Tuesday, August 12, 2008

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.



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.



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:


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!




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----



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



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


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!

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