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 :

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)

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

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: 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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