Wednesday, November 19, 2008

“You thought I said what?”---H. Paulson- IFCN Wk 50 –Wed- Equity: $1,439.60

We got a few more FirstStrikePlus trades. For a short while this morning it looked like we were going to have a very good up-move in the Euro and Sterling. Then they reversed as quick as they started up.

So, we got stopped out of the eur/usd and usd/chf. Still no trade in the gbp/jpy. Maybe there won't be one this week.

Chop continues as individuals and large companies fear the worst. (Whatever that “worst” might mean to them!)

A few recent, timely quotes:

"I was very careful when I said what turning the corner
meant. I said I believe that that meant that we have stabilized
the financial system and prevented a collapse. I was also very
careful in saying that we have a lot of work ahead of us...," -
U.S. Treasury Secretary Henry Paulson

"My most likely outcome is for a couple of quarters of
negative growth and inflation coming down, but not getting to
that deflationary state," - Federal Reserve Chairman Donald
Kohn

"There are some signs that credit markets, while still
quite strained, are improving" - U.S. Fed Chairman Ben Bernanke

The week's FirstStrikePlus trades:
  • eur/usd: Long @ 1.2723, stopped at 1.2508 for 215 pip loss.
  • gbp/usd: Long @ 1.5126, stop 1.4615.
  • usd/chf: Long @ 1.2061, stopped at 1.1945 for 116 pip loss.
  • usd/jpy: Short @ 95.39, stop 97.39.
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.

Trading account equity: $1,459.60.

Silver position equity: $-20.00
(Current XAG price: $9.30 – 200 unit position average: $9.40)
TOTAL Equity: $1,439.60

A final quote, one of my lifetime favorites--

"Two things are infinite: the universe and human stupidity; and I'm not sure about the universe."
Albert Einstein

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!

Tuesday, November 18, 2008

Show us the Money?-- IFCN Wk 50 –Tue- Equity: $1,529.10

So--- we've all heard about the billions of dollars given to banks to improve liquidity and to ease the problems with getting money back in the the financial system, via either loans or credit guarantees.

What don't we see any of that money showing up anywhere that could do any of us some good?

There is a term people need to begin understanding- “quantitative easing”. (Hint: Japan has been doing this to their money supply since 1999-- and the main reason that the word "carry trade" is on the brain of almost all forex traders.)

It is an intentional action to force huge money reserves into the banking system with the expectation that banks will eventually exchange those assets for higher-yielding assets. What if the banks just decide not to make those exchanges?

The very real risk is that the banks bestowed with all the money fail to lend the excess reserves to businesses and consumers, which only extends the frozen credit that is threatening recession in the world's major economies.
The so-called excess reserves have jumped to $363.6 billion from $2 billion in August as the Fed added to its emergency lending programs.

When and if that money starts showing upin the economy, the markets will have a chance to get back to some version of normal. It could be a wait.

If you want to understand what the Fed is doing, in his own words (Governor Ben S. Bernanke) ..., check this out! It is incredibly enlightening!

-----

The week's only FirstStrikePlus trade:
  • Eur/Usd: Long @ 1.2723, stop 1.2508.
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.

Trading account equity: $1,487.10

Silver position equity: $42.00
(Current XAG price: $9.61 – 200 unit position average: $9.40)
TOTAL Equity: $1,529.10

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 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!

Monday, November 17, 2008

The Calm!-- IFCN Wk 50 –Mon- Equity: $1,479.31

The currency markets are in a self-imposed quagmire. That's fine.
If they calm down enough, when they start moving again, the potential for gain is much greater.

The week's current FirstStrikePlus trade:
  • Eur/Usd: Long @ 1.2723, stop 1.2508.
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.

Trading account equity: $1,486.31

Silver position equity: $ -6.00
(Current XAG price: $9.37 – 200 unit position average: $9.40)
TOTAL Equity: $1,479.31


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!

FirstStrikePlus- 5 Profits!-- IFCN Wk 50 –Mon- Equity: $1,527.65

I didn't feel the need to post very much last week. The negativity is so thick out there that you could cut it with a chainsaw. Highlighting negativity doesn't help a trader's perspective.

It must run its course. It will.

I am actually extremely positive about the potential in the currency markets over the next few months. We could have some annoying markets, but trends are inevitable after all the talk of "crisis" that's besieged every area of the financial world.

I believe, beginning next year; the mood of most markets will improve substantially for a very simple reason: the majority of the world just got what it wanted.

The US had only a slight majority of people (who voted) that favored the current president-elect. But the rest of the world population that cared (over 85% by most figures) was gushing over the possibility of an O. win. Now that they have what they wanted, the actualizing of that fact in January will very likely make them feel that whatever decisions are made will be “super-intelligent” ones, since they'll be made by their new messiah. (If you think I exaggerate by my rhetoric, just spend 5 minutes reading or listening to the current fauning hype of the media.)

The collective will then vote with their capital, now that their future is secure. Secure in the belief that they won't have to pay for much of anything, themselves, in the future. The government, which they don't realize doesn't earn money..., only spends it..., will pay for their wonderful future.

The illusion will become real. Trends will begin anew.

Profits should be grand.

-----

I am making a minor change in how I recap the trades for the IFCN Challenge. Because our primary exit period for both OneNightStand and FirstStrikePlus trades is on Monday morning @ 00:00, it is only logical to make the official end/start of the week at that time.

This will make it easier for you to follow the trades and for me to keep up the running trades as they are executed without excessive complications. This is a good time to do it because there were no OneNightStand trades either the 10th or today the 17th.


Here's last week's recap:

The data below is as of the open of Monday, Nov. 17, 2008: (00:00 CST)

Equity from last recap: $1,554.20

OneNightStand Exit(s) on 11/10/08 or 11/17/08 :
-None-
Total ONS Profits: $ -0-

Monday's FSP exits:
*Eur/Usd: Short @ 1.2681, exited at 1.2560 for 121 pips profit.
*Gbp/Jpy: Short @ 154.84, exited at 1.4275 for 1209 pips profit.
*Gbp/Usd: Short @ 1.5532, exited at 1.4743 for 789 pips profit.
*Usd/Chf: Long @ 1.1853, exited at 1.1974 for 121 pips profit.
*Usd/Jpy: Short @ 97.18, exited at 96.89 for 29 pips profit.

Existing FSP trades:
(None)

Current FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) If not exited will be held until profitable on a subsequent Monday's open, stopped out or reversed by next week's positions. For complete rules, check here----

OneNightStand 11/14/08 entry(s):
-None-

Current FSP/ONS trade equity is: $1,489.65

Special Silver long position:
Silver position equity: $38.00
(Current XAG price: $9.59 – 200 unit position average: $9.40)
Weekly total XAG position equity loss: ($-92.00)

WEEK'S TOTAL EQUITY: $1,527.65
Total Loss for Week: $ 26.55
(1.7 % weekly decrease)

-----

A side note: you would normally think that a week where you took profits of 2,269 pips over 5 markets that it would be a huge gain. We had a decent gain, but with the small positions placed due to the excessive volatility previously, it was not that significant. With the weekly ranges decreasing, it is more likely a directional move could earn us larger returns.

In addition, the core silver position had a $92 drop in value.

Here's to another 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. 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!

Wednesday, November 12, 2008

Dollar Resurgence Builds Profits!-- IFCN Wk 49 – Wed- Equity: $1,480.65

All the week's FirstStrike Plus trades are in positive territory. The trend week I was looking for showed up- just in the opposite direction from what I would have expected. Another example of why I take the trades anyway, even though my mind might not like it.

Some extremely so. The short Gbp/Jpy trade started last week, which didn't get exited this Monday because of insufficient profits-- now has in excess of 1200 pips profit. The Gbp/Usd from this week is up over 600 pips.

The FSP concept works. As long as we don't overtrade or overleverage our positions, the potential is very great.

These are the current week's FirstStrikePlus trades (including 2 trades from last week):
  • Eur/Usd: Short @ 1.2681, stop 1.2917. Trade in progress.
  • Gbp/Jpy: Short @ 154.84, stop 160.27. Trade in progress.
  • Gbp/Usd: Short @ 1.5532, stop 1.5879. Trade in progress.
  • Usd/Chf: Long @ 1.1853, stop 1.1721. Trade in progress.
  • Usd/Jpy: Short @ 97.18, stop 100.15. 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.
Trading account equity: $1,492.65

Silver position equity: (-$12.00)
(Current XAG price: $9.34 – 200 unit position average: $9.40)
TOTAL Equity: $1,480.65

Today we have a good example of the equity swings caused by having a significant portion of equity in one tradeable, namely XAG (silver). The quick drop in silver prices dropped our equity substantially in 24 hours. That volatility is why silver is called the “restless” metal. There is little rest for those who hold it long term and have intolerance for the typical swings it sports.

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!

Tuesday, November 11, 2008

Rangebound Trade Continues-- IFCN Wk 49 – Tue- Equity: $1,530.10

There isn't a lot of activity going on in the currencies, other than ranging trade that develops after large moves like we've seen in previous weeks. Banking institutions and trading firms are testing to see how committed their trading cohorts are to defending their positions, causing many false starts and aborted moves.

In general, it is wise to have smaller commitments when this type of market appears, and since we are positioned with trades with larger-than-normal stoploss parameters we are effectively trading with small positions. Adaptive risk works well when volatility is still relatively large, and yet allows the potential for profits when markets start trending again.

I'm all for the forex markets to congest a bit more before trending out of this area. But the markets don't care what I want. The best I can do when they are like this is just wait for my trades to execute.

Monday morning I exited two FirstStrikePlus trades profitably just after Midnight CST. Then, starting late Monday and early Tuesday, we entered 3 new trades to give us complete coverage in all 5 pairs. (See current listing below)

There were no OneNightStand trades to exit Monday morning.

FirstStrikePlus first-profitable-opening Monday exits:
*Gbp/Usd: Short @ 1.5881, exited at 1.5776 for 105 pip profit.
*Usd/Chf: Long @ 1.1664, exited at 1.1756 for 92 pip profit.

These are the current week's FirstStrikePlus trades (including 2 trades from last week):
  • Eur/Usd: Short @ 1.2681, stop 1.2917. Trade in progress.
  • Gbp/Jpy: Short @ 154.84, stop 160.27. Trade in progress.
  • Gbp/Usd: Short @ 1.5532, stop 1.5879. Trade in progress.
  • Usd/Chf: Long @ 1.1853, stop 1.1721. Trade in progress.
  • Usd/Jpy: Short @ 97.18, stop 100.15. 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.
Trading account equity: $1,438.10

Silver position equity: $92.00
(Current XAG price: $9.86 – 200 unit position average: $9.40)
TOTAL Equity: $1,530.10

We've seen a lot of swinging prices in the XAG. As some have noted, the current XAG position unnaturally affects the Challenge account. I am very aware of that.

As risk/reward concerns are the stuff that traders live and die by, I know that the silver position is a valuable addition to my account, and very likely a position trade that can add incredible value vs. the short term risk and volatility negative effects. This may not suit you however.

If you do not wish to trade the XAG, don't. I was able to add it because of the outsized profits the Challenge account garnered in its regular trading this year-- and the risk/reward was so biased in my favor. I would rather have some of my excess balance holding silver than just sit there unused.

If and when silver is over $20, the human mind will be asking, “Why didn't we pick up more silver when it was under $10/ounce?”

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!

Sunday, November 9, 2008

Positions Maintain Status Quo! -IFCN Wk 48 – Fri- $1,554.20

Another choppy week due to the forex markets trying to resume more normal volatility. There are potential profits from this week's current trades, but nothing to stir the imagination. We can expect to get greater profits after the markets get closer to “normal”. When smaller weekly volatility becomes typical again we will be able to trade larger size. Then some decent profits can accrue when a trend week develops.

This week's action was close to a wash. Which is appropriate since there was very little major action in the currencies, just a lot of to-and-fro with news of the election sifting through everyone's consciousness.

Next week could be a trend week. I'm ready.

Here's last week's Friday recap:

The data below is as of Friday's close, Nov. 7, 2008:

Start of week equity: $1,558.01

OneNightStand Exit(s) on 11/3/08 :
-None-
Total ONS Profits: $ -0-
(Total increase from Friday's equity: $-0-)

This Week's FSP exits and entries-
  • Eur/Usd: Long @ 1.2903, exited at 1.2569 for 334 pips loss.
  • Eur/Usd: Short @ 1.2569, stopped at 1.2957 for 388 pip loss.
  • Gbp/Jpy: Long @ 159.69, exited Monday open at 1.6242 for 273 pips profit.
  • Gbp/Jpy: Short @ 154.84, stop 164.62. Current trade--
  • Gbp/Usd: Long @ 1.6412, exited at 1.5881 for 531 pips loss.
  • Gbp/Usd: Short @ 1.5881, stop 1.6439. Current trade--
  • Usd/Chf: Long @ 1.1664, stop 1.1460. Current trade--
  • Usd/Jpy: Long @ 97.26, exited Monday open at 98.49 for 123 pips profit.
  • Usd/Jpy: Short @ 97.18, stop 100.25. Current trade--
Current FirstStrikePlus trades will be exited on Mondays at 00:00 CST if profitable. (First-Profitable-Open Exit) If not exited will be held until profitable on a subsequent Monday's open, stopped out or reversed by next week's positions.

OneNightStand 11/7/08 entry(s):
-None-

Current FSP/ONS trade equity is: $1,424.20

Special Silver long position:
Silver position equity: $130.00
(Current XAG price: $10.05 – 200 unit position average: $9.40)
Weekly total XAG position equity gain: (+$50.00)

WEEK'S TOTAL EQUITY: $1,554.20
Total Loss for Week: $ 3.81
(0.2 % weekly decrease)
-----

Despite large apparent losses (pip-wise) in the the FirstStrike Plus trades, remember that the positions have been so small that they are really minor-- usually less than .5% per pair, sometimes much less.

That is the benefit of having the FSP method key off recent volatility. When the previous weekly range is small, then a small move can profit us handsomely. When the previous week's range is large, the latent risk tends to diminish.

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!