Sunday, April 5, 2009

Drawdown Deepens! -IFCN WK 69- Fri- Equity: $2,670.62

After Friday's close, I realized that I held an additional trade that I shouldn't have.

My FSP trade of short usd/chf from 1.1372 with a stop at 1.1497-- should have been stopped out when the price rallied up to 1.1506 on Wednesday April 1st. It turns out that I read my stop order wrong and placed it 20 pips higher than I should have. Of course, this mistake resulted in a missed loss, and potentially a profitable trade for Monday's open. In my experiences, mistakes usually cause larger losses. This time it seems to have benefited me. Even so, this has been a tough week.

Also, we had three OneNightStand trades executed. They were all long entries:
gbp/jpy, gbp/usd, usd/jpy. The gbp/jpy got tagged for a 100 pip loss and the other two (not stopped out) await Monday morning's open for their exits.

A point of note: This was one of those weeks where the Gbp/Jpy gave us grief. If we had not gotten elected on the short side at virtually the low of the week, the FSP long entry would have given us another 850 pips so far- and a welcome $100 at my current account size. Then, the ONS Gbp/Jpy stop-out on Friday at the low of the day just before recovery to closing at the high of the week...

I got a few emails from readers asking if I thought others (read: funds) were following our trades just to stop us out.

I doubt it. I have seen the markets doing many things over the years, and close calls happen all the time, for us and against us. Still, I don't enjoy getting my stops hit and then the market going merrily in the direction I was positioned. It can be hard to not take it personal even if it is part of the reality of trading.

The week's FirstStrikePlus trades:
  • eur/usd: Long @ 1.3375, stop 1.3184.
  • gbp/jpy: Short @ 136.47, stopped 138.90 for 242 pip loss.
  • gbp/usd: Long @ 1.4385, stop 1.4179.
  • usd/chf: Short @ 1.1372, stop 1.1497.
  • usd/jpy: Short @ 96.21, stopped at 97.50 for 129 pip loss.
FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit)
OneNightStand trades executed Friday, April 3, 2009
*Long gbp/jpy @ 147.88, stopped at 146.88 for 100 pip loss.
*Long gbp/usd@ 1.4783. Exiting Monday, 00:00 CST.
*Long usd/jpy@ 100.19. Exiting Monday, 00:00 CST.

Trading account equity: $1,942.62

Silver position equity: $ 728.00
(Current XAG price: $12.77 – 400 unit position average: $10.95)
TOTAL Equity: $2,670.62

As the markets would have it, we gained nicely on our FirstStrikePlus and OneNightStand trades as a group, yet lost again in the XAG section of the account. When silver helps the account it can be amazing. When it hurts the equity, it is equally amazing.

We'll see how the markets work out Monday where we should be exiting most, if not all of the currency trades.

Joel Rensink

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