Monday, June 30, 2008

Ahead One step, then back Two! --IFCN Wk 30 -Mon- Equity: $752.13

We got some profits this morning, then promptly had some losses.

Trading as usual.

You might want to scroll down and check out some of the comments on previous posts.

Here was one from June 28th--

Hi Joel. Thanks for posting this blog, very informative.

I was wondering, if you were to get stopped out of all your First Strike and ONS trades (assuming you had all five currencies in trade on the same day) what would your approximate drawdown be?

From reading your blog I believe you a using about 1% risk per trade, so is it around 10% loss in a week if you had all trades open and hit the stop loss?

Thanks, keep up the great work.


Thanks for the good question.  The scenario you ask about is possible, but extremely unlikely, due to the market dynamics which cause the two systems to be triggered.

The total drawdown for the week could very likely exceed 10% (possibly even 12 - 13%) if we got 5 failed FirstStrike trades and 5 failed OneNightStand trades.  

That eventuality would be very rare, as the likelihood of getting 5 OneNightStand trades in any one week would be amazing in itself.  And if they got executed, it would be extremely unlikely that all of the FirstStrike trades would have been losers too.

The important thing for you as a trader is--- be aware of the possibility of such an event, and if that possibility would represent an unbearable risk, it is a strong indication that you are trading too much size for your situation.

This morning after midnight CST, I exited Friday's three OneNightStand trades.
OneNightStand 06/27/08 entries---
  • Eur/Usd: Long @ 1.5769, exited this morning at 1.5787 for a 21 pip gain.
  • Gbp/Usd: Long @ 1.9896, exited this morning at 1.9934 for a 38 pip gain.
  • Usd/Chf: Short @ 1.0222, exited this morning at 1.0171 for a 51 pip gain.
Total profits- 110 pips ($8.25)

It was nice that the trades resulted in profits, even though they were not substantial.

Shortly after exiting the above ONS trades, we got entered two short FirstStrike entries, the Gbp/Jpy and Usd/Jpy. Both trades moved into profit quickly, but as the early morning wore on, the profits evaporated and then the trades got stopped out.

The rest of the day wore on, finally resulting in the last three pairs getting executed. With the news releases scheduled this week and the coming holiday (July 4th), it will be interesting to see the potential developments. The rest of the world doesn't have a holiday on the 4th as the US does, but money doesn't sleep.

If we still have trades in progress late in the week, we will exit on Friday, July 4th as usual.

The following are this week's FirstStrike entries:
  • Eur/Usd: short @ 1.5737, stop 1.5797. Trade in progress.
  • Gbp/Jpy: short @ 210.59, stopped out at 211.49 for a 90 pip loss.
  • Gbp/Usd: short @ 1.9884, stop 1.9944. Trade in progress.
  • Usd/Chf: long @ 1.0223, stop 1.0163. Trade in progress.
  • Usd/Jpy: short @ 105.53, stopped out at 106.13 for a 60 pip loss.
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $752.13.

Joel Rensink

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