The Dollar's Herculean Strength Continues! --IFCN Wk 36 -Mon- Equity: $835.63.

The forex world is running for cover again this week from the new dollar bulls. Traders who just weeks ago thought the dollar was finished and would never recover are frantically buying the dollar as if it is the last game in town.

It isn't. But it might feel that way if you were short any sizable amount.

This morning I had the pleasure to exit the ONS trades from last Friday. We picked up a few more dollars from the weekend hold, primarily due to the continued down move of the Eur/Usd.

OneNightStand 08/08/08 entries--
All below exited this morning, 08/11/08, after midnight--
*Eur/Usd: Short @ 1.5192 –exited at 1.4979 for 213 pips profit.
*Gbp/Usd: Short @ 1.9269 –exited at 1.9194 for 75 pips profit.
*Usd/Chf: Long @ 1.0714 –Exited at 1.0814 for 100 pips profit.
*Usd/Jpy: Long @ 109.89 –Exited at 110.05 for 15 pips profit.
Total Profits: $ 30.22

Then came the placing of the week's FirstStrike orders:

Soon after, all 5 trades were executed and summarily stopped out by early morning.

The following were this week's FirstStrike entries:

• Eur/Usd: Short @1.4935, stopped out at 1.4995 for a 60 pip loss.
• Gbp/Jpy: Short @210.57, stopped out at 211.47 for a 90 pip loss.
• Gbp/Usd: Short @1.9148, stopped out at 1.9208 for a 60 pip loss.
• Usd/Chf: Short @ 1.0764, stopped out at 1.0824 for a 60 pip loss.
• Usd/Jpy: Short @ 109.56, stopped out at 110.16 for a 60 pip loss.

It is common for the markets to be fairly choppy after big moves like we experienced last week. So, out of the markets at least until Friday where there may be some potential OneNightStand trades--- we can do some study, some research and maybe think a little about the psychology of trading.

On Friday, I asked if any of you had some good success from taking the trades last week, and for those who felt like it to send an email so I could share some feedback so people can see how normal human thought processes need to be modified in the quest to become capable traders.

I got an overabundance of responses, and I thank you all very much for your contributions. I have to admit that I was actually amazed that so many have been faithfully pulling the trigger on these trades through the bad weeks as well as the good ones like last week.

I will post a few of them below tonight, and tomorrow post a few more.

Some key trading fundamentals came up naturally in some of the emails and I want to make sure others get to see them.

Some of the emails I received follow below:
(I'm sorry there is not room for all of them, thanks again to all of the writers)
----
I was surprised to hear about the trader that didn't get his fills at Oanda, must say I have never had a problem with them but my trades are small compared to some of the other traders there. Anyway it has been a good week for me to with my little system, here is the spreadsheet for the systems trades for the week. The only difference is I closed ou this morning with 152 pips instead of the 209 that were available at day's end, I still get a little nervous I guess though I am getting better.
Have a great weekend,
Xxxxxx

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Great trading week. Amazing in fact. As you know, I was in a pretty serious drawdown (64%) and this one week, I gained 80%. Now I am almost back to my original account balance and I am confident I will surpass my previous high over time whether it is from this trend or another.

I didn't like that drawdown, but generally I was okay. That is not to say I didn't go through the typical psychological crap. I did. But, the best result is, I persevered and stuck with the discipline. This showed me how strong the method is once you hop on a trend (and it was early in the trend) and maintain your discipline.

I should have learned the lesson below from your posts already. I made an assumption. First mistake. I took vacation this week (first in 2 years but yes I did work all week anyway, just did it from beach)
and did not bring my computer knowing there was one here already. I was on the computer a few times on Thursday and I decided that after I everyone went to bed I would set up the ONS trades. Well, there was a big storm and the internet went out. I couldn't believe it. I had much more anxiety over that then I did about my drawdown. It was midnight and all I could do was sit and watch the damn modem light wishing for it to go back on. Please stop blinking and go solid. Please.

I then looked for an all night internet cafe somewhere on the island via phonebook to no avail. I actually contemplated waking up a relative who lives here. That would have won me some points with the family.

I couldn't sleep as I was as anxious as a teenager the night before his big first date. I kept checking the connection every couple of hours for service. Waiting, waiting. This was like watching water boil. Painful.

Finally, it dawned on me that I could try to access my account through my phone. They have a beta for this on Oanda that I had looked at before. Not charting but can trade. I then contemplated violating one of my cardinal rules, which would be to rely on your e-mail to signal the trades. Key word is contemplated. Luckily, early the night before I had looked at the 10/40 MA and recalled the direction for the buys/sell. I was fairly confident, after this weeks trend and the current prices, that the MA lines weren't going to change in those hours.

I entered my trades solely from my memory as to where the highs and lows were and surprisingly I wasn't that far off. In fact G/J, was right on, not that it makes a difference with that trade. I did miss some movement in the trades but still profitable heading into weekend.

My lesson: always be prepared. I went out and promptly bought a wireless cell card for my laptop and will add a dial up account to my repetoire as well. Will this get entered in my book of shame?

Without a doubt.
Xxxxx
-----

Hi Joel,

Great trading this week for you alpha account. I can only imagine how your other trading accounts did. I was trading your first strike method and had a 21% increase in my capital from this week. I have traded it a total of 4 weeks now (3 weeks in drawdown(-8%) and 1 profitable week (+21%)). I just wanted to say thank for all of your help to us small fish out here.
Thanks for your help,
Xxxxxx

-----
Thanks to all of you again for all of your meaningful responses.

See you tomorrow.

Current equity is $835.63.

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!

Weatherman..., Trader- 2! --IFCN Wk 33 -Tue- Equity: $675.23.

Hours after the last posting, we prove that we are long or short..., until we aren't. And, we paid personally for our losses.

The dollar bulged suddenly on Tuesday because Treasury Secretary Paulson vocally supported the currency and the Federal Reserve Bank of Philadelphia president stated that he thought interest rates should be raised. Despite the nervousness implied in the markets recently, at last there is a persistent belief that the Fed is concerned enough about a “too robust” of an economy that will require higher interest rates.

Because of the above utterances, all of the original FirstStrike trades were entered and summarily stopped out. I wasn't surprised, as so many major indications have been indicating that the dollar is showing remarkable strength after so many years of weakness.

Not that I believe, or any other credible economic watcher believes that the current dollar strength is a permanent turnaround. But the current dollar strength should be much more persistent than generally expected, and could be financially damaging to determined dollar bears.

Currently, the Challenge account has only been taking the first trade of the week and cancelling the other side of the weekly FirstStrike orders.

As has happened a number of times in the past, this week I neglected to cancel some of my reverse orders, resulting in long positions in both the Usd/Chf and the Usd/Jpy, as cited below. Reverse trades are valid trades. Although they increase the weekly risk, they also offer additional potential reward when major currency reversals take place so quickly.

The following are this week's FirstStrike entries:

• Eur/Usd: Long @ 1.5923, stopped out at 1.5863 for a 60 pip loss.
  
• Gbp/Jpy: Short @ 212.28, stopped out at 213.18 for a 90 pip loss.
  
• Gbp/Usd: Long @ 1.9996, stopped out at 1.9936 for a 60 pip loss.
  
• Usd/Chf: Short @ 1.0160, stopped out at 1.0220 for a 60 pip loss.
  
• Usd/Jpy: Short @ 106.31, stopped out at 106.91 for a 60 pip loss.
  

Reverse trades taken: (See explanation above)

• Usd/Chf: Long @ 1.0260, stop 1.0200. Trade currently in progress.
  
• Usd/Jpy: Long @ 107.31, stop 106.71. Trade currently in progress.
  

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

Current equity is $675.23.

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, 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!

The Phone Rang, it's my Wife! Sell the Euro!--IFCN Wk 30 -Tue- Equity: $730.43.

I finally got stopped out of the three remaining FirstStrike entries-- the Eur/Usd, Gbp/Usd, and Usd/Chf, for a 60 pip loss each.

A total of 5 FirstStrike trades and 5 losses.  It has happened before and will happen again, many times....

These are the FirstStrike entries and exits for the week-----
Eur/Usd: short @ 1.5737, stopped out at 1.5797 for a 60 pip loss.
Gbp/Jpy: short @ 210.59, stopped out at 211.49 for a 90 pip loss.
Gbp/Usd: short @ 1.9884, stopped out at 1.9944 for a 60 pip loss.
Usd/Chf: long @ 1.0223, stopped out at 1.0163 for a 60 pip loss.
Usd/Jpy: short @ 105.53, stopped out at 106.13 for a 60 pip loss.

____________________

You might have laughed at the title for this entry and the following discussion. I would prefer you find the entire concept discussed laughable. It isn't for many.

One of the last times I had 5 quick losses in FirstStrike I remember that I had a flat tire the same day, and was forced to buy two premium tires because the tire got destroyed by my driving on it on the way to a safe zone.  In below zero weather.  I mentioned it in the post that day stating that “ losses are losses.” You have to take them when and however they happen.

Today, I had a huge rock thrown off the back of a highway maintenance truck which obliterated my back window of the same truck. Coincidence?

Yes. Just a coincidence.

It is amazing how many people, even traders who should know better, actually get superstitious about things like coincidences. Especially coincidences that happen in the market at the same time you take a sudden loss or make a huge profit.

Example: A series of unexpected phone calls from a spouse over a period of a couple days which simultaneously come after a series of “perfect” appearing trades that turn into devasting losses might set your mind up for failure if you even think about the two actions having a connection.

Next time you get a “perfect” trade setup and the phone rings, you may immediately figure its your wife (not much downside unless she is divorcing you) or your new trade is probably a loser (plenty of downside if you start thinking that way and it affects your trading in any way).

It is best not to assign any value to anything that does not have a proven causal link to your trading.

We have the possibility of some OneNightStand trades this week. The orders will go out early Friday morning. If you choose to not take the trades this weekend, I wouldn't hold it against you. I will be trading reduced size because of the holiday period.

Current equity is $730.43.

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!

Ben says- "It's Just Some Campers Grilling Some Steaks"-IFCN Wk 11 -Thu- Equity: $484.40

Have you ever tried fundamental trading in Forex? By this I mean trading on the news released and doing the whole "macro" thing-- trying to figure out how the different financial bodies of the the different major countries all interact.

I'm sure there is somebody out there who is successful at it, but it must be tiring. Especially when most of the moving lips out there are lying.

Example:
The Fed just reduced its projections for economic growth for 2008 because of the (extremely well-publicized) credit issues and soft housing market. They also indicated that they see larger future unemployment nmbers and higher inflation.

The Fed is now predicting the unemployment rate will be around 5.2% to 5.3% in 2008, up from the previous forecast of 4.9% and the 2007 average unemployment rate of 4.6%. They also think that the GDP will grow between 1.3% and 2.0% in this year, down from earlier forecasts of 1.8% to 2.5%.

Now is where I think it gets interesting:

The Fed now expects inflation to be somewhere between 2.1% and 2.4% this year, above the previous estimate of 1.8% to 2.1%.

• Anyone check the price of gas today? Crude oil, as well as heating oil and unleaded gas (before taxes) are up exactly 5 times the price they were 6 years ago this month.
  
• Anyone check the price of a bushel of wheat today? $18.50/bushel Minneapolis Wheat (5 times it's price just 2 years ago) and $10.50/Chicago Wheat (3.5 times it's price 2 years ago)
  
• Gold and silver? (3 times their price 6 years ago)
  
• Copper? (6 times it's price 6 years ago)
  

You could add 100's more items to the list. Even houses-- as troubled as the current market is-- are more than double what they were 6 years ago.

These are the costs of the main staples of life in this country. Anyone who doesn't live on the street or by the charity of others is paying a tremendous amount more each year than the TYPICAL projected "joke" inflation numbers the Fed releases.  (I can't believe that ANYONE can choke down the figures the government releases over and over..., but somebody obviously does.  They keep doing it!!!!)

If the Fed was responsible for reporting a forest fire burning 10,000 acres-- they would probably report that the smoke everyone's smelling is some campers grilling some steaks and there's really nothing to worry about.

How much more are you earning than you were 6 years ago?

Anyway, the reason I bring this up is simple....

You cannot expect to trade your hard earned capital based on news and data that governments choose to bestow on you. It isn't just the Fed. The other countries are interested in managing their currencies to their best advantage and will tell what ever it takes to get you into bed..., with them.

You need a method to trade that has risk controls and an edge that you can prove. Which doesn't care what Ben Bernanke has to say. The method needs only to care what the prices say.
------------------------

On to the trading account:

I've been stopped out of the following 5 FirstStrike pairs:

• Eur/Usd: short @ 1.4631 -stopped out for a loss of 60 pips
  
• Usd/Chf: long @ 1.0995 -stopped out for a loss of 60 pips
  
• Usd/Jpy: long @ 108.30 -stopped out for a loss of 60 pips
  
• Gbp/Jpy: short @ 211.14 -stopped out for a loss of 60 pips
  
• Gbp/Usd: short @ 1.9575 -stopped out for a loss of 60 pips
  

------------------------
Current positions: None
Equity: $484.40
------------------------
It will be very unlikely that we will see any OneNightStand trades on Friday. The necessary breakout points are excessively distant.

We will recap tomorrow.

Joel Rensink
www.infiniteyield.com

Week 4 - Thu- Current Equity: $569.19

I finally did get stopped out of the EUD/USD for a 60 pip loss.

A total of 5 FirstStrike trades and 5 losses.

That is the way trading works some weeks.

And, probably no correlation at all, but losses are losses; I had a flat tire today because of below zero weather..., and running on it a short distance to a safe get-off spot destroyed the tire. Had to buy 2 of them to balance them out. I hate those “donut” tires they put in cars these days....

We have the potential of a couple of short trades on OneNightStand for tomorrow- possible short in GBP/USD and possible short in GBP/JPY.

I'll send the particulars to the newsletter subscribers tonight around 12:00 midnight.

Current equity stands at $569.19.

We'll recap 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 to.