Weekly Summary: Mar 31 - Apr 4

A small change in strategy added with more discipline than before resulted in a big change in the result. How big you ask? How about a profit of $3065.87 for the week? Now I know this could be a one time event and I cannot expect the same results every week. Or maybe even a big draw down next week, but it is a confirmation that the new strategy does work.

What Changed?
Up until this month, I was following trading systems which operate on long time frames. This also meant I was looking for 100-200 pip on average for every trade I enter. Now due to the bigger time frames, I had to have bigger stop losses which meant my position size were usually small (0.3 lots).

Towards the end of last month, I read something in the OzFX forums which made sense and decided to give it a try. Basically when you are trading with these setups that operate on higher time frames, the first 20-50 pip is the easiest to get. So why not enter a trade with bigger position size and capture these initial 20-50 pip move? And maybe if the signal is really strong, even try for the 100 pip move? So that's what I did this week. I usually entered trade with lot size of 1 (10 mini lots) and have the stop loss 50 pips away thereby risking a maximum of $500 a trade.

How do I Use It?
Now that is just one part of the strategy. I also need to be able to find the trend and get in at the correct time. For this, i used my different setups, each on a specific time frame. I used the OzFX system on daily and 4 hour charts, the HAS method on 1 and 4 hour charts, the A-MACD method on 4 hour charts and the Elite system on 15 minute to 1 hour charts. I generally enter the trade based on the trend from OzFX, HAS or A-MACD systems (higher time frame) and use the Elite setup on lower time frame to re-enter the trades. That way, I can I can enter the same pair multiple times and capture 20-50 pips each time.

What Did I Do Wrong?
Now all was not rosy this week. While I made lot of profit, I also made some trades I shoudn't have even though they made me money. It was just sloppy trading, like not having the discipline to wait for my limit orders to get filled, chasing the price, not putting stop losses correctly and meddling with the target points (greed = BAD). This is something I am hoping to improve on.

So here are the highlights of this week.

• Adopted a different trading strategy and its paid off handsomly so far. It still more testing to see its risk/rewards.
• Came across another trading system called the Elite which is simple and works great on lower time frames (1 hour and lower).
• More disciplined in my approach than last week. Did not enter any trades without a stop loss and target point. While I meddled with the target points to get more profit, I never adjusted my stop losses.

And finally the stats for the week. Instead of putting the numbers down, I am just going to give the trade report here.

Trade Update - GBP/JPY Long CLOSED

The Trade:
Going long the GBP/JPY pair.

System:
The trade is based on the Elite setup on 15 minute chart.

Explanation:

The Figure above shows the entry and exit point. I entered the trade based on the fact that when the 3 EMA hits the 34 SMA, there is normally a bounce. This is confirmed by looking at prior instances. And I was actually right about this idea, at least at the point where I entered.

• At 11:50pm I notice the price trying to bounce off the 34 SMA line. I enter long this candle (green) and place a stop loss 20 pips away, and target point 20 pips higher.
• The price initially goes higher, but falls back down and re-tests the 34 SMA line.
  
• Finally at 12:15am, my stop loss is hit and I am ot of the trade.
• Starting the next candle, we have a short rally before there is a sharp fall.

Results are as follows.

Total Pips: -200
Total Profit: $195.26

Mistakes:
There is one big mistake I made on this trade. That is to enter the trade very high. I entered the trade at the top end of the green bar instead of waiting it to fall closer to the 34 SMA. Add to it the 7 pip spread for this pair, and I am almost shooting myself in my foot. Had I waited for the bar to fall close to 34 SMA before entering, I might have escaped my stop loss being hit, and could have participated in the brief rally.

Rating:
Due to the poor entry, I have to rate this trade a 2.5 star. I could have done better. Just need more patience & discipline.

Entry & Exit:
Lots: 10
Entry (Long): 204.582
Stop Loss: 204.382
TP: 204.782

Trade Update - GBP/CHF Long CLOSED

Update 04-04-08 7am:
I kept meddling with the target point for this pair moving it from 20 pips to 50 pips and back. Finally I set it to 30 pips before heading to bed and it was a great thing. The pair barely managed to hit the target before a big move down. The story today seem to be a strong Yen, but I am not going to enter any trades today.

Total Pips: +300
Total Profit: $296.99

Trade:
This pair has been on a strong uptrend, and I am entering it once again. Going long the GBP/CHF pair.

System:
This trade is based on the Elite setup in 1 hour chart.

Reason:
This pair has been on a strong uptrend. I entered it a few times yesterday successfully, and I am going to try to do that again today. The 3 EMA is still above the 34 SMA. I entered this trade when the 3 EMA crossed over the 10 SMA. The CCI shows a strong uptrend. I am looking for a 30 pip profit. Stop loss is placed just below the 34 SMA line.


Rating:
This trade would be a 4 star. The pair is on a strong uptrend. And the chart shows that every time the 3 EMA crossed the 10 SMA, there is a rally. So I am entering based on that. Looking for a 30 pip profit.

Entry & Exit:
Lots: 10
Entry(Long): 2.01795
Stop Loss: 2.01081
TP: 2.02095

Trade Update - USD/JPY Long CLOSED

Update 04-04-08 7am:
The strengthening of the Yen overnight stopped me out of this trade. There were couple of things I could have done better in this trade. First, I could have placed the stop loss point to be just below the 34 SMA line on entry instead of below the low of the previous candle. Since my entry point was close to perfect, this could have limited my loss when the signal reversed. Chart below shows what I mean.


Second, today being NFP day, I should not have been holding any Dollar positions. Its a major news event, and we know there aren't too many good news for the US economy at the moment.

Total Pips: -362
Total Profit: $355.17

The Trade:
Going long the USD/JPY pair.

System:
The trade is based on the Elite setup on 1 hour chart.

Reason:
As in my previous trade, its purely technical and based on the Elite setup. The 3 EMA has crossed over the 34 SMA and the 34 CCI has crossed above 0.


Rating:
Again this trade was entered perfectly as soon as the crossover occured. So I would rate this trade a 5 star. The only rish is that tomorrow is NFP day, and I need to get out of the trade by then. But I am looking for just a 20 pip profit. The stop loss has been placed below the lows of previous candle.

Entry & Exit:
Lots: 10
Entry (long): 102.573
Stop Loss: 102.210
TP: 102.773

Trade Update - USD/CHF Long CLOSED

Update 04-03-08 11pm:
I got stopped out of this trade. The low volume definitely had a say. Also I feel I should have placed my stop tighter. Since I entered very close to the 34 SMA line, I should have placed my stop just below that line rather than below the low of the previous candle. That could have cut my loss by half.

Total Pips: -248
Total Profit: $245.46

Lesson: Do not enter trades between 4pm EST and 1am EST as the volume is extremely low.

The Trade:
I had mentioned this in my watch list for the day. Going long the USD/CHF pair.

System:
This trade is based on the Elite setup on 1 hour chart.

Reason:
Perfect entry setup using the Elite setup on 1 hour chart. The 3 EMA was crossing over the 34 SMA. The 34 CCI has just crossed over 0.


Rating:
I believe I entered the trade to perfection. So this would rate as a 5 star. Only drawback is that this trade is against the long term trend. But we are looking for 20 pip profit target. So that is hopefully not important.

Entry & Exit:
Lots: 10
Entry (Long): 1.01293
Stop Loss: 1.01045
TP: 1.01493

Watch List for April 3rd.

Here is my watch list for April 03-04.

OzFX(Daily):

• AUD/USD Long - price above 200 SMA. AC and AO showing red. Stoch oving higher. RSI and %R are flat.
• EUR/GBP Short - more than half way into the trend. Should be used only for small short term moves.
• EUR/JPY Short - currently in overbought territory. Need to watch for a pullback.
• EUR/AUD short - well into the trend. should be used for small moves.
• GBP/CHF Long - mid way into the trend. Stoch in overbought territory. Enter for short moves.

HAS(4 hour):

• EUR/USD long - Both the H4 and D1 HAS bars indicate a blue. Need to wait for a confirming blue candle to enter long.
• AUD/USD Long - H4 shows blue candle, but D1 still shows red. But the AO indicator is green and about to cross above 0.
• EUR/CAD short - H4 has been showing red candles all along. D1 is starting to turn red. But we might be at the tail end of the move.

A-MACD(4 hour):

• EUR/USD long - the moving averages havn't crossed yet, but its very close. The CCI is also very close to crossing above 0.
• GBP/USD long - currently in this pair. Will look to hold it.
• AUD/USD long - The moving averages have crossed over and the CCI is above 0. But ot dosen't look like a strong signal.
  

Elite(1 hour):

• EUR/AUD long - the 3 EMA just crossed over the 34 SMA. CCI is above 0.
  
• EUR/CHF long - moving averages clossed over. Little late for entry, but the price is still close to the 34 SMA due to low volume. Has strong uptrend.
  
• USD/CHF long - moving averages looking to cross over. Good time to enter. Tomorrow is NFP, so be cautious.
• USD/JPY long - moving averages close to crossing over.

Trade Update - EUR/JPY Long CLOSED

Update 04-04-08 7am:
Another trade where I messed with the target point moving it between 20 and 50 pips. But I was lucky to set it to 30 pips before going to bed. The last up candle hit the target point before a broad Yen rally caused the pair to pullback steeply.

Total Pips: +300
Total Profit: $293.24

The Trade:
Going long the EUR/JPY pair.

System:
The trade is entered based on the Elite setup on 1 hour charts.

Reason:
On the 1 hour chart, we see the price move back up after a brief consolidation. The Euro has been on an extended uptrend against the Yen the past week, and I am trying to follow that trend. The 3 EMA has just crossed over the 34 SMA on the Elite setup. The 34 CCI has also broken above 0. I don't have the perfect entry timing, but I think I should still be able to catch the trend. I am looking for a 50 pip target point and I have the stop loss just below the 34 SMA.


Rating:
I will rate this trade a 4 star. The Euro has been on an extended uptrend against the Yen. And while a pullback is imminent, I think I will be able to catch this ride. I didn't get the entry spot on, but I am not too far from the 34 SMA.

Entry & Exit:
Lots: 10
Entry (Long): 160.517
Stop Loss: 160.117
TP: 161.017