Tag Archives: trading diary

Trade Review: EUR/USD (-170 pips)

Entered EUR/USD short at 1.3766 on 19 Oct. Stopped out 24 Oct at 1.3936. Result: -170 pips.

Entered with a stop at 1.3936 and a target of 1.32. Greatest open loss: 170 pips Greatest open gain: 110 pips.

It’s frustrating to be right on the macro front but get the levels/timing wrong. That’s what happened with my EUR/USD short.

I entered the trade thinking there would be a European resolution on the weekend, as planned. I was right about the Guardian story being bunk, my read on bank recapitalization plans being ratcheted down was right. Economic news has also been disappointing.

I see two possible trading outcomes from this weekend’s summit. Outcome 1: Discord, disagreement or disarray. Outcome 2: an agreement that falls short of expectations or becomes impossible to implement.

That prediction rings true. (the full reasoning is here)

What concerned about a further stock market rally but I thought 1.3936 and the 55dma would cap the rallies. I was wrong.

What I didn’t anticipate was the round of repatriation that’s going on at European banks. The threat of higher capital ratios is causing them to reduce exposure abroad and bring euros back. They are also said to be holding back on dollar lending.

What I’ve learned: As soon as the story changes, get out. The moment it became apparent that European leaders were changing the timeframe, I should have got out. I also should have recognized that there are/were way too many moving parts in the euro story to accurately forecast everything. It’s not like forecasting Australian CPI or a Fed meeting. I should have been more disciplined with the entry level.

 What I’m happy about: the initial timing of the trade was solid. I was up 80 pips within a few hours. I’m also pleased with my overall assessment of the outcome. I wish I were still in this trade because the euro is going to fall. But this is the first losing trade I have had in awhile so I’m not going to compound it by chasing.

I’m looking at USD/CAD longs once again.


Trade Review: AUD/CAD (+311 pips)

Entered AUD/CAD long at 1.0248 on 12 Aug added on Aug 15 at 1.0295. Exited 23 Aug (+147 pips) at 1.0395 and 30 Aug (+164 pips) at 1.0459. Result: +311 pips.

Entered with a stop at 1.01 and a target of 1.05. Greatest open loss: 80 pips Greatest open gain: 340 pips.

Technicals were the primary driver for a long AUD/CAD entered on Aug. 12. The weekly chart caught my attention due to the dragonfly reversal. I also noted how rate hikes were overpriced in Canada.

My full reasoning was here

I noted that my next best idea was short CHF/JPY and that would have also been an excellent trade that was never in a negative position and gained as much as 600 pips in the same time frame.

After the break of 1.03 on Aug 14, we waited for a pullback and doubled our long position at 1.0295.

On Aug. 17 we noted there was no reason to take profits but the pair went on to post its worst one-day performance of the trade, falling 100 pips.

Despite this, we remained confident and felt a bounce to 1.03 (at least) was about to happen.

We went back to the weekly chart on Friday and it continued to look lucrative.

On Aug 22 we were rewarded with a surge to 1.04. We accurately saw this as a great time to take some profits. This allowed us to hang onto the second part of the trade for an additional 60 pips (above where we sold the first unit).

What I’ve learned: I may have rushed into buying the second unit after the break of 1.03. As we saw, there was a deeper pullback than I anticipated and this was the only time I was nervous about the trade. I targeted 1.05 so I may have exited the trade too soon. The weekly chart looks like it will get to at least 1.0550 but I’m nitpicking at a great trade.


What I’m happy about: Lots. I saw a lucrative pattern on a weekly chart and hung onto the trade for close to three weeks. The thing I’m most proud of is the way I sold the first part of the trade at the perfect time, nearly nailing the top on the bounce over 1.04 and locking in a nice profit that allowed me to easily wait out the next run toward the ultimate target. Opening a trade with two units or adding a second unit early on is my favourite manner of trading because it gives me this flexibility. I’m also pretty happy about noting that short CHF/JPY was my second favourite idea.









July Trade Tally +281 pips

July was a good month of trading. My losses were small and my gains were big. I haven’t made any trades in August. The closest I came was on Aug. 4 when I was on the cusp of buying JPY.

I wish I could have took my own advice and sold USD/JPY. The tweet came at the absolute peak on Aug 4 and this trade would have never been down more than 20 pips. Four sessions later, USD/JPY was down more than 350 pips.

Anyway, in July I made seven trades and earned 281 pips. For the details of the trades, click the hyperlinks. All my trades are done live on twitter. Follow @FX_Button.

July Trade Tally

July 27

USD/JPY – -30 pips

USD/CHF -30 pips

July 26

AUD/USD +92 pips

July 18

AUD/USD +108 pips

July 4

USD/JPY +168 pips

June 30

NZD/JPY -26 pips

June 30

NZD/CHF -1 pip


Tally: +281 pips on 7 trades.


July Trade Review: USD Longs (-60 pips)

USD longs versus CHF (at 80.12) and JPY (at 77.92) on July 27. Stopped out of both trades on July 29 July 29. Result: -60 pips

USDCHF trade analysis July 27
USD/CHF Hourly July 25-30
USDJPY trade analysis July 27-11
USD/JPY Hourly July 26-30

Entered with stops at 79.82 (30 pips) and 77.62 (30 pips). Greatest open loss: 30 pips. Greatest open gain: CHF +34 pips; JPY negligible

I entered this pair of trades at the same time. This was late on Wednesday, with a weekend debt ceiling deadline looming. The idea was simple: any good news about the US debt ceiling debate would lead to a pop in USD/JPY. At the same time, USD/JPY had leveled out around 0.8000 so it looked well supported.

What I should have known better: Never bet on the sanity of US politicians. They continued to bumble along until the weekend and eventually made a deal with hours to spare before the Aug. 2 deadline. Part of the reason I erred was because I believed it was necessary to have a deal before the weekend. Media reports mislead me. The lesson, I guess, it to only trade politics if you know the system inside out.

What I’m happy about: The stop was certainly in the right spot. I for 30 pips I bought myself 36 hours of negotiations. When the deal was finalized, it led to a 120 pip (JPY) and 140 pip (CHF) bounce. The rallies were about what I expected. So I took a gamble with 4×1 odds in my favour and lost on bad timing.


July Trade Review: AUD/USD (+92 pips)

Entered AUD/USD at 1.0950 on 26 July. Exited July 26 at 1.1042. Result: +92 pips

AUDUSD trade analysis July 26
AUD/USD 30 minute, July 26

Entered with no stop. Greatest open loss: 15 pips Greatest open gain: 110 pips

Sometimes a trade that is bought minutes or hours ahead of data looks whimsical but when it’s good, it’s often because it was set-up long beforehand.

I entered this trade because I became bullish Australian dollar after the RBA minutes on July 18 (my analysis here).

I became further convinced AUD/USD was going higher due to the breakout of the triple-top at 1.0789 on July 21.

AUDUSD tweet 21 Jul
Follow @FX_Button

I was waiting for a pullback but I knew that I wanted to be long into the decision. At the same time, it was risky to be holding USD positions because of debt ceiling talks and volatility in markets so I minimized those risks by buying hours before the decision on the bottom end of the recent range.

“We’re sure that the record of 1.1012 will fall,” we wrote.

What I should have known better: If I would have thought harder and prepared better, I would have realized what the break above resistance at 1.0789 was forecasting and been ready to buy on the pullback to 1.0800. I also left some pips on the table by covering perhaps too quickly. Eco data is always somewhat unpredictable, so I should have used a stop, even though I was watching the decision.

What I’m happy about: The fundamentals and technicals aligned and I jumped at the opportunity. What’s better than that?


July Trade Review: USD/JPY (+168 pips)

Entered USD/JPY short at 79.21 on July 4. Added July 21 at 78.49. Exited July 25 at 1.0627 (+120 pips) and July 27 (+42 pips). Result: +168 pips.

USDJPY trade analysis July 19
USD/JPY Daily July

Entered with stop at 79.56 (35 pips). Greatest open loss: zero pips Greatest open gain: ~200 pips

I entered this trade on my expectations of problems with debt ceiling talks. On July 18, we were two weeks away from Aug. 2 deadline and expectations were for a deal to get done. The trade was based on my belief that nothing gets done easily or smoothly in Washington – a trade I’ll make every day of the week.

I shared my analysis in a post entitled: Debt Ceiling Hiccups to Come Sell USD/JPY. I wrote “Every story I’ve read late on Tuesday sounds like an agreement is just a matter of hammering out some details and drafting a bill. That is NEVER the case in US politics.”

I posted via stocktwits in this post/chart

What I should have known better: If I would have held the trade until July 28, I would have made 385 pips. The time from the 24 Jul to 28 Jul was frustrating because the news kept getting worse but USD/JPY wasn’t breaking down. There was lots of talk about barriers at 78.00 and 77.75. The news was progressing exactly as I expected but the market wasn’t acting how I expected so I cleared out. I suppose that was a wise move with the first half of the trade but with the second half, I should have just moved the stop lower instead of rushing out of the trade. A bit too cautious.

What I’m happy about: Many things. First, I was never holding a loss on a trade that earned 168 pips. Second, I didn’t jump into the trade on July 18. Instead I waited for a bounce. Even though the bounce was only 15 pips but it was a good start to a very disciplined trade. Third, I added to a winning trade. Fourth, I moved my stops down all the way.

Bonus thought: Look how oversold the RSI is, I almost want to buy USD/JPY expecting a bounce in the next 2-3 days on a debt ceiling deal.


July Trade Review: AUD/USD (+108 pips)

Entered AUD/USA short at 1.0735 on July 4. Exited July 18 at 1.0627. Result: +108 pips

AUD/USD daily July 2011
AUD/USD daily July 2011

Entered with stop at 1.0800 (65 pips). Greatest open loss: 54 pips Greatest open gain: 210 pips

I entered this trade ahead of the RBA decision on July 4. I expected a dovish statement and explained why in a post RBA Will Remain on the Sidelines, AUD Vulnerable  “The Australian dollar is likely to fall if policymakers do not take strong incremental steps toward future rate hikes,” I wrote. “The market is still hanging on to the idea that the RBA could hike in August but we see it as a long shot.”

I wanted to be short USD on July 18 so I exited the trade. Then the RBA minutes were more hawkish than I expected. I wrote this before exiting the trade RBA Minutes Disappoint Doves “What sounded like worries about employment and growth in the statement, read more like a simple adjusting of time frames in the minutes,” I wrote, noting that a high CPI reading late in July could put rate hikes back on the table.” Later in the month I used this perspective and I made money on AUD/USD longs.

What I should have known better: Not much. I could have booked a nicer profit on July 11 but I wasn’t prepared (see my trades in NZD/JPY and NZD/CHF for more).

What I’m happy about: This is what I do best – trades based mostly on fundamentals with some technical underpinnings. I entered the trade ahead of a fundamental event and left the trade as soon as the fundamentals changed. I also didn’t get shaken out by the nearly 300 pip rally on July 11-12.


July Trade Review: NZD/JPY (-26 pips)

Entered NZDJPY at 66.68 on 30 June. Exited July 29 at 66.92. Result: -26 pips

NZD, JPY, Chart
NZD/JPY May-July Daily

I entered this trade at the same time as my short NZD/JPY trade. I wanted to be short the carry trade at a time I thought stocks were overbought with many risks on the horizon. The stops were wide and this was meant to be a position that could last a month (which it did).

What I should have known better: Similar to NZDCHF, I was away from my computer on July 11 and did not have a T/P order in. While I had a few days to still book a great profit in NZDCHF, this pair rebounded quickly to a loss. Still, it was an amateur mistake.

What I’m happy about: I wasn’t too concerned about the initial loss as I was willing to eat some pips in expectation that I would eventually be in the money. I’m very happy about the way I exited this trade. Sentiment was hurting due to weak GDP data, debt ceiling worries and downgrade worries but the S&P 500 bounced off the 200dma so I covered quickly and shrewdly for a manageable loss.


July Trade Review: NZD/CHF (-1 pip)

NZDCHF trade analysis FXButton
NZD/CHF daily May-Aug

 Entered NZDCHF short at 69.67 on 30 June. Exited  July 25 at 69.68. Result: -1 pip

This was one of two trades I entered in late June with wide stops. The reasoning was: 1) expectations of rising risk aversion. 2) Hikes overpriced from RBNZ. 3) Slowing in China. 4) Run-up beginning June 26 was overdone.

This trade went against me initially but I remained confident even when I was holding a loss of more than 100 pips. The 300 pip swing in my favour into July 11 was exactly what I was hoping for and it was precisely when all the reasons I entered the trade coalesced. The reason I didn’t get out of the trade with a large profit is quite sad… I wasn’t at my computer on July 11 and didn’t have a limit trade in place. At the very least, I should have lowered my stop to where I entered the trade, to lock in a profit.

What I’m happy about: The thesis for my trade was correct and I didn’t get shaken out early. I held the trade until it got back to my entry level.

What I should have known better: the T/P levels should have been ready. If not, I still had LOTS of time to get out with a 125+ pip profit from July 11-18. I stole a tie from the jaws of victory here.