Getting Back Up

Those successful in the market will often say that it is not because they are right all the time, they are just better at accepting and fixing their mistakes. I'm still working on those two aspects of trading, but I have improved so much from when I began.

The market is always right.

You'll hear that said, too. It is a basic truism, albeit, somewhat anthropomorphic. I guess it should be, "The market just is." But, of course, it is not going to change because you push it to.

Accept that you were wrong and try to make the best of it. Which leads me to something called "outs." This is a concept that you will hear about frequently in the poker world, but not quite so directly in the trading world--which makes sense. In poker, the "outs" (that is, the number of ways you can make a solid, if not winning, hand) are much more tangible. We know exactly how many cards are in a deck, how many of each suit, and how many of each rank per suit. It's all easily summed up in an entry level probability formula.

The markets, however, are not so easily quantified. Whereas you know there are 52 cards in a standard deck, in the markets there is no upper bound on stock price, and the lower bound gets hit only when rock bottom, zero, is reached. Volume and earnings, volatility and news releases, make trading a much more complex game.

Take '08 and the beginning of '09, for instance. Records were broken, both positive and negative. But, even so, you must leave yourself an "out." Essentially, in the trading world this means: do not over utilize leverage, know your support and resistance levels, diversify (cash is diversification! as are short positions), and never ever place all your eggs in one basket (i.e. the opposite of diversification).

There are other rules, too, that will provide you with extra "outs." Those take time and experience to develop.

I will write some more about these topics, as they are extremely important, but would like to say that my three trades in EUR/USD are closed. Two with +25 pips each, and the third with a loss of ~10pips. I am up to $113, or about a 10.5% gain from beginning. My poker account is currently at $45, which puts me at a $60 gain for the month of July. In both cases, I'm pleased--more work ahead!

Thank you for reading.

Learn From Your Mistakes

I probably should've looked at the news in a little more depth. Oh well, I've been in worse situations. I'm down quite a bit, although I didn't take my initial long position as stated below. I entered around 1.419 and then again around 1.41 (which would have been a good entry if I hadn't neglected entering a limit exit). I'm in again at currently breakeven. But I am still down quite a hefty amount, most of which could have been hedged or taken care of if I had given it all a bit more care.

So I am digging myself out of a hole.

Which is something you really do not want to have to do in any business where money is the foundation (maybe that implies all businesses? I don't know). But, in trading, in poker too, you will find building your account (i.e. your bankroll) is a lot harder than losing it. And if you lose it, you will have a much more difficult time earning it back. Small mistakes can make your job much more difficult. Might as well take a rest when you're tired so that you don't screw up and have to put in more time later.

You can check the current price on the EURUSD to see how much I am up or down =) Haha. I haven't closed the positions, yet, and am working on some damage control. I took out $25 from my poker account when I started to get frustrated and make stupid decisions. That left me with $1 or so. My brother owed me $10 in poker money (from a while back) which he sent me. From ~$11 I am up to $29. I stopped playing tourneys and lower limit/NL tables and moved on to the higher micro limits and lower low limits (.1/.2, .25/.50, and .50/1). Doing well playing nearly all solid pocket hands. It's not a straight ascent, as not only my luck fluctuates (e.g. I lost kings full of aces to aces full of kings on the river, BLAH!) my emotions also fluctuate. But not as much as at the .02/.04 because I am making more than I was at those tables, meaning less frustration.

That will lead into an article on expectations sometimes soon.

EURUSD Charts Reading Breakout Potential

Personally, I want to side with those who think the market is going to collapse further. If that were to happen, many people would run into the dollar (a relatively safe haven) pushing the EURUSD pair downward. It really doesn't matter what I feel, though, especially with the above chart. It appears that price action is building up right below 1.4250. I've seen this before, and given the current "less-than-terrible earnings," I wouldn't be surprised to see a breakout. (FYI: I haven't added any longs yet, albeit I also have no shorts.)



Here's an hourly chart. As you can see there's been quite a bit of upward clashing into the 1.4250 boundary. The one major pullback didn't hold at all, and actually took place on largely limited volume (off hours). Looks like a sweet (they tend to work, especially in this environment) bull flag forming. I don't know when we will break up, or if we even will. But I do think that with some care, such perspective can give you an edge, especially with some of the continued strong short interest expressed by the permabears. They could definitely add some fuel to this fire.

PS: I'm going to try to vary emphasis among topics a little more than I have been recently. My interest in poker is strong right now since I have just begun, and learning new things is so easy (i.e. it's much easier to learn things when you don't know much; the basics).

Take care--more to come.

Back

I was away for the last week, but I did get in some poker and a little bit of forex. I limited my forex trading to a couple of positions in my nano account and ended up with a ~2% gain.

Poker was another matter altogether. The day before I left I decided I would try to up my game using a variety of Pokerstar legal tools, which included a HUD and an odds calculator. I really wanted to up my game. Well, it didn't pan out. I kept changing my strategy trying to figure out what was wrong while I lost tournament after tournament. I had purchased a couple books as well, and tried out their various (albeit simplistic) strategies and couldn't find anything that worked.

Luckily, I came across one line in The Mathematics of Poker that really struck me. Essentially, it said that on a long enough timescale being too passive will hurt you, while shifting towards aggressive play leads to a higher chip count.

I took that in, because it was basically how I won my first set of tournaments. I didn't need an odds calculator or a program telling me how many times an opponent bet preflop or voluntarily added chips. I just needed to work on appropriately putting pressure on the opponent.

Anyway, after losing around $20-24 over the last six or so days, I placed first in a dollar tournament yesterday. I utilized a very aggressive, yet tuned, strategy. And it worked.

Tables vs Tournaments

I'm terrible at the cash tables. It's an entirely different game from tournaments. As is obvious, every hand you play comes from real money. In a tournament you have already put up the money that you are willing to risk. Not only that, but you know the amount that everyone else is willing to risk, and you all start with the same chip power. I tend to feel it gives me more breathing room than the cash games.

I'll be staying away from the cash games until I make a good chunk of cash, and, even then, I may want to just stay with tourneys. Better risk to reward, for the most part.

Plugging some leaks.

PS: I need to write something about discipline. Hell, I need to work on my discipline.

Status Update

Ten days ago I opened a poker account. Since beginning with an initial stake of $25, I have increased its value to $61.61 ($36.61 in gains or a ~146% profit). I feel that my game has improved dramatically over the last week and a half, although it isn't so hard to improve when you have so much to learn.

After losing a micro account and basically busting another micro account, I have managed to slowly build a nano account ~26.5% and another micro account ~6.3%. I have yet to recoup the two previous losses, but feel I am on my way to understanding the markets well enough to eventually do so.

I'll be writing more over the weekend. Take care, and play safe!

Contact

Feel free to leave a comment if a post is on a topic you would like to discuss.

For questions, comments, or hate mail, please use the following email address (put it into regular form--I have to keep the spam bots at bay somehow):

thelastpip AT gmail DOT com

Disclaimer

I will touch this up in the future.

But, the basic idea is: be responsible for your own actions. What is written on this website by myself (i.e. not in the comments, linked to, or quoted) is to the best of my knowledge correct. However, as I am human, it is liable not to be 100% correct. Because of this, always use multiple sources.

I am trying to provide the best information I can, albeit, I am not a financial adviser and should never be used as a substitute to a full financial education or acredited quality advice. You will take full responsibility for any actions based on any information on this site. I cannot guarantee anything here will work. Please, use your wits.

In sum, this site is not meant to be used as anything other than a forum for discussion, a journal for myself, and possibly, an educational resource. Do not take my advice at face value. Always research things on your own. Sometimes I assume knowledge you may not have or take precautions that may not be stated. Please do not follow my every word, as words are ambiguous, easily misinterpreted, and rarely extensive enough to adequately represent reality.

You've been warned.

And, hopefully, I have been exonerated from any potential lawsuits.

Nothing Much

Made 6.2 pips (62 cents) in my micro account bringing it up to 108.31 (~.58% today and ~5.7% overall). I don't think I'm going to be doing anymore trading today, unless I can pick something up at the extremes.

Played a one dollar poker tourney and lost. My impatience was there the entire time. Ended up losing to a runner runner flush draw. I had a straight, ace high. Oh well, it happens. More this weekend.

Update: came in 13th (out of 990) in a one cent tourney and won ten cents (needed 9th or 10th to get more). Also took another trade in the EURUSD which netted 6.7pips (another 67 cents pushing overall gain up to ~6.3% and the daily gain to ~1.2%--all rounded to the nearest tenth of a percent).

Forex/Poker Account Updates

Placed in two one dollar tourneys today. Got 8th (out of 90) in the first and 2nd (out of 90) in the second, with a $2.70 and $16.66 prize awarded, respectively. After last night's mediocre win in the 25 cent tourney, I didn't know if I would be able to pull off another dollar tourney. To myself, I proved otherwise.

I still have a lot to learn, especially when it comes to placing bets, reading other people's bets and positions, and various other technical and tactical skill; but, I feel like I am on my way--somewhere.

PS: The nano account is at a little above $12 and the micro account is at $107 (albeit with a $1 losing position still on. Should swing into my direction; at least, I'm still holding it for a while). Lots of work, lots of work.

Update: Closed the last position; the micro account is now at $107.69 or up about 5.1% from its start yesterday. My nano account is officially at $12.0332 (yes, those are fractions of a cent) or up about 26.5%.

On Position

Position plays an important role in Texas Hold'em. Being first to bet puts you at a disadvantage. You are placing your bet without the added benefit of knowing what the other players are doing. Because of this, it is much harder to safely play marginal hands from first or second bet. It even makes playing good hands more difficult.

Many people will say that the button is the best position. I would agree most of the time. However, there is something alluring about being in one of the blind positions. If no one raises, you get a free or relatively cheap bet, and no one knows the strength of your hand. Even if you have something you wouldn't normally put money on, oftentimes, because other players assume you don't have anything, you can limp through the preflop with the chance of not only getting something on the flop, but also, being in a position to confuse your opponent. Have a good hand to begin with? Underbet and see if you can pull out a bigger pot. Have mid-trips after the flop? This hand is exceptionally good if another player hits top pair and mid or low pair (for two pair). You can even play this with low trips, however, I tend to get scared out of the bigger pots. Someone with two pair will normally go to the river or further (depending on how much you push). As long as you have the only trips (maybe with your pocket deuces) you're set.

Position is also helpful when bluffing. If you go through two other opponents' checks, why not throw on a bluff if you think you can get one or both of them to fold? Maybe you don't have top anything, but if you have a good number of outs, it tends to be worth it. Limit the competition, or get rid of it altogether and make the blinds plus a couple bets as well.

Small Update; Lots of Progress

Finished 8th out of 90 in a 25 cent tourney that seemed to go on forever--I guess that's poker. Anyway, I won 81 cents which doesn't cover all of the entries I've made into that tourney (four to six), but I think I'll move forward with caution.

Also, I banked ~6pips in my micro account. I thought about leaving it on for a while longer, but figured ~6pips, or about 60 cents, is a little more than half a percent, which isn't bad for the first evening. I'm going to mess around with the account some more and see if I can get my performance to match up to my nano account. That would definitely be progress.

21%

I know it's just cheap change, but the nano forex account has gone from a starting amount of $9.51 to today's finish of $11.51 (and some odd fractions of a cent). That's a two dollar or 21% gain. I'm definitely moving forward.

Actually, I've felt so comfortable with my progress that I have added $100 to the $2.49 left in my micro forex account. If I can continue to reign in my patience and adhere to my leverage rules, I should be able to do fairly well with that account too. While I'd love to be up 1000% or more, 21% sounds like a reasonably agressive number for the markets I'm in. Although I have a lot to work on, I would have to say I'm pleased with my results thus far.

(my other two or three trades were closed after the daily report was emailed):

Type	Lots	Item	Price	Price	Trade P/L
sell	0.10	eurusd	1.4090	1.4075	15.00
sell	0.10	eurusd	1.4091	1.4086	5.00
sell	0.10	eurusd	1.4100	1.4096	4.00
sell	0.10	eurusd	1.4110	1.4105	5.00
sell	0.10	eurusd	1.4131	1.4128	3.00
				P/L:	32.00

Finished 6th

I finished 6th (out of 360) in a 10 cent poker tournament earlier today. After placing in the one cent tournament, I decided my next goal would be to place in the 10. And I did! winning a $1.70 prize.

I'm happy about the win, but, as always, there are areas that could use some improvement. I placed a few stupid bets and played a few too many dumb hands for longer than I should've (sometimes just calling preflop when I should save my money and fold). Also, as I progress and get better at reading people, I need to yield to these developments and fold more often! There's nothing like getting reamed out of double or tripple (or more) of the big blind when my guess as to what the other person is holding is largely correct.

In any case, I'm moving up to the 25 cent tourneys, with a goal of placing there. I'm also thinking about taking out my original deposit of $25 as I have 45+ right now (which should be more than enough to keep me going).

Some poker observations soon.

A Pip Here, A Pip There

The trading confirmations I receive by email got kind of broken apart yesterday. Anyway here they are with 2 pips earned today (traded for about 10 minutes; much too tired):

Type	Lots	Item	Price	Price	Trade P/L
					XXX
sell	0.10	eurusd	1.3970	1.3969	1.00
					1.00
				P/L:

Type	Lots	Item	Price	Price	Trade P/L
sell	0.10	eurusd	1.3976	1.3966	10.00
sell	0.10	eurusd	1.3984	1.3979	5.00
sell	0.10	eurusd	1.3996	1.3986	10.00
buy	0.10	eurusd	1.3918	1.3920	2.00
				P/L:	27.00

PS: That puts me up to 1096.58 cents (i.e. $10.96 from a start of $9.51 or a 15.25% gain). I'm thinking about building up another micro account with FXCM. I'll fund it with more than the required $25 in order to create a safer environment. Also, they have much better spreads than LiteForex (which is understandable, it must be hard to give a good spread to nano traders). I'd rather trade a 1.8-2.5 pip spread than a solid 3 pip spread. More on this development later.

Some Poker and a Little Forex

Before you know it, I'll have to change the name of this site to The Last Chip, with all my poker talk. But, truly, I think the two have something in common (which might explain why I am enjoying poker so much). I've failed at playing the no-limit tables. Lost quite a bit of money (I'm down to about 44.50 or so--my high of 51+). On the other hand, I am doing better in tournaments. I came close to placing several times and did place in my last tournament (albeit, it was a one penny tourney). I came in 14th place out of 990. Yes, nine-hundred and ninety people. That was probably my seventh entry into that tournament (came close to placing once before, but missed it by 2 positions!).

My skills have a lot of developing to go through, but I feel like I'm continuing to improve. Once I can exercise more discipline, I think my account will be on an average incline. It's my stupid impatience that often gets me in trouble (both in poker and in trading).

Today, I didn't do much forex trading. I put on one trade and a few limit orders and ended up with about 25 pips in my account. Not bad, but not great.

More soon.

Short Poker Update

I moved from playing mostly low limit tables (.02/.04 and .05/.10) to playing no limit (.01/.02 or .02/.04) this weekend. And in the process, I lost quite of bit of my gains. Playing no limit tables is an entirely different game than the limit tables. For one, the people playing at these tables tend to be better poker players, which makes sense--you can make more money. Also, it is difficult to figure out exactly how much to risk on which hands, in which positions, and at what time. Much more challenging.

Anyway, I was scared I would have to post that I lost $12+/- trying to learn the game, but I won't have to say that. I did have a drawdown of $12+/-, but I ended up pulling through after trying my hand at several tournaments. I played three $1 tournaments and lost each one (second to last place, and then somewhere in the middle each of the other times). Then I played a few play money tournaments, the last of which I won (third place or so, I can't remember). So I decided to give a $1 tourney another chance and after about 2 hours or so I came in first place. My goal was to place, so I was very happy.

That was a 90 entrant game with a $24.80 prize for first. So I am now up about $26.00+ or so and fairly happy with my progression.

More tomorrow.

Gains in Forex, Neutral Poker, Some CFDs

Type	Lots	Item	O Price	C Price	Comm.	Swap	Trade P/L
buy	0.10	usdjpy	92.04	92.29	0.00	0.00	27.09
sell	0.10	eurusd	1.3925	1.3925	0.00	-0.59	0.00
buy limit	0.10	eurusd	1.3860	1.3916	cancelled
sell	0.10	eurusd	1.3960	1.3953	0.00	-0.59	7.00
sell	0.10	eurusd	1.4015	1.4005	0.00	-0.59	10.00
buy	0.10	usdjpy	91.82	91.89	0.00	0.00	7.62
sell	0.10	eurusd	1.3970	1.3960	0.00	-0.59	10.00
sell	0.10	eurusd	1.3982	1.3977	0.00	-0.59	5.00
sell	0.10	eurusd	1.3996	1.3986	0.00	-0.59	10.00
sell	0.10	eurusd	1.3911	1.3910	0.00	0.00	1.00
buy	0.10	eurusd	1.3914	1.3919	0.00	0.00	5.00
buy	0.10	eurusd	1.3893	1.3898	0.00	0.00	5.00
buy limit	0.10	eurusd	1.3879	1.3883	cancelled
buy	0.10	#aa	9.18	9.12	-0.05	0.00	-0.60
sell	0.10	#jpm	32.76	32.71	-0.16	0.00	0.50
sell	0.10	#aig	10.14	10.37	-0.05	0.00	-2.30
sell	1.00	#aig	10.74	10.99	-0.54	0.00	-25.00
					-0.80	-3.54	60.31
Overall		Balance: 1 068.58		Day's P/L:		55.97

I feel like I'm slightly improving my forex game. Yes, 55.97 cents doesn't look like much, but, not being myopic, it sure is a good way to progress on this journey. Getting ~56 cents (and even more before I played with CFDs) translates into ~56 pips, which in micro, mini, or standard account would be $5.60, $56, or $560 respectively.

Having to spend less time on worrying about margin calls and more time working into and out of trades provides much relief. There would be no way I could execute so many trades in even a micro account given the margin I have. And I won't feel comfortable trading with adequate margin in a mini or standard account until I'm successful at this level, which is the goal.

At the very bottom of the list you'll see #JPM and #AIG which represent the stocks $JPM and $AIG. I got extremely excited when I scrolled down the list of available currencies and discovered a list of stocks. I've traded stocks before, but it's always been such a bitch because of the day trading requirement (and my lack of 25k+). But here, I can mess around with the shares as much as I want, albeit with slightly larger spreads. The losses were mostly because I wanted to see if I could actually trade them, thus, I put little thought into the stocks themselves.

Poker is still going well. I'm at $15 exactly after going bust in an $.80 buyin. That's my second or third bust in a buyin, which seems reasonable to me as long as I don't add more chips on that table and fix any sloppy play that may be contributing to my losses. As with all of the above, poker takes a lot of discipline and work. I get very tired after a good 20 or 30 hands, wishing I could sit in the rooms eight hours every night while watching both the currency, stock, and futures market during the day.

It doesn't work very well. That's 8hrs + 6.5hrs + ~3hrs blogs/news/books, or 17.5hrs of work. That leaves 6.5 hrs for sleep that tends to be edgy due to my daily caffeine intake and my often unsuccessful desire to watch Japan and Euro trading hours (provides some nice opportunities).

I'll have to get back into exercising soon.

Take care everyone.

Mmm. Sweet Leverage and Some Poker

Or lack thereof.

Despite the wider spreads, I like my new nano account. Being able to incrementally add (average in or down) or subtract does wonders for the bottom line. I still do not like my trading (sloppy and a bit too risky still), but at least I'm in the green (this doesn't inclue three or four trades that I had open when my daily readout was sent; however, they are also closed--scratched or positive--for an overall account gain of +100.07 cents):

Type	Lots	Item	Price	Price	Trade P/L
buy	0.10	usdjpy	92.82	92.86	4.31
sell	0.10	eurusd	1.3909	1.3902	7.00
buy	0.10	eurusd	1.3902	1.3904	2.00
buy	0.10	usdjpy	93.12	93.22	10.73
sell	0.10	eurusd	1.3990	1.3980	10.00
sell	0.10	eurusd	1.3978	1.3958	20.00
sell	0.10	eurusd	1.4044	1.4039	5.00
sell	0.10	eurusd	1.3975	1.3970	5.00
sell	0.10	eurusd	1.4001	1.3996	5.00
sell	0.10	eurusd	1.4024	1.4019	5.00
sell	0.10	eurusd	1.4039	1.4029	10.00
sell	0.10	eurusd	1.4030	1.4025	5.00
sell	0.10	eurusd	1.4051	1.4046	5.00
sell	0.10	eurusd	1.4055	1.4050	5.00
				P/L:	99.04

Also, I opened a poker account two days ago after successfully playing some online play money poker. I didn't think I would do well with real money; you know, things are different when real money is involved. But, even though that may be true, I'm still up nearly $15 (minus 6 cents or so) from a beginning balance of $25. My poker returns are beating my forex returns.

Nano Accounts

I had some money in an AlertPay account and decided to open a nano forex account with LiteForex.org. Here are the results thus far:

Type	Lots	Item	Price	Price	Trade P/L
balance	deposit				951.00
buy	1.00	eurusd	1.3894	1.3881	-130.00
sell	0.10	eurusd	1.3883	1.3860	23.00
buy	0.10	eurusd	1.3870	1.3875	5.00
buy	0.10	eurusd	1.3890	1.3890	0.00
buy	0.10	eurusd	1.3860	1.3865	5.00
buy	0.10	eurusd	1.3849	1.3854	5.00
buy	0.10	eurusd	1.3850	1.3860	10.00
buy	0.10	eurusd	1.3847	1.3852	5.00
buy	0.10	eurusd	1.3838	1.3848	10.00
buy	0.10	eurusd	1.3835	1.3843	8.00
buy	0.10	usdjpy	92.51	92.61	10.80
sell	0.10	eurusd	1.3854	1.3854	0.00
buy	0.10	usdjpy	92.71	92.81	10.77
					-37.43
				Trade P/L:

I'm down 37.43 cents, but that's not bad considering my first trade threw me off. I thought I had a single nano lot on, but it turned out to be a micro lot. Everything else went okay. Not great, but I managed to make back ~$1 of my loss.

PS: I closed my position in the other account. I kept getting hit with 15 cent rollover fees and had no way of averaging down. I also got alittle concerned when we neared 1.37 territory.

S&P 500, right below its 200 day MA

The only thing that will save the EURUSD pair is a rebound in the S&P500 around the 880 mark. Over the past few months this area has strengthened. If it can hold (I'm somewhat doubtful) a rally in the EURUSD should take place. If it can't, I think we plunge at least 30% of the distance made from the March lows (to 800 area or so).

We'll see how earnings are perceived in the upcoming weeks.

1.39-1.4

If I had been up early this morning I would probably have closed my position for $1-3 of profit after using a mental trailing stop. We're back down at 1.39, and while it is quite impressive that we headed to 1.405 or so early this morning, I wouldn't be surprised if we dipped even lower as the overall US market continues to plunge.

If we can maintain the recent lows of 1.388~ and perhaps create some strength as we move upward, I may hold on for my original target. I would like to see the daily continue to put in a bottom in the upper right arm. If that fails, I would be wise to bail at whatever opportunity I have.

Not much in the way of economic reports this week, which should benefit me. More and more earnings will start to come out, which will make things volatile.

Support Held

Support held and the S&P500 managed to finish positive for the day. The EURUSD managed to bounce back from its lows last night and it's continuing to move upwards, even after the US market close.

I'm still holding. But on a side note, I did some demo trading last night with 10k in play money. I traded only mini contracts, and have decided that if possible it is best to fund whatever forex account you have with a 1:1 ratio between contract size and account size. Having 10k in play money for trading 10k contracts made trading much less stressful. I could take on a small position and should it succeed I could slowly add to it. Or, if it didn't succeed, I could setup certain positions at which to slowly add more, averaging down the size. I would only average if the technicals and fundamentals showed it was desirable.

In any case, the accounts I've been trading are undercapitalized. I can't expect to do well with $27 controlling a 1k contract. Unfortunately, at the moment that is what I have to work with.

ES

If the EURUSD continues to head in favor of the USD, then tomorrow will definitely be a down day in the S&P. Should it be a down day in the S&P look for 880 to hold. Without that important support holding, I wouldn't doubt a flight to relative safety in the dollar and a lower price on the EURUSD as a consequence.

Strength Caused By Risk Aversion

One thing I'm worried about.

Leverage and Other Crap

Take a look at the EUR/JPY pair today; it's far below my entry point. If I wasn't leveraged 60:1 + I may have been able to make some bank on it (of course, I don't know what I was thinking with my stop loss). In any case, I found that I had ~$27 in an another account with FX Club. I put on a long trade in the EURUSD pair at 1.4010 and am looking for a retrace to 1.41 for a $9 gain.

My stop is going to be based mostly on fundamentals, as was my entry (although I had trouble entering, as I normally do with new trading programs...I'll get better). My exit is based on technicals. The fundamental reason I'm betting against the dollar is that I think the 9.5% unemployment rate, while better than 9.6% is still pretty bad, not to mention, it is probably going to be eclipsed by the a confounding increase in job losses. In any case, I don't see too much deviation from the previous trend as there's nothing amazingly and/or unexpectedly good in today's numbers.

I will get out when my account drys up, when my profit target is hit, or fundamentals (or technicals, but to a lesser extent) change.

PS: Leverage is around 37:1

EURUSD Chart with Important Events and S&P 500 Prices

Here's a chart that I have been trying to get myself to put together for the longest time. I wanted to see how the EURUSD pair reacted in relation to news events (only events that BabyPips.com lists as "red flags" are marked) and S&P500 prices.

I'm still trying to piece together what it all means and will probably miss something given the limited amount of data I utilized, but hopefully I can develop some conclusions. For instance, there is some correlation between the strength of the USD and the quote on the S&P 500 (albeit, many have mentioned this before). A strong dollar, i.e. a low reading on the EURUSD, prohibits the S&P500 from rising without significant impetus.

More soon.

Jui Jitsu Fucked

Anyone watching basically knows that I got jui jitsu fucked in my last trade. I didn't put a stop on it, which was partially because I was negligent and partly because I wanted to risk all $16 and whatever cents. Too bad JPY released a report saying that their country was going to have a longer recession than previously anticipated. You should always be careful around any releases.

Anyway, I have been completely frustrated, mostly with my lack of discipline which has led to such dismal results for me. I could push it onto my huge leverage or my stupid impulsive bullcrap from last week, but even with that, it all boils down to discipline (although a larger bankroll and less stress for money would help; then again, that's why I am in this game).

So, before I add another $25 to my account I need to brush up on my discipline. Unfortunately, without the money to be made, I don't have a ton of motivation to do what I'm doing. I'm going to have to squelch my desire for instant gratification in order to accomplish anything in this volatile market.

Short EUR/JPY

Short the EUR/JPY pair at 135.213, looking for a retrace around 134.8. May go lower to test the uptrend line.

Edit: And the account is currently at $16.24 which is somewhat of a bummer. But I'm still pushing forward.

Uncertainty

I lost ~$2.60 last night. I guess I put the short on a little too early and I didn't want to see the EUR/USD shoot up today for some reason.

$18.87 Some Wins; Some Losses

Damn. I really wanted to hold on, but I have some errands to do and don't want the positions on while I'm gone. In any case, I wouldn't be surprised if the EURUSD pair fell lower. As for the AUD/USD, I don't have any clue.

Lost about $.95 on the AUD and gained about $1.20 on the EUR. Bleh. Well, it could've been much worse.

$18.62 and the "Real Money" Effect

After I posted last night, I went on to do a little more trading. I learned two things: One, I need to maintain a strong clear mind uninhibited by the temptations of profit or the lamentations of loss. If I can do that, I am one step closer to success.

Two, minimizing leverage can do wonders for a good position. Not only does it provide you with quite a bit of leeway should the position not do exactly what you plan at exactly the moment you plan it, but it also limits something I'd like to the "real money" effect.

The "real money" effect occurs when you're doing something (normally playing a game) that you are relatively competent at. You know the rules, you know what you have to do in order to win, etc. However, because "real money" (in quotations because different people consider different amounts to be significant) is involved you lose touch with those rules needed to succeed. Your mind is no longer on the game, but on the money. And because of that, you end up doing stupid things you normally wouldn't do, losing you money.

Take care everyone.

$17.83

Took a4.3 pip loss in the AUD/USD, but made up for it by catching a 16.3pip gain in the USD/JPY. I think it has a good chance of hitting at least the 95.80 area, if not 96. I took my lot off, anyway. That's another $1.28 I can scratch off my losses.

Gotta keep the discipline so that I can continue moving in this direction.

Simulated Trading Contest

I love all types of trading. I've done stocks, options, futures and forex, and still participate in all of them to some extent. If you're interested in playing a futures trading game with the chance of winning an Apple gift card, check out CME's simulated trading game. I find myself playing it on and off with a best score of just over 5200 (it took me a long time to break the 4k level). There are a few tricks here and there, but I'm going to keep them a secret. I'm guessing anyone interested in playing for a while will figure them out on their own anyway.

Enjoy.

Money Management; Risk Rules

As I posted a while back, I am not going to be trading more than a single microlot (1k of currency) until I break above $50. Trading with this amount of leverage is still very risky. Currently with 16.55 in my account, trading a 1k lot of currency requires leverage of 60.4:1 (taking the entire account and not just the margin required by FXCM into consideration). Even if I were to have $25 in the account, I would still be trading with 40:1 leverage, which (if you have been following the leverage maintained by some of the currently hurting financial institutions) is tremendous leverage.

With high leverage comes lots of risk. I would like to limit the risk especially as the account grows in size. Yes, it's impossible for me to reduce the leverage at the moment without adding more to the account, but I do want a plan in place to reduce leverage as I move forward.

This is why I am waiting on a second lot until I hit $50, at which time a single lot would provide me with 20:1 leverage in my account. The second will push me back up to 40:1. While still hefty, it is much more reasonable and provides much more leeway should a trade go against me. Furthermore, and I have given this quite some thought, I will not add a third contract until I hit $100 (or the equivalent to 30:1 leverage). That may be a very long time away, but I want to be prepared as I near $50 and then $100. These precautions will help me prevent catastrophe as my account grows. Obviously, as I move forward, I will continue to reduce leverage. 10:1 sounds like a safe area for which to aim, albeit I will weigh the pros and cons as I move forward.

As always, the currency markets are tremendously risky. With large amounts of leverage you can destroy an account (of whatever size) with relatively little effort. Make sure to protect yourself from greed and from unrealistic expectations so that you can succeed.

Trades

As can be seen from looking at the p/l column above, I really fucked up during the first round of trading.

I'm down 133.5 pips; but have made some improvement from a low of $8.74

$16.55

I'm good at taking profits...not so good at taking losses. While I'm inching my way back up, I still fear that I am going to have psychological trouble taking a loss. At least my impulsiveness is dropping. Still worried about my ability to take a loss that will save my ass..more soon including tables of all my trades.

$15.11

I really wanted to get over the $15 hump.

update (@11:54 PST): $15.87; i probably could've held the short longer, but i took profit to act as a buffer to the $15 level as well as protection against me falling asleep.

An update.

I took a vacation last week. Anyway, at one point the account was down to 8.74. Now it's up to 14.92 after a good day early yesterday and late the day before (38 pips or so). I accidentally entered two orders at one point, but have been following my rule of one contract, which likely prevents me from getting into much trouble. Also, I'm focusing on slightly larger setups with a bigger timeline. They don't always work out, but when they don't I can usually break even. And when they do work out, I get more than the typical 4 pips here 2 pips there. I'd like to aim at setups with the potential for 20pips+ (ideally 50, but we'll see as I move along). Over the last two days I went for some 50-100pip setups that netted me 10pips here and 25pips there. I haven't hit the desired homerun, but I have also gone without too many huge drawdowns.

It's much more refreshing to say the least. I'll post my trade report so that you can see the havoc I wrecked upon my account and the slow comeback that has brought my account back to ~50% of where I started (better than being at ~30% of the starting amount).

size

right now, just one micro lot. once i get to $50 i can consider adding another.

/

It was taken out. Need to rethink this plan.

Edit: going to try again. I think the downward sloping trend line will act as resistance.

My Best Bet

I'm thinking a retest of that upward sloping support line is my best bet. I've got a short on with a ~7pip stop and a ~35pip limit.

Impulsive

I made some terrible impulsive moves this morning while trading EURUSD. I wanted so badly to get back into this game that I dropped all logic. I kept changing back and forth between long and short. And I lost a lot of money.

I need to come up with some sort of strategy to prevent me from trading based on impulse. It also needs to provide me with a money management framework. I'm thinking each and every trade needs to be charted and commented upon...

Despite the losses ($14 or so), I at least cut my losses and turned off the program before killing my entire account. If I left my short on I would've lost way more than $14...

Economic Calendar

Here's Baby Pips' Economic Calendar. Hopefully it will keep me out of the market (or at least on my toes) during important events.

Range Charts

This is the beginning of a habit I will need to adopt if I want to succeed. Here are a few of the longer time frame charts that I will use in order to make my trades come europe's opening.

Forex Hours

I found this spiffy webpage that gives forex market hours in your local timezone.

At the moment I'm going to restrict myself to trading the EUR/USD pair. Because I will likely find the most action while the Europe and/or United States sesions are open I'll be trading from Midnight to 1PM PST. I won't trade outside of those hours until I develop my account and decide trading different hours would be beneficial.

More rules to come.

Genesis

My impatience is already showing itself. Last night I deposited $25 into my FXCM Microlot Account. It already had 4.90 from the last time I played around with it. That 4.90 has been whittled down to 1.17. I've had two 10+ pip runs but my losers have been greater. In any case, I'm back in the Forex game.

Despite the losses, I'm going to propose a rather ambitious plan. Perhaps, that's an understatement. I want to get the account to $1M within a time frame of 5 years. As it gains I may roll the money into another standard account (as opposed to micro) and continue.

This journal will plot my upcoming battles, chart my past successes and failures, and keep me motivated. As of now I'm already in a rut; but, no step is wasted that provides me with greater insight.