Weekly Summary: Mar 10th - Mar 14th

What a week this was. The beginning of this week looked like a continuation of last week as I started off with a losing trade. I was almost down $400 by this point. However I had confidence in the systems I was using and stuck with it which paid off as the week progressed.

Highlight of this week:

• Developed my set of indicators that are profitable. It lets me get into trades before the OzFX system signals them.
• Was able to remain profitable this week despite the failure of the majority of the trades signaled by the OzFX forum. This was mainly because I was able to get in earlier into these trades using my system and bank 50 to 100 pips profit before it was signaled by the OzFX system.
• Found a new system (HAS) on the web and modified it. Its a simple system, but very profitable so far.

With the 3 trades I entered based on my system, 2 were successful. The third one (USD/CAD Short) failed because of the better than expected CPI data which caused a temporary spike in the dollar. That teaches us an important lesson: Keep track of the news for each trade.

Now on to the HAS system which I stumbled upon this week. First off, I did not create this system. It was created by Steintz who was generous enough to share it with the world. I was browsing through various blogs when I came across this system. And with all systems, I modified the rules a little bit for entering & exiting a trade to suit my needs.

At its very core, this is a very simple trend following system. But it tried to follow the trend across multiple time frames. It is this simplicity that I find appealing. And of the 6 trades I placed using this system, 5 of them were massively profitable, usually within a day. And the system I lost, it happened because I did not follow the system correctly. I should also mention that I exited the trades prematurely to lock in the profits. The signals were still valid, and I could probably be making more money holding on to them.

Both the HAS system and my system have been tested for just one week. It remains to be seen how these two perform over the long run. I think these 3 systems are definitely powerful to find good trade opportunities.

For the coming week, I plan on doing more research to learn about new systems. My goal is to read and learn at least one new system every week, and use it if I like the idea. I generally prefer systems that work on longer time frames since I cannot be trading all day. I also plan on developing a set of rules to use the HAS system performs on smaller time frames. The target is to capture quick 10-20 pip profit per trade.

Finally the stats for this week.

• Number of Trades: 10
• Number of Wins: 7
• Win Percentage: 70
  
• Win/Loss Ratio: 2.33
• Gross Profit: $1626.25
• Gross Loss: $753.14
• Net Profit: $873.11
• Avg. Profitable Trade: $232.32
• Avg. Losing Trade: $251.05

Click this to get the full list of my trades this month.

Trade Update - EUR/CHF Short CLOSED

Update 03-14-08 11:30am:
Close my final open position to end a pretty good week. Once again, the HAS system has been immensely profitable in most of the trades ( out of 6). I was a bit cautious with this trade and opened only 2 lots, because it showed just 1 red dot at that time. But it still turned out be a great call.

Lot 1: +100 pips
Lot2: +125 pips

Total Pips: +225
Total Profit: $225.12

The Trade:
I entered this trade based on the HAS system on the 4 hour charts. I have just the 1 red bar following the blue bars, but I figure that should be fine as the lower time frames all show red bars. But since I had got bitten by this trade before, I am opening only two lots instead of the usual three.


Lots: 2
Entry (short): 1.5758

Trade Ideas

I could not find any proper long trades for the day, so I decided to experiment with the HAS system on smaller time frames. So I spent about 20 minutes looking at the 15 minute chart and opening the following trades. All trades were opened with 3 lots.

USD/CAD Long: $21.31 (+21 pips)
EUR/CHF Long: $280.42 (-282 pips)
AUD/JPY Long: $410.74 (-411 pips)
USD/JPY Long: $29.69 (+30 pips)
CAD/JPY Long: $338.78 (-339 pips)
CHF/JPY Long: $17.80 (+18 pips)
EUR/JPY Long: $29.73 (+30 pips)
GBP/JPY Long: $59.46 (+60 pips)
EUR/GBP Long: $121.68 (+60 pips)

As you can see, most trades are with the yen as it was seeing some weakness on Japanese market open. I will also post the pips & profit made on these trades.

I am just going to leave them open for tonight and come check to see how they are doing tomorrow. The target points are small (10 to 20 pips) as its based on the smaller time frame. Keeping my fingers crossed.

Update 03-14-08 10am:
Well not a bad experiment. 6 of the 9 trades were successful and hit their target points. Which is a pretty good success rate. I closed the remaining 3 trades for loss. However since we didn't have a stop loss for this system, we ended up with big losses. But this does show that we can trade this system in short time, but we need to figure out a better way to minimize risks.

Trade Update - EUR/JPY Short CLOSED

Update 03-14-08 11am:
I must say I am pretty impressed by this system. At the basic level, its a simple trend following system which checks the trend over multiple time frames and places trade accordingly. I suppose that simplicity is also its power. Anyway, here are the results.

Lot 1 & 2 (closed at 7am): +200 pips (100 * 2)
Lot 3 (closed at 11:15am): +125 pips

Total Pips: +325
Total Profit: $325.59

Update 03-14-08 7am:
We hit the first target point of 156.15 and closed 2 lots for a +100 pips gain each. The final lot is trading at a gain of +60 pips.

The Trade:
This is another trade based on the modified HAS system on 4 hour charts. This time, I am entering the trade when we have multiple red bars following the blue ones. But the price had retraced back to the red bar, which gives us a good entry point. Check the charts to see what I mean.


Lots: 3
Entry (Short): 157.15

As before, I do not have a stop loss or target point for this trade yet.

Trade Update - USD/CAD Short CLOSED

Update 03-14-08 7am:
This trade didn't work out so well. Actually it was going well right until we got the US CPI data. Its one of those data that moves the currency markets, especially the dollar significantly and this time, I was on the wrong side of the trade. All 3 lots were closed at stop loss.

Total Pips: -306 (102 * 3)
Total Profits: $308.46

The Trade:
This trade is based on my system on the daily chart. Both the AC & AO are showing green for this pair. But its been on the decline for the past 3 days, and the price is below the 200 SMA. Also the Stoch, RSI and %R are moving down. So i think we could realize atleast a 50 pip profit in this trade.


Lots: 3
Entry (Short): 0.9823
Stop Loss: 0.9923
TP1: 0.9773
TP2: 0.9723

Trade Update - EUR/CHF Short CLOSED

Update 03-13-08 7am:
Oh well, what do you know. I had put 50 pip stop loss on this trade as I didn't want to risk a big drop when I was away from my computer, but as it happens that is what made me lose money in this trade. The stop loss was hit, but the pair is now below where I entered and the signals are still valid. So next time on, I should stick to the chart and trust it. So overall a good trade, but bad execution.

Total Pips: -150
Total Profit: $151.05

The Trade:
This is my third trade entered today using the HAS system on 4 hour charts. This time the Euro is showing weakness against the Swissy over multiple time frames. So time to short.


Lots: 3
Entry (Short): 1.5723

As with the previous trades, I do not have a stop loss or target point for this trade.

Trade Update - AUD/JPY Short CLOSED

Update 03-14-08 7am:
They say patience and confidence in the system is the most important traits in trading, and this trade illustrates that fact. After being down as much as -140 pips (per lot) on this trade, I doubled up and opened another position as soon as I got another signal using the system. And in the early morning move, we managed to hit our target points for a nice profit.

Lots 1-3: +33 pips (11 * 3)
Lots 4-6: +100 pips (100 * 3)

Total Pips: +333
Total Profits: $334.21

Update 03-13-08 11pm:
Interestingly, I got another signal for this pair using the HAS system. The original position is down almost -90 pips at this point, but I decided to open another position for this pair.


Lots: 3
Entry (Short): 94.65

I am not going to set any stop loss for this position, but I am going to set a limit for the original position at break even.

Update 03-13-08 3:30pm:
As of now, it seems like the trend is changing and this pair is poised to go higher. At current levels, I am already down approximately 175 pips per lot. The unfortunate part is that I opened this trade on my FXPro account at home, and I do not have access to it. So if its not closed by now, I will probably have no equity left by the time I reach home. :) SO now, it all depends on luck.

The Trade:
This is another trade based on the HAS system. The Yen is showing strength against all currencies today, and the HAS indicators show a downward trend across multiple time frames. Good time to enter a short trade.


Lots: 3
Entry (Short): 93.76

As before, I do not have a stop loss or target point for this trade. The position will be closed when the signal reverses.

Trade Update - USD/JPY Short CLOSED

Update 03-13-08 7am:
What a trade this has been. The final 2 lots hit their stop loss, but I stil made a lot of money in this trade.

Lot 1 (closed at 10pm): +150 pips
Lot 2 & 3 (closed at 5:40am): +200 pips (100 * 2)

Total Pips: +350
Total Profit: $348.47

Again, had I not had the stop loss, I would have probably made more money in this trade. But I am not going to get too greedy and just take what I can get.

Update 03-13-08 12am:
What a fantastic trade this has been so far. This trade was in the money right from the start and looks like it will continue making me more pips. I closed one lot for a +150 pips gain. The remaining 2 lots are currently trading at +126 profit. I have a stop loss now set to collect +100 pips on the remaining lots.

Due to the success of this trade, I have opened 2 other trades using this system. Lets see how successful they are.

The Trade:
This trade is based on a new system I came across today called the Heiken-Ashi Smoothed (HAS) system created by Steinitz. I am just borrowings his ideas, and like other systems I use, just modified or loosely trades based on that idea.

I will write about this system in detail, but in the meantime, this is how the trade looks. As you can see, the last 2 candles in the HAS indicator (in the chart window) shows red, and the lower indicator shows red dots on multiple time frames. This says its a strong down trend and safe to enter short.


Lots: 3
Entry (Short): 101.66

I do not have a stop loss or target point for this system as I exit the position when the signal changes. Again this is purely experimental, but I want to see how my ROI is with this style of money management and the risks involved.

Trade Update - AUD/CAD Long CLOSED

Update 03-13-08 12am:
Finally decided to close this position before heading to bed. I wasn't sure how this position would hold up in the European session, and didn't want to risk losing the profit I had.

Lot 1 (closed at 12 noon): +50 pips
Lot 2 & 3 (closed at 12am): +42 pips (21 * 2)

Total Pips: +92
Total Profit: $92.86

Overall I was happy with this trade as I was able to get into this one before it was signaled via the OzFX system. In fact, while I made decent profit on this trade, the OzFX forum closed this for a 35 pips loss.

Update 03-12-08 5pm:
Finally closed our first lot in this trade for a +50 pip profit. The remaining 2 lots are fluctuating quiet a bit and even went below my entry point (I haven't moved my SL to BE as I am trying a different strategy), but is currently up +40 pips. Interestingly, this exact trade was recommended in the OzFX forum with an entry at 0.9271. So I am pretty happy that I was able to catch this signal earlier. I will have to research my signals more to get an idea of the risks involved.

The Trade:
As in my previous trade, I am trying to play the Aussie dollar rally against all majors. Once again this signal is based on my system on the daily chart. The AC is showing green bar, and the RSI, Stoch and %R indicators are trending up fro oversold. Looking at previous patterns in the chart, this could be the start of a rally and I am looking to catch the signal early.


Lots: 3
Entry (Long): 0.9218
Stop Loss: 0.9118
TP1: 0.9268
TP2: 0.9318

Trade Update - AUD/USD Long CLOSED

Update 03-13-08 10am:
Now I am really proud of this trade. I got into this trade following my system which was to follow the trend using the Stoch, RSI and %R indicators. I also used the 200 SMA as a filter to make sure the pair had a upward trend. Whats even better is that I got into this pair very early, right when the uptrend was starting.

Not surprisingly, this pair has brought in a lot of pips for me and its still continuing higher and the signals still look good. But i decided to take my profits for now and start afresh.

Lot 1 (closed on 3/11): +50 pips
Lot 2 (closed on 3/12): +100 pips
Lot 3 (closed on 3/13): +150 pips

Total Pips: +300
Total Profits: $300

Update 03-12-08 5pm:
The second lot closed at +100 pips earlier in the afternoon. So we have banked 150 pips in this trade so far. The third lot is still open and currently trading at +88 pips. I haven't moved the SL to BE for this trade as I am trying a different strategy. I am just letting my positions run until the signals turn.

Update 03-11-08 11pm:
So our first lot closed at +50 pips profit. The remaining lots are currently trading at +55 pips range. After yesterday's big loss, this is a welcome change as I see just green in my positions. :)

The Trade:
The Aussie dollar has been in rally mode against all currencies since yesterday. Now this trade is not based on the OzFX system, but just my call seeing the indicators. The AC has turned green, but its still not close to the 0 mark, and the AO still shows red. However the Stoch, RSI and %R are all trending up from oversold conditions suggesting we might be in for a rally. I am just trying to catch the signal early in this trade, so lets see how successful I am.


Lots: 3
Entry(Long): 0.9264
Stop Loss: 0.9164
TP1: 0.9314
TP2: 0.9364

Trade Idea for 03/10/08

Update 03-11-08 7am:
So I wasn't the only one who was wrong with the JPY pairs. All 3 pairs hit their stop loss and closed down 100 pips per lot. Thats a lot of money if you are betting on all 3 positions. Even the GBP/CHF position is way down currently. Luckily I decided not to enter this trade formally.

The Idea:
Today in the OzFX forum, the following signals were given. However, I am skeptical about all of these as some of the indicators already in oversold territory.

1. EUR/JPY - Short - 155.61:

2. AUD/JPY - Short - 92.86:

3. NZD/JPY - Short - 79.99:

4. GBP/CHF - Short - 2.0460:



As you can see in the charts above, the Stoch, RSI & %R indicators for all these pairs are in extreme oversold conditions. While it is possible for these indicators to remain in the oversold condition, it seems too risky to me.

Moreover the other point is that 3 of the 4 signals involve shorting the Yen. I need to check whats bringing the yen down against all these pairs. IN any case, I have opened these trades in one of my demo accounts. But since I wouldn't have opened these trades myself, I will not count these towards my month total.

Trade Update - CHF/JPY Short CLOSED

Update 03-11-08 7am:
Once again this pair has decided to kill me. When I held it in a long position, this pair would not go up and now when I hold it in a short position, it spiked to new highs thereby hitting my stops. It looks like the Yen was weak in yesterday's session against all currencies. All the JPY pairs opened in the OzFX forums also resulted in loss.

Total Pips: -300
Total Loss: $293.63

So officially this has got to be my most hated pair as I have collectively lost around $400 in 3 trades with this pair (2 massive losses and a small win). I will be more careful trading this pair in the future.

The Trade:
Today I just closed my long position on this pair. But at the end of the day, I got the signal for the short trade. All the indicators are trending down, including the RSI, %R, Stochastic and the AC & AO are showing red. The only thing that does not confirm to the OzFX daily system is that the price is above the 200 SMA. But considering the amount of resistance this pair had to the upside, I hope this should not be an issue.


Lots: 3
Entry (Short) - 99.60
Stop Loss - 100.60
TP1 - 99.10
TP2 - 98.60