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!

1 comment:

The Archiphage said...

I programmed an OpenOffice spreadsheet to help with these more complex order calculations. I was gratified to see that I got within a few pips of your entries, and a couple of them were exact. Wow... another stellar start to a week. (How 'bout that Pound/Yen?!) I've moved stops to at least breakeven on everything... no sense in letting these turn into losses. I am trailing stops on the positions that have over 2x the amount I risked, which is my standard approach in the Challenge account. I figure it's the right thing to do, since my position sizes are aggressive and my equity curve is already pretty tough on the psyche.
Anyway, thanks again for all the effort, education, and inspiration you've put out there!