Items Tagged With October 2005

Seeing I don't want to make any rash decision before the weekend, I will keep 2 open positions into next week. The 2 positions are the following:

1. Short EUR/USD at 1.2103 (-23 PIPS)
2. Long GBP/USD at 1.7801 (-198 PIPS)

First, let me say that part of the reason I entered into the long position was because of a commentary I read from Thompson. I try not to listen to the hoopla from anyone except for me but I got sucked in this time. Make it a rule to never listen to what anyone else says. Do your own homework and I'll do mine.

My strategy for Monday is quite simple.  This is assuming the Dollar will have a clear direction on Monday. If not, I will put it off until it does. Once the direction is established, exit 1 of the 2 positions. So if the dollar is looking bearish for the day, I'll exit position 1 above. If the dollar is looking bullish, I will exit position 2. Have a good weekend.

-W

I'm looking at the Forex Futures open interest change in Short positions for the Swiss Franc.  There were 6081 more short positions this week than last.  I need to look at various technicals of USD/CHF but if it looks good, I'll short the Swiss Franc today or tomorrow.

The USD is up against the majors this morning with traders awaiting a slew of data this week, with US trade on Thursday and CPI, retail sales, industrial production and business inventories on Friday.

My stop/loss of 1.7491 on my GBP/USD position was triggered at 2:00 am last night.  I lost $310 on this trade including .86 in interest. 

My USD/JPY position is still intact down about 20 pips.  I expect solid range trading between 113.75 and 114.39 until more US data is released.

The longer I trade, the more I realize that trading is best if done intermediate or long-term.  Let me site an example.  Back a couple of weeks ago, I posted that I was finally taking my losses on a trade like a man.

 
 I lost 310 pips on this trade and only stuck with it for 2-3 days.  The price of the GBP/USD today is 1.7844.  So if I had held on to that trade, I would be up 43 pips today. 

I exited 1 of my 2 positions today, the EUR/USD.  Last Friday, I was attempting to hedge my Sterling position that was down 200+ pips by shorting the EUR/USD.  I got impatient with the EURO as it was down +30 pips in Sunday/Monday trading .  I set a stop last night before going to bed at the price I got in at and it triggered this morning.  So I didn't gain or lose anything.

I'm still stuck in my GBP/USD position which has turned into a huge mistake, down 274 pips as I write this.  It just shows that if you lose your discipline with money management techniques, it's really hard to correct.   If I would have stuck with my 30 pip stop/loss technique, I would actually be trading right now.  Instead I'm just sitting here crossing my fingers which is no way to be successful as a forex trader.   I know I should just exit this position and take the loss but it is so hard to do right now.  I just keep hoping the Sterling will make a comeback.  I promise to never to fall in love with an open position again. 

I registered for FXCM's trading seminar next Saturday in New York City.  It's being held at the New York Marriott in the Financial District.  It's free but I'm sure I'll get the sales pitch.  I'm also willing to accept the bombardment from salespeople as long as I learn something plus I only live 8 miles outside of the city so I can always leave if I don't find anything beneficial.  Topics that will be discussed include:

- The Fed and the US Dollar
- Emerging strategies and new trading opportunities
- Outlook and forecast for the major currencies
- China's currency revaluation

I found this report from Thompson interesting:

"USD/JPY remains bid in Asia this morning, slowly grinding higher. Rumors that Osama Bin Laden died in the recent Pakistan earthquakes have spread to the Asian market, and may have been responsible for the move up in USD/JPY to a fresh 17- month high of 114.72 a few minutes ago. The rumor looks to be unfounded so far with USA Today reporting that U.S. officials are cautioning against too much speculation, especially with little evidence. It just may be that dealers are looking for an excuse, any excuse, to buy more USD. Although option-related selling continues ahead of presumed 114.75 barriers, it may be only a matter of hours if not minutes before 114.75 is also taken out. Stops are eyed above but more offers are seen likely ahead of large 115.00 option barriers. USD/JPY trades 114.67/70."