Monday, September 7, 2009

1185 % increase since December 2007

I'm glad to have a chance to make an update.

Sorry about my long absences. But, trading is what I do for a living and when duty calls..., it usually takes the form of an early morning Eur/Usd or coffee trade.

This year has been one of my busiest and most personally profitable. Last year was terrific for me in my personal trading - especially the last half - so this year is a unsuspected bonus. All markets have ebbs and flows, and right now the majority of the world's money is sitting on the sidelines waiting for confirmation of something to make a commitment.

When volatility starts to increase due to that commitment, I have to get involved. You already know the drill.

Since the last update in April --- in the Challenge account I have made 108 FirstStrikePlus and ONS trades and added 600 ounces to the long XAG position. The previous position of 400 ounces had an average of $10.95.

The 3 silver additions were: 200 ounces @13.04, 200 ounces @ 13.70 and 200 ounces @14.31.

This makes an average position of 1000 ounces of XAG @12.59.

Due to this enhanced position and the beneficial price action of the last month in silver – we have hit new equity highs. The Challenge account shows a 1185 % increase since December 2007 when I started the blog and the account with just $500. This is equivalent to a 677% annual average return.

That even impresses me.

At the time I started this site very few believed it was possible to get such percentage increases, especially after publicly declaring that intent. Now that many others following this Challenge have had similar gains, it isn't so unreasonable in people's minds.

Nevertheless, if one wishes to follow along on some or all of the trades taken here, remember that pure risk capital be used. If your lifestyle and that of your family will not be hampered by the loss of the money risked, it usually qualifies as risk capital.

Last week we had another week of losses in FirstStrikePlus.

Week of Aug. 31, 2009---FirststrikePlus trade executions:
eur/usd: Long @ 1.4342, stopped at 1.4262 for 80 pip loss.
gbp/jpy: Long @ 152.30, stopped at 150.06 for 224 pip loss.
gbp/usd: Long @1.6355, stopped at 1.6206 for 149 pip loss.
usd/chf: Short @1.0553, stopped at 1.0626 for 73 pip loss.
usd/jpy: Long @ 93.29, stopped at 92.55 for 74 pip loss.

-----
OneNightStand trades executed Friday, Sept. 4, 2009:
-None-

Trading account equity: $ 2,816.41
Loss from previous week: $ 214.56.

Silver position equity: $ 3,610.00
(Current XAG price: $16.20– 1000 unit position average: $12.59)
TOTAL Equity: $ 6,426.41

There is a strong difference between investing and trading. Especially when you are willing to put up with substantial drawdowns despite constant trading..., while waiting for your “edge” to reassert itself.

This last week we saw a sharp move up in silver and gold. A significant part of the Challenge account could be considered by many an "investment" in silver. It really is a trade, just a very long term one - I will be happy to sell when volatility becomes extreme at higher levels. As long as inflation demons lurk in the shadows, the trade should prosper easily.

As most of you know, I've been bullish silver since the $8.40 low. Time and price (Gann indications) came in very strongly then and I have more personal certainty that silver low will never be seen again than the USA will remain capitalist for the next 4 years. (I do believe that even if we should have to suffer socialism, it will be as short-lived as Prohibition was. And it will end badly for the perpetrators.)

I've calculated that with the current equity and a modest 60% increase per year for the next 7 years will build the Challenge account into over $160K. Of course, increases like we experienced over the last year and a half can't be expected all the time. But if I do just a fraction as well as I've done already-- I could hit a million+ in those 7 years.

Some have emailed me commenting on how dismal the current returns have been trading First Strike Plus and OneNightStand.

Yes, I know.

That is definitely the way trading is, you keep taking trades that have a statistical edge and get hammered (experiencing losses) until you don't. If that is what you've been experiencing, congratulations! You've been trading the same markets I have.

The spectacular gains I've enjoyed in the last month (as already mentioned) were due primarily to my silver position. I expect that a significant amount of the Challenge account's gains for the next few years will be from silver enhancement. Silver is increasing the account size while currencies are just holding their own.

Eventually the currency markets will take off and we should profit as we have in the past. That's one of the reasons there is so much latent profit potential in proper trading of markets. The vast majority of market watchers/traders get sick and tired of getting hammered (experiencing more losses) and stop trading. The market, now clear of side currents – starts trending again. (By then, that majority has found a new “shouldn't lose” system and they repeat the process.)

For those of us in the USA, have a good Labor Day holiday.

Best of wishes to you all. I cautiously look forward to the FSP trades this week. The ranges have narrowed tremendously and the potential for large profits is here. Or just our usual containable 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!

6 comments:

Manfred said...

Could you write a little of your use of Gann time/price analysis? I'd really appreciate it.

Good going. Keep it up.

tagskie said...

hi.. just dropping by here... have a nice day! http://kantahanan.blogspot.com/

Marco said...

Hi Joel,
I nooticed in a posting some time back that you adjusted your stop to breakeven if and when your position is up by a certain amount.

i) are you still doing this? Should this be in the FSP trading rules?
ii) is it discretionary as to when you do this, or do you have a specific pip target that triggers this.

Regards,

Marco

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