Weekly Review 9 March: up +49%

Saturday 9 March 2013

After a frustrating second half in February, I am back into comfortable and positive territory. The account is up +48.9% for the week, and for March so far. This is the first week of March so there is the possibility of repeating February’s second half debacle, but I hope I am lucky or smart enough for that not to happen this month.

Attached is the updated worksheet, which will also be in the updated ‘Account Performance’ page.

I have observed that I always do well after I spend a lot of time analysing my recent errors following a period of losses. What I need to develop is for this kind of trading to become the ‘norm’, the habit. i.e. develop a winning habit. I must admit I have come a long way from a few years ago when losing was the habit and winning was an occasional pleasure. Hence my confidence that my trading will get better each week.

I have set myself some pretty ambitious goals for this year, in terms of account value by the end of the year and I’m quietly confident of reaching those goals. I have also set milestones marking my progress towards my goal. To make it interesting I’ve promised different friends and family a small celebration when I reach each milestone. The first milestone was celebrated in early February. I’m hoping the next milestone celebration happens next week!

Market Commentary

The market is always interesting around the NFP, the ECB meeting, and the Fed meetings, and becomes quiet / choppy away from these events. I tend to make profits around these periods of high volatility and then lose most of the profits in the choppy trades afterwards. I’ve learnt this lesson and will be careful to reduce my trading in choppy markets.

Here’s my take on the markets as I see them over the next few days, few weeks:

EURUSD: Is sitting on very strong support at 1.3000. This support was validated yesterday when the pair could not break the 1.2950 barrier and closed the week above 1.30. We can expect a bounce here. However, the bigger picture target from the break of the H&S top a few weeks ago is still in play – 1.2830. And if we do make it to that target it validates an even bigger H&S with the neckline at 1.3000, whose target is near 1.23. So choppy trade for the next week or so until 1.300 is broken cleanly and then a bout of EU weakness leading to 1.23. In the fundamental picture this aligns well with political events in Italy. New elections are likely to be announced after May 16, therefore the period leading up to that announcement should see Euro weakness. My analysis is not based on the fundamental events, but solely on the charts, but I like to see how the fundamental picture correlates so well with the technical picture.

USDJPY: The chart for this pair is fantastic. Rarely do we see the laws of physics working in the charts! (A body in motion continues in a straight line unless acted upon by an external force). In the markets almost nothing ever goes in a straight line for too long. The yen is the pair always breaking the rules. I expect the yen bear market will continue for a few weeks more, probably till it reaches 100. When the trend finally breaks, it will be a long and painful correction for those that entered late. I hope my system catches the turn and I can make some good pips from the correction when it comes. But for now it us onward and upward for USDJPY.

GBPUSD, AUDUSD, etc: I  can see clear opportunities in the GBPUSD but I figure why bother? When the EU and UJ offer such good opportunities, I don’t need to play  the GBP (the devil’s currency!) and the AUDUSD which has very low liquidity these days.

In line with my caution about over-trading I will be trading less now than in the past, so my blog will become more boring than usual. But as I’ve written elsewhere, this blog is about serious trading and making profits. No thrills, no gambling, no ego-boosting bombastic predictions. Good trading. Nothing else.

Attached is the updated account worksheet. Have a good weekend!