Systematic FX Trading Journal

Switch EURUSD and USDCHF values ;). Made a mistake on the quote.

Intermediate term trader closed off its long dollar position against the three vanillas with a combined loss of $115.14. However, its short EURJPY paid off which is still open and up $112.98 and counting. It is now short USDJPY since 109.73. S

Short term trader not doing much up some 15 dollars on mixed trading.

Overall not the best trading day I have had but it could have definitely been worse.
 
Thanks quickturtle! Best of luck to you as well.

Well not the best day for me. Positions getting hit by the whipsaws. The EURJPY trade went out of line and closed for a mere 6 pip profit (after getting hit with a 1 pip swap fee) for a profit of $8.93 only. Still sitting on the USDJPY short trade which is in pretty big negative territory with the current dollar bull run after that small trend reversal. Currently down 38 pips+the 1 pip swap fee I got hit with for an unrealized loss of $67.40. Definitely not the best of times for trend following traders. Glad I got out of those dollar long positions earlier with a relatively small drawdown rather that ride this rollercoaster.

As for equities, the GOOG short is looking great. Another day with the broader markets in slight positive territory while the darling of Wall Street Google is down another 5.99 (2.41%). Sitting on a 6.5% unrealized gain as of now. MUSA and MUSAW just stagnating around their levels and were down a few cents.

One thing to note is that Telkonet (TKO) has hit an important support point today that exists in the 2.50-2.55 region. I am getting my trigger finger ready to long this stock if I see the support holding. Otherwise going to stay out of the position. I am bullish on the stock on a fundamental basis as well as I believe their technology is going to be in high demand in the US as well as in Europe where they operate. Will update if I hold a position.

Here is a TKO chart: http://img.villagephotos.com/p/2005-8/1064681/TKOchartaug23.GIF

As for the broader market they are basically stagnating at the support point identified during the weekend. Might open some position in QQQQ and SPY if I see some opportunities there.

Good trading everyone!
 
I have decided to short Baidu (BIDU) today. James Roger said "short hysteria and buy value". Well thats what I am doing! Lets view the checklist:

-Technicals
-in a downtrend: check
-high volume during the downturn: check

-Fundamentals
-high valuation: check
-overhyped by Wall Street: check

No stock deserves a valuation that is in the QUADRUPLE PE range. However, the picture isnt crystal clear. Its volatile and there is a growing short float. So any news or big bull push can multiply itself (as we saw today). However, I still believe that the picture is clear enough to give me conviction about the trade. So today went short BIDU at 79.8 a share. Currently at a loss with the price hovering at 82 but lets watch and see. I am bearish on the internet search industry in general as I believe it has been over played by Wall Street and needs to be brought back to earth. One risk I do have is the correlation between BIDU and GOOG shorts I have. This is why I will tread water carefully so not to have a big loss on the account.

As for FX systems are holding their own during these choppy times. Few losses today but nothing too big. Still sitting pretty since start of the journal. Currently systems are trying to feel out different high momentum levels to initiate a position and closing out quickly when the position's mometum disappears. Currently long the dollar on a variety of pairs and long Yen vs. the euro. Lets see some trends occuring so we can capitalize!
 
FX

Pretty rough! A lot of whipsaws this week reminds me of the start of last week. Systems trying to pick the start of new trends but getting stopped out by the criteria stops in place. Overall for this week I am down 210 dollars. Last weeks profit still keeping me net positive so not worrying much.

Equities

That BIDU short is in the positive region now after todays fall. Up some ~2.5% since initiating position. GOOG short gave back its gains that it had this week and currently up ~3.6%. MUSA and MUSAW stagnating along which I am happy with. The buyout should be completed in a few months time.
The boarder markets cracked support. Gives me more conviction to hold on to my 100% directional short portfolio.

TKO continuing its freefall. My momentum and trend indicators keeping me out for now. However, I will begin bottom picking soon as the acceleration should taper off in a few days time possibly.
 
Wow. I just realised that I didn't have my trailing stop function on. No wonder some of the 40+ pip winners last night ended up costing me 200 bucks. Human errors like this annoy the heck out of me :mad:.

Oh well. Currently account recovering nicely. Down just 40 dollars for the week. Only position worrying me is the long EURJPY which was up some 50+ pips but now up only 23 pips or so after some big reversal. Lets see how it plays out.
 
Closed out all positions as of now. Made up almost all of this week's losses. So ending the week with a loss of $51.52. Not really a terribly bad week. The reason I have closed all positions and stopped all trades for the remainder of this week is because I have made some key changes to both the systems and the account operations as to ensure future longetivity as well as profitability. The changes will make the systems much more robust in nature as almost all factors in the positions decision, risk management, and money management will be undertaken through the use of price and time. The changes will also have a more effective method of dealing with ranging times (such as this week) and make more profits per positions than before.
I have also diversified fully into a range of pairs that should make the positions uncorrelated in nature and reduce drawdown risks further. A total of 10 pairs will be traded. They are: GBPUSD, EURUSD, USDCHF, USDJPY, USDCAD, GBPJPY, EURCHF, AUDJPY, AUDUSD, EURGBP.

P/L (since starting journal): $627.77

As for equities positions took a hit all round today but no damage really. Net positive.
 
Even though I am a systematic trader I still do like to analyze the markets and try to give an unbiased, reaction based trading view. So here is my thoughts for the coming week on four pairs:

EURUSD

There is some very strong resistance overhead. Especially on the H4 charts where we saw choppiness last week and eventually a break as sustained momentum was nonexistent on the upside it will be interesting what happens next week. As for the current situation we have EURUSD sitting on a strong support level with a 23.6% fib and a major horizontal support level in the 1.2250-1.2260 level. Also have a upward sloped trendline sitting just below at 1.2185-1.2190 levels. If this support region is broken we are prone to a move down to the lows at 1.1960s and possibly lower. However if the support holds we should see some upside to 1.2400 and after that resistance level to the 1.2450-1.2460 region.
So keep an eye on the open and react to the price move.

eurusddailyaug27.gif


GBPUSD

We have some good region of resistance above this price point. The first resistance exists in the 1.8116-1.8126 regions in the form of a down sloped trend line. This one is a major reaction trend line as it has fared since the start of this year. After this level is another region of high resistance in the 1.8145-1.8155 levels from the 38.2% fib level. And yet after this level there is another resistance level in the form of a downward sloping trend line in the 1.8260-1.8265 regions with paced degression. On the bottom side support exists at 1.7810-1.7820 region and after that we are set to test new lows at 1.7280s on the macro timeframe.

gbpusdaug27daily.gif


GBPCHF

Last week the support at 2.2680-2.2685 was cracked at the 50% retracement level. We have support at 2.2560-2.2565 levels after which the next support is at the 2.2400-2.2410 levels in the form of a 38.2 retracement. Overhead resistance existing in the 2.2820-2.2825 level and after that in the 2.2850-2.2860 with a down sloping trend line existing in that region. At the open next week if we see stagnation expect choppiness. However, if a swift break occurs either upwards or downwards it should be a high probability setup by going with the trend to the S&R levels.

gbpchfaug27daily.gif


GBPJPY

Expect GBPJPY to trade in the same range as last week albeit possibly smaller one. Price currently halfway between fib retracement levels. Support existing at 197.45-197.50. Resistance existing at 199.20-199.25 levels. After that the next support level existing in the form of an upward sloping trendline at the 197.00 regions. The resistance level existing after the 61.8% retracement level is 199.75-199.80 in the form of a downward sloping trend line. These levels should provide ample opportunities for trading ranges with high probability regions existing when prices near the S&R levels identified here.

gbpjpyaug27daily.gif


This is what my analysis tells me are the key macro S&R levels on these currency pairs. I view S&R levels to be areas where one should expect some sort of reaction. I PREDICT probable regions where such S&R levels may be. However, I REACT when such an area is hit based upon price action. When price for example blows past a major S&R level wait for it to open on the next bar and then go long with stops in play as always. Thats a high probability play.

Trading is all about placing rational bets based upon odds of success. Keep the bets reasonable. You need chips to play the game.
 
The opening today was a pretty calm one. A continuation of action from last week so no big gaps or anything. Lets hope this week we profit well.

BTW I have also decided to quote the profit I made in term of percentages as well as in dollar amounts. This is because a key component in trading is money management which other forms of measurements such as performance in pips does not measure.

P/L (since start of journal): $627.77
Return (since start of journal): +25.08%

Best of luck trading this week to everyone.
 
Equities

Okay making some changes.

I have sold off my entire MUSA position and put in orders to get in on MUSAW instead. The reasoning for this move is expressed in the following exerpt:

"Now let's quickly consider the warrants. The question is where were the warrants trading last time MUSA was at 17 bucks? I'm showing that Between April 22 and April 25th MUSA was approximately at 17.00. At this time the warrants were trading at 4.01 to 3.73. Since some time has now passed, let's assume the lower end and go with 3.75 or so for the warrants. Thus the warrants have a great chance of seeing an awesome rebound if this deal is cancelled."

I am basically covering the downside risk of MUSA by switching to MUSAW and increasing my upside frontier. The risk exposure I have on this deal is decreased through this unless of course they change the time when the buyout will take place which affects MUSAW.

So out of MUSA at 19.62.

Return Equities (since starting journal): +0.82%
 
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