One Week After Yuan Revaluation

"People who bought the yen on speculation of further strength in the yuan sold it back."

"News is expected to remain robust for the dollar."

The market is seemingly unpredictable for the past week. There are a lot of ongoing fundamental rather than technical moves in response to the recent Yuan revaluation. I am now slowly recover from the aftermath of holding short position on yen and by not adapting quickly enough for the possible trend reversal. A possible implication for the future is to stay away from the market as soon as abnormality has been identified.

I have to admit scalping in a shorter time frame (minutes) can yield better results than swing (days) during the time of uncertainty and fundamental adjustments.

Trading via Action Index

Based on swing trading strategy, I produce report which delivers trading signals on a basket of 11 currency pairs at end-of-day. I had a second thought on my yesterday report (above). I have since re-weighted my index in order for them to yield the following actions in future:

For buy,
Group all indexes with value between 7.01 to 10 in Buy section
Sort and rank them in ascending order, e.g.
1. USD/JPY 111.94 (7.33)
2. EUR/USD 1.2054 (7.67)
3. EUR/JPY 134.93 (9) Trend (15 days)
4. EUR/CHF 1.5600 (9) Trend (22 days)
Choose 1 and 2 as confirmed buy for the next trading day

For sell,
Group all indexes with value between -7.01 to -10 in Sell section
Sort and rank them in descending order, e.g.
1. GBP/USD 1.7485 (-7.33)
Choose 1 and 2 as confirmed sell for the next trading day

For close/no position,
Group all indexes with value between -7 to -7 in Close section
e.g.
GBP/CHF (-7) and etc.

Things should become clear and straightforward from today onwards.

Looking Forward to a New Week

All good things come to a halt. Last week performance: -377. Actually, I could salvage some of the losing positions by at least 200 pips if stop loss limits (of 100 pips) were in place. Therefore, I will be experimenting in next week by mounting reasonable limits on my opening swing trades. Also, may not want to hold too many positions at the beginning of the week, ideally start with 1~2 positions.

Based on this, Monday trades will be as follows:
Long EUR/USD
Long USD/JPY
Avoid GBP/USD
Avoid GBP/CHF

Best Two Trading Weeks

I have adopted a more laid-back swing trading approach due to the uneasiness of constant monitoring on the live price movements. The new approach has opened myself to a range of opportunities on all popular currency pairs for the last two weeks. Analytical work is only required in the evening session to identify and sort all the monitored positions according to their potentials.

I have summarised all my trades for the last two weeks at the following webpage:
http://tradingforaliving.bravehost.com/report050627.html

The two-week trial efforts have yielded +1042 and +560 points respectively. Better than expected results.

Daily Forex Evaluation by Advanced Index

Here is a typical report that I will produce at the end of each trading day. Basically, it tells me about the latest arising opportunistic technical situations. The specially formulated advanced index helps me to gauge the next market moves and hence recommending me on the potential trades.