The Dollar is Losing its Grip! -IFCN WK 67 – Monday- Equity: $2,413.69

This morning we got some early strength in the Pound and Euro triggering long FirstStrikePlus trades, carry-over strength in the Gbp/Jpy almost triggered a long position there also.

At today's open I exited my elective long eur/usd trade from last week for a 155 pip profit. There were no OneNightStand trades entered on Friday to be exited this morning.

In the last four trading sessions we have started to see some grudging strength develop, which is actually a better indication of a currency turn-around than a quick, sharp move. That kind of action would tend to indicate a simple reaction.

Nevertheless, the sterling and euro backed off considerably from their highs today. I would have preferred a bit more strength, but the market gives what it gives-- and we work with it.

We came into the week short the gbp/usd and gbp/jpy, but those trades didn't last very long. The trading community focused on comments from Bernanke and some believe that caused the foreign currencies to gain on the dollar. I simply believe that the dollar's strength is grossly overdone and is likely to wane from this area.

Week's beginning equity at Monday's open: $2,485.44 w/XAG =13.05

This morning's action:
*Long eur/usd @ 1.2744 exited this morning's open at 1.2899 for 155 pip profit.
*Short gbp/jpy @ 136.71, stopped at 139.09 for 238 pip loss.
*Short gbp/usd @ 1.3993, stopped at 1.4132. for 139 pip loss.

-----

The week's current FirstStrikePlus trades:

• eur/usd: Long @ 1.3020, stop 1.2859. Trade in progress.
• gbp/usd: Long @ 1.4171, stop 1.3980. Trade in progress.

FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit)
Trading account equity: $1,711.69

Silver position equity: $702.00
(Current XAG price: $12.94 – 300 unit position average: $10.60)
TOTAL Equity: $2,413.69

This should be an interesting week.

What markets actually do when there is new potential open to them is extremely revealing for the future.

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!

Rebound at Last! IFCN Wk 45 – Mon – Equity $1,326.12

Last week I revisted the double-edged sword issue of volatility and the benefit to using breakout points which are adaptive to current volatility instead of fixed breakout points. I am releasing a version of FirstStrike that better adapts to market conditions. Bring on the big moves! I will be using this adaptive version from now on in the IFCN Challenge account.

Since I was not able to get the ruleset for FirstStrike Plus distributed before this week's action began on Monday, I used the same double risk/doubled distance fixed point method used the previous week. Volatility is, of course, even higher this week than last.

When you have the Dow rocketing up more than a 1100 points in a day, and the Gbp/Jpy up more than 1400 pips from Friday's lows, you can be sure that this business is not for amateurs and order placement better be made with due respect to the action we are experiencing.

In last week's recap post, completed a short time ago – I inserted a link to download the PDF which explains how the orders for FirstStrike Plus are calculated. If you wish to continue with the original version of FirstStrike, that is definitely up to you; just be aware that a 100 pip move right now in the Gbp/Usd takes less time than a 20 pip move did 3 weeks ago in the same trading pair. Again, here is the link to FirstStrike PLUS.

As a side note: It is very possible that we are seeing a bottom being made in the Gbp/Usd, Eur/Usd, and maybe even the Gbp/Jpy that could last for weeks, months, and perhaps even years. Many great companies' stocks have hit irrationally low prices that will undoubtedly be snapped up. Microsoft, although not my favorite company, is currently irreplaceable in a technical world. From what I saw today, I'm certain Microsoft is a huge buy. And I don't ever like stocks.

It may be a little early to tell for sure, but the level of panic that masses of people have been feeling last week makes the kind of bottoms that stick for a very long time.

____________________

After this morning's open at 00:00 CST, I exited the short OneNightStand Eur/Usd trade from Friday. I was short @ 1.3442 and had gone into the weekend profitable, but not very encouraged by the end-of-week action I saw. I exited the Eur/Usd this morning at 1.3522 for an 80 pip loss. ($12.23 total equity loss from Friday.)

Here are the IFCN results of this week's FirstStrike trades:

• Eur/Usd: Long @ 1.3623, stopped out at 1.3503 for a 120 pip loss.
• Gbp/Jpy: Long @ 171.74, stop 169.94. Trade in progress.
• Gbp/Usd: Long @ 1.7119, stop 1.6999. Trade in progress.
• Usd/Chf: Short @ 1.1258, stopped out at 1.1378 for a 120 pip loss.
• Usd/Jpy: Long @ 101.02, stop 99.82. Trade in progress.

FirstStrike trades not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current trade equity is: $1,326.12.

I haven't picked up any more silver, yet. I'm beginning to feel like a werewolf after Friday's cleanout moves.

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!

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!

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.

-----

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!

Ben Bernanke, Font of Information! --IFCN Wk 32 -Tue- Equity: $737.12

Federal Reserve chairman Ben Bernanke had his testimony before the Senate Banking Committee today. Remarkable things were said.

1. “There is speculation in the oil trade.”
   
2. "There seems to be adequate oil in the ground.”
   
3. “There is no "magic bullet" to deal with high commodity prices.”
   

Thanks. I feel much better now. And to think these guys make the big money for sharing this crucial information.

Even so, this type of rhetoric swung the markets around, and sent oil down more than $9 at one point.

He could have said something really interesting, like, “I can't tell you what I plan on doing about high oil prices, the slide in the dollar and interest rates because my magic 8 ball got broken!”



The Gbp/Usd has still proven to be the strongest trade of the week. At one point earlier today, our equity stood at $759.50. And then, after Mr. Bernanke spoke, it fell off substantially. I'm not too surprised, as I was quite impressed with having any profits at all this week with all the news stories whipping up the masses.

The following is the status of this week's FirstStrike trades:

• Eur/Usd: Sold @ 1.5848, stopped out at 1.5908 for a 60 pip loss.
  
• Gbp/Jpy: Long @ 212.11, stopped out at 211.21 for a 90 pip loss.
  
• Gbp/Usd: Long @ 1.9906, stop 1.9846. Trade in progress.
  
• Usd/Chf: Long @ 1.0240, stopped out at 1.0180 for a 60 pip loss.
  
• Usd/Jpy: Sold @ 105.95, stop 106.55. Trade in progress.
  

Note: Any FirstStrike trade not stopped out before Friday gets exited on Friday just before 15:00 CST.

Current equity is $737.12.

See you tomorrow. Keep your stops in.

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, Yahoo or Hotmail addresses. Nothing personal, but 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!

Eur/Usd Tries to Go Higher-- Just Couldn't do it! -- IFCN Wk 17 -Mon- Equity: $802.43

After a big couple of weeks, it isn't surprising that we should have some downside action. And we are seeing it this week.

The Eur/Usd tried again to go to new highs, something it attempted at the end of last week and wasn't able to accomplish either. If a market can't go up..., there is really only one other direction for it to travel.

We got 5 quick FirstStrike entries early this morning and are still live on 2 of them, with a standing loss in only one pair, the short Usd/Chf. I think it will be stopped out quickly.

• Eur/Usd: long @ 1.5842, stopped out @ 1.5782 for 60 pip loss.
  
• Gbp/Jpy: short @ 198.28, stop 198.88. Currently profitable.
  
• Gbp/Usd: short @ 1.9875, stopped out @ 1.9935 for a 60 pip loss. Nasty loss because it fell back immediately after the stop run----
  
• Usd/Chf: short @ .9913, stop .9973. Currently under water a bit.
  
• Usd/Jpy: short @ 99.27, stopped out @ 99.87 for a 60 pip loss.
  

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

Current equity is $802.43.

I got a nice email from a reader---

I hope all is well and you had a great weekend. Thank you for recommending Fortunes Formula...so far its a very cool book. I'm about 100 pages in...

I had a question about Kelly Criterian as it relates to wager size. I assume you use some sort of variation to adjust your "bet" size or trade. Ive never read anything youve written that discussed this though.

With Kelly, he applied his theory to win expectation such as a horse race that had posted odds. In trading though, isnt the expectation fairly low in regards to which positions will be winners? Are you simply using a flat percentage (1-2%) per trade? If so (assume 2%), is it 2% per position or 2% total position in your 10 total positions for firststrike this week?

I'm having problems with the application.

R-----

My reply:

Thanks for the question---

About the money management for FirstStrike.

Yes, the percentage risked is per-trade. All of the FirstStrike trades are supposedly independent for money management purposes. (In reality, sometimes there is a great deal of correlation between trades. But there are not 10 trades taken, only five. After the first trade executes in a pair, the other opposite order is cancelled.)

Great question.

I use a special money management protocol for FirstStrike which reduces risks substantially versus potential gain and is an advance over straight fixed fractional trading. Which, nevertheless, still works just fine. But everyone needs to watch their drawdown potential and I am no different in that category..

Have a great week. I do love that book too.

Thanks again R-----.

Maybe tomorrow will have some interesting moves.

Until tomorrow.

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 or Yahoo addresses. Nothing personal, but 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!

Euro and Pound Gain moderately Against the Dollar!!! -- IFCN Wk 16 -Mon- Equity: $684.63.

It was nice to have a long weekend. As stated last week, I exited all remaining FirstStrike trades @ 15:00 CST on Thursday. Also, no OneNightStand orders were entered Friday.

There was some minimal trading that took place on Friday, but the spreads and lack of opportunity should have kept all but the gambler out of the marketplace. 90% of the market players (read: the “big money”) celebrate easter or other holidays at this time of the year, so it is wise to be out. If you follow this line of thought you will rarely miss any opportunities except to get slaughtered if you ignore it.

The FirstStrike orders below were all executed. As usual, the Gbp/Jpy was a heartbreaker- got us long, looked like it was going to be perfect, backed off just enough to stop out the trade and then skyrocketed back up.

FirstStrike also got short Usd/Chf, which quickly got stopped out for a loss.

But so far, the Eur/Usd, Gbp/ Usd and Usd/Jpy longs are still in progress.

Eur/Usd: BUY 1.5410, stop 1.5350.
Gbp/Jpy: BUY 198.05, stopped out @ 197.45 for 60 pip loss.
Gbp/Usd: BUY 1.9819, stop 1.9759.
Usd/Chf: SELL 1.0131, stopped out @ 1.0190 for 59 pip loss.
Usd/Jpy: BUY 100.42, stop 99.82.

As always, any trade not stopped out before Friday-- exit on Friday just before 15:00 CST.

Current equity: $684.63. My Euro and Gbp pairs have larger position size due to my money management algorithm. So far so good. That can change however, as you know too well.

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 or Yahoo addresses. Nothing personal, but 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!

Dollar hits an air pocket! IFCN Wk 12 -Tue- Equity: $536.24

Looks like a good week for FirstStrike so far. It took a while for the market pairs to pick a direction, but when they did-- we've gotten some line moves.

A recap of our entries today:

Usd/Jpy: Went long yesterday @ 107.91, exited today @ 107.67 for 24 pip loss. I simply got out early. The market failed at an area it should have held if it was going to go higher.

I saw no reason to take a bigger loss just to prove a point. Also, the Euro, Swiss and Pound all were gaining strongly on the dollar. Under these circumstances there was no reason to wait for the inevitable loss.

• Eur/Usd:  Long @ 1.4867, stop 1.4807.
  
• Gbp/Usd: Long @ 1.9709, stop 1.9649.
  
• Usd/Chf:   Short @ 1.0836, stop 1.0896.
  

Any trade above not stopped out before Friday-- exit on Friday just before 15:00 CST.

It is always surprising how quick one can rebound from a drawdown. The week isn't over yet, but at least we're seeing positive action.

See you tomorrow.

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 which address you would like it sent.

Week 5 - Mon- Current Equity: $546.40

There were no OneNightStand trades exiting this morning.

The weather is getting nice here in Minnesota for a few days. Always like to have chance to step out for a walk after trading all day, and not have to wear tons of clothing.

Within a couple of hours after the beginning of the week we had FirstStrike entries on all of our pairs. By mid-morning three of the trades were stopped out. For a while it looked like the currencies were going to have a strong day right out of the gate,  but it hasn't worked out that way.

FirstStrike trades today:
-----
Gbp/Usd- Sold@ 1.9657, stopped for 60 pip loss
Gbp/Jpy- Bought@ 215.29, stopped for 60 pip loss
Usd/Jpy- Bought@ 109.49, stopped for 60 pip loss
Eud/Usd- Sold@ 1.4681, stop 1.4741. Currently short
Usd/Chf- Bought@ 1.1147, stop 1.1087. Currently long
-----

Current equity stands at $546.40.

The important thing is-- we've entered and now we let the market do it's work.

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.