Trade Update - EUR/USD Short CLOSED

Update 03-18-08 10pm:
This trade went exactly as planned when I entered it. Within minutes of entering, I was up +50 pips. But instead of locking in the profits and closing the trade, i held on to my position and let the trend reverse. This is especially the wrong thing to do when the trade is entered based on lower time frames. I just need to take my profits and move on.

Lesson:
Small time frames = Small profit + small stop loss.

Total Pips: -150
Total Profit: $150

The Trade:
Finally, after weeks, we have a chance to short the Euro. The Fed rate cut helped spark a broad Dollar rally, and I am just riding the momentum train here.

System:
This is based off the HAS system on 30 minute chart.

Reason:
As mentioned above, the Fed cut interest rates by 75 basis points. This was lower than what the market has expect (100 bps), and hence sparked a broad dollar rally against all currencies. The short time frame charts are also agreeing with the rally, so I decided to go with the trend.

This is a purely momentum based rally with a small stop. So i need to exit this trade quickly as soon as I realize some profits.


Rating:
I would rate this a 3.5 star. The current trend is againt the long term trend, and I need to exit this position as early as I can.

Entry & Exit:
Lots: 3
Entry (Short): 1.56664
Stop Loss: 1.57140
TP1: 1.56144
TP2: 1.55914

Trade Update - AUD/CAD Long CLOSED

Update 03-19-08 10am:
Another of my trades which hit the stop loss after hitting the first TP. This has been happening all week, and I am not able to catch any breakouts for significant profit. At least I made some profit on the trade.

Lot 1 (closed at 12:30am): +50 pips
Lot 2 & 3: 0 pips

Total Pips: +50
Total Profit: $50.31

In times like these, I wonder if I should just close all my lots when I hit the first target point. Especially considering this trade had limited upside potential.

The Trade:
The trade is go to long on the AUD/CAD pair. As with my previous trade today, the A-PAC currencies are showing strength today.

System:
This is based on the HAS system on the 4 hour charts. I did however enter this trade with a buy-limit order to get a better entry price.

Reason:
As seen from the charts, the Aussie Dollar has been gaining grounds against other majors today. We have the required 3 blue candles which confirms the trend. The daily candle is borderline blue, but that's because we placed a buy limit order when the price was moving down.


Rating:
I would rate this trade a 3 due to the following.

• We have already seen a big price appreciation from the lows.
• We bought this on the short term consolidation phase. Hence the daily time frame is just borderline blue. We might be entering this trade prematurely. Maybe we should have waited for the downtrend to reverse before taking our position.
  
• The upside to this trade is not much. Maybe 100-120 pips. So the risk-reward ratio is probably not ideal.

Entry & Exit:
Lots: 3
Entry (Long): 0.9228
Stop Loss: 0.9128
TP1: 0.9278
TP2: 0.9328

Trade Update - NZD/USD Long CLOSED

Update 03-19-08 7am:
As mentioned before, this pair had significant upside resistance and hence limited upside potential. The remaining 2 lots hot their stop losses.

Lot 1 (closed at 9pm): +50 pips
Lot 2 & 3: 0 pips

Total Pips: +50
Total Profits: $50

Update 03-18-08 9pm:
My first target point has been hit and the first lot is closed for a +50 pip profit. Stop loss bas been moved to break even.

The Trade:
The A-Pac currencies are showing some strength today and reversing their losses of the past few days. I am entering long the NZD/USD pair.

System:
This trade is entered based on the HAS system on 4 hour time frame.

Reason:
After couple of losing days, the NZD has started moving back to the upside. And by the HAS system, we have 2 candles confirming the trend. On the fundamental side, we have the PPI and the interest rate statement being released today for US. And its almost a surety that there will be a 75-100 bps cut which will further devalue the USD.


Rating:
I would give this trade a 4.5 star due to the combination of technical and fundamental factors. The charts clearly confirms the trend. There might be short term consolidation, but the move is definitely to the upside. And the release of data points in US later in the day might help our trade.

Trade Update - USD/CAD Short CLOSED

Update 03-18-08 7am:
Another successful trade. The price moved just enough to hit my profit target. But I had modified the trade yesterday to buy a third lot if the price hits the initial 50 pips target. And I had a 50 pip stop loss on that trade which was hit. So the net was just a +50 pip gain here.

Lot 3 purchased at 0.9901. There was a 3 pip slippage in my buy order.

Lot 1 &2 (closed at 4am): +100 pips (50 * 2)
Lot 3 (closed at 4:35am): -50 pips

Total Pips: +50
Total Profit: $47.69

The Trade:
This trade was actually recommended on babypips.com site. As a short term play, we are shorting the USD/CAD pair.

System:
This trade is mainly based on the Babypips.com recommendation. However this also falls into my system as some of the indicators are trending down.

Reason:
After a brief rally, the USD seem to be losing steam. The Stoch, RSI and %R indicator seem to hint at that fact as they have all started moving down. Also we have 2 important economic data being released tomorrow. The Canadian core CPI as well as the US PPI and interest rate statements. Considering the economic events happening the past few days, and the fact that the Fed cutting interest rate is almost guaranteed, we can expect the Dollar to move lower.


Rating:
I would rate this trade a 2 mainly because its based on fundamental factors. While the trend is looking to move downwards, we dont have the signal from the AO or AC. Even the HAS system has not signalled this trade.

Entry & Exit:
Lots: 2
Entry (Short): 0.9954
Stop Loss: 1.0004
TP: 0.9904

Missed Opportunity - EUR/AUD Long

This was one trade I was looking at today, and I had an opportunity to buy. All time frames showed blue, and the price was in a pull back mode. So it was a good time to buy as soon as the trend reversed. But I never did, and I just missed out on a easy 300 pip move. :(

Oh well. Live & learn.

Update 03-16-08 9:30pm:
Extreme volatility in the markets have caused the Euro to move up by almost +500 pips against the Aussie dollar. In fact, the Aussie & Yen have been extremely weak against other currencies due to the new from US financial markets over the weekend.

Trade Update - GBP/AUD Short CLOSED

Update 03-19-08 7am:
This trade is a prime example of what NOT to do in trading. I committed every possible mistake and broke every single rule. But somehow, I still managed to break even and not lose any money.

Total Pips: 0
Total Profit: $0

What went wrong:

• Entered trade just for the sake of trading. I did not have the patience to wait for the ideal trade. Instead, I just wanted to enter any trade available.
  
• Entered trade too early. I did not follow the HAS system rules, and entered the trade as soon as I saw a single red candle across multiple time frames. I did not wait for the 2nd confirmation candle. Part of the reason is tied to the above one.
• No stop losses. I ignored the fundamental money management principle, and did not add any stop loss for the pair. My idea was to stop the order when the signal changes. But within minutes of entering the trade, I was down almost -400 pips per lot or about $1200 for this trade.
• The next money management principle I ignored was not closing the trade when the signal changed. When the signal did change, I was down more than $1200, and I didn't want to close the trade and take the loss. So I just continued holding the position hoping it would break even.
• Finally, I let emotions take over, during entering and especially when exiting the trade. If I had followed my rules, I would have exited this trade for a -300 pips loss, instead I let it ride and was lucky to break even.
  

The one thing I did do right was place the trade in the direction of the long term trend. The weekly and monthly charts still had a downward trend and this helped me break even in the long run.

Update 03-17-08 6pm:
After a brief pullback, this pair is starting to rise again making my life miserable. I am still continuing to hold this. Tomorrow 2 important economic data for UK is being released. Hopefully that will help me break even with this trade. I am still trailing by -341 per lot in this trade.

Update 03-16-08 8:40pm:
This week has started as a disaster. Due to the worsening of the US credit markets, the Asian markets have opened sharply lower. Bear Sterns agreed to a $2 per share purchase by JP Morgan Chase in an emergency bailout. The Fed also cut some interest rate. All these resulted in the Aussie & Yen moving lower sharply against other currencies.

Since I opened this trade without a stop loss, I am down about -365 pips per lot, or a total of -1095 pips for this trade. I have not yet closed this position, but this is definitely a disaster which is going to set me back a lot. Lessons learnt?

• Reinforces why I need to stick to the rules and not break them. Wait for the 2nd HAS candle to confirm the trend.
• Always have a stop loss. I would have exited this trade long back instead of having to hold on to with a 400 pips loss currently.
  

The Trade:
As with other pairs, the Sterling is showing weakness against the Aussie Dollar. So I am shorting this pair.

System:
This trade is based on the HAS system on the 4 hour charts.

Reason:
After a brief rally for about 2 weeks, the Sterling has been steadily moving down the past few days. Finally today I got the signal from the HAS system to enter this trade short. The daily time frame switched from blue to red and the rest of the time frames already showed red. I entered this trade even though there is only one red bar instead of the 2 I look for mainly because the lower time frames are showing a downward trend. So I feel this trade will make us some profits.


Trade Rating:
I give this trade a 4 star due to the following reason.

• There is only one red bar across all time frames (H4 and above) when I entered the trade.

Entry & Exit:
Lots: 3
Entry (Short): 2.1418

I have not yet set a stop loss or target point for this trade. I will be doing this depending on how the trade progresses.

Trade Update - GBP/USD Short CLOSED

Update 03-17-08 8pm:
I closed the final lot as I was noticing a reversal of the signals. Even though it was way off the peak, I did make a good profit in this trade.

Lot 1 (closed at 3:41am): +50 pips
Lot 2 (closed at 4:09am): +100 pips
Lot 3 (closed at 7:45pm): +107 pips

Total Pips: +257
Total Profit: $257

Update 03-17-08 5pm:
This trade is still going strong for me. The final lot is now trading at +170 pip profit. I have moved the stop loss to +100 pip so I definitely make some profit.

Update 03-17-08 7am:
This trade was literally on life support. Within minutes of me entering this trade, it was down almost -95 pips and very close to being stopped out. Luckily it wasn't, and during night, it managed to do quiet well. We closed to first 2 lots for +50 pips and +100 pips respectively. The third lot is now trading at +85 pips profit. Stop loss has been moved to break even.

The Trade:
To start of the week, I am going short the Sterling.

The System:
This trade is based on the OzFX system on the daily chart.

Reason:
After a long rally up, the Cable has been showing weakness against the dollar the past 2 sessions. And I just noticed the signal in the OzFX system. The Stoch, RSI and %R indicators are all moving down from oversold territory. This usually signifies a strong move down. The price however is above the 200 SMA, but just barely.


Trade Rating:
I would rate this trade as a 2.5 because of the following reasons.

• Price is above the 200 SMA.
• AO shows 2 red bars, which means I entered this trade late.
• I entered the trade at the lowest point instead of waiting for a pullback for a better entry point.

Entry & Exit:
Lots: 3
Entry (short): 2.0135
Stop Loss: 2.0235
TP1: 2.0085
TP2: 2.0035