With regards to the last post...

This Reuters story from Japan a couple of hours ago:

Japan Logs Record CPI Drop and Jobless Rate
Published: Thursday, 27 Aug 2009 8:10 PM ET

Japanese core consumer prices fell a record 2.2 percent in July from a year earlier, with weak demand playing a growing role in pushing the world's No. 2 economy deeper into deflation.

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The premium I paid for the October calls will be negligible if we keep getting deflationary numbers like this.

Just bought Gold Calls

I just bought Gold calls to protect my short position. I think that Gold is sympathetic with equities and I think that equities are high on little volume. BUT, it seems that we have broken some big resistance...so, as much as I dislike it, I have to go with the uptrend...Long 10 contracts October 975 Calls @ 9.70.

...I am short Gold because I don't see the inflation that everybody is concerned with yet...and I think that the Dollar is beaten up and will bounce, at least temporarily. I don't plan on holding these for a long time.

Imagine not having access to any financial news...

Really…think about that for a second. It’s crazy to think how far we’ve come from the days when traders were…just traders! Check out this new video and think about what YOU would do!

The other successful accounts I talk about in my blog are all beneficiaries, in some part, to the wisdom of Adam and Market Club...I'll post the results again later, but The Trade Triangles really do work! This is an utterly fascinating (and short) video.

Out completely

Covered the other half for an additional $300 profit. I really wanted to let it run because I had moved my stop up to b/e BUT the Melody is screaming.

4 accounts make up the 140% return rate we have had in this blog...here's the statement for the most recent one we started in June...the Bob Iaccino account. This is the only one I have traded in the last 2 weeks.

Covered 1/2...

Just covered 1/2 my short for $350 profit @1.6172, while moving my stop up to b/e for the other 1/2 (a la Bob Iaccino's trading technique.)

My reasoning for doing this earlier then the original T1 (1.6146) is because Melody is way over 60 and I don't always have access to the traders to see what they did (they make the same trades.)

Contradictions

Ever since starting to trade Forex and learning the relationships between the pairs, I have tried to understand the concept of making multiple trades that, on the surface, may seem contradictory. Right now I am short the Sterling/Greenback...which is obviously positive for the Dollar. This is a Bob Iaccino (Trader Outlook) trade.

At the same time, Forex 360 today entered a long CAD/YEN trade today. Their trade is a lot more of a medium term trade then the above, BUT, their stop is right below where it is trading now. Based on the 4 Hour chart, I wouldn't have made the trade here.

Anyway, who am I?...These guys know a lot more about Forex then I do, and this trade suggests that the initial bias is long (according to them)...and therefore contradictory to the above trade. Traders would go long on this pair if they were shifting funds away from the Dollar. I found this explanation (from learningmarkets.com) to be very interesting:

International trade currencies: These currencies are heavily influenced by changes in global demand for raw materials (commodities) and finished goods. A few of them—the Canadian dollar (CAD), the Australian dollar (AUD) and the New Zealand dollar (NZD)—are often referred to as the “commodity currencies.” Currently, the Australian dollar (AUD) and the New Zealand dollar (NZD) also have very high target interest rates in their economies and are therefore also very sensitive to changes in the forces behind capital flows, such as interest rates, the credit market and yields.

Capital flow currencies: These currencies are heavily influenced by changes in demand for investments including equities, bonds and interest bearing investments. The U.S. dollar (USD), the euro (EUR), the British pound (GBP) and the Swiss franc (CHF) are the primary capital-flow currencies because the markets represented by these currencies have the strongest and most active banking and financial sectors in the world.

Trade Update

The same chart a few hours later, as I am now short Cable. Patience is something that I continue to practice and strive for. I decided to get in lower then the original participants got in (Iaccino and the traders who were awake) because the shorter term charts were showing the rotation weakening. (Clicking on the chart gives you a clearer view):












This is a Trader Outlook trade and one of the things they look at is the level of the Melody ADX...which is higher then I'd like (53ish.) We are taught that 60 is a good point to look for an exit.

This is the next thing I have to practice and incorporate into my decision-making...as the $67 service is great, but we have to make these decisions most of the time, as the traders (they make all the trades that are recommended) are not always in the chat room.

Talking Rotation

I missed a Bob Iaccino trade because the 4 Hour chart broke when I was sleeping. His firm shorted the Sterling/USD at 162.74. Their targets are 161.46 and 160.54. The pair is now trading at 161.80, but it would be dumb to chase 4o pips here, so I will wait for a retracement back up to their original entry point.

This is a very volatile pair, so one must be careful (clicking on the chart gives you a clearer view):

With regards to the last post...

The Melody ADX on the recently discussed trade is now at 59.25. Even though the T2 has not been reached...many times it doesn't. This is why for this account I have to trade in the area of the prices given, because I am not an institution with million Dollar computers.

In my intermediate account, this is not as necessary, because I do the research and I have my own way of determining targets.

Another lesson learned...DARN IT!

The great part about doing something you enjoy (trading) is that you still want to learn. Since January my overall accounts have done very well (long time readers have seen a gain of over 110%.) But, I just learned another lesson from Bob Iaccino:

Yesterday, I got out of the balance of my Eur/Sterling trade with an overall profit of around $750 @0.8717 in the Bob Iaccino account. I started this separate account because I wanted to mimic his trades as close as I could. Well...I was spooked. I didn't like the action in the pair and I expected a selloff, so I got out, even though I doubted he got out...and he didn't!

The problem was, like most pairs after a big move, selloffs will occur...but then there is a retracement. That's what has occurred here as the pair is now at 0.8758. (Clicking on the chart gives you a clearer view):

Take a look at the Melody ADX indicator underneath. When I got out of the trade, the value was only at 48.07. Bob teaches that a big move is usually not exhausted until 60 (reading is now at 58). So, even though I listen to every seminar he does (for peanuts,) and even though I made a good profit, I cost myself AGAIN, just like in the post from the other day when I talked about position size.

Closed Trade

I am out of the second half of the EUR/GBP trade with a $500 profit ($750 total.)

Long 1/2 position of EUR/GBP since Friday

This is a Trader Outlook trade that I initiated Friday:

I went long 1 Lot EUR/GBP @.8654 and sold 1/2 at .8681. Once I booked my $225 profit, I moved my stop to b/e (original entry point for the entire trade) and will hold the other half to my target of .8790. So now, I have a realized profit, the potential for more, and my risk is now zero.

If you want to learn to trade, Bob Iaccino (who's on TV all the time) is one source that everybody should use...I have learned so much, and for a bag of balls.