Forex Account at 3/15/2010 Close
Posted by The Diatribe Guy on March 15, 2010
OUTSTANDING ORDERS as of End of Day 02/28/2010 settled by End of Day 03/15/2010
o/s xauusd 0.02 buy 1110.00 closed on 03/02 +26.05
o/s xauusd 0.01 buy 1120.00 closed on 03/02 +14.24
o/s xauusd 0.01 buy 1130.00 closed on 03/03 +12.29
New Orders since End of Day 02/28, settled by end of day 03/15 – ALL are GOLD BUY orders (XAUUSD)
Date of entry / Lot size / Buy Price / Date of Settlement / Net Profit
03/09 0.02 1110 03/10 +32.90
New Orders Since end of day 02/28, still outstanding as of end of day 03/15 – ALL BUY GOLD positions
Date of purchase / Lot size / buy-in price
03/04 0.01 1130.00
03/08 0.01 1120.00
03/10 0.02 1110.00
03/12 0.02 1100.00
Current Equity Balance: $3,132.18
Assessment of Risk:
Strategy is still to trade Gold LONG only, but I do have some short positions eyed if price increases to at least 1170. (I have a few outstanding short positions on gold at lower prices and long positions on the dollar against the Yen but these are holdovers from a previous strategy and I’m just riding them out for now). I am still trading without a stop loss. The risk is that prices continue to fall without a rebound, meaning that I am unable to cash in on profits while losing equity.
Currently, I am trading position sizes of 0.01 lots at $10 increments from $1120 to $1230, and then I have position sizes of 0.02 lots at $10 increments from $1040 to $1110, then 0.01 lots from 990 to 1030, and 0.02 at 980. These are adjustments I made to reach my safety net goal of being able to absorb a price fall to $970. (This is down from $975 as of 2/28. I want to continue to lower that target value. By the end of March, my target is to be able to absorb a drop to $965. Since this target isn’t really unreasonable in light of prices within the last year, I am trading fairly aggressively, and that comes with risk. The plan is to slowly reduce that risk either through smaller lots, higher gaps between trades, or more capital. This comes with a slower percentage growth as it relates to capital, but that’s all part of the risk/reward trade-off. Preferably, I can accomplish the “more capital” part by profit taking rather than injection of funds. Short positions will also hedge against this – at the moment, I am not taking any potential shorts into consideration.
One little potential wrench in things is that there is talk of regulating the markets so that maximum leverage is 10:1, meaning that margin requirements would increase quite a bit. Higher margin requirements mean that I have to place more money into the account. It doesn’t really cahnge the strategy itself, but it just requires that the money that I currently don’t need in this account and can put to work elsewhere now needs to be shifted into this account. Since the tied-up capital may increase, it could reduce percentage return. That will be unfortunate if it happens, but it is what it is.
I am hoping to see a surge in the price of gold past $1230, because at that point I am going to reduce risk by not taking any positions until a $50 drop in the price, which is where a lot of my risk is without a lot of potential reward. As mentioned, I currently have short positions set for higher price levels. That is entirely speculative at this point, and kind of goes against the the grain of the entire purpose of this strategy, but I may be willing to take that risk. Still pondering that. I reserve the right to jump out of that.