Archive for February, 2007

Worst Day In 6 Years

February 27th, 2007 Jason

I am writing this from my laptop because 2 days ago my Trading PC (yes, that’d be the new one that I bought new 3 months ago) crashed. The power went out in for no good reason causing my hard drive to fail to the point where I wasn’t even able to get to PC Recovery mode. For the past 2 days I have been trying everything I could to recover my data and get everything back up and running. I received a new hard drive from the manufacturer today but they sent me the wrong Recovery Disks so I have to wait another 2-3 days before I can even hope to get back online.

That being said, it looks as if I’ve been missing quite a lot of action in the markets here recently with the Dow down 5 days straght with today being the worst day since september 11th. I don’t have access to my charting software but I was able to pull up a chart on http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=&time=&freq=. NOT PRETTY.

The technical damage here is huge! And while I’ll be looking for a bounce in the days (and maybe even weeks) to come, it is definitely time to go from bull to bear mode. There will be a bounce, so don’t go selling all of your shares tonight. But look to hedge your bets and scale out of some those profits as price approaches climbs back up to around where they opened today (but there’s no telling how long such a move will take).

Wish I could say more, but until I get my trading computer back online, I’m affraid that I’m out of commission here for the next couple days.

Despite whatever may have happened today, keep in mind that with this kind of move, there will be plenty of opportunities for very nice profitable plays. I look forward to jumping back into the fray as soon as possible.

Good luck everyone…

Posted in Uncategorized 10 Comments »

2-23-2007 Daily Trading Lesson

February 23rd, 2007 Jason
EUR/GBP Position Closed

I covered my 2 short lots today in EUR/GBP for a net profit of 80 pips (40 pip profit * 2). After yesterday’s drop I had adjusted my stop to break even and this morning I awoke to find that price had already touched my target of .6691 but didn’t penetrate it so I didn’t get filled.

I got antsy as the 1-minute chart started to roll over so I went on ahead and closed the position out at .6693 as I am heading out with my wife today to look for some stuff to put in our new home and wasn’t going to be able to monitor the position. I’ll try to do some more in depth market analysis this weekend (both in the equities and FX markets) to see where my next play is going to come from.

As for now, I gotta run. Happy trading!

Posted in Results, Trading Lessons, Uncategorized 5 Comments »

2-20-2007 Daily Trading Lesson

February 20th, 2007 Jason
EUR/GBP Hitting Resistance

I couldn’t help but fade this setup despite the fact that longer term, the EUR pairs have just broken out or area looking to do so and so are looking pretty bullish. But it was this EUR/GBP pair that really caught my eye.

Over the past 1.5 months, EUR/GBP has dropped 200+ pips in a very short period of time and has only now clawed its way back up to its original, untouched, starting point prior to the drop. This is usually a shortable setup in its own right, but add to that an FFF fade setup, price over-extension from the 10-EMA, and the rolling over ADX & RSI and it really is a no-brainer.

It may work, and it may not, but the Risk/Reward is very adequate for this kind of a play so I have gone short with a stop just over the most recent high looking for a pullback somewhere in between the 10 & 34 EMAs. If this play is going to work is should pan out within the next couple days. Anything longer than that and that could signify trouble for, as I said, I do like how the EUR is looking more longer term.

Posted in Trading Lessons, Uncategorized 10 Comments »

2-6-2007 Daily Trading Lesson

February 6th, 2007 Jason

I just wanted to give a quick update on my last EUR/USD trade. After it moved 80 pips in my favor I adjusted the stop to break even and was recently stopped out. It looks like it might be trying to roll back over so I am wondering whether I made a mistake by getting out too early, but I’ll be keeping an eye on it to see if I can jump back in.

Right now the two pairs that I’m monitoring most closely are USD/JPY & GBP/CHF. The former is dropping into an area of prior consolidation and might be worth trying out on the long side. The added bonus of USD/JPY is that it also doubles as a carry trade so that I’m pulling a pretty nice interest differential the longer it remains open.

The British Pound has been holding up nicely across all pairs here recently and has been in a nice, controlled, consolidating pattern against the JPY, USD, & CHF. But since I’m already watching USD/JPY I’m more inclined to ignore the GBP/USD & GBP/JPY pairs. Which leaves GBP/CHF which also carries a nice interest rate differential and is forming a bullish consolidation pattern.

There are a couple of ways I could play the GBP/CHF. I could wait for an upwards momentum breakout from the consolidation pattern with a stop under the most recent pivot low. Or I could wait for a pullback to the 34 EMA or 50% Fibonacci retracement. I’m leaning more towards the second option because I fear that any momentum breakout to the upside might turn out to be a momentum divergence and fail as the price has advanced 1500 pips already in the past 2 months already.

If I’m wrong, then I miss out on a nice run, but if I’m right then I can get in at a much better price so we’ll see.

Posted in Results, Trading Lessons, Uncategorized 10 Comments »
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