Ahead One step, then back Two! --IFCN Wk 30 -Mon- Equity: $752.13

We got some profits this morning, then promptly had some losses.

Trading as usual.

You might want to scroll down and check out some of the comments on previous posts.

Here was one from June 28th--

Hi Joel. Thanks for posting this blog, very informative.

I was wondering, if you were to get stopped out of all your First Strike and ONS trades (assuming you had all five currencies in trade on the same day) what would your approximate drawdown be?

From reading your blog I believe you a using about 1% risk per trade, so is it around 10% loss in a week if you had all trades open and hit the stop loss?

Thanks, keep up the great work.

-Anonymous-


Thanks for the good question.  The scenario you ask about is possible, but extremely unlikely, due to the market dynamics which cause the two systems to be triggered.

The total drawdown for the week could very likely exceed 10% (possibly even 12 - 13%) if we got 5 failed FirstStrike trades and 5 failed OneNightStand trades.  

That eventuality would be very rare, as the likelihood of getting 5 OneNightStand trades in any one week would be amazing in itself.  And if they got executed, it would be extremely unlikely that all of the FirstStrike trades would have been losers too.

The important thing for you as a trader is--- be aware of the possibility of such an event, and if that possibility would represent an unbearable risk, it is a strong indication that you are trading too much size for your situation.

This morning after midnight CST, I exited Friday's three OneNightStand trades.
OneNightStand 06/27/08 entries---

• Eur/Usd: Long @ 1.5769, exited this morning at 1.5787 for a 21 pip gain.
  
• Gbp/Usd: Long @ 1.9896, exited this morning at 1.9934 for a 38 pip gain.
  
• Usd/Chf: Short @ 1.0222, exited this morning at 1.0171 for a 51 pip gain.
  

Total profits- 110 pips ($8.25)

It was nice that the trades resulted in profits, even though they were not substantial.

Shortly after exiting the above ONS trades, we got entered two short FirstStrike entries, the Gbp/Jpy and Usd/Jpy. Both trades moved into profit quickly, but as the early morning wore on, the profits evaporated and then the trades got stopped out.

The rest of the day wore on, finally resulting in the last three pairs getting executed. With the news releases scheduled this week and the coming holiday (July 4th), it will be interesting to see the potential developments. The rest of the world doesn't have a holiday on the 4th as the US does, but money doesn't sleep.

If we still have trades in progress late in the week, we will exit on Friday, July 4th as usual.

The following are this week's FirstStrike entries:

• Eur/Usd: short @ 1.5737, stop 1.5797. Trade in progress.
  
• Gbp/Jpy: short @ 210.59, stopped out at 211.49 for a 90 pip loss.
  
• Gbp/Usd: short @ 1.9884, stop 1.9944. Trade in progress.
  
• Usd/Chf: long @ 1.0223, stop 1.0163. Trade in progress.
  
• Usd/Jpy: short @ 105.53, stopped out at 106.13 for a 60 pip loss.
  

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

Current equity is $752.13.

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!

Dollar Slammed this Week! OneNightStand profits!--IFCN Wk 29 -Fri- Equity: $767.88.

After a volatile beginning, this week the major currencies continued the directions set last week, with the dollar losing against all of them.

The Fed holding the same interest rate and some in the Eurozone increasing theirs-- was a knee-jerk recipe for dollar weakness. Less interest differential for the dollar-- the dollar loses some supporters.

As many are beginning to realize, the carry-trade is one of the largest reasons big money avidly chases the Forex rabbit so hard. The coming weeks will tell the tale for how large the money-shifting will get.

Here's this week's recap:

The data below is as of Friday's close, June 27, 2008:

Start of week equity: $ 789.67.

OneNightStand Exit(s) on 06/23/08:
None

Completed FirstStrike trades this week:

• Eur/Usd: short @ 1.5557, stopped out at 1.5617 for a 60 pip loss.
  
• Gbp/Jpy: short @ 211.09, stopped out at 211.99 for a 90 pip loss.
  
• Gbp/Usd: short @ 1.9673, stopped out at 1.9733 for a 60 pip loss.
  
• Usd/Chf: long @ 1.0415, stopped out at 1.0355 for a 60 pip loss.
  
• Usd/Jpy: long @ 107.90, stopped out at 107.30 for a 60 pip loss.
  

Total losses:  330 pips
Total profits:     0 pips
Net losses:     330 pips ($29.77)

OneNightStand 06/27/08 entry(s)

1. Eur/Usd: Long @ 1.5769.
   
2. Gbp/Usd: Long @ 1.9896.
   
3. Usd/Chf: Short @ 1.0222.
   

If the protective stop is not elected on Friday, the ONS rules are to hold the trade over until Monday morning, 00:00 CST

Unrealized Profits:        $    7.98
End of week equity: $ 767.88 (includes unrealized P&L)
Total Loss for Week:      $ 21.79 (2.7% weekly decrease)

This was an ok week even though we lost all five FirstStrike trades. A couple of them held on for a while showing that the potential for a sizable move is still in the offing. Then, on Friday morning, we got three OneNightStand trades which remained profitable into the close, ready for an exit on Monday morning. Mixed results, but results they are.

Good quote you might want to put on a sticky note near your trading computer--
"It is a truth very certain that when it is not in our power to determine what is true we ought to follow what is most probable." — Descartes

See you 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. 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!


 

How Long until You earn a Million?--IFCN Wk 29 -Thu- Equity: $759.90.

I ran across this interesting list on the net earlier today.

Here are 30 jobs with earnings anywhere from below minimum wage to six-figure salaries and how long it would take to earn $1 million in terms of years.

1. Architects, except landscape and naval: $64,150 ---16 years
   
2. Automotive service technicians and mechanics: $33,780 ---30 years
   
3. Bartenders: $16,350 ---61 years
   
4. Bookkeeping, accounting and auditing clerks: $30,560 ---33 years
   
5. Carpenters: $36,550 ---27 years
   
6. Child, family and school social workers: $37,480 ---27 years
   
7. Choreographers: $34,660 ---29 years
   
8. Coaches and scouts at colleges, universities and professional schools: $37,530 ---27 years
   
9. Computer and information systems managers: $101,580 ---10 years
   
10. Computer applications software engineers: $79,780 ---13 years
    
11. Computer support specialists: $41,470 ---24 years
    
12. Dental hygienists: $62,800 ---16 years
    
13. Desktop publishers: $34,130 ---29 years
    
14. Elementary school principal: $82,414 ---12 years
    
15. Executive secretaries and administrative assistants: $37,240 ---27 years
    
16. Hairdressers, hairstylists and cosmetologists: $21,320 ---47 years
    
17. Librarians, local government: $44,960 ---22 years
    
18. Middle school teachers, except special and vocational education: $46,300 ---22 years
    
19. Network systems and data communications analysts: $64,600 ---15 years
    
20. Personal financial advisers: $66,120 ---15 years
    
21. Photographers: $26,170 ---38 years
    
22. Pharmacists: $94,520 ---11 years
    
23. Physical therapists: $66,200 ---15 years
    
24. Police and sheriff's patrol officers: $47,460 ---21 years
    
25. Post-secondary teachers: $56,120 ---18 years
    
26. Retail salespersons, department stores: $19,610 ---51 years
    
27. Special education teachers, preschool, kindergarten and elementary school: $46,360 ---22 years
    
28. Technical writers: $58,050 ---17 years
    
29. Travel agent: $29,210 ---34 years
    
30. Veterinarians: $71,990 ---14 years

The above figures are averages and represent income before taxes and costs of living are taken out. That means you will never be able to earn a million dollars.

Yes, you will always hear about those plans where you save so much to make a million by such and such a date. If those plans really worked there would be dozens of families on this earth who would each have 100 trillion dollars from saving a few pennies a thousand years ago and repeating the investment drill over the centuries.  Ask the next millionaire you meet if he got it by saving and sticking it in the bank at 5%.

My solution-- Chunks!
Almost always, million dollar profits are due to some form of business. To reliably get a million you have to create and sell a business that makes money, or receive money in big chunks, so that you are taking it in much faster than you or your wife can adapt to spend it. Either from a realestate deal, a business deal or a form of investment that is scalable where logarithmic profits are possible.

Like trading.

When one has on a good-sized position in a market that is going somewhere, money flows to your account like you somehow invented it. It doesn't work that way if you try to earn it by labor. The cost of making money by labor is too excessive.  It is too easy to use up while you make it.

____________________

It looked early in the week that we had the potential to make some decent profits with FirstStrike. Those possibilities have gone away with all of our trades now having been stopped out.

This week's last FirstStrike trade, the Usd/Jpy long @ 107.90, was stopped out at 107.30 for a 60 pip loss.

Tonight we have some OneNightStand possibilities. I'll send them out later to the subcribers.

Current equity is $759.90.

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. 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!

Been Bitten? --IFCN Wk 29 -Wed- Equity: $763.20.

-----A young girl was trudging along a mountain path, trying to reach her grandmother's house. It was bitter cold, and the wind cut like a knife. When she was within sight of her destination, she heard a rustle at her feet.

Looking down, she saw a snake. Before she could move, the snake spoke to her. He said, "I am about to die. It is too cold for me up here, and I am freezing. There is no food in these mountains, and I am starving. Please put me under your coat and take me with you."

"No," replied the girl. "I know your kind. You are a rattlesnake. If I pick you up, you will bite me and I will die!"

"No, no," said the snake. "If you help me, you will be my best friend. I will treat you differently."

The little girl sat down on a rock for a moment to rest and think things over. She looked at the beautiful markings on the snake and had to admit that it was the most beautiful snake she had ever seen.

Suddenly, she said, "I believe you. I will save you. All living things deserve to be treated with kindness."

The little girl reached over, put the snake gently under her coat and proceeded toward her grandmother's house.

Within a moment, she felt a sharp pain in her side. The snake had bitten her.

"How could you do this to me?" she cried. "You promised that you would not bite me, and I trusted you!"

"You knew what I was when you picked me up," hissed the snake as he slithered away.

____________________

If anyone was watching the forex markets shortly after 2:00 pm CST, they saw a number of divergent violent reactions. Many got bitten.

The dollar got suddenly stronger, and then decidedly weaker. The cause of this confusion was the form of statements made by the Federal Reserve. Their monetary policy was left unchanged at 2%. But the vote to leave the rate unchanged was not unanimous. One Fed President was in favor of raising the rate due to serious inflation concerns. It is an art form to dictate your intent as two opposite results.

The story described above bears remembering. The Fed has many carnivorous qualities where your money is concerned.

____________________

The following is this week's last FirstStrike trade:

• Usd/Jpy: long @ 107.90, stop 107.30. Trade still in progress despite the wild action after Wednesday's FOMC release.
  

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

The short Gbp/Usd @ 1.9673, was stopped out at 1.9733 for a loss of 60 pips.

Only one FirstStrike trade left alive. Perhaps there will be some OneNightStand trades for Friday.

Current equity is $763.20.


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!

People Who Think about Art as an Investment are Pathetic! --IFCN Wk 29 -Tue- Equity: $760.55.

The famous quote above is from Walter Hubert Annenberg (1908 – 2002), an American billionaire. He was a previous owner and publisher of the Inquirer, the creator of Seventeen magazine and TV Guide; a philanthropist, and a diplomat.

Estimates are that Annenberg donated more than (US) $2 Billion in his final years. Believing education was the greatest investment he spent much on schools, libraries across America. He still had $4 Billion to leave his family when he died.

His collection of French impressionist art was valued at approximately (US) $1 Billion in 1991 and was donated to the Metropolitan Museum of Art in New York City when he died in 2002.

He was a pro in the art department.

In 1991, he pledged his $1 Billion collection of Cézannes, Monets, van Goghs, Gauguins, and others to the Met (postponing delivery, until his death; meanwhile he collected substantial tax breaks-- my kind of guy).

He was smart with his money, thought ahead for the “long haul”. He figured he'd be around for a long time, so he made sure that his capital would last long enough to accomplish his purposes. That was smart too. He made it to 94.

We have to be thinking for the “long haul” as traders. Strangely enough, being ready for the long haul as traders has little to do with money.

It has everything to do with your mental aspect.

Trading is not a quick draw contest. Yes, sometimes you have to be swift to take advantage of situations, but not overly so. There are plenty of opportunities that come very regularly. If you are ensconced in this business of trading, you will make yourself ready to take advantage of them.

Trading is not investing.

There is an old cartoon from a decade old Wall Street Journal taped to my desk.  This is the kind of "art" I collect.  I attach it below:



That concept is definitely not for a forex or derivatives trader.

We deal with high leverage and yet, have to take losses of reasonable size. We must be willing to take profits of unreasonable sizes to gain. These abilities are definitely not comfortable for the many, just the few who can adapt to it.

This week we were up over 3% early Monday morning in the Challenge account. Now, the account is 6% lower from the peak, with actualized losses and only 2 potential trades that may still turn into losses.

I don't have a problem with this kind of trading. Do you? (Some do – I got some emails today from some new readers saying how ridiculous it is to have a total of more than 200 pips profits on Monday and not take them..., my answer? Go ahead and take them if you wish, it is your money....)

Imagine that trading professionally may entail many successive weeks like this, over and over again until you get a BIG move that brings home all the profits. It does.

Imagine giving up the week before the BIG profit week. It happens to many. The poor bastards usually feel like hanging themselves.

It comes down to the “long haul” mentioned before. To succeed and survive as a trader you have to know what the possible consequences are from your trading style. They may not be pretty, but the results you are seeing on this site are better than 90% of profitable trader's experiences.

If you are able to keep putting in the orders after mounting losses week after week, you have the right stuff it takes to make a success. (Another reason why you must trust your method of trading!)

___________________

The following are this week's FirstStrike entries:

• Eur/Usd: short @ 1.5557, stopped out at 1.5617 for a 60 pip loss.
  
• Gbp/Jpy: short @ 211.09, stopped out at 211.99 for a 90 pip loss.
  
• Gbp/Usd: short @ 1.9673, stop 1.9733. Trade in progress.
  
• Usd/Chf: long @ 1.0415, stopped out at 1.0355 for a 60 pip loss.
  
• Usd/Jpy: long @ 107.90, stop 107.30. Trade in progress.
  

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

The Gbp/Jpy went higher after stopping out my trade, finally hitting the FirstStrike buy price for the week. If one had taken it, it too was stopped out. It is not the week for that pair.

On to the rest of the week!

Current equity is $760.55.

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, 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!

Peter, Paul and Mary..., Dictate the Strength of the Euro! --IFCN Wk 29 -Mon- Equity: $799.33.

Inflation is increasing noticably in the Eurozone and the US. More noticably in the Eurozone of late because of the previous extreme emphasis on the America's economic situations which are loudly and rancorously trumpeted.

Some have correctly noted that both the Eurozone and the US have similar economic growth figures so far. Yes, but those figures are very deceptive as is what economic growth the figures are based on.

Economic growth caused by increases in tax-based employment (government jobs) is John robbing Peter and Paul to pay Mary. The financial trick of creating money to pay John and taxing Peter, Paul and Mary additionally to pay for it is just one step away from the pure case of John robbing Paul....

Europe is highly-taxed and inundated with social programs run amok. The US is a bit better in the economy efficiency department with lower taxes and business structures available for lower taxes, and limited social programs by comparison. (An admitted Jeffersonian, I believe in few social programs other than individual personal choice to help the unfortunate. In my ideal political cosmos, it would be very important to make good friends, and to have been a good friend if you fell on hard times.)

Despite all of the diabolical calls for the end of the US financial system, the housing market concerns, rising unemployment and historic gasoline prices---- the complete and utter end of consumer spending is another oft-called catastrophe that has not happened.

The US will likely rebound faster than Europe with its technological advantages.

The US has a relatively happy bunch of people who are optimistic and aren't afraid to continue purchasing items. They are certain that their future is bright.

The other continent has pessimistic citizens who have governments that are constrictive and anti-business.

Who would you want to bet on? Or hang out with?

The dollar could easily get substantially stronger over the coming months over the Euro and similar currencies.

The following are this week's FirstStrike entries:

• Eur/Usd: short @ 1.5557, stop 1.5617. Trade in progress.
  
• Gbp/Jpy: short @ 211.09, stopped out at 211.99 for a 90 pip loss.
  
• Gbp/Usd: short @ 1.9673, stop 1.9733. Trade in progress.
  
• Usd/Chf: long @ 1.0415, stop 1.0355. Trade in progress.
  
• Usd/Jpy: long @ 107.90, stop 107.30. Trade in progress.
  

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

The Gbp/Jpy short trade was just entered at the low of the day. Then I got stopped out shortly thereafter. You may not have been entered on your platform due to small differences in entry prices. If so, just ride whatever Gbp/Jpy trade is entered to the end of the week as usual.

Current equity is $799.33. A positive start to the week so far.

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!

2 + 2 = 4 ! --IFCN Wk 28 -Fri- Equity: $789.67.

Not much can be said about this week except I'm glad it is past.

A lot of other markets held my attention due to resources involved. Greater risk = greater attention.

The grains are very active and dangerous, but risk managers is what traders are. Where the risk is, the profits are. Making sure that you can handle the specific risk you are willing to take is the ultimate question.

If you are in a trade, whether profitable or not, if the market becomes riskier than you can handle there is only one choice. Get out!  Wait for YOUR trade!

Trading the grains this week was at the upper edge of my risk toleration zone. Anyone else with less experience was likely way past their experience zone. Have any idea who has the best odds of surviving and profiting intact?

I have said this before, and if I keep posting- will likely many other times in the future: You only need to know one thing, for sure to be able to profit in the markets.

It is the knowing, and the will to act on that knowing that makes it possible for you to get an edge over the other competitors for your capital. It also helps if that one thing you know is a surprise to the other competitors.

When neophytes get into the froth of a market blowoff, 2 + 2 = 4 is a surprise!

____________________

Here's this week's recap:

The data below is as of Friday's close, June 20, 2008:

Start of week equity: $ 785.05.

OneNightStand Exit(s) on 06/16/08:
*eur/usd: Short @ 1.5365, out @ 1.5394 for -29 pips
*gbp/jpy: Long @ 210.76, out @ 2.1114 for +38 pips
*gbp/usd: Short @ 1.9433, out @ 1.9505 for -72 pips
*usd/jpy: Long @ 108.10, out @ 108.24 for +14 pips
Total loss: -49 pips ($5.11)

Completed FirstStrike trades this week:

• Eur/Usd: long @ 1.5444, exited Friday @ 1.5623 for 179 pips profit.
  
• Gbp/Jpy: long @ 211.89, stopped out at 210.99 for a 90 pip loss.
  
• Gbp/Usd: long @ 1.9555, stopped out at 1.9495 for a 60 pip loss.
  
• Usd/Chf: short @ 1.0424, exited Friday @ 1.0346 for 78 pips profit.
  
• Usd/Jpy: short @ 107.74, stopped out at 108.34 for a 60 pip loss.
  

Total losses: 210 pips
Total profits: 257 pips
Net profits: 47 pips ($9.73)

OneNightStand 06/20/08 entry(s)
-none-
Unrealized Profits: $ -0-
End of week equity: $789.67 (includes unrealized P&L)
Total Gain for Week: $ 4.62 (0.6% weekly increase)

This was a good week. Anytime you can take this many trades and have a virtual scratch, that is good. This was a terrible week for so many other traders, faithful execution of the given trades was the best thing you could do.
See you 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. 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!