Kathy Lien Boris Schlossberg Trades

I cancelled the trading signals provided by Kathy Lien’s and Boris Schlossberg’s sometime in March 2007.   The reasons why?

Read my post titled,  Done with Boris and Kathy Service

Their results since I canceled aren’t much more impressive, in fact probably worse. 

Their website is located at http://www.bkforexadvisor.com

Their trading philosophy is this:

"…every single one
of our trades is a fusion of both fundamental and technical analysis.
We also believe that money management is just as important as the
entry, which is why we practice defensive trading. This means we try to
bank profits as often as possible regardless of the size and reduce our
risk in the market as early as possible. In order to achieve this, we
usually trade lot sizes in multiples of two (2). There is always a
first target (known as T1) and a second target (known as T2). It is our
rule of thumb that whenever T1 is reached, we move our stop on the
remaining position to breakeven (the entry price) so there is no longer
any real risk and we have banked a portion of the profits. This allows
us to NEVER TURN A WINNER INTO A LOSER."

Below is the performance since I started tracking on December 20th, 2006. 

Month	Pip P/L	Gross P/L	Total # of Trades	Total Winning Trades	Total Losing Trades	Total Even Trades	Avg. Winning pips	Avg. Losing pips
7	62	$551.3	4	3	1	0	35	-42
8	-97	$-764.2	19	9	10	0	20	-28
9	22	$-112	17	8	9	0	27	-21
10	6	$90	4	3	1	0	18	-49
Total	-7	$-234.9	44	23	21	0

Popularity: 2%

Forex Trading Price Action Is Better Than Using the CCI

There’s a newer article on Investopedia titled "Channel Breakouts with the CCI" by Schlossberg and Lien.  I read it and don’t see why you would want to use this strategy when there’s a much better alternative.  

You can read the article to get a more in depth explanation of the strategy but I’ll try to give a quick synopsis.  The strategy looks to trade higher highs and lower lows of the commodity channel index.  For a long trade, you wait for a reading to exceed +100 and enter a trade on the close of the candle if the reading exceeds the previous peak reading.  For a short trade, you do the opposite.    I remember reading about this strategy a couple of years ago when I was an indicator junkie.  I found it appealing but that was then.  Now, I use indicators at an absolute minimum.  

If you want to trade momentum especially intraday, you have to get on quickly while it lasts.  I don’t think a lagging indicator allows you to do this.  There’s a simple alternative to this strategy, trade breakouts of previous day highs or lows.  There’s other alternatives too if you just set your mind to finding them and doing testing.  For instance, you can follow all the rules of the strategy but not use the CCI, use price peaks instead.   Remember, every indicator is a derivative of price.  

Looking at charts, the CCI indicator is always late to the game and sometimes falsely identifies areas of momentum especially when the price is trading in between the previous days high and low range.  So while I can’t say that this strategy won’t make you money, I think that there are other ways of identifying momentum that give you a better chance.  

Popularity: 4%

Millionaire Traders

{mosimage}I picked up a copy of "Millionaire Traders" by Kathy Lien and Boris Schlossberg a couple of weeks ago and just returned it to the bookstore.  I know I've been tough on Lien/Schlossberg in the past with their forex trading service but I just wanted to mention that my thoughts of this book were not influenced by their service.  What a snoozer this book was.  It was impossible to get through.  It's basically a "Market Wizards" style question and answer book but it comes nowhere near to the quality of the Schwager books.   I had never heard of any of the traders profiled in this book and I would have loved to know how Lien and Schlossberg verified that these traders were in fact successful.  Some of them just didn't sound successful and some of the answers to questions were questionable at best.   Sorry, but in this business, you need to show me PROOF and they just don't do it.  This is just my opinion.  Don't take my word for it, check out the book yourself.  If anything, it's a good substitute for a sleeping pill. 

Popularity: 7%

Done With Boris and Kathy Service

I think it's time for me to put this subject to bed.  I've been using Kathy Lien and Boris Schlossberg's Forex signal service since September 2006.  It was free in 2006 but if you continued using it into the new year, you had to pay.  I started using it as a way to diversify my trades and also to give me more insight into Forex signal services.   It didn't quite work out as I expected but I'm glad that I explored it.  Here are some of my observations which are my opinion only:

• Boris and Kathy are decent risk managers which I think is an important aspect of trading forex.  Though this is the case, I've lost more money than won by using their service.   I personally do not think they are profitable and if they are, it's not by much.
• They send out trade signals at weird times, many times after the action is over.  This is indicative of their lagging trading strategies. 
• It's hard to be dependent on someone else to provide you with trades.  You don't know when the signals are going to come in so it's difficult to be ready when one does.
• I'd much rather be responsible for my losing than having someone else be responsible for it.
• Boris and Kathy seemed to portray their performance as much better than it really was.  End of week reviews focused on winning trades, not losers and their performance stats were based on best case scenario.
• What happened to their 2 lot strategy? I may have missed something but one day they were using a 2 lot, 2 target strategy and the next day they were using a strict 1 lot, 1 target strategy.
• They had excuses for being stopped out.  I personally don't see how or why you could even have an excuse for being stopped out.  The bottom line is the price hit the point where you no longer wanted to accept more risk.
• I'm not sure how in one sentence I can say they are good risk managers and then the next say their particular trades aren't any better than 1:1 reward/risk but this is the case.  When they make a initial trade call, it has a better than 1:1 reward/risk, sometimes 2:1 but ultimately, they rarely gave a trade time to hit its target.  Most of the time, they closed early with a worse than 1:1 reward/risk.    

I am officially halting the use of their service mostly due to the fact that I don't see any benefit to using it.  The bottom line is that I had to be ready to trade at the sound of any new text message which isn't easy and on top of that, I didn't make a cent.  So there really is no point in continuing.  

Popularity: 2%

February Bloody February

February is beating me down hard and I'm looking forward to March.  I lost on two h-system trades today and one yesterday.  The British pound has been very indecisive over the last two weeks but I'm staying on my toes because I'm expecting a big fat breakout sometime soon.

I have to admit that I'm putting off the updating of my trade history because I know that my trading efforts from September 2006 until last month will be essentially wiped.   To put it another way, my profits over the last five months probably won't survive the beating I'm taking this month.  Was this all for nothing?  I'd have to say definitely not.  I've obviously still got a long ways to go and this month can be a great learning experience. 

Stay tuned later for a post where I'm going to give you reasons why I've always been concerned with the h-system money management rules.   

I actually had the best Lien Schlossberg trade last night when I shorted the CAD/JPY.  I profited 77 pips on a 1 lot trade.  Unfortunately, we were also short the USD/JPY but they recommended an exit with a 10 pip profit last night.  Since then, the USD/JPY plunged a unusual 200 pips.

I still enjoy the challenge the Forex markets have given me so I'll accept my losses and move on.  I'm not this challenged at my full-time job so I welcome it with open arms.

Popularity: 4%

Five Consecutive Profitable Months

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.

Popularity: 5%

Forex Trading Neglect

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…. 

Popularity: 5%

Chat With Boris Schlossberg

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.

Popularity: 4%

Back To Profitability

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.   

Popularity: 5%

The True Test

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.

Popularity: 5%

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