Discretionary Forex Trades Paying Off For Now

I set up a basket of swing forex trades since last Thursday when the Dow index was hovering near the 7500 - 7600 level. At present, my positions mainly consist of long carry trades and short US-dollar trades. I had discussed these trade ideas in my last posting and practically decided to call my own shots as my black-box mechanical systems were not able to cope with the recent extreme market conditions.

• U.S. Stocks Post Biggest Two-Day Rally Since 1987 on Citigroup

I was glad that I made such a move as I was still holding most of the positions at this point of writing. I want to see the US stock markets to take off further.

Stock Markets are Finally at a Turning Point

During this volatile time, it's important to stay on track no matter what. It's all about capital preservation and reducing risks during tough market conditions. It's important to honour stop-loss levels and there is no reason to fight the markets without a proper trading plan.

There is something extraordinary about this market. At present, the forex markets are greatly affected by the performance of stock makets. The latest dip in the US markets has significantly changed the daily normal operation of the forex markets, especially during the month of November.

All daytrading systems are facing a uphill battle due to the current situations. Nonetheless, my major-pair system still ended breakeven for the week, and +260 pips on the month.

The cross-yen system took a hit while 100-pip program gave back some of its gains during the last 3 days. This gave me an indication that we're about to see a shift in the market sentiment in order for us to go short the US dollar and to buy into the recovery in the stock markets.

These markets present a great buying opportunity if you got a bunch of cash left waiting to speculate and invest.

Making Forex Pips Out of Dow Jones Extreme Swings

The Dow Jones Industrial Index had erased a whopping minus 400 points at the opening and was finally ended in a triple-digit gain of 400 points. A massive 800 points swing intraday.

I didn't follow stock charts these days. But as a forex trader, I did pay attention to yen-crosses / carry trades markets. During this financial turmoil, high yield currencies such as GBP/JPY, AUD/JPY, AUD/USD, NZD/USD, etc are showing a good price correlation with the movement of stock market indices.

When the Dow Jones was hovering near the breakeven level midday, I made my first two discretionary trades in the yen-crosses markets. Promptly took my profits after the Dow's first 100-point breakout run. I then reversed my positions after Dow hit 200 plus points. Exited immediately with reasonable profits for the second time. I decided to stop trading after that and were actually out of position during the Dow's final-leg surge to 400-point gains.



Most of the time, almost 90% of my forex trades are executed by my automated trading programs / expert advisors. Today, I made an additional gain of 313 pips manually using my discretionary skills and technical judgement with my forex chart systems.