Forex Account Update As of 6/30/2010

OUTSTANDING ORDERS as of End of Day 06/15/2010 settled by End of Day 06/30/2010
None.

In that respect, it was a relatively uneventful and boring half-month.

New Orders since End of Day 06/15, settled by end of day 06/30 – ALL are GOLD orders (XAUUSD) unless specified otherwise:
Date of entry / Type of Entry / Lot size / Entry Price / Date of Settlement / Net Profit
06/17 SELL 0.01 1239.32 06/23 +11.71
06/18 SELL 0.01 1251.84 06/21 +10.91
06/21 SELL 0.01 1264.48 06/21 +21.47
06/24 SELL 0.01 1239.88 06/10 +12.22
06/25 SELL 0.01 1252.40 06/28 +15.35

New Orders Since end of day 06/15, still outstanding as of end of day 06/30 – ALL GOLD positions unless otherwise specified
Date of entry / Lot size / Entry price
06/24 BUY 0.01 [USDJPY] 89.47
06/29 SELL 0.01 1239.88

Carried Orders Since before end of day 06/15, still outstanding as of end of day 06/30
Date of entry / Type of Entry / Currency Pair / Lot size / Entry price
08/18/09 BUY USDJPY 0.01 95.00
09/02/09 SELL XAUUSD 0.01 956.55
09/02/09 SELL XAUUSD 0.01 963.90
09/02/09 SELL XAUUSD 0.01 972.00
05/05/10 SELL XAUUSD 0.01 1165.00
05/24/10 SELL XAUUSD 0.01 1188.05
05/25/10 SELL XAUUSD 0.01 1200.05
06/04/10 SELL XAUUSD 0.01 1212.18
06/15/10 SELL XAUUSD 0.01 1226.93

Current Equity Balance: $4,000.85, which is down 1.01% since 6/15.
Given that as of 10/31/2009 the balance was $2,360.46, my current yield is 69.49% since that date.

Still not much really happening over the last couple weeks. Gold hit a new high so the buy/sell levels were reset. Despite a few settled positions at profit, the loss of 1% simply has to do with where the price settled at the close of 6/30. Given the number of current shorts, price is a bit higher than I’d like to see. Nothing to be too concerned about, in my opinion. Just need to be patient and wait for a retrace.

Assessment of Risk:
Strategy is still to trade Gold LONG in the long term, but as discussed I am taking some short positions as a shorter-term play, since we’re at all time high levels. I will not buy any positions until price reaches $1,1203.05, which is approximately a 5% retrace from the recently established all-time high (actually calculated by taking 99% to the 5th power). Since I’ve decided not to dive right in with buys at a 1% retrace, I’ve decided to start my buys at the 5th calculation, where each step is a 1% retrace from the previous value, not the highest value. Thus, the calculation of 99% to the 5th. The next buy point is 99% of that price; the buy point after that is 99% of that price; and so on. If price establishes a new all-time high, then my buy-in points adjust accordingly. The strategy on the shorts right now is that, even though I’m bullish, I expect retracements to happen and we’re at levels now that I feel pretty comfortable that price will move down past profit targets at some point. I will short when price is within 5% of all-time highs only (calculated, again, s 99% to the 5th power). I have remaining shorts from the previous all-time high, at $1165, at 1188.05, at 1200.05, and at 1212.18. As I close those out, I’ll put in sell limit orders at new levels starting at 1203.05. The next point is 1% higher than that, and so on. For those who do not want the risk of short positions, just don’t play there. I’d keep my buy-in thresholds the same, though. In that event, you would have no positions at the moment, and just waiting for a price retrace to get in.

I mentioned the old gold shorts from a previous strategy. In addition, I only have one remaining long position on the dollar against the Yen, also a holdover from a previous strategy. I also have a new Yen buy order that has nothing to do with this strategy. Just looks like an eventual profit opportunity, though it’s currently counting against equity.

I am still trading without a stop loss. The risk is that prices continue to fall (or rise) without a retrace, meaning that I am unable to cash in on profits while losing equity. I’d profit on the shorts right now, but then I’d buy all the way down, increasing my risk position.

I am trading BUY position sizes of 0.01 to 0.02 lots (mostly 0.02 now) at increments as defined above, down to my current $950 target. Going forward, I will now target $945 as my risk target risk point by the end of July. With new high levels in gold being established, just maintaining those target levels pushes lot sizes lower. I’m inclined to not be as concerned about pushing those targets lower as aggressively as I have been, but at the very least I want to keep doing that to some extent.

I have also calculated my “maximum price” level, assuming I continue to enter short positions on an upward surge in price. I actually don’t have that spreadsheet handy at the moment, but that price is now over $1480.00. This includes the effect of all old short positions currently held. As my account balance increases, so does the Max Price. So, by reducing my Minimum Price and continuing to increase my Maximum Price, my safe range continues to expand.