First Post Booker Trade

I opened my first "post booker" trade this morning at 4:15 a.m. in the GBP/USD following a break of the lower channel at 1.7849.  Since then is has worked itself against me a bit barely stopping my position out.  As of 4:42 a.m., my position is still open.  Of course it would be nice to come out on top in my first trade since starting 1 on 1 training but we'll have to wait and see.

There are some economic reports coming out of Eurozone and Germany during the current session along with U.S. Consumer Confidence and Existing home sales at 10:00 a.m. EST.  I'm off to the gym at 5 a.m. and will try to pick up the US session at 7 a.m. this morning (My routine sounds like Raghee Horner's.)  She has stated that she sometimes looks at European session action before going to the gym and then concentrates on the US session.  I was going to the gym before all of this so I don't want everyone to think I'm trying to fanatically emulate her behavior though if this is what it took to consistently be profitable, I would do it.

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 

Studying in Advance for Next Week

Booker has me a lot more attentive to upcoming Economic Releases and the trade opportunities that can arise.  Therefore, taking 1 day at a time, I took a look at the Global Economic calendar for Monday, April 24th to see if any pairs may exhibit volatility due to any releases.   It generally looks like a light day with NO economic releases out of the United States.  The UK does have a couple of releases at 4:30 a.m. EST including Retail Sales (month over month), Public Finances, and Money Supply (month over month.)  Last month during the retail sales announcement, the GBP/USD moved about 30-35 pips following. 

Therefore, I will plan on getting up at 4:00 a.m. Monday morning to look for a trade opportunity in the GBP/USD using short-term charts (15 minute?)

I'll be going through more of Rob's lessons this weekend and will keep everyone updated on my progress.

I hope everyone had a great trading week.   Have a relaxing weekend. 

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. 

Dooku Forex Trading System

I started to work on multiple trading systems over the last week or so and realized that I was falling into the same trap of trying to do too many things at once.  I decided this weekend to work on my first trading system more.  The first thing I did was give it a cheesy name so that I can distinguish it from all the others.  I have named it Dooku.  You can figure out on your own where I got this one from. 

This system was previously being tested on hourly charts with a risk reward of 1:1.  It tested well with a 50 pip stop loss and a 50 pip profit target.  The first thing I wanted to do was to get the risk reward to 3:1.  I successfully accomplished this and Dooku tests very well on the hourly charts with a stop loss of 75 pips and a profit target of 225 pips.  

I will forward test this system this week and going forward to see how it performs.  From my backtesting, it has never had a losing month.  I will forward test this with real money and 1 lot each trade.  I will use a 75 pip stop and a 225 pip profit target.  I will trade only the GBP and EUR.  From my calculations, this system will generate an average of 20 signals a month for each currency pair.

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)

Rob Booker Analysis Today

This information is already stale but good for those of you who want exposure to Rob Booker’s style. 

GBP/USD 1 Hour Chart 

Friday, the pair broke below the redline, and created a really nice short trade.  Here’s what I would consider now: a short trade on a break below the low of Friday, with a target of EITHER of the blue lines shown below.  The lowest blue line is the more aggressive target.  One way to handle this is to initiate the position immediately on a break below Friday’s low, then move the stop loss to break even when the pair hits the FIRST blue line below.  Then use the lowest blue line as the profit target.

 

 

 

My performance per Currency Pair

I decided to take a look at all of my trades since day one and find out which currency pair has been most profitable for me.  The results were interesting:

USD/JPY: +3720
EUR/JPY: +2400
GBP/JPY: +1370
USD/CAD: +890
NZD/USD: +470
USD/CHF: +420
EUR/GBP: -70
AUD/USD: -130
GBP/USD: -$410
CHF/JPY: -650
EUR/USD: -$1430

History says to stay away from the EUR/USD pair.  I had a feeling that the USD/JPY was my best friend.

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