Back to the Grind!

GT, as my trading pal Black (http://blackbottleforex.blogspot.com/) calls me, has a black coffee in hand and hands on the keyboard.  Have not posted for a while, but that does not mean I have not been carving through the FX markets.  It’s been a wild ride since my last post just after Lefty’s big win at the Masters. 

It’s certainly true that my goal is to build consistent profits over time, however my results the past few months have been more like a skater style we used to call OC.  Now OC nominally stands for out of control, which I have not been, but it really refers to riding on the edge or all over the place if you will.  How else could you describe a period of trading where you have a gross gain of Pips in a month and still lose money?  Of course, this period was preceded by a month in which I had a total loss of Pips and made money!

It seems to me that the volatility in my account echoes that of the market in general.  Yesterday’s Non-farm Payroll (NFP) was a big disappointment and the EUR/USD and EUR/GBP pairs that I follow most tanked.  Having learned my lesson from trying to trade the NFP in the past I was flat as an earlier trade in the EUR/GBP hit my tight trailed spot early Friday making for a nicely profitable start to the month of June – 352 Pips were ripped.  The adjustments to my trading style from the start of the year continue to work out.  I am trading with much wider mental stops and profit targets, building my positions over time and following longer time frames.  No scalps for me.

Radical dude.

Lefty Wins!

The Grinder Trader was up late last night watching the Masters.  Great final round play by almost everyone.  Watching the play of Lefty Phil Mickelsen had me thinking about visions Arnold Palmer.  When Phil hit the shot from the trees over a creek it was the 2010 version of hitching up the trousers and going for the bold play.  I hit my own aggressive shot by going long EUR/USD for a quick 20 Pips just after the market opened up on Greek bailout news over the weekend.

I'm still undecided about where we go from here.  Check out the piece in Slope of Hope by the folks at Retracement Levels.  Portugal or Spain, take your pick they say...

http://slopeofhope.com/2010/04/eurusd-a-short-by-retracement-levels.html

Viva la Manga!

I’m back from a much-needed break in Spain on the Costa Calida.  After some golf, tennis, tapas and Rioja I am ready to ease back into the FX markets.  A better NFP report came out while I was away and the Greek contagion seems to have caused a bit of tug of war in the EURUSD world.  I took a few shorts in the pair during the past week based on seeming overbought conditions for a few PIPS.  I’ve read in a few blogs that some people are asking whether the downward trend in the pair begun in November 2009 is nearing an end.  Time will tell.

My visit to Spain gave me a chance to feel the pulse, for a week anyhow, of how the “crisis” is playing out there.  Anecdotal evidence (golfer gossip) abounded of golf resort and real estate developments heading to receivership or foreclosure.  La Manga Golf Resort, where I stayed, was busy but not swamped despite the Spring Break holiday for Europeans over Passover/Easter.   Tee times were available, reservations for dinner weren’t too challenging and we found great rates for the apartment/flight.

My fundamental/technical analysis based on this is… I’m not ready to call an end to the downward trend just yet.  Best to be wary in the coming week.

Sweeper...

I’m closing out the month of March here at Grinder Trader.  Like I said in January I’ve set a modest goal of 200 pips per month, hoping to extend it where I can.  January was good, February was the lost month and I end March on the up swing.  I was really looking to just recover a bit from February.  Sort of make a dent in the loss to prove that I can trade and come back from a slam.  Practice can make perfect, or at least right the ship.  March was one of my best trading months thus far in my three-year odyssey as I stretched the goal out to 588 pips.  That beats the February bite of (245) pips.

I’ve joined one of the first Forex social networking sites – Currensee.  You should take a look at http://www.currensee.com/ for more info.  I am quite impressed by the fact that they ask that you put your trades out there (real money only) for all to see.  You can hide but then what is the point.  It’s a virtual accountability method that is sure to help any trader.  I’m looking to put together my own team of traders who are looking to grind out the profits.  Join us.

For now check out the monthly sweep.   With the non-Farm Payroll (NFP) coming up, I’m off to Spain for the Easter Break.

Wired, Angry... What?

Check out this interesting piece in today’s New York Times.  Day traders are alive and well apparently.  I’m not real interested in the angry part.  The beauty of being an independent trader is that we are the only ones in charge.  If I choose to make the trade it’s all my decision.  Taking my profits too soon (ok enough) or letting my losses run (it’s going to turn around) is all about me.  It’s the freedom that the Grinder Trader loves – it’s like a cruise down the beach on a long board.

I was most struck by the profiled traders thoughts on algorithm trading and how they often gripe about being hit by the “algorithm boogie.”  I am in a dance all right, but I’m the only partner.  It’s not the program, my broker or even other traders.  I guess this is why I identify so much with Mark Douglas’ Trading in the Zone. This is a must read for any “day” trader who is looking to grind this into a money making venture.  The challenge is great; those who stick with it will be rewarded.  I don’t subscribe to the conventional wisdom that trading on your own is giving your money away.  I can and we will make Forex and Options trading a big success.

It was great fun trading the EURUSD last week until the EU meeting in Brussels.  Initial reaction was a rebound at the end of the week when the current idea du jour to bail out Greece was announced.  What about Portugal and Spain?  It will be another interesting week.

I’m hopping on that long board.  

http://www.nytimes.com/2010/03/28/business/28trader.html?src=linkedin

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Lost (last) Month...

 In skateboarding as in trading, it would seem that taking a slam every now and again is inevitable.  So it was with last month – my lost month.  I returned from my trip to Washington with all the trading confidence in the world.  A week of unnecessary meetings was troubling and the sudden loss of a valued colleague led to my biggest slam of the year.  But really it was all about me.  Skaters fear locking up on the coping of a ramp or pool more than any fall.  A big backside air with a lock-up leads to the full body slam. 

Going big in trading leads to similar slams.  Overtrading, failure to follow trading plans, or trading too many lots in the Forex world is the quickest way to suffer a fall.  February was a month punctuated by a handful of these trades.  Most of us who follow the EURUSD know that the year has seen a bit of a downtrend, a few up moves along the way, but mostly a grind down.  My mistake was to not follow my typical trading rule – never trade against the trend.  I did and I slammed!

But the Grinder Trader does not give up.  A simple refocus on my trading rules, a decrease in lot sizes and improving trade selection has helped me recover a large portion of the losses.  I know that I will get to the big airs – I just have to grind it out.

I Love the Sound of Coping…

Skateboarders love the feel and sound of a grind on cement coping.  A focused grind is loud and proud, slightly on the edge and always controlled.  The trading world is not much different; one must be focused, confident and willing to take risks.  Success in both endeavors requires the credo of never give up.  A common mistake that we often make is to bail early on a trade or give up on our method.  Usually, stepping away to regroup before trying again solves a losing streak or a bailed trick.  It would seem that the technique is as mechanical as it is mental.  I’ve had the experience that having the mental edge breeds sustained success.

January has been a good month here at Grinder Trader.  I think it has been in large part due to success early in the month that bred focus and confidence.  My modest monthly goal of 200 pips for the month was both challenging and reachable.  Once I reached the goal, I placed a stop on the amount but continued trading.  At month end I doubled the goal ending the month + 405 pips.  Here the lesson was to go with the flow while the momentum continued.  It certainly helped that I was riding what seems like a change in direction for the EURUSD pair from a year ago.  The 200-day SMA was a magnet; we shall see how the level reacts overhead.

So ends the first month of then year.   The trick now is how I transfer to February with confidence in place, but with a clean slate for the month ahead.  Past results are no guarantee of future success they always say, yet success must breed sustained achievement.  The skater in me certainly knows the path to the next successful trick is paved by the success of earlier work. 

Lance Mountain knows how to make the transfer, check it out…

Sorry for the Inconvenience

On my way to Washington this morning and was truly amazed at the reaction of those around me to increased security.  Inconveniences it appeared is something that should be fine for everyone but the individual.  Case in point, a man directly in front of me was visibly and loudly put out because there was not a separate line for First or Business Class passengers.  After all there had been one prior to Detroit and he was flying First Class.  He stated loudly "why do you think I fly First Class?"  I guess he doesn't realize the bad guys fly premium class too!

So, sorry for the inconvenience to all you out there who want it all, but don't want to give up anything in return.  The credo of personal sacrifice appears to be for everyone else.

Politics and Profits

Woke up this morning to the news that the Mass Senate race has gone to the Republicans.  I saw considerable speculation in the blogs I read that this impacted the overnight markets.  At Slope of Hope, the Avatars have taken over and at Evil Speculator some commentators see the EURUSD as having been broken.  Certainly the action in the lighter Asian session has pushed the pair under the 200 Simple Moving Average.  This is a big deal in classical FX trading.

I was short two lots late in the day yesterday, anticipating a bounce off of resistance at 1.4290 on the shorter term charts.  I was looking for a move down to the bottom of a channel bounded around 1.4260. The results in the Senate race helped push the pair lower than expected, so I rode it past my original profit point to the 1.4200 level.  I tightened my mental stop at that point and hit buy to close out the two lots for 75 pips!  My monthly target of 200 has been exceeded by more than 100!

Grind on!

Take profits or let them run?

Take profits or let them run?

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Please take a look at this fine post on FxMadness, remember pigs get rich and hogs get slaughtered.

Oink!

I Don’t Like Mondays, Then Again…

Trading foreign currencies is a shredders game.  Seduced we are by a wild, free market with few rules and a pitch that the market is open nearly all the time.  And it’s true – sort of.  I suppose for me, the seeds to fool around with this market were planted when I first began traveling abroad in the late 80’s.  I filled my pockets with Irish Pounds and Italian Lira.  Drinking Guinness in Dublin and pounding espresso in Milan took plenty.  Of course, I was shredded by the moneychanger’s game each time I cashed in a travelers check.  Paying the spread to my Forex Broker is no different.

Like most newcomers to the game I tried to trade all the time at first.  Asian session, European session, and New York session – you name it.  Monday and Friday were great days to lose my money since it never occurred to me that traders needed to warm up on Monday and were ready to go home early on Friday.  I guess folks wait to make a move on Monday and take profits to buy martinis on Friday.  Once I laid back and chose my sessions wisely, rarely taking trades on Monday and never on Friday afternoon (New York time), my FX trading has improved.

Unlike most people here in Germany, I had a day off to celebrate MLK day in the States today.   This presented a good opportunity for me to watch the Asian close and European action knowing that the overlap with New York (best time for me to trade) would be sleepy.  I saw the EURUSD bouncing between 1.4390 and 1.4340, so I took a trade when the pair bounced off the 1.4390 resistance area and gained 13 quick points on the sell side. 

I enjoyed the bounce today while the EURUSD grapples with where to go next.  The grind goes on.

First a Bail, Then a Stand-up Grind

My trading week started with a bail when an overly tight stop of 30 pips was hit on my first trade of the week.  I was looking for the Euro to rebound a bit on Monday, considering the greenback had spent time in December gaining strength.  This seemed to me based on traders closing profitable trades at year-end to close out their books.  After all, the dollar fell for most of the year.    The daily moves hit my profit target at one point after hitting the electronic stop.  I truly have had better results using mental stops based on a read of the charts, together with a feel for the market action. 

I guess it’s a bit like learning a new trick on a skateboard.  The electronic stop works like the fear of falling.  If you are afraid of falling you almost always bail without success.  The electronic stop is the fear factor that prevents you from making the trick or grinding out profit.  It’s a mental game, so I’m using mental stops more often.  Of course, I have to be there to monitor the action. 

The remainder of the week I tried to practice the idea.  I put on my kneepads determined to focus on making the trick.  Follow-on trades on Tuesday yielded 25 pips as I just scratched the edge of the market.   I ended the week with confidence in grinds that were controlled and smooth.  First a backside rip that was worth 33 points.  I ended the week’s session with a full stand-up grind that brought home 53 additional pips.

Back to back grinds feel pretty good, but I’m looking for carving grinds now!

A Token Claim

 With a frontside grind, Grinder Trader posts the following technorati claim token:

2KE8WQVASEAM

The Daily Grind

If I mention the daily grind most people immediately think of a cup of Starbucks coffee, however that is not what this blog is about.  The idea is a slow, smooth and stylish method to grind out profits from the forex and equity markets.  I'm a life long skateboarder who idolized the Dogtown style and envies the skateboarders of today.  This is the inspiration behind Grinder Trader.

I wrote a few days ago that I would likely not take any forex trades until after the Non Farm Payroll announcement this Friday.  However, an opportunity arose and I took a small tester position by selling one lot of EURUSD.  I quickly bailed with a small profit.  Later on I dropped in two lots with another sell order that closed when it hit my admittedly tight stop.  Net result was a 68 pip profit.  On the way to a 200 pip monthly goal.

We're grinding it!

The Clean Slate

It snowed in Frankfurt yesterday.  Unusually, it was more than a dusting leaving the ground completely covered.  It was incredibly clean, sauber as they say here in German.  I consider it a good starting point for the trading year.  My slate is clean, no trades entered, no losses and no gains.  I'll likely place no forex trades until after the Non Farm Payrolls (NFP) on Friday.  The market is adjusting to the return of the big boys.  Patience is best here.

Let it snow, let it snow!