Year-end report: 3.1% gain

This year, I am thankful that I finished with a +3.09% capital gain. It is much smaller than 2009 and 2010, and I only traded 10 times in a year. By now, I know very well about my trading style and cycle. I don’t day-trade. I don’t hold too long to the carry-trade. I only take the position when I anticipate to book the profit (or at least know where the result is heading) within a week or so. This year’s market overall especially in the major cross-currencies (*) was not giving me much opportunities. But it’s OK to me because I am not a full-time trader, and I am not convinced to change my style until the risk for such change, including the effect to my personal life style, can be measured somehow. But again, I did not lose money by rushing to take position. That is what matters a lot.

Looking at weekly chart of EURUSD, I decided to anticipate EURUSD to go as low as 1.2450 after updating the Elliott Wave labels as in this chart:

Another currency pair I like to trade is AUDUSD but this year was dreadful side way move. But I remain mid-term bullish towards 1.135. The reason I used 1.382 Fibonacci of the amount of 2008 crash is that I am assuming the rally since 2008 bottom is Wave b of a expanded flat wave. That means after marking 1.135 or so, AUDUSD will crash..even lower than 2008 bottom. That sounds crazy. I know it and I am just saying this is one possibility. The other scenario I wrote sometime this year is that the AUDUSD had a real bottom in 2008, and it just rallies towards 2.00 or more from here. That sounds equally crazy. So, I don’t really know the long term, but for the mid-term, I’d rather be long of AUDUSD when I see a sign of upward impulse wave formation:

Thanks for reading my blog, and hopefully next year will be the busier one in terms of trading and posting. I wish all of you a good luck in 2012!

* I stopped trading metals after the regulation horizon got unclear for non-institutional traders.

Complex Elliott Wave of EURUSD (daily and weekly charts)

On September 22, I successfully exited after being short EURUSD for two weeks from 1.3960 to 1.3450. 1.3450 was my target and I did not care how much further it’d go down from there. The bottom was 1.3146. Soon after I expressed my view that EURUSD may not get downward pressure for long from there as in the previous post, EURUSD started to rebound strongly. Actually I had been anticipating a EURUSD rally after the pessimism as you can see unrealized X in the chart I posted on September 5th.

Now looking forward in the weekly chart, I am split into the two slightly different scenarios. Scenario #1 is telling me that b has been marked and EURUSD will rally towards X (1.5350 or higher) without making new low since Oct 4:

In Scenario #2, I am seeing a possibility that the current rebound is .b of uncompleted b , so EURUSD will go further down to 1.2450~1.2500 in coming weeks:

Below is the daily chart if I take Scenario #1. In the very short term, I may be able to take short position from b to c. But I have not made up my mind to participate in this trade. If anything, I’d be conservative since my view is split in two scenarios.

Ended Q3 with 4.44% gain

Rational Move’s capital growth for Q3 of 2011 was 4.44%. Year-to-date growth is 3.07%. I traded 6 times during this 3 month period.

If the memory in my brain has not been manipulated for my convenience (I don’t trust human memory too much unless the memory is also recorded on medium in a credible way), I recall that I was anticipating this year to be a tricky one for traders. I thought so mostly by observing the charts with through the lens of Elliott Wave, but underlying reasons may be the post QE 2 market condition, and so on.

I struggled in the first half of this year. I only traded 3 times because I did not see much opportunities. This blog is recording only the Forex and metal trading with Elliott Wave. I traded ETFs successfully when the unrest in Middle East broke out. So, as a whole, I was still ahead by a little.

Because of Dodd-Frank Act, it became unclear whether personal trader like me could trade metals. I thought it is not worth the risk. So, I decided to stop trading gold although I was correct in anticipating the big rally of the precious metal.

Q3 was very good. I traded 6 times, and I won all. After the big win shorting EURUSD, I am not sure how much longer EURUSD will keep getting downward pressure as it seems to have completed an downward impulse wave as I predicted in the previous post. I am not surprised if this cross currency makes a sudden change of the direction to north. I think it’s time to wait and see.

As for AUDUSD, I am waiting for a clear rebound over the parity to define the current bottom. After that, I will wait and see if AUDUSD accelerate the rally or goes below the bottom.

I also have some personal matter to take care of. So definitely no trade in the first week of October.

Real time trading tweets

The plan in the article may get rejected any time, so please check out my tweets on Twitter.

Current risk exposure:

"","","","","$29,058.30","","","","","","","","","","","","","","","","","","","","41.95%","","","2.00%","","","","","","","","","","","","","","","","","","","","","","","","","","","",""
Rational Move always use stop loss orders, and this is the worse case potential loss over the capital for the currently open positions. This is unrealized loss is less or equal to the risk exposure.

Capital growth

From recent 100 trades (%) The growth right before the 1st trade is set to 0%.
About this graph

Drawdowns

From recent 100 trades (%)
About this graph

Total returns

Since inception
(Aug 10, 2009)
Year-to-date Quarter-to-date
0% 0% 0%
This is a normalized value: the return on each trade is normalized against the capital just before the trade execution. This way, it is eliminating the effect by the capital change from deposits and withdrawals. The calculation thus reflects the trading performance of each trade. The value does not contain unrealized profits and losses. RM's trading strategy never risks more than 5% of the present capital. Not including subtraction by tax.

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