Tuesday, September 30, 2008

Silver Plunge Opportunity! IFCN Wk 43 – Tue- Equity: $1,449.47

European banks are running amuck this week as global money markets are locking up. Numerous foreign banks have required capital infusions from governments, including our Federal Reserve.

Because money markets have gotten difficult to obtain money from, typical business isn't so typical anymore and credit risks have increased greatly for these European banks. They are dealing with the problem by dumping anything they can to straighten out their balance sheets and dropping anything that they think might make them look bad to the money markets who they depend on for liquidity. That means-- sell anything not nailed down.

As the bailout scenario before us is extremely inflationary long term, it was very interesting to see silver, and gold – to some extent; both being dumped – just like the other currencies to raise dollars.

Early this afternoon I bought some additional silver for the Challenge account. I emailed the subscriber list to notify those who are interested in silver, one of the two original currencies.

The email I sent follows:


-----Special Situation Alert!-----

Due to panic selling in the markets, we are able to obtain
silver at a better-than-average price. Even though the
silver price may go lower, I consider this a reasonable
area to obtain additional size. Also, for the record, I
have added more silver to my private accounts.

I just purchased 50 additional units of XAG (equivalent to

50 oz. of silver) on Oanda @ $12.00, with a stoploss point
of $11.00. (Total risk of $1.00/ounce or $50.00.)

I am still holding my current position of 100 units of XAG

obtained at $10.75. I am raising the protective sell stop
on that position to $10.75, up from 10.25 for a loss of -0-
in case it gets touched.

This means that the total risk on the IFCN Challenge

account silver position is still $50.00; yet I have a total
position size of 150 oz. with an effective average of
$11.17.

Joel Rensink

-----

A number of subscribers emailed me back to say they were able to buy additional silver at $12.00 and below.

The markets are far from being settled, but that is often when some of the best opportunities show themselves. Time will tell regarding the silver position. Who knows how much more liquidation might be ahead?

-----

After today's chaos, we are definitely not making new highs in equity. We lost over $100 in less than 12 hours.

Yesterday I placed a 50% profit trailing stop, which locks in at least half of the maximum profits attained before getting triggered, on the short FirstStrike Gbp/Jpy trade. The market rallied with all of the confusion today and we got stopped out locking in 367 pips of profit. The Usd/Jpy short trade was placed at a breakeven stop, which got triggered for a 1 pip profit. So, the only FirstStrike trade remaining this week is the short Gbp/Usd, which at the time of this writing had 418 pips of profit.

As there are no guarantees which way these markets are going to react, except erratically – I am placing a 50% profit trailing stop on the Gbp/Usd trade, as you will see below.

__________________


The week's FirstStrike trades:
  • 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. (50% profit stop)
  • Gbp/Usd: Short @ 1.8230, stop 1.8001. (50% profit stop)
  • 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. (Breakeven stop)
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current trade equity is: $1,297.47.
Silver position equity: $152.00. (Current silver price: $12.18)
TOTAL Equity: $1,449.47

Plenty of motion this week. I'm glad we were able to extract some profit from some of it.

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!

Monday, September 29, 2008

Anyone Want to Buy Some Stocks- Or Nancy Pelosi go Home? IFCN Wk 43 – Mon- Equity: $1,556.92

I'm sure there are many people who threw in the towel in the stock market today. Discomfort ran rampant.

It didn't help that the resident commie Nancy Pelosi caused bitter feelings just before the vote with the partisan speech she gave on the floor of the House of Representatives. With the strong feelings and pressures all sides were feeling, some representatives just had enough. I wasn't there, but there is plenty of footage.

I'm a trader. I would have preferred getting it over with. You can't stop idiots from spreading their ideas, especially when they're issued gavels.

The news continues about the buyout/sellout. Although it is doubtless going to be concluded soon, the agonizing over it continues in the media 24/7. And in the minds and hearts of the troubled.

Concern is palpable whenever a gathering of people takes place; at coffee shops, in the line at grocery stores, when you get gas and talk to the next guy filling up. Anger, resentment; all earmarks of fear, are present in every exchange.

I believe the biggest problem that is being dealt with is the mental one-- people feel like they are being hijacked without any chance to fight.

The stock market did what it tends to do when the people holding stocks are feeling fractious. The fact that some long term cycle lows are due soon probably had something to do with the ease of the market break.

----------------------------------------

Challenge Account currently up 211% in the last 43 weeks and 220+ trades.

In contrast to the stock market, the profits in the Challenge account continue to grow. When you have straight-line currency moves from the beginning of the week as we've been enjoying lately, it is hard not to make profits.

If it was that way all the time! Still, the Challenge account is now above $1500 and marks a tripling of account size since I started.

We got filled on all five of the week's FirstStrike trades and 2 of the pairs have been stopped out – the short Eur/Usd and the long Usd/Chf.

Of the three remaining, and quite profitable short trades, the Gbp/Jpy is having the largest run to the downside.

The 50% profit trailing stop has been placed on the Gbp/Jpy because it has had over 700 pips in profit at its peak today. The other two trades are doing well, but not excessive. I moved their stops to breakeven because they have moved substantially and it would be ridiculous to take a loss after such large profits were attained.

Silver dropped a little from last week's close. I am actually surprised it did not fall more.

__________________

The following FirstStrike trades were entered this morning:
  • Eur/Usd: Short @ 1.4449, stopped out at 1.4509 for a 60 pip loss.
  • Gbp/Jpy: Short @ 193.74, stop 190.07. (50% profit stop)
  • Gbp/Usd: Short @ 1.8230, stop 1.8230. Breakeven stop.
  • Usd/Chf: Long @ 1.1007, stopped out at 1.0947 for a 60 pip loss.
  • Usd/Jpy: Short @ 105.89, stop 105.89. Breakeven stop.
Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

Have a good evening. No matter what else happens this should be a decent week.


Current trade equity is: $1,325.92.
Silver position equity: $231.00.
TOTAL Equity: $1,556.92

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, September 28, 2008

Fear Profits! IFCN Wk 42 – Fri- Equity: $1468.07

We had a pretty good week with all of the news and fear setting hold of the forex markets. We are definitely not done with volatility. I've been very impressed with how well the Challenge account has been doing despite the whipsaws we're seeing every day.

Silver has held in there like a champ. We gained some more on our little 100 oz. XAG trade. I wouldn't be surprised if we had a small drop into next week. We've had a strong push up, it would be reasonable for the market to see how strong metal holders really are. Of course that could cause a serious drop in equity, but that is the nature of higher leveraged positions. Under the right circumstances I could see adding a little more to the existing silver position.

Here's the week's recap:

The data below is as of Friday's close, Sept. 26, 2008:

Start of week equity: $ 1341.49

OneNightStand Exit(s) on 09/22/08 :
-None-
Total Profit: $ 0.00.

Completed FirstStrike trades this week:
Eur/Usd: Long @ 1.4542, exited at 1.4700 for 158 pip profit.
Gbp/Jpy: Long @ 195.75, stopped out at 194.85 for a 90 pip loss.
Gbp/Usd: Long @ 1.8348, exited at 1.8495 for 147 pip profit.
Usd/Chf: Short @ 1.0959, exited at 1.0824.for 135 pip profit.
Usd/Jpy: Short @ 106.08, stopped out at 106.68 for a 60 pip loss.
Total losses: 150 pips
Total profits: 440 pips
Net profit: 290 pips ($48.58+)

OneNightStand 09/26/08 entry(s):
-None-

Systems' End of week equity: $1,211.07 (includes unrealized P&L)

Special Silver long position: 100 oz. @ 10.75 on 9/17/08. Stoploss @ 10.25.
Position equity: $257.00 ( 9/26/08 close @13.32.)
Silver Equity weekly gain: $78.00.

WEEK'S TOTAL EQUITY: $1,468.07
Total Gain for Week: $126.58 (9.4% weekly increase)

It was another good week for the IFCN Challenge account. There is still a lot of paranoia in the financial system. Expect to see a lot of swinging moves for a few weeks until Europe figures out where it stands in the financial crises going on.

See you Monday.

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, September 25, 2008

Ben Bernanke and the Devil! IFCN Wk 42 – Thu- Equity: $1,422.30

My considered, previous advice made to Wall
Street; and now to Washington:

If you wear clothes made of flash paper, don't
smoke.


Everyone who has a news show, blog, pulpit..., is
going on and on about the government
buyout/sellout of idiots who mishandled Trillions
placed in their care. Everyone seems to be
outraged. They all want to know how and why this
mess happened.

I have little interest in talking much about it
because everyone else is overdoing it. I will
add a few simple notations and then some great
links that say what I would if I was into
unnecessary duplication.

Both the "How" and "Why" of this mess are very
simple.

The "How"- Wall Street is all about fee income
and is geared towards rewarding those who get
more fees with the biggest bonuses.

The "Why"- Wall Street trading entities made
every deal they could with any "devil" they
could, because they wanted more fees than their
competition, so they would get the biggest
bonuses; and figured all the devil's deals would
balance out, and if they didn't, then somebody
would bail them out. Perhaps a bigger Devil?

They were right. Someone showed up interested in
saving them.

Who then, is really the Devil? He may not be Ben,
but I think Ben knows him.
----------------

Smart links I liked explaining the current
amalgam:

Link one........................
Link two........................

The Fed Chairman shouldn't be called "Helicopter
Ben" any longer. A different plane needs to be
linked with his name, perhaps something like the
one shown here....

World's Largest Airplane. (video)

Have a calm day.

Do you realize that this mess makes future
profits virtually guaranteed for volatility
breakout traders like us? When the public
finally understands that current inflation upticks
are not just an indication of a cold, but CANCER;
then watch these markets trend. It will take
some time for the realization, but when it
happens, it will be awe inspiring.


Silver will eventually lead the pack. Get some!
__________

I'm still long FirstStrike Gbp/Jpy from @ 195.75
with a protective stop at 194.85.

Current trade equity is: $1,182.30.
Silver position equity: $241.00. (Current silver
price: $13.16)
TOTAL Equity: $1,423.30.

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, September 24, 2008

A Time for Rest....

The markets have gone from wildly crazed to..., dull.  

Amazing. I've had virtually no trades for a day.  

People are digesting the historic buyout/bailout/sellout going on in America.

It won't take long, they'll get off the sidelines soon. Nevertheless, this is making a light week for us. I can get some long-awaited research done.

I'm still long FirstStrike Gbp/Jpy from @ 195.75 with the protective stop at 194.85.

Current trade equity is: $1,191.68. 
Silver position equity:       $257.00. (Current silver price: $13.32
TOTAL Equity:             $1,439.55. 

See you tomorrow.

Joel Rensink 
www.infiniteyield.com

Tuesday, September 23, 2008

One FirstStrike Trade Left! IFCN Wk 42 – Tue- Equity: $1,431.68

Due to placing the 50% profit trailing stop, which locks in at least half of the maximum profits attained before getting triggered, we have only one trade left in play of our five weekly FirstStrike trades.

The long Gbp/Jpy FirstStrike trade that was faltering yesterday when I did the day's recap-- decided to hang on for another day and is now marginally profitable. It came within 10 pips of being stopped out last night, but you never know for sure how far a trade will push the limits. That is why you have to be resolute in your trading but still aware of significance when something doesn't happen.

I'm glad that the trailing stop took us out. The potential for sharp moves back in favor of the dollar are very likely.

Many people are still running scared out there. And they still have the financial ammo that can disrupt the markets for hours.

__________________
The week's FirstStrike trades:
  • Eur/Usd: Long @ 1.4542, exited at 1.4700 for 158 pip profit.
  • Gbp/Jpy: Long @ 195.75, stop 194.85. Trade still in progress.
  • Gbp/Usd: Long @ 1.8348, exited at 1.8495 for 147 pip profit.
  • Usd/Chf: Short @ 1.0959, exited at 1.0824.for 135 pip profit.
  • Usd/Jpy: Short @ 106.08, stopped out at 106.68 for a 60 pip loss.
FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current trade equity is: $1,191.68.
Silver position equity: $240.00. (Current silver price: $13.15)
TOTAL Equity: $1,431.68

Not much to say after a very flat day. I'm sure the week will have plenty of action by Friday.

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!

Monday, September 22, 2008

Currency Rally? IFCN Wk 42 – Mon- Equity: $1,455.05

We got filled on all five of the week's FirstStrike trades and so far, only one has been stopped out – the short Usd/Jpy.  

Of the four that went profitable, only the Gbp/Jpy was faltering as I write this, and probably will be stopped out soon.

The 50% profit trailing stop has been placed on the remaining 3 trades because they all had approximately 300 pips or more in profits at their peaks today. The markets' speed smells of corrective action, so it pays to be prudent when we are seeing such incredible volatility.
                                       __________________ 

The following FirstStrike trades were entered this morning: 
*Eur/Usd: Long @ 1.4542, stop 1.4700. (50% profit stop)
*Gbp/Jpy: Long @ 195.75, stop 194.85. Trade in progress. 
*Gbp/Usd: Long @ 1.8348, stop 1.8495. (50% profit stop)
*Usd/Chf: Short @ 1.0959, stop 1.0824. (50% profit stop)
*Usd/Jpy: Short @ 106.08, stopped out at 106.68 for a 60 pip loss. 
Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST. 

Have a good evening. 

Current trade equity is: $1,193.05.
Silver position equity:      $262.00.
 TOTAL Equity:              $1,455.05

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, September 21, 2008

Dollar Finally Gets Chance to Prove how Strong It Really Is! IFCN Wk 41 –Fri– Equity: $1341.49

This was a very good week. Any week you can survive financially intact with extreme divergent motion is a raging success. 

FirstStrike held its own despite losing on 4 of the 5 entries with a small overall loss because of diminished size on the Gbp/Jpy winning trade.

A bright spot was the IFCN silver purchase of 100 units (ounces) of silver at 10.75. The trade was indeed fortunate in timing. It should be a great trade even if I had entered $.50 to $1.00 higher.

No OneNightStand trades got triggered Friday, thank goodness.

Here's the week's recap:

The data below is as of Friday's close, Sept. 19, 2008:

Start of week equity: $1,174.29

OneNightStand Exit(s) on 09/15/08 : 
-None-
Total Profit: $ 0.00. 

Completed FirstStrike trades this week:
-Eur/Usd: Long @ 1.4439, stopped out at 1.4379 for a 60 pip loss.
-Gbp/Jpy: Short @ 190.21, stopped out at 187.36 for a 285 pip profit. (50% Trail option) 
-Gbp/Usd: Long @ 1.8086, stopped out at 1.8026 for a 60 pip loss.
-Usd/Chf: Short @ 1.1090, stopped out at 1.1150 for a 60 pip loss.
-Usd/Jpy: Short @ 105.38, stopped out at 105.98 for a 60 pip loss.
Total losses: 240 pips 
Total profits: 285 pips 
Net gain: 45 pips ($11.80) Dollar loss due to smaller position on higher risk Gbp/Jpy trade 

OneNightStand 08/29/08 entry(s): 
-None-

End of week systems' equity: $1,162.49 (includes unrealized P&L) 

(Special Silver long position: 100 oz. @ 10.75 on 9/17/08. Stoploss @ 10.25. Friday close @12.54.) Silver Equity gain: $179.00.

WEEK'S TOTAL EQUITY: $1341.49 
Total Gain for Week: $167.20 (14.2% weekly increase) 

We'll see if the bad news tapers down next week. The IFCN account is now up 168% in just 41 weeks, or 213% annualized. That could cut a couple years off the trade time to my goal.

We enjoy the good times but are always wary.  Difficult times are never that far away when you are a trader. You only have to wait a little while.

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, September 18, 2008

Having No Trade IS a Trade! IFCN Wk 41 – Thu- Equity: $1,288.56

I find it amazing, and not at all comforting.

The ease with which the policy makers throw the “B” word around.

Billion dollar buyouts are glibly bandied about on the hour.

The Treasury has promised to buy up to $200 billion of Fannie and Freddie stock to keep those institutions alive. The Fed agreed to an $85 billion bridge loan to AIG, this week on Tuesday. The Treasury plans to buy $5 billion of mortgage-backed debt this month.

To get a handle on what a billion is----

A tightly-packed stack of new $1,000 bills totaling $1 billion would be 63 miles high. In comparison, jet planes fly at 30,000 - 40,000 feet (5.7 - 7.7 miles high).

A billion inches is 15,783 miles, more than halfway around the earth (circumference).


Back to the mess----

The 5 major troubled firms dealt with this week, alone, appear to have had more than $500 billion of what are termed “Level 3” assets as of the end of June 30. These assets owners say the values of these assets can only be determined through theoretical financial models because of illiquidity.

Sounds like Long Term Capital Management fiasco Number Two on top of the mortgage crisis.

What I believe will happen is the creation of a new version of Resolution Trust Corp., which was the 1990s fund to manage devalued assets from the late 1980's Savings and Loan Crisis.
_______________

On a different note, with the volatility and reverse moves experienced this week in the currencies, it will be virtually impossible for us to get any OneNightStand trades. I will put in the orders as usual, but with the extreme volatility I wouldn't blame anyone for not taking any trades until next week. The markets aren't shutting down anytime soon, and extreme volatility is usually worse than no volatility at all.

Counter-parties to all of the markets are running around like their hair is on fire.

Taking no trade is also a trade. Sometimes, the very best kind.

Have a good morning.

Current equity is 1,288.56.

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, September 17, 2008

Silver Trade! IFCN Wk 41 – Wed- Equity: $1,223.88

I take my own advice.

I decided to buy some of the $3 silver I wrote about last week for the Challenge account.  And it appears, not an hour too soon.

Early this morning I was adding silver to my personal accounts and decided it was a good time to put a little silver in the IFCN account. So far my timing was incredible.

Early this morning the IFCN account bought 100 units (100 oz) of XAG/USD @ 10.75. The stoploss is set at 10.25, or $50.

I believe the value of picking up some cheap silver here is worth the 5% risk and is transfering some of the recent profits made into a position that has substantial long term potential. If successful, it will bring an awareness to additional market inputs. If not successful, it will simply show a 5% loss.

As time goes on there may be additional purchases. IFCN will in no way become a buy and hold trading account, but since time is the largest edge traders have, ability to hold profitable positions for as long as reasonably possible is proof of that edge.

There may be those who won't like that I added silver to the account. I gave everyone reasonable notice last week that silver was in what I consider a low risk zone. If anyone wished they could have bought substantially lower than I did. I am here to make return. Period.  

I will keep separate silver profits or losses from regular trades in the recap.

Current equity is $1,223.88  (Thanks to XAG!)

Joel Rensink 
www.infiniteyield.com

Best Solution! IFCN Wk 41 – Wed- Equity: $1,162.49

We are now out of the week's FirstStrike trades.

I used the 50% trail rule mentioned last week on the short Gbp/Jpy. It seemed appropriate as the maximum profit on the trade was 569 pips at one point. It is just as well because the market volatility today was extreme again and caused fits for most traders still operating.

It is good to have a little pause in the week to reflect on what we're doing here.

For those of us who will admit it; a very helpless feeling comes over you when you make a trade. The size of that helpless feeling may decrease over time and after many trades may seem to meld into the other feelings in your day. It will always be there.

The reason is because we do not know for sure whether or not the trade will work out. Every trade is a little leap of faith. I'm reminded of a scene in the movie, Indiana Jones and the Last Crusade, where Harrison Ford (corrected) has to cross a bottomless void to get to the final room where the old Knight and Grail are to be found. He steps out without seeing a path, not knowing if this action is his last; obviously believing the information which showed him the way that far. He lived to get treasures another day.

You only have control over your risk. Good trades take care of themselves, most of the time. It is when circumstances materially change after the trade begins-- where the opportunities are rich.

Yes, you get to choose when to put on a trade, and if you are trading some statistical method such as the ones highlighted here-- you will take entries that are relatively mechanical in nature. If you trade the method completely mechanically you will only make the return that is dictated by one set of parameters with no variance for changing conditions.


Take note of the following truths about trading and you will find the secret to excess returns.
  • Your entries are not what can break your account – but the way you exit can.
  • Your entry does not make the profits or losses – the way you exit does.
  • It is not your entry which is first in importance – it is always your exit.

__________________


The following FirstStrike trades were executed this week:
  • Eur/Usd: Long @ 1.4439, stopped out at 1.4379 for a 60 pip loss.
  • Gbp/Jpy: Short @ 190.21, stopped out at 187.36 for a 285 pip profit. (50% Trail option)
  • Gbp/Usd: Long @ 1.8086, stopped out at 1.8026 for a 60 pip loss.
  • Usd/Chf: Short @ 1.1090, stopped out at 1.1150 for a 60 pip loss.
  • Usd/Jpy: Short @ 105.38, stopped out at 105.98 for a 60 pip loss.

Have a good morning.

Current equity is $1,162.49. Not bad for a week with 4 losses!


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, September 15, 2008

A Double Edged Sword! IFCN Wk 41 – Mon- Equity: $1,150.40

We got filled on all five of the week's FirstStrike trades and all of them were stopped out except the Gbp/Jpy-- so far. The same volatility that paid us the last couple of weeks is the same that stopped us out this week shortly after entering. I'm glad we're out.

That isn't really all that surprising, considering the news that came out over the weekend, about the additional brokerages being bought out due to possible insolvency issues. Knee-jerk reactions after that kind of news is to be expected, and I'm actually surprised that I still have one winner.

Normally no one would think Merrill Lynch would have to sell out. Expect more 2 sided action before the large traders figure out which direction is the safest for the near term.

I think FirstStrike's being out of most of the currencies may not be a bad thing this week. Let some of the fear die down.

__________________

The following FirstStrike trades were entered this morning:

  • Eur/Usd: Long @ 1.4439, stopped out at 1.4379 for a 60 pip loss.
  • Gbp/Jpy: Short @ 190.21, stop 191.11. Trade in progress.
  • Gbp/Usd: Long @ 1.8086, stopped out at 1.8026 for a 60 pip loss.
  • Usd/Chf: Short @ 1.1090, stopped out at 1.1150 for a 60 pip loss.
  • Usd/Jpy: Short @ 105.38, stopped out at 105.98 for a 60 pip loss.
Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

Have a good evening.

Current equity is $1,150.40


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!

Recent Reader Responses!---- Sept. 15, 2008

Here are a small illustrative group of emails I've received since the middle of last week.


Hi Joel,

The last 2 weeks have been pretty interesting for
First Strike, with big swings and substantial
retraces.

I have not been able to resist the temptation to
lock in some profit. After having had so many
losses until recently, I decided I wanted to
avoid some and lock in a profit (even if only 1
pip). Thus I have been trailing from being in
profit of around 2 x stoploss, which is a lot
earlier than you suggest.

My results over the 2 weeks combined have not
been too bad though:

my profit................. 'official' profit
w/c 1st + 30............. +758
w/c 8th +1064......... +418

I must admit, that I didn't feel so good about it
a week ago.

I may go back to letting the trades run, or
perhaps with your -50% trail now that the net
balance is looking better.

All of this really goes to prove that trading
success is much more down to one's emotions than
one's method.

Regards,

Xxxxx

-----

Hi Joel,

I really enjoyed your Silver entry on your blog, thanks for that.

I have a small savings account for my daughter and I told my wife a while back I'd like to periodically exchange cash for silver coins for her account. I was initally put off by the large difference between the value of the commodity and the actual prices that silver coins go for.

So basically you are saying that's the way it will always be so that when silver goes back up the real value of the coins will continue to out pace at that same disparity? Then it makes total sense to buy some silver coins, the Eagles look really nice too.

Best Regards,

Xxxxx in XXX

-----

Hi Joel,

Thanks for all of your help. I have learned more in the three months that I have been reading your blog than in the past year of reading all types of books and websites on trading. I have had good success with FirstStrike and OneNightStand. With your hints, I have been able to devise a money management system that helps increase the profitability of FirstStrike. I have decided to take your silver hint after doing some reading on silver. I put a limit order long at $11.00 and a sl of $8.00. Using the .01 per pip on OANDA. After reading about silver, I really see how it is underpriced right now.

..., Also, trading FS and ONS for the last 3 months has increased my account 59% and gaining!

Thanks again,

Xxxxxx Xxxxxxxxx

----

Hey Joel

Thanks for the tip on silver. I've been studying a little about silver since I met with you and the general consensus seems to be that when silver rises, it does so in greater multiples than gold. Of course I know that you know that. I've read a little about the reasoning behind it--industrial uses etc.. I'm buying a little whack of silver.

My infinite yield account is up 78% since Sunday--still holding and nothing on the charts has me second guessing. The big gain came from adding onto Geppy without increasing the risk by much. Chalk one up for the good guys!

Happy Trading--

Xxxx


Thanks, everyone, for all your comments and interest in the site.

If I can answer a question you have, I will. I am usually pressed for time, so my answers may not be big.

Yes or No questions are definitely a plus!


Joel Rensink
www.infiniteyield.com

Friday, September 12, 2008

Rock - Roll! - IFCN Wk 40 – Fri – Equity: $1,174.29

To say we had a volatile week is the largest understatement possible. We had gigantic profits by Thursday on all of our trades, as anyone knows who took this week's FirstStrike trades.

If we had gotten out at the maximum point of profit on each of our trades, we would have been up more than $350 dollars – or 31.8% for the week, a truly huge percentage gain for just one week. As it was, we ended up only 6% higher than last week. Profitable, but not earth-shaking. I still will take those profits over losses any day.

-50% Trailing Stop Revisted-

In the past I introduced you to the idea that when gains are outsized early in the week – you can adopt a simple trailing stop strategy that originated in the trading pits. The moment profits become larger than a certain size, such as 300 pips in a trade, you can protect half of the existing profits on a trailing basis.

For example: the week's short Gbp/Jpy trade had 835 pips of profit at 10:00 AM on Thursday. Using the 50% trailing point after we had 300 pips in profit would have trapped at least 417 pips in profit for the week. As it was, holding until Friday's close only garnered 103 pips.

Where this trailing setup loses out is situations where the market makes large reversal swings, stops you out and then goes on the same direction it did previously and you lose out on even larger profits. There are trade-offs for using or nor using all trailing strategies, and losing large potential profits like we did this week was a great example.

The 50% trailing strategy can be a benefit in markets like we saw this week, but by no means all market types. How can you tell the difference? Good question. If you can't, don't use it.

Still, it was a profitable week and we are at a new equity high We are up 134% since Dec. 2007.

-----

Here's the week's recap:


The data below is as of Friday's close, Sept.12, 2008:

Start of week equity: $1,104.38

OneNightStand Exit(s) on 09/08/08 :
None-
Total Profit: $ -0-.

Completed FirstStrike trades this week:
  • Eur/Usd: Short @ 1.4364, exited Friday at 1.4214 for a 150 pip profit.
  • Gbp/Jpy: Short @ 194.27, exited Friday at 193.24 for a 103 pip profit.
  • Gbp/Usd: Short @ 1.7872, exited Friday at 1.7871 for a 1 pip profit. (Breakeven stop was placed)
  • Usd/Chf: Long @ 1.1199, exited Friday at 1.1312 for a 113 pip profit.
  • Usd/Jpy: Short @ 108.31, exited Friday at 107.80 for a 51 pip profit.
Total losses: 0 pips
Total profits: 418 pips
Net profit: 418 pips ($69.91+)

OneNightStand 09/12/08 entry(s):
None-

End of week equity: $1,174.29 (includes unrealized P&L)
Total Gain for Week: $69.91 (6.3% weekly increase)

We had no OneNightStand trades this week. I'm just as glad, because it was inevitable that the dollar would have to correct sometime. Since it obviously started a retracement today, I'm glad it didn't hook the ONS trades and then reverse the way it did.

Anyone who took the trades this week and held to the bitter end has my admiration and respect. It took character to give up profits that have a tendency to beckon to you and beg you to take them.

Looking forward to next week.


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, September 11, 2008

Great Week! - IFCN Wk 40 – Thu – Equity: $1347.74

I got a lot of interesting responses about the silver post yesterday, all positive; along with some success stories from some of you who are actually taking the trades highlighted here. I'll try to include some in the next few posts as space permits.

Here is another Silver chart with current retracements. (Thanks to Tim from Regina, Sask.)


The past couple of weeks have been very profitable for this style of trading, and are typical of the way profits come in when you trade robust breakout methods. They aren't cute and cuddly, but they extract large profits when the markets start to move and take no prisoners. The key to success trading breakout methods is this: execution!

-----

The week's continuing FirstStrike trades:

Eur/Usd: Short @ 1.4364, stop 1.4364.
Gbp/Jpy: Short @ 194.27, stop 194.27.
Gbp/Usd: Short @ 1.7872, stop 1.7872.
Usd/Chf: Long @ 1.1199, stop 1.1199.
Usd/Jpy: Short @ 108.31, stop 108.91.

Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

After new lows on the Euro and Pound, a retracement seems to be starting. The forex currencies are pretty battered after weeks of weakness.

There is a strong chance of more OneNightStand trades tonight. The orders will go in, but I know tired markets when I see one, and little follow through is likely if any orders get triggered.

Current equity is $1347.74

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, September 10, 2008

The Return of $3.00 Silver, Get it While You Can! --IFCN Wk 40 -Wed- Equity: $1,310.44

(If you have no interest in Silver and the opportunity to purchase it, feel free to skip this post. This post is my own personal opinion and a look at what I personally consider to be the single greatest opportunity available for the small investor to protect their wealth from inflation and make a tremendous amount of money with very little overt risk. No guarantee is expressed or implied.)

I have been purchasing physical silver since the beginning of my trading life and much heavier since 2003. I have traded silver successfully in the futures markets for decades. It is a frustrating market most of the time because of the personality of the individuals who trade and invest in it.

Trading and investing are two different things. Houses and paintings are typically considered investments. A lawyer would say that investments are any vehicle into which funds can be placed with the expectation that it will generate positive income and/or that it's value will be preserved or increased.

Silver fits into that category well. People have bought silver and held for a very long time before they profited. Some smart investors have done exceeding well. You should be one of them.

I could spend hours telling you why I am certain that we will see $100/ounce silver before we see $8/ounce silver. I won't. There are great websites who trumpet the story very well. Remember, the biggest financial moves take place because of well-known conditions that everyone could see if they just would. Then something happens that gels a different point of world view which makes one group of individuals prosper better than the rest.

Supply and demand works – regardless of what some liberals may believe.

Even the recent oil moves were easy to anticipate. With so many third-world countries wanting energy to create products like the first world countries have, it was inevitable that if oil supplies didn't increase as rapidly as the demand, something would have to give. It did. Prices went up.

Now prices are falling because the producers really started loving the excess profits they we making and decided to produce even more. They did and the prices are now falling substantially.

Back to silver.

One of the main reasons silver is now so low is because of falling oil. Millions of mutual fund investors have been sliding money into commodity-based index funds to take advantage of the “sure-thing” oil moves of the last year. Let me tell how these things work.

When you buy your shares of a commodity index fund you are buying a basket of commodity FUTURES contracts at the same time as the others buying the fund that day. Due to oil and grain prices making huge moves up after the end of last year and the beginning of this one, these millions of fund investors were encouraged to buy the commodity indexes so they could have some return, as stock markets have been dismal return-wise. And the brokers got a decent commission too.

Now with crude and grains falling off, these same investors who decided oil prices were never going to fall again and bought near the oil highs are, as I write; throwing in the towel and getting out of these index funds.

The problem this makes for silver is this: Index funds have been good for commodity bull markets because they are “buy-only.” They buy up futures contracts, not the real stuff behind the contracts. No real barrels of oil were purchased, or bins of wheat, or silver bars.

Index funds are much worse for bear market corrections. The herd mentality of the end-user ---the mutual-fund investor who was just trying to improve his return..., causes them all to sell at the worst possible time, when the news is blaring about how bad these funds are for all who have them.

When they sell their pieces of the index fund, the big red button gets pushed and oil contracts get sold, along with wheat, corn, cotton, coffee, sugar and SILVER and gold contracts. Regardless of the relative value of these other markets, oil is the biggest component and the major reason that anyone was in them in the first place.

If you try to price silver bars right now, they are substantially higher than the cash price that you will find on Oanda. (XAG/USD – 1 unit equals 1 ounce) The reason is the futures and dealer prics are being shoved down excessively vs. the real price it actually requires to get physical silver. The spread is very large. Don't expect it to get narrower. Feel free to check this out.

My point of this longer-than-I-expected diatribe is this: Silver isn't going much lower.

If you disagree after checking out the facts available, great. Definitely your choice.

Many sophisticated investors who desire to buy silver first create a buying hedge. They find a spot they are interested in purchasing silver, and purchase that quantity on the futures markets or a firm like Oanda. Then they find the physical form that they wish to keep; bars, rounds, bags of pre-1964 circulated 90% silver coins. After they lock in that price, they can then offset their hedge to get the price chosen. This method allows a silver investor to take as much time as they want to find the silver products they want. And if you use Oanda, you can do it ounce by ounce buying from Ebay if you want.

Just from a paper investment idea, if you buy 100 units of XAG/USD on Oanda @ $11.00, using just $21.40 of margin, and the price goes back up to @$21.00 where it was in March, you will gain $1,000. If the market falls further to $8.00, you would be out $300. Even if it went to $3.50, the old low, you'd only be out $750. Tough call isn't it?

This is something everyone can figure out for themselves. Check out a long term silver chart. Ask yourself what you think the odds are that silver will make it back to $21? Or even much higher because of inflation and the dollar's inevitable return to be the weak currency it really aspires to.




For a inflation adjusted chart of silver check this link. You should find the story compelling enough to consider buying some silver soon.

Don't be surprised in the very near future for silver to be up $1.50 - $2.00 overnight, and then never fall back. The public buys at tops and sells at bottoms. They are selling now.

Final point. Silver is a finite material difficult to obtain by hard dirty work. Dollars are in infinite supply, just push the buttons on the Fed computer and you have more of them. Just because your wife isn't interested in buying silver doesn't mean it isn't a good idea. I'm sure she loves forex trading too.

-----

I am still in this week's FirstStrike trades:

Eur/Usd: Short @ 1.4364, stop 1.4364.
Gbp/Jpy: Short @ 194.27, stop 194.27.
Gbp/Usd: Short @ 1.7872, stop 1.7872.
Usd/Chf: Long @ 1.1199, stop 1.1199.
Usd/Jpy: Short @ 108.31, stop 108.91.

Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

The dollar remains strong. We are profiting from that strength.

Current equity is $1,310.44.

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, September 9, 2008

A day of rest! --IFCN Wk 40 -Tue- Equity: $1,275.46.

Not much change in the forex markets after yesterday's stunning moves. Monday's dollar surge resolved into a sideways trading pattern. The Euro and the Sterling have been trounced very hard over the last 5 weeks. A rest for awhile wouldn't be unusual at all.

The week's FirstStrike trades are still in progress:
  • Eur/Usd: Short @ 1.4364, stop 1.4364.
  • Gbp/Jpy: Short @ 194.27, stop 194.27.
  • Gbp/Usd: Short @ 1.7872, stop 1.7872.
  • Usd/Chf: Long @ 1.1199, stop 1.1199.
  • Usd/Jpy: Short @ 108.31, stop 108.91.
Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

Current equity is $1,275.46.


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, September 8, 2008

FirstStrike has Another Great Day! --IFCN Wk 40 -Mon- Equity: $1,325.86

FirstStrike's value is self-evident after a day like today. When the currency markets are very strong or very weak, volatility-breakout methods are incredibly powerful.

The higher gap openings on the gbp/usd, eur/usd, and gbp/jpy were gifts to our methods.

What few in the forex trading world understand is that “real” trading risk drops when volatility increases. Extricating larger profits with lower implied risk is what gives you a greater edge in this environment.

I was contacted by a number of the Magnificent 7, (last month's London Squeeze workshop attendees) they too had outsized winners over the last week and today – in addition to the profitable FirstStrike and OneNightStand trades they took.

Fortunately for them, London Squeeze had similar profits to FirstStrike today. The important difference for the “7” using an additional daily-chart-based method like London Squeeze is – they will have a chance to take some of this day's profits quicker than FirstStrike. Efficiency can be higher, with the only downside being increased frequency of trade.

-----

We got filled on all five of the week's FirstStrike trades and all of them are profitable so far. Some, like the short gbp/jpy and gbp/usd are extremely profitable. Many who took the trades are itching to take the profits. I understand completely. If you are in these trades, remember, it is your money. You can take the profits if you wish. Maybe it will prove to be the most profitable thing to have done, after the week is over.

In the Alpha Challenge account, I will hold until Friday if not stopped out.

In the past I've mentioned that when we get large profits on any FirstStrike trades, it is acceptable to move your stop to breakeven. When one of our regular currency pairs attains 200 pips (gbp/jpy ~ 300 pips), I do not wish to experience a loss if the market reverses somehow, so I usually move the stop-loss on the position to the entry price. I have done so on 4 of our existing trades.

__________________


The following FirstStrike trades were entered this morning:
  • Eur/Usd: Short @ 1.4364, stop 1.4364. Trade in progress, stop-loss at breakeven.
  • Gbp/Jpy: Short @ 194.27, stop 194.27. Trade in progress, stop-loss at breakeven.
  • Gbp/Usd: Short @ 1.7872, stop 1.7872. Trade in progress, stop-loss at breakeven.
  • Usd/Chf: Long @ 1.1199, stop 1.1199. Trade in progress, stop-loss at breakeven.
  • Usd/Jpy: Short @ 108.31, stop 108.91. Trade in progress.
Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.
Have a good evening.

Current equity is $1,325.86.

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!

Saturday, September 6, 2008

Forex trading Homeruns! --IFCN Wk 39 -Fri- Equity: $1104.38

Another great week!

Straight-line forex moves the past weeks helped the Challenge account make a 161% annualized return since I began trading it in December of 2007!

OneNightStand and FirstStrike did great this week. Not bad for a couple of simple but robust trading methods. Of course, some may think that luck plays a large part in abnormal returns, but I have found that it usually is more a situation of inevitable market opportunities meeting a prepared trader.

When the forex markets start making large moves continuously and seemingly unpredictably, the majority of participants are unprepared for the increased volatility. Those traders who have methods which can reap profits from that kind of volatility only need to reliably execute to receive their share.

I must admit in my own case, trading for 2 decades-- it's not been my cleverness that has brought me the greatest profits. It has been my willingness to execute thousands of trades that seemed lackluster in potential that turned into valuable positions. The trades became special properties from which I was able to receive additional value by holding just a little longer than others for greater than average profits.

The extra value I received could not have happened had I not entered in the first place. That said, I missed one trade this week, right at the end. It's mentioned in the recap.

Here's the week's recap:

The data below is as of Friday's close, Sep. 05, 2008:

Start of week equity: $978.83

OneNightStand Exit(s) on 09/01/08 :
*Gbp/Usd: Short @ 1.8239 – Exited at 1.8031 for 208 pips profit.
*Gbp/Jpy: Short @ 199.60 – Exited at 1.9568 for 392 pips profit.
Total Profits: $ 52.19. (Increase of $40.39 from Friday's close)

Completed FirstStrike trades this week:
  • Eur/Usd: Short @ 1.4584, – Exited at 1.4235 for 349 pips profit.
  • Gbp/Jpy: Short @ 194.93, – Exited at 189.04 for 589 pips profit.
  • Gbp/Usd: Long @ 1.8080, stopped out at 1.8020 for a 60 pip loss.
  • Usd/Chf: Short @ 1.0979, stopped out at 1.1039 for a 60 pip loss.
  • Usd/Jpy: Short @ 108.03, stopped out at 108.63 for a 60 pip loss.
Total losses: 180 pips
Total profits: 938 pips
Net profit: 758 pips ($94.94 net gain.)

OneNightStand 09/05/08 entry(s):
*Eur/Usd: Short @ 1.4211, exited at 1.4306 for 95 pip loss.
Total ONS losses: $ - 9.78

End of week equity: $1,104.38 (includes unrealized P&L, if any)
Total Gain for Week: $125.55 (12.8% weekly increase)

If I took the OneNightStand trades perfectly this week, I would have bought the Usd/Chf trade @ 1.1182. It happened in the last 15 minutes of the day and my order had already expired an hour before. I didn't notice the price going higher or I would've had to execute it. I might be missing out on a profitable trade, but errors do happen to all of us.

We cannot afford to make many.

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, September 4, 2008

Wow! Dollar Rampage Continues--IFCN Wk 39 -Thu- Equity: $1,106.75.

Wow!

After today's action it bears repeating twice.

The dollar continued its rampage. It appears that every currency fund manager finally decided there isn't going to be any reprieve in the dollar's strength, so they all decided to act as one in buying the dollar. Watching all the currencies slide in unison, it gave you the impression of a waterfall.

The potential “Turtle Trade” entry mentioned yesterday, selling the Usd/Jpy @ 107.59 --- got hit today and the market plummeted nearly 200 pips further. As you can imagine, on a day where the dollar was king versus most major currencies, with only the Yen gaining on it--- the yen REALLY dominated all of the other currencies in their respective crosses.

The Gbp/Jpy really fell! At one point it was 550 pips lower than the yesterday.


The FirstStrike shorts: Eur/Usd and Gbp/Jpy are really performing well in this environment.

This week's current FirstStrike entries:
  • Eur/Usd: Short @ 1.4584, stop 1.4644. Trade in progress.
  • Gbp/Jpy: Short @ 194.93, stop 195.83. Trade in progress.
Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

Tomorrow we will be exiting the FirstStrike trades. New equity highs again today!

Over the past months many have wondered as to why I've included the Gbp/Jpy in the 5 pairs I follow. It has definitely had its strings of losers. This week's action is an example of that why. When the Gbp/Jpy trends it takes few prisoners.

It is possible that we may get some OneNightStand trades Friday, but I would prefer not to. After all this bloodletting, there may not be that much potential left to be extracted. But, as usual, I will place the orders and will see what develops.

Current equity is $1,106.75.


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, September 3, 2008

Euro/Usd Hits 1.4400! --IFCN Wk 39 -Wed- Equity: $1,031.60

Weeks ago when the Euro was still threatening new highs I mentioned that the Euro could easily fall all the way back to 1.4400. I got a few chiding emails at the time, but that's fine. Markets always look great just before they fall, and look awful just before they lift off. The projection of 1.4400 was a coincidence of Gann rules and some retracement rules from an old wheat trader named Burton Pugh.

Burton Pugh had some very useful rules that he wrote in the small publication, “Science and Secrets of Wheat trading.” They applied to all markets, but since he mainly ran a wheat hedging operation, he promoted their use in wheat. He had many “Bull Market rules” and “Bear Market rules”, but one direction given in the “Bear Market rules” he indicated that after a market broke its uptrend line, (which the Eur/Usd had) it would return back to the lows of its last big advance before starting a new advance. In this case, the 1.4400 area. Gann often indicated that numbers like 144 are natural support areas.

So there you have a simple anatomy of a “return move” that worked perfectly to the numbers. Burton Pugh and W.D. Gann are both long gone and dead for more than 50 years. Maybe they had a few things figured out after all.

Pugh's publication is long out-of-print and likely only in the hands of a few older traders like me who hoard unusual market trading paraphernalia. There is and always has been a lot of refuse in the trading business, but never as bad in the past as we see available on the internet. Incredible in its uselessness for serious traders.

Not because everything is without merit, but most of the materials which contain meritorious content have equally offsetting bad content and there is no way a neophyte would ever be able to tell which is right and which the dross.

So, most information readily available is worthless because of its adulterations. It actually forces the determined trader to start completely from scratch to find trading truth, and that takes glacial time frames to get results.

My recommendation: GO OLD. Read very old trading books and material. Most systems and methods promoted in the past were simpler and more robust. Much of what was written 50 years ago wasn't incredibly powerful, but it was still much better than the tripe promoted by every third email you get now. And the older material is easy to test to give you a baseline for future study.

-----

A potential “Turtle Trade” entry is imminent. A higher probability sell in the Usd/Jpy @ 107.59. (See chart attached below) The reason the Turtle method has enjoyed some greater than average success is because of a unique provision for the method to increase the size placed on their Donchian-style breakouts after a previous trade which resulted in a loss. All based on a simple 20-day breakout for going long and short.

Since the last Usd/Jpy breakout buy was at 108.00, if the market takes out the current 20-day low at 107.60 that would make the last trade a loss -- and according to the Turtle's algorithm -- that'll increase the new short trade's expectation. I've run the Turtle concept of the “last-trade-a-loser” position increase on all of the major markets many times and many different ways, even with non-Turtle type systems --- and I have to concur that there seems to be a measurable increase in value for trades after a previous loss.


Just thought you might find it useful to think about, and perhaps study for future use.

-----

The FirstStrike shorts: Eur/Usd and Gbp/Jpy are still working and increasing capital.

This week's surviving FirstStrike entries:
Eur/Usd: Short @ 1.4584, stop 1.4644. Trade in progress.
Gbp/Jpy: Short @ 194.93, stop 195.83. Trade in progress.
Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

I thought yesterday that there might be a good potential for my last two trades to diminish or even be stopped out this week. I would prefer that not be the case, but the dollar seems to be losing momentum. Whatever happens, we are at a new equity high right now. That is always a good thing.


Current equity is $1,031.60.

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, September 2, 2008

Dollar Bulls to Own the Earth? --IFCN Wk 39 -Tue- Equity: $1,003.55

If the Euro and Pound continue to fall at their current rates, it wouldn't take long. As all of us know, currency speculation and exchange is accomplished on margin. Trends like we've seen recently can make a well-placed $10,000 investment in the dollar a $2 million bet with 200:1 leverage. Overdo your risk and you can lose in an hour what you made in month by rational trading.

I think a few too many specs out there are counting their profits a bit early, but that's how markets facilitate trade. They give everyone what they want, just at different times and prices than they originally expected.

Everyone has too much position size on when they take their most surprising loss.

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Now we have been stopped out of three of the week's FirstStrike trades. Only the short Eur/Usd and the short Gbp/Jpy are still in play.

This week's FirstStrike entries:
  • Eur/Usd: Short @ 1.4584, stop 1.4644. Trade still in progress.
  • Gbp/Jpy: Short @ 194.93, stop 195.83. Trade still in progress.
  • Gbp/Usd: Long @ 1.8080, stopped out at 1.8020.
  • Usd/Chf: Short @ 1.0979, stopped out at 1.1039.
  • Usd/Jpy: Short @ 108.03, stopped out at 108.63.
Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

I have a feeling we're going to have two more losses by the end of the week. When markets get hammered as hard as the ones we've been following, volatility increases and makes it difficult for the markets to reverse or go forward. Then you see volatility with no direction for longer than you might like.

Current equity is $1,003.55.

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, September 1, 2008

The Stories are Now All About the Pound! --IFCN Wk 39 -Mon- Equity: $1,014.23

Dollar bulls should start to worry a little.

All the news has been buffeting the Sterling and benefiting the Dollar, at least as far as the pundits will venture a comment.

Crowd behavior is a frightening thing. And fickle, obviously. Now the pound is the object of misery. The Euro isn't doing too great in the polls either .

A good rule to live by – whether in trading or just living: never rejoice at the misery of another. If you do, soon enough the misery may be yours. Moderation in thought goes far in trading. You are less likely to go to dangerous extremes in your behavior.

On a slightly different note, it is always good to have a decent perspective of where a market has been in the past to get an idea of where it might go. The pound is falling, so let's see where it could land.

One of the greatest market tendencies is for a market to retrace to its 50 percent point, recognized and written about at least a hundred years ago by various market researchers in the past, the most notable being W.D. Gann and R.N. Elliott of Elliott Wave fame.

Elliott hypothesized that because humans are themselves rhythmical, their activities and decisions could be predicted in rhythms and one of those rhythms involved prices and their equilibrium.

When any specific move takes place, all the prices bought and sold from the very bottom of the move to the very top of the move tend to average out at the very middle or 50% level. For this reason alone, the 50% level tends to draw any given market to it when that market goes into a corrective phase, such as seen in the Gbp/Usd right now.

Notice the Gbp/Usd chart below. You can see where the market has been since 1991 till now. The mid-point of the 17 year range (and the 50% retracement of the previous bull market) is 1.7425. We're not too far away any more.


Note the multi-year diagonal triangle that was broken to the downside, indicating a serious move down. We're in it now.

It does look like the pound could be under pressure for a while. No typical support areas have helped the market maintain even a bounce. It seems very likely the Gbp/Usd will get as low as the 1.6600 area before it has completed its full downleg. That could take some months.

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We finally got filled on all five of our week's FirstStrike trades and have already been stopped out of two of them, the Usd/Chf and the Gbp/Usd. Details are below-

This week's FirstStrike entries:
  • Eur/Usd: Short @ 1.4584, stop 1.4644. Trade in progress.
  • Gbp/Jpy: Short @ 194.93, stop 195.83. Trade in progress.
  • Gbp/Usd: Long @ 1.8080, stopped out at 1.8020.
  • Usd/Chf: Short @ 1.0979, stopped out at 1.1039. (Exactly the high of the day!)
  • Usd/Jpy: Short @ 108.03, stop 108.63. Trade in progress.
Any FirstStrike trade not stopped out before Friday-- exits on Friday just before 15:00 CST.

That Usd/Jpy trade still looks interesting. It worked last week despite all of the other currencies' weakness against the dollar. If the dollar starts giving up some of its gains it could likely benefit the yen the most percentage-wise. As always at this time, we have a long week ahead of us.

Last week's trading got a bit wearisome.

Have a good morning.

Current equity is $1,014.23.

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!