I executed 3 trades this week. Let’s take a look at them:
1) 8th March: Short GBP/USD at 1.5151
I took this trade a few hours before I went LIVE on CNBC. I just wasn’t convinced that the Sterling was going to continue edging up. I mentioned on CNBC that the Sterling wouldn’t touch 1.52 and it would fall all the way down to 1.50.
The best way to “put my money where my mouth is” was to take the trade! From the chart, you can see that the highest price on the candle was 1.5194. It dropped to 1.50 about 12 hours later; and has since broken 1.49.
From the chart, you can see that I actually tightened my stop along the way. Stop was initially at 1.5251 but I tightened it to 1.5048 to lock in a 100 pip profit.
Price went on to hit my target of 1.5000.
Result: 151 pips profit. Here’s the chart:
(Click to enlarge)
2) 8th March: Short GBP/JPY at 136.95
Support level at about 139.36 was broken on 25th Feb. After making a new low of 132.17 on 1st March, I waited for a retracement before going short again (since the momentum was down).
Went short at 136.95, and decided on a stop loss of 200 pips. I didn’t enter a profit target for this one; although I knew that my minimum risk/reward ratio had to be 1:1 for this trade. I exited at 134.90.
Result: 204 pips profit. Here’s the chart:
(Click to enlarge)
3) 11th March: Long EUR/CHF at 1.4605 (Trade in Progress)
My pending order for the EUR/CHF was triggered on Thursday evening. There was an immediate “spike” of about 25 pips once the price dipped below 1.46. I don’t think it was the SNB, but it does look juicy. Let’s see if the SNB steps in and jacks it up another 150-200 pips!
14 pips in the money so far. Here’s the chart:
(Click to enlarge)
EUR/CHF Trade Update on 15th March 2010
My stop loss of 1.4555 was hit at 4.45pm in the afternoon today (Singapore Time). Lost 50 pips. The chart is still moving downwards as I write this. It’ll be interesting to see at which point the SNB comes in to weaken the Swiss Franc again! Well, on to the next trade I say!
I executed 4 trades this week. Let’s take a look at them:
1) 1st March: Short EUR/USD at 1.3638
Strong downtrend on EUR/USD, so remember, we should only think about going short. I went short near the top of the trading range (Resistance at 1.3680 and Support at 1.3445). Stop loss was placed above the previous high, and out of the trading range; hence 1.3708. Trade exited in about 2 hours.
Result: 80 pips profit. Here’s the chart:
(Click to enlarge)
2) 1st March: Short USD/CAD at 1.0515
On the 1 hour chart, the uptrend line was broken on 26th Feb with the candle’s closing price of 1.0518. Went short a couple of days later at around the same price (entry at 1.0515) because data coming out from the markets was positive for Canada and weak for US. I identified a Resistance at 1.0573, so I placed a stop above it at 1.0585. Trade exited in about 6 hours.
Result: 80 pips profit. Here’s the chart:
(Click to enlarge)
3) 2nd March: Long AUD/USD at 0.8971
This trade was taken because RBA (Reserve Bank of Australia) just increased rates to 4% (from 3.75%).
The RBA stated that, “In Australia, economic conditions in 2009 were stronger than expected.” Top corporate giants like BHP Billiton (world’s largest mining company) and Woolworths (Australia’s largest retailer) also recorded strong corporate profits.
This was an aggressive trade, because I entered a few minutes after the news announcement.
Result: 50 pips profit. Here’s the chart:
(Click to enlarge)
4) Pending Buy Order for EUR/CHF at 1.4605
The last intervention by the SNB (Swiss National Bank) was on 5th Feb. This gave me a “clue” that they may not let the currency pair fall below 1.46. Although the EUR/CHF pair is moving like a snail now, it’s really exciting to see it “take-off” when the SNB intervenes. Typical interventions can cause it to soar about 100-200 pips.
I put my Stop Loss about 10 pips BELOW the “candle’s low price” of 1.4567 on 5th Feb. Going for 160 pips profit on this one. Here’s the chart:
(Click to enlarge)
Good harvest for the week: 210 pips profit.
I’m also looking at GBP/AUD (again!). From the daily chart, you will see that on 26th Feb, a candle finally closed below the Support level of 1.7250. It will be a good Short trade when the chart retraces back to about 1.6850.
I triggered just one trade during this period. Here it is:
1) 8th Feb: Short USD/CAD at 1.0740
Been watching the chart for a while, and I noticed a resistance level at about 1.0760. Hence, I went short at 1.0740. Took profit at 1.0597. Banked 142 pips on this one. The price has dropped a further 150 pips since I exited. Here’s the chart:
(Click to enlarge)
What? No more trades?! Unfortunately, the answer is Yes, no more.
I’ve hit my target for Feb so it’s a wrap, well, at least for this month.
Been keeping a close eye on EUR/USD though. As I mentioned on CNBC last week, the markets are overwhelmingly “short.” However, rather than execute a trade now, I’m choosing to wait a few days for the market to digest the meeting in Brussels; where European finance ministers gathered to discuss “bailout” support for Greece.
So far, what’s on the table is 2 main points:
1) “Financial markets are completely wrong if they think they can destroy Greece,” Jean-Claude Juncker, Luxembourg’s prime minister and chairman of the finance ministers’ meeting in Brussels, told a news conference.
2) The EU has given Greece 3 months to take “urgent measures” to rein in their problems.
No cash hand-outs; yet.
Over to you now. I’d love to hear from you again. We had a really great time last week discussing about last week’s trade. Everyone learned from one another’s questions. Let’s keep this up!
So… here’s my request to you again:
1. What is your Biggest Takeaway from This Trade Review Today?
Here’s what happened last week. I executed 4 trades. Err… ok you got me. It was 5 trades actually
And while I had voices in my head screaming “OVER TRADING!”, I took them nonetheless. So here they are:
1) 2nd Feb: Short USD/JPY at 90.67
Reason for the trade: On the higher time frames, USD/JPY was making nice lower lows and lower highs, a classic distinction for a downtrend. I didn’t put a profit target on this one (a big NO-NO), but I exited the trade a day before the release of the NFP figures. I typically don’t like to hold short-term trades over big annoucements. So check out Murphy’s Law: just as I exited, the price fell ANOTHER 150 pips in my direction! Haiz… that’s the way the way the cookie crumbles.
Nevertheless, I’ve been taught not to “worry about trades that you’ve exited.” So, didn’t lose much sleep on this one.
Result: 52 pips Profit. Here’s the chart:
(Click to enlarge)
2) 2nd Feb: Short GBP/USD at 1.5921
Reason for the trade: Can’t think of anything mysterious for this one. In a downtrend, I go short. That’s the mantra. Stopped out for this one. As if to taunt me, the charts went higher to 1.60 then plunged like a rock to 1.55.
Result: 63 pips Loss. Here’s the chart:
(Click to enlarge)
3) 2nd Feb: Short CAD/JPY at 85.47
Classic trade. Chart was trading in a nice 200 pip range after hitting a new low of 83.64 on 27th Jan. Went short near the upper border of the channel. Here’s where I SCREWED UP: I initially set a profit target of 84.41 (to net a total profit of 106 pips), but my ITCHY FINGERS closed out the trade after I was 71 pips in the money. MAJOR LEARNING LESSON: Get away from the laptop after you’ve entered the values! You will see from the chart that it did hit my profit target. Gave up 35 pips on this one…
Result: 71 pips Profit (could have been 106 pips if I wasn’t distracted by something else!). Here’s the chart:
(Click to enlarge)
4) 2nd Feb: Short EUR/USD at 1.3919
Although the EUR/USD is in a firm downtrend, this was a WRONG TRADE because I was already in a GBP/USD trade earlier on. Let me explain. Based on readily available data, the 2 currency pairs of EUR/USD and GBP/USD have exhibited a strong 87% positive correlation over the last 1 week alone (and 88% for the last 1 year). This means that if GBP/USD moves downwards, there is a 87% chance that EUR/USD would also move in the same direction.
Now, it is a WRONG TRADE because I was ALREADY exposed to a possible loss on the GBP/USD trade, and I basically “added on” to that risk with a EUR/USD trade. BAD BOY!
Result: 53 pips Loss (and you wonder why!). I kicked myself on this one! Here’s the chart:
(Click to enlarge)
Incidentally, all 4 trades were executed within 4 hours. On hindsight, it was a little “over the top.” Got to stick to my trading rules!
Major learning lesson #1: DO NOT meddle with your trades once you’ve entered them (remember the CAD/JPY trade where I closed it early). The ONLY time you are “allowed” to do so is when you tighten your stops.
Major learning lesson #2: DO NOT take trades on pairs that exhibit very close correlations at the same time (unless you’ve either closed out the first one, or made it a risk-free trade by tightening your stop). You could either win both, or lose both. This would be gambling. Not trading.
5) 4th Feb: Short GBP/AUD at 1.8175. Trade in Progress.
This is a long-term trade. My stop is at 1.8400 and profit target is at 1.7675. Slightly more than a 2:1 risk/reward ratio. Going for 500 pips profit on this one. Very nice downtrend on the daily charts, and price is near resistance on the range channel. Plus point is the swap earned per day.
About 200 pips in the money for this one already. Here’s the chart:
(Click to enlarge)
Total pip count for the week:
1) Short USD/JPY: 52 pips profit
2) Short GBP/USD: 63 pips loss
3) Short CAD/JPY: 71 pips profit
4) Short EUR/USD: 53 pips loss
5) Short GBP/AUD: Trade in Progress
Over to you now. I’m eager to hear from you. I started this blog so that you can comment and interact with me!
Ask anything by using the comment box below. This way, everybody can read your questions and my answers, and learn from it. You can learn from everyone else too.
So… let me know your thoughts! For example:
1. What is your Biggest Takeaway from This Trade Review Today?
2. What is your Biggest Question?
GBP/AUD Trade Update on 11th Feb 2010
I exited the trade with 530 pips profit. I actually expected to hold this one for about 2 weeks, but it hit my profit target in about a week. Sweet! The plus point is the positive swap earned per day. Here’s the chart:
The blog launch on 25th Jan 2010 was a success! More than 500 people signed up for it. Thank you for your strong support! This segment, “Take A Pip!” will discuss everything on possible trade ideas, trade reviews and learning points.
So let’s start with the trades. I executed 3 trades last week:
1) 27th Jan: Short GBP/USD at 1.6214. Profit was taken in about 24 hours. Reason for the trade: the chart was in a downtrend; and resistance was at about 1.6250. Profit 76 pips. Here’s the chart:
(Click to enlarge)
2) 28th Jan: Long EUR/GBP at 0.8657. Trade is still in progress. I’ve moved the stop above the entry price, so it’s essentially a risk-free trade. Price is currently 68 pips above entry price. Here’s the chart:
(Click to enlarge)
3) 29th Jan: Short USD/JPY at 90.79. This was right after the release of US GDP numbers of 5.7%. While seemingly good, I didn’t feel that it was sustainable. Profit 80 pips. Here’s the chart:
(Click to enlarge)
Good harvest for last week! 156 pips in the bag and potential for more in the current EUR/GBP trade.
EUR/GBP Trade Update on 5th Feb 2010
I exited the trade with 102 pips profit. I got out because there was some news due to be released for the Euro Zone, and I typically don’t like to hold short-term trades during such announcements. Here’s the chart:
(Click to enlarge)
Total pip count so far:
1) Short GBP/USD: profit 76 pips
2) Short USD/JPY: profit 80 pips
3) Long EUR/GBP: profit 102 pips
Total pips in the bag: 258 pips for the week. Not bad, but not getting ahead of myself. Don’t think the unblemished record can continue for long though.
Looking forward to some losses. I’ll try my best to post the trades as soon as I take them. No promises though.
However, my advice is this: don’t follow my trades just because I take them. That is NOT the intention of my blog. You need to spend a bit of time to understand your trading profile and couple it with risk management before you can become a successful forex trader. My trading style couples both short-term and long-term possibilities.
The market is BIG ENOUGH for all of us to win. The key word here is personal responsibility. I take FULL responsibility for my trades. You need to do the same.
