Good day.
We are going to start our review by unveiling a new technique we will introduce starting this Monday for our futures traders. The technique is based on trading the Spanish IBEX35 futures.
Why are we introducing this technique? We have been offering this technique as part of our Spanish-language service since 2008 and we have had good results. In addition, as we have seen that the Sp has been very difficult recently (since Thursday, we have experienced a marked improvement), we are going to introduce this new technique in hopes that it will help us achieve the results we have attained in prior years.
One can trade Ibex 35 futures with any large broker. We recommend using IB (www.interactivebrokers.com) for trading both futures and forex. They have two contract types:
Large contract: The ticker is IBEX35. Pricing is by 1 point and each point is valued at 10 euros / $12.50. One must deposit approximately 10.000 euros / $12,500 as a guarantee for each contract.
Small contract: The ticker is IBEX. Pricing is by 5 points and each point is valued at 1 euro / $1.25. One must deposit approximately 1.000 euros / $1,250 as a guarantee for each contract.
Here is an example of Ibex pricing from last Friday.
We recommend you start with the small futures, called the MiniBEX, to familiarize yourself with it. If you have any questions, do not hesitate to ask us.
Signals for this new technique will be sent by email at 3:30 am EST. The target will vary and the stop will always be 40 points.
For example, today’s target was 195 points with a 40 point stop. We hit our target, which means that a small contract would have a gain of 195 euros / $243.75 per contract whereas for a large contract our gain would be 1.950 euros / $2,437.50 or close to 20% of the guarantee required for the contract.
This week, we have made a profit of 480 points with this technique. That translates to 480 euros / $600 for a small contract or 4.800 euros / $6,000 for a large contract, almost 50% of the required guarantee.
What do we like about the Spanish index? Besides the fact that we know it well because we have executed many operations with it over the last few years, we like it because it is an “extreme” index meaning that it always goes up or down more than indexes for other markets. In the following chart, you can see how, on Friday afternoon, the Ibex future went down 6% while the German Dax went down only 2.30%, Eurostock went down 3.91% and the Sp lost 1.66%. We like it because it is dynamic and this gives us a lot of opportunities for intraday trading.
This coming Monday, we will send our Daily Market Advice subscribers the first signal for this technique via email.
MINISP FUTURES
With regards to the Sp, up until last Thursday afternoon, we had a very complicated week, as we have let you know. Since the activity of the previous Thursday, as you can see on the chart below, the market was left with very low volume in all position and this made it difficult to operate up until Thursday evening, as we have even seen bars of 5 points in 1 minute, something uncommon for the Sp.
The following are charts with examples of specific moments of the week.
The morning:
Last Thursday, we decided to stop trading because of the low volume amount and, as you can see, Thursday evening would have made 4 points, Friday morning another 4 and Friday opening 5 points after a really bad week. Therefore, we hope that starting this Monday we can operate the Sp with more resolve than we saw at the beginning of this past week. We have traded the Sp over many years and, before this past week, we had never seen movement with such low volume nor have we seen movement so pronounced.
FOREX
Now we will review FX for the past week. Here are the numbers:
As you can see, this year we have registered thus far 130 positive operations and 110 negative ones. Even with low yield techniques during these past months and to the contrary to what one might think at first, these numbers demonstrate what we have always been working towards; to have stable and robust techniques that, leveraged to allow one to support the worst string of losses, make it difficult to either trigger trades or to accumulate important losses.
Take a look. With only 20 positive operations, we have a gain of +740 Pips this year. Those are good numbers. Of course, you know we don’t make 1,000 Pips a month with stops nor do we experience Drawdowns of 1,000. And if with 20 positive operations we have a gain of +740 Pips, imagine what will happen when the situation normalizes. Last year, we made a gain of more than 10,000 Pips with 200 positive operations. Our performance continues to be spectacular; we only need to grow at a faster rhythm. In addition, we also want to comment on bad luck and how it is impeding that growth…
FX operations from this past week:
We gained 184 Pips in 17 trades; 9 positive ones and 8 negative ones.
What happened again this past week that keeps preventing us from achieving better results?...
May 12th signal:
These extremely unusual events described here, coming within a couple of pips of the targets, caused us to end the USA FX session with a loss of 106 Pips instead of a 106 Pip gain.
Keep in mind that for a $10,000 account with 2% of risk, this means going from $10,400 to $9,600. This is what we have been suffering over many weeks now and this is the cause of our lower performance this year. These incidents, or bad luck, are really dangerous and they demand a great effort from us to later recover from them. This week, we would have had a gain of +461 Pips and instead our gain was +249. We believe that what we have commented on and lived through lately by many of you clearly demonstrates why we have not been able to “take off” yet this year.
And this is how we have performed in the second quarter of the year, to date.
Finally, we would like to close this review by informing you, once again, that over the following days we will begin to officially execute a new FX technique with small stops and large targets in an attempt to take advantage of the current market volatility. The technique will have a set time. You will receive the signal at 3:30 am EST and we expect to utilize it several times a week.
Best regards and have a great weekend.
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