading opportunities, instead two specific issues limited my trading. First, I started adding long positions after the strong move in late June. This left me unable to trade any shorts during the entire month due to the non-hedging rules that were put into place. Second, with vacation and moving to a new broker I did not want to have any more exposure in the account than necessary so did not add new long positions after mid-month. Ending up with a profit is still nice. August could also be a very slow month as I believe many traders around the world, especially in Europe take holiday around this time. I will still follow my trading plan but will wait until my funds are deposited at the new broker before opening any more trades.

Quick move down

The E/C just dropped 25 pips in 2 minutes. Looks like it was a pop in the EUR/USD that caused the rapid decline.

Trading Update 7/30

Closed the last half long position so I am now all cash. Would probably enter short here but am planning on withdrawing the bulk of my funds from the account and transferring them to my new broker.

News update on the Euro-Swiss

EURO-SWISS: Trading with a buoyant tone and tracking dollar-Swiss gains

the cross taking out the 76.4% retrace of the June-July sell-off at

Chf1.5316 and pushing on to Chf1.5335 at writing. Techs now highlight

trendline support from the March highs coming in at Chf1.5357 ahead of

the June peak at Chf1.5380.

Trading Update 7/30

I closed half of my last long position at 1.5311. This leaves me with only one half position left and my take profit point 30 pips away.

Another Euro Swiss news update

EURO-SWISS: Extending this week`s highs and moving towards offers in the

Chf1.5300 area as dollar-Swiss remains buoyed just off best levels. A

break above the figure to expose the 76.4% retracement of the June-July

sell-off at Chf1.5316 with traders then noting expiry interest for the

NY cut at Chf1.5350. June spike highs seen as the ultimate target at

Chf1.5380.

Interesting morning action

The EURCHF just gapped up 8 pips at the start of the London Session (3am EST/7am GMT). This is not a regular occurrence, actually it is fairly rare in my opinion. 8 pips isn't significant and it will probably close right away but still very interesting. Also, here is a list of today's expiring options on a few currencies. Please notice the Euro-dollar and Euro-Swiss, these could play a roll in today's price action depending on where the pairs are coming up to the cut. I'll discourse on options more later.

FX OPTIONS: Expiries of note for today`s 1400GMT/1000EDT cut

* Euro-dollar; $1.4085(lge) $1.4100 $1.4000 $1.4300

* Dollar-yen; Y95.35 Y94.70/80 Y94.00 Y96.00

* Euro-yen; Y134.00 Y135.00

* Cable; $1.6500

* Euro-Swiss; Chf1.5350

* Aussie; $0.8200 $0.8175

News update on the Euro-Swiss

This came across the wire at 10:24 am EST today. Nothing revolutionary but it is interesting to see how much the interventions have cost the SNB, and that there is another benefit to them owning Euros.

EURO-SWISS: Marc Chandler of Brown Brothers Harriman estimates that

the SNB has spent $32bn to keep the SFC from firming (vs the euro)

since March. He says Swissy has fallen about 4.3% vs the euro over this

period. Chandler stresses however that the increase in SNB euro holdings

may also have a "valuation component" to it as well. Intervention is one

of the SNB`s "unique" QE tools he reminds. "Whereas the US Japan and

the UK bought their own bonds the SNB says its bond market is too small

so it has to buy foreign bonds and to do so of course requires buying

foreign currencies" Chandler says. Euro-Swiss currently at Chf1.5240

saw a range of Chf1.4576 to Chf1.5447 in March remained in tight ranges

in April and May and saw a Chf1.5004/Chf1.5380 range in June. In July

so far the cross has Chf1.5106 to Chf1.5271 with today`s spike caused

by remarks by SNB`s Jordan stating the SNB would continue to intervene

if necessary.

Trading Update 7/29

Closed another half long position at my profit target. This leaves me with 1 full long position open. Spreadsheets and charts will be updated shortly.

Missed opportunity?

I had to leave today and set a limit on a half position I have open that was within 25 pips of my target. When I returned I found that my limit was 4 pips over the highest level reached today. Was my target too high? I don't believe so. This is a business and my plan is to make a certain amount of money on each trade, so if the market doesn't want to give that to me today then I'll wait a while longer.

Trading Update 7/27

I just closed half of my 2nd long position at 1.5244. I'm still sitting on 1.5 long positions.

Sunday opening action

The EURCHF opened with a 20 pip gap down yesterday afternoon. This presented a short-term trading opportunity to enter long and look to take profit as soon as the gap closed. I decided against entering this gap trade because neither the EURUSD or USDCHF appeared to have any gap at all, nor was there any recollection of the gap on the news wires.

As I write this the pair is sitting at 1.5247, right at resistance from the end of last week. If we can break the 1.5250 level convincingly then I should be able to ring the register on some nice pips from my 2nd long position.

Weekly wrap-up

I have just returned from a week long vacation in Puerto Vallarta, Mexico. It was a great time and I recommend it to anyone looking for a relaxing time by the ocean.

As I was on vacation this week I had set some take profit orders for my open positions, which were never quite hit. So the week passed without any trades opened or closed, and I am still holding 2 full long positions.

Charts and Trades

I just updated the total return chart and added the monthly return as well as the closed trade list. As you can see from the trade list I haven't had a losing trade yet. Then why is the account down .2% this month? Fees. Since I hold positions for days or even weeks, my broker charges the standard "roll rates" for holding the position overnight. These fees have not been offset by closed trades, which is usually the case. Also, this has the potential of being a losing month based on circumstance alone.

I am going on vacation to Mexico this Friday and am not counting on being able to access the trading platform while out of the country due to spotty internet access. Who wants to work on vacation anyway? This wouldn't normally be a problem except that the new NFA First-in First-out rules go into effect on August 1st. After that date I will no longer be able to close an individual position that is profitable, instead the oldest position will be closed first. My plan is to transfer the account to another broker to avoid these issues but I will either have to close out the positions where they are when the transfer is to take place, or leave some money in this account and transfer the balance. Neither option is ideal, but unless the price moves up from today's high that is the decision that I will have to make.

Trading update 7/14

Just closed a half position at 1.5189, which was a 30 pip gain from entry. This is a fairly strong move up considering the London session should be wrapping up if it already hasn't. I'm still long 2 full positions so this mini-trend can continue on all week in my book.

Interesting article on currency trading

This month's issue of Currency Trader Magazine has an excerpt from a new book by Marc Chandler, "Making Sense of the Dollar". The piece gives a good background of participants in the currency markets and what their motivation and advantage could be. Not every player is looking for speculative profits, even though their participation impacts ours.

Weekly wrap-up

I'm holding 2.5 long positions going into this week. Last week saw only 1/2 of a position closed for profit, which puts me down for the week when you count the roll paid to my broker for holding the positions open overnight for so long. The EURCHF has been on a steady move down since the intervention a couple weeks back. The plan hasn't changed, "Buy the dips and sell the rips."

There are a couple of macro items on the Swiss agenda for the week: ppi and retail sales. However, neither of these will have much of an immediate impact on the pair. It is a good idea to keep track of these because when the SNB sees that their export economy is starting to get back into form they could start to pull back on their goal of devaluing the Franc.

New middle eastern currency delayed

Snippet on Euromoney.com stating the the GCC have extended their deadline 3 years to have a group currency for that region, much like the Euro.

More info on reserve currency

Here is an interesting article published yesterday on Economist.com.

Trading update 7/9

Earlier I closed the position opened yesterday on the run up during the 8 AM EST hour.

Trading Update 7/8

Opened the 2nd half my 3rd long position at 1.5136. This was a fairly quick run down, and it could well have further to go, but I wanted the opportunity to capitalize on the move back up that should be coming very soon.

G8 meeting

Among the many topics to be discussed over the next three days are the recent calls for a move away from the U.S. Dollar as the world's reserve currency. It seems like every other week a headline says that China or someone else is wanting to establish a new reserve currency. Then, like clockwork, another article is ran stating that no such comments were made.

Here is a link to the official website of the G8 meeting in Italy. Some other topics on the agenda are the economic crisis, international trade, climate change, and many others.

No trades taken today. I have 2.5 open long positions so far. With the NFA rules eliminating hedging I can't open up short positions so I will continue to take long positions and look to close them on retracements.

Trading update 7/6

I opened half a long position at 1.5159. The take profit target is 1.5209. The price action was muted for the rest of the day so we'll have to wait until tomorrow for an opportunity to either take this more recent entry off the table or complete the position on further movement south.

Break to the downside

Not long after I posted the range of the past couple days the pair broke to the downside through the low and is sitting at 1.5167 right now. There was a strong movement to get to this point but the momentum, at least for the moment, has stalled. It appears that the sentiment is to the downside with traders possibly trying to force the SNB to act again and again to book quick profits. The stair-step down could result from no one really knowing when or where another intervention would happen and the shorts not wanting to get caught out with big positions.

Starting the week

News Events: Other than the Swiss Unemployment Rate being released on Wednesday morning this is a quiet week for data. The unemployment probably wont have much of an impact on the EURCHF but keeping track of upcoming news events is very important for any trader, especially a currency trader.

Technical View: The EURCHF seems to be in a short-term range of 1.5175 to 1.5250. The former is the low from 7/2, which is the lowest point achieved by the shorts since the big move up on 6/24. The longs haven't been able to push the pair past 1.5250 since late session on 7/1.

Open Positions: I have 2 positions open at 1.5261 and 1.5194 respectively. The target for the 2nd position is 1.5250 which was hit on Friday morning but I left it open to see just how far some buy side interest could push the pair considering the extremely low volume of a holiday weekend in the U.S.

Small spike this morning

At 5:45 a.m. this morning the EURCHF spiked up 40 pips or so. The question most likely on trader's minds, including mine, at the time was the likelihood of this being the result of some sort of intervention. As the pair just hit my take profit target for my 2nd long position and the motivation behind the move was still in question, I decided to keep the position open. The news wires finally reported that it was an U.S. investment house behind the move. As such if the pair moves up to the 1.5250 level again today I will probably take the 2nd position off the table.

Trading update 7/2

Opened the 2nd half of my long position at 1.5194. The overall trend looks to be down since the last spike up on June 25th. However, my strategy is not to ride a trend. With the new NFA rules about being long and short the same instrument I'm looking for a retracement to the 1.5240 area to close this 2nd position.

More from the SNB quarterly report

There is a statement on page 29 about how the depreciation of the franc against the euro has been partially offset by the appreciation of the franc against the dollar. This statement could lend some credibility to the claims that the 2nd big move last Thursday that started with the USD/CHF was some sort of intervention.
There isn't much more about their past or future interventions but there is some interesting economic data and viewpoints. Basically, they think that the economies of most industrialized nations will begin to grow modestly late this year, mostly as a result of government stimulus. China has already hit the bottom and should rebound quicker than the rest of us, and it will take a number of years for the various governments to recover from this massive stimulus/debt binge. Chart 2.4 on Page 17 gives a pretty good graphical representation of why the Swiss economy is so closely tied, and their currency so correlated, with the European Union, and its all about exports.

Today's news events

The U.S. Unemployment numbers came in at a loss of 467,000 jobs, quite a bit more than the 350,000 loss that was expected. The unemployment rate ticked up to 9.5% with a total of 6.5 million jobs lost since the start of the recession, according to the Wall Street Journal. The ECB, as expected, left its key interest rate alone at 1%.
The only noticeable impact of either event is the EURCHF retracing half of the move upward that came on the heels of the quote I shared in an earlier post from the SNB. This retracement could also just be the natural order of things and have nothing to do with either news event today.

SNB comments this morning

The Swiss National Bank released their quarterly report this morning. I haven't made it through the entire document yet but here is one key statement, "It will take firm action to prevent an appreciation of the Swiss franc against the euro." This report is as of mid-June when the EURCHF was somewhere between 1.5200 and 1.5050, so that doesn't necessarily mean that they will take action at this level. I will continue to review the document and post about what I find relevant or interesting.

Trading update 7/1

There was a fairly quick run down in the EURCHF from 1.5240 to 1.5213 which prompted me to open half a long position at 1.5220. Price continued to dip to a low of 1.5199 but has recovered almost to my entry point as of now. I had posted a couple days back that a break of the 1.5200 barrier could lead to another quick 50 pips on the downside. That could still be the case, however, there seems to be support at that level right now so it remains to be seen if we'll see a solid break to the downside from here.
There is still, in my opinion, a sense of uncertainty about when or if another intervention could happen. There's the U.S. Unemployment numbers tomorrow and then the long holiday weekend here in the U.S. which does make me question whether or not the SNB could take advantage of the expected light volume on Friday to run the pair up going into the weekend.

Tight range this week

The EURCHF is trading in a very tight range after the large moves seen over the past 2 weeks. 73 pips from top to bottom so far with my position open just over half-way up that range at 1.5260. The tight range and location of my position equals no trades so far this week. There is an ECB press conference tomorrow at the same time as the release of the U.S. Bureau of Labor Statistics monthly unemployment rate, which could explain the range seen so far this week.

June wrap up

June is now history and it was a pretty decent month. The portfolio was up 4.21% for the month which is respectable. The goal isn't to double the account each month, instead I am focusing on consistent profits month in month out.
I opened and closed a total of 16 trades in the month of June. Since I leg into positions this isn't an accurate representation of total positions traded, that number is closer to 10. This trading strategy does not require extremely active trading, which is one of its strengths. Going into July I am still holding 1 long position.

Trading update 6/26

Opened a long position a little while ago. Legged in putting just under half the position on at -20% divergence then completed the position at -.32%, or 1.5261. The pair just broke down past yesterday's low of 1.5257 which could open up a move all the way down to the 1.5200 level. That was an area of consolidation on Wednesday between the big morning and afternoon moves. A solid break of 1.5200 could push the pair back down to the 200 day moving average at roughly 1.5150, which could be a very important area of resistance because both the 200 day and 200 hour moving averages converge there.
All of that is nice to know but it doesn't affect the way I trade on a daily basis. The next long entry for me would be under 1.5210 which could be a stretch for today. This current downward move could be more correlated to the USDCHF being close to session lows, after all the EURCHF necessarily has to be close to if not exactly the result of the EURUSD multiplied by the USDCHF.

Zero Sum Game

I was having a conversation with a friend last night who was very curious why I get up around 3am on weekdays. I explained that I trade the forex market and he said quite succinctly that I am a professional gambler. That comment made me chuckle and he went on to ask what the difference was between me sitting at a computer looking at charts trying to pick when to trade and playing online poker. This got me thinking and we went on to discuss how this is a zero sum game just like poker. The money I made yesterday trading came from someone, at my level it came from my broker. They take the opposite side of every trade I enter so if I win they lose and so on. When the dollar amounts get bigger the only thing that changes is who takes the other side of the trade. As a capitalist this idea that in order for me to win someone somewhere has to lose doesn't bother me a bit. We each put our best foot forward and today I came out on top.

Slow morning

The pair is trading in a tight range this morning of around 30 pips top to bottom. I am all cash right now, waiting for a solid entry opportunity. There is nothing wrong with going into the weekend without any trades on as some crazy things can happen in just a couple days, like Lehman Brothers going belly-up and the government telling us we were on the brink of disaster.

Trading update

Closed my short position at 1.5260 which happened to be pretty much the low for the day so far. Looks like the USDCHF action has slowed as its down qutie a bit from the days high. I'm not trading the spread right now, but I feel it is important to keep track of the EURUSD and USDCHF because a significant move in either can drag or push the EURCHF along.

More madness

EURCHF went up 100+ pips in three minutes, again. Rumors about "official" or "semi-official" buying were flying around, but I don't think they hold any water. An intervention at this rate would have to be pretty big and get much better results to be worth the effort since we're only 30 pips above the start of the move now. Unfortunately I don't have an alternate hypothesis for the big move, at least not a good one. My best guess is that a big player took on a position and it took the pair right through a bunch of stops people had right above 1.5320. I was looking for a buy just before the big move but my trading platform mysteriously closed so I didn't get in. However, picked up a partial short position about half-way up the move that as of this writing is in the green.

Good call yesterday

Deciding to sit the rest of the day out was a good call. The first thought after a significant move, at least for many traders, is to catch the "inevitable" retracement which would have meant going short. However, I bet very few people expected the SNB or someone else to start purchasing the USDCHF in large quantities which drove up the EURCHF in kind. This was especially surprising because of the time, very late in the European session. All of the previous large moves have taken place much earlier in the day.

Good morning SNB

Today I closed all of my long trades during the large run up starting at 6:44am EST. The intervention by the SNB or one of their proxies took the EURCHF 100 pips past my target so I was able to book some solid profits today. As of now I am all cash waiting, most likely, until tomorrow morning to initiate any trades. With the Fed statement still looming this afternoon and such a strong move this morning it is prudent to wait for some stabilization before reentering the market.

Slow start to the week

I opened another long position last night shortly after trading opened, primarily because of the gap down from the Friday close. Assuming that the gap would close overnight was correct as it only took 10 hours for it to retrace the full amount. However, I kept the position open because I still hold a strong bias on the long side at these levels. Also, my entry is almost -.25% from my nearest position so it fits within my trading plan.
The beginning of this week could be quite slow with traders waiting for the Federal Reserve to finish their meeting and release their statement and the Fed Funds rate at 2:15pm EST on Wednesday.

Still Trading

No posts but quite a few trades recently. Moved to trading full time and really enjoy it. The SNB came out yesterday and reiterated their concern for an appreciating currency against the Euro, which was expected but still good to hear since I was holding 3 long positions. After 8am EST the big move up finally came and I closed the 3rd position for profit. I have been trading full term for the past 3 weeks, all of which have been profitable and I'm holding 2 positions going into the weekend.

Mid-day update

Closed the losing side of my short position once the overall profit of the position was above my threshold. Still holding 1 short USD/CHF with a stop placed at my minimum profit target of 1.1387. The price could move right back to that stop and that will be it, or it could keep moving south and make this trade quite profitable.

Trading results 4/13

Opened 1 long position yesterday at a daily divergence of -.25%. Price moved down past that level and all 3 positions were held overnight. The E/C is hovering around 1.5130 at this writing which puts my short quite close to being profitable, it was opened at 1.5141.

Reserve Currency Madness

China, for at least the 2nd time this month, has made it known they think that the U.S. Dollar should be replaced as the world's reserve currency. Why is this madness? Well for one thing they are holding a lot of both U.S. Dollars and U.S. government debt, both of which would plummet in value if the reserve currency status ended. Much more research on my part needs to be completed to get an accurate view on this whole issue but suffice it to say that I don't think anything will come of it, but if it does watch out.

Trading results 4/10

Only took 3 trades this past week which is lower than usual. However, it was a profitable week which is all I can ask for. After 12pm on Thursday there wasn't much trading going on as Europe and the U.S. were closed for Good Friday. I'm still holding the 1 long and 1 short position that have been open for a while. This does limit my ability to enter new positions but its better than taking the large loss that would come with closing either or both of those at this point. This week should be business as usual looking for both long and short entries and booking profits when possible. I still think the the SNB, Swiss National Bank, will step in as a buyer if the E/C goes to far down. 2 weeks ago it pushed all the way down under 1.5100 which put it as close as 2.5% to the point where they intervened the last time. The question is how many traders want to take the risk and sell as it drifts down because if they guess wrong it would be costly.

Today's tight range = US Employment numbers

The BLS (Bureau of Labor Statistics) is releasing the non-farm payroll report this morning. This is the initial read on March unemployment in the U.S. along with probable revisions to the last 2 month's reports. This news event is specifically why the market is in a tight range throughout the European session. Traders don't want to be on the wrong side of this report when is released at 8:30AM EST.
Last month it came in at -651k. The consensus, or expectation, for this month is -659k. If the report is close to that number on either side the response will be fairly muted. However, if it is very weak the dollar with get hammered. If it is a lot better than expected the dollar will probably rally. The way I setup positions to be relatively dollar neutral this could be a non-event either way for the portfolio. It still has to be watched because if one side or the other moves at a greater velocity it might create opportunities to close positions at higher then normal profit.

Trading results 4/2

I've been trading but since each position is a larger percentage of the balance I have to be more conservative with my entries. Still holding a long at E/C 1.5350 and a short at 1.5140. These positions might be held a while but I can still take positions as opportunities arise. Opened another short yesterday after the strong run from 1.5174 all the way up to 1.5283. My entry was at 1.5274. The E/C seems to be hanging around this area with typically weak volume this morning so the position is still open. Right now its a profitable position so I'll decide later in the day whether or not to close before the weekend. The rationale for this is that Sunday opens often bring gaps and the risk is that the price could gap up on some action by the SNB, EU, or US Fed and not come back to these levels for a while.

Trading results 3/26

Opened a short position at +.25% divergence and patiently waited for it to come back down to the starting price where I closed for a nice profit. Still holding the long position from the 19th but I'm not worried at all.

Trading results 3/25

Over the past 4 days I've opened and closed a couple trades successfully. I closed a long well below my target because the correlation of the E/U and U/C netted me a nice profit without the movement of the E/C. I'm still holding a long at 1.5347 but that position has been open since the 19th.

Trading results 3/19

Opened 2 long positions that were both closed for a profit. Opened a third long at 1.5352 that is still open. The SNB announced today that there could or will be future foreign exchange interventions on their part to make sure that the Franc doesn't appreciate against the Euro. My reading is that this puts a floor under the EUR/CHF pair but at what point no one knows. I'm not sure if that will lead traders to push downward to find that level or if greed will take over and everyone will buy the dips and sell the rips regardless of what the SNB does. Either way there should be plenty of opportunities to open based on the daily divergence.

Trading results 3/18

Another crazy day in the currency markets. The Federal Reserve crushed the dollar by announcing that they will buy $300 Billion in U.S. Treasury notes as part of a quantitative easing. This event would've been a non-starter for the account but for some reason I decided to take winning sides of positions off the table. This was categorically the worst strategic decision I could have made, unfortunately I didn't realize this until a couple of minutes later. Once I started to comprehend that I was now in possession of large, losing trades without anything to offset them it came down to watching my account drift its way into a margin call with nothing I could do to stop it but hope. Net result, loss of most of my capital. Bright side, no more losing positions to try and trade around. Luckily tomorrow is another day.

Trading results 3/17

Closed the 2nd long position for a profit. Still sitting on the 1st long opened but not worried at all since the closing price of the day is only a few pips away. Total portfolio return to date is 11.36% in 7 trading days. However, I'm still holding 4 losing positions that will have to be reconciled at some point.

Mid-day update 3/17

Closed the other short position this morning. Opened 1 long position yesterday 1.5390, and another this morning 1.5342. The first one I opened to have some long exposure, that's why it doesn't fit in with the schedule posted earlier. The second long position is right at -.25% divergence from last night's close.

Mid-day update 3/16

Opened 2 more short positions early this morning. One at EUR/CHF 1.5365 and 1.5402. It ran up to 1.5450 before coming back down. Closed the 2nd position for a profit and let the EUR/USD side run for a little extra. I have taken 2 positions outside of the strategy to provide some upside protection, essentially one leg in the EUR/USD and USD/CHF long, since my portfolio is so far "out of the money" if you will in the short side because I fear running into a margin call. Going forward I'm going to be a little more aggressive on opening long side positions, and more conservative on opening on the short side.

Mid-day update 3/13

I opened a short position this morning at 1.5380. I know, another short? I would've opened closer to 1.5400 but this entry was good enough. The pair reacted as expected and crept down until I closed for a profit around 1.5340.
Actually this is a good time to mention my exit strategy. When the pair reaches my targeted exit I close the side of the trade that is at a loss and put a trailing stop on the side in profit to see if I can catch a move on that one pair. It doesn't run every time, or even most of the time, but when it does it can multiply what would've been a nice gain by 2 or 3 times.
Its reassuring to see that absent the craziness from yesterday the premise is sound. Not expecting much for the rest of the day, Friday afternoons tend to be very quiet since the rest of the work is already enjoying their weekend.

Trading Results 3/12

Added 3 more short positions that are going to be quite problematic. Again carried positions past 5pm so took another negative roll hit to the balance, this is probably going to be the trend for a while. The plan is to leave the open positions aside to be closed later and start from scratch. 1.5312 looks to be the starting point for tomorrow's trades.

Wow! Bad Day.

Today, suffice it to say, was not a good day for me in the market. I started the day still holding my short position from yesterday and missed an exit due to sleep. The position could have still been closed for a profit but I didn't see a reason to leave money on the table so I waited for it to creep back down again. Unfortunately I didn't foresee the Swiss National Bank making the decision to forcibly depreciate their currency so as the EUR/CHF started to rise I opened 2 more short positions at 1.4837 and 1.4877 expecting to catch a strong retracement back down. Then it happened. The price went to 1.5157 with a quickness where I decided to put on yet another short because, seriously, how high could it go in 1 day? Anyone who paid attention to the currency market today will know that it peaked above 1.5300! So the 3% of the time that the EUR/USD and USD/CHF are not inversely correlated happened in a big way today because of the actions of the Swiss.

Trading Results 3/11

Still holding the short position opened this morning. Since it was open past 5pm my account was charged the roll over amount which for this trade was .28% of the portfolio. I'll describe what roll is and why its important at a later date. Looks like the start point for any upcoming trades will be EUR/CHF 1.4801. This works because its higher than the entry of my current position, if the close had been lower than my entry I would then use my entry point as the start for the next days trades. Basically this is to make sure I'm letting the pair move enough between positions to create the opportunity for profit and to limit risk. If the EUR/CHF moves higher I will look to enter a second short position at 1.4838, if it goes lower I'll close the current short position out at 1.4760 (entry -.25% or 37 pips).

Mid-day update 3/11

Opened a short position this morning. Entered at +44% from the 7pm EST open because I missed it at the target entry. The price has been hovering around the entry point most of the day, but did get within 5 pips of my planned exit. The position is still open.

The trading plan

Simultaneously, or as close to as humanly possible, either buy or sell 2 separate currency pairs. A successful entry should result in being either long both pairs or short both pairs. Why? The 2 pairs I am trading are among the most negatively correlated pairs meaning they tend to move in opposite directions more often than most other pairs. The level of correlation between any 2 pairs can be seen in these tables at forexhit.com. If I am long or short both pairs then one will be positive and one will be negative most of the time. The benefit is that my downside risk is limited by the fact that if one moves strongly against me there is a high probability that the other is moving similarly in my favor. While this is by no means a guarantee to not lose money on a trade it is quite comforting. The challenges are two fold. First, the size of the trade that is profitable is lower than if I was only taking a position in 1 pair at a time so there are potentially lower profits per trade. Second, since they are not 100% negatively correlated (only 97%) there is a small possibility that they could move in the same direction the wrong way and make the position very unprofitable. The 2 traded pairs are chosen specifically because of the negative correlation, but also because they provide a few other very important benefits. They are both "majors" which means they are very heavily traded so the liquidity is better than most, we can "hedge" out most of the U.S. Dollar risk by the size of positions taken, and there is a pair that combines the non-Dollar portions of both pairs to use as a trigger.
A third pair is chosen as the trigger for entries and exits because it is a combination of the two traded pairs. I watch this pair for movements of a minimum size to enter a position. If the trigger moves up the required amount I will enter a short position in both traded pairs, if it moves down instead I will enter a long position. When/if after my entry the trigger pair moves back towards the starting price I will close the position. That is the main theory of the strategy, the price will revert to the mean over time.

What is being traded?
EUR/USD and USD/CHF pairs.
Trigger for entries/exits?
EUR/CHF.

Schedule for entries/exits?

1lot -0.25( or +0.25 of course)

lot 2 -0.25

lot 3 -0.25

lot 4 -0.50 exit 0.25 pull back (pb)

lot 5 -0.50 exit 0.25pb

lot 6 -1 exit 0.50 pb

lot 7 -1 exit 0.50 pb

lot 8 -2 exit 1 pb

lot 9 -2 exit 1 pb

lot10 -3% double lots exit 2pb.
A lot is also referred to as a position and consists of the combination of both traded pairs entered at a specific time. The -.25 is referring to a percentage move so I'm looking for the EUR/CHF to move +/- .25% from the closing price before entering the first position and so on. Unless otherwise specified above I close a position when it retraces .25% in the direction of the trade.

Ratio of EUR/USD to USD/CHF?

The goal is to be as close to U.S. Dollar neutral as possible because that helps to eliminate one more risk to the portfolio. When entering a trade I check to see what the EUR/USD is trading at because this is used as a quick reference on the ratio I want to maintain. As an example if the EUR/USD is trading at 1.50 then every position is long/short 100,000 Euros and short/long 150,000 Dollars. I want to cover these 150,000 Dollars so I will buy 1.5 units of USD/CHF for every 1 unit of EUR/USD. This means my effective trade could be long 100,000 Euros, short 150,000 Dollars and long 150,000 Dollars, short 116,000 Swiss Francs (assuming the USD/CHF is trading at 1.16). It isn't important how many more or less Euros or Francs are in each position, just that as much of the Dollar risk is hedged out as possible.

Size of each position?

I stay between 3 and 3.5% of the total portfolio value for each position. So for each $100.00 in the account I only want to start with $3.00 to $3.50 total between both pairs. The reason for this is that the price doesn't always revert back to the mean immediately, sometimes it can move against me for quite a while so I need to have the capacity to open more positions and not get a margin call. The second important fact that impacts the size is the ratio mentioned above.

Time frame and what to use as a starting point?
I only use a 1 hour chart of the EUR/CHF but it doesn't really matter much. As far as a starting point to determine how far away from the mean the price moves I use the GMT 0:00 opening price as my starting point (this is the open of the bar at 7pm EST).

When I trade?
I try and watch the market as much as possible but the best times seem to be from the opening of the London session to mid-afternoon in the U.S.

Trading Results 3/10

Even though I woke up at 1:30 am I missed 2 trades this morning. The first was missed because the price of the EUR/CHF stopped 2 pips short of my entry target. The second because I went back to sleep. The day, and the entire adventure for that matter, finally got started later this morning with the first of 2 short positions opened. #1 closed for a small profit. #2 for quite a bit more. Total return for the day was 4.6% of the portfolio value.

What is currency trading?

Is it a bunch of crazy people standing in a small circular area yelling out seemingly random phrases and tossing papers as seen in the movies? Not so much. A more accurate picture would be a bunch of people in a room, each sitting in front of 3 to 6 computer monitors filled with charts. Someone is trading that desk almost all the time from 5pm on Sunday to 4pm Friday.
Here are some FAQs from Investopedia but the nuts and bolts are that the currency market is a worldwide, completely electronic market for the buying and selling of foreign currencies.
What makes it different from trading stocks, commodities, or options?
First, the hours. Depending on which broker you choose you can take trades 24 hours a day from 5pm Sunday to 4pm Friday. How is this? The market services the entire globe so when the east coast of the U.S. is finishing dinner the Asian markets are just getting warmed up. An hour or so before they call it a day the London session kicks into gear and takes us well past the traditional start of the trading day in America.
Second, the volume. Depending on who you talk to the average daily dollar amount of trades is anywhere from US$2 trillion to US$3.5 trillion. Compare that to the highest monthly dollar volume the NYSE Group has had in the past 5 years of US $3.6 trillion. When you take this extremely high volume and divide it across the 20 to 30 pairs able to be traded at most currency brokers, instead of the thousands of stocks listed on any given exchange you get one beautiful thing....liquidity.
Third, the leverage. If you want to lever up (trade more shares of a stock than you can afford) in the stock market you have to have a fairly large account and have to borrow the shares on margin from someone, most likely your broker. Currency brokers provide automatic leverage from 50:1 to 400:1 or even higher. This is actually necessary in most instances anyway since the standard currency contract size is 100k. This makes the barriers to entry very small.

It begins

The purpose of this blog is to track my currency trading results. I will endeavor to keep this updated with results of trades, reasoning behind the trades, and other useful information about the topic. I opened a live account with FXSolutions and will track the progress on this blog.
This is best described as a mean reversion dollar neutral hedge strategy, which I'll get into more as I go along. I did not come up with this system. Rather it was posted on ForexFactory, a currency trading forum. I will attempt a brief description of the strategy but anyone interested in trading should read all of the posts for Spieler’s strategy here.