Dollar's a Loser

On Friday, 28 September 2007:-

1. USD index made a new all-time low @ 77.66



2. USD/CAD set a multi-year low @ 0.9914

3. EUR/USD set a new all-time high @ 1.4274

4. Spot gold price rallied to the highest since January 1980 @ 746.7

Do Not Fight the Trend

Loonie's a winner...and my two losing positions.

Trading book:
Long USD/CAD (x2) @ 1.0204 effective cost

Hence, possible improvement to my trading system:

1) Use a 100-pip stop loss level when opening position.

I had 43 winners for the last 2 week (from 13 Sept), yielding a total of 941 pips. The average drawdown for those positions is -26. The highest drawdown recorded is -86. If I had the emergency stop in place, the system would automatically close out the losing position for -100. Hence, it should be a simple 200 pip loss on the loonie positions instead of a current running loss of 400. Looking at my results, I should not be afraid of trading losses, and it is OK and 'healthier' to take a hit occasionally.

2) Attempt to clear my trading book towards the end of the day.

Holding onto a losing position for too long could impair your trading judgement. This week, I 'carelessly' added onto a losing position, hence the second long USD/CAD position in my trading book. I even tried to long EUR/CAD . I think I can do better by having a clean, new trading book for each new trading day.

Canada's Dollar Rises to 30-Year High

It's happening again, with a 30-year record high since 1977! I am still holding a single long position USD/CAD position from 1.0302. The pair is pretty well beaten down (again) today. Earlier, it traded as low as 1.0200.

Although I am still quite confident about its "soon-to-happen" recovery, I am not going to add another long position from here (1.0228).

A week ago, my system experienced this as I overtraded the position .


The system has since rebounded strongly from there and right now, I just need to have some patience to ride this through.

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