Yen Swing Trade Analysis
TRADE
Date: Friday, February 24th
Entry: Short USD/JPY at 117.05
Reason for trade/setup: With a downward trend in motion, I was looking for a swing trade to short the USD/JPY. I was waiting for price to retrace back up where a minor Asian session breakdown occurred several hours prior at 117.10. The DMI indicator was used as confirmation that the existing trend was still in place.
Initial Stop: 117.19; the high of previous bar
Initial Target: 116.40
RESULT
Exit: 116.76
Reason for Exit: End of day
Profit/loss: +29 pips/ +$745.10 (3 lots)
Trade executed according to plan? yes
Outcome: This trade entry went exactly according to plan so much so that it surprised me. The price didn’t reach my limit and that didn’t surprise me.
Thoughts: The market doesn’t generate trades like this everyday and this setup would only apply to trending markets.
; "Forex swing trade")
12 Weeks Trading Forex
With 12 weeks of trading forex in the books, I currently have a balance of $17,346.74. I started with exactly $10,000 12 weeks ago with the goal of quitting my job to trade full-time by October 1st of this year. That would leave me with 218 days left. After about 3 months of trading, I cannot make a determination if this is a realistic date or just plain crazy. As I’ve stated before, I live in the New York city area where the cost of living is higher than most cities in the United States. I realistically need to make at least $100,000 a year to support my lifestyle. This includes food, a roof over my head, transportation, and a retirement plan not to mention student loans. In 12 weeks, I’ve profited $7,346.74 which averages to $31835.87 for a year. That is not going to cut it nor is it guaranteed that I will consistently make money each month. If I look at my performance in 4 week increments, things tend to look a bit better.
Weeks 1-4 +1101
Weeks 5-8 +1779
Weeks 9-12 +4467
This week I started out down similar to last week. I rallyed back to end the week down only $300. This is the second straight week where I had to bite and scratch to get closer to the black. I made some stupid impulsive trades but generally had a decent week sticking to my plan.
I’ve come to the conclusion that I’m a lot more effective when I place an order that doesn’t fill at the current market price. Instead of going to the price, I let the price come to me. Last night, I placed an order to sell the USD/JPY at 117.05 when the price was trading at 116.70. Eventually my order was filled and I ended the week making about $800 on this trade. When you let price come to you, trading becomes a lot less impulsive. There is no question that I’ve made a lot more money in my sleep than when I’m awake. You can’t overtrade, change your strategy, or act impulsively when your fast asleep in the middle of the night.
I haven’t had time to put all of my Trade Analysis down on "paper" yet but I will get to it this weekend. Don’t forget that there are 2 Raghee Horner webinars this weekend. They are free and I’m sure space is still available. I went to her last 2 webinars and found them motivational and beneficial. I hope to hear some of you there tomorrow.
USD/CHF 2006-02-21
TRADE
Date: Tuesday, February 21st
Entry: Short USD/CHF at 1.3082
Reason for trade/setup: Using the 240-minute chart, there was the presence of a downward trend line above. In addition, a momentum indicator that I created and am currently testing indicated a short opportunity. Furthur confirmation was obtained from the 3-period, 5-period Price oscillator using EMA and the continued downward movement of the 8-period, 21-period Price oscillator. Stochastic crossover and a decreasing rate of change since early February provided double-secret confirmation.
Initial Stop: 1.3121, the high of the entry day.
Initial Target: 1.3050 then 1.2950 which are horizontal support lines.
RESULT
Exit: 1.3121
Reason for Exit: Stop Loss triggered
Profit/loss: -38 pips
Trade executed according to plan? yes
Outcome: After trade entry, the pair had remained close with the downward trend line. Volatility was non-existent during Asian session. The USD was bullish going into the European session and the pair went as high as 1.3153 stopping me out of the position between 3 am and 7 am. This trade never moved in my favor by more than a couple of pips.
Thoughts: All the indicators in the world can’t predict the future. I seemed to have multiple confirmation, felt great about the trade, yet it didn’t turn out well. I feel good about executing the trade though because I didn’t go against my plan. I saw a possible setup and pulled the trigger. If I could do it all over again I would make the trade again but may have waited for an increase in volatility. In addition, I probably set my profit targets too high considering the lack of price action this week.
