Review of the second week of February

As we do every weekend, we are going to analyze the market and review the success of our techniques over the past week. 

With regard to our Forex techniques, our European Morning Techniques have earned 96 pips this year to date and the USA Morning Techniques have earned 108 pips.

Let’s review the week, technique by technique.

Gbp/Usd. Monday -30, Tuesday +38, Wednesday -45, Thursday -45 and Friday -61. Week summary -143 pips.

Last week, our results were 53-50+30+34+89 = 156 pips of profit.  As you can see our results have been inferior to the historical ones.  They have been better than January which was the worst month since the beginning of 2009 but the results have been far below a typical month as demonstrated by the fact that our second worst month was November of last year with a profit of 185 pips.

Below you can see the green line (series 3) marks the maximum amount in our account and the red line (series 2) marks the periods of loss before we overcame new maximums.

The start of 2010 has seen atypical results for this technique (GBP/USD European Morning) which normally gives us a profit of at least 300 pips a month. Therefore, we hope that the technique begins to function this next week as it did during all of last year.

European Morning Technique - Eur/Jpy.

On Monday, we didn’t trade but, had we traded we would have gained 10 pips.  On Tuesday and Wednesday, the maximum price ranges were exceeded, so we didn’t trade.  On Thursday, we did trade and, on Friday we didn’t but we would have gained 50 pips.  It is a shame we didn’t trade short on Friday as we would have easily gained 50 pips.  Following our technique for the week, we would have gained 110 pips but, because we started on Thursday and Friday we didn’t trade, we gained 50 pips this week.

USA Eur/Jpy Morning Technique with reverse.

Monday -81

Tuesday +91

Wednesday +30

Thursday +46

Week summary +86 pips.

As you know, this technique is very risky because of the reverse but this week went well for us.

With regard to our SP Futures Techniques, here are results so far this year.

And here are the operations we executed this week.

As you can see, we have operated very little because we have tried to be very conservative given the recent state of the market and, as it turns out, we were correct because, had we executed all the possible operations, our numbers would have been worse.

The following is an exercise to see what would have happened had we executed all possible operations last week.  This past week was a difficult one for our techniques due to the fact that the market was relatively stagnant, without any tendency and with rapid movements at specific points in time.

DAY	TECHNIQUE	OUTCOME	COMMENT
Monday	Morning	-4	We hit the stop.
	Opening	-4	Would have hit the stop.  We didn’t trade.
	Evening	+0.25	Market very stagnant.
Tuesday	Morning	+1	Counter-tendency trade that didn’t breakthrough.
	Opening	-4	Just like the previous day.  We didn’t trade.
	Evening	0	Would not have hit the entry price. Market stagnant.
Wednesday	Morning	0	Would not have hit the entry price.
	Opening	+5	After three sessions hitting the stop, today it would have made it to 5 points. We didn’t trade.
	Evening	-0.25	Similar to previous days without movement at market close.
Thursday	Morning	-4	We didn’t trade. Had we, there was a false upward break and we would have lost -4 points.
	Opening	-4	Just like previous sessions, movement without a tendency.  We entered short; the price went down 2 points and later bounced.
	Evening	0	No movement.
Friday	Morning	4	The short would have been triggered at 4:59am EST.
	Opening	-4	We didn’t trade but, once again, there was no movement at the opening.  A strange week for the SP.
	Evening	+0.25	We hit the entry point and we exited after making the stop profit of 0.25 in a dormant market.

 To summarize, it was a difficult week for our SP techniques because, as we’ve discussed, the market this past week lacked a general tendency, was overall inactive and had rapid movements, both gains and losses.

We hope that the next week the markets, taking advantage of the fact that next Friday options expire, start to move more forcefully increasing volatility and the tendency we need.

Keep in mind that Monday is a US Holiday (Washington’s Birthday) and the US markets will be closed therefore WE WILL BE NO SP FUTURES TRADES even though that market is open because on holidays normally it is not worth it to operate.