Ultra-Conservative Approach to Trading

I don't know if it is possible but the last couple of weeks I've been taking the ultra-conservative approach with tight stops and non-greedy limits.  It seems to be working for me so far but I have to be careful not to suddenly change my method and set a wider stop because doing so can easily wipe out all of my tiny gains. 

I'm actually very proud of a trade I had this morning because even though the USD was strongly pushing upwards against the CAD, I took my 25 pips that I set out to take when I opened the trade.  The proud feeling was when I saw the price immediately turn back down.  This brings me to my main point, should I be patient and let my profits run or take a small profit.  Over the last couple of weeks, I've seen some huge days especially with the Sterling where if I was patient, the gains could have been 100+ and even 200+ pip profits.  But if this market is trending only 20% of the time or less, am I doing the right thing by taking a profit one-fifth or one-tenth of the potential profit.  I really don't know the answer to this.  I'd also like to know if any of you think that a 60 pip profit target for a week is "weak."

I have to say that the more I think about my 60 p. profit target for the week, the more I like it.  Why? Because it fits my personality.  I have a hard time sitting around for days, even hours, while the price moves ever closer to stopping me out or eating into my profits.  I've also found that even when I think I'm trading the daily charts, I'm really not because I'm entering on the daily chart and exiting on either a 15 minute chart or strictly on discretion.  So what I'm getting at is for now, I'm sticking to the small time frames and depending on my progress may keep it that way at least for a while.

Popularity: 4% [?]

This week PROFIT GOAL REACHED!

I carefully reached my profit goal in Week 4:

Week #	Pip P/L	Gross P/L	Total # of Trades	Total Winning Trades	Total Losing Trades	Total Even Trades	Avg. Winning pips	Avg. Losing pips
4	61	$506.8	18	9	7	2	19.8889	-16.8571

This week, I profited 61 p.  If anyone remembers, my goal when I started Rob Booker training was to make a total of 60 p each week.  Trading 1 lot at a time isn't going to allow me to do this for a living but increasing this to 3 or 4 lots will.  I personally feel that a lot of people go into trading forex (myself included) with the thought that they need to profit many many pips each week.  When I say many pips, I'm thinking over 200 or so pips a week.  I hear how many traders not unlike myself profiting over 400 p for a given week which is absolutely possible but you also have to be honest with yourself.  Can you consistently make 400 p a week? I don't think it is possible!  Imagine the additional pressure you're putting on yourself when you're expecting even 200 p a week.  I find that keeping a pip target low and then raising your lot count is a more realistic expectation.  

The above trades were all day trades.  I do not have any position trades open and really haven't in a long time.  My goal is to continue day trading and then find position trades on longer term charts.

Making 61 p isn't easy.  I made 18 trades, profiting on exactly half.  I was very careful today and hesitated to make a short AUD trade which would have hit my target (30 p had I made the trade) because I was at +51 p and was satisfied with ending the week here.  I did see another trade this morning though and took the chance of going long on the USD/CAD.  I was still very careful placing a tight stop and only looking to stay in the trade if it went a little my way  I got out of the trade quickly for a 10 pip profit bringing my total for the week at +61.

To be totally up front, I really haven't sent Rob Booker email in weeks nor have I been following his "Chart School" all that closely.   I've been discretionary trading all week just like last and I don't know if it is a coincidence or not that I have been profitable both weeks.  I'm not trying to apply any new techniques but just trying to become more intimate with the techniques and indicators that I already have.   I haven't stopped learning or exploring new techniques or indicators but it really is just for exposure and because I feel the need to learn new things regularly.

I'm away until Sunday and will be back then to get ready for next week.  I hope everyone caught some good trades this week.  Take care. 

Popularity: 8% [?]

TIC Report and my CAD position

TIC data was released at 9 this morning and it was less than
forecasted.  Net foreign purchases of long-term securities were
$69.8 billion.  The forecast was for 80.2B.  I thought that
this would have been bearish for the dollar but the dollar took off
after the release.  I scratch my head sometimes and wonder why
what I thought would happen didn't.  Either way, I don't care
which direction the price goes because I was waiting for a channel
break either up or down.

The dollar did well overnight and my
long USD/CAD position was up about 70 pips during European session
trading.   Ahead of the NY session and the TIC report release,
some of the dollar gains were given back this morning.  I had
moved up my stop this morning to 1.1143.  I entered at
1.098.  The USD/CAD actually hit the .250 fibonacci at 1.1175 and
then bounced off.  This is where having multiple lots would have
helped.  I was watching  3 fibonacci levels:

.250 = 1.1175           .382=1.1280             .500=1.1374

If
I had entered with 3 lots, I would have placed a stop order at the .250
for the 1st lot and held on to the other 2.  This is all in
hindsight but something I thought about when entering this
position.  Either way, when the prices started consolidating a bit
this morning, I was stopped out at 1.1143 for a profit of 45
pips.  Should I have held on to the position longer? I don't
know.  I didn't want to give back all the gains if the dollar
started to get pounded again.  I figure I can go long again on a
break above the
.250 fib.

Popularity: 5% [?]

Forex Volume April 18th Report

The latest Commitments of Traders Report was released today.

Name	Open Int	Long Pos	Short Pos
Crude Oil	495795	183102	116353
CAD	40999	23225	16307
CHF	43779	10744	32912
GBP	49814	27302	22208
JPY	118999	38749	79890
USD Indx	18272	11223	4994
EUR	86016	70019	14677
NZD	6072	5272	800
AUD	30108	20597	9436

Crude Oil – ↑ Very Bullish

CAD – ↑ Very Bullish

CHF – ↓ Very Bearish

GBP – ↑ Bullish

JPY – ↓ Very Bearish

USD Index – ↑ Very Bullish

EUR – ↑Very Bullish

NZD – ↑Very Bullish

AUD – ↑Very Bullish 

Popularity: 6% [?]

Most Volatile Pairs during Asian Session

Before I dive into this post, let me tell you that from everything I've read and watched from Rob Booker (and from everything he has directly told me) it doesn't seem like the Asian session exists to him.  Now he hasn't told me this exactly but he seems to concentrate his effort on the NY Session from 7 am EST – 11 am EST.  I told you earlier today that when he was working full-time, he was trading the European session and he did tell me yesterday that you will get a lot of trade opportunities from 4 am EST.  So from the information I've gathered, I'd have to say he recommends trading during the hours of 2 am and 11 am EST.  

What about the Asian session?  For those of you that work in the United States or Canada or anywhere close to the Eastern Time Zone, the Asian session gives us a chance to actually trade when we get home from work without having to get up in the early morning hours with 1/2 a nights sleep to trade the European session.   

I will ask Rob if he recommends trading the Asian session or if any of his student have success doing so.

What I wanted to do in this post was to mention the most historically volatile pairs during the Asian Session thanks to Kathy Lien from FXCM.  Kathy did a good amount of research on this subject and I thank her for the information though I have asked for absolutely no permission to use it.  These PIP ranges are for the time period between 7 p.m. – 4 a.m. EST

Currency Pairs	PIP Range
GBP/JPY	112
GBP/CHF	96
USD/JPY	78
USD/CHF	68
GBP/USD	65
AUD/JPY	55
EUR/CHF	53
EUR/USD	51
USD/CAD	47
NZD/USD	42
AUD/USD	38
EUR/GBP	25

As you can see from the chart above, the best options for risk-tolerant traders during this time period are the GBP/JPY, GBP/CHF, and USD/JPY.

For risk-averse traders, AUD/JPY, GBP/USD, and USD/CHF provide more moderate volatility.

The only problem I see with the risk-tolerant pairs, at least 2 of them is the spread.  The GBP/JPY spread at FXCM is 9 pips, the GBP/CHF 15 pips! The USD/JPY offers the lowest spread on FXCM at 4 pips.

The risk-averse pairs are a bit better spread wise with AUD/JPY at 8 pips, GBP/USD at 5 pips, and the USD/CHF also at 5 pips. 

Popularity: 7% [?]

Learn:Forex Exclusive Guest Idea

EUR/CAD – April 6th, 2006

 

Our attention is looking away from the USD based pairs with the NFP report due out Friday.

 

Notice the EUR/CAD has been on a month long uptrend with one
correction. We feel it is due for another minor correction. Why? There
are a few things pointing in this direction. First, the candle pattern
(a shooting star). Second, notice the high of the wick yesterday
attempted to test the .618 fib. Fourth, the resistance in this area.
And finally look at the momentum indicator at the bottom…divergence is
forming.

 

 

 

 

 

Popularity: 3% [?]

fxcmtr.com Guest Trading Ideas

I still have an account balance at FXCM and therefore am entitled access to their "Trading Room."  The primary feature that I visit on a daily basis is their Guest Trading Ideas section.  Currently there are 8 guests providing trading ideas.  Some guests provide ideas on a daily basis while others come and go as they please (ie: Rob Booker.)  I find some better than others but anything that may show me how others are seeing the market can only be beneficial.  Who are the guests?

1.    John Dean from Currency Insight Ltd
2.    Marius Alexe from Phincorp Capital
3.    Learn:Forex
4.    Jes Black from Black Flag Capital
5.    Black Swan Capital
6.    Jared Martinez from Market Traders Institute
7.    Dynamic Trend Profile
8.    Rob Booker 

I’m going to provide some of their ideas in the coming days so we can all see how beneficial their comments are. 

I’m providing John Dean’s Guest Trading Idea below:

USD/CAD – March 29^th, 2006

Near term USD trends continue to improve with evidence building to suggest an important/cyclical low is now already in place at 1.1300. Previous/notable reactive highs around 1.1800 are targeted next and once this supply level gives way a re-test of the psychological 1.2000 level is anticipated.

 

 

 

 

 

Popularity: 6% [?]

March 7 Commitment of Traders Report Released

As always, visit http://www.forexproject.com/Forex_Volume to view "Forex Volume"

CAD – No significant changes, VERY BULLISH
CHF – 22,373 less short positions, VERY BEARISH
GBP – Increase of 4,081 short positions, BEARISH
JPY – Increase of 14,161 short positions, BEARISH
EUR – Increase of 3,519 short positions, MIXED to slightly BULLISH
NZD – no significant changes, BULLISH
AUD – increase of 4,899 short positions, MIXED

Popularity: 4% [?]

CFTC report for February 28th Released

As always, the "Forex Volume" reports can be viewed at http://www.forexproject.com/Forex_Volume/

Summary:

1.  CAD increase of 8,221 long positions (Sentiment:  Very Bullish)
2.  CHF increase of 23,807 short positions (Sentiment: Extremely Bearish)
3.  GBP decrease of 11,359 short positions (Sentiment: Bearish)
4.  JPY decrease of 33,735 short positions, increase of 14,628 long (Sentiment: Bearish)
5.  USD Index had no major changes (Sentiment: Extremely Bullish)
6.  EUR increase of 8,785 long positions (Sentiment: Bullish)
7.  NZD had no major changes (Sentiment: Bullish)
8.  AUD decrease of 3,474 long positions (Sentiment: Neutral)

Popularity: 3% [?]

Dollar Strength and EUR/USD Channel

I’ve been trading the EUR/USD since yesterday evening and caught the breakdown below 1.1855.  The USD has not been able to push below 1.1827 though and until then the price may remain in a 60 pip channel.  

 

 

 

 

 

 

 

I’m up a little more than $400 to start the week in realized gains but as of now am only in a short EUR/USD position that I entered on a pullback last night.   There haven’t been any major developments since the Asian trading session set most currency pairs in motion except for the USD/CAD which has broken down nearly 75 pips from yesterday evening.  I was actually long on a USD/CAD position yesterday and decided to get out after hearing that some favorable economic reports were expected from Canada this morning.  This demonstrates some good behavior on my part with an exit of the position with a $100 loss.  I didn’t see the pair doing what I would have expected from my technical analysis and wasn’t aware of the economic reports coming out of Canada when I entered the position.  What good would it have been to stay in the position?

Popularity: 5% [?]

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