Wednesday, May 29, 2013

Who's your Cable provider?

Good evening traders,

From a Forex Factory forum post by user RoBik:

"Before the advent of radio, the only means of communication across the Atlantic Ocean was to physically connect the continents with a transatlantic telegraph cable, which was operative in 1867. The exchange rate between the United States dollar and British pound is still colloquially known as "cable" by financial marketeers on account of the fact that the rate was originally transmitted via a transatlantic cable."

I've done ok this year on most of my cable trades because the Pound Sterling has continued to lose value against the US dollar for most of the year. Early this week, after taking a shot going short EUR/JPY and getting burned, my next setup search yielded quite a little gem that helped recover most of those losses.



Looking back about a week on the 4 hour timeframe, you can see the hallmarks of a downtrend. Lower highs and lower lows. Sold short at $1.5105, my stop was at the last swing high, and my limit was the bottom of the candle body (excluding the wick) on the reversal candle of the previous swing low. Bread, butter and jam for 72 pips.

Post a comment. Let me know about something you'd like to see on the blog. Drop a line about a trade that worked for you.

STT

Sunday, May 26, 2013

Finding Zen

Good day to all you small time traders wherever you are.

One of the most fascinating things that I've found while researching people who are successful in trading is that they seem to have one thing in common. They search to find a balance between their trading life and their real life. The most common schedule seems to be to spend about an hour researching setups, and then to trade for about two to three hours after the market opens. Then, win or lose that day they turn the trading station off, go outside and do their favorite physical activity. Check out Eminimind.com in my Most Valuable Links for an example of this lifestyle.

I would love to put this into practice one day.

So in my search for the application of balance in all things, I find it appropriate to focus on zen and balance in this post. Here are some pictures I took recently near the Hasedera shrine in Kamakura, near Enoshima Japan.

Good luck trading next week,
STT

















Friday, May 24, 2013

Gold still glitters... A little.

I only took one trade over the last the week. I've been particularly busy at work, and haven't had the time to research my setups to the degree that I require to have conviction to enter.

My GLD trade was as basic as you can get. Here's a 3 month chart of GLD:


I looked back to April 15th at the close price of about $131. On Friday, May 17th, I noticed that the closing price was right around that same level of $131. Even though there is a downtrend in place, the April 16 bounce indicates a presence of buyers at the 130 level. The thesis of my trade is that the test of this level will again result in a bounce, even if it fails later.

I placed my entry order before the open on 20 May to purchase a GLD Jun 22 '13 $135 call for $2.15. I was filled at $2.10. The next day, I put in a limit order to close the trade at $4.20, and on the 22nd I was filled.


Not alot to this one, but the lesson is that these opportunities are many no matter the vehicle that you chose to trade. Whether it's common stock, options, forex, or futures, major levels of support or resistance are great levels to scope out viable trades.

Drop a line if you have questions or comments. Follow me @B50cal1978 on twitter. Anything that I have a high level of conviction on, I will tweet.

Don't forget to check out the killer links to the right.

Happy trading,
STT

Friday, May 17, 2013

Japan has been good to me.

In more ways than one, Japan has been good to me.

First, my wife just got back from the market in Yamato with a new Chu-Hi that I have not had before. Made by a company called Oenon, it's about 6% joy with 2.5% juice. Love you baby.

Second, I had a good result for my long USD/JPY trade that played out over the last week. As in a previous tweet (Don't forget to follow me @B50cal1978), I noted that I was long 2 lots of USD/JPY at about 100.20. I had a 100 pip trailing stop that brought my exit up to 101.81, which was hit on Wednesday for a gain of about 160 pips.

I have been trying to enter the Euro short against the USD last week, and over 3 trades trying to enter, I am negative 12 pips. First trade was on a break below 1.30 of which I banked 38 pips, and put a new entry for a break below 1.295. Got stopped out on that one. Later in the week I went for an entry below 1.2930, got filled. Eventually, this position was positive by 50 pips and I brought the stop up to break even. At this point I was hoping to begin trailing in some profits, but this was not to be. And my third attempt to enter Euro short was stopped at break even.

This week, I'm looking for a corrective rebound in gold and the Australian Dollar. With gold, I'll be using the GLD, and I have an order in for a GLD Jun 22 135 call to play an anticipated correction back into the 137/140 level in the GLD ahead of further declines in gold.

Because of the oversold nature of AUD, I'm going to looking very closely at going Short Euro, against the Aussie.

My experiment in Currency ETF's and Reverse Iron Condors continues. My aforementioned monthly RIC in FXE was closed for a slight profit, and FXB was closed for a slight loss. For those that follow currencies, had I been able to get enough volume to get filled in my May RIC for FXA, I would have gotten full profit. There is very low volume in FXA, so I was never filled.

I have anecdotal data from a trader on the Seeking Alpha website that had a 75% success rate (9 out of 12) using a Reverse Iron Condor strategy on Google (GOOG) with his long strikes set at a Delta of 20 to 22 on entry. I am interested in this, and have a order in for a GOOG RIC to expire Jun 22, with the long strikes at a Delta of 23 on the call side, and 25 on the put side. My short strikes are $10 out from my longs, so possible ROI on the trade is about 125%. Update to follow in June.

Comments and questions are welcome. Let's get a conversation started.

STT

Thursday, May 9, 2013

Status of Forces

Hello small timers,

Here's a snapshot of my currency trades as they sit right now.

Short USD/CAD:


I'm short from 1.0085 on a purely technical look, based on my SMI (Data below Signal, both below 0) and price action below a rolling over 200 period moving average on a 4 hour chart. I am using Parabolic SAR to trail the stops and have moved my stop about 40 pips to the good.

Entry orders for Long USD/JPY above 1.00. One lot at 100.00 and one lot at 100.25 each with a 50 pip stop. I believe that if there is a break above 100 that there will be follow through based on the last 2 news inspired breakouts.


Follow me @B50cal1978 on twitter, I do my bet to tweet changes and entries on my positions. Drop a short comment if you have a question or want to weigh in the trades.

I'll post soon with an update on my options positions when I have time. I've entered a 144c/144c/140p/139p Revers Iron condor in GLD expiring 18 May.

Cheers to those who are viewing, vote on the poll if you have moment. Better yet, drop a line suggesting a poll on a subject of interest.

STT

Wednesday, May 1, 2013

In for a pence, out for a pound

Good evening small time traders wherever you may be. Feel free to drop a comment or question.

I haven't been able to post for a little while due to work. I wanted to share a successful trade to balance some of the bad trades that I have posted lately.

Here's 229 pips banked in GBP/USD:


For those of you that follow me on twitter @B50cal1978 I posted when I entered the trade at 1.52470 on the 24th of April (Japan time). I entered this trade specifically because of the potential for exacerbated movements based on multiple news releases.

Regardless of the movements of the S&P 500, Economic fundamentals in the U.S. are generally disappointing, while fundamentals of the U.K. are generally exceeding expectations since the beginning of the year. Here's the high importance economic releases from last week:


So, while I was chillin' in Osaka, I figured that if Cable (GBP/USD) went my way on U.K. GDP, that the move could be further extended by bad U.S. GDP data. And, in an extremely rare case for me both went my way, and I happened to get a good entry before the data by chance.

Trade management was easy. It was a single lot trade with 50 pips initial risk, with the stop trailed manually according to the Parabolic SAR dots as they appear under the 4 hour bars.

This move could also be positive for my Reverse Iron Condor options trade on FXB. More to follow.

Thanks for your time if you've read this far.
STT