Digital Diatribes

A presentation of data on climate and other stuff

Forex Account Update as of 4/30/2012 [Through 08/31/2010]

Posted by The Diatribe Guy on May 1, 2012

Well, it has been nearly 2 years since my last update. Nobody probably cares about this, but I am still trading Forex successfully, but a few things have changed.

The first change occurred when I expanded to trading all currency pairs. I based it on the initial Gold/Silver strategy, but because there is not an underlying tangible asset, both shorts and longs are appropriate. Further, over the last couple years I’ve continued to find ways of reducing risk of overtrading while not appreciably affecting returns. Of course, with reduced risk comes expected fewer returns, but some risks are commensurate with return and some are not. So I’ve continued to tweak as I go along. As opposed to trying to explain all the tweaks, I’ll just recap what I’m doing now, skipping a few of the details. If anyone wants a full primer in this, I’d be happy to have that exchange.

Interestingly enough, I’ve abandoned trading the metals altogether, thanks to our good friend Dodd-Frank, which I guess was supposed to protect us from ourselves in the gold markets. Not trusing that individuals are capable of buying gold on margin, we’re no longer allowed to do so. The big banks, of course, can do it – just not us. This “reform” has the impact of doing nothing but taking options away from small investors in the name of protecting us. Yes, some people are stupid and lose their money. So, I guess we need to protect stupid people from themselves at the expense of non-stupid people. Well, at least there are other trading options… for now.

Basically, I trade all currency pairs, and I’ll trade either short or long. I still use the very, very, low position size strategy with no stop loss. By low position, it means trading a single microlot at a time, for every $3000 or so of account value. You can trade multiple positions across currencies, but only as the trades make sense.

Step one: Download 4-hour history for each currency into a spreadsheet. I have a formula that tracks the 4 hour support points and resistance points. My criteria is that you need to go back at least a year, but no more than 5 years. Every now and then you’ll need to update this, which is simple enough to do in MT4 by going to the history area and exporting it to the file location, and then just copy/paste into the spreadsheet. You could link if you want to, but that bogs things down and it’s easy enough to cut and paste.

Step 2: Set sell stop orders at your initial support point and buy stop orders at your initial resistance point. highlight that point on your spreadsheet so you know what you’re using. The order will be the microlot position. Set initial take-profit anywhere from $10 – $30 levels, as you desire, to take advantage of any sudden spikes or drops.

Step 3: Every day, Highlight the next point and modify your orders on each currency pair.

Step 4: After a good deal of time, you will catch up to a trend. That’s kind of the point to that long, drawn-out process. Move up the levels, which will be breached when a trend is established. You are counting on that trend continuing.

Step 5: Once an order is executed, wait until your total profit (including carrying costs) is at least $5 per microlot. This doesn’t sound like much, but your margin requirement per microlot is only about $30 on average, so this is a 15% return per trade (roughly). As you execute more and more orders, this adds up. You can also do the calculations needed to change your take-profit to a level closer to $5 if you don’t want to miss any profit opportunity.

Step 6: Once a trade is executed, go back set a new buy stop/sell stop order in that direction in your 1 – 5 year range of history and start over again. Manage the period so you are not overtrading. You should never have more than 30 microlots open per $3000 at any given time.

Step 7: I have not closed any orders recently, even though some have been open for months. I may choose to do so at some point, and that’s up to you, but I just let them ride. Some currencies do have higher carry costs and may be worth closing at some point. In 2010 when I did some major tweaks, I closed some losing positions. Also, my initial Short Strategy was a loser and I pulled the plug on that and took quite a hit, so you will see losses there. That strategy is no longer employed and those losses should not have happened – it was a dumb strategy. 10/15/2010 was the fateful write-down day, and will be reflected during the October 2010 recap. Oh, well – not everything works.

With that general explanation, here is my activity from 7/31/2010 to 8/31/2010. I will be splitting the history up into posts recapping by month until I am all caught up.

OUTSTANDING ORDERS as of End of Day 07/31/2010 settled by End of Day 08/31/2010
Date of entry / Type of Entry / Currency Pair/ Lot size / Entry Price / Date of Settlement / Exit Price / Net Profit
07/16 BUY XAUUSD 0.01 1203.05 08/06/2010 1206.09 +3.03
07/23 BUY XAUUSD 0.01 1191.02 08/04/2010 1197.07 +6.04
07/27 BUY XAUUSD 0.01 1179.11 08/02/2010 1188.13 +9.01
07/30 BUY USD CAD 0.01 1.0281 08/10/2010 1.0347 +6.19

*Net profit means profit after consideration of swap fees (these can be negative or positive)

New Orders since End of Day 07/31/2010, settled by end of day 08/31/2010
Date of entry / Type of Entry / Lot size / Currency Pair / Entry Price / Date of Settlement / Exit Price / Net Profit
08/02/2010 BUY 0.01 xauusd 1179.11 08/03/2010 1188.13 +9.02
08/04/2010 BUY 0.01 usdjpy 85.47 08/04/2010 86.26 +9.16
08/04/2010 BUY 0.01 USDCAD 1.0190 08/06/2010 1.0243 +5.08
08/05/2010 BUY 0.01 xauusd 1191.02 08/05/2010 1197.07 +6.05
08/06/2010 BUY 0.01 usdjpy 85.45 08/10/2010 85.93 +5.59
08/06/2010 SELL 0.01 xauusd 1203.05 08/09/2010 1200.04 +3.01
08/06/2010 BUY 0.01 xauusd 1203.05 08/06/2010 1206.09 +3.04
08/09/2010 BUY 0.01 xauusd 1203.05 08/10/2010 1206.09 +3.04
08/10/2010 SELL 0.01 xauusd 1203.05 08/11/2010 1200.04 +3.01
08/10/2010 BUY 0.01 xauusd 1203.05 08/11/2010 1206.09 +3.04
08/11/2010 BUY 0.01 usdjpy 85.09 08/12/2010 85.59 +5.84
08/11/2010 SELL 0.01 xauusd 1204.05 08/11/2010 1200.04 +4.01
08/11/2010 BUY 0.01 xauusd 1203.05 08/11/2010 1206.09 +3.04
08/11/2010 BUY 0.01 xauusd 1203.05 08/12/2010 1206.09 +3.03
08/12/2010 SELL 0.01 usdcad 1.0487 08/12/2010 1.0449 +3.64
08/16/2010 BUY 0.01 gbpusd 1.5543 8/18/2010 1.5615 +7.20
08/17/2010 SELL 0.01 xauusd 1227.48 08/18/2010 1218.36 +9.12
08/18/2010 SELL 0.01 xauusd 1227.48 08/24/2010 1221.61 +5.88
08/19/2010 BUY 0.01 gbpusd 1.5515 08/19/2010 1.5615 +10.00
08/19/2010 BUY 0.01 usdchf 1.0348 08/23/2010 1.0364 +1.54
08/20/2010 BUY 0.01 gbpusd 1.5515 08/23/2010 1.5615 +10.00
08/20/2010 BUY 0.01 eurusd 1.2700 08/27/2010 1.2708 +0.80
08/24/2010 BUY 0.01 eurjpy 107.57 08/27/2010 108.01 +5.22
08/24/2010 BUY 0.01 gbpusd 1.5483 08/27/2010 1.5521 +3.80
08/24/2010 BUY 0.01 usdjpy 84.72 08/26/2010 84.82 +1.18
08/24/2010 SELL 0.01 usdcad 1.0629 08/27/2010 1.0546 +7.87
08/24/2010 BUY 0.01 eurjpy 106.22 08/24/2010 106.32 +1.20
08/25/2010 SELL 0.01 xauusd 1239.88 08/30/2010 1234.66 +5.23
08/25/2010 BUY 0.01 usdchf 1.0260 08/27/2010 1.0299 +3.79
08/27/2010 SELL 0.01 chfjpy 83.01 08/30/2010 82.47 +6.38

New Orders Since end of day 07/31/2010, still outstanding as of end of day 08/31/2010
Date of entry / Type of entry / Currency Pair / Lot size / Entry price
08/12/2010 SELL 0.01 xauusd 1203.05
08/12/2010 SELL 0.01 xauusd 1215.2
08/20/2010 SELL 0.01 usdcad 1.0465
08/24/210 SELL 0.01 xauusd 1227.48
08/30/2010 SELL 0.01 audnzd 1.2672
08/31/2010 SELL 0.01 xauusd 1239.88

Carried Orders Since before end of day 07/31/2010, still outstanding as of end of day 08/31/2010
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
06/24/10 BUY USDJPY 0.01 89.47

Equity Balance @ 8/31/2010: (not recorded).
Monthly Return: (not recorded)
Initial 10/31/2009 balance: $2,360.46
Current Yield since inception: (not recorded)
Annualized Return: (not recorded)
Average monthly return: (not recorded)

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