Weekly review 05/23/2010

Good day. 

We are going to start our weekly review with Forex trading.

FOREX

FX operations from this past week

As you can see, this week we had a negative outcome.  We have had a streak of bad results after having a positive streak the previous week.  Unfortunately, our recent success ratio, although positive, is somewhat low and we haven’t recently been able to string together two or three good streaks which would give us the results we are accustomed to.

Now we will provide you with the details of our operations this past week for European FX y USA FX.

EU	US
20	-81
-40	-90
-47	-90
10	-36
-81	44
-84	90
-52
-274	-163

The biggest disappointment for this month continues to be the European Technique.  Here are the numbers for the previous week. 

EU	US
100	147
-47	64
-73	-46
-70	-60
55	-68
50	91
-39	51
-40	84
50
84
70	263

Remember we had some bad luck last week as two operations for the U.S. Technique (as well as many others this month and year) missed the target by two pips (+104 Pips).

For now, we will continue as we have.  The volatility we wished for has arrived but it has been totally chaotic, causing prices to move 200 to 400 pips from one session to the next, even though from the opening of London exchange to the N.Y. exchange the price may be the same. 

As a curiosity, take a look at the following chart which demonstrates activity we have seen very infrequently.  It shows a 400 Pip fall that is completely recovered from only hours before the N.Y. close (400 Pips!!!) and even goes positive.

We continue to study the market while waiting to come out of this "Stand by" period, as we have not broken any Drawdown or negative historic parameter and we hope our strings of positive results come soon.

FUTURES

With regards to our Ibex trading, this past week was quite complicated and, as you can see in the chart below, the reason was that we had a week of wide ranges but very lateral and with continuous directional changes.

With regard to our Sp trading this past week, we only executed two operations for 0.75 points.  We did not operate because we didn’t see clear opportunities: volumes in positions were low and volatility was very, very high.

The week had a strong, downward trend, lowering the Sp from Thursday of the previous week no less than 125 points before the expiration of options on Friday.  The movements of this trend were brutal, as we have never seen before.  Look below at the example of Friday’s session with 15 minute bars.  There are price movements of up to 17 points in 15 minutes.  For our techniques, which go with 4 point stops, this drives us completely nuts.  It is like flipping a coin because, in addition, volumes were extremely low all week, just like the previous one.

Now we will review our numbers from the week.  You can see the results applying the normal technique or the inverse of the technique.

DAY	TECHNIQUE	OUTCOME Normal	OUTCOME Inverse
Monday	Morning	0	0
	Opening	5	-4
	Evening	-4	2
Tuesday	Morning	-4	4
	Opening	-4	5
	Evening	-4	2
Wednesday	Morning	-4	4
	Opening	-4	-4
	Evening	0.25	2
Thursday	Morning	0	0
	Opening	5	-4
	Evening	0	0
Friday	Morning	-4	4
	Opening	-4	5
	Evening	-4	2
		-25.75	18

Take a look.  If we apply our normal trading technique, we incur a loss of 25.75 points.  On the other hand, if we apply the inverse of the technique, we would have an 18 points gain.  The reasons are clear.  Just look at Friday’s opening.  Minimums were reached just after the opening and then the market turned after 30 minutes.

And, as you can see, the same thing happened in the evening.  In addition, because positions are so empty and volatility is so high, 4 points is nothing.