Day 37

Start Balance                     $15,449

Today's Profit Target             $201.28 (Day 34)
Required Position size         199,400 (JPY), 166,800 (USD)

Trades

1     +99,700K     EURJPY          *2.5 pips      (0:50)
2     +83,400K     EURUSD         *-9.4 pips     (6:41)
3     +83,400K     GBPUSD         *3.8 pips     (1:02)
4     +166,800K    EURUSD         5.4 pips      (0:48)
5     +83,400K     GBPUSD         *4.7 pips     (0:09)
6     -83,400K      EURUSD         *-2.3 pips    (0:23)
7     +166,800K    EURUSD         5.9 pips      (0:07)

* half the full sized position. this is the equivalent no. of pips if the position was full sized.

Total                      10.65 pips ( $211.73 )

End Balance          $15,661

Project Status 

Day 37 end target  $16,186
3 Days Behind (same as yesterday)
$524.94 behind schedule or 25.74 pips on tomorrow’s pip value.

Comments

I knew things would be even more quiet today in Asia as the Hong Kong, Singapore & China markets were all closed in addition to Japan’s Golden week but I didn’t realize how much of Europe was on holiday as well, apparently it was labour day, whatever that is? 

Despite it being quiet I managed to eke out a few pips on the first trade in the Asian time. I was also feeling very confident that the EURUSD was going much higher today after analyzing it in every possible time frame so I put on a position in Asian time and let it ride. I was sure this was going up but not sure enough to go full size, my confidence is still AWOL at the moment. The half sized position turned out to be a blessing in disguise as this trade was the victim of the true evil of the currency markets and I couldn’t begin to do it justice without an image.

The attached image shows what can happen at any moment in the currency markets, funnily enough this never seems to happen to me in the right direction though. Fortunately this is the first time I’ve been clobbered this bad so far in this project, but it has happened to me on several occasions in other accounts, usually in the GBPUSD. I had this position open for nearly 4 hours when out of the blue it sold off 30 pips in less than 5 minutes (the image is a 1 minute chart), up until that point it had been oscillating around about +/- 8 pips around my entry price, the red line on the image shows were my entry level was. This sell-off happened without any news whatsoever. The news service that I receive through one of my brokers said that most traders were at a loss to explain what happened. But I guess the markets being quite thin due to all the holidays probably contributed to it. I was very lucky that it was only half sized for a couple of reasons. One was that it meant I didn’t have to sell it straight away, I was 6.3 pips in credit at this point so I had a bit of room left to move. But secondly it allowed me to trade against the sell off if it spiked up. I was actually away from the screens when this happened (bad timing) and came back as it was attempting it’s second attempt to move back up (2^nd large green bar at the bottom of the dip). At this time it had recovered about 8 pips from the bottom so I was around 23 (11.5 full sized pips) down combined with my 6.3 pips in the bank meant that I wasn’t in too bad shape. But I was pretty frustrated after being so patient and waiting for hours only to see it go so far into the red so quickly. I took out another full size long position thinking it might continue to move up quickly and I could get some quick pips. As can be seen on the chart It did move up quite orderly but it took a lot longer than I would have liked to get 5 pips out of it (trade 5), I don’t average down as a rule, as I think it’s usually a very bad practice, but if quick scalp trades look on offer I’ll often take them before closing out an existing losing trade. Of course my original position was also recovering some of the loss at the same time so things weren’t looking so bad. In the end I closed out the original for an 18.8 (9.4 full size) pip loss which wasn’t a great result, I could have got out much better but just got it all wrong. My original view on the EURUSD turned out to be correct as it later went on to make almost a new high so I could have actually kept this and made a really good profit on it, but that’s another story.

I had a break at this point as the thin markets were not to my liking and only being 2 pips up I knew I had to come back to the market later when the US opened to finish the job. Two more half sized positions had me chipping away up to nearly 5 pips and then I decided on one last full sized trade to end the day. This was as the EURUSD was pushing up near to it’s previous high and I got 6 pips very quickly to end the day with required pips. Looking at the chart the next day, the EURUSD had sold down 60 pips in the hour following nearly hitting the high. It really is no wonder it’s so hard to make money in this market.