FAT 8023, week 5 and 6

Trader took small profit for most of his trades and also cut losses smaller, probably due to the smaller volatility. I wonder why he didn't trade the Euros.

The Euros moved 1000 ticks up from the low and have retraced 300 ticks, that's good volatility, retracement to sell.

FAT8023 4th Week

Trader Shorted the AUD which came down about 20 ticks, put a stop near to entry and got hit later in the night with 2 ticks profit to cover comm. But, he was not so fortunate with the GBP and suffer losses in both trades.

Trader uses multiple time frames, 5 mins, 30 mins, 4 hourly and daily charts and MACD as one of the indicators for entry. He was caught himself too when the short term indicators failed him, he tried to stop the bull from charging forward.

He blamed himself for not being patient enough and not following the rules and refusing to take smaller losses even when the indicators start to reverse. A little lost of confidence after the account goes under, very normal emotion for a trader. Told me he will go slow and be more patient.

Met up with a few former Nikkei floor traders last night at the wedding dinner of the daughter of a mutual friend, all of them have reduce their trading volume tremendously just like me, that's how tough it is to make money trading short term now with the Algos in control. The rabbits were all caught by the Algos while the human traders become the sitting ducks when there is any news announcement, we just can't react fast enough.

The older traders like us were extremely lucky that we have our golden years, our skill is no longer suitable for today's technology

Euro

Are we hitting a resistance for the Euro at this level in the Daily chart? The upmove has been very powerful, picking the top at your own risk.

 

 

The MACD in the 4 hourly chart has failed many times to cut down, can only sell when it cut down again, just have to wait patiently for the Bulls to exhaust themselves.
 

FAT 8023 4th week, Friday

Trader put a stop at entry level for the CAD, the order was filled with a slippage of 6 ticks when the Fed announced the QE3. He called to ask why the order was filled so far away. I told him he was lucky the ordered was filled only 6 ticks away as most of the professional orders would have been pulled out just seconds before any news announcement. I told him that he should put the stop at least for 5 ticks profit to cover slippage and comm. A lesson learnt.

From his trade, I can feel he is conservative, no hurry to get into any position and doing small trades, one at a time for the moment. I am comfortable, no pressure on his side to perform and time for him to get use to futures trading.

So, I was wrong on the market, I managed to take small profits on the S&P and the GBP before the market rally and cut loss in Simsci, damn it, from a long postion to turning short.

But I was caught on the Euros and the Yen, didn't respect the market, deserved to be punished. But lucky it was just a very small position. I am now paying to learn, and should heed my trader's advice, "DIE DIE must put stop, no matter how far away", so I must act on what I teach and preach.

FAT8023 4th Week Thursday

The above chart is provided by dailyfx.com and it's free!

Trader 8023 went short last night in the CAD. The futures contract of CAD and the Cash is reversed, meaning buying the CAD forex is equivalent to selling the futures contract. The above chart is showing the Cash forex USD/CAD on a 4 hourly time frame.

Reasons for the entry is because the MACD for the 4 hourly cash chart is cutting up as well as the price moving above the averages.

The risk involved in this trade is the impending FOMC decision on QE3 tonight, anything can happen. Let's see how it play out and trader is trying to ride the profit despite having 30 ticks in the pocket.

Where to from here?

With the bad figure on the Non Farm Payroll on Friday night, the USD tanked against all currencies while the S&P surge in anticipation of QE3 and talk about stimulus by the Chinese government.

I am caught short with some small positions in Euros and S&P futures while I long the Simsci futures. I shorted the Yen futures too at around 1280 level.

Can anyone tell me where the market is heading?

In fact no one would be able to tell where the market is going, I just have to managed my own positions based on risk and money management.

My gut feeling is telling me, when would it be a better time to sell the Euros, Yen, GBP and the S&P?

Of course, it's election year in the US, short the S&P at your own risk.

I am putting in some sell stops for these contracts if it head down south again, wish me good luck.

 

FAT8023 Week 3 Saturday

AUD tested  the low a couple of times after trader went long, he took profit after a spike up, usual mindset of most traders, decent profit after the market went against him.

The USD weaken further against all currencies on Friday night after the figures came out and trader was caught short at almost a 100 ticks higher than the level he took profit the previous day. I would too  have the same mindset to short since the AUD came up that much, but of course the force was too great for anyone who tried to stop the advance. The train just roll them over. 

Trader stop loss was 60 ticks away, no doubt it was a bit far away. I had previously discussed the strategy with him over such far stop loss levels which I felt profit to stop loss ratio was out of line. He told me yes, he still need to polish up especially on taking profit, the need to really go for the home run. Saying is obviously easy, the difficult part is in the execution.

FAT8023 Week 3 Thursday

Trader threw in the towel, cut losses on the 2 CAD contracts after it came down and retraces back and gave back those profits he made over the last 2 weeks. He then switch to shorting the GBP instead. He told me that the indicators were moving against him and he wanted to protect the account instead of letting it go under.

Trader work on Tuesday, so no trading. Took profit on the GBP and went long on the AUD.

He track the market while still working and did some trades on his own Forex account with his Samsung S3 mobile phone, that's the beauty of technology. But, unfortunately the Pats futures platform don't support mobile trading. He told me some of the trades he took but dare not put it in the futures account, still very conservative at the moment.

Yesterday the CAD came all the way down, if he had hold on to them, he would have made some tidy profit. But....

FAT8023 week 2

Trader 8023 was busy this week with some part time project, thus was able to enter only 2 trades for the week.

Last night he average on the bad CAD position with another contract which is quite close to his initial stop lost at 53. Averaging on bad trade is not what I can stomach, but for him it's just in his strategy. It will be interesting to see how he manage this position next week.