Digital Diatribes

A presentation of data on climate and other stuff

Forex Account at 03/31/2010 Close

Posted by The Diatribe Guy on March 31, 2010

OUTSTANDING ORDERS as of End of Day 03/15/2010 settled by End of Day 03/31/2010
o/s xauusd 0.02 buy 1100.00 closed on 03/16 +47.00
o/s xauusd 0.02 buy 1110.00 closed on 03/16 +30.99

New Orders since End of Day 03/15, settled by end of day 03/31 – ALL are GOLD BUY orders (XAUUSD)
Date of entry / Lot size / Buy Price / Date of Settlement / Net Profit
03/24 0.02 1090 03/26 +34.59
03/22 0.02 1100 03/31 +30.59

New Orders Since end of day 03/15, still outstanding as of end of day 03/31 – ALL BUY GOLD positions
Date of purchase / Lot size / buy-in price
03/19 0.02 1110.00

Current Equity Balance: $3,404.44
Given that as of 10/31/2009 the balance was $2,360.46, my current yield is 44.2% in 5 months. Not bad.

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 – lately this has edged closer to closing position, hopefully it continues to rise). 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 $1050 to $1110, then 0.01 lots from 970 to 1040 except at $1020 where it would be 0.02 lots. No plan for below 970 at the moment. These are adjustments I made to reach my safety net goal of being able to absorb a price fall to $965. (This is down from $970 as of 3/15. I want to continue to lower that target value. By the end of April, my target is to be able to absorb a drop to $960. The plan continues to be 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.

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.

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