When It Rains It Pours! 103.8% Return! --IFCN Wk 39 -Mon- Equity: $1,019.22.

When OneNightStand trades work, they really work!

This morning after midnight, I exited Friday's two ONS trades, the 2 shorts: Gbp/Usd and Gbp/Jpy. Again like last week, OneNightStand performed admirably with very large profits, especially in the Gbp/Jpy. Exiting at midnight again captured most of the profits possible from holding over the weekend.

You can see why taking OneNightStand trades are a habit I've loved for years.

OneNightStand- 08/29/08 entries:
Trades below exited this morning, 09/01/08, after midnight--
*Gbp/Usd: Short @ 1.8239 – Exited at 1.8031 for 208 pips profit.
*Gbp/Jpy: Short @ 199.60 – Exited at 1.9568 for 392 pips profit.
Total Profits: $ 52.19. (Increase of $40.39 from Friday's close)

After exiting the OneNightStand trades, I placed the week's FirstStrike orders.

At present none of the FirstStrike trades have been executed.

It will be interesting to see if we get any profitable moves this week since just a few of our regular FirstStrike trades have been profitable over the past few weeks. Eventually a few more should kick in.

At some point you would think a correction to the dollar move might commence. We saw a bit of a strength in the yen last week in the short Usd/Jpy trade.

The dollar has definitely taken over the limelight in the currency world. Maybe a correction is overdue.

Current equity is $1,019.22.

That is a 103.8% absolute return on equity since the start of this site. (140% annualized) This is much greater than I was initially shooting for, but I will happily take it. Early success like this can shave a year or two off the target term. Since I support making whatever additional return is available to me as it becomes available, I appreciate every bonus that comes along.

More OneNightStand trades like today are welcome.

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!

Lookout Below! Falling Pound – Part 2!--IFCN Wk 38 -Fri- Equity: $978.83

I was quite surprised at the action of the British pound last Friday. The falling to new lows after 2 weeks of waterfall action was an example of extreme weakness. This week's repeat of new lows shows incredibly weak action.

This week, the Gbp/Usd didn't fall as much, but this Friday it acted much like a week ago, falling to new lows and triggering a OneNightStand sell trade. The pound was also very weak versus the Yen, so the Gbp/Jpy ONS trade got triggered for an even bigger profit by Friday's close. We are holding those trades over until Monday morning to exit as per the ruleset.

It is good to see more OneNightStand trades getting executed. They are high probability trades and are “invisible” to the mainstream trading world.

-----

We had quite the week in the FirstStrike trade camp. I was beginning to wonder if we were ever going to see the Usd/Jpy fall and stay down until our exit at the end of Friday's trading.

Because it did indeed fall AND I had additional size placed on the trade as detailed over the last few days – the Challenge account profited handsomely.

(To reiterate briefly; because I saw a very low risk situation in the Usd/Jpy FirstStrike trade I placed a much larger position on it, while willing to accept an additional 2% risk to the account. The trade worked out and the account has leaped to new equity highs.)

This week's beneficial profits came from a strong personal understanding of the FirstStrike weekly trading concept. Or luck, as some others will see it.

Of course, the unrealized profits from the two short ONS trades also contributed positively to my week's closing bottom line.

-----

Here's the week's recap:

The data below is as of Friday's close, Aug. 29, 2008:

Start of week equity: $814.41

OneNightStand Exit(s) on 08/25/08 :

*Gbp/Usd: Short @ 1.8511 – Exited at 1.8420 for 91 pips profit.
Total Profit: $ 7.76. (Increase over Friday's equity by $7.60)

Completed FirstStrike trades this week:

• Eur/Usd: Long @ 1.4767, stopped out at 1.4707 for a 60 pip loss.
• Gbp/Jpy: Long @ 203.61, stopped out at 202.71 for a 90 pip loss.
• Gbp/Usd: Long @ 1.8471, stopped out at 1.8411 for a 60 pip loss.
• Usd/Chf: Short @ 1.0962, stopped out at 1.1022 for a 60 pip loss.
• Usd/Jpy: Short @ 109.63, exited Friday at 108.81 for an 82 pip profit. (With very large size)

Total losses: 270 pips
Total profits: 82 pips
Net loss: 188 pips ($145.02+) Profit from the jumbo Usd/Jpy trade

OneNightStand 08/29/08 entry(s):

*Gbp/Usd: Short @ 1.8511
*Gbp/Jpy: Short @ 199.60
The above to be exited Monday morning, 00:01 CST
Unrealized Profits: $ 11.80

End of week equity: $978.83(includes unrealized P&L)
Total Gain for Week: $164.42 (20.2% weekly increase)

See you next week. Maybe we'll get some profitable action from this volatility.

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!

Chopped!--IFCN Wk 38 -Thu- Equity: $868.02.

Torture is legal in the forex markets.

What a week!

I almost would have preferred getting stopped out of all the pairs this week instead of this cliff-hanger mentality the market is in.

The short Usd/Jpy trade is still in force, carrying a heavier-than- normal trade size as described in the last two posts.

Again, early this morning the market dropped hard, almost as deep as before- but not quite. Then up-elevator, back up to the danger zone. But, so far, the trade hasn'tbeen stopped out.

The market will do what it must and so will I.

-----

I don't know if we will get any OneNightStand trades on Friday, but it does look possible for the Gbp/Jpy. It has been falling for a long time, and doesn't seem to be letting up.

The funds short these currencies are the happiest they've been in months. Considering the difficulties with their trading style, they deserve what little happiness they can get.

Hard to believe that some of these markets have stretched so far without reactions. When markets get stretched a long ways like this, it is very possible to get a very sharp reaction when it comes.
----

The week's remaining FirstStrike entry:
**Usd/Jpy: Short @ 109.63, stop 110.23. Currently profitable with additional size
Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

Current equity is $868.02.

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, 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!

Yen Volatility Creates 2nd Opportunity!--IFCN Wk 38 -Wed- Equity: $852.11.

It happened again. I was forced to sell more Usd/Jpy.

The Usd/Jpy fell like a Scud missile Tuesday night after my posting the information about the added size placed on the short FirstStrike Usd/Jpy trade.

Early this morning, when the market took out the Tuesday's low, I moved the protective stop on the second add-on to breakeven. And then, the unbelievable happened – the market shot right back up and stopped out Tuesday's add-on short at 109.63 for no loss/no gain.

I figured, if it can come back this far, it will probably march up and stop out my main trade put on Monday. I waited almost 4 hours as the market traded above 109.63, getting as high as 109.89 – but not going anywhere near my stop on the first position.

I re-entered my additional sell at 109.63 again, this time with a stop of 109.90. Meanwhile, the Gbp/Usd and the Eur/Usd started getting stronger. Right after 1:10 PM CST I got filled on my added position.

As you are likely aware, I don't often take additional trades in the Challenge account. This adding of size at the FirstStrike trade price is obviously elective and only done at this critical period because of my awareness of the method and my understanding of the greater potential of a FirstStrike trade that has resisted many attempts to fail.

To reiterate from yesterday: when I see unusual strength in a specific trade while the other pairs' trades fail, the abnormally strong pair needs to be rewarded with more size.

I am willing to accept additional losses if the larger, parallel trade doesn't work out. As I've said before, the way one ultimately makes large profits as a trader is by having large size in a market that is going your direction and keeps going.

If you have further questions about this trade you can read yesterday's post again.

____________________

The following is this week's only working FirstStrike entry:

• Usd/Jpy: Short @ 109.63, stop 110.23. Currently profitable with additional size.

Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

Current equity is $852.11.

The current equity is higher despite the 4 losses this week due to my increased size on the trade, explained above.

As an additional note warning the dollar's strength may be temporarily waning, look at the following chart of the Gbp/Usd.

The market patern displayed is the diagonal triangle formation. They are also known as “wedges” among the Elliot Wave crowd. These are highly reliable formations indicating temporary or significant bottoms or tops, depending on where you find them.

A diagonal triangle (falling wedge) is a bullish signal, and usually comes at the end of an downtrend. It combines a down trendline (drawn across lower high prices) with another downward-sloping (but converging) support line. When the market breaks out of the “funnel” created by the converging lines, it tends to make an important bottom for a while.

We'll see how strong the dollar is 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, 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!

High Volatility Creates Unique Opportunity!--IFCN Wk 38 -Tue- Equity: $847.61.

Today, I decided to risk a little more to make some multiplied return on the yen's strength against the dollar. I will explain why and how.

Anyone who is following the FirstStrike trades saw the entries yesterday and the stop-outs of the first two trades. Then today, the astounding final smash of the Gbp/Usd and upward jolt of the Usd/Chf early this morning would force any trader to be impressed with the strength-grabbing hold of the dollar.

It appears to me we are viewing the final grand rush of the first leg of the dollar's emerging move to strength. Who is left to sell the Sterling or Euro who has not already done so? A great setup for a correction.

Through all of this tumult, the lone FirstStrike Usd/Jpy short did not succomb to the dollar's strength and get stopped out. Very amazing! That fact told me this – the dollar was finally about to take a rest.

So far, it looks right.

When the dollar/yen wasn't stopped out after such carnage, I greatly boosted the size of my short position early this afternoon when the price fell to 109.63 again, only this additional position had a 20 point stop. So far there has been no threat to the stop. But this is only Tuesday. Long week ahead until Friday.

If the increased position loses, I will only experience a reasonable additional loss. If it is successful, I will geometrically increase the profitability of the trade.

Why did I bump up my position size on the short Usd/Jpy?

At the London Squeeze workshop held here in Minneapolis on Aug. 16th, I described to the attendees (who I refer to as the Magnificent 7 – every one a brave and intelligent guy) the powerful edges that can result from information that comes to you after you are in a trade. (There will be more information about this in a coming newsletter)

Information has incredible potential. But not always. Some of the greatest value comes from within; your own experiences with your trading method, and other times new, valuable information comes from without – the trading environment. Today, we had a combination of the two.

I've traded FirstStrike for a very long time. When I see abnormal strength in a specific trade while the other pairs' trades fail, the abnormally strong pair needs to be rewarded with more size. So, if I am right and the Yen gains substantially over the dollar, this could still be a very good week for the IFCN challenge account.

I will accept the additional loss if it doesn't work out. When the risk is the lowest is the best time to capitalize on your advantage.

The following is the status of this week's FirstStrike entries:

• Eur/Usd: Long @ 1.4767, stopped out at 1.4707.
• Gbp/Jpy: Long @ 203.61, stopped out at 202.71.
• Gbp/Usd: Long @ 1.8471, stopped out at 1.8411.
• Usd/Chf: Short @ 1.0962, stopped out at 1.1022.
• Usd/Jpy: Short @ 109.63, stop 110.23. Currently profitable.

Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

As I write this the “snap-back” of most of the currencies is progressing.

See you tomorrow. Have a good night/new morning.

Current equity is $847.61.

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!

Attempted Reversal Week!--IFCN Wk 38 -Mon- Equity: $803.58.

At least the beginning of the week was a small triumph.

This morning at 00:00 CST, I exited Friday's only ONS trade, short the Gbp/Usd. This time OneNightStand performed the way I expect it to, with a generous profit. Exiting at midnight garnered most of the profit possible from holding over the weekend.

A great performance.

OneNightStand- 08/22/08 entry:
Trade below exited this morning, 08/25/08, after midnight--
*Gbp/Usd: Short @ 1.8511 – Exited at 1.8420 for 91 pips profit.
Total Profit: $ 7.76.

After exiting the Sterling trade, I placed the week's FirstStrike orders.

By morning all were executed and had decent profits. Those profits have diminished and 2 of the five trades have been stopped out as you will see below.

This week's FirstStrike entries:

• Eur/Usd: Long @ 1.4767, stopped out at 1.4707.
• Gbp/Jpy: Long @ 203.61, stopped out at 202.71.
• Gbp/Usd: Long @ 1.8471, stop 1.8411.
• Usd/Chf: Short @ 1.0962, stop 1.1022.
• Usd/Jpy: Short @ 109.63, stop 110.23.
  

Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

It would be great if we could get a snap-back on some of these currencies. Time will tell.

The dollar is obviously still incredibly strong.

See you tomorrow.

Current equity is $803.58.

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!

Lookout Below! Falling Pound!--IFCN Wk 37 -Fri- Equity: $814.41

I was quite surprised at the action of the British pound on Friday. I wasn't surprised at the pound falling after having a small correction, but plummeting to new lows for the move – putting in 2 year lows – was amazing!

And the OneNightStand trade in the pound got triggered! After all the conflagration witnessed in the currency markets recently, this was an extreme move by anyone's measure.

As of 2005, Warren Buffett was widely proclaimed as one of the foremost traders who had been betting against the dollar since 2002. His view was that widening US deficits and diminishing trade would drop the value of the dollar. Apparently his view has changed.

Comments on Friday which stated that Mr. Buffett had no further bets against the dollar encouraged some to jump on the dollar's side. He also said U.S. stocks were much more attractive than they were a year ago.

Trader's coppering his bets better be ready for a rough ride. Even though the dollar will likely gain some more, there could be some dangerous volatility with that kind of news coming out.

I do believe that U.S. realestate, stocks, businesses, etc. are grossly undervalued relative to world values. Especially considering the future potential of technologies that reside here.

That doesn't mean anyone immediately cares about your inexpensive house in a great neighborhood when their own house is burning down, regardless of neighborhood.

The fire?

Some flames about the British economy appeared on Friday, and hence the value of the Sterling-- were tainted by the fact that Britain's GDP actually was unchanged in the second quarter when all the previous estimates were for increased growth.

Also, the general consensus is growing that the European Central bank could be lowering interest rates very soon.

Just a thought..., imagine how bad Britains and Europeans must feel about their economies when the well-publicized economic ills of the U.S. are taking a backseat to their own?

Next week will show us how negative the feelings are for the European currencies.

-----

Here's the week's recap:

The data below is as of Friday's close, Aug. 22, 2008:

Start of week equity: $841.14

OneNightStand Exit(s) on 08/18/08 :

*Eur/Usd: Short @ 1.4753 – Exited at 1.4745 for 8 pips profit.
*Gbp/Usd: Short @ 1.8619 – Exited at 1.8689 for 70 pips loss.
*Usd/Chf: Long @ 1.0984 – Exited at 1.0936 for 48 pips loss.
*Usd/Jpy: Long @ 110.41 –Exited at 110.26 for 15 pips loss.
Total Losses: $ 10.12 (Change of -$15.63 from Friday's close)

Completed FirstStrike trades this week:

• Eur/Usd: Short @1.4695, stopped out at 1.4755 for a 60 pip loss.
• Gbp/Jpy: Short @205.32, exited at 203.64 for a 168 pip profit.
• Gbp/Usd: Short @1.8639, stopped out at 1.8699 for a 60 pip loss.
• Usd/Chf: Long @ 1.0985, stopped out at 1.0925 for a 60 pip loss.
• Usd/Jpy: Short @ 109.77, exited at 110.02 for a 25 pip loss.

Total losses: 205 pips
Total profits: 168 pips
Net loss: 37 pips (-$11.26)

OneNightStand 08/22/08 entry(s):
*Gbp/Usd: Short @ 1.8511
The above to be exited Monday morning, 00:01 CST
Unrealized Profits: $ 0.16

End of week equity: $814.41(includes unrealized P&L)
Total Loss for Week: $26.73 (3.1% weekly decrease)

Looking forward to the new 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!

How High can the Euro go?--IFCN Wk 37 -Thu- Equity: $830.60.

Now that the dollar has gotten significantly stronger-- and quickly over the last few weeks, now the questions being asked are, “how far can currencies like the Euro or British pound rally against the dollar before succombing to weakness again?”

We have achieved a bit of softening to the dollar over the last few days. It took a lot of news about oil prices going up, struggles with Russia, uncertainty of the US economy, coming elections. A whole bag of things--- just to get a small rebound in the other currencies.

We will be watching.

The important thing to remember is, the path of least resistance demonstrated by currencies is for the dollar's continued strength.

Even with literal saber-rattling from Russia, ultimately the world knows that the US is the one to bet on. Russia has too much to lose from playing hardball.


They've gotten used to Western products and have little capacity to make their own. Since the major economy in Russia is profiting from professional hooligans, international trust issues towards Russia are fading fast where financial matters are concerned.


-----

It is unlikely that we will have any OneNightStand trades for Friday. But the orders will go in as usual.

We lost the short Gbp/Usd trade for a loss of 60 pips. That means we have 2 FirstStrike trades going into Friday.


The following is the status of this week's FirstStrike entries:

• Eur/Usd: Short @1.4695, stopped at 1.4755 for 60 pip loss.
• Gbp/Jpy: Short @205.32, stopped at 206.22 for 60 pip loss.
• Gbp/Usd: Short @1.8639, stop 1.8699. Trade in progress.
• Usd/Chf: Long @ 1.0985, stopped at 1.0925 for a 60 pip loss.
• Usd/Jpy: Short @ 109.77, stop 110.37. Trade in progress.

Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

Have a good Friday.

Current equity is $830.60.

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!

Dollar Stall!--IFCN Wk 37 -Wed- Equity: $839.20.

The dollar stall continues.

Any recent news about the world's currencies still is dominated by concerns for the european economies. It is keeping the major dollar gains in place. There may be some simple reasons for this, universal perception finally coming to the fore.

Have you ever heard about the “Big Mac Index”?

I ran across this interesting article from The Global Guru about it. You've probably heard about it in the past due to the invention of the term and published index by the Economist since 1986.

The index is actually pretty cool. It puts in perspective how much money it takes to purchase a common item (the ubiquitous McDonald's Big Mac) in 120 countries. It is a quick and easy, perhaps not perfect-- indicator of where prices around the earth may be seriously out of whack.

Such as the “Euro Area” as it is termed, where the Big Mac is priced at an average of $5.34.

On the site mentioned above, the Global Guru-- the question posed is--- if you were running money in a currency hedge fund, where would the Big Mac index suggest that you position your money?

Based on the current numbers, there are 6 currencies that are most out of position vs. each other.

This is what the site had to say. “Looking purely at the Big Mac Index, you'd buy the Japanese yen (FXY), (28% undervalued), the Australian dollar (FXA) (17% undervalued), the Mexican peso (FXM) (17% undervalued). You'd sell the Swiss franc (FXF), the Swedish krone (FXS), the euro (FXE) and the pound (FXB), (57%, 43%, 19% and 21% overvalued, respectively.) “

Pretty interesting, and not far off from my point of view.

You might want to keep an eye on the index in the future. Just check out the Economist website.

-----

Our 3 remaining FirstStrike positions are still alive, two of which are doing well. The short Gbp/Jpy is working well and so is the short Usd/Jpy.

See you tomorrow.

Current equity is $839.20.

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!

Slide Halted!--IFCN Wk 37 -Tue- Equity: $816.20.

I wasn't far off thinking that we had seen the equity highs for the week. It would take a minor miracle to reach the levels of yesterday.

The following is the status of this week's FirstStrike entries:

• Eur/Usd: Short @1.4695, stopped at 1.4755 for 60 pip loss.
• Gbp/Jpy: Short @205.32, stop 206.22. Trade in progress.
• Gbp/Usd: Short @1.8639, stop 1.8699. Trade in progress.
• Usd/Chf: Long @ 1.0985, stopped at 1.0925 for a 60 pip loss.
• Usd/Jpy: Short @ 109.77, stop 110.37. Trade in progress.

Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

Gold and silver are holding after their serious smashes last week. It has been a long time since Ive seen such a melee in silver. Usually that means a bottom for a while. It appears that the currencies agree with that tendency.

After weeks of carnage to the world's currencies there is a breather in the wings. The Billion dollar question: how far can they retrace before the selling begins anew?

Have a good evening and new morning.

See you tomorrow.

Current equity is $817.20.

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!

Resumed!--IFCN Wk 37 -Mon- Equity: $851.37.

A person might think that the currency onslaught might just take a breather after more than 2 weeks of waterfall. Obviously not.

This morning after 00:01 I exited the ONS trades from last Friday. This was not one of the times that ONS made us more proud over the weekend. The currencies we held over the weekend experienced the only minor rally so far against the dollar.

That cost us.

OneNightStand 08/15/08 entries--
All below exited this morning, 08/18/08, after midnight--
*Eur/Usd: Short @ 1.4753 – Exited at 1.4745 for 8 pips profit.
*Gbp/Usd: Short @ 1.8619 – Exited at 1.8689 for 70 pips loss.
*Usd/Chf: Long @ 1.0984 – Exited at 1.0936 for 48 pips loss.
*Usd/Jpy: Long @ 110.41 –Exited at 110.26 for 15 pips loss.
Total Losses: $ 10.12

Then I placed the week's FirstStrike orders.

The trades started trickling in after a few hours. By evening all of them got executed.

The following were this week's FirstStrike entries:

• Eur/Usd: Short @1.4695, stop 1.4755.
• Gbp/Jpy: Short @205.32, stop 206.22.
• Gbp/Usd: Short @1.8639, stop 1.8699.
• Usd/Chf: Long @ 1.0985, stop 1.0925.
• Usd/Jpy: Short @ 109.77, stop 110.37.

Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

The week has started out profitably, but as most followers of this site understand well by now, it is a long week yet.

The dollar is still incredibly strong. The higher opening this morning against the dollar was the high of the week so far.

See you tomorrow.

Current equity is $851.37. (Look quick-- that may be the high for the 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!

Olympic Strength!--IFCN Wk 36 -Fri- Equity: $841.14.

The dollar's strength continued all week. If the currency's performance this week were in the Olympics, the dollar would have been the uncontested winner in every event.

Most in the financial world attributed much of it to the instability of the former Soviet Union made obvious by fresh news of continued fighting. Perhaps.

The news is fickle and loves to attribute one trouble to another. It likes to make a tidy package. The reality is likely closer to this concept-- the US economy isn't and hasn't been as bad as the news about it trumpeted over the last many months, and the rest of the world has over emphasized how much better they've had it. Reality eventually rights all things.

For a few years in the late '80's, the “civilized” world believed that Japan would own the world because of the Japanese economy's undaunting strength. At the time, the Japanese property valuation of Tokyo alone exceeded by a large margin the total American valuation of every square inch of property in the US!

Eventually, reality caught up with the imaginary valuations and fixed the irrational views by sending losses to the deluded.

This is the way of free markets. They tend to be wrong long enough to allow the very gullible to own the worse values. The word to the wise is – don't allow yourself to be gullible.

2 + 2 always equals 4.

-----

Here's the week's recap:

The data below is as of Friday's close, Aug. 15, 2008:

Start of week equity: $869.12

OneNightStand Exit(s) on 08/11/08 :
*Eur/Usd: Short @ 1.5192 –Exited at 1.4979 for 213 pips profit.
*Gbp/Usd: Short @ 1.9269 –Exited at 1.9194 for 75 pips profit.
*Usd/Chf: Long @ 1.0714 –Exited at 1.0814 for 100 pips profit.
*Usd/Jpy: Long @ 109.89 –Exited at 110.05 for 15 pips profit.
Total Profits: $ 30.22

Completed FirstStrike trades this week:
Eur/Usd: Short @1.4935, stopped out at 1.4995 for a 60 pip loss.
Gbp/Jpy: Short @210.57, stopped out at 211.47 for a 90 pip loss.
Gbp/Usd: Short @1.9148, stopped out at 1.9208 for a 60 pip loss.
Usd/Chf: Short @ 1.0764, stopped out at 1.0824 for a 60 pip loss.
Usd/Jpy: Short @ 109.56, stopped out at 110.16 for a 60 pip loss.
Total losses: 330 pips
Total profits: 0 pips
Net loss: 330 pips

OneNightStand 08/15/08 entry(s):
*Eur/Usd: Short @ 1.4753
*Gbp/Usd: Short @ 1.8619
*Usd/Chf: Long @ 1.0984
*Usd/Jpy: Long @ 110.41
All above to be exited Monday morning, 00:01 CST
Unrealized Profits: $ 5.51

End of week equity: $841.14(includes unrealized P&L)
Total Loss for Week: $27.98 (3.2% weekly decrease)

It would have been great if the account could have retaken some of the FirstStrike trades when they “re-Struck” to the downside. We would have doubled the account easily.

With markets like this for a while, anything is possible. Anyone trading viable methods in the shorter terms have had a cornucopia of profit opportunities. Any upticks in the eur/usd and gbp/usd have been good sells for the last week.

We'll see what the next week will bring.

As an additional note, 7 experienced IFCN subscribers attended a workshop this weekend in Minneapolis concerning trading London Squeeze, a robust daily volatility-breakout method that has been effective for decades. It has proved itself effective trading simultaneously with FirstStrike and OneNightStand.

It was a fantastic gathering, with everyone getting a chance to describe their experiences and successes (or lack of success) trading forex. I definitely enjoyed meeting such a determined and intelligent group of traders whom I am confident will excel in coming months.

I'll keep you posted as I hear of their success. Or lack of, as the case may be. Trading is a challenge despite the determination we bring to it.

Looking forward to a new 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!

Price is the Reality!--IFCN Wk 36 -Thu- Equity: $835.63.

The next time you hear the talking heads starting to rapsodize about how and why the market needs to do this or needs to do that, you are hearing what their sponsors want you to believe.

The only thing you need to believe is the last tick on the monitor. That tick is what determines what price you get if you need to buy or sell.

In forex that reality has been yelling that the dollar is worth a lot more than it used to. Entropy being what it is, that state is likely to remain for a while.

Current equity of Infiniteyield Forex Challenge Account: $835.63.

It seems likely that a number of OneNightStand trades could be triggered Friday.

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, 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!

If Only!--IFCN Wk 36 -Wed- Equity: $835.63.

If only...!

Those words probably have been sincerely spoken more often by traders than anyone in any other occupation.

The action this week reinforces to traders how difficult trading can be. Missing great trades can be much more stressful than actually losing money in a bad trade.

If we hadn't been stopped out on this week's FirstStrike Gbp/Jpy short trade by just a few pips, what a difference it would have made monetarily. Or the Gbp/Usd and Eur/Usd shorts. Or all of them.

Trading is full of these close calls. That is why it takes a special type of person to be able to take the financial and psychological hits and pick themselves up again.

One way traders cut down some of the frustration of missed trades is by having secondary methods of getting into higher value trades that escape their primary method.

This only can be adequately accomplished when the trader has already proven to himself that he can successfully execute the precise trades he intends and doesn't ad lib or start taking trades without definite indications.

Some were able to continue profiting from the continuing currency slide because they were trading longer term methods such as the “Turtle” method mentioned 2 weeks ago.

Just as a note, the “Turtles” and those copying their trading style are finally cleaning up backing the dollar.

Their current positions:

• Long Usd/Chf @ 1.0401 current profits: 480+
• Long Usd/Jpy @ 108.00 current profits: 150+
• Short Eur/Usd @ 1.5610 current profits: 700+
• Short Gbp/Usd @1.9647 current profits: 950+

Not bad at all. But long term trading has its drawbacks---and drawdowns. I know this because my most important profits have been due to longer term trades, trades that go on for what can seem forever.

Ultimately, most professional traders trading styles morph into those where they can be profitably rewarded from most larger trends without taking undue personal risk. Often this involves individual choices of time frames that the trader can successfully monitor and execute “their” trades. This style is sometimes modified by the trader's disposition towards certain markets with which he feels a greater kinship.

I like the futures markets for their purity and robust moves, but love the currency markets because of their very human nature. (If you begin to understand human nature dealing with money--you get additional edges trading currencies.)

Money is something everyone thinks they understand and have a definite relationship with. Currency trading is a beautiful market for long and enduring trends because the major players have huge agendas. Not necessarily agendas which benefit you.

We'll see how big their agendas are for the dollar in coming weeks.

Current equity: $835.63.

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!

Pound Pounded to 21-Month Low!--IFCN Wk 36 -Mon- Equity: $835.63.

The pound slid to its lowest level in almost 21 months against the dollar after a vaunted report indicated that the current credit squeeze brought the real estate market to a "virtual standstill".

Banks have curbed lending as they handle outright losses and writedowns due to fallout from the troublesome U.S. subprime-mortgage market where Britain has held assets. Inflation concerns are all the buzz after a report showed Britain's inflation increased to 4.4 percent in July, more than double the central bank's 2 percent target.

After the report, a Michael Metcalfe, the head of macro-strategy at State Street Global Markets, London; said that investors should sell the pound versus the dollar. “The pound is still being swept along by a broader dollar move.''

Whenever the media offers direct advice in print, the featured move is likely to take a breather for a day or so. Maybe the pound and Euro will give us a small rally to sell. Thanks Michael!

The British pound has lost 4.8 percent against the dollar in just the past month. It certainly is looking like we have a durable trend beginning for the dollar.

-----

I promised a few more excerpts from the readers who reaped rewards from taking the FirstStrike and OneNightStand trades last week. (thanks again to those who shared their experiences)

Hello Joel!

Yes, it sure was a great week in the Challenge account. I'm at a new equity high as well, up something like 50% on the week, not yet counting the ONS trades. I think my position sizing is considerably more aggressive than most people recommend. We'll see how well I can stick to that when the amount in that account grows to a sum that actually means something to me. (I predict I'll do fine.)

I notice you're weighting your entries differently based on which direction you favor in each pair. I'm going to start thinking about how to do that myself. I've been using the same size on both orders in each pair all along. It works, but what you do will obviously work better if I'm at least better than chance at picking the direction. Maybe you could put a star next to the order you're weighting more heavily when you send the orders each week.

Now, as to the results, my trades were as follows:

1. GBP/USD: short @ 1.9686 exited Friday @ 1.9220 for a 466 pip gain
2. USD/JPY: long @ 108.20 exited Friday @ 110.26 for a 206 pip gain
3. EUR/USD: short @ 1.5539 exited Friday @ 1.5007 for a 532 pip gain
4. USD/CHF: long @ 105.20 exited Friday @ 1.0819 for a 299 pip gain
5. GBP/JPY: short @ 211.76 stopped out @ 212.66 for a 90 pip loss

Net gain: 1,413 pips

My ONS entries are the same as yours.

I can't imagine taking profits early using a system like this. How would you ever make up the losses without holding out for gains like this? If I recall correctly, we had something like 6 straight weeks of losses, and some of those weeks were worse for me than they were for you because of reverse trades you took. Once my orders are all triggered and the opposite orders canceled, I basically just don't look in the Challenge subaccount until Friday. Speaking of canceled orders... I hope Oanda will implement an OCO function soon. It sure would make my trading life easier since I use the bracketing idea for 2 other systems I trade in addition to F/S.

-Xxxxx

----------

Since you asked in your blog for our trading experiences this week, here's mine.

I don't usually take your FS trades. This week I took my trades in swissy based on daily volatility breakout, and had a great week!

I did, however, take all of the ONS trades as usual. Finally, a great week! I'm well over 300 pips in total profits so far and we'll see what Sunday night will bring.

-Xxxxx

----------

Yes, it has been a very good week’s trading. I started trading the two Infiniteyield Forex Challenge systems on the 21st May and was down from GBP 5,000 to 3,453 so it had been a slippery slope up to the beginning of the week. Now my total equity (including open ONS positions) is over GBP 4,600... Very nice when it happens!

As you know, I am based in London so I take the trades around 5-6 hours before you though exit at the same time on Friday’s (I am not a good morning person). Generally I do not monitor my trades very closely once all the OCO orders have been sorted out. On Thursday evening I was pleasantly surprised by the First Strike action and entered my ONS orders – 3 of them were entered within an hour or two before I went to bed! I next checked the positions at 5.00pm on Friday afternoon and was showing a 38% profit... I exited the trades at 20:35 as I was still at work and wanted to leave for home – I thought the position wouldn’t change that much and may get worse rather than better. Overall that proved a reasonable assumption.

Due to my slightly different opening price time, I had 3 profitable trades and they were:

GBP/USD---USD/CHF---USD/JPY

For a total of 884 pips profit. Nice.

The ONS trades are looking good too – just going to be difficult to know whether to exit earlier or wait until midnight when I enter my First Strike orders.

I think that because I have a full time job and cannot always watch my trades it makes it easier for me to follow the system. In some ways it is easier too as you don’t have to agonise on when to exit – you just follow your system at the preset times.

My original plan was to increase my equity from GBP 5,000 to 50,000 after the first 3 months but I didn’t as I was so far underwater. I would have made serious profits had I done that but waiting was still the best plan. I want to be in this for the long haul and the big profits can wait. I now feel I can really make a go of this and become a full time trader.

I’m glad the week was good for you too. Your money management looks impressive and I keep on trying to guess how you do it!

-Xxxxx

----------

Hi,

I took the ONS and FS (both ways) trades and despite my poor execution, my returns are great. I mistakenly thought that the entry for ONS would be different if it came in at the 10 day low. By the time, I sorted it out and put market orders in, I missed out on 30 pips or so.

Thank you.

A. Xxxxx

-----------------------------------------------------

Note: This is a particularly valuable lesson displayed above. Executing despite making a mistake is the correct thing to do. Make sure you have the trade on. If you have to adjust your position size downward to facilitate the error - do it. Taking risk-adjusted trades is what succeeds, nothing else. ----JR----

-----------------------------------------------------

Joel,

I wanted to let you know that I did take all the trades and held on to them by the rules and boy am I glad I did.

It sure did take the sting off of the drawdown we were experiencing.

Thank you for what you are doing

Xxxxx

----

Thank you all for your responses. I'm sorry there wasn't more room for all of the ones I received, but I appreciate the time and details you were able to relate.

Trading correctly starts with your own mental preparedness. If one has the correct outlook and perception of the task, it is much easier to accomplish it.

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!

The Dollar's Herculean Strength Continues! --IFCN Wk 36 -Mon- Equity: $835.63.

The forex world is running for cover again this week from the new dollar bulls. Traders who just weeks ago thought the dollar was finished and would never recover are frantically buying the dollar as if it is the last game in town.

It isn't. But it might feel that way if you were short any sizable amount.

This morning I had the pleasure to exit the ONS trades from last Friday. We picked up a few more dollars from the weekend hold, primarily due to the continued down move of the Eur/Usd.

OneNightStand 08/08/08 entries--
All below exited this morning, 08/11/08, after midnight--
*Eur/Usd: Short @ 1.5192 –exited at 1.4979 for 213 pips profit.
*Gbp/Usd: Short @ 1.9269 –exited at 1.9194 for 75 pips profit.
*Usd/Chf: Long @ 1.0714 –Exited at 1.0814 for 100 pips profit.
*Usd/Jpy: Long @ 109.89 –Exited at 110.05 for 15 pips profit.
Total Profits: $ 30.22

Then came the placing of the week's FirstStrike orders:

Soon after, all 5 trades were executed and summarily stopped out by early morning.

The following were this week's FirstStrike entries:

• Eur/Usd: Short @1.4935, stopped out at 1.4995 for a 60 pip loss.
• Gbp/Jpy: Short @210.57, stopped out at 211.47 for a 90 pip loss.
• Gbp/Usd: Short @1.9148, stopped out at 1.9208 for a 60 pip loss.
• Usd/Chf: Short @ 1.0764, stopped out at 1.0824 for a 60 pip loss.
• Usd/Jpy: Short @ 109.56, stopped out at 110.16 for a 60 pip loss.

It is common for the markets to be fairly choppy after big moves like we experienced last week. So, out of the markets at least until Friday where there may be some potential OneNightStand trades--- we can do some study, some research and maybe think a little about the psychology of trading.

On Friday, I asked if any of you had some good success from taking the trades last week, and for those who felt like it to send an email so I could share some feedback so people can see how normal human thought processes need to be modified in the quest to become capable traders.

I got an overabundance of responses, and I thank you all very much for your contributions. I have to admit that I was actually amazed that so many have been faithfully pulling the trigger on these trades through the bad weeks as well as the good ones like last week.

I will post a few of them below tonight, and tomorrow post a few more.

Some key trading fundamentals came up naturally in some of the emails and I want to make sure others get to see them.

Some of the emails I received follow below:
(I'm sorry there is not room for all of them, thanks again to all of the writers)
----
I was surprised to hear about the trader that didn't get his fills at Oanda, must say I have never had a problem with them but my trades are small compared to some of the other traders there. Anyway it has been a good week for me to with my little system, here is the spreadsheet for the systems trades for the week. The only difference is I closed ou this morning with 152 pips instead of the 209 that were available at day's end, I still get a little nervous I guess though I am getting better.
Have a great weekend,
Xxxxxx

-----
Great trading week. Amazing in fact. As you know, I was in a pretty serious drawdown (64%) and this one week, I gained 80%. Now I am almost back to my original account balance and I am confident I will surpass my previous high over time whether it is from this trend or another.

I didn't like that drawdown, but generally I was okay. That is not to say I didn't go through the typical psychological crap. I did. But, the best result is, I persevered and stuck with the discipline. This showed me how strong the method is once you hop on a trend (and it was early in the trend) and maintain your discipline.

I should have learned the lesson below from your posts already. I made an assumption. First mistake. I took vacation this week (first in 2 years but yes I did work all week anyway, just did it from beach)
and did not bring my computer knowing there was one here already. I was on the computer a few times on Thursday and I decided that after I everyone went to bed I would set up the ONS trades. Well, there was a big storm and the internet went out. I couldn't believe it. I had much more anxiety over that then I did about my drawdown. It was midnight and all I could do was sit and watch the damn modem light wishing for it to go back on. Please stop blinking and go solid. Please.

I then looked for an all night internet cafe somewhere on the island via phonebook to no avail. I actually contemplated waking up a relative who lives here. That would have won me some points with the family.

I couldn't sleep as I was as anxious as a teenager the night before his big first date. I kept checking the connection every couple of hours for service. Waiting, waiting. This was like watching water boil. Painful.

Finally, it dawned on me that I could try to access my account through my phone. They have a beta for this on Oanda that I had looked at before. Not charting but can trade. I then contemplated violating one of my cardinal rules, which would be to rely on your e-mail to signal the trades. Key word is contemplated. Luckily, early the night before I had looked at the 10/40 MA and recalled the direction for the buys/sell. I was fairly confident, after this weeks trend and the current prices, that the MA lines weren't going to change in those hours.

I entered my trades solely from my memory as to where the highs and lows were and surprisingly I wasn't that far off. In fact G/J, was right on, not that it makes a difference with that trade. I did miss some movement in the trades but still profitable heading into weekend.

My lesson: always be prepared. I went out and promptly bought a wireless cell card for my laptop and will add a dial up account to my repetoire as well. Will this get entered in my book of shame?

Without a doubt.
Xxxxx
-----

Hi Joel,

Great trading this week for you alpha account. I can only imagine how your other trading accounts did. I was trading your first strike method and had a 21% increase in my capital from this week. I have traded it a total of 4 weeks now (3 weeks in drawdown(-8%) and 1 profitable week (+21%)). I just wanted to say thank for all of your help to us small fish out here.
Thanks for your help,
Xxxxxx

-----
Thanks to all of you again for all of your meaningful responses.

See you tomorrow.

Current equity is $835.63.

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!

Infiniteyield Forex in Action! New All-Time Equity Highs! --IFCN Wk 35 -Fri- Equity: $869.12

Trading is more a mental game than financial.

There will be no chest-beating from me after such a great week. Those of you who took the FirstStrike and OneNightStand trades this week are very glad they did, and should feel welcome to do a little chest-beating if you feel like it. You deserve it, because you actually took the trades. Those who took the reverse-trade short in the Eur/Usd can buy the drinks this weekend.

Enjoy those good feelings as much as you can, because the simple truth is the good feelings never feel good enough to eradicate the negative feeling experienced when undergoing the continuous psychological drain brought on by months of losses.

My simple summation of the week, “It's about time!”

Profiting as a professional trader comes down to taking your trades and holding on to the winners as long as they keep going your way. How one accomplishes this mission is part of the journey.

After this week's action, many who've just watched from the sidelines as FirstStrike was successful in so many of the pairs can see how it is actually TIME that makes the large profits possible from proper currency speculation. The only thing that stopped the Euro and the Pound from falling further this week was Friday's closing bell.

This action made it possible for FirstStrike and OneNightStand to profit mightily from the one-way markets.

If we had not been stopped out prematurely on the Usd/Jpy and the quick, errant long trade in the Eur/Usd, we would have had a HUGE week in the Alpha account. As it was, I still had some decent size on for the Gbp/Usd and Usd/Chf trades. The ONS trades today were simply the topping on the cake.

Even I was surprised as to how profitable the ONS trades were today. It goes to show that even experienced traders can underestimate the strength of panic and disappointment in large capital markets. That is why we tend to follow our own rules quite studiously – we know that the emotions of fear or greed can overwhelm the logic that we base our profit centers on.

Last week I touched on the “majority” rule: When the majority of a market's participants finally realize a new trend is present, you are likely at the midpoint of the move. I am certain that the majority have finally figured that there is a new trend in the currencies now, and they just found out for sure – today!

I was a beginning trader once too. I know that many who entered early in the week took profits after a couple of days in their favor, just because they've experienced so many losses in the past weeks. Only a few of you were able to resist taking the large profits available by Wednesday that paled into insignificance by Friday.

If any of you actually had good success from taking the trades this week, I would love to hear from you. Please send me an email.

I've already heard from one serious trader whose short Eur/Usd entry order (reverse trade) wasn't filled at all on Oanda. The jury is still out how they're going to handle the out-trade. It is markets like these that really test traders and the systems they trade on. I experienced no difficulties, but maybe others have....

I would love to share some of your feedback (no identifying material will ever be transmitted) with others so people can see the normal human thought processes that need to be modified.

--------------------

Here's the week's recap:

The data below is as of Friday's close, Aug. 8, 2008:

Start of week equity: $681.21

OneNightStand Exit(s) on 08/4/08 :

None--

Completed FirstStrike trades this week:

• Eur/Usd: Long @1.5627, stopped out at 1.5571 for a 56 pip loss.
• Gbp/Jpy: Short @211.98, stopped out at 212.88 for a 90 pip loss.
• Gbp/Usd:Short @1.9686, exited Friday at 1.9202 for 484 pip profit.
• Usd/Chf: Long @ 1.0530, exited Friday at 1.0808 for 278 pip profit.
• Usd/Jpy: Long @108.30, stopped out at 107.70 for a 60 pip loss.

Total losses: 206 pips
Total profits: 762 pips
Net profits: 556 pips

OneNightStand 08/08/08 entry(s):
*Eur/Usd: Short @ 1.5192
*Gbp/Usd: Short @ 1.9269
*Usd/Chf: Long @ 1.0714
*Usd/Jpy: Long @ 109.89
All above to be exited Monday morning, 00:01 CST
Unrealized Profits: $ 27.60

End of week equity: $869.12 (includes unrealized P&L)
Total Gain for Week: $187.91 (27.5% weekly increase)

This was admittedly a great week.

I didn't lose very much on the long Eur/Usd FirstStrike trade as it was only placed with minimal size. The Gbp/Jpy loss was not great either, but the Usd/Jpy was a full sized loss.

Nevertheless, the large Gbp/Usd and Usd/Chf trades were in markets that appeared to be on a mission. My only regret is that I didn't get on a Eur/Usd reverse trade. That would have been great, but it doesn't pay to get greedy.

As I stated last week and numerous times in the past, the way one profits from trading is by having substantial size on substantial winners.

Now that the world is totally aware of the Dollar trend change, trading may get more difficult again. Or not.

We'll see.

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. 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!

Despite Adversity, Patience wins out! --IFCN Wk 35 -Thu- Equity: $755.34.

"He that can have patience can have what he will."

Benjamin Franklin

Most don't remember that Benjamin Franklin was our nation's prime mover helping to establish the paper currency system in America. His early currency exchange provisions enabled our flegling country grow to the behemoth it is today. Whether for an ultimate good – or bad result, time will tell; he did understand economy and the proper use of money. He considered it a tool to be used adroitly and at the right time.

This was the right time to be involved buying the dollar and selling almost all other currencies.

Concerns about growth of world economies slashing demand for commodities are prompting traders to sell most currencies vs. the U.S. dollar. Countries such as Australia and Canada export many major commodities, such as oil, natural gas, and base metals. This drop in commodity demand and prices makes their currencies vulnerable too.

At the same time, weakening global growth and softer oil prices have led European investors to return to the greenback as a safe-haven currency.

Because of these forces, this has turned out to be a very good week for FirstStrike.

We are still in 2 FirstStrike trades that are profiting nicely. The only way things could be better would be if we still had the Usd/Jpy trade working for us, and of course a short in the Euro. Finally the world has come to a realization that the dollar should not have been sold as deeply as it was.

That is the nature of free markets. They overdo and then correct themselves, usually at the expense of the most irrational. The key to profiting is having robust methods for determining reasonable entries in the (temporarily) unreasonable market.

The following are this week's remaining FirstStrike entries:

• Gbp/Usd: Short @ 1.9686, stop 1.9746. Trade in progress.
• Usd/Chf: Long @ 1.0530, stop 1.0470. Trade in progress.

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

Current equity is $755.34.

I do have serious concerns about the profitability of any OneNightStand trades that might be executed tomorrow. With the extreme moves that have taken place already this week, the likelihood of most of the markets energy being spent is great. I'll still take the trades.

See you tomorrow.

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!

Euro Contretemps! --IFCN Wk 35 -Wed- Equity: $717.77.

Two more FirstStrike trades have bit the dust since Monday's
Eur/Usd loss. Surprisingly, the long Usd/Jpy and not so
surprisingly, the short Gbp/Jpy.

The dollar is in the midst of a major rout against all
the other major currencies. It was inevitable, considering the
world's unflagging bearish stance of dollars and anything dollar related over the past 2 years.

The press just loved reporting how the great US was experiencing financial difficulties. The constant rant about how the US' excesses were finally coming home to roost was a bit too early, but understandable for the world's have-nots. The “coming home to roost” consequences are reserved for a later time....

Reminds me of a metaphor involving an auto accident. Be careful about laughing at your fellow traveler's soiled clothes from the contretemps before you realize yours are shredded.

When any market reaches an apex it has little else to do but
reverse. The greater the surprise to the largest group
financially involved-- the greater the rout! This is a HUGE
surprise to most which involves many interrelated markets, so a serious reversal is likely in order.

-----
I got an interesting email within the last day that I will share
with you.

Joel,

I’m glad to see that the FX markets are turning around. I
have a question I was hoping that you could provide some insight to with regards to trade size.

As you mentioned to me in a previous e-mail, if you increase
your profits, you will increase your trade size.

At what point do you need to start to splitting up your trades?

For example, a friend explained to me once when I asked the
question, “If I had $5M USD, and I wanted to buy Silver Eagle
coins, how long would it take to get the coins?”

His answer was to the effect of, “Well, if you put that much
money out on the street for that product at once, then you will be raising the price of the product you are buying. If you DID want to buy that much, you would have to do it a little at a time”. Translation…. You can’t effectively make that
big trade all at once.

I did a Wikipedia search under Algorithmic Trading
http://en.wikipedia.org/wiki/Algorithmic_trading and there is
discussion on how algorithms in the trading systems can take a trade and break it up into multiple orders.

The bigger the amount being traded, the more it needs to be broken up into smaller amounts.

So my question to you is, if you started an account with $500, and your trade risk was 1% per trade. At what point ($$ amount) would you need to begin splitting up your trade size?

Thanks!

Xxxxxx

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Answer:

Good question.

This question can only be replied with a "that depends" answer.

Which market?

I could buy $5 million in silver coins instantly (ok, 3 minutes)
without raising any street price anywhere. Of course, I know
where to buy. If you tried buying that quantity of silver from
the small locality of Witchita, Kansas you definitely would
drive up the price tremendously.

Same goes with most markets. I could theoretically trade
FirstStrike and ONS without changing anything with my current money management all the way up to 2 - 3 million account size. Then I might consider breaking up the trades a bit.

I would likely make the change sooner because I would be
able to smooth equity swings by entering at different entries. When the Alpha account gets big enough, I'll do it.

Thanks for the question.

Joel

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The following are this week's FirstStrike entries:

Eur/Usd: Long @1.5627, stopped out at 1.5571 for a 56 pip loss.
Gbp/Jpy: Short @211.98, stopped out at 212.88 for a 90 pip loss.
Gbp/Usd: Short @1.9686, stop 1.9746. Trade in progress.
Usd/Chf: Long @1.0530, stop 1.0470. Trade in progress.
Usd/Jpy: Long @108.30, stopped out at 107.70 for a 60 pip loss.

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

The Usd/Jpy trade getting stopped out was more than a little
irritating. I would have preferred that trade had remained
intact. I was sure that the dollar was going to gain vs. the
yen. The bump in profits would have been welcome.

Current equity is $717.77.

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!