This morning the Euro broke out against the Yen and the Pound. But it was the EUR/USD pair that caught my eye. It has been consolidating downwards for the past 2 months in a very orderly manner but never really in an out of control manner. So today, when price broke out above Friday’s high I went long with a close stop under Friday’s low. My initial target would yield a solid 3.5 R/R.

If this trade is going to start moving, it should do so sooner rather than later and it is by no means out of the woods as a good argument could just as easily be made for shorting here in the 8/34 EMA sell zone created when both EMAs are sloping downwards and price is approaching from underneath. So I’ll have to watch it closely tomorrow and if nothing positive happens within a day or two (and I haven’t gotten stopped out), I’ll really have to start tightening up my stop.

The good things this trade has going for it are MACD cross and psuedo RSI divergence. Price is trying to map out a double bottom, but like I said, the next couple of days will be very telling. The EUR/JPY has been in a very strong uptrend for the past few months and until some technical damage appears on the chart, it’d be hard to bet against its continuance. What worries me is this EUR/GBP chart:

It has definitely sustains some technical damage and I will expect some strong resistance in the neighborhood of the yellow line. Once price reaches it, if there has still been no movement on my EUR/USD trade, then I’ll have to really to tighten my stop and even start thinking about going the other direction.

Time will tell soon enough, but right now, the 3.5 to 1 trade-off make it worth the attempt.

I finally managed to throw together a basic spreadsheet to analyze my FX trades and I am happy to report that I am off to a great start so far! My win/loss ratio is over 50% which is always nice, but what is really incredible has been the average return for the trades I have taken so far; Almost 70 pips / trade!!!

Grant it, those last 2 shorts in GBP really went a long way towards that end. I’m trying to pick my spots very carefully and as of this moment I am flat, but have a couple of pairs that I am watching. Now that I have the spreadsheet, I hope to post more daily updates and a continuing log of my trades as I continue to move forward with my foray into the FX markets. So far so good, we’ll just have to wait and see if i can keep 8:1 ratio on my winning/losing trades.

Have a great weekend. My wife and I are going house hunting tomorrow as we hope to move to Williamsburg, VA in a couple of months. Wish us luck!

Today eneded with a complete mental breakdown. This morning I felt very aware and patient. I made a couple of mistakes but I was able to keep them small. Subsequently, by mid-day I was within $10 of my daily goal and only needed 1 successful trade to push me over the edge. I waited for hours for something to come up.

The market moved, yes indeed, but I didn’t see anything that really was screaming at me. Then around 3:00 E.S.T. I saw a little trade that I thought might do it. In hindsight, the trade was OK at best and soon after I entered the TRIX reversed on me which should have been the sign for me to cut my losses, keep them small, and wait for the next setup. Instead, I stubbornly held on until my original 1 point stop was hit and in an instant erased an entire days worth of profits.

Oh but I didn’t stop there. Still steaming from the loss, I then proceeded to jump right on into a trade 5 minutes later without ANY of the factors firing off that would have made it even an OK trade. It was simply a pure gamble and within another couple minutes I had taken my second full stop of the day and turned a +1.10 R-unit returning day into a -2.20 R-unit loss. There was just not excuse for that last trade, and I am embarassed to have made it.

Consecutive Days Hitting Net Daily Goal: 0
# Days Hitting Goal out of Last 20 (with goal of 16/20) : 3/6
Weekly PnL (Stop = -6.66) : -1.10 R-Units
Total PnL this Level (Stop = -10.00) : -3.54 R-Units