1185 % increase since December 2007

I'm glad to have a chance to make an update.

Sorry about my long absences. But, trading is what I do for a living and when duty calls..., it usually takes the form of an early morning Eur/Usd or coffee trade.

This year has been one of my busiest and most personally profitable. Last year was terrific for me in my personal trading - especially the last half - so this year is a unsuspected bonus. All markets have ebbs and flows, and right now the majority of the world's money is sitting on the sidelines waiting for confirmation of something to make a commitment.

When volatility starts to increase due to that commitment, I have to get involved. You already know the drill.

Since the last update in April --- in the Challenge account I have made 108 FirstStrikePlus and ONS trades and added 600 ounces to the long XAG position. The previous position of 400 ounces had an average of $10.95.

The 3 silver additions were: 200 ounces @13.04, 200 ounces @ 13.70 and 200 ounces @14.31.

This makes an average position of 1000 ounces of XAG @12.59.

Due to this enhanced position and the beneficial price action of the last month in silver – we have hit new equity highs. The Challenge account shows a 1185 % increase since December 2007 when I started the blog and the account with just $500. This is equivalent to a 677% annual average return.

That even impresses me.

At the time I started this site very few believed it was possible to get such percentage increases, especially after publicly declaring that intent. Now that many others following this Challenge have had similar gains, it isn't so unreasonable in people's minds.

Nevertheless, if one wishes to follow along on some or all of the trades taken here, remember that pure risk capital be used. If your lifestyle and that of your family will not be hampered by the loss of the money risked, it usually qualifies as risk capital.

Last week we had another week of losses in FirstStrikePlus.

Week of Aug. 31, 2009---FirststrikePlus trade executions:
eur/usd: Long @ 1.4342, stopped at 1.4262 for 80 pip loss.
gbp/jpy: Long @ 152.30, stopped at 150.06 for 224 pip loss.
gbp/usd: Long @1.6355, stopped at 1.6206 for 149 pip loss.
usd/chf: Short @1.0553, stopped at 1.0626 for 73 pip loss.
usd/jpy: Long @ 93.29, stopped at 92.55 for 74 pip loss.

-----
OneNightStand trades executed Friday, Sept. 4, 2009:
-None-

Trading account equity: $ 2,816.41
Loss from previous week: $ 214.56.

Silver position equity: $ 3,610.00
(Current XAG price: $16.20– 1000 unit position average: $12.59)
TOTAL Equity: $ 6,426.41

There is a strong difference between investing and trading. Especially when you are willing to put up with substantial drawdowns despite constant trading..., while waiting for your “edge” to reassert itself.

This last week we saw a sharp move up in silver and gold. A significant part of the Challenge account could be considered by many an "investment" in silver. It really is a trade, just a very long term one - I will be happy to sell when volatility becomes extreme at higher levels. As long as inflation demons lurk in the shadows, the trade should prosper easily.

As most of you know, I've been bullish silver since the $8.40 low. Time and price (Gann indications) came in very strongly then and I have more personal certainty that silver low will never be seen again than the USA will remain capitalist for the next 4 years. (I do believe that even if we should have to suffer socialism, it will be as short-lived as Prohibition was. And it will end badly for the perpetrators.)

I've calculated that with the current equity and a modest 60% increase per year for the next 7 years will build the Challenge account into over $160K. Of course, increases like we experienced over the last year and a half can't be expected all the time. But if I do just a fraction as well as I've done already-- I could hit a million+ in those 7 years.

Some have emailed me commenting on how dismal the current returns have been trading First Strike Plus and OneNightStand.

Yes, I know.

That is definitely the way trading is, you keep taking trades that have a statistical edge and get hammered (experiencing losses) until you don't. If that is what you've been experiencing, congratulations! You've been trading the same markets I have.

The spectacular gains I've enjoyed in the last month (as already mentioned) were due primarily to my silver position. I expect that a significant amount of the Challenge account's gains for the next few years will be from silver enhancement. Silver is increasing the account size while currencies are just holding their own.

Eventually the currency markets will take off and we should profit as we have in the past. That's one of the reasons there is so much latent profit potential in proper trading of markets. The vast majority of market watchers/traders get sick and tired of getting hammered (experiencing more losses) and stop trading. The market, now clear of side currents – starts trending again. (By then, that majority has found a new “shouldn't lose” system and they repeat the process.)

For those of us in the USA, have a good Labor Day holiday.

Best of wishes to you all. I cautiously look forward to the FSP trades this week. The ranges have narrowed tremendously and the potential for large profits is here. Or just our usual containable losses.

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!

Markets Finally Coming Back to Life!

Like many who read this blog, I save key thoughts and phrases I find over the years. I write them down when I find them in periodicals, old books, and sometimes even the internet (usually a poorer place to find brilliance in print).

I found the following missive yesterday going through 5 year-old trading records. I had written it in longhand on the back of one of my older silver charts. Moral: It pays to go through your old records.

You Can Do or Be Whatever You Desire.

You have to get disgusted. You have to make a decision to change. You have to visualize that change becoming a reality. And you must take the action necessary to make it happen.

Time is what puts everyone on a level playing field. It's a non-renewable resource; when it's gone, it's gone, and you can't get it back. I have 24 hours in my day - no more and no less than you do in yours. It's what you choose to do during those hours that will keep you broke or make you a fortune.

I know I saved the above because the thoughts definitely apply to trading, and anything else of value too. I will address some critical points from it in a few minutes.

The last few months have been busy for me, and very likely you too. With the new administration in Washington, many who were thrilled aren't as thrilled, the others who weren't thrilled are even less thrilled and the socialists among us are ecstatic. But this post isn't going to be about my strong reservations about government (in the specific tense or in general).

The fact is that somewhere between 10 and 25 Trillion dollars has been dumped into various places in the U.S. economy. Some of these places are banks, who will hold on to the money until they get the permission or certitude that they will be able to better their return than the interest they receive putting the “gift money” back with the government in T-Bills.

Other receivers of “gift money” are bank funds or government shills who are just waiting for conditions (like some healthy public confidence) that will enable them to invest in businesses and various stock entities. Either way, whatever these “gifted ” entities are waiting for eventually will take place and the money will be leaked into the economy.

Then the money will be returned as deposits and then be lent out again, only multiplied many-fold to more people/businesses and the madness will return that makes traders and speculators so valuable and happy for awhile.

The above is inevitable. Plus, the money that the general public thinks was lost in the last year and a half will somehow find its way back to the market and make a future economic boom that will be hard to imagine for the average currently numb and depressed mutual fund holder.

Economics 101: (Print out this rule and stick it on your trading wall/desk/computer/monitor)

Money, once created, never disappears. It is only transferred to a position of higher utility.

Meaning, the money that the majority of the baby-boomers had exposed and lost from their 401Ks and mutual funds got liberated by those who had a more correct view of financial circumstances and are currently applying to the “next big thing”.

The next BIG THING? Inflation on a scale previously never experienced, because there has never been this much money created in the world just waiting to be spent.

There are those who would beg to differ or fight about some of the points above , but the statements prove true when the applicable country's currency remains intact, a full business cycle completes, AND the country remains CAPITALIST in nature.

So, if you have time, patience and the certain knowledge that the U.S. will remain capitalist, there is no problem.

Do you have all 3? I do not, just the first 2.

There is another element necessary. You need sufficient capital – if you wish to profit from a capitalist system.

If you don't have capital for the coming inflationary times right now, get it somehow, soon.

Back to the paragraph at the start of this post about being able to be or do whatever you desire.

Right now it is popular in this country to blame the productive and the risk-takers for the problems many suffer. Never is it mentioned that every individual also has to think, plan and be responsible for their own assets and future opportunities.

The idea that the government should “take care of us” and be responsible for redistributing wealth is epidemic – and greedily seconded by the half of the country who prefers to receive – instead of struggle for something better by themselves with their own ingenuity. The “taking action” part is the crux. If so many are afraid to fail – with the result that they never take risks, then those who ARE willing to take reasonable risks have improved their odds to succeed tremendously.

What you choose to accomplish in your 24 hours a day will determine your success in the future. Especially in trading.

Life is trading. All based on choice – yours.

You can live wherever you want. Why not live in a place where there is low crime and plenty of money (and opportunities)? Instead of renting, you can buy a property that has a better chance of appreciation because of its location.

By your financial decisions you can create the best credit rating possible.

You can work wherever you want. You can educate yourself to whatever degree you wish and attain what success you demand of yourself. Maybe it will take time and effort. Make the effort if you wish the results.

You can choose the size of your family. You can marry well, or not at all.

You can be as healthy as your genetics allow by taking care of your diet and exercise.

If you trade and invest, you need to do more – care more – than the rest of the market participants to ensure you have an edge that you will act on – every time. When others stumble, you can get ahead. I was relentless for 18 hours a day for 5 years to make sure I had a viable edge for trading. Then it got just a little easier for the next 25 years. I care more and execute every time when others might just think, "Maybe the market won't go up this time. Maybe silver is in a bear market just like Bob Prechter says."

Did anyone say doing all these things is easy? No. But they are doable, attainable by those who are willing to take relentless action.

Beware a government that promises easy answers to success-for-some by handing the bill to others who will never benefit.

Thomas Jefferson must be spinning in his grave.

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!

Free Markets Benefit Man Best!

Most people are not aware of how difficult it is to trade systematically.

At first it may not seem like such a big deal, but after you do it over a long period of time, and you see the markets move counter to your method at times that you "just knew they would" ..., you start wanting to deviate more.

Market Wizard Bill Dunn -

Below are links to two great videos with a man who has had serious experience trading in the forex and futures markets over the decades. He has had volatile results (read: severe drawdowns), but he also has had an unending series of new equity highs to show for his consistency.

His message: follow your system exactly! After you have proven statistically that it will work.

He also has strong views on the benefit of "free markets" and the likelihood of success of those who would think that they can "do better" than the markets.

Watch Bill Dunn's 2 videos....

Part 1

Part 2

See what you think.

Joel Rensink

Trading Review

The last month has seen spectacular results.

The trading review is coming....

NFP day-

Two economists meet on the street.
One inquires, "How's your wife?"
The other responds, "Relative to what?"

-----

Thoughts specially for traders who've been in the battle for the last few weeks:

"Genius is only a greater aptitude for patience."--
George-Louis Leclerc de Buffon ('Buffon's needle problem' came from him, he is one of few Frenchmen I've appreciated.)
"The two most powerful warriors are patience and time."--
Leo Tolstoy (Brilliant inveterate gambler who wrote War and Peace)
"I am extraordinarily patient provided I get my own way in the end."--
Margaret Thatcher (I wish she were our president.)

Later this morning we will have the NFP (Non-farm Payroll) news. Perhaps that will trigger some OneNightStand trades. I wouldn't be surprised if they find out that projected job losses aren't as bad as they've thought.

More later....

JR

Fibonacci and Inflation! -Thursday, April 30, 2009

I was sent a very interesting link from a trader buddy who agrees with my long-time-held assessment that super inflation is on its way, whether anyone wants to believe it or not.

This is the beginning of the FIBONACCI SEQUENCE:

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, ...

I'm sure most of you who have heard of Fibonacci's sequence probably think it's main application is in price movements and retracement levels-- it is highly revered by many in that use.

Where it finds greatest power is in the application of time cycles. Walter Roman wrote an interesting article about inflation and Fibonacci you can access here:

http://www.financialsense.com/fsu/editorials/2009/0430.html

I'll be adding this week's trades to this post.....

Joel Rensink
www.infiniteyield.com

April 13 - 20 recap

Last week's recap--