This has been my first full week trading forex since before Christmas and it's been a fairly lacklustre one overall. My 4 hour trading system (see right for more details) did manage to generate two winning trades out of two, so I can have no complaints there. However the Forex Morning Trade system only triggered two trades and they were both closed out at break-even. There were three days where the trading conditions were not met, as you can see below:

Monday: no trade
Tuesday: no trade
Wednesday: 0 (break-even)
Thursday: no trade
Friday: 0 (break-even)

To be fair the trade on Wednesday did come within a few points of the 40 point target, but sadly it didn't quite make it and fell all the way back to break-even. Nevertheless at least it didn't trigger any losing trades.

I had an email from someone complaining about how poorly this system had performed over the Christmas and New Year period. My response was that this is hardly surprising because all systems struggle to perform as well during this period because the markets are a lot quieter. Now that everyone is back at their trading desks I am fully expecting it to continue to make profits in 2011.

Moving on to my 4 hour trading system, there were two excellent set-ups. Well actually looking back there was one good set-up because the other trade that I placed was a breakout trade.

The system trade came on the USD/JPY pair on Tuesday morning. The Supertrend was green on the daily chart, indicating a bullish trend, so I went long on the 4 hour chart when the EMAs that I use crossed upwards. I went long at 83.04 and managed to close half the position for 40 points. I then moved my stop loss up to break-even and targeted 84.00, but sadly the price fell back to this break-even level.

The breakout trade was a very straight forward one. It was on the EUR/GBP pair yesterday morning. Looking at the 4 hour chart it looked as if this pair had fallen asleep because it had traded in a very narrow range between last Friday afternoon and Thursday morning.

It looked massively oversold anyway so when a 4 hour candle closed above this range, I wasted no time in entering a long position (at 0.8342). I set my stop loss at the bottom of the trading range and set my target price at 0.8400, and thankfully this was hit later in the day. I could actually have banked another 100 points in the end, but I was more than happy with the outcome.

So overall it was quite a profitable week overall. To be honest it was my stocks that really brought home the bacon this week, and Barclays in particular because my long-term target of 300p was finally hit, which automatically closed out four long-standing positions for a very nice profit. I'm now going to start building up positions in Tesco, Morrison and JKX if it falls a little further.

However that's enough about stocks. This is a forex trading blog after all.

If you would like to check out my main 4 hour trading system, you can do so my filling in the form above and subscribing to my newsletter.

Otherwise have a great weekend.