The Chop Continues! -IFCN Wk 47 – Thu- $1,455.40

One day you're at completely new equity highs, and the next-- you're down more than 10% those highs. Welcome to the world of high volatility!

The Eur/Usd shot up strongly early today and then dropped like a rock. Same with silver. And the other forex pairs.

Doesn't mean that the moves are done, but it appears we will still have to wait a bit until they get stronger. Indecision is still the order of the day

Here are the current week's FirstStrikePlus trades:

• Eur/Usd: Long @ 1.2903, stop 1.2489. Trade in progress.
• Gbp/Jpy: Long @ 159.69, stop 143.62. Trade in progress.
• Gbp/Usd: Long @ 1.6412, stop 1.5510. Trade in progress.
• Usd/Chf: Short @ 1.1479, stop 1.1650. Trade in progress.
• Usd/Jpy: Long @ 97.26, stop 92.64. Trade in progress.

FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete rule-set for effective trade management.


Current trade equity is: $1,453.40
Silver position equity: $ 2.00
(Current XAG price: $9.41– 200 unit position average: $9.40)
TOTAL Equity: $1,455.40

Have a good morning. Only time will tell how profitable this week's trades will be.

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!

Perversity Rules- New Equity Highs! -IFCN Wk 47 – Wed - $1,667.31

I am surprised but happy that we got filled on all of our trades so quickly. A different wind is blowing in the forex market this week. The wind is up for most currencies.

It definitely looks like the dollar top is in. All the self-proclaimed savants 2 ½ months ago were certain that the Euro was unkillable – last week believed the Euro was finished. That is the condition I especially love when I contemplate a turn in the market.

The perversity of the market rules! It really would be best for all concerned if the currencies and commodity and stock markets continue to hold and put on gains. Long term, no one profits from depressions or conditions that can turn into them. The sooner the markets get liquid and buoyant, the better it is other players AND for us.

If the major players get sidelined by topsy-turvy markets, who will there be to pay us?

No surprise to most of you, after yesterday's bullish action in the XAG (silver), early this morning I had to buy another 100 units . This time I got filled at $9.30. That now makes the Challenge account's XAG total position 200 units (200 oz.) with a position average of $9.40. The XAG position stop is now placed at $7.90.

It was gratifying to see silver jump up again later this morning. I'll be a little happier when silver is $25.00.

Here are the current week's FirstStrikePlus trades:

• Eur/Usd: Long @ 1.2903, stop 1.2489. Trade in progress.
• Gbp/Jpy: Long @ 159.69, stop 143.62. Trade in progress.
• Gbp/Usd: Long @ 1.6412, stop 1.5510. Trade in progress.
• Usd/Chf: Short @ 1.1479, stop 1.1650. Trade in progress.
• Usd/Jpy: Long @ 97.26, stop 92.64. Trade in progress.

FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete rule-set for effective trade management.

Current trade equity is: $1,503.31
Silver position equity: $164.00
(Current XAG price: $10.22 – 200 unit position average: $9.40)
TOTAL Equity: $1,667.31

It is too bad our position sizes are so small on FSP this week. It can't be helped when the last few weeks have been so violent.

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, 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!

We Finally Got a Trade this Week! -IFCN Wk 47 – Tue - $1,438.76

After last week's moves, I wouldn't have been at all surprised to get NO trades this week in FirstStrikePlus. When you vary your buy and sell points due to the previous week's volatility and the previous week was the week from Gehenna, the market has to do a serious move to get a trade the next week.

We have one.

The Usd/Jpy rallied up to hit our buy price at 97.26. I don't have a lot of size on this trade because of the risk being 462 pips, but I also wouldn't be surprised if it turned out to be a winner by next week. The markets have been pretty oversold!

Most of the day the trade was profitable, but this evening the Usd/Jpy has slid back. It is a long week. Maybe we'll get another trade. Perhaps short the Usd/Chf....

I'm sure most of you watched the XAG drop heavily this morning to $8.45 and then recover to be up on the day. It pays to have a strong constitution when dealing in silver.

The current week's FirstStrikePlus trade:

• Usd/Jpy: Long @ 97.26., stop 92.64. Trade in progress.

FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete ruleset for effective trade management.

Current trade equity is: $1,471.76

Special Silver long position:
Silver position equity: (-$33.00 )
(Current XAG price: $9.17 – 100 unit position average: $9.50)

TOTAL EQUITY: $1,438.76

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, 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 Night Stand trades Successful! -IFCN Wk 47 – Mon - $1,430.86

After this morning's open at 00:00 CST, I exited the 4 surviving OneNightStand trades from Friday. The summary follows-

OneNightStand 08/24/08 entries:
*eur/usd: Short @1.2728, out at 1.2566 for 162 pips profit
*gbp/jpy: Short @152.82, out at 147.20 for 562 pips profit
*gbp/usd: Short @1.6029, out at 1.5717 for 312 pips profit
*usd/jpy: Short @95.33, out at 93.59 for 174 pips profit
Total ONS Profits: $ 84.70
(Total increase from Friday's equity: $45.50)

Current trade equity is: $1,473.86

Special Silver long position:
Silver position equity: (-$43.00 )
(Current XAG price: $9.07 – 100 unit position average: $9.50)

TOTAL EQUITY: $1,430.86

After all that volatility last week, it isn't surprising that there are still no FirstStrikePlus orders filled this week. I would be ok with none of them getting filled, but it's likely that at least a couple might, the most likely being the Usd/Chf trades which are only 128 pips away from this morning's open. Contrast that with the Gbp/Jpy pair which has buy/sell orders spaced more than 1200 pips from the open. Last week's move in the pound/yen was spectacular and had a historically large weekly range. It would be best if we didn't get a trade in that market until things quiet down.

I thought it would be instructive to compare last week's actual results trading FirstStrikePlus with what the actual system returns would be exiting on the first-profitable Monday's open -- which would've been this morning's open. If I had waited till this morning's open to exit, in every case except one – the long Usd/Chf trade – there would have been a substantial increase in profits. See below---

Mechanical entry/exit of last week's FSP: (*) is improvement over actual results
Eur/Usd: Short @ 1.3367, exited at 1.2593 for 774 pips profit (+212)
Gbp/Jpy: Short @ 174.07, exited at 1.4764 for 2643 pips profit (+896)
Gbp/Usd: Short @ 1.7193, exited at 1.5736 for 1457 pips profit (+354)
Usd/Chf: Long @ 1.1401, exited at 1.1607 for 206 pips profit (-66 )
Usd/Jpy: Short @ 100.95, exited at 93.80 for 715 pips profit (+352 )

Total losses: 0 pips
Total profits: 5795 pips (+1748)
Net profit: $280.95
Total additional gain vs. actual results: $77.89 (38% better results if I had held to Monday's open)

This is of course just one example, and it is not likely that we'll see many more weeks like the last one. As mentioned last week, with the action we saw- it became more of a gamble to be in the market at all. Even though we could have improved our profits by staying in, it could have easily worked out negatively for us.

This week may be a good one for reflection. And maybe a little rest.

This weekend I am going to be in Las Vegas for the London Squeeze workshop, Saturday Nov. 1st. I am looking forward to meeting the traders, some who've come from around the world. If this event is anything like the previous one, it will be beneficial for all of us.

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, 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!

Historically Profitable Week! -IFCN Wk 46 – Fri - $1,428.36

In 25 years of currency trading, I do not remember a week like this one.

Even tempering my risk tremendously this last week--- the IFCN Challenge Account has done extremely well with the straight-line moves in most all of the currency pairs favoring the dollar and yen.

It turned out to be a great week to be trading FirstStrike Plus. If we were still trading the original FirstStrike model of 50 pips added to/subtracted from the open with 60 pip stops and only taking the first trade, a couple of the big winners wouldn't have been taken. When volatility increases, it is best to have a method that adjusts automatically with that volatility. Even if the distance to the stop is a larger number than you would prefer.

Fortunately, with firms like Oanda allowing you to tailor your risk to as little as you want with incredibly small position sizes, having a 171 pip stop on the Eur/Usd is not a problem-- 1% risk of a $1200 account is $12.00. 700 units of Eur/Usd or .07 cents/pip x 171=$11.97 . So the profit of 562 pips this week in the Euro translated to $39.34. Not bad at all for the risk involved.

With the extended moves of Friday, it is obvious that coming out on Thursday was detrimental to potential profits from the FirstStrike Plus trades. I still would do the same thing again in a future situation due to extreme volatility. With frequent oscillations of hundreds of points up or down in minutes regardless of currency pair, being in any forex trade became more of a gamble than a reasonable strategic speculation.

By Monday morning's open we will see the opportunity cost for the decision. It could be substantial. Nevertheless, we currently have winning OneNightStand trades to exit on Monday morning.

Here's last week's Friday recap:

The data below is as of Friday's close, Oct. 24, 2008:

Start of week equity: $1,207.10
OneNightStand Exit(s) on 10/20/08 :
-None-

Completed FirstStrike Plus trades this week:

• Eur/Usd: Short @ 1.3367, exited at 1.2805 for 562 pips profit
• Gbp/Jpy: Short @ 174.07, exited at 1.5660 for 1747 pips profit
• Gbp/Usd: Short @ 1.7193, exited at 1.6090 for 1103 pips profit
• Usd/Chf: Long @ 1.1401, exited at 1.1673 for 272 pips profit
• Usd/Jpy: Short @ 100.95, exited at 97.32 for 363 pips profit

Total losses: 0 pips
Total profits: 4047 pips
Net profit: 4047 pips ($203.06+)

OneNightStand 08/24/08 entry(s):
*eur/usd: Short @1.2728
*gbp/jpy: Short @152.82
*gbp/usd: Short @1.6029
*usd/chf: Long @1.1735, stopped out for 100 pip loss.
*usd/jpy: Short @95.33
The above to be exited Monday morning, 00:01 CST
Unrealized Net Profits: $ 32.20

Current trade equity is: $ 1,442.36

Special Silver long position:
Silver position equity: (-$25.00 )
(Current XAG price: $9.25 – 100 unit position average: $9.50)
(Weekly total XAG position equity gain: (-$14.00)

WEEK'S TOTAL EQUITY: $ 1,428.36
Total Gain for Week: $ 221.26
(18.3% weekly increase)

This was a very good week. I have gotten a number of emails from IFCN watchers/traders who have had 25% to 100% gains this week due to the FirstStrikePlus trades. I'm very happy for you.

Extraordinary markets make for extraordinary profits. No doubt there will be those who think these results are just due to chance. Research, and trading a very small account with real money at Oanda should help with those beliefs.

On to next week.....

Best wishes, and thanks for all the great notes of appreciation.

(Side note: Since profitable trading is usually accomplished due to some exploitation of human behavior, I am always interested in quirks of human nature. Please read the following:
Aoccdrnig to rcecnet rsecearh, it deosnt mttaer waht oredr the ltteers in a wrod are, olny taht the frist and lsat leettr be in the rghit pclae. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe!)

Interesting! Perhaps someone can figure out how to profit from this kind of tendency?

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!

Outsized Profits Demand Early Exit! -IFCN Wk 46 – Thu – $1,436.16

Due to an extraordinary decision, at 09:31 CST I exited all of my FirstStrikePlus trades at the market. I still have the single XAG position of 100 units @ $9.50, a Non-FirstStrike trade. This week's FirstStrikePlus trades have gained more than 16% on equity with less than 5% total risk.

Early this morning, I had a nagging feeling that there was something that I needed to check. And so I did.

I did some market research about previous extremes I've experienced in forex volatility and the trades resulting from it. Primarily FirstStrike trades. This week has/had profits that exceeded 99% of all previous extreme weeks in the past 25 years. Could my profits get larger? Yes. But the research I worked through indicated that I had a 10% chance of having a larger profit by the time of exiting via a first-profitable-open and a 90% chance of having a significantly smaller profit than I had at the moment I completed my figuring.

My choice was obvious. Seconds later all of my FirstStrikePlus positions were gone. This was definitely a “preemptive-action-because-I-know-my-system” exit. (PABIKMS)

I make no apologies for closing my positions early.

I am executing this Challenge to increase the value of the account, not prove that I can follow a system. To loosely quote one of the famous traders of Market Wizards interviewed by Jack D. Schwager, “It is important to follow the rules of your system. It is also important to know when to break the rules.”

I trade to make excess profits vs. my risks, not win a “World's Best Mechanical Trader” award. It is possible I will give up additional profits by this early exit. I can live with that possibility. If this situation occurs again, I will take the exact same steps. Verify conditions, make an accurate assessment, execute as necessary.

For those of you who wish to continue holding and exit on Monday's open if the trades are profitable, or be willing to be stopped out for a loss, you will be following the system. You will then get the results of the system, which very likely will be extremely profitable after a week with moves of the magnitude we've seen.

I use systems like FirstStrikePlus as tools to get in and out of markets with a statistical edge. If I can improve my odds and average size of profit by knowing the inner dynamics of that system-- I will do so in a heartbeat. I take the ordinary mechanical trades, from exact entry-to-exact-exit more than 95% of the time. The special 5% is when excess profits are possible.

If one doesn't have any additional advantage, trading a system that has a basic edge is the minimum you need. Then you begin to really learn, usually by doing the repetition necessary to trade the method-- putting in orders and getting executed in the market. It then becomes your personal choice whether you will take practical advantage of those things you learn over time-- by improving the average size of your profits compared to the statistical model--- or not.

My exits follow----

Completed FirstStrikePlus trades this week:

• Eur/Usd: Short @ 1.3367, exited at 1.2805 for 562 pips profit
• Gbp/Jpy: Short @ 174.07, exited at 1.5660 for 1747 pips profit
• Gbp/Usd: Short @ 1.7193, exited at 1.6090 for 1103 pips profit
• Usd/Chf: Long @ 1.1401, exited at 1.2805 for 272 pips profit
• Usd/Jpy: Short @ 100.95, exited at 1.2805 for 363 pips profit

Total losses: 0 pips
Total profits: 4047 pips
Net profit: 4047 pips ($203.06+)

Current trade equity is: $1,421.16
Silver position equity: $15.00+
(Current XAG price: $ 9.65– 100 unit position average: $9.50)

TOTAL Equity: $1,436.16

This evening is when OneNightStand trades are placed. The markets have moved enough for one week to minimize the potential for even average success for OneNightStand entries.

I will dutifully place my trades, but I will be risking less than .5% of account size per entry.

Have a good day..

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 Dollar, the Strongest of the Weak..., Today! -IFCN Wk 46 – Wed – $1,402.66

The dollar struck two-year highs against a majority of currencies today as concerns about worsening national economies again challenged investors to pare some more “risky” holdings. Investors are finally understanding that European economies could deteriorate as much as the U.S. economy. Funny how they are actually buying into that “weak” US economy when they sell their currencies and buy the dollar.

What interests me is how these same investors who just 3 months ago were dyed-in-the-wool euro zealots are now dyed-in-the-wool dollar zealots.

The fact that they were so wrong in their judgment before now makes them experts in determining “real” value---TODAY???

Why not pay someone to throw gasoline on the flames? The Bank of England Governor ---Mervyn King, suggested this week that the British economy might be entering the first recession it's seen in 16 years. That didn't help European investor's feeling about holding currencies and stocks in an already depleted market. More selling was triggered.

All of this tumult really helped our FirstStrikePlus trades. The Gbp/Jpy pair had 1550 pips profit at the time of writing this. Impressive.

Too bad the position sizes of the Challenge account are so much smaller this week because of the volatility last week. That is the nature of trading correctly. At least we are in, in the right markets-- and in the right directions.

The current week's FirstStrikePlus trades:

• Eur/Usd: Short @ 1.3367, stop 1.3538. Trade in progress..
• Gbp/Jpy: Short @ 174.07, stop 178.65. Trade in progress.
• Gbp/Usd: Short @ 1.7193, stop 1.7452. Trade in progress..
• Usd/Chf: Long @ 1.1401, stop 1.1302. Trade in progress.
• Usd/Jpy: Short @ 100.95, stop 102.47. Trade in progress

FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) See complete ruleset for effective trade management.

Current trade equity is: $1,408.66
Silver position equity: ($6.00 -)
(Current XAG price: $ 9.44 – 100 unit position average: $9.50)

TOTAL Equity: $1,402.66

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!