Wednesday, August 13, 2008

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

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1 comment:

The Archiphage said...

As you know, I use 2am/6 gmt as my open. That did keep me out of the first whipsaw on GBP/JPY, but actually being in that trade has been no picnic. The position was up by 766 pips by 11 am yesterday, and has taken back more than 300 of it so far. Still, it looks like I'll likely be able to cover the losses on the other 4 positions as long as we don't get a major reversal before I close this one tomorrow. My size on this pair is always only 2/3 what I trade on the others, so that's why I need at least 364 pips instead of only 240.