March Profits

I've managed to pick myself up from last month's disaster and gained a little confidence today after both my h-system and reversal trades profited 60 pips total.  I was able to jump on and off for the downward momentum in the European session and then jump back on and off for the upward momentum during the US session.  I'm currently up 36 pips or a return of investment (ROI) of 5.4% for the month of March.  I've decided to take Ed Mamula's advice on calculating profits for reporting my progress here.  If you want to check out Ed's post titled, "Pips vs. Percentages Part 2" you can do so by browsing to http://edmamula.com/2007/03/09/pips-vs-percentages-part-2/    

I've started my trading reorganization plan by rewriting the rules for the two GBP/USD trading systems I use.  I've also redone the trade tracking spreadsheets  I use to store more detail.  I realize that I need to keep more detailed records regarding my trading systems so that they can continually be optimized.

As for all of the other technical analysis I wanted to learn more about specifically fibonacci, chart patterns, and carry trades, I'm not going to pressure myself to look into learning these any further at this point in time.  I received a comment from Motu of Auckland, New Zealand who got my mind back on keeping it simple:

I think we're all guilty of thinking if we knew more it would make us
better traders. But IMO that is a dead end road. Some really successful
traders use very simple stuff.  Have a read of "The Logical
Trader" by Mark Fisher…his ACD system is a nice blend of statistics
and discretion…plus he still uses it (see thelogicaltrader.net for a
book excerpt) - and it is very simple to use.  Alternatively, Phil McGrew's stuff really works….and I'm certain Phil is the real deal in terms of trading himself.You
mention "it's strange that I spend so much time optimizing and
organizing this website but I don't translate this over to my forex
trading and studies."The reason for this IMHO is that site
maintenance it is not as stressful as trading! On the other hand,
trading profitably is incredibly boring…or should be. I think many of
us would be better off leaving our money in a portfolio of carefully
chosen CTA's…

Thanks Motu.   

I am going to continue reading Nicole Elliot's book on Ichimoku which I could possibly use for position trading the USD/JPY in the future. 

Popularity: 3%

What Am I Studying?

I have definitely been sidetracked for some time now, preoccupied with only particular GBP/USD forex trading systems.  Due to this fact, I feel like I've disregarded other aspects of technical analysis that may one day turn out to be useful.  This started about 6 months ago after my first full year of trading, where I found myself sitting in front of my computer staring at charts for what felt like forever.  I don't know if it was burn-out or if I just felt like these other forms of technical analysis required discretion, something that I wasn't successful at.  it could also have been that I was looking for instant gratification after months of hard-core learning. 

I'm not sure where my trading will be next year or this year for that matter but I feel the need to start concentrating on some of these neglected areas.  It's strange that I spend so much time optimizing and organizing this website but I don't translate this over to my forex trading and studies.  I feel very disorganized and sometimes behind in what others have learned in an equal or shorter period of time.  I've said this before but I'm going to try to put together a list of things that I want to study and learn more about.  I want to continue with my GBP/USD trading systems but I also want supplement other things into the fray.  Just off the top of my head are:

1. Ichimoku specifically on the USD/JPY.  I'm still reading the new ichimoku book that was sent to me but I've always been interested in this indicator and I want to explore it further
2. Chart patterns
3. Money Management
4. Carry Trades
5. Divergence
6. Fibonacci

These are only a few but I think the key as I said previously is to get organized and try to create a learning schedule so that I can become more adept at forex technical analysis.

Popularity: 8%

Ichimoku Charts Book

Harriman House, publishers of finance, business, economic, and political books were nice enought to send me a free copy of "Ichimoku Charts: An Introduction to Ichimoku Kinko Clouds" which I received last week.  The author is Nicole Elliott, a trader for Mizuho Corporate Bank.  I had seen Nicole's name before when I regularly visited the Mizuho bank technical analysis research website.  You can find the links for this and other recommended sites at http://list.forexproject.com.  I found this site very unique in that it was the only technical analysis site where I've seen the exclusive use of ichimoku.  So I started reading the book last week and my first impressions are that it's refreshingly unique material, challenging, yet rough around the edges.  The author is a trader and not unlike me, probably not a trained writer.  In addition, I think she may be European so I cannot relate to some of the non-trading terms she utilizes.   Like I said before, a lot of the information contained in the book is totally new to me so I have yet to grasp a lot of it.  Overall, I'm intrigued and looking forward to reading it further.  When I have time to allow the information to marinate in my head, I'll be sure to pass it along.  Let me leave you with the main elements explained within the book:

1. candlesticks
2. 9 and 26 day moving averages
3. the Cloud and its size
4. Chikou Span
5. long term wave count
6. short term wave count
7. the Wave principle
8. price targets
9. time principle 

I can't fully review the book until I'm finished so I'm hesitant to recommend it but if you are really interested in learning more about the elements above now, you can always buy the book at  http://www.harriman-house.com/pages/book.htm?BookCode=22962

Popularity: 3%

Ichimoku Cloud Filters

I have had interest at times in the Ichimoku indicator mostly for longer term trades.  The information on the internet or in books related to this indicator such as how to interpret or trade using it are very thin at best.  So when I find new articles related to the Ichimoku, I think they are worth posting.  There is a new article titled, "Ichimoku Cloud Filters Information Storm" on Investopedia that gives a good overview of how to interpret the components of the indicator and also an example of how to trade using it.  The author, Richard Lee compares the use of the Ichimoku to the use of your run-of-the-mill support and resistance lines.  

http://investopedia.com/articles/forex/06/ichimoku.asp  

Mizuho Corporate Bank provides daily technical analysis for most currency pairs for free and their analysts use the ichimoku in most of their charts.  This may be a good place to see how they use the ichimoku each day if you want to learn.  http://www.mizuho-cb.co.uk/TresInternet/TECHNICALS/Index.htm  

Popularity: 5%

17 Pips Last Week

I have not been posting regularly because I just haven't had the time.  I've said this many times before but this is only temporary and I have not lost my dedication to trading. 

Last week, I only made 1 trade and profited 17 pips.  It's not much but I've been using a new system that has been in the works for a year that pretty much kept me out of the market.  I really don't want to get into much detail about it because I don't know how it will turn out and I'm still trying to see what works and what doesn't.  It's really nothing new; it incorporates moving averages, MACD, RSI, the Ichimoku Cloud, and 3 time frames (60-minute, 240-minute, Daily)  I don't use the Ichimoku as it was designed.  I just use the Cloud.  This is not a system that generates automated signals for me.  It is a lot more discretionary.

So I'll continue to use this going forward and see if I can develop some sense of consistency.  I'll try to come around my blog more regularly as I feel bad when it's neglected.  I hope everyone is doing well. 

Popularity: 4%

Shorting the USD/JPY

I sold USD/JPY this evening at 114.02.  I studied technicals for the pair and came to the following conclusions:

Â¥ Solid resistance exists at 114.39 which was lightly brushed yesterday at 114.28
Â¥ Japan economic indicators have remained strong.  Machine Order
announcement tomorrow is expected to indicate a     rise
Â¥ Ichimoku support cloud is at 111.27 and 38.2% Fibonacci Retracement for September low and October high at 112.45
Â¥ Comments by U.S. Treasury Secretary Snow stating that he and the
other G7 countries share the view that China should strive towards a
more flexible FX system.  Remember my previous post that proposed
that reevaluation of the yuan could boost all Asian currencies

[Read more]

Popularity: 1%