Five Consecutive Profitable Months

January 31, 2007

I was able to rebound today with a +90 pip h-system trade and a +21 pip Lien Schlossberg trade.  This brought my January 2007 total to +80 pips.  It isn't much but nevertheless, it is my fifth straight month trading forex profitably. 

I want to talk about the trading signal service that Kathy Lien and Boris Schlossberg offer.  I lost 97 pips using their service this month.  In their defense, I missed two of their most profitable trades because I just didn't have the ability to trade at the time.  Even if I would have caught these trades, I still would have been negative for the month.  If I had to estimate it, I might have been down about 30 pips if I could have taken these trades.  Their member area shows that with today's profitable trade, they were profitable by about 30 pips in the month of January.   This performance is under ideal conditions; where I was able to trade at their exact entry and exit points.  This was usually not the case since emails or text messages lagged or the price just slipped.  I didn't follow 3 of their signals, 2 because I wasn't available to trade at that time and another because by the time I received their email to enter the trade, their target was already hit.  Most of their signals require entering at market price so you don't have any prep time whatsoever.  In addition, their signals occur at random times throughout the day and night.  Strangely, they have no qualms opening a trade in the afternoon (US EST) which I would never do myself.  Realistically, although they show a profit on paper, it would have been very difficult for someone using their service this month to show a profit.  I would be surprised if I was wrong.   They rarely had that surefire trade that allowed one to get in, grab profits, and get out.  Their trades tended to take some time to develop, sometimes for better and sometimes for worse.  Although their initial call showed a 2:1 reward/risk ratio, it rarely showed this ratio in the end.  For instance, today's trade call went out with profit target of 55 pips and a stop loss of 30 pips, almost a 2:1 ratio.  Similar to many past trade calls, they sent out a message to close the trade immediately at market before the target was hit.  This particular trade was closed with a profit of 32 pips (under ideal conditions) for a reward/risk of 1:1.  Their risk/reward more times than not worked out to no better than 1:1. 

The point of all of this is not to bad mouth the service, just to make everyone aware of the caveats with forex signal services.   Kathy Lien and Boris Schlossberg are undoubtedly very informed about the Forex market and carry an almost implied trust.   This is a good thing but what I realize more and more is that just because they're well informed doesn't mean they can make money trading.  One month doesn't tell the whole story either but I don't think one should imply that well-known traders who command a certain level of forex celebrity make money trading forex.  I'm not saying that Boris and Kathy don't make money trading forex.  They really didn't this month but they very well might next month.  One thing for sure is that they aren't making a killing from trading forex.  They probably are making a killing selling their signals though.

I promised I would use the service through the end of February, so I will follow through on this.

Revealing the Forex H-system

January 31, 2007

I've contemplated introducing everyone to my trading system because it's just so easy but I never do because I don't want to be responsible for losing trader's money.  It's also a system that has definitely been used by others in either its current incarnation or some modified version of it.  As I close out the month of January with another H-system win; the system produced 10 wins and only 2 loses this month; I wonder if my success with this system has my thinking skewed.   Is it really as easy as this? Since I've started tracking this system's individual performance, I've had the following success:

  • September 2006  +294 pips
  • October 2006  +279 pips
  • November 2006  -28 pips
  • December 2006  +61 pips
  • January 2006  +467 pips

These results are produced with a trading system that produces a 1:1 reward/risk most of the time.  Most people would reject this system on this fact alone.  Believe me, I've tried to get more reward out of it but most of the time this trades during the European session (I'm asleep) and I can't squeeze more out of it because I'm not there to do it.  

I think that having a very simple system where I follow a simple set a rules is the way to go.  I do truly believe this but I should also note that I haven't been able to find another simple system in addition to the h-system.   So is it really that simple? The system is simple but finding out if it was viable was not.  It took a lot of time and effort.  Everyday, I learn a little more about it that may assist in making the system more successful.   I do think that profiting from trading can be this easy as long as you keep certain things in check like fear and greed.  Emotional or impulsive trading can really knock you off track and can ruin your entire plan in an instant.  I really don't know what more there is to trading than this.  I have a simple strategy, I follow the strategy taking my gains and losses sometimes consecutively, I try not to let fear or greed enter my mind, and in the end I'm profitable. Is it wrong for me to think that people over complicate trading? I haven't been doing this long enough to come to this conclusion just yet.  I could have 3 consecutive losing months with this system and my entire way of thinking could change.  

Forex Trading Neglect

January 30, 2007

It's been quite a rough patch in the non-trading world the last couple of weeks and to top it off, I started this week on the OUT SICK list.  I'm still in bad shape so I really haven't performed any website updates over the past couple of days.  I finally got my trading history for the month up to date at http://www.forexproject.com/My_Trade_History/

I am at -31 pips for the month of January with 1 day left.   I have no one but myself to blame for this but the service provided by Lien Schlossberg has not helped.  I am down -118 pips using the service this month.  When I started using it, I was hoping to diversify a bit since I have mainly been trading only the GBP/USD.  

On the other hand, my H-system trades have performed well, +377 pips for January.  http://www.forexproject.com/H_Trading_System/

The other losses that I've incurred have been due to my discretionary trades.   

I'll get back to everyone later when I feel a little better.  Good trading…. 

Forex Trading with Heikin Ashi

January 26, 2007

There's a new article on Investopedia titled, "Confirm Forex Momentum with Heikin Ashi."  Heikin Ashi is just another way of representing candlesticks.  For instance, instead of using the actual close for the candlestick close, the Heikin Ashi uses the (High+Low+Open+Close)/4 formula.  I read it and threw it on my charts to see if it may be useful to me.   I don't use candlesticks at all in my trading at this point and I don't really see the need to use the Heikin Ashi either at this time.   You can read the article at http://www.investopedia.com/articles/forex/07/heikinashi.asp

Here are my USD/CHF daily charts with and without the Heikin Ashi.

With Heiken Ashi

without

 

 

 

 

 

 

Chat With Boris Schlossberg

January 26, 2007

Boris Schlossberg is by no means a celebrity but his presence in the Forex world is definitely evident.  I talked to Boris yesterday but unfortunately it wasn't to exchange trading ideas or strategies.  It was a friendly call from him to confirm that I was not posting the Lien Schlossberg trades I receive from their service on my site in real-time.  I do post their trades on this site but only after they are closed and I don't post any details of the trade except for currency pair and whether it was a buy or sell.  I had already received an email a couple of weeks ago from someone at Investopedia asking me this same question but I guess he just wanted confirmation.  I'm well aware of the copyright protection that they have and would never consider breaking the law. 

I just wanted to make this public so that there is no misunderstanding.  I'm actually considering just not posting anything about their trades except for profit/loss.   He didn't have a problem with me posting what I already do but it may not be worth the trouble.  I also want to reiterate that it was a friendly call and not accusatory in any way.

Back To Profitability

January 24, 2007

I apologize for the limited posts and also for posts that aren't as beneficial to you.  I've mainly been talking about me, me, me.  I'm in a bind for time this week so I'm just giving short updates until I can get back into the swing of things.

I've quickly recovered from my losses and I'm actually now up 22 pips for the month of January.  This was all thanks to an h-system trade last night that got me 90 quick pips and another 30 pip discretionary GBP/USD trade.

I have to also give some recognition to Lien Schlossberg, who have assisted in capturing 63 pips this week.  They also hit on a trade this morning for over 40 pips but I couldn't take it because I couldn't trade the US session.  They are unfortunately -47 pips for the month.  I will have to add to their trade performance page the fact that the performance I show is taking into account slippage, delayed alerts from their servers, and the inability to take certain trades either due to slippage or because I just wasn't in front of a computer.  Today was the first trade I could not take though so I consider these results realistic.  http://www.forexproject.com/Kathy_Lien_Boris_Schlossberg_Trades/

I have to be happy with what has transpired this week going from -191 pips on Sunday night to +22 pips today.  I said yesterday that the true test was to see if I could pull myself out of the funk before falling further into negativity.  It seems like I've been able to do this.  If I can continue with smart and unemotional trades, recovering from my losses this month will be my greatest accomplishment so far as a forex trader.   

Slight Comeback

January 23, 2007

I've made a slight comeback overnight capturing 71 pips.  I only traded 1 lot on an h-system trade because I received a signal during the Japanese session which in the past I've never acted on.  From my experience using this system, when I get a signal during the Japanese session, it's usually a very good one.  So I decided last night to change my rules to listen to the signal during the Japanese session but with a smaller trade size.   Deciding to tweak my rules a bit is not occurring because I've been losing as of late.  I really have been considering making this change for a while.  The recent success of these signals have forced me to do it.  By the looks of the GBP/USD move going on right now, I wish I would have traded more than 1 lot. 

The GBP/USD is at it's highest point since 1992!

The True Test

January 22, 2007

Some of you have told me to lose the signals I get from Lien and Schlossberg.  I'm going to stick with them for now for two reasons:

  1. Because I said I would stick with them through the end of February
  2. It makes for a nice experiment which is what this site is all about

There is no doubt I'm in a slump, down 186 pips this month.  I'm still not too concerned that my streak of consecutive winning months will end.  I feel like I might be able to turn this around before the end of the month.  

To put this in perspective though, based on my performance over the previous three months, I've pretty much broke even.   So after hours upon hours of studying and trading over the last 90 days, I don't have much to show for it.  What keeps me going is the fact that I've only been trading for a year and a half and the simple fact is, I've been profitable over the last 8 months.  My winnings haven't pushed me over the poverty level but like I said, I still have a lot of experience to gain.  

This month and next month will tell more of the story though and I consider this string of losing as the true test.  If I can fight my way out of this I'll have a world of confidence and hope. 

Don't be surprised if the posting is thin this week.  I've got a lot of non-trading things going on right now.

Inflation Concerns Around The World

January 19, 2007

There's a quick read in the Economist regarding the inflation concerns around the world.  The Bank of England unexpectedly raised rates; who's next? Many speculated that the United States would start lowering rates this year but instead, we may see rate hikes.   

"The most worrying possibility was raised by Mervyn King, the head of
the Bank of England, last year: that China, India, and other rapidly
growing Asian nations may have been behind the low inflation
experienced by much of the world in the past decade or so."

Bobbing Back Up?

iPod Conquers Currency Markets

January 19, 2007

It's interesting to read how an Australian bank is using the slimline iPod nano to compare global currencies.  Based on the price of the nano in different countries, one may suggest that one currency is undervalued against another.  Canada was the cheapest place to buy a Nano at 144.20 and the US was fourth cheapest at $149.  Based on these numbers, the US dollar is undervalued against the currencies of the top 22 countries on this list.  

The Index is called the CommSec iPod Index.

1. Brazil $327.71

2. India $222.27

3. Sweden $213.03

4. Denmark $208.25

5. Belgium $205.81

6. France $205.80

7. Finland $205.80

8. Ireland $205.79

9. UK $195.04

10. Austria $192.86

11. Netherlands $192.86

12. Spain $192.86

13. Italy $192.86

14. Germany $192.46

15. China $179.84

16. South Korea $176.17

17. Switzerland $175.59

18. New Zealand $172.53

19. Australia $172.36

20. Taiwan $164.88

21. Singapore $161.25

22. Mexico $154.46

23. U.S. $149.00

24. Japan $147.63

25. Hong Kong $147.35

26. Canada $144.20

 

Source: CommSec, Apple

 

http://www.redherring.com/Article.aspx?a=20802&hed=iPod+Conquers+Currency+Markets  

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