Week 4 Performance Review
December 30, 2005
Yet another week with low volume where we see Friday prices positioned at the low or high for the week with the advantage going to the USD:
Ranges for the week
EUR/USD: 1.1778-1.1931 (currently 1.1788)
GBP/USD: 1.7129-1.7408 (currently 1.7189)
USD/CHF: 1.3050-1.3197 (currently 1.3182)
USD/JPY: 116.17-118.16 (currently 117.84)
Week 4 was another losing week for me (-15 pips, -$242, 4 winning trades, 6 losing trades)
After 4 weeks of trading, I’m still up 123 pips and $1100. If I were trading full-time, the $1100 wouldn’t be enough to cover a majority of my expenses this month and I’d probably be homeless. That is why I’m holding on to my full-time job for now until I can see consistent returns.
This week my charts got "fatter" as I added more indicators and moving averages.
In week 1 and 2, I was in "Raghee Horner" mode and my charts only had the wave and MACD indicators. Weeks 1 and 2 just so happened to be my most profitable. I wasn’t comfortable with just going through the motions of using only her strategy so in weeks 3 and 4, I’ve been experimenting more with EMA’s (8,21,50,100,200), CCI (Thanks Andrei), candlestick patterns, and other indicators like momentum, stochastics, RSI, and bollinger bands. Weeks 3 and 4 might have been a good week to take a sabbatical to just watch the charts and train my eye to spot patterns as they emerge as Andrei mentioned in one of his helpful comments this week.
In the meantime, I’m reading a lot and trying to learn as much as possible. I followed others advice and picked up a copy of "Trading in the Zone: Master the Market with Confidence, Discipline, and a Winning Attitude." I’ve also been lightly reading, "The Candlestick Course" by Steve Nison and "Day Trading the Currency Market" by Kathy Lien. Lien’s book is much better than I thought and has given me additional insight into the market that I otherwise would have missed.
Happy New Year!
Popularity: 4%
Reviewing the Weekly Charts
December 17, 2005
As I mentioned in my previous post regarding the Commitment of Traders Report, there was a substantial decrease in short positions in the EUR, GBP, CHF, and AUD. These positions were not replaced with long positions. I take this as being a consolidative signal as the balance between net longs and net shorts is approaching.
I’ve also been looking at the weekly charts as I do on most weekends. I wonder if the USD will have another down week? One chart I would like to point out in the CHF Weekly where RSI bearish divergence is evident.
; "CHF Bearish RSI divergence")
From what I’ve read about RSI, it was designed to anticipate price changes and if a divergence occurs, it should be taken as merely an alert for the trader. This alert raises the possibility that a reaction will occur or maybe a reversal of trend. Bearish RSI divergence IS NOT a sell signal. A swing trade should be confirmed with an additional indicator such as moving average crossover or the break of a trendline. A break of the trendline at 1.2650 could be a confirmation but as of now there is no moving average crossover confirmation as the 8 period EMA > 21 EMA > 55 EMA.
Popularity: 2%
Currency Trades made last night
October 27, 2005
I made 2 trades last night that are currently in negative territory. Both trades were based on overbought/oversold indicators using MACD, Stochastic, and RSI. I also based my trades on support and resistance lines. I’m sticking with these trades and setting wider stops than usual. Read more to view my trades.
Popularity: 3%
Forex Article - Trend versus No Trend
October 20, 2005
I read an excellent article this morning discussing the use of
trending and momentum indicators. It states that during a trend,
momentum indicators should be disregarded because they generate false
signals. If the currency pair is not in a trend (currency pairs
trade in a no trend environment 2/3 of the time), then momentum
indicators should be used. Technical indicators that are
mentioned are DMI, MACD, and RSI.
Popularity: 1%
Yen still trading tight
October 17, 2005
The question is, when is the Yen going to breakout? I’ve been
watching the Yen for a good week and a half and there is a stalemate
between buyers and sellers:
As
I write this, the Yen just hit 115.15 which is the highest it has hit
all year. It could just be a whipsaw though and that’s what I’m
willing to bet. The hourly RSI and stochastic are showing
overbought.
Longer term, I think the technicals still
favor the USD but short-term, the balance will return and the pair will trade in the tight range.
Popularity: 2%
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