New site

Well I haven't forgotten about my open trade ... it's just that it's taking a long time. Currently I'm in profit, but I believe the euro will go higher still.

Meanwhile, if you're into programming, check out another of my new sites ... Cave of Programming

Off Topic: Making Money from Home etc.

This is a quick, off-topic post just to promote my new website .... Fascinating Experiments.com

This is going to be a site where I write about anything I feel I know something about -- computer stuff, moving to a new country, scientific weight loss and exercise, forex ... with a theme of changing your life, by earning money in some new way, living somewhere new and so on.

EUR/USD Long

I have bought EUR/USD!

It's a long time since I felt any degree of certainty about the market, and even now I can't say I feel that this is the best trade ever. But it seems that optimism is rising about the Euro, with leaders talking seriously about how to solve the Euro problem once and for all, while at the same time speculation is stepping up that the US will continue QE, since there's been no good reason for them to stop it.

Long term I feel the euro is likely to fall apart, but for now, the trend is up ...

Summary:

EUR/USD BUY 1.3664, STOP 1.3390, TARGET 1.4000
Portfolio value: 10,058

The Polish Zloty

Is it worth considering a long on the Polish zloty (PLN), perhaps against the euro? Oanda offers EUR/PLN at about a 15 pip spread, which is not horrendous, especially since a euro is worth about 4 zloty.

Andrzej Rzonca, who apparently is an economics professor sitting on the monetary policy committee of Poland's national bank, is reported as saying that interest rates will have to rise to curb "credit growth". I assume he is talking about inflation. He also says the zloty is 'undervalued'.

Poland is the only member of the EU to have not experienced a drop in GDP due to the recession. The GDP of Poland was $430.08 Billion US dollars in 2009 and is estimated to have INCREASED to $479.026 billion dollars in 2010 (final-quarter results not in yet). The national debt is running at 44% of GDP, which by current standards is not so bad, while the Government believes it has the deficit, now at around 7.9% GDP, under control.

Apparently many people are thinking the central bank will raise rates at its meeting on the 19th. Hmmm, later on I'll take a look at the chart ....

December 2011 Trade Review

EUR/USD Short:

http://feveredtrading.blogspot.com/2010/11/eurusd-short.html
http://feveredtrading.blogspot.com/2010/11/eurusd-stop-moved.html
http://feveredtrading.blogspot.com/2010/12/eurusd-stopped-out-for-profit.html

Although this wasn't a horrendously bad trade, in retrospect I feel it was a bit stupid to short the euro against a currency that was really in a very uncertain state, the dollar. Why bet on a currency going up when it is undergoing QE? Nevertheless I made 1% of ill-gotten gain from this trade, by moving the stop down.

EUR/USD Short:

http://feveredtrading.blogspot.com/2010/12/eurusd-short.html
http://feveredtrading.blogspot.com/2010/12/eurusd-stopped-out-for-loss.html

I tried to repeat the same trick twice, and got caught out here, stopped straight out! In fact EUR/USD clipped my stop, then subsequently dropped. So in a sense it was almost a good trade. But I still regret going long on USD, when USD was and is in such a mixed state.

Summary

For this month I was tempted into going against my own tentative principles, and went long on dollars when I should have gone long on something more solid, like the Swiss franc. Who knows what direction the dollar will take? Even so, I came close to making a profit, and in the end made just the most miniscule of profits.

Going forwards, I shall endeavour to make only trades that seem more solid than the above, and with generous stops! I feel I'm being tempted somewhat into setting stops based on desired risk-reward ratios, rather that setting stops on a sound technical basis and leaving the trade if the risk-reward is bad.

I have also decided to chance 5% per trade, since I'm not even trading real money. I'm going to select only the very best trades, even if that makes only one or two trades a month, and even if some months there are no trades to be taken. Why take bad trades? When I'm doing this full time with real money, then I may investigate other trading styles with fake money.

New Year, (Slightly) New Strategy

I think for the new year I'm going to start using 5% of my portfolio per trade, since it's fake money anyway!

I'm itching to place a trade, but no trade is leaping out at me at the moment. A EUR/CHF short is very tempting, but I don't see any definitely bad news about the euro, only a load of banks saying it's going down in the near, medium and long term.

So I'll hold off till I really feel it.

Maybe EUR/CHF will take direction after the SNB inflation data on Thursday. Or maybe we need another slew of bad euro stories.

EUR/CHF still dropping!

If only I had followed logic and my own system instead of getting carried away with EUR/USD! EUR/CHF is STILL dropping even now!!!

I must never again fail to remember that currency trading is all about logic and not getting carried away by the news.