Review of second week of March

Good morning/afternoon.

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

FOREX

Here is a summary of the quarter to date for Forex trading.

When we examine our results for 2009, we see that our profit year-to-date is only 10% of the profit achieved last year for a similar number of operations.  We have explained the reasons for this in previous reviews: the lack of volatility and direction for many pairs make it difficult for our Forex and Futures techniques to work.  In addition, these market conditions don’t allow us to employ our Stock techniques as the vast majority of stock prices have been stagnant over the last several months.  With regard to our Stock techniques, in the past our Stock Evening Technique employed a 4% target and a 3% stop and 80% of our trades were profitable.  Now, we wouldn’t even be able to set a 1% target as the majority of stock prices aren’t moving.

What’s important is that we remain profitable; our accounts have grown since the beginning of the year even under the worst market conditions imaginable.  Imagine what will happen when market conditions improve…

These are the operations we executed this past week.

This week we executed 4 operations with losses and 9 with profits.  It is a shame we registered losses with our Eur/Jpy operations at the end of February and the beginning of March because, without these losses, our results would be above 250 pips for this month in only the first two weeks.  In February, we would have made a gain of almost 500 pips.

Now let’s focus on intraday SP trading.

Now let’s study how our techniques fared over the last three weeks both as designed as well as how we would have done trading exactly the opposite (the inverse) of what our technique prescribed.

We see that during 13 sessions the market went from 1115 down to 1084 and later rose to yesterday’s maximum of 1155. On the surface, this range appears to be ample and, with three hours a day to trade, we would assume that our results should be good.

The following are the results of all operations executed both normally and inversely.  Take a look, because the numbers are surprising.  

Last 15 sessions:

Normal -17 points

Inverse 3.25 points

Last week:

Normal -4.25 points

Inverse 4.75 points

As you can see, both the results of the normal and inverse trading are disappointing. The reason for these poor results is clear, as we can see on the following chart of the week with 5 minute intervals. We had noise, noise, noise, and very, very narrow ranges as well as a complete lack of volatility.

DAY	TECHNIQUE	OUTCOME Normal	OUTCOME Inverse
Monday	Morning	-4	4
	Opening	-4	-1
	Evening	-4	4
Tuesday	Morning	4	-4
	Evening	0	0
Wednesday	Morning	+0.5	-4
	Evening	0	0
Thursday	Morning	0	0
	Evening	2	-1
Friday	Morning	0	0
	Evening	0.25	0,25
Monday	Morning	-4	4
	Opening	-4	-3,5
	Evening	-2	2
Tuesday	Morning	-4	4
	Evening	0	0
Wednesday	Morning	0	0
	Evening	0	0
Thursday	Morning	0	0
	Evening	0,5	-0,5
Friday	Morning	1,5	-1,5
	Opening	5	-4
	Evening	0,25	-0,25
Monday	Morning	-4	4
	Opening	-4	2
	Evening	1	-1
Tuesday	Morning	0	0
	Opening	5	-4
	Evening	0,25	-0,25
Wednesday	Morning	-4	4
	Opening	5	-4
	Evening	-4	3,5
Thursday	Morning	0	0
	Opening	-4	5
	Evening	2	-2
Friday	Morning	4	-4
	Evening	-1,5	1,5
		-17	3,25

Over the last several years, this had not happened and, if you take a look at March, the situation is even getting worse.  We see that for every Morning trade in previous months we had ranges before the European Opening of 5-8 points and now, in March, these ranges are 1-3 points, which is really quite ridiculous.

Therefore, just as with our Forex trades, we are increasing our profits little by little with 59.25 points earned this quarter so far.

Clearly our results are far from what we achieved in 2009 or 2008.

Never-the-less, we continue to work hard and what is most important for us is that the market returns to its normal patterns, not like it has been over the past several weeks, so that our technique again provides us with the profits we’ve become accustomed to.

Have a great weekend!