Friday, October 31, 2008

The Chop Continues! -IFCN Wk 47 – Thu- $1,455.40

One day you're at completely new equity highs, and the next-- you're down more than 10% those highs. Welcome to the world of high volatility!

The Eur/Usd shot up strongly early today and then dropped like a rock. Same with silver. And the other forex pairs.

Doesn't mean that the moves are done, but it appears we will still have to wait a bit until they get stronger. Indecision is still the order of the day

Here are the current week's FirstStrikePlus trades:
  • Eur/Usd: Long @ 1.2903, stop 1.2489. Trade in progress.
  • Gbp/Jpy: Long @ 159.69, stop 143.62. Trade in progress.
  • Gbp/Usd: Long @ 1.6412, stop 1.5510. Trade in progress.
  • Usd/Chf: Short @ 1.1479, stop 1.1650. Trade in progress.
  • Usd/Jpy: Long @ 97.26, stop 92.64. Trade in progress.
FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete rule-set for effective trade management.


Current trade equity is: $1,453.40
Silver position equity: $ 2.00
(Current XAG price: $9.41– 200 unit position average: $9.40)
TOTAL Equity: $1,455.40

Have a good morning. Only time will tell how profitable this week's trades will be.

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!

Wednesday, October 29, 2008

Perversity Rules- New Equity Highs! -IFCN Wk 47 – Wed - $1,667.31

I am surprised but happy that we got filled on all of our trades so quickly. A different wind is blowing in the forex market this week. The wind is up for most currencies.

It definitely looks like the dollar top is in. All the self-proclaimed savants 2 ½ months ago were certain that the Euro was unkillable – last week believed the Euro was finished. That is the condition I especially love when I contemplate a turn in the market.

The perversity of the market rules! It really would be best for all concerned if the currencies and commodity and stock markets continue to hold and put on gains. Long term, no one profits from depressions or conditions that can turn into them. The sooner the markets get liquid and buoyant, the better it is other players AND for us.

If the major players get sidelined by topsy-turvy markets, who will there be to pay us?

No surprise to most of you, after yesterday's bullish action in the XAG (silver), early this morning I had to buy another 100 units . This time I got filled at $9.30. That now makes the Challenge account's XAG total position 200 units (200 oz.) with a position average of $9.40. The XAG position stop is now placed at $7.90.

It was gratifying to see silver jump up again later this morning. I'll be a little happier when silver is $25.00.

Here are the current week's FirstStrikePlus trades:
  • Eur/Usd: Long @ 1.2903, stop 1.2489. Trade in progress.
  • Gbp/Jpy: Long @ 159.69, stop 143.62. Trade in progress.
  • Gbp/Usd: Long @ 1.6412, stop 1.5510. Trade in progress.
  • Usd/Chf: Short @ 1.1479, stop 1.1650. Trade in progress.
  • Usd/Jpy: Long @ 97.26, stop 92.64. Trade in progress.
FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete rule-set for effective trade management.

Current trade equity is: $1,503.31
Silver position equity: $164.00
(Current XAG price: $10.22 – 200 unit position average: $9.40)
TOTAL Equity: $1,667.31

It is too bad our position sizes are so small on FSP this week. It can't be helped when the last few weeks have been so violent.

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!

Tuesday, October 28, 2008

We Finally Got a Trade this Week! -IFCN Wk 47 – Tue - $1,438.76

After last week's moves, I wouldn't have been at all surprised to get NO trades this week in FirstStrikePlus. When you vary your buy and sell points due to the previous week's volatility and the previous week was the week from Gehenna, the market has to do a serious move to get a trade the next week.

We have one.

The Usd/Jpy rallied up to hit our buy price at 97.26. I don't have a lot of size on this trade because of the risk being 462 pips, but I also wouldn't be surprised if it turned out to be a winner by next week. The markets have been pretty oversold!

Most of the day the trade was profitable, but this evening the Usd/Jpy has slid back. It is a long week. Maybe we'll get another trade. Perhaps short the Usd/Chf....

I'm sure most of you watched the XAG drop heavily this morning to $8.45 and then recover to be up on the day. It pays to have a strong constitution when dealing in silver.

The current week's FirstStrikePlus trade:
  • Usd/Jpy: Long @ 97.26., stop 92.64. Trade in progress.
FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete ruleset for effective trade management.

Current trade equity is: $1,471.76

Special Silver long position:
Silver position equity: (-$33.00 )
(Current XAG price: $9.17 – 100 unit position average: $9.50)

TOTAL EQUITY: $1,438.76

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!

Monday, October 27, 2008

One Night Stand trades Successful! -IFCN Wk 47 – Mon - $1,430.86

After this morning's open at 00:00 CST, I exited the 4 surviving OneNightStand trades from Friday. The summary follows-

OneNightStand 08/24/08 entries:
*eur/usd: Short @1.2728, out at 1.2566 for 162 pips profit
*gbp/jpy: Short @152.82, out at 147.20 for 562 pips profit
*gbp/usd: Short @1.6029, out at 1.5717 for 312 pips profit
*usd/jpy: Short @95.33, out at 93.59 for 174 pips profit
Total ONS Profits: $ 84.70
(Total increase from Friday's equity: $45.50)

Current trade equity is: $1,473.86

Special Silver long position:
Silver position equity: (-$43.00 )
(Current XAG price: $9.07 – 100 unit position average: $9.50)

TOTAL EQUITY: $1,430.86

After all that volatility last week, it isn't surprising that there are still no FirstStrikePlus orders filled this week. I would be ok with none of them getting filled, but it's likely that at least a couple might, the most likely being the Usd/Chf trades which are only 128 pips away from this morning's open. Contrast that with the Gbp/Jpy pair which has buy/sell orders spaced more than 1200 pips from the open. Last week's move in the pound/yen was spectacular and had a historically large weekly range. It would be best if we didn't get a trade in that market until things quiet down.

I thought it would be instructive to compare last week's actual results trading FirstStrikePlus with what the actual system returns would be exiting on the first-profitable Monday's open -- which would've been this morning's open. If I had waited till this morning's open to exit, in every case except one – the long Usd/Chf trade – there would have been a substantial increase in profits. See below---

Mechanical entry/exit of last week's FSP: (*) is improvement over actual results
Eur/Usd: Short @ 1.3367, exited at 1.2593 for 774 pips profit (+212)
Gbp/Jpy: Short @ 174.07, exited at 1.4764 for 2643 pips profit (+896)
Gbp/Usd: Short @ 1.7193, exited at 1.5736 for 1457 pips profit (+354)
Usd/Chf: Long @ 1.1401, exited at 1.1607 for 206 pips profit (-66 )
Usd/Jpy: Short @ 100.95, exited at 93.80 for 715 pips profit (+352 )

Total losses: 0 pips
Total profits: 5795 pips (+1748)
Net profit: $280.95
Total additional gain vs. actual results: $77.89 (38% better results if I had held to Monday's open)

This is of course just one example, and it is not likely that we'll see many more weeks like the last one. As mentioned last week, with the action we saw- it became more of a gamble to be in the market at all. Even though we could have improved our profits by staying in, it could have easily worked out negatively for us.

This week may be a good one for reflection. And maybe a little rest.

This weekend I am going to be in Las Vegas for the London Squeeze workshop, Saturday Nov. 1st. I am looking forward to meeting the traders, some who've come from around the world. If this event is anything like the previous one, it will be beneficial for all of us.

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!

Sunday, October 26, 2008

Historically Profitable Week! -IFCN Wk 46 – Fri - $1,428.36

In 25 years of currency trading, I do not remember a week like this one.

Even tempering my risk tremendously this last week--- the IFCN Challenge Account has done extremely well with the straight-line moves in most all of the currency pairs favoring the dollar and yen.

It turned out to be a great week to be trading FirstStrike Plus. If we were still trading the original FirstStrike model of 50 pips added to/subtracted from the open with 60 pip stops and only taking the first trade, a couple of the big winners wouldn't have been taken. When volatility increases, it is best to have a method that adjusts automatically with that volatility. Even if the distance to the stop is a larger number than you would prefer.

Fortunately, with firms like Oanda allowing you to tailor your risk to as little as you want with incredibly small position sizes, having a 171 pip stop on the Eur/Usd is not a problem-- 1% risk of a $1200 account is $12.00. 700 units of Eur/Usd or .07 cents/pip x 171=$11.97 . So the profit of 562 pips this week in the Euro translated to $39.34. Not bad at all for the risk involved.

With the extended moves of Friday, it is obvious that coming out on Thursday was detrimental to potential profits from the FirstStrike Plus trades. I still would do the same thing again in a future situation due to extreme volatility. With frequent oscillations of hundreds of points up or down in minutes regardless of currency pair, being in any forex trade became more of a gamble than a reasonable strategic speculation.

By Monday morning's open we will see the opportunity cost for the decision. It could be substantial. Nevertheless, we currently have winning OneNightStand trades to exit on Monday morning.

Here's last week's Friday recap:

The data below is as of Friday's close, Oct. 24, 2008:

Start of week equity: $1,207.10
OneNightStand Exit(s) on 10/20/08 :
-None-

Completed FirstStrike Plus trades this week:
  • Eur/Usd: Short @ 1.3367, exited at 1.2805 for 562 pips profit
  • Gbp/Jpy: Short @ 174.07, exited at 1.5660 for 1747 pips profit
  • Gbp/Usd: Short @ 1.7193, exited at 1.6090 for 1103 pips profit
  • Usd/Chf: Long @ 1.1401, exited at 1.1673 for 272 pips profit
  • Usd/Jpy: Short @ 100.95, exited at 97.32 for 363 pips profit
Total losses: 0 pips
Total profits: 4047 pips
Net profit: 4047 pips ($203.06+)

OneNightStand 08/24/08 entry(s):
*eur/usd: Short @1.2728
*gbp/jpy: Short @152.82
*gbp/usd: Short @1.6029
*usd/chf: Long @1.1735, stopped out for 100 pip loss.
*usd/jpy: Short @95.33
The above to be exited Monday morning, 00:01 CST
Unrealized Net Profits: $ 32.20

Current trade equity is: $ 1,442.36

Special Silver long position:
Silver position equity: (-$25.00 )
(Current XAG price: $9.25 – 100 unit position average: $9.50)
(Weekly total XAG position equity gain: (-$14.00)

WEEK'S TOTAL EQUITY: $ 1,428.36
Total Gain for Week: $ 221.26
(18.3% weekly increase)

This was a very good week. I have gotten a number of emails from IFCN watchers/traders who have had 25% to 100% gains this week due to the FirstStrikePlus trades. I'm very happy for you.

Extraordinary markets make for extraordinary profits. No doubt there will be those who think these results are just due to chance. Research, and trading a very small account with real money at Oanda should help with those beliefs.

On to next week.....

Best wishes, and thanks for all the great notes of appreciation.

(Side note: Since profitable trading is usually accomplished due to some exploitation of human behavior, I am always interested in quirks of human nature. Please read the following:
Aoccdrnig to rcecnet rsecearh, it deosnt mttaer waht oredr the ltteers in a wrod are, olny taht the frist and lsat leettr be in the rghit pclae. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe!)

Interesting! Perhaps someone can figure out how to profit from this kind of tendency?

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, October 23, 2008

Outsized Profits Demand Early Exit! -IFCN Wk 46 – Thu – $1,436.16

Due to an extraordinary decision, at 09:31 CST I exited all of my FirstStrikePlus trades at the market. I still have the single XAG position of 100 units @ $9.50, a Non-FirstStrike trade. This week's FirstStrikePlus trades have gained more than 16% on equity with less than 5% total risk.

Early this morning, I had a nagging feeling that there was something that I needed to check. And so I did.

I did some market research about previous extremes I've experienced in forex volatility and the trades resulting from it. Primarily FirstStrike trades. This week has/had profits that exceeded 99% of all previous extreme weeks in the past 25 years. Could my profits get larger? Yes. But the research I worked through indicated that I had a 10% chance of having a larger profit by the time of exiting via a first-profitable-open and a 90% chance of having a significantly smaller profit than I had at the moment I completed my figuring.

My choice was obvious. Seconds later all of my FirstStrikePlus positions were gone. This was definitely a “preemptive-action-because-I-know-my-system” exit. (PABIKMS)

I make no apologies for closing my positions early.

I am executing this Challenge to increase the value of the account, not prove that I can follow a system. To loosely quote one of the famous traders of Market Wizards interviewed by Jack D. Schwager, “It is important to follow the rules of your system. It is also important to know when to break the rules.”

I trade to make excess profits vs. my risks, not win a “World's Best Mechanical Trader” award. It is possible I will give up additional profits by this early exit. I can live with that possibility. If this situation occurs again, I will take the exact same steps. Verify conditions, make an accurate assessment, execute as necessary.

For those of you who wish to continue holding and exit on Monday's open if the trades are profitable, or be willing to be stopped out for a loss, you will be following the system. You will then get the results of the system, which very likely will be extremely profitable after a week with moves of the magnitude we've seen.

I use systems like FirstStrikePlus as tools to get in and out of markets with a statistical edge. If I can improve my odds and average size of profit by knowing the inner dynamics of that system-- I will do so in a heartbeat. I take the ordinary mechanical trades, from exact entry-to-exact-exit more than 95% of the time. The special 5% is when excess profits are possible.

If one doesn't have any additional advantage, trading a system that has a basic edge is the minimum you need. Then you begin to really learn, usually by doing the repetition necessary to trade the method-- putting in orders and getting executed in the market. It then becomes your personal choice whether you will take practical advantage of those things you learn over time-- by improving the average size of your profits compared to the statistical model--- or not.

My exits follow----

Completed FirstStrikePlus trades this week:
  • Eur/Usd: Short @ 1.3367, exited at 1.2805 for 562 pips profit
  • Gbp/Jpy: Short @ 174.07, exited at 1.5660 for 1747 pips profit
  • Gbp/Usd: Short @ 1.7193, exited at 1.6090 for 1103 pips profit
  • Usd/Chf: Long @ 1.1401, exited at 1.2805 for 272 pips profit
  • Usd/Jpy: Short @ 100.95, exited at 1.2805 for 363 pips profit
Total losses: 0 pips
Total profits: 4047 pips
Net profit: 4047 pips ($203.06+)

Current trade equity is: $1,421.16
Silver position equity: $15.00+
(Current XAG price: $ 9.65– 100 unit position average: $9.50)

TOTAL Equity: $1,436.16

This evening is when OneNightStand trades are placed. The markets have moved enough for one week to minimize the potential for even average success for OneNightStand entries.

I will dutifully place my trades, but I will be risking less than .5% of account size per entry.

Have a good day..

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!

Wednesday, October 22, 2008

The Dollar, the Strongest of the Weak..., Today! -IFCN Wk 46 – Wed – $1,402.66

The dollar struck two-year highs against a majority of currencies today as concerns about worsening national economies again challenged investors to pare some more “risky” holdings. Investors are finally understanding that European economies could deteriorate as much as the U.S. economy. Funny how they are actually buying into that “weak” US economy when they sell their currencies and buy the dollar.

What interests me is how these same investors who just 3 months ago were dyed-in-the-wool euro zealots are now dyed-in-the-wool dollar zealots.

The fact that they were so wrong in their judgment before now makes them experts in determining “real” value---TODAY???

Why not pay someone to throw gasoline on the flames? The Bank of England Governor ---Mervyn King, suggested this week that the British economy might be entering the first recession it's seen in 16 years. That didn't help European investor's feeling about holding currencies and stocks in an already depleted market. More selling was triggered.

All of this tumult really helped our FirstStrikePlus trades. The Gbp/Jpy pair had 1550 pips profit at the time of writing this. Impressive.

Too bad the position sizes of the Challenge account are so much smaller this week because of the volatility last week. That is the nature of trading correctly. At least we are in, in the right markets-- and in the right directions.

The current week's FirstStrikePlus trades:
  • Eur/Usd: Short @ 1.3367, stop 1.3538. Trade in progress..
  • Gbp/Jpy: Short @ 174.07, stop 178.65. Trade in progress.
  • Gbp/Usd: Short @ 1.7193, stop 1.7452. Trade in progress..
  • Usd/Chf: Long @ 1.1401, stop 1.1302. Trade in progress.
  • Usd/Jpy: Short @ 100.95, stop 102.47. Trade in progress
FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete ruleset for effective trade management.

Current trade equity is: $1,408.66
Silver position equity: ($6.00 -)
(Current XAG price: $ 9.44 – 100 unit position average: $9.50)

TOTAL Equity: $1,402.66

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, 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!

Tuesday, October 21, 2008

Go With the Flow! -IFCN Wk 46 – Equity: $1,378.14

This is turning out to be an out-sized (profitable) week for the newly instituted FirstStrikePlus.

Because the forex market has presently shown a strong tendency to whip back and forth, simple fixed volatility breakout points are subject to being triggered and being stopped out within minutes. Even so, they do work, because if the market doesn't immediately stop out the position initiated, the resulting profits from these types of markets can be and have been..., extreme.

It is better for overall net profitability and for proper trading education to trade with a volatility-adjusted method such as has been adopted.

Here are the current week's FirstStrikePlus trades:
  • Eur/Usd: Short @ 1.3367, stop 1.3538. Trade in progress..
  • Gbp/Jpy: Short @ 174.07, stop 178.65. Trade in progress.
  • Gbp/Usd: Short @ 1.7193, stop 1.7452. Trade in progress..
  • Usd/Chf: Long @ 1.1401, stop 1.1302. Trade in progress.
  • Usd/Jpy: Short @ 100.95, stop 102.47. Trade in progress
FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete ruleset for effective trade management.

Current trade equity is: $1,315.14
Silver position equity: $63.00
(Current XAG price: $10.13 – 100 unit position average: $9.50)

TOTAL Equity: $1,378.14

Many of you have contacted me about the large profits you have accrued, wondering if I am planning on implementing a trailing stop, such as the 50% trail which I have used in recent weeks. You may certainly go ahead and use the technique if you wish, on part or all of your position. It should smooth your equity curve, but it may also stunt the potential of your trades in the current market.

We'll only know for sure by the time of our exits.

With FSP, part of the larger edge it provides is the extra time it can stay in a trade. I may avail myself of a trailing stop in the future, but it will likely be only on rare occasions. It is tempting when you have 700+ pips in a trade to trap a measure of profit.

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!

Monday, October 20, 2008

Sometimes the Best Position Is.... -IFCN Wk 46 – Mon – $1,283.01

a small position....

Smaller positions with larger stops are best when markets are this fluid. This was a good week to start trading FirstStrikePlus.

After this morning's open (Monday) at 00:00 CST, there were no OneNightStand trades to exit. Just the new entries for FirstStrike Plus. If you haven't already, download the volatility-adjusted ruleset here --


Here are the IFCN entries for this week's FirstStrikePlus trades:
  • Eur/Usd: Short @ 1.3367, stop 1.3538. Trade in progress..
  • Gbp/Jpy: Short @ 174.07, stop 178.65. Trade in progress.
  • Gbp/Usd: Short @ 1.7193, stop 1.7452. Trade in progress..
  • Usd/Chf: Long @ 1.1401, stop 1.1302. Trade in progress.
  • Usd/Jpy: -No trade yet-

FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete ruleset for effective trade management.

Current trade equity is: $1,237.01

Silver position equity: $46.00
(Current XAG price: $9.96 – 100 unit position average: $9.50)

TOTAL Equity: $1,283.01

Placing your orders may take courage, but that is the only way you will be able to profit from these extraordinary moves.

I'm sorry I haven't been able upload these posts as timely as I would have preferred. Business has had to take priority. There have been many funds needing technical assistance over the past weeks, with me captive on the phone for most waking hours.. I don't particularly enjoy this part of the market fallout.

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!

End of Week Recap.... -IFCN Wk 45 – Fri – $1,207.10

This is the last week we will be reporting on regular FirstStrike trades. (Fixed 50 pip breakouts above/below the week's open) Next week we will be using FirstStrike Plus, a volatility-responsive FirstStrike model.

Here's last week's Friday recap:

The data below is as of Friday's close, Oct. 17, 2008:

Start of week equity: $1,205.35

OneNightStand Exit(s) on 10/13/08 :
10/10/08 Eur/Usd short @ 1.3442 exited at 1.3522 Monday for an 80 pip loss.
($12.23 total equity loss from Friday.)

Completed FirstStrike trades this week:
  • Eur/Usd: Long @ 1.3623, stopped out at 1.3503 for a 120 pip loss.
  • Gbp/Jpy: Long @ 171.74, exited at 176.05 for 431 pip profit
  • Gbp/Usd: Long @ 1.7119, exited at 1.7320 for 201 pip profit
  • Usd/Chf: Short @ 1.1258, stopped out at 1.1378 for a 120 pip loss.
  • Usd/Jpy: Long @ 101.02, stopped out at 99.82 for a 120 pip loss.
Total losses: 360 pips
Total profits: 632 pips
Net profit: 272 pips ($24.98+)

OneNightStand 08/17/08 entry(s):
*None--

Current trade equity is: $ 1,218.10

Special Silver long position:
Silver position equity: (-$11.00 )
(Current XAG price: $9.39 – 100 unit position average: $9.50)
(Weekly total XAG position equity gain: (-$11.00)

WEEK'S TOTAL EQUITY: $ 1,207.10
Total Gain for Week: $ 1.75
(0.1% weekly increase)

I'm getting ready for next week's start of FirstStrike Plus. The trading methodology should be better able to profit when weekly volatility is excessive -- as we are currently experiencing. As I mentioned a week ago, I had originally planned on releasing it after the first year anniversary of the IFCN trading challenge. Since the markets are dealing us their toughest, it is best to advance to meet it with the best tools.

The potential for profit is better too. Persevere through the wild rides the dollar is providing right now. The crazy moves can't last forever, even though it seems like it when you're in the market.

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, October 16, 2008

Silver Attention! -IFCN Wk 45 – Thu – Equity $1,246.21

You might find the following daily XAG chart interesting----

I've talked about diagonal triangles before, and there has rarely been a better example than is now visible in XAG (silver). There was a fast drop again today, with a tap to a slight new low, which touched the support-line created by numerous decending lows on the chart. According to practical technical analysis, when the downsloping resistance line (upper line) is breached to the upside, the next impulse move should be under way.

Due to the fortuitous drop in silver today, I bought 100 units of XAG @ 9.50. I have a stop placed at $7.50. ($200 risk) I have little concern of that stop being touched.


The week's remaining FirstStrike trades:
  • Gbp/Jpy: Long @ 171.74, stop 169.94.
  • Gbp/Usd: Long @ 1.7119, stop 1.6999.
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current trade equity is: $1,208.21.
Silver position equity: $38.00
(Current XAG price: $9.89 – 100 unit position average: 9.50)
TOTAL Equity: $1,246.21

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, 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!


Wednesday, October 15, 2008

It Takes Time....IFCN Wk 45 – Wed- Equity $1,182.72

Markets rarely stop and turn on a dime. After getting soundly pummelled for weeks, oftentimes the best solution is respite. That is the current choice of the most of traders.
We lost another trade today. The FirstStrike long Usd/Jpy @ 101.02 got stopped out at 99.82 for a loss of 120 pips. It was a victim of featureless trading after the sharp run-up on Monday. Traders are not very willing to push much position size in any other currency but the dollar.

Fear of increasingly bad economic numbers is keeping most forex traders on the sidelines. Last week's action took a major psychological toll on everyone. While most of the panic selling and buying has been completed, any new positions placed are very tentative in nature.

Current trading reminds one of old sayings about cats and hot stoves.


This week's current, remaining FirstStrike trades:
  • Gbp/Jpy: Long @ 171.74, stop 169.94.
  • Gbp/Usd: Long @ 1.7119, stop 1.6999.
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current trade equity is: $1,182.72

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, 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!

Tuesday, October 14, 2008

The Quiet Before the Storm! -IFCN Wk 45 – Tue – Equity $1,268.56

The dollar seems to be stopped by the global recapitalization plan. Surprised?

You shouldn't be. It is the classic working out of the “Buy the news, sell the fact!” principle that works regardless of the side you happen to be on. In this case it was the foreign currencies being traded in for dollars as long as panic reigned, and now that the panic is basically over..., they're not continuing their dollar buy programs.

After Friday's tremendous currency capitulations, we sit in narrowing ranges above the lows waiting to see if there is going to be another spike.

That is why we follow our method, and FirstStrike has us long the Sterling and Gbp/Jpy, and long Usd/Jpy, the only long Dollar trade that is currently working.

I expect the dollar to lose ground from here, with intermittent foray's like a border collie in a herd of sheep. Because that is what is expected of it.


The US dollar tends to gain during times of risk – large entities feel being buried in the world's largest volume financial currency is a protection of sorts. That perception is a reality we have to accept. For now.

That perception will not likely last forever.

Werewolf Alert! The XAG (silver) is looking like it may have stopped going down too. This is a very good area to pick some up for the long haul - if you can handle the risk holding it to below $8.00. On Friday it got as low as $9.40 before it recoiled back up. Panic did a number on some large hedge funds. Now that the price is down here it is up to us to pick up what we can afford.

----------

This week's current, working FirstStrike trades:
  • Gbp/Jpy: Long @ 171.74, stop 169.94.
  • Gbp/Usd: Long @ 1.7119, stop 1.6999.
  • Usd/Jpy: Long @ 101.02, stop 99.82.
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current trade equity is: $1,268.56.

Have a good day.

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!

Monday, October 13, 2008

Rebound at Last! IFCN Wk 45 – Mon – Equity $1,326.12

Last week I revisted the double-edged sword issue of volatility and the benefit to using breakout points which are adaptive to current volatility instead of fixed breakout points. I am releasing a version of FirstStrike that better adapts to market conditions. Bring on the big moves! I will be using this adaptive version from now on in the IFCN Challenge account.

Since I was not able to get the ruleset for FirstStrike Plus distributed before this week's action began on Monday, I used the same double risk/doubled distance fixed point method used the previous week. Volatility is, of course, even higher this week than last.

When you have the Dow rocketing up more than a 1100 points in a day, and the Gbp/Jpy up more than 1400 pips from Friday's lows, you can be sure that this business is not for amateurs and order placement better be made with due respect to the action we are experiencing.

In last week's recap post, completed a short time ago – I inserted a link to download the PDF which explains how the orders for FirstStrike Plus are calculated. If you wish to continue with the original version of FirstStrike, that is definitely up to you; just be aware that a 100 pip move right now in the Gbp/Usd takes less time than a 20 pip move did 3 weeks ago in the same trading pair. Again, here is the link to FirstStrike PLUS.

As a side note: It is very possible that we are seeing a bottom being made in the Gbp/Usd, Eur/Usd, and maybe even the Gbp/Jpy that could last for weeks, months, and perhaps even years. Many great companies' stocks have hit irrationally low prices that will undoubtedly be snapped up. Microsoft, although not my favorite company, is currently irreplaceable in a technical world. From what I saw today, I'm certain Microsoft is a huge buy. And I don't ever like stocks.

It may be a little early to tell for sure, but the level of panic that masses of people have been feeling last week makes the kind of bottoms that stick for a very long time.

____________________

After this morning's open at 00:00 CST, I exited the short OneNightStand Eur/Usd trade from Friday. I was short @ 1.3442 and had gone into the weekend profitable, but not very encouraged by the end-of-week action I saw. I exited the Eur/Usd this morning at 1.3522 for an 80 pip loss. ($12.23 total equity loss from Friday.)


Here are the IFCN results of this week's FirstStrike trades:
  • Eur/Usd: Long @ 1.3623, stopped out at 1.3503 for a 120 pip loss.
  • Gbp/Jpy: Long @ 171.74, stop 169.94. Trade in progress.
  • Gbp/Usd: Long @ 1.7119, stop 1.6999. Trade in progress.
  • Usd/Chf: Short @ 1.1258, stopped out at 1.1378 for a 120 pip loss.
  • Usd/Jpy: Long @ 101.02, stop 99.82. Trade in progress.

FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current trade equity is: $1,326.12.

I haven't picked up any more silver, yet. I'm beginning to feel like a werewolf after Friday's cleanout moves.

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, 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!

Still Alive! IFCN Wk 44 – Fri – Equity $1,205.35

Volatility concerns have encouraged me to make a change that I had planned to implement after the IFCN celebrated its first anniversary. That change is to introduce a version of FirstStrike that automatically adapts its buy/sell prices to the current volatility of the market.

The original version has worked well for the last 10 months, but with no idea of when the increased market activity will subside – I am issuing the ruleset for FirstStrike Plus which I will be using from next Monday forward in the Challenge account. You can obtain it from this link....

Here's last week's (Delayed) recap:


The data below is as of Friday's close, Oct. 10, 2008:

Start of week equity: $1,265.62

OneNightStand Exit(s) on 10/06/08 :
-none

Completed FirstStrike trades this week:
  • Eur/Usd: Short @ 1.3518, stopped out at 1.3638 for a 120 pip loss.
  • Gbp/Jpy: Short @ 180.00, exited at 177.03 for 297 pip profit.
  • Gbp/Usd: Short @ 1.7488, stopped out at 1.7608 for a 120 pip loss.
  • Usd/Chf: Long @ 1.1460, stopped out at 1.1340 for a 120 pip loss.
  • Usd/Jpy: Short @ 102.18, exited at 100.27 for 191 pip profit.
Total losses: 360 pips
Total profits: 488 pips
Net profit: 128 pips ($5.89+)

OneNightStand 08/10/08 entry(s):
*Gbp/Jpy: Short @ 166.14, stopped out @ 167.14 for 100 pip loss. ($11.40-)
*Eur/Usd: Short @ 1.3442
The open position above to be exited Monday morning, 00:01 CST
Unrealized Profits: $ 3.24

Special Silver long positions:

200 unit XAG position stoploss hit @ 10.75. (Position average 10.87)
Position equity at end of week: -0-
(Weekly total XAG position equity loss: $58.00.)

WEEK'S TOTAL EQUITY: $1,205.35

Total Loss for Week: $60.27 (4.8% weekly decrease)

What an incredible week! We saw a huge peak to valley equity swing – at one point unrealized equity was $1552, much of that from XAG profits – which then disappeared when an over-leveraged hedge fund had to dump its cargo on Friday without any elegance whatsoever. There went our profits and a 22% drawdown completed in less than 12 hours.

Trading with high leverage is what causes the following axiom to be repeated forever – big positions create big problems....

As this recap was delayed, it is obvious that the stock and forex markets have stood their ground on Monday and are putting in a good showing.

We're in for the ride. The rest of the week will show us how big that ride might get.

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!

Historic Week! IFCN Wk 44 – Fri-

Due to extraordinary time demands caused by trading volatility this last week, I did not complete the week's recap and detail intended information about optional volatility modifications to apply to FirstStrike and ONS.

Both should be completed Monday, October 13.

I'm glad to help others to potentially reap the opportunities presented by the current market action, but I'm also critically aware of my responsibility of taking care of my own profits and trading. Thanks for your understanding.

Joel Rensink

Thursday, October 9, 2008

Another Shoe Falls! - IFCN Wk 44 – Thu- Equity: $1,458.23

These are momentous times.

It is nice for those of us who are liquid and in the forex market, taking only the trades where we have an edge, instead of being at the mercy of fund managers who were in grade school when the “crash of '87” took place. These sad creatures have only known bull markets and don't realize that serious drops can take place. Like what we see now.

Everyone should read Nassim Taleb's books- Fooled by Randomness and Black Swan if they haven't already. And even if they have. It helps get perspective on the current panic of the unwitting.


Here is the status of this week's final FirstStrike trade:
  • Usd/Jpy: Short @ 102.18, stop 103.38. Still going-- last check: ~350 pips profit.
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Yesterday I mentioned that there were very few shoes left to fall. We got a huge one today, via the stock market(s). Around the world, the stock markets fell tremendously. The chart below is what the Dow did this week at the time of writing.


So many people are afraid just when they should have been waiting in cash for the greatest bargains of the next decade.

Of course, I like values like silver, which inflation and high energy prices make extremely expensive to mine. But there are hundreds of stocks like McDonalds, for a quick example; which are unlikely to go out of business or suffer any slowdown whatsoever.

Panics come in cycles. A big cycle bottom in the stock market is due right now. That doesn't mean that the stock market is going to stop on a dime, but it indicates to me that the panic in the market will get a little less severe and probably help the currencies stabilize soon.

The gross domestic product (GDP) is a measure of a country's income and output. Usually it is defined by the total market value of all goods and services produced within the country in a given calendar year. The USA has gone through wars and depressions and terrible crises before. They all seemed terrible and frightening at the time. But still the GDP of this country increased steadily despite the problems, likely because of the spirit of the people who live here.

They think, they create, they add value. Not all of them, to be sure. But enough of them. Check the chart below for the GDP from 1900 to present. We had 2 world wars, a major worldwide depression, high interest rates, low interest rates, and even Jimmy Carter. And still the GDP has risen.


The end is not here yet. We have too many bull markets to ride before that happens. The new bull markets created from this panic will make everyone forget the troubles now just like no one remembers the “panic of 73”.

Have a good evening.


Current trade equity is: $1,235.23.
Silver position equity: $223.00.
(Current XAG price: $11.99 – 200 unit position average: 10.87)
TOTAL Equity: $1,458.23

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!

Wednesday, October 8, 2008

The TRUTH: We're the 10th Man!! - IFCN Wk 44 – Wed- Equity: $1,366.54

The following was sent to me thanks to George B. --

Bar Stool Economics

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this:

  • The first four men (the poorest) would pay nothing.
  • The fifth would pay $1.
  • The sixth would pay $3.
  • The seventh would pay $7.
  • The eighth would pay $12.
  • The ninth would pay $18..
  • The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

'Since you are all such good customers, he said, 'I'm going to reduce the cost of your daily beer by $20.'

Drinks for the ten now cost just $ 80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free.

But what about the other six men - the paying customers?

How could they divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33.

But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, paid nothing (100% savings). The sixth now paid $2 instead of $3 (33%savings). The seventh now paid $5 instead of $7 (28%savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 (22% savings) The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before.

And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

'I only got a dollar out of the $20,' declared the sixth man.

He pointed to the tenth man, 'but he got $10!'

'Yeah, that's right,' exclaimed the fifth man.

'I only saved a dollar, too. It's unfair that he got ten times more than I!'

'That's true!!' shouted the seventh man.

'Why should he get $10 back when I got only two? The wealthy get all the breaks!'

'Wait a minute,' yelled the first four men in unison.

'We didn't get anything at all. The system exploits the poor.'

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him.

But when it came time to pay the bill, they discovered something important.

They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists, and college professors, is how our tax system works.

The people who pay the highest taxes get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore. (Note: Think: Atlas Shrugged! - jr)

In fact, they might start drinking overseas where the atmosphere is somewhat friendlier...


David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia

For those who understand, no explanation is needed.

For those who do not understand, no explanation is possible
__________________

Here is the status of this week's FirstStrike trades:
  • Eur/Usd: Short @ 1.3518, stopped out at 1.3638 for a 120 pip loss.
  • Gbp/Jpy: Short @ 180.00, exited at 177.03 for 297 pip profit.
  • Gbp/Usd: Short @ 1.7488, stopped out at 1.7608 for a 120 pip loss.
  • Usd/Chf: Long @ 1.1460, stopped out at 1.1340 for a 120 pip loss.
  • Usd/Jpy: Short @ 102.18, stop 103.38. Trade in progress.
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

I'm beginning to believe the worst of the avalanche is over. There are very few shoes left to fall.

Have a good evening.


Current trade equity is: $1,226.54.
Silver position equity: $140.00.
(Current XAG price: $11.57 – 200 unit position average: 10.87)
TOTAL Equity: $1,366.54

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!

Tuesday, October 7, 2008

Higher Volatility – Sword of Damocles! IFCN Wk 44 – Tue- Equity: $1,337.95

Sword of Damocles

The recent high volatility has made “normal” a thing that changes hourly. In general, volatility is a good thing for traders, like me, who use volatility-breakout methods. But, you need to be aware of the flip side of the volatility equation too.

We saw the real cost of volatility in our ONS trades last Friday.

OneNightStand operates on a principle that was originally discovered and exploited without using stops. With some money management, using a reasonable stoploss on each trade; you can eliminate serious negative outliers. And eliminate great profits, as we saw with last week's ONS sells of Eur/Usd and Gbp/Jpy. My 100 pt. stops got hit because of substantial snapbacks intraday. If stops were not used, as per the original concept--- exiting Monday morning would have returned profits of 129 pips and 322 pips respectively. A much better result for those specific trades.

I have proven to my own satisfaction that using money management stops does improve overall trade efficiency, as most of the big profit outliers don't back up once entered. I will continue their use. The psychic cost is when you see the principle work with you safely out of the market by your own hand.

FirstStrike trades this week were taken with double the usual size of buy/sell points and stop points once entered. For example, this week's buy orders for Eur/Usd:

(eur/usd: 1.3618 OPEN) BUY 1.3718, stop 1.3598. If the regular 50 pip buy/sell distance and 60 pip stop were used the order would be: BUY 1.3668, stop 1.3608.

The reason is, again; the recent extreme volatility. Volatility in a given market can make you a lot of money-- if you are still in when it finally goes your trade's direction. When latent volatility is so great that your buy/sell distances can be elected due to increased “noise” levels, you stop having as great of an edge relative to the risk you are taking by entering trades.

Currently the 10 day average daily range of the Eur/Usd is 254 pips. For the previous year prior to the August meltdown, the average daily range was around 124 pips. For the Gbp/Usd pair, the numbers are 287 and 162 respectively.

That is why it is better if you use breakout points that are adaptive to current volatility instead of fixed breakout points. For volatility breakout methods, fixed points do work adequately over time-- but the variance in potential returns increases too. Hence the reason for this week's increase in entry numbers from the weekly open.

In my personal trading I have always used volatility-adjusted entry points. One of the main reasons I started trading the IFCN account with fixed points was because the simplicity of the concept and I thought newer traders might find the process less arduous and facilitate their taking of the trades. I've reiterated numerous times that the biggest hurdle traders have to overcome is the consistency of taking trades with the same kind of edge over and over again..., that consistency is more important than how big the edge is. “Being in” is how you put yourself in the way of profits.

Months ago I mentioned that I intend to eventually convert the FirstStrike trades to buy/sell points based on current volatility. It wasn't necessary before the recent major increase in forex volatility. Since it is here now with no indication of letup, it is a good time to incorporate it into the Challenge account. In the next few days I will discuss the volatility parameters I will incorporate into FirstStrike and perhaps even into OneNightStand trades.

I have little doubt that those who wish to continue using fixed buy/sell levels will do well over time, but the increased risk of premature stop-outs will have be borne.

Concerning the FirstStrike trades this week, almost all of the “normal” 60 pip stops would have been hit before there was any opportunity to make substantial profits. Since the trades had larger stop points, it was necessary to reduce position size accordingly, something that is easy to do with Oanda, since you can trade the smallest possible position size of any firm I'm aware of.

After getting filled and the market plummeting, I moved to a 50% trailing stop on the Gbp/Jpy profits as they were very large very quickly. We are out happily with 297 pips profit.


Here are the IFCN results of this week's FirstStrike trades:
  • Eur/Usd: Short @ 1.3518, stopped out at 1.3638 for a 120 pip loss.
  • Gbp/Jpy: Short @ 180.00, exited at 177.03 for 297 pip profit. (50% profit stop)
  • Gbp/Usd: Short @ 1.7488, stopped out at 1.7608 for a 120 pip loss.
  • Usd/Chf: Long @ 1.1460, stop 1.1340. Trade in progress.
  • Usd/Jpy: Short @ 102.18, stop 103.38. Trade in progress.
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

More Silver dealing:

At 2:50 PM CST Monday I bought 100 units more of XAG @ 11.00 with a stop at 10.75 (Total risk $25.00) That brings the IFCN account's silver position to 200 oz. (average: 10.87) with a position protective stop at 10.75. The latest was a very low risk entry and whether this additional trade succeeds or not, will be my last attempt at purchasing until higher prices become the order of the day. Likelihood of success will increase as the prices get higher, unfortunately-- so will the risk.


Current trade equity is: $1,223.95.
Silver position equity: $114.00. (Current silver price: $11.44)
TOTAL Equity: $1,337.95

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!

Sunday, October 5, 2008

The Week's Silver Bullet! IFCN Wk 43 – Fri- Equity: $1,265.62

Quite a week. We had great results with two of our FirstStrike trades, a result which is always welcome.

We had extremely negative results in our XAG, or silver trades. That doesn't mean that buying silver is bad, but it means that there is a lot of market action that must be withstood until visible trends resume.

As we've seen many times in the past, tradable trends can appear seemingly from nowhere, and definitely on their own timetable.

Here's the week's recap:

The data below is as of Friday's close, Oct. 3, 2008:

Equity at End of Previous Week: $1,468.07


OneNightStand Exit(s) on 9/29/08 :
None

Completed FirstStrike trades this week:
  • Eur/Usd: Short @ 1.4449, stopped out at 1.4509 for a 60 pip loss.
  • Gbp/Jpy: Short @ 193.74, exited at 190.07 for 367 pip profit.
  • Gbp/Usd: Short @ 1.8230, exited at 1.7728 for a 502 pip profit
  • Usd/Chf: Long @ 1.1007, stopped out at 1.0947 for a 60 pip loss.
  • Usd/Jpy: Short @ 105.89, exited at 105.88 for 1 pip profit.
Total losses: 120 pips
Total profits: 870 pips
Net Gain: 750 pips ($93.15+)

OneNightStand 08/29/08 entry(s):

*Eur/Usd: Short @ 1.3747, stopped out at 1.3847 for 100 pip loss.
*Gbp/Jpy: Short @ 184.72, stopped out at 185.72 for 100 pip loss.
Realized Loss: $ 21.60.

Systems' End of week equity: $1,282.62.

Special Silver long positions:
50 unit XAG buy @ 12.00, exited at $11.00 for $50.00 loss.
100 oz. @ 10.75 on 9/17/08. Stoploss @ 10.75.
Position equity: $33.00 ( 10/03/08 close @11.08.)
(Silver Equity total weekly loss: $274.00.)

WEEK'S TOTAL EQUITY: $ 1,265.62
Total Loss for Week: $202.45 (13.7% weekly decrease)

I am constantly reminded of the true, old saying, “Live by the sword, die by the sword.” When you have highly leveraged positions, you get large changes in profits and losses. The silver trades were shining proof of that effect this week in the loss column.

Ironically, the moves – and the losses in the challenge account are directly attributed to other highly leveraged positions held by banks that have been forcing them to exit dissimilar markets (crude oil hedge funds) chaotically which affect other markets like silver (as part of the product baskets held by the hedge funds).

Next week should be equally tumultuous.


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, October 2, 2008

Not a Quiet Day! IFCN Wk 43 – Thu- Equity: $1,312.67

Wow! Not a day for the faint-hearted in the metals!

Today, it seemed to be hard to keep a good metal up. Yesterday, silver showed its typical strength and ran up to 12.96 before backing off somewhat by the end of the day.

Out of nowhere – it seemed – came massive selling, dropping the price more than $2.00 from yesterday's high, more than 15% of the metal's value within 27 hours. Gold fell in unison, but to a smaller extent.

For a long while the market hovered just above my stop at $11.00 for the extra 50 units (50 ounces) I picked up Tuesday at $12.00.

Eventually, the price slid to hit my stop, I lost the $50 risked and then had the opportunity to watch the silver market go down even further to test the area where I bought the first 100 ounces 2 weeks ago. I had raised my stop to breakeven – at 10.75. As of this moment, the low has been 10.79 on Oanda and I have not been stopped out yet.

If I was paranoid, I might believe that Silver traders are reading my mind, or at least this site to hit my stops. That's ridiculous of course, but the markets do go where bunches of orders are. Orders are the fuel for the market.

This sudden silver collapse is ironic, since the current financial boondoggle we find ourselves unwittingly paying for is – to date – the single largest contribution to inflation ever created. If the public was truly aware of the ramifications of the current conflagration, they would be buying “real” material instead of holding most of their paper assets which have had dismal showings over the last 5 years. But no, they and the asset managers of the world are in wrong investment vehicles because they prefer to be in the good graces of all the other managers and investors.

Even if they are in perpetual bad company.

Those who have not sold troubled stocks by now are (1) among those who bought way too high and the stocks in question are worth nothing, (2) they are afraid to sell now because either they would have a loss and don't have the foggiest where to put their capital into now, or (3) they would be taking substantially smaller profits than they could have had just 2 months ago and say they don't want to pay taxes on the insignificant sums. So they hold, waiting for an Easter bunny to make them well.

This sad group are in “hope” mode, the poorest substitute for action. Any action is better than hope. Actions which are not found to be optimum can be reversed.

In the recent words of Rudy Giuliani, (this is not a political plug) “Change is not a destination, just as Hope is not a strategy.” This statement applies to trading even more than politics.

__________________

I lowered the trailing stop on the remaining short Gbp/Usd trade to a point just above a significant high on the hourly bar chart. If the market continues to fall, great, more profit potential. If it decides to reverse, we will get out with a great profit.


Week's remaining FirstStrike trade:
  • Gbp/Usd: Short @ 1.8230, stop 1.7728. (Significant high stop- At least 502 pips)
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current trade equity is: $1,260.67
(50 units XAG bought @ $12.00 sold at $11.00 for $50.00 loss.)
Silver position equity: $52.00. (Current silver price: $11.27/ 100 oz.@ $10.75)
TOTAL Equity: $ 1,312.67

I've said before that the account would see some volatility. Doesn't mean I enjoy it.

I don't think we will get any OneNightStand trades, but the orders are all going in.

See you tomorrow.

Until then, I found a trivial, but interesting site that you might find interesting.

Belgium Doesn't Exist!


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!

Wednesday, October 1, 2008

Quiet Day! IFCN Wk 43 – Wed- Equity: $1,492.80

Obviously, everyone is waiting to see if a vote is going to succeed on the Bail-out. As volatile as today was, it was relatively calm compared to those previous.

The market's mood is like the family waiting room in a maximum security prison 1 hour before an execution, everyone agonizing to see if the governor will indeed commute the prisoner's sentence as promised.

We will watch and wait. What else can we do? No one asked us when the debts were made and no one asked us if we wanted to pay for it.

On a brighter point, buying the extra silver yesterday at $12.00 was good. Silver roared up to just short of $13 this morning. It seems to be hard to keep a good metal down. At least today....

__________________


Week's remaining FirstStrike trade:
  • Gbp/Usd: Short @ 1.8230, stop 1.7940. (50% profit stop- At least 290 pips)
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current trade equity is: $1,312.80.

Silver position equity: $180.00. (Current silver price: $12.37/average $11.17)
TOTAL Equity: $1,492.80

Not much to do but sit watch. Perhaps we'll get a bottom in the Euro and Sterling if they ever get this bail-out package ok'd. If not getting the package done makes the markets go down, it could be a sell-the-news-buy-the-fact situation.

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!