Thursday, July 31, 2008

Nothing is quite as perfect as Great Plans that fail! --IFCN Wk 34 -Thu- Equity: $679.77.

"The marvel of all history is the patience with which men and
women submit to burdens unnecessarily laid upon them by their governments."--
William Edgar Borah

The report this morning caused tons of buying of the Eur/Usd
and Gbp/Usd, lots of selling in the Usd/Chf and Usd/Jpy---
followed by complete reversals in all of them except the Usd/Jpy which only had an anemic rebound.

The dollar truly won this round. Those who chose to sell the
dollar, regardless of how long they held the position must have had a chill when the market did a complete reversal after all the follow-through.

What we saw today was true professionals realizing this might be the last time for a long while that they could sell the Eur/Usd at such good prices. 130 pip reversals after Eur/Usd-friendly news is a serious wake-up call to Euro bulls.

This action tends to indicate a wild time tomorrow when the
actual Non-Farm Payroll numbers are released.

Oil came down another $2.69 today. As I write this, it has
fallen even further overnight. If the correlations hold fast
between oil and the Euro, the Euro may have a lot more sliding to do.

As others are finally now realizing, the US economy is
much closer to bottoming than the European community.

The first period of denial turns into acceptance, which is where many financial heads are heading right now. It will be interesting to see how the reality of trading reactions will meet the theories of news punditry at the NFP news in the
morning.

---------

I'm still long the Usd/Chf, and profitable. The report reaction
this morning took the price of the Usd/Chf right down to the
entry, then rebounded quickly back to the highs of the day.

The following is this week's remaining FirstStrike position:
  • Usd/Chf: Long @ 1.0407, stop 1.0347. Trade in progress.
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $679.77.

Have a good morning.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to: newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!


Wednesday, July 30, 2008

No One Worries About Your Fire, When They Have One Themselves! --IFCN Wk 34 -Wed- Equity: $671.33.

After dropping more than 200 points in trade the other day, the
Eur/Usd has basically spent the last 30 hours sitting and
waiting for..., something.

The focus in the currency markets has obviously moved from fears
about the US economy to concerns about the rapidly deteriorating
economic conditions in the European Community.

If another European financial “shoe falls” there will be
little to hold the Eur/Usd from pirouting lower.

The conditions in the functional European world indicate
immediate and dramatic declines in demand.

The same problem exists with the Switzerland. This country
which manages huge amounts of currency still is a slave to the
money and doesn't produce much extra value in these oscillating
financial times. High taxes and low productivity make it tough
for their demand to increase. And the current pattern in the
Usd/Chf is showing it.
____________________

The Turtle Method as it applies to Forex. Why the
Technical
funds are long the Dollar

The Turtle trading method has been talked about for decades,
with equal amounts of awe and derision. I will not go into the
story of the system-- so many words have been written about it
already any interested person can do a simple search and then
read for days, different ideas pro and con.

Nevertheless, it is still traded by those who appreciate and
understand its power and have learned to withstand the flipside
of large profits-- large drawdowns. Other negatives of the
method are the large stops and large capital requirements to
trade a reasonable portfolio.

The Turtle method is a long term, viable method for trading
Forex. It is also well known for the success it bestows users
when a trend it identifies continues for a long time; such as
the very long, very profitable trade in the Eur/Usd for the last
2 years.

I won't go into the systems rules, except to mention that the
majority of the trades taken are due to breakouts of the last 20
day's highs or lows. You can find the complete rules of this
historic, original system in seconds from an internet search of:
"Original Turtle Trading Rules".

Most people, after a thorough investigation of the ruleset,
decide not to trade it. Not because it won't work, but usually
because of the substantial capital commitment.

As you probably can figure out for yourself, you can trade the
Turtle system yourself at firms like Oanda with just $500, not
the $500,000 that you would need for a proper futures trading
account. This also means that you won't make very much either
on an annual basis unless you use above average (dangerous)
position size, and you will not get the balancing effects of a
well-rounded portfolio either.

The reason I mention this system is because many hundred of
millions of dollars still follow this or very similar systems in
the exact markets we are trading. We are currently trading at
the Turtle trading "action points" of a number of currencies right now.
  • Long Usd/Chf @ 1.0401 July 24
  • Long Usd/Jpy @ 1.800 July 29
  • Short Eur/Usd @ 1.5610 July 29
  • There is a pending short order for Gbp/Usd @1.9647
Most of the breakouts are still profitable. Time will tell if
these will be great trades or not. They should be, but markets
can move a lot in the short term, as you have seen in the Forex
Challenge.

----------

I am still currently long the Usd/Chf, and reasonably
profitable.

The following is this week's remaining FirstStrike entry:
  • Usd/Chf: Long @ 1.0407, stop 1.0347. Trade in progress.
Note: Any FirstStrike trade not stopped out before Friday gets
exited on Friday just before 15:00 CST.

Current equity is $671.33.

Have a good evening.

Joel Rensink
www.infiniteyield.com


PS: To receive the FREE! trading rules for the Infiniteyield
Forex Challenge ($499 value) and the semi-monthly
newsletter about this challenge, send an email to:
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you would like it sent. Please do not use AOL, Yahoo or
Hotmail addresses. Nothing personal, but they've been known
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Tuesday, July 29, 2008

Dollar Recovery Obvious, but Obvious to Whom? --IFCN Wk 34 -Tue- Equity: $666.73.

In trading, perception tends to become reality only after a period of
time where there are no major conflicts to the new perception.

Any basic commodity group that is priced in dollars and is showing a
decline in prices, is giving the perception that the dollar is getting
stronger, at least in that sector. If it were just one sector, the old
perception of permanent dollar weakness might remain.

But, it isn't just one sector losing value to the dollar. Many sectors
are now paling in strength to the dollar.

Gold is providing an unflinching indication of the market’s perception
of risk and dollar sentiment. Gold prices have been consistently
falling on the back of troubling news in the Arab states and financial
blowups which would normally (in a “weak-dollar” perceptive world) cause
the metal to surge $25 per news shock. This suggests that the dollar
is likely to continue gaining in strength.

People understand that the US economy is not setting records, but it
isn't falling apart any more either. It was holding its own with
$147/barrel oil prices. It is inevitable that it should get better when
oil drops below $100/barrel..., just down the road.

Year ago, (when oil was $50/barrel) a veteran trader stated:
“$100/barrel oil is not the problem, it is the solution to high energy
prices”. That solution is working its magic, but not in a way that most
consumers appreciate.

The building of strength in the US economy will continue if oil prices
continue backing off. Crude oil is proving itself plentiful, and if the
world doesn't look out--- who's financial institutions and investors
have finally all gotten into energy based funds--- they will experience
a shocking drop in position prices as disinvestment pressures force them
to liquidate at serious losses.

Yin and Yang continue forever. Just when you thought it was safe to
expect permanent high energy prices....

As I've mentioned for many months, the weakness of the US economy has
already been priced into the market, but the deterioration in places
like the Eurozone and the UK is catching many financial units by
surprise. That too means the dollar will be the new strongarm on the
block for awhile.

The Challenge account finally got long the Usd/Chf. To bad the
Challenge account didn't have reverse trades entered in the Eur/Usd this
week. For those of you who did, good show. My personal accounts got
short the Eur/Usd and Gbp/Usd because of daily breakouts, so I'm very
glad the dollar is showing some strength now.

The following are this week's FirstStrike entries:
  • Eur/Usd: Long @ 1.5767, stopped out at .5707 for a 60 pip loss.
  • Gbp/Jpy: Short @ 213.75, stopped out at 214.65 for a 90 pip loss.
  • Gbp/Usd: Long @ 1.9946, stopped out at 1.9886 for a 60 pip loss.
  • Usd/Chf: Long @ 1.0407, stop 1.0347. Trade in progress.
  • Usd/Jpy: Short @ 107.31, stopped out at 107.91 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 $666.73.

Have a good morning.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex
Challenge ($499 value) and the semi-monthly newsletter about this
challenge, send an email to: newsletter@infiniteyield.com
and tell me to
which address you would like it sent. Please do not
use AOL, Yahoo or
Hotmail addresses. Nothing personal, but
they've been known to filter
out more good mail than actual spam.
Try a Gmail address. It's free,
simple and perfect for traders!



Monday, July 28, 2008

Mirror week? Dog days of Summer? --IFCN Wk 34 -Mon- Equity: $668.51.

Sorry about the delay in getting the Infiniteyieldforex Challenge update for last week. My weekend was in many ways a reflection of the previous week, volatile and surprising at the same time. I had great moments and frustrating moments, the most frustrating moments involving a very unexpected hard drive failure on an important trading computer. Back to 95% restored but tired of Microsoft anything at this point.

Dog Day reference:

The "dog days of summer" comprise the 40 days beginning July 3 and ending August 11, coinciding with the ancient rising of the Dog Star, Sirius.

This time period has been attributed to be an evil time "when the seas boiled, wine turned sour, dogs grew mad, and all creatures became languid, causing to man burning fevers, hysterics, and phrensies" - Brady’s Clavis Calendarium- (circa 1813)

And now, when forex trades and computer hard drives turn on their owners.... I have absolutely no belief in such things but the reference is interesting. A few ships sink at this time of year a thousand years ago and everyone blames the stars. And probably a few new traders after the last few weeks.
____________________

We're experiencing a very similar week to last back to back.

We are in four FirstStrike trades that aren't doing handflips. But as I know all too well, we have a long week ahead of us. The news this week will also likely be conflicting too.

The following are this week's FirstStrike entries:

Eur/Usd: Long @ 1.5767, stop 1.5707. Trade in progress.
Gbp/Jpy: Short @ 213.75, stop 214.65. Trade in progress.
Gbp/Usd: Long @ 1.9946, stop 1.9886. Trade in progress.
Usd/Jpy: Short @ 107.31, stop 107.91. Trade in progress.

Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $668.51

Have a good morning.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Holding the Course Not for Wimps! --IFCN Wk 33 -Fri- Equity: $675.94.

It takes a great deal of character to take trades over and over again which end up losing.

A perfect example was this last week. After a series of 4 weeks with marginal profits or actual losses, we came into last week and immediately were slammed with 5 losses.  

I got a small net profit from a pair of uncancelled reverse trades that did little to stem the onslaught.

Remembering that this is a numbers game gets difficult if all you've been experiencing recently is losses.  

Colonel Sanders as an old man spent two years driving across the United States looking for restaurants to buy his chicken recipe. He was turned down 1,009 times before someone finally accepted his deal and history began to be written....

That doesn't mean that we want to or have to wait till we are old to "finally" succeed, but strings of losses aren't very encouraging either.

Persistence ultimately rules, but does it have to take so long? We'll see!
___________________

Here's last week's recap:

The data below is as of Friday's close, July 25, 2008:

Start of week equity: $709.06.

OneNightStand Exit(s) on 06/21/08 : 
Gbp/Jpy: long Friday @ 213.64, exited Monday morning @ 213.03 for 61 pip loss (-$ 4.56).

Completed FirstStrike trades this week:
Eur/Usd: Long @ 1.5923, stopped out at 1.5863 for a 60 pip loss.
Gbp/Jpy: Short @ 212.28, stopped out at 213.18 for a 90 pip loss.
Gbp/Usd: Long @ 1.9996, stopped out at 1.9936 for a 60 pip loss.
Usd/Chf: Short @ 1.0160, stopped out at 1.0220 for a 60 pip loss.
Usd/Jpy: Short @ 106.31, stopped out at 106.91 for a 60 pip loss.
Reverse Trades taken:
Usd/Chf: Long @ 1.0260, exited Friday @ 1.0370 for 110 pip profit.
Usd/Jpy: Long @ 107.31, stopped out at 106.71 for a 60 pip loss.

Total losses: 390 pips  
Total profits: 110 pips 
Net losses: 280 pips (-$28.56)

OneNightStand 07/25/08 entry(s)
None--

End of week equity: $675.94.(includes unrealized P&L)
Total Loss for Week: $ 33.12 (4.6% weekly decrease)

The reverse trades as a group had a small positive addition, but were far from a resounding profit.

The forex markets are madly trying to make sense of all the conflicting news tossed at them every few days. Being reactive only creates potential for greater losses.

Have a good evening.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Hotmail or Yahoo addresses. They've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!


Thursday, July 24, 2008

No sure thing! --IFCN Wk 33 -Thu- Equity: $671.45.

The Dollar is maintaining most of its strength aquired in the last week.  But continued action betrays the fact that many of the market participants have different ideas of how strong they feel the dollar will be allowed to maintain.

The existing home sales news worked out as I suspected, the dollar remained strong and got stronger vs. the Euro and the Pound.

We are still currently long the Usd/Chf and Usd/Jpy FirstStrike “reverse” trades. The trades have diminished quite a bit. If still in progress tomorrow we will exit tomorrow.
  • Usd/Chf: Long @ 1.0260, stop 1.0200.
  • Usd/Jpy: Long @ 107.31, stop 106.71. (Looks like it may get stopped out soon)
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $671.45.

Recap tomorrow.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to: newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!


Wednesday, July 23, 2008

What would you bet that the Fed already knows the numbers? --IFCN Wk 33 -Wed- Equity: $689.56.

Existing home sales for June, to be released Thursday by the National Association of Realtors (NAR), are widely expected to fall to an annual pace of 4.94 million units following a 2.0% increase to 4.89 million in May.

With sparse financial news from the U.S. this week, the currency markets may move on it.

Not all forecasts agree of course.

Lehman Brothers economists are looking for a 1% advance to a 5.05 million pace of sales in the month.

Economists from JPMorgan look for a second month of gains to put the pace at 5.01 million.

The existing home sales data is excluded from many other measures, so in many ways it is a pure information play.

The existing home sales index jumped 7.1% in the April report, which suggests existing sales could see a boost this month, yet they fell back 4.7% in May. The troublesome nature of this report contributes to the wide parameters of forecasts for Thursday's report, which range from from a low of 4.78 million units to a high of 5.10 million.

I believe the Fed already has seen the numbers and released the intent by having its spokesmen make unique and market pushing statements in recent days.

Crude has been falling.  Amazing.

Who'd have guessed?

Supposedly crude oil inventories declined further than expected in the week ending July 18. Despite the decrease in inventories, crude dropped in price to $125.30 when the inventory data was released.

Gold has dropped precipitously, quickly falling $30 an ounce. That too gives additional strength to the dollar.

It is beginning to look like the Euro and other european currencies are beginning to sag versus the dollar. Since so many hedge funds have been simultaneously long crude AND the Euro, capital outflows could be severe.

As mentioned yesterday, we are currently long the Usd/Chf and Usd/Jpy FirstStrike “reverse” trades, the opposite trades of the initial entries. They are both still in progress.
  • Usd/Chf: Long @ 1.0260, stop 1.0200.
  • Usd/Jpy: Long @ 107.31, stop 106.71.
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

It would be nice if these trades continued profitable after the five straight losses taken on the initial trades.

The two trades I have have decent potential if the dollar just stays moderately stronger.

Current equity is $689.56.

See you tomorrow.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Tuesday, July 22, 2008

Weatherman..., Trader- 2! --IFCN Wk 33 -Tue- Equity: $675.23.

Hours after the last posting, we prove that we are long or short..., until we aren't. And, we paid personally for our losses.

The dollar bulged suddenly on Tuesday because Treasury Secretary Paulson vocally supported the currency and the Federal Reserve Bank of Philadelphia president stated that he thought interest rates should be raised. Despite the nervousness implied in the markets recently, at last there is a persistent belief that the Fed is concerned enough about a “too robust” of an economy that will require higher interest rates.

Because of the above utterances, all of the original FirstStrike trades were entered and summarily stopped out. I wasn't surprised, as so many major indications have been indicating that the dollar is showing remarkable strength after so many years of weakness.

Not that I believe, or any other credible economic watcher believes that the current dollar strength is a permanent turnaround. But the current dollar strength should be much more persistent than generally expected, and could be financially damaging to determined dollar bears.

Currently, the Challenge account has only been taking the first trade of the week and cancelling the other side of the weekly FirstStrike orders.

As has happened a number of times in the past, this week I neglected to cancel some of my reverse orders, resulting in long positions in both the Usd/Chf and the Usd/Jpy, as cited below. Reverse trades are valid trades. Although they increase the weekly risk, they also offer additional potential reward when major currency reversals take place so quickly.

The following are this week's FirstStrike entries:
  • Eur/Usd: Long @ 1.5923, stopped out at 1.5863 for a 60 pip loss.
  • Gbp/Jpy: Short @ 212.28, stopped out at 213.18 for a 90 pip loss.
  • Gbp/Usd: Long @ 1.9996, stopped out at 1.9936 for a 60 pip loss.
  • Usd/Chf: Short @ 1.0160, stopped out at 1.0220 for a 60 pip loss.
  • Usd/Jpy: Short @ 106.31, stopped out at 106.91 for a 60 pip loss.

Reverse trades taken: (See explanation above)
  • Usd/Chf: Long @ 1.0260, stop 1.0200. Trade currently in progress.
  • Usd/Jpy: Long @ 107.31, stop 106.71. Trade currently in progress.
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $675.23.

Have a good morning.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Monday, July 21, 2008

Weatherman..., Trader! --IFCN Wk 33 -Mon- Equity: $701.41.

The Japanese market was on a holiday and other markets were without any reports to encourage strong positions. That is why nothing seemed to happen today.

The economic calendar from the US should give more information as the week wears on. Fear of ruinous consequences in the financial sector have eased somewhat following recent better-than-expected earnings reports from the banking sector.

Nonetheless, the Fed has revealed tan increased concern with their enlightened view of the economy-- saying – simultaneously – out of the same mouth, that they intend to keep lower interest rates..., until they raise them.

What a great job! Like being paid as a weatherman while getting paid a CEO's salary simply uttering, “There will be sunny skies..., until it rains sometime.”

On a third thought, maybe we traders aren't much different. We are long or short..., until we aren't. But at least we pay personally for OUR errors. AND the errors of the Federal Reserve system.

Early this morning, we exited the long Gbp/Jpy OneNightStand trade from Friday – in @ 213.64, out at 213.03. A loss of 61 pips (-$ 4.56).

We entered four FirstStrike trades today. Had a quick loss in the Gbp/Jpy. I would have thought that the short side of the pound and euro might have been a better trade, but the trades we got are below.

The following are this week's FirstStrike entries:
  • Eur/Usd: Long @ 1.5923, stop 1.5863. Trade in progress.
  • Gbp/Jpy: Short @ 212.28, stopped out at 213.18 for a 90 pip loss.
  • Gbp/Usd: Long @ 1.9996, stop 1.9936. Trade in progress.
  • Usd/Chf: Short @ 1.0160, stop 1.0220. Trade in progress.
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $701.41.

Have a good night/morning.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!


Sunday, July 20, 2008

Living Forever! --IFCN Wk 32 -Fri- Equity: $709.06.

I intend to live forever, or die trying.
Groucho Marx

Markets like this last week make you think that you might have to live forever to finally catch a big move. Markets are very patient. You must be too.

Here's the week's recap:

The data below is as of Friday's close, July 11, 2008:

Start of week equity: $ 729.65.

OneNightStand Exit(s) on 06/14/08 :
Exited the long Eur/Usd OneNightStand trade from Friday – in @ 1.5911, out at 1.5898.
A loss of 13 pips (-$ .95).

Completed FirstStrike trades this week:
  • Eur/Usd: Sold @ 1.5848, stopped out at 1.5908 for a 60 pip loss.
  • Gbp/Jpy: Long @ 212.11, stopped out at 211.21 for a 90 pip loss.
  • Gbp/Usd: Long @ 1.9906. Trade exited Friday at 1.9984 for 78 pip profit
  • Usd/Chf: Long @ 1.0240, stopped out at 1.0180 for a 60 pip loss.
  • Usd/Jpy: Sold @ 105.95, stopped out at 106.55 for a 60 pip loss.
Total losses: 270 pips
Total profits: 78 pips
Net losses: 192 pips (-$19.84)

OneNightStand 07/18/08 entry(s)
*Gbp/Jpy: long @ 213.64. To be exited Monday morning, 00:00 CST.
Unrealized Profits: $ .20

End of week equity: $709.06.(includes unrealized P&L)
Total Loss for Week: $ 20.59 (2.8% weekly decrease)

This was a choppy trading week.

Some week soon we will have an intense move or two. Or three. I'll keep on putting in the orders.

Have a good night.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Hotmail or Yahoo addresses. They've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Thursday, July 17, 2008

Dollar Strengthens More! --IFCN Wk 32 -Thu- Equity: $707.07

The Gbp/Usd is the only FirstStrike trade still working. It definitely looks like one of those weeks where the early profits get drained away.

Oil has been falling precipitously, along with grains and other main commodities.  Continuation of these factors will be bearish on the Eur/Usd and bullish for the dollar.

Why? Perception of the currency policy makers. We'll see if it works out that way.
____________________

The short Usd/Jpy trade was stopped out with a 60 point loss.

I still remain in the following trade--
  • Gbp/Usd: Long @ 1.9906, with stoploss at 1.9846.  
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

It is possible that one or two OneNightStand trades could be entered this week. The required breakout levels are a bit far away in every case. That didn't stop the Eur/Usd last week though.

Have a good Friday.

Current equity is $707.07.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Wednesday, July 16, 2008

Dollar Strengthens! --IFCN Wk 32 -Wed- Equity: $729.93

Remarkable.

The difference a few days make.

A few days ago the “dollar was over” in the minds of the majority in foreign exchange. New high in the Euro, more mortgage banking crisis news, new highs in crude oil. 2 days later, oil dropped 15 dollars and shares of Freddie Mac melt UP!

The dollar rose more on Wednesday, moving further from a record low against the Euro, due to a continued drop in oil prices and a surprise of strong earnings at Wells Fargo & Co calmed the stock market into realizing the sky may not be falling.

U.S. stocks rallied. The dollar got boosted immediately after the Federal Reserve's June meeting showed the belief that the next interest rate move would likely be an increase.

Bank of New York Mellon strategist Michael Woolfolk said that the Fed could raise rates by September.

A $4 drop in oil prices gave more fuel to the rally, offsetting an early report that showed U.S. consumer prices in June rose by the most since the aftermath of Hurricane Katrina in September 2005.

Investors poured into bank stocks, driving Wells Fargo up 32.8 percent, while shares of rivals like Citigroup, JPMorgan Chase & Co and Bank of America Corp jumped 13 percent or more.

Shares of Fannie Mae and Freddie Mac, which had lost more than 60 percent of their value since the beginning of July, were likewise propelled by the broad financial rally, jumping 30% in a day.

Federal Reserve Ben Bernanke's remarks that they are "in no danger of failing" helped people see diamonds where yesterday they saw broken glass.

____________________

The Gbp/Usd and Usd/Jpy trades are still working, but their profits have diminished substantially. We have two days until our exit.

The following are the remaining FirstStrike trades:
  • Gbp/Usd: Long @ 1.9906, stop 1.9846. Trade in progress.
  • Usd/Jpy: Sold @ 105.95, stop 106.55. Trade in progress.
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $729.93.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Tuesday, July 15, 2008

Ben Bernanke, Font of Information! --IFCN Wk 32 -Tue- Equity: $737.12

Federal Reserve chairman Ben Bernanke had his testimony before the Senate Banking Committee today. Remarkable things were said.
  1. “There is speculation in the oil trade.”
  2. "There seems to be adequate oil in the ground.”
  3. “There is no "magic bullet" to deal with high commodity prices.”
Thanks. I feel much better now. And to think these guys make the big money for sharing this crucial information.

Even so, this type of rhetoric swung the markets around, and sent oil down more than $9 at one point.

He could have said something really interesting, like, “I can't tell you what I plan on doing about high oil prices, the slide in the dollar and interest rates because my magic 8 ball got broken!”



The Gbp/Usd has still proven to be the strongest trade of the week. At one point earlier today, our equity stood at $759.50. And then, after Mr. Bernanke spoke, it fell off substantially. I'm not too surprised, as I was quite impressed with having any profits at all this week with all the news stories whipping up the masses.

The following is the status of this week's FirstStrike trades:
  • Eur/Usd: Sold @ 1.5848, stopped out at 1.5908 for a 60 pip loss.
  • Gbp/Jpy: Long @ 212.11, stopped out at 211.21 for a 90 pip loss.
  • Gbp/Usd: Long @ 1.9906, stop 1.9846. Trade in progress.
  • Usd/Chf: Long @ 1.0240, stopped out at 1.0180 for a 60 pip loss.
  • Usd/Jpy: Sold @ 105.95, stop 106.55. Trade in progress.
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $737.12.

See you tomorrow. Keep your stops in.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Monday, July 14, 2008

Game Theory Alive and Well! --IFCN Wk 32 -Mon- Equity: $717.01

There is some historic news involving game theory.  Game theory is a field which has shown great potential in the markets and definitely impacts trading as a profession.

Before we look at it, I'll review our current positions.

Early this morning, we exited the long Eur/Usd OneNightStand trade from Friday – in @ 1.5911, out at 1.5898. A loss of 13 pips ($ .95).

We entered all five FirstStrike trades today. Had quick losses in the Usd/Chf and Eur/Usd. So far the Gbp/Usd has proven to be the strongest trade of the week.

The following are this week's FirstStrike entries:
  • Eur/Usd: Sold @ 1.5848, stopped out at 1.5908 for a 60 pip loss.
  • Gbp/Jpy: Long @ 212.11, stop 211.21. Trade in progress.
  • Gbp/Usd: Long @ 1.9906, stop 1.9846. Trade in progress.
  • Usd/Chf: Long @ 1.0240, stopped out at 1.0180 for a 60 pip loss.
  • Usd/Jpy: Sold @ 105.95, stop 106.55. Trade in progress.
Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $717.01.

____________________

-----News release courtesy of Stoxpoker.com-----

On July 3-6. 2008, a lineup of serious professionals, who make a living from playing poker, went
head to head with the latest version of Polaris, a poker AI (artificial intelligence) designed by the University of Alberta’s Computer Poker Research Group.

The match was held at the 2008 Gaming Life Expo, down the street from this year’s World Series of Poker in Las Vegas.

There were 6 matches of one on one limit hold’em. Each match consisted of two humans playing against the computer in separate locations, and the contest used a “duplicate” format wherein the set of cards dealt during the match would be the same at both teammates’ tables. At one location a human would play one side of the cards, and in the other location his teammate would play the opposite side of the cards.

After 500 hands the winner was determined by whether the humans or the AI had the highest net score. This duplicate format greatly helped to reduce the short-term element of luck and make the matches a much truer contest of skill.

After the first five matches the tournament was tied at 2 wins for the humans, 2 for Polaris, and 1 tie (according to the rules of the tournament a win of less than 25 “small bets,” the betting unit on the early streets in limit hold’em, would be declared as a tie). That meant that the last match of the tournament would also be the tie-breaker, and to add to the dramatic element Polaris’ last set of opponents was arguably the strongest.

Polaris won the match in convincing fashion, winning both sides of the duplicate match for a net win of 90 small bets. This gave Polaris a final record of 3-2-1, and provided the CPRG with their first win over human opponents. The CPRG had created a similar event last year against professionals Phil Laak and Ali Eslami where Polaris finished with a final record of 1 win, 2 losses, and 1 tie.

----- End of News Release-----

This was the first time in an officiated tournament that a poker computer bested the human players.

This is an extremely significant development. The ramifications to other skilled professions, such as trading is staggering.

This validates the principle that game theory can be programmed sufficiently to be used as a mathematical edge in games that previously only could be dominated by highly experienced players who mentally weighted the importance of known variables: mutually agreed game information, stakes and bet sizes.

Does this mean that we have to worry about game-theory-programmed robot traders in our future?

Yes and no.  Completely depending on how you respond to these developments.

We've already been trading with and against AIs for a number of years. Remember Long-Term Capital Management?

Poker has some strong similarities to trading, but also important differences. Instead of 5 or 6 players, the markets have millions of players. Even though some of these players sift themselves into groups that can be somewhat predictable, they're mass irrational responses make it difficult for robots to handle their manias, naked fear and overwhelming greed.

Being a human trader is a bonus in the markets. You have the ability to use any computer advantages proven useful AND your brain.

Those who trust in hope, luck and “I think this should work...,” will be the donors of your future wealth.
___________________

Have a good evening.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Sunday, July 13, 2008

Dollar Takes a Hit Despite Good News! --IFCN Wk 31 -Fri- Equity: $729.65

Eur/Usd jumped to new weekly highs after the data on exports and imports was released. And, although the information released was actually fairly bullish for the dollar, the dollar dropped heavily against all major Forex currencies because of solvency concerns for Fannie Mae and Freddie Mac agencies.

Ben Bernanke is testifying to the US Senate next Tuesday, July 15th, for a semi-annual release of Fed concerns, policies and aspirations. This could be significant for next week's moves.
____________________
Here's the week's recap:

The data below is as of Friday's close, July 11, 2008:

Start of week equity: $730.43

OneNightStand Exit(s) on 06/07/08 :
-None-

Completed FirstStrike trades this week:
  • Eur/Usd: long @ 1.5691, exited Friday at 1.5921 for a 230 pip profit.
  • Gbp/Jpy: short @ 211.23, stopped out at 212.13 for a 90 pip loss.
  • Gbp/Usd: short @ 1.9717, stopped out at 1.9777 for a 60 pip loss.
  • Usd/Chf: short @ 1.0251, stopped out at 1.0311 for a 60 pip loss.
  • Usd/Jpy: long @ 107.75, stopped out at 107.15 for a 60 pip loss.
Total losses: 270 pips
Total profits: 230 pips
Net losses: 40 pips (-$2.33)

OneNightStand 07/11/08 entry(s)
*Eur/Usd: long @ 1.5911. To be exited Monday morning, 00:00 CST.

Unrealized Profits:      $   1.55
End of week equity: $729.65.(includes unrealized P&L)
Total Loss for Week:      $ .78 ( 0.1% weekly decrease)

This was actually quite an amazing week. I would never have expected to be virtually unchanged after the way this week started.

With oil prices swinging as they are and the worries about government mortgage agencies failing, you get large moves that test a trader's mettle.

Next week should be interesting just because of the action we saw this week.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Hotmail or Yahoo addresses. They've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!


Thursday, July 10, 2008

This Week was Asleep! --IFCN Wk 31 -Thu- Equity: $709.55

Not a lot of change..  I still periodically think about the cow pictured yesterday.  That's how slow trading has been.

We're still long the Eur/Usd with profits. If we still have profits by the end of trading Friday, we'll be happy to take them. It was a pretty anemic week.

A couple OneNightStand orders have a realistic chance for getting filled, namely-- the Gbp/Jpy and the Usd/Jpy. We'll see what Friday has for us. It would be nice to have some positive “fireworks”.

Current equity is $709.55.

Have a good Friday. I'll recap later on Friday.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Wednesday, July 9, 2008

Learning to Trade Isn't This Hard! --IFCN Wk 31 -Wed- Equity: $712.44

Being a successful trader requires being tough enough to take regular adversity, keep persevering with your efforts so as to come out the other side victorious.

So, I'm typically the champion of determined people. No one can succeed at anything difficult or important without persistence. But sometimes you hear about extremes that just make you wonder.

Here is a link to a story about a woman whom I'm confident will never be our competition in the Forex market.

This 62-year-old woman has finally passed a driving test - 27 years after her first lesson.

She went through 20 different driving instructors, tens of thousands of dollars and months of time in training over the decades. Mrs. Clarke also failed 12 tests, cancelled 35 others and had 50 mock exams. Check it out if you dare.

"You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time."
-- Abraham Lincoln --


A corollary of that statement indicates that there must be a lot of fools available almost all the time.  Evidence exists to support this.

For example:  the concern of “Global Warming”.

Universally validated extremes in earth's climate over previous thousands of years precludes any “chicken-little” leaps of concern. A degree here or there increase in a decade doesn't make “Global Warming”, any more than in the '80's did it make for the heralded “New Ice Age” because temps dropped a degree or two in previous decades.

But, there are those who profit from rabble-rousing, and have gotten people stirred up. (obviously, "some of the people all the time.") See the picture below--



This is something you're not going to see anywhere else! I like cows and am embarrassed for it. I don't even want to know how the tank operates. All because some feeble-thought starts insisting that the “sky is falling”.

Here's the story.

____________________

We're still long the Eur/Usd and mildly profitable.

The following is this week's remaining FirstStrike entry:
Eur/Usd: long @ 1.5691, stop 1.5631. Trade in progress.

Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $712.44.

Have a good evening. See you tomorrow.

I'm still thinking about that poor cow.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Tuesday, July 8, 2008

Can You Handle A Look in the Abyss? --IFCN Wk 31 -Tue- Equity: $706.20

These following quotes are all very true, and it is terrific that “Wall Street” was so expertly done. I tend to side with Gekko in the film, who would be considered a choir boy compared to the hi-jinx played today by operators in the markets.

Gordon Gekko: “The richest one percent of this country owns half our country's wealth, five trillion (dated) dollars. One-third of that comes from hard work, two-thirds comes from inheritance, interest on interest accumulating to widows and idiot sons-- and what I do, stock and real estate speculation.”

“You've got ninety percent of the American public out there with little or no net worth. “

“I create nothing. I own. “

“We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it.”

“Now, you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you. “


Bud Fox: “How much is enough? “
Gordon Gekko: “It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.”

Later, when Bud Fox is about to meet the authorities for his financial transactions, he meets Lou Mannheim, a sage of the Wall Street-that-was.

Lou Mannheim cryptically states: “Man looks in the abyss, there's nothing staring back at him. At that moment, man finds his character. And that is what keeps him out of the abyss.” (Side note: only those who push the envelope in life ever visit the view of the “abyss”. Which can be good or bad. The greatest opportunities come from mortal reflection.)

Many major financial players are looking into their own personal abyss. Various ones have bet their lives on the Euro, high prices for crude oil, and lower global interest rates. If they find that those positions may not be the absolutes they figured, they will end up finding their character, and make their moves.

Which will create years of opportunity for the rest of us.
____________________

Two more FirstStrike trades stopped out, the short Gbp/Jpy and the short Usd/Chf.

As I stated yesterday, I'm not surprised.

We'll see if the last trade survives the end of today.

The following are this week's FirstStrike entries:
  • Eur/Usd: long @ 1.5691, stop 1.5631. Trade in progress.
  • Gbp/Jpy: short @ 211.23, stopped out at 212.13 for a 90 pip loss.
  • Gbp/Usd: short @ 1.9717, stopped out at 1.9777 for a 60 pip loss.
  • Usd/Chf: short @ 1.0251, stopped out at 1.0311 for a 60 pip loss.
  • Usd/Jpy: long @ 107.75, stopped out at 107.15 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 $706.20.

Have a good evening.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Monday, July 7, 2008

Euro is Skittish! --IFCN Wk 31 -Mon- Equity: $714.40

After very interesting closes last week in most of the currency pairs, I figured this week could be challenging.  I hate being right about that.

It is very rare for a market to reverse to the downside like the Eur/Usd did and not at least make an attempt at correcting. When the market doesn't correct, you have a great opportunity because most traders count on a correction for their methods.

The market is correcting as I write this, and we have entered all five of our FirstStrike trades for the week. Two have already been stopped out. I don't have great expectations for the other three either, even though currently we have small profits overall.

This brings up a question(s) sent to me by a reader-

Dear Joel,

Do you exercise some discretion in exiting trades in the First Strike system?

For example, from 6 PM (CDT) last night until 3 AM this morning, price indicated bearish divergence for the Dollar (Price going up, MACD going down) which was confirmed by a bearish candle closing out of Overbought at 9 AM. At the time we were long the USDJPY and short the GBPUSD which both promptly stopped out.

One question is, do we stay with the program when there's a high probability of being stopped out or do we use discretion and exit early? Unfortunately, we've only been with the program for a short period and, as you know, neither the First Strike or One Night Stand has been performing well. Fortunately, we're only trading [reasonable size] until we get comfortable with the system (I refuse to demo because I'm the world's greatest trader when its only play money}. Another question, how about red news events affecting the pairs we're trading?

My gut feeling is that these programs work because they have proven themselves over time so don't meddle - my cautious side says lets move stops, etc., to preserve some of the gains. I don't expect a detailed response but would like to know if you do exercise some discretion in your serious money account....

Happy Trading,

Kxxxx & Mxxxx


Thanks for the note:

Appropriate question.

I take the trades whether or not I like the trades. Especially in the Forex Challenge account. In my personal trading for serious money, I do occasionally use some discretion.

You are right about "these programs work because they have proven themselves over time so don't meddle."

But, for me to indicate you shouldn't be prudent about large positions facing extreme conditions would be incorrect.

In my personal trading of FirstStrike, I am able to increase overall returns by 50% to 100% over time. The majority of additional edge comes from exiting at better levels than the standard exit at the end of the week. Occasionally by getting in a little sooner, when it is "obvious" that the buy/sell price will be hit.

Thanks.

Joel

Thanks again for the questions---K&M--

The best thing I can add to this is this-- If discretion works out so well for you, maybe you should be trading completely discretionary.

FirstStrike is admittedly a simple method. What is particularly good about that is, you can improve the results of it quite easily.

But not if you can't trade it straight up. If you can't make yourself enter at the times you should, with the appropriate position size without discretion, you will never learn how the method works over the long haul and see how some simple discretion may actually help or perhaps hinder your profitability.

There was an additional question about news. For all intents and purposes, FirstStrike doesn't care about news. News will likely improve our profitability. If we have entered a market, haven't been stopped out after a few days-- there are better odds for our continued profitability than sudden loss due to any news event.

I stay in through news reports!
____________________

The following are this week's FirstStrike entries:
  • Eur/Usd: long @ 1.5691, stop 1.5631. Trade in progress.
  • Gbp/Jpy: short @ 211.23, stop 212.13. Trade in progress.
  • Gbp/Usd: short @ 1.9717, stopped out at 1.9777 for a 60 pip loss.
  • Usd/Chf: short @ 1.0251, stop 1.0311. Trade in progress.
  • Usd/Jpy: long @ 107.75, stopped out at 107.15 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 $714.40.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Saturday, July 5, 2008

Independence Day! -Continued --- IFCN Wk 30 - Sat-

To be among the best and succeed at trading:

ONE-----You have to have financial resources to be able to start trading.  That 's the easy part.  You can always get money.  The toughest resources to obtain are those that enable you know for certain there is opportunity in a certain marketplace.  Not everyone can remain committed to trading markets for long periods of time.  If you expect to succeed you will have to be involved for a long enough period to have a reasonable likelihood of success.

No different than expecting to make money in real-estate. Which might be a better option for you. Prices are cheap right now, and no one else wants to buy! Just writing this makes me want to start picking up some more property.

TWO-----You can't expect to succeed just trading on your gut instincts.  If that worked....  

It just doesn't.  So you will need strategies that you can articulate, which have a definable edge and a reason why they will work.

That being said: at the same time you also need to be able to adapt quickly.  Things can change quickly, positions need protection and sometimes the greatest opportunities are in your current profitable trades, when something unusual has happened to benefit your position.  Your greatest edge as a trader is in your correct understanding of HOW and WHEN to be adaptable.

THREE-----You need great sources of information.  People that you can rely on.  People who will keep you informed about things going down in the financial world before they hit the wires.  When I started, that was nearly impossible to come by.  Now that I have been useful to many in the industry, I get calls about "the other shoe falling before the first one hits the ground."

FOUR-----Simple complexity.

There needs to be harmony in the manner you apply your edge. You have to personally determine a strategy to balance your capital and your trading potentials. Your trading methods have to be based on pure concepts yet integrate into your composite capital management so you get the bills paid on time. Even if you don't have a winning year. Which can happen even if you did nothing wrong and probably did a whole lot of better than most would have, but you still had a loss.

I was so impressed with the ability of Jack to perform as well as he did considering the grief he was going through at home. If the spouse is on board with your trading, GREAT! If not, you will have difficulty maintaining the mental edge to compete with those who have fixed that aspect of their life.  Trading is a more a mental game than anything.  You can not trade conflicted.  If you have someone fatiguing your mind while you are trying to trade, you will lose in more ways than just the money.  The financial losses can be devasting in that frame of mind.

Knowledge and experience matters.

Whether you're a trader, a cabinet maker or golf pro, it is very difficult to obtain professional results without hanging out with professionals and getting a quality education.  If you don't obtain them somewhere, you might be able to learn all by yourself.  It's possible, but the markets will bet against you all the way.

This weekend, think it over.  

See if there might be some better solution for your independence than taking up trading.   Like a position in sales or a side business.   Maybe real-estate.  It's cheap now.  (I know that I mentioned that earlier!)

If you decide to un-subscribe from the newsletter, I'll be happy to oblige.  I'd rather you declare your independence doing what you can do best.  

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to: newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Hotmail or Yahoo addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Independence Day! --IFCN Wk 30 -Fri- Equity: $730.43.

Independence....

Independence is a wonderful word. Having the freedom to do what you wish within very reasonable terms is what all peoples on earth want. (Except for those who think it is ok under certain circumstances to wrap a baby girl in bombware and have her walk into a crowded building.)

When most people think of independence they are thinking of having the financial wherewithal that allows them to do just about anything with their time that they cannot do now without asking someone who gives them a paycheck.

Many believe that trading is the ultimate vehicle to enable this kind of independence.

I have this kind of independence completely from trading, and of course, am somewhat biased on this subject.

My bias is different than most might think. I don't believe most of you reading this should ever attempt to trade for a living. If you want to trade part time or test out some ideas you have with micro capital-- GREAT!  

Trading is an intriguing mistress who doesn't like to share.  

I don't say this because I want to keep all the market's money to myself. Trading is tough.

Many other jobs are too.

But with most jobs your requirements are to show up, apply your expertise, and at the end of two weeks, you get a check.  You usually aren't required to show up with a quarter of a million dollars and 2 out of three weeks end up having to pay the firm.

12 years ago, a good trading friend of mine (I'll call him Jack) was bemoaning that his new bride Joan, a beautiful daughter of a successful lawyer, was incredulous that he could go to the futures exchange all week and end up making more losses than profits-- forcing him to pay up. Sometimes weeks would pass before he would show black ink.  Jack had been making a living trading like this for 8 years, but Joan couldn't handle it. It was completely illogical to her that you could go to work, and not make money by the end of the week for your efforts.  Jack had to be doing something wrong....  (Yeah, he married the wrong girl....)

After being together for over a year, in which he made better than average returns, Joan finally said, “You have to get a job with my father, or we're through.”

Jack's been married to someone else now for ten years, who better understands the trading concept. He made absolutely certain she knew the realities of trading his way before he made the next “trade”. Divorce was expensive since Joan had access to a determined and emotionally-involved lawyer, her father.

Most people thinking this business has to be nirvana just don't think about what they need to pull it off.

These four things are crucial to be the best in this business....

Independence, to be continued ----
____________________

Here's this week's recap:

The data below is as of Friday's close, July 4, 2008:

Start of week equity: $ 767.88 (including unrealized P&L)

OneNightStand Exit(s) on 06/30/08 :
*Eur/Usd: Long @ 1.5769, out @ 1.5787 for a 21 pip gain.
*Gbp/Usd: Long @ 1.9896, out @ 1.9934 for a 38 pip gain.
*Usd/Chf: Short @ 1.0222, out @ 1.0171 for a 51 pip gain.
Total profits- 110 pips ($8.25)

Completed FirstStrike trades this week:
  • Eur/Usd: short @ 1.5737, stopped out at 1.5797 for a 60 pip loss.
  • Gbp/Jpy: short @ 210.59, stopped out at 211.49 for a 90 pip loss.
  • Gbp/Usd: short @ 1.9884, stopped out at 1.9944 for a 60 pip loss.
  • Usd/Chf: long @ 1.0223, stopped out at 1.0163 for a 60 pip loss.
  • Usd/Jpy: short @ 105.53, stopped out at 106.13 for a 60 pip loss.
Total losses: 330 pips
Total profits: 0 pips
Net losses:  330 pips ($37.72)

OneNightStand 07/04/08 entry(s)
-none-
Unrealized Profits: $ -0-
End of week equity: $730.43. (includes unrealized P&L)
Total Loss for Week: $ 37.45 (4.8% weekly decrease)

This was another week with losses. You get used to them trading over the long haul.

Have a safe holiday weekend. The weather is great here in Minneapolis. Our 4th of July was only 78 degrees. A little warmer than I like, but very pleasant.

See you next week.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to:
newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Hotmail or Yahoo addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Thursday, July 3, 2008

Million Dollar Question!--IFCN Wk 30 -Thu- Equity: $730.43.

In response to my last post, selling the Euro was the right thing to do!

I took a big trade today right after the Non Farm Employment report came out. I took one of my low risk DIBS trades, short the Eur/Usd at 1.5863. The market cratered. Anyone selling within a minute of when I did-- had instant profits after getting filled. It was a meltdown. The entire world must have been long the Euro going into the report.  (See chart below)


Were you a seller too? I know I wasn't the only one selling. But here's the Million Dollar Question, “Where do you get out?”

The answer to that question is the reason some people make a living at trading and others break even or worse.

My answer to the above question: I'm still short. I will stay short until the market stops going down.
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If you are trading a system or even a special setup where a combination of significant factors come together--- you finally end up in a trade.

In a perfect world, you immediately place a protective stop. The reason the stop is called a protective stop is not because it is protecting the position. The stop is protecting your capital. Stops are much more vigilant than most of the individuals who should be using them.

In the real world, few people put in stops. They might put in a stop-- but then keep moving it farther away from the market when the market starts going against them. And keep on moving it away to avoid the inevitable.

The point isn't to be RIGHT, it is to make money. This means that we have to be right with the market, which IS always right. Take your losses when they are small or they will have the chance to get BIG.

Do not people realize that there will always be another chance to get in?

The market is never wrong. It is how we handle the trades we take can make us wrong.

It is correct to have losses. The markets' existence depends on them. Someone has to lose for someone else to gain. This causes people who are now “winners” to feel richer and then exit the market, thereby stabilizing the market. The exiting of losers causes the market to adjust to another “correct” level.

Why people insist on doing the same things over and over and get the same bad results is still amazing after decades of seeing the same reactions. But that is beneficial to traders, little actually changes. Just the faces of the losing sides.

It didn't take me very long to learn the business of taking small losses. It took one miserable oat trade early in my trading career. I had heard that oats were in oversupply, and I saw the market falling 5 cents off the highs of the last month. Conditions seemed ripe.

I shorted a single contract of oats. The first day it went my way by ½ cent as of the close. That was the best I ever had it with that trade. My “mental” stop was about 6 cents. ($300) I now believe you have to be mentally ill to use mental stops.

Each and every succeeding day after entry, the market either closed unchanged or against me a penny or less, usually just a half cent. Intraday volatility was minimal, about a 2.5 cent range every day ($125 - $50/cent) After 3 weeks, the market was against me 16 cents or $800. I just couldn't believe that the market wouldn't swing my way, even a little. The margin on oats was only $300 at the time and here I lost $800 just one nick at a time. I finally had enough and got out.

$800 isn't much money now. But then, it was 25% of my capital lost in one strange trade. I know that if there had been just one sharp day against me I would have been out of there immediately. I know that if I just had one day in my favor I would also have gotten out.

But it was so gradual....

That was the last time I traded a position without a hard stop in the market. And never again risked so much on one trade. (Note to self: Don't ever again be in a situation like the frog slowly steamed to death by swimming in cool water put on the stove.)

What closes the majority of trading accounts isn't losses. It's holding on to losses with no idea of where “enough” is.

Being in a losing trade is the most natural thing in the world. Most of my trades are losses. But they are small compared to my profits.

Every large loss starts out as a small one. Ignoring losses is the surest way to turn them into bigger ones and quicken your exit from trading. Get used to taking small losses on trades. Trade small enough positions so that taking the small loss is inconsequential. Then it is easier to train yourself to make smaller losses.

The moment you finally get rid of a loss, the pain stops, with just a dull ache for short time. Then you can forget it.

How to make Big money trading forex.

The flip side to losses is this---

I am certain that the reason people don't make substantial money from trading is:  they've never made substantial money from trading.

How're you ever going to get a big payoff if you never let a profit get big?

Back in the week of August 13-17 of 2007, a FirstStrike sell in Gbp/Jpy attained 1,916 pips at its zenith and 1,205 pips by the close of the week. Besides interesting proof that just one trade can overwhelm a half year of straight losses, it would be nigh on impossible for most people who consider themselves traders to handle a trade like that.

“It's just...so...biggg!!!”, said one of my friends. “I have to take some profits.”

All they would have to do to handle it would be accept the bonanza. Of five friends I know who take these trades religiously every week, some having traded for 15 years--- only one of them got full profits (1410 pips) from that trade. The others got 450 pips, 500, 670, and 710 pips respectively.  I got 1300.

It wasn't luck. I just don't care. About the things losing traders care about.

I have taken tens of thousands of trades. There is no thrill left (pleasure, yes! - from perfect execution) from putting on a trade, just knowledge that the only way you get paid by trading is by getting entered in markets that are about to move.

I'm not afraid of losing. I'm afraid of not letting big profits accumulate. I know that if you get a big move in one direction, it is likely to get even bigger.

I know that markets go into phases where it is hard to win for long periods and then go into periods where it is difficult to lose if you just execute the trades.

If one wants to make big profits you have to begin training yourself to take some of those big profits.
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We have only a slight possibility of some OneNightStand trades for Friday. I doubt they will happen but I will send out the orders to subscribers this evening.

Have a good, safe, holiday weekend!

Current equity is $730.43.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to: newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!

Tuesday, July 1, 2008

The Phone Rang, it's my Wife! Sell the Euro!--IFCN Wk 30 -Tue- Equity: $730.43.

I finally got stopped out of the three remaining FirstStrike entries-- the Eur/Usd, Gbp/Usd, and Usd/Chf, for a 60 pip loss each.

A total of 5 FirstStrike trades and 5 losses.  It has happened before and will happen again, many times....

These are the FirstStrike entries and exits for the week-----
Eur/Usd: short @ 1.5737, stopped out at 1.5797 for a 60 pip loss.
Gbp/Jpy: short @ 210.59, stopped out at 211.49 for a 90 pip loss.
Gbp/Usd: short @ 1.9884, stopped out at 1.9944 for a 60 pip loss.
Usd/Chf: long @ 1.0223, stopped out at 1.0163 for a 60 pip loss.
Usd/Jpy: short @ 105.53, stopped out at 106.13 for a 60 pip loss.
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You might have laughed at the title for this entry and the following discussion. I would prefer you find the entire concept discussed laughable. It isn't for many.

One of the last times I had 5 quick losses in FirstStrike I remember that I had a flat tire the same day, and was forced to buy two premium tires because the tire got destroyed by my driving on it on the way to a safe zone.  In below zero weather.  I mentioned it in the post that day stating that “ losses are losses.” You have to take them when and however they happen.

Today, I had a huge rock thrown off the back of a highway maintenance truck which obliterated my back window of the same truck. Coincidence?

Yes. Just a coincidence.

It is amazing how many people, even traders who should know better, actually get superstitious about things like coincidences. Especially coincidences that happen in the market at the same time you take a sudden loss or make a huge profit.

Example: A series of unexpected phone calls from a spouse over a period of a couple days which simultaneously come after a series of “perfect” appearing trades that turn into devasting losses might set your mind up for failure if you even think about the two actions having a connection.

Next time you get a “perfect” trade setup and the phone rings, you may immediately figure its your wife (not much downside unless she is divorcing you) or your new trade is probably a loser (plenty of downside if you start thinking that way and it affects your trading in any way).

It is best not to assign any value to anything that does not have a proven causal link to your trading.

We have the possibility of some OneNightStand trades this week. The orders will go out early Friday morning. If you choose to not take the trades this weekend, I wouldn't hold it against you. I will be trading reduced size because of the holiday period.

Current equity is $730.43.

Joel Rensink
www.infiniteyield.com

PS: To receive the FREE! trading rules for the Infiniteyield Forex Challenge ($499 value) and the semi-monthly newsletter about this challenge, send an email to: newsletter@infiniteyield.com and tell me to which address you would like it sent. Please do not use AOL, Yahoo or Hotmail addresses. Nothing personal, but they've been known to filter out more good mail than actual spam. Try a Gmail address. It's free, simple and perfect for traders!