Trading Forex and Stock/Equity Options...how hard can it be??

More Beliefs....

2007-05-02T08:48:00.000-04:00

So, I've been doing reading for the last few days...some self improvement books and some trading systems books, and this book on psychology and peak performance.

Here are some beliefs that I will use to develop my trading system.

I believe there is an opportunity everyday to pull money out of the market. I want to have at least one good trading idea per day.
I believe trading with the fundamental trend gives you a higher probability of profit.
I believe Fibonacci ratios work. They provide high probablity entry signals for trend trading, especially at the 61.8% Fib retracement level.
I believe trade management is just as important, if not more important, than picking out the direction of the market. Know when to lock in gains and cut losses. Because of the nature of the Forex and how it reacts to news events, this becomes more important on as you go down in time frames.
I believe risk management is key to success. Never risk more than 1% on average. I will try to risk around .5% on most of my trades and my max risk size will be 2%.
I believe in scaling in and out of positions. This increases the breathing room I can give my trades, lock in profits, and reduce risk. Definitely makes trading less stressful.

Beliefs on "Support and Resistance"

"00" levels are very strong areas of support and resistance. They have a high probability of stopping/slowing a move or even reversing it. I think this is the case because that's where big money puts orders in. Probably easier to calculate risk/reward using these levels.
Pivot point levels work, but better so on days of light news reports.
I strongly believe in Fibonacci ratios because I think everyone else and their mama is watching them.
The most watched MA's (simple 50, 100, 200) can work as support/resistance levels.

My Top Ten Beliefs about the Forex Market... and many more!

2007-04-28T13:07:00.001-04:00

The Forex markets are not random. They move for many reasons like: trade flows, reaction to new news, big money adjusting large positions, central bank diversification, etc. When the markets are not moving (extremely low volatility), that means traders are waiting for the next big event (i.e. News report, Central Bank talk, etc.)
My "edge" comes from the ability to determine market sentiment on fundamental data and determining entry and exit points using technical analysis. My position sizing skills are pretty good, but needs improvement.
I believe buy and hold does work, in the really long term (years) and if you can handle the swings. But I think active trading is more profitable, and less risky if you can do it right.
Swing trading suits me, but it all really depends on the market conditions. Range trading can provide many trading opportunities.
For Forex, I think finding support and resistance works well as a basis for a trade idea. Price action seems to respond well to moving averages, Fibonacci ratios, and Pivot Points.
Price action is dependent upon how the market interperates data and how it will eventually affect interest rates and interest rate differentials.
I do not need to be right, even half the time, to be profitable.
I do not need others to give me ideas, nor do I have the need to give others ideas.
I can tolerate losses pretty well. I think I can handle a 20% draw down in my account before I feel the need to stop and re-evaluate my system.
My top 5 keys to trading are:

Having the correct mental state and being able to focus
Using a well thought out system based on your beliefs and what you know.
Taking the extra time to prepare for every trade.
Using correct position sizing.
Trade with confidence.

This may change in the future as I gain more experience, but that's my top 10 for now. This list will be ongoing and one I will visit often as I learn more.

More beliefs next time on...

...support and resistance....

I am back... hopefully!

2007-04-24T20:19:00.000-04:00

It's pretty funny. I was just reading my last post and I happened to see how I was getting "unlazy" and start ripping this blog up. Haha. This post was back in Sept. '06. Well, I am back, but with a different purpose for this blog. I've been trading for quite a while now, with some success, but I know I can do a lot better. It's not my strategies or my commitment. It's my psychology. I haven't yet defined who I am and how I view the market. I haven't yet defined my trading goals and how to break it down to smaller objectives to achieve that main goal. Well, I'm going to start doing that in this blog. I'm going to work on my trading psychology ( and maybe put a few trades up as well.)

So, what is my goal as a trader??? Absolute returns of course!! A million bazillion dollars!! Hehe. Financial freedom would be nice, and working for myself has been awesome but I think there's another reason. I think God gave me the passion to play this game. A gift to make money out of thin air. A gift I haven't really tapped in to. So, to pay back this gift given to me, I want to enrich the lives of others financially, and to give to those who don't have the opportunity to invest or those who can't help themselves. I'd like to create a charitable trust fund where all the profits go to good causes like fighting illness and disease, the poor, whether it's here in the US across the globe.

I think Winston Churchill said, "We make a living by what we get, we make a life by what we give." I want to be more of a giver. Honestly, I'm not much of one now, and that's one of the things I have to work on myself.

Anyways, to achieve my goal of absolute returns for my funds is a tough one. I was just reading Trader Monthly where the top money manager made over 300% last year. This guy manages over $2 Billion. For those of you that don't know, that is completely insane. Moving that much money is difficult. Actually, for most managers running money that size, 20% return puts you in superstar status. Anyways, I can go on that forever. Back to my goals.

I have 3 main trading strategies: a basket of currencies, discretionary forex trading, and options trading.

For my currency basket, my goal is a 100% return. This is very doable.

For my discretionary forex trading, I want to have a 20% return. I think this is doable as well, but I am incorporating a new daytrading strategy. We'll see how that goes.

And for my options account, my goal is a 30% return.

So, from this day I will review my accounts every quarter, starting with the end of Q2.

So, that's my yearly goals. In my next post I will write down a few of my beliefs in the market and break down my yearly goals into quarterly goals.

2006-09-13T11:41:00.000-04:00

Where have I been? Well, I've been vacationing, party, and wining and dining women all over the world! Okay, maybe not. I have been trading just a little too lazy to blog about it. Well, i'm getting unlazy, so how's my summer trading been? Well, i'm my options account i'm back up 18% ytd. Would've been higher, but i got crushed back in the spring when my Russell 2K index spread went totally against me. My forex trading account is doing well up 5% ytd, but now i'm toying with carry trades and playing the tight correlation between EURUSD and USDCHF. I'm going try to update as much as possible, so stay tuned!

Options and Forex Update

2006-04-24T08:52:00.000-04:00

April options expiration has passed and I learned a new lesson...If, it's the next to the last day of the options cycle, and your short on an index option is close to ITM, spend the small commission and close it out! Here's what happened: The Russell 2000 index appeared to be OTM on Friday, so i assumed that my short calls expired worthless. Wrong! The quotes that are shown during the trading day for indexes are based on 60% of the stocks opening up in that index, so it really doesn't show the true price of the index. So when I thought the Russell 2000 index closed less than 780, the settlement price was actually 783.08!!! Ouch!! So, I got bit for 3 points on that one which means I lost $2.40 a contract. Since the Russell 2000 is what I play the most I got a big chuck of my year-to-date profits eaten up. I was up 17% on my account year-to-date, but now i'm up only 10% year-to-date. Still not bad for 3 months I guess. It's an expensive lesson worth learning in the trading business.

Forex Trade upate:

My short on the USD/CAD is working out nicely, but I think it's time to take some profit off the table. I can see that the pair is a bit oversold and should make a strong correction before ressuming the trend back down. Closed half of my position for a profit of 51 pips. Moving stop for other half to break even. My forex account is actually starting to look pretty nice.

Forex Trade - USD/CAD

2006-04-10T08:25:00.000-04:00

Here's what has been happening with USD/CAD:

The pair made a couple of closes below the fib lines I pointed out on the previous chart. If you stuck with the short trade it would have netted around 125 pips for a very nice profit.

USD/CAD is a "commodity currency" which means it is correlated with commodities like oil, metals, etc. We will probably continue to see commodites rise which means a continued drop in this pair. I'm looking to short 10 pips below the previous day's low with a stop above the previous day's high, and target the bottom of the channel.

In my options account, the Russel 2000 index has been going strong which brought the index dangerously close to my short Apr calls. So, I adjusted the my calls another strike higher from 770 to 780, which reduced my profit from $2.20 per contract to $.60 a contract. The index has dropped down to about 756, but I think I did the right thing in protecting my position. Also, I bought calls in IWM to hedge and so far they have made a pretty decent profit. We'll see what happens at the April expirations!

Forex Trade - USD/CAD

2006-03-28T13:47:00.000-05:00

Trade review and idea on USDCAD:

As you can see in the yellow box on the chart that the trade went my direction for a max 95 pips. I decided to take the trade off when it hit the 50 SMA for a total of 80 pips.

I'm still watching this pair looking to go long or short again if it breaks one of the fib extension levels as drawn on the chart. No specific entry points. I'm just going to keep an eye on it for a few more days.

In the options world I've entered new iron condor postions but the market has moved closer to my calls in RUT. So, to hedge I bought Aug 06 ATM calls on IWM just in case. Should soften the blow just in case my written calls go ITM. If not I'll keep my position in IWM and continue to write calls against it until August expiration for extra credits to my account. I love options!

USDCAD - 03/09/06

2006-03-09T22:17:00.000-05:00

Here's a trade idea on USDCAD:

Short at the top of the channel at about 1.600. Stop above 1.1650. Target the middle of the channel around 1.1500.

Options Update - 02/21/2006

2006-02-21T17:44:00.000-05:00

My Feb options positions all expired with profit.

XEO 100 FEB position expired with a $90 profit per contract.
SPX 100 FEB position expired with at $100 profit per contract.
RUT 100 FEB position expired. I closed out a portion of that position, so my total profit for it was $185 per contract. Not a bad month I should say.

For the March expiration cycle I pretty much entered the same positions, but with a closer trading range. It seems like the indicies are having a tough time breaking to the upside. Also, I have entered into a couple of butterflies on the XSP. A put butterfly at 126/127/128 for a debit of $10 per contract and a call butterfly at 129/130/131 for a debit of $10 per contract. It's a low probability trade, but if either hit maximum profit that means a 900% gain on my investment. I just thought I'd start to incorporate a new strategy.

As far as my forex trading goes...I'm still developing my strategies. With forex I think I need to focus on shorter time frame and adjusting my entry rules. It's working out pretty well so far. I will have a new trade up later this week.

2006-02-09T12:43:00.000-05:00

Hello hello...sorry I haven't been updating my forex blog. I have been trading, but I've been working on other things and other traders, and I haven't had a free second to write down an entry or two....

I have a comment asking me to describe my method. Really, there's nothing much to it. I basically trade off support and resistance. It seems in forex, the markets react well to moving averages, fibonacci lines, pivot points. I also take into account news and economic reports coming out. I know that's not really much of an explination, but after watching the markets for so many years I guess I have gained experienced on how these reactions take place.

A tip to use with these tools, especially fibonacci retracements, is that the trend is your friend. Not saying that it is impossible to trade profitably against the trend, but your probability of a successful trade is much higher.

Right now the markets are pretty choppy to do short term trades. In the longer view, it seems that the US dollar is making a run, so working on 4 hour and daily charts may be the way to go now. Check out the AUDUSD, NZDUSD, USDCAD, and USDJPY. They're all trending, but it's a slight trend. I think the dollar's strength is going to continue with the next few interest rate hikes, but with the removal of "a measure paced" in the last FOMC statement, who knows.

Well, hopefully i'll be able to post up a trade idea tonight.

2006-02-02T12:00:00.000-05:00

I'm sorry I have not been posting in the last few days. The market has been really choppy, largely due to the FOMC meeting this past Tuesday. With that meeting behind us I think it would be okay to get back into the swing of things. I should have a new trade idea tonight. Also, check out my good friend and mentor Pipcrawler. He posts his daily picks at http://www.babypips.com/forex-analysis/pick-of-the-day.html I'm learning a lot from him and his methods. Stay tuned for a trade idea tonight!

-Tradervlad

Forex Trade Review - NZDUSD

2006-01-26T08:51:00.000-05:00

Shorted NZDUSD at 0.6849 and made 10 pips. Here's the chart:

Forex Trade Idea - NZDUSD

2006-01-25T09:25:00.000-05:00

Here's a good chart setup for the NZDUSD:

The 200 SMA has always been a good support/resistance point to trade off of for as long as I can remember. Here on the 1 hour the 200 SMA stopped the bull run the pair was making. Now I have two orders in for a long and short trade. If a full candle forms above the 200 SMA i'll go long with a 10 pips stop below the 200 SMA and a target of 10 pips below R2(0.6885).
I mostly think it will go short so I have an entry order to short at 0.6859 with as stop of 10 pips above the 200 SMA and an initial profit target of 10 pips. I'll probably open up 2 lots with the second lot going for the 50 SMA as a target(approximately 40 pips). -TraderVlad

Forex Trade Review - USDJPY

2006-01-25T04:34:00.000-05:00

USDJPY decided to do a little consolidation, so I decided to take my 62 pips per lot and get outta there! When consolidation occurs I'm never sure where a pair is going to go next, so in this case I thought 186 pips is good enough for me. I'll just wait for the next trading opportunity. Probably the thing I learned most from this trade is that it fits my trading style. Like with options, I pretty much set it and forget it. I put on a trade and I check the price maybe once a day or at the close just to make sure nothing crazy happened. I may make an adjustment once a month, if even that. I'd like the same with forex. Just put the trade on and check it maybe once a day. That's it. So, I'm going to incorporate longer term trades using daily charts and 4hr charts, but if i see a great 1hr chart, i'll make sure I post it up too. Okay, off to look out for the next new idea!

-TraderVlad

Forex Trade Review

2006-01-21T12:26:00.000-05:00

I apologize for the lack of updates. I've had a sick friend and I've been out of town for the past few days. I'll be back monday morning with another trade idea and chart. Also, I fix the problem with my latest chart not pulling up on that USDJPY trade. Just a quick updat on that trade. It was up a max 60 pips before it reversed into the negative side and then back close to BE. USDJPY closed the week at 115.27. I entered at 115.19.

One thing to think about in this position is that I'm going against the dollar which may not be a good thing during this time of year. We're getting Nov. economic reports, and the end of the year is usually a good time for the US as far as economic growth. But I'm going with the short term downtrend, and by the looks of the daily chart it's an even struggle between the bulls and the bears now. I may have to readjust this position by taking a few lots off. I'll post if I do. Have a great weekend!

- TraderVlad

Forex Trade - USDJPY

2006-01-18T10:40:00.000-05:00

I've been searching through my usual forex pairs and I found a nice chart on the USDJPY. Here it is:

Not considering the recent TIC data report and other US economic reports, I like this chart for the short term down trend and retracements. It's following retracement patterns beautifully. I will open 3 lots with 3 profit targets to maximize risk to reward ratio. Max risk is 225 pips. max reward is 492 pips if I take off 1 lot for every target hit. This is definitely going to be a long term position.

Now considering economic data, the TIC report today showed a very strong number of 89.1B which definitely covers last week's trade deficit of 64B. Good news of the US economy and the dollar, which goes against the trend of this trade. I will just have to see.

Tech Support Please!

2006-01-17T10:37:00.000-05:00

Well, I woke up this morning to find my pc having all kinds of issues! It shuts down by itself, and when it was on I would click on the web browsers and on the FXCM icon and nothing would happen. Grrrrrrrrrrrr!!! Luckily, Xtick was working, but what's the point if I can't access my trading account. Seriously, these brokers should developing software for the Mac. Until I get a new laptop it looks like I'll still be able to put up chart ideas, but not trade them.... anybody have any ideas on a new laptop? Nothing fancy, it would be just for websurfing and forex...

Forex Trade Review - EURJPY

2006-01-14T08:12:00.000-05:00

Well, it look like I got stopped out of my most recent trade idea on the EURJPY. ECB president Trichet spoke yesterday with a hawkish tone towards the EU economy. This indicated rising inflation and interest rates which caused the Euro to shoot up in value. Now, I traded an hour and half after he was supposed to speak thinking i'm okay, but appearantly the market took a while to factor in his comments. On the plus side, I do trade the Alba system which was a winner, so my loses were offset by that. at the end of the day i was only down 4 pips.

Forex Trade Idea - EURJPY

2006-01-13T10:13:00.000-05:00

Forex trade idea for 01/13/06:

I know it's friday but this chart looks so good:

It might not move again until next week, and usually i don't hold positions over the weekend, but with EURJPY being in a downtrend and resistance at 100 sma and 61.8% retracement level this is a high probably of profit potential with a greater than 1:1 risk to reward ratio.

So, i'm going to be patient with this one and look to exit on monday or tuesday if it continues to consolidate. We'll see what happens. The weekend is here so let's take a break from Forex and have a great weekend!!
-TraderVlad

Forex Trade Idea Review - USDCAD

2006-01-12T08:17:00.000-05:00

Yesterday I shorted USDCAD at 1.1609 and closed it at 1.1599 for a 10 pip profit. It did eventually hit my target of the S2 line at 1.1573, but I'm glad I got out at 10 pips. I'm not greedy. hehe. Here's the chart:

Forex Trade Idea - 01/11/06

2006-01-11T09:07:00.001-05:00

here's an idea for a forex trade today:

USDCAD is in a short term downtrend. I would take a short trade below the S1 line and target the S2 line. My stop would be right above the 200 SMA. Good luck!

Forex Trade Idea Review

2006-01-10T22:27:00.000-05:00

I closed the trade out today because it started to consolidate between the 50 and 100 sma's. It'll probably do that for a while since there aren't any major news events coming up. So I took a 9 pip profit, but it actually maxed at about 29 pips. I think I need to develop better rules for taking profit. Anyways, here's the chart:

Forex Trade Idea - 01/10/06

2006-01-10T08:34:00.000-05:00

Here's my trade idea for today:

short AUDUSD @ .7509/ Stop @ .7553/ target the 200 sma

Here's the daily chart:

Here's my hourly chart:
This is a pure technical play. Let's see what happens...

Options Trade - 01/09/06

2006-01-09T11:19:00.000-05:00

I entered into three iron condor positions today:

RUT FEB06 650/660/740/750 for a credit of $2.10 per contract
SPX FEB06 1230/1235/1335/1340 for a credit of $.90 per contract
XEO FEB06 560/565/605/610 for a credit of $1.00 per contract

each positon has a profit potential of 20% gain if OTM by expiration.

Option trade update:

The RUT JAN06 Iron condors I entered in Dec '05 have been closed out for a $1.50 profit per contract. 15% gain for each position.

No forex trade ideas right now. I don't really like trading on mondays plus there aren't any significant reports coming out today. We'll see what happens tomorrow!

Forex Trade Review 01/06/06

2006-01-06T08:00:00.000-05:00

Hello, just an update on the trade idea from yesterday. I entered short at 1.1625 and it just went sideways. I'm assumed the market was just going to wait for the NFP report, so I just got out at 0 pips. The NFP is a crazy report and I didn't want to get caught up in any whipsaws...hopefully i'll have a trade idea soon for the NFP, so stay tuned...

Forex Trade Idea - 01/05/06

2006-01-05T14:37:00.000-05:00

here's a trade idea on USDCAD

short USDCAD @ 1.1625/ stop above 1.1670/ take profit @ 1.1546

Let's see what happens...

Forex Trade Review - 01/03/06

2006-01-03T10:34:00.000-05:00

hmmm...well, it looks like i got stopped out on my position from this morning. 30 pips loss. here's my thoughts. I knew there was a US economic report coming out at 10:00 am EST. Private and government construction was up, but home building growth was at a slower pace than originally predicted by economists. They predict in 2006, because of the rising interest rates, home sales will slow considerably in comparison to the previous years. I guess this is what caused the sell off in the dollar today.

This wma cross system I have used has not been effective for me lately during the US/EU session. It has been during the EU session when I would just analyze and put the trade on at night before the EU session starts. From now on i'm just goin to stick with that and not use the system during the US session. we'll see what happens....

My Forex Trade Idea - 01/03/06

2006-01-03T08:38:00.000-05:00

Here's a forex trade idea based on the 5/20 wma cross over system:

Enter short on GBPUSD at 1.7253. Stop at 1.7283 and target 1.7223. Profit target right above pivot point. Market reversals happen at pivot points, so that's definitley a good time to take profit. Time to make some pips!

Forex Review

2005-12-28T10:28:00.000-05:00

I've been watching the forex markets and reading market reports all morning and here's my new idea...stop trading!! Because of the holiday season t's going to be choppy for the rest of the week and with low volume there's higher chances of higher volatility. Ofcourse, I'm going to continue to watch and if a really, really, really good trade idea comes up I'm definitely going to take it. For today, I'm just going to relax and maybe play some video games(while I have charts up ofcourse). Tomorrow there's a few US economic reports...well see if any good opportunities arise. To those reading have a good one!

Forex Trade Review - 12/27/05

2005-12-27T22:07:00.000-05:00

Well, it looks like my forex trade stopped out today...can't win them all as they say. Here's the chart:

The reason I took the trade was because it was in a downtrend, it appeared to bounce downwards away from the 100 sma, and the economics of the forex trade sounded pretty good. Now, I saw the long wicks in the candles before the trade, but I was convinced that it would still go downwards. I guess it's a good sign in the shorterm of the turn around. Hopefully another lesson learned and I won't make the same error in the future. As far as a new trade idea, nothing good at the moment. I will update in the morning. Good night!

Forex Trade Idea - 12/27/05

2005-12-27T08:26:00.000-05:00

Well, I had a great break and did some non-stop eating, but it's time to get back to making some pips! Well, I've been reading reports and checking out forex charts all morning, and here's a forex trade I just entered:

Short EURJPY @ 138.66/ stop @ 138.96/ target 138.18. This trade may take a while, so i'm going to let it run. Good risk to reward and the EURJPY is in a downtrend. Also, because the Japanese economy is poised for growth and the EU is still unstable, I may even let the trade run if it continues in a downtrend and add positions on later. Let's see what happens....

And I'm also thinking about entering short on GBPJPY, but I'm not sure if I can handle the spread on that bad boy:

Well, I would love some feedback on my charting if anyone has any. Good luck to all!

Forex Trade Review - 12/22/05

2005-12-22T17:15:00.000-05:00

Sorry, but it's been a hectic week and a half so I've gotten kinda lazy with my trade idea posts. I did trade and here's the record:

It was a pretty good week with a 4:1 win ratio, but my avg. win vs. my avg. loss is very lopsided. It's something I really need to work on and I believe the cause of it is patience. I trade with hourly charts, so I'm going to have to adjust my time frame to about a day or so in being in a position to let the position "mature" for lack of a better term. Hopefully, after the holidays I'll be able to get back to writing regular trade ideas and reviews.

I'm probably not going to trade for the rest of the week, so to everyone I hope you have a blessed holidays!

Forex Trade Review - 12/21/05

2005-12-21T09:18:00.000-05:00

I did a couple of shotgun trades last night... haha not really shotgun because they were based on my fib retracement methods.

Here's the record:

Here's the charts:Usually, I would go for the previous high or low as my first profit target, but I used a little discrection with news coming out in AUDUSD and I'm trying out a time filter on USDCAD. So I exited with a total of 26 pips gain.

Well, off to look for the next trade....

Forex Trade Idea Update - 12/20/05

2005-12-20T10:10:00.000-05:00

On the USDCAD trade idea, it never reached my entry point of 1.1657. It came as low 1.1659 then shot straight up...currently at 1.1714 at the time of this writing.

My forex trade idea on Cable turned out to be a 30 pips loss. When I put this trade on I kinda broke my rules. The cross was at 1.7610, so I should've entered at 1.7640. If I entered there I would've hit my 30 pip target at 1.7670. I entered at 1.7650 because that was the pivot point and GBPUSD might have hit resistance at that point. Hopefully, another lesson learned. Stick to the rules.

Also, US PPI came out with a surprise number of -0.7% vs. consenses of -0.5%. A really good number for the US which could lower concerns of inflation. The dollar is making a strong right now. I'm going to look for retracements and possibly enter long the dollar.

I'll update this blog this afternoon with charts.

Well, off to look for another trade idea....

Forex Trade Idea - 12/20/05

2005-12-20T03:47:00.000-05:00

I'm looking at a trade on USDCAD:

I have first or second entry on the chart because I have decided at the moment which one i'm going to enter first. Most likely the 38% fib line. So i have put an order in to buy at 1.1657. Stop at 1.1623. Target at 1.1700. USDCAD is in a minor uptrend and I don't want to trade against it.

I also have an order in for Cable to buy at 1.7650. Right above pivot point. I know I have drawn a downward channel, but this trade is based on the wma cross. Stop at 1.7620. Target between 1.7680 - 1.7700

Forex - 12/19/05

2005-12-19T08:51:00.000-05:00

So, last night I was looking at cable (GBPUSD)using my wma cross and thinking I should short at 1.7685. Here's the chart I was looking at:

I've only been trading this system for a few months, but I know it works because in the morning hours (4:00 am EST - 6:00 am EST) Cable makes a move.

Here's what happened:

It would've been good for 30 pips if i entered at 1.7685 and it hit my first target at 1.7655. From now on that's what i'll do...check the cross at about 2 am EST and if it looks good...go for it!

Right now I'm looking for a new trade idea, so stay tuned!!! - TraderVlad

Forex Trade Idea Update - 12/15/05

2005-12-15T19:10:00.000-05:00

Well, it looks like traders are still moving into the yen, but there wasn't a retracement that brought down yen enough to trigger my trade ideas.

CPI for EU is coming out at 5:00 am EST. My next trade idea will probably be for the EURUSD. Generally I like to stay out of trades during news reports, but I'm starting to develop trading around the news as a part of my trading arsenal. I'm expecting to be lower than previous which means a lower possibility of rate hikes by the ECB. Based on this reasoning, I'll probably look to short EURUSD below the previous low of 1.1906. If I come up with stop and targets I'll update this blog. Have a good night!

Forex Trade Idea - 12/15/05

2005-12-15T12:21:00.000-05:00

Looks like all yen crosses made big moves yesterday and last night. Even though it's some of the largest moves in a one or two day period time I think anybody has ever seen(700 pips in GBPJPY/300 pips EURJPY)I'm going to still going to go long yen because I think traders are going to continue to move from the dollar to the yen. Here's my trade idea

EURJPY: short at 139.78. Stop at 140.34. Profit target at 139.05
GBPJPY: short at 206.51. Stop at 207.35. Profit target at 205.30

Forex Trade - 12/14/05

2005-12-14T10:29:00.000-05:00

I woke up a little bit later than usual and as soon as I saw the charts I saw another trade setup on USDCAD. I knew the Trade deficit report came out, so I waited about half an hour after the report to enter the trade. The Trade Deficit hit an all time high. Now I knew I should have went long because the number was so high, but i entered short mostly because of the longer term downtrend. So I entered short at 1.1478 with a profit target of 1.1442 and a stop at 1.1510. Unfortunately, the trade deficit number pushed my position to hit the stop. So, I had a losing day, but I'm gonna analyze this trade more this afternoon and try to make sure I don't have a losing trade again in future similar situations. I hope this helps...

Forex Trade Idea Update - 12/13/05

2005-12-13T17:19:00.000-05:00

Well, it looks like I'm positive pips today. I entered short on USDCAD @ 1.1531 at 7:20 am EST and at 10:23 am my profit target of 20 pips was hit. I hope others have benefited from the Forex trade idea this morning.

So as expected, the Fed raised the raised interest rates another quarter of a point. Here's the Yahoo Finance article on it if you want the details. But the most important part that moved the markets was how the Fed left out a key phrase they usually include when they raise rates - "that even with the increases rates were still quite low." This is a signal to economists that the Fed is close to halting the rate hikes, possibly after the March or May Fed meeting. We'll just have to wait and see what the economy does and if inflation creeps up.

I have 3 more days until December options expiration. Wall Street used the Fed's remarks today to rally. Right now I'm 3 points OTM on my XEO position. Hopefully, it'll stay that way for the rest of the week!

Forex Trade 12/13/05

2005-12-13T07:36:00.000-05:00

Well, it looks like the same Forex trade idea from yesterday looks good to me. So I will enter USDCAD @ 1.1531 short with a stop at 1.1550 and a profit target of 1.1511. I readjusted my profit/loss targets because of the news reports coming out just in case of quick whipsaws. A safer trade would be to wait until USDCAD touches the 50 SMA on the one hour chart, but I'll just go in at 1.1531. Let's see what happens...

Forex Trade Idea Review - 12/12/05

2005-12-12T20:58:00.000-05:00

Well, it looks like I never entered the trade. After I put up the trade idea USDCAD came withing 2 pips of my entry point. Man, if it did enter it would have been good for the 30 pips profit target. Actually, as of this moment USDCAD has stalled at the 1.1500 price level. 30 pips would have been nice, but it's time to move onto the next trade opportunity.

Well, my charting software is still no good, so I'm using my broker's charting software which will have to do for now. The only thing I can't do very easily is drawing channels, which is a pretty big part of my analysis. Hopefully, it'll be back up soon. Anybody know of any good charting software besides Xtick?? Let me know!

Forex Analysis - 12/12/05

2005-12-12T08:32:00.000-05:00

Hello, let's see what's going on in the Forex market today... Well, the dollar is taking a beating against the euro and the pound due to buying in the middle east and asia, and traders here in the US readjusting their positions before the Fed meeting tomorrow. This week is action packed full of economic reports. Hopefully, I can catch some moves and make some pips. I'm thinking of one of two ways to play the strong move. 1. Wait for retracement and go long euro or pound... 2. Wait to see if there is going to be consolidation and possibly go short. So, basically we gotta wait and see. If i see a trade forming I will post again with an update.

My charting software is down so I can't really comment on the other pairs. I'm kinda upset because I had a great chart setup I was going to post yesterday on USDCAD... but xtick has been down all weekend!! ARRRRGGGHHH! Okay I'm over it..time to move on hehe. Hopefully it will be back up soon. Well, I am still thinking of getting into USDCAD. There isn't much in the way of economic news in Canada so I think it'll continue to react to technicals, most notably the 50 sma. It's been bouncing off the 50 sma to the downside, plus the pair is in a downtrend...so here's a trade idea:

short USDCAD @ 1.1531...stop at 1.1560...profit at 1.1502

Roughly a 1:1 reward to risk ratio.
Let's see what happens!

OPTION UPDATE: Sold Iron condor on RUT 100 Jan at
730/740/650/640 @ 2.00 per contract.

Forex Trade Update/ New trade idea

2005-12-09T09:27:00.000-05:00

Hello! Well, it looks like the short on GBPUSD @ 1.7498 got stopped out at a 30 pip loss. The reason I entered that trade was because I use the 5/20 MA cross which works really well in short term market reversals and trending markets. It looks like though cable decided to go range bound last night and stopped me out. It's okay, just analyize, learn, and move on...more opportunities later to make pips right??? :)

And the TradeIdea of the day is: No trade! With no major economic news for the rest of the day I'm going to sit out. U. of Michigan consumer confidence has just come out and it looks like it's pushed the dollar a little bit. With most of the world getting ready for the weekend there's not much goin on in the other currencies.

I will post a week in review, plus my outlook this week. I will also post an update later on my options trading. I am possible going to enter new postions in my options account. If you do trade Forex today, please be cautious!

Forex Trade Signal

2005-12-08T20:24:00.000-05:00

Short GBPUSD @ 1.7498...stop 1.7528, take profit @ 1.7468 ... 5wma/20wma cross

Forex Trade Review:

I did quite a few trades in the past few days trying to catch the short term moves in this choppy market. It's been great for testing out a few ideas as far as my methods on support and resistance, fundamental discretion, and time filters and discretion. Here's my record from 12/06/05:

Currency Date/Time Entered Sold/Bought Bought/Sold Gross P/L Net P/L
USD/JPY 12/05/05 08:36 AM B 121.14 S 120.94 16.51 15.38
NZD/USD 12/06/05 07:07 PM B 0.7136 S 0.7160 -24.00 -24.00
USD/CAD 12/06/05 08:03 PM S 1.1576 B 1.1619 -29.29 -29.29
GBP/USD 12/06/05 08:05 PM S 1.7383 B 1.7353 30.00 30.00
EUR/JPY 12/07/05 09:27 AM B 141.71 S 141.86 12.39 12.39
NZD/USD 12/07/05 07:45 PM S 0.7031 B 0.7011 20.00 20.00
USD/CAD 12/07/05 10:07 PM S 1.1590 B 1.1614 -20.66 -20.66
EUR/JPY 12/08/05 07:58 AM S 141.82 B 142.05 -19.07 -19.07
NZD/USD 12/08/05 08:51 AM S 0.7004 B 0.7018 -14.00 -14.00
USD/JPY 12/08/05 11:59 AM B 120.32 S 120.32 0.00 0.00
Total: -28.12 -29.25

Now the first thing that comes to mind when i look at this is, "man, i'm trading way too much!" The next thing is obviously my losses on average are larger than my wins...roughly 21 average loss and a 19 pip average gain. And I have a 4:5 win/loss ratio. One of the important lessons I hope will stick in my head is from the 24 pip loss on NZD/USD, which is to always check the news before you get into a trade. Well, the news on this pair at the time was unexpected, but I have it in my head now to always see what's happening before getting in. I hope this review helps someone. If anyone has any questions or comments feel free to leave a comment or send me an email at tradervlad@gmail.com

Options Update 12/08/05

2005-12-08T13:49:00.000-05:00

Yesterday, I closed out the call side of my RUT iron condor spreads. My short calls started at a strike of 700 and the current price is about 686. I learned a long time ago to take some profit off the table to take away event risk. The general rule is take half of your positions off when you've reached 80% profit point. I closed out all of the call side of my options with a profit of $100 per contract because it's so close to the 700 strike. Now I'm just waiting to see what happens in the next week with the S&P 100. I have Iron condors with the XEO as well with my short call spreads at 580/585. Right now the market is trading sideways...hovering around it's highs for the year. The current price of XEO is 574.49. I think it'll stay below the 580 strike because i think the market is overbought and it looks like it's having trouble breaking into new highs. We'll have to wait and see next week...

Since my last forex post, i've made about 10 trades...i'll update and talk about those trades in my next post.

USDJPY trade was good!

2005-12-06T07:59:00.000-05:00

It looks like the trade mad a good 30 pips. Couple of thoughts on it though. My confidence was shaky on that trade, and the reason for that is because when i entered the usdjpy hadn't touched the 50 sma yet. If I had waited, that would have reduced my potential loss and increased my profit target. Ofcourse, the trade off is potentially missing the move. All in all, it worked out well. If you watch the USDCAD or AUDUSD, their central banks are making rate decisions today. Canada will announce at approximately 9:00 am EST, and the consenses is that they will raise rates to 3.25% from 3.00%. The Aussies will announce their desicion about about 5:30 pm EST, and consenses will be no change. It would be a great lesson to watch and see how those decisions affect their currency, especially if there is a surprise. I'm looking at a short position on USDCAD at the moment. I am going short at 1.1530 with a 1.1565 as my stop and 1.1510 as my profit target. It's a 20/35 risk to reward ratio, but it looks like a high probability profit trade.

Forex - 12/05/05

2005-12-05T08:29:00.000-05:00

My previous trade on GBPUSD entered at 1.7295. It stopped out at 1.7325. It have a max of about 20 pips, but I was going for 30 pips. Why did it not work? I would guess that I should have not entered that cross because there was news from the UK coming out at 4:30 am EST. The next cross was a winner. I should have waited for that one because it did happen right around the same time as the news report, and the news report pushed it into profit territory. Right now 8:32 am EST I'm looking at a long trade on USDJPY. Enter at 120.92. Profit target of previous high at 121.40 and stop loss at 120.56(trend line). About a 1:1 risk to reward ratio. Let's hope it works

where have i been??

2005-12-04T18:39:00.000-05:00

Okay i know i said i'd be posting a whole lot more, but i've been going thru a few changes as far as what i trade and my strategies. This past month I've been focusing on forex a whole lot more, doing a morning analysis on the EURUSD and developing systems for multiple pairs. I usually post a morning analysis on another website, so i think i'm going to start posting here my moring forex analysis. As of this moment I'm looking at a potential trade. Short GBPUSD @ 1.7295 with a stop loss at 1.7325 and a target of 1.7265. I'll do an update on this trade in the morning.

"Life is a mirror. If you frown at it, it frowns back: if you smile, it returns the greeting." - William Makepeace Thackeray

Forex trade

2005-11-04T10:27:00.000-05:00

Short GBPUSD @ 1.7600....30 pip stop loss. target 1.7500 this trade may take a few days to hit target. good luck!!

www.babypips.com

2005-11-04T09:10:00.000-05:00

I'm not sure if i've mentioned it before, but i'm also a forex trader as well as options trader. I thought i'd start posting my forex trades as well. Before i start doing that, if anybody who reads this who is new to forex and wants FREE education in that market please check out www.babypips.com It's a new site that's again FREE and a fun way to learn how to trade forex. I have a blast trading and I think learning how to trade forex should be fun too! I wish i found this site when i started trade...might have save me a ton of money in education, especially in the school of hard knocks!

Now, the reason I bring up www.babypips.com is because they have the ALBA system, which you get for FREE if you sign up for the ALBA Learn'n Trade. It's a great system that i've been using for a while with 80% winning trades and about a 1:1 risk to reward ratio. Needless to say it's been good to me. I'm still learning forex, but this system has kept my account afloat against my bone headed crazy forex bets. eventually, i'll learn some discipline hehe. It's a great system for beginners because it's so EASY! Now the ALBA Learn'n Trade is FREE as well!! All you have to do is sign up for one of the brokers babypips recommends and use babypips as a referral. That's it! FREE EDUCATION! FREE SYSTEM! FREE LIVE TRAINING! You can't beat that!! So, check out www.babypips.com!!!

Okay so it's been a while...

2005-10-24T21:25:00.000-04:00

I haven't posted in this thing a while, but now it's time to start again. i've been slackin this thing because i'm getting comfortable. Been relying only on iron condors. Can't do that anymore. Like anything else I can't get comfortable because that's when you stop improving. Anyways, let me talk about october expiration cycle.

Essentially, it was a very volatile market. A week before options expirations there was a drop in the S&P and Russell indexes of about 5% or so. The markets are very mixed now with oil, fear of inflation, hurricanes, and the uncertainty a new fed chairman will bring. I was heavily weighted in the S&P 100 options, and the Russell 2000 index options. I bought butterflies and condors to adjust the put side of my iron condors and fortunately i didn't end up in the money. I'm sure that you've heard that getting exercised isn't bad, which it isn't, but there are still exercise fees.

I've learned an important aspect of money management during this cycle. Here is my new rule: Do not have more than 70% of cash tied up in trades. During this cycle i pretty much had all of my capital in trades. Unfortunately, the market did what it does...moves unexpectedly without warning. I had no extra capital to adjust or buy out of my positions. Also, i missed getting into positions for the next cycle. So now with 25 days to go in the current cycle i am unable to get into any iron condor postions with any decent credits or probability of profit.

I've missed the nov options cycle, which is okay because it's time to start a new trading strategy. I'm excited because at the end of this week the CBOE will start trading Weekly Options. Every friday, except for when the regular options expire in a week, there will be options on the SPX and OEX expiring in a week. There's only going to be 5 strikes; two in and out the money and one at the money. It's a great way to take advantage of economic or business news that can move the markets fast(like the 1.6% rise in markets today after the announcement of the new Fed Chief). I have ideas on creating a strategy on day trading these weeklys and adding a new dynamic to my portfolio. We'll see what happens.

Last week of Sept exp

2005-09-11T13:29:00.000-04:00

Haven't posted on here for a while...This options cycle i decided to take another step back an do more backtest, so i only traded half my account in various index option spreads. I'm going to start updating on a regular basis. I think I need to. Writing down all the things you learn from experience is the only way to have it stuck in your head. So, I'll be posting more soon. Visit again!

freaking CME

2005-08-17T23:07:00.000-04:00

so on monday, CME takes an 18 point dive. It's the last week and it takes a dive. I've been waitin forever and I was up $2.50 each contract. had to take a $.30 hit now. went in the money. Lesson learned from this. ALWAYS close half your position when 80% profit has been achieved. Lock in the profit Vlad!!! a nickel or dime isn't worth the event risk. Now it looks like I'll only be up about 4% this month. At least it's not a losing month.

Second thing I'm learning. I've been trying to get in the SPX. Damn near impossible, even if i'm $.15 below national mid. I think this time of the cycle there's alot of sellers out there. Not buyers.

Can't get emotional, or this game will kill you emotionally....

"to one who has faith, no explination is necessary. To one without faith, no explination is possible" - Thomas Aquinas

2005-08-10T09:55:00.000-04:00

Well, it's about 9 days till Aug expiration and so far so good. I know I should just move on from old trades, but a lesson was learned with ADBL. Always cut your losses. On reasons i can't find at the moment the stock went from $18+ down to $13.5 at the moment. I would've taken the full loss of $2.5 minus the credit. Instead I only took a $.60 hit.

On Aug 2, I put on an iron condor on the SPX. 1190/1195/1260/1265 Aug contracts and i managed to get a .50 fill on it. not bad. a quick 10% on my money. hopefully it'll stay under 1260 for the next nine days.

My CME trades are looking good. The stock had a continual 5 day drop, looks like investors are buy on the dip pushing the stock back up to about $300. Looks like i'm gonna get full credit on each Aug position. $2.70 per postion. It'll be good if i hit it.

Looking into Sept expiration I think i'm going to play the SPX for the most part. A whole lot less risk of movement with pretty decent credit. Right now the SPX hit the 38% on the fib and bounced straight back up. I'm looking to set up the next positions with a low of 1185 and a high of 1270. This is going to be the aggressive portion of my account.

In my FX trading I lost 30 pips per position today. Trade was based on my High/Low of previous day strategy. Alot of whipsaw during the european session, so i got stopped out. The trade would have eventually made money no more than 30 min later if i had a larger stop.

new trade

2005-07-29T22:15:00.000-04:00

Initiated iron condor trade on CME: Sept05 250/260/350/360 for a credit of $1.80. After reading financials looks like profits are just going to keep growing with the strong economy. So i put a 50 point cushion to the upside, and 40 points to the downside. Probably won't start seeing real gains on this position until september, but when it hits the $1.40 mark i'm going to take profit. When's the last time your bank gave you 14% on a $1000 in 2 months. Not bad.

blah blah

2005-07-27T12:29:00.000-04:00

Closed out ADBL trades yesterday because it was trading below $17....and it hit my stop loss of $.50 In the pre market it looks like it's trading back up. Great...looks like I need to take less risky trades, especially during earnings season.

Lost another 20 pips in FX account. Tried selling at previous day's low. It broke but not enough to hit my limit.

Today's trades

2005-07-25T03:12:00.000-04:00

BC triggered a trade in GBPUSD today at 1.7386. I didn't take it because I thought the pivot play on cable at 1.7444 was a safer play. And it looks like I didn't get it right this time. The BC play netted a max 50 pips, while the pivot play stopped me out at a 20 pip stop loss. Bought USDCHF on BC indicator at 1.2982 and that got stopped out on a 30 pip loss. So, I'm down 50 pips in my FX account today. I think i'll stick to rob's trades. haha

In options, ADBL went ITM today. I'm setting a stop loss at $.60 making it a 1:1 trade. It is on an uptrend, but it looks like it may close today below the trend line. I'll wait until tomorrow to make an adjustment. All other trades look good.

Using the gyration finder in Platinum last night I came up with 4 potential credit spreads for September: BIIB, WLT, BC, IR
I'm not going to enter into any September plays until 45 days until expiration. 45 days is a long time where anything can happen.

4 Iron Condors and a Bull Put

2005-07-24T18:54:00.000-04:00

On July 18th 4 positions were initiated....
Iron condors:
GOOG 260/270/350/360 for a $3.10 credit
NUE 40/45/55/60 for a $.95 credit
CME 260/270/340/360 for a $2.70 credit
VLO 70/75/95/100 for a $1.05 credit
Bull Put Spread:
ADBL 15/17.5 for a $.60 credit

Being a novice I didn't pay attention to the fact that this is earnings month. I was really worried when Google released earnings, but so far the stock has stayed around the 300 level. NUE had really good earnings along with the rest of the steel sector so I got hit on that one. Stock jumped up above the $55 level, so I bought back the call side of the iron condor for a debit of $1.30(ouch!)because I think the steel sector has been beaten. I think a lot of investors are going to jump in to this sector on good news. So as long as it does not go below $45 my max loss is goin to be $.35(not too bad)...It's all looking good right now, but I still have 26 days to go. If all goes well I should grow my account 10% this month, even after the hit with Nucor.

Google...??

2005-07-21T18:19:00.000-04:00

Google announced earnings today. Good profits, but there were negative remarks durning the conference call....sent the stock down as much as 20 points in the after market to bring it to about 298. Hmm, I have an 260/270/350/360 Iron condor on that bad boy. So the drop was kinda a relief. We'll just have to see what happens. I'm thinking with a big drop like that, the market is gonna see it as a buying opportunity. It's a great company with positive cash flow, good earnings and it pretty much dominates the industry. And for those of ya who do not know what an Iron condor is, you can "Google" it... hehe...but pretty much it's an advanced option play where if the price closes in between 270 and 350 by the option expiration, I make money and that is a good thing....it's a risky play to put on during earnings season, especially with volatile stocks like google, but what's life without a little risk right....

As far as the forex, i'm staying out of it for a few days to see what's gonna happen with the Yuan reevaluation and how the market is going to play that....that's just a little too risky for me...