Trades for the week of 28 September
Posted by The Lonely Trader on October 4, 2008
Whoops…with all of that volatility, I only took one trade! And it turned out to be the messiest pair of the majors. At the beginning of the week, I told myself I would stand aside until the weekend funk had a chance to work itself out. I didn’t get a signal until almost midnight on Tuesday. And it was the only decent signal all week.
01 October: USDJPY short
I noticed early in the week that USDJPY was acting differently than the other majors. It seemed to be exhausted after a huge day on Monday and an almost equally huge retracement on Tuesday. I realized after Monday’s mayhem that EURJPY was leading the way. More to the point, the Euro was taking it in the shorts across the board. (Get it?) I also noticed the JPY was doing quite well against the GBP.
If anyone is reading this, he or she has already asked, “Well then, dummy, why not just short the Euro?” Good question. Only problem is, I’m forward testing a real trading method, with a small account (albeit real money). And I didn’t have a signal. The most recent opportunity in a Euro-denominated pair was back on the 26th of September — A EURJPY signal at 155.38. (Shoulda, coulda, woulda.) And there were false signals galore. It was a messy situation and I entered the USDJPY trade with this in mind, although I was strangely confident that it would go my way.
Well, the trade did go my way, but it was painful to watch. So little progress in so much time — when the daily excursions were rolling at nearly twice the 60 day average for most other pairs on Tuesday, all USDJPY could do was eek out little more than half the other majors. Had I not entered so late, and in the middle of the channel that formed on late Tuesday and into Wednesday, my management would have been more positive as well as profitable. But there it is. This is the problem with trading hourly breaks in a swing model. (I usually look for other triggers at better value.)
So there it is. My account is now positive from inception, above $1171. Click on the chart above to open the trade journal entry.
Looking forward to next week.
