January 28, 2011

Weekly Trading Update - 24-28 January 2011

This week was very dull on the trading front. Nothing seemed to happen at all. My shares have hardly moved, my 4 hour trading system generated one small winning trade, and the Forex Morning Trade system finished the week at break-even.

Let's start by discussing the Forex Morning Trade system first of all. I have to say that my admiration for this system is starting to wane now. It's no fun getting up at 6.15 AM in the middle of winter, and it's even more frustrating when it was all for nothing, as was the case this week. You can see the results below:

Monday: no trade
Tuesday: no trade
Wednesday: -40 points
Thursday: 0 (break-even)
Friday: +40 points

I would never put anyone off buying this system because I still haven't had a single losing week since September, when I first started using it. However the profits, if any, are often in the region of 40 points and the hours are not that convenient for some people. I think I will probably continue trading it for a few more weeks, but it is definitely on trial because I quite fancy another hour in bed every day.

On to my 4 hour trading system now, and there were two signals overall from the major currency pairs. The EMAs crossed upwards on the 4 hour chart of the USD/JPY pair, and this could have been a decent opportunity to go long, but unfortunately the crossover candle was huge (94 pips), which automatically ruled it out for me.

The other set-up was on the GBP/USD pair. The trend was still upwards (according to the Supertrend indicator on the daily chart) so I was looking for an upward EMA crossover on the 4 hour chart and this occurred on Wednesday night / Thursday morning.

I really didn't fancy this one at all because I'm still quite bearish about this pair, but 1.5900 seemed like a good place to go long. Luckily the price did go up 50 points, allowing me to close half the position and move my stop loss to break-even, but unfortunately it didn't quite hit my next target of 1.6000. In fact it eventually fell back to break-even, so it was only a modestly successful trade in the end.

At the time of writing I am really tempted to open a short position at 1.5885 as the EMAs have crossed downwards again, but I think I am going to resist the temptation because this would be trading against the daily trend, and it's never a good idea to open new positions on a Friday in my experience.

There was one other trade I want to tell you about. I found this one completely by accident yesterday afternoon. I was looking through some of my saved templates / systems on ProRealTime yesterday and opened up by CCI divergence system because I haven't used this one for ages.

Anyway it just so happened that when I opened it, I was presented with a 15 minute chart of the EUR/USD and there was an absolutely perfect set-up right before my eyes. This pair had had 3 highs during the day, all around the 1.3758 mark, and on each occasion the CCI (10) and CCI (60) were getting progressively lower at these high points, which was a great divergence signal and therefore an excellent signal to go short. So I did so at 1.3732 and closed my trade at 1.3700 for a profit of 32 points.

I had completely forgotten about this system as I have so many now, either completed or under development. However I will definitely be paying more attention to it now as I've always liked this particular system.

Anyway that's about it for this week. I'm not really bothered about the modest profits I've made in the last few weeks because the major positive for me this week was that my health seems to be improving at long last. After having chest and stomach pains for the last three months or so, I have had three good days now where I have been a lot better. So hopefully I am on the road to recovery.



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