Current situation

Haven't had a lot of time the past couple weeks. In the process of moving. Took a larger loss on a long term play, got stopped out and too much going on economically right now for me to pay attention to. I did have a good run for a couple of weeks but made the mistake of increase my position sizes after some good profits.

Interesting enough, I am in the process of reading a book right now by Bo Yoder. Optimizing your trading Edge. He talk about profits and losses as a cycle. When markets are giving money, they always try and take back. It is a traders job to test the waters appropriately to determine whether or not it is one or the other. In my situation, I had a good couple of weeks and took profits. It would have been responsible of me to slow down and even decrease my position size after my run of profits, just to test the waters of the market. I realize that I may be right about the the longer term outlook of the market, but short term can stop you out of a position constantly even if YOU ARE RIGHT. I've only been trading a couple of years and mostly on paper. The book talks about traders who test a strategy on paper and it works out great, only to jump into the live market and get destroyed. This is because of the payout/payback cycle he talks about which I believe related to and is similar to the cyclical business cycle modern economies encounter. As soon as the trader goes live.. the market has switched on him. He then turns around after taking losses and tests his strategy again on paper and is profitable again.

Point being. After a run of profits. Do not increase your position size assuming that your market strategy is the holy grail. The holy grail is your psychology and the way you approach the market. Test the waters of the market out with smaller positions to figure out if the run is still valid.

Anyways, the book is good reading. Check it out.

GBP/JPY update

POUND/YEN has retraced and seem to have found resistance. I have decided to pull the trigger on my short. I have a very wide stop on this trade because it is a long term play. Slightly in the profits so far. I have a tendency to exit my trades too early and this is going to be my biggest challenge in this position.

May 12

Took the day off. Woke up late so I missed out on some big moves. NYSE is bullish today, that was a nice sign. I am putting the government IRA I manage into aggressive mode throughout the rest of the week.

EUR/USD Quick profit

Eur/usd pair retraced over the last few daily sessions. Opening today only to hit and bounce off of resistance. This has been my favorite pair since last FED cut rate. Technicals on it seem to be playing out very well.

+50 points in less than an hour and still move to room. I decided to exit the trade at support because it was such a fast move. I will re-enter with a pullback, but, there is a good probability it continues down.

05/09/08 End of day

I didn't trade today. I wasn't really feeling any trades. I did set up some trades for next week which I will post Sunday before European session.

GBP/JPY UPDATE

First chart is GBP/JPY now. It has done what I expected it to do 2 days ago (see archive). I haven't taken a position on this because I planned on shorting this for long term swing. Its still a to-watch.

The second chart is its condition 2 days prior.

Third chart is long term chart indicating elliot wave theory principle. I really like the way this

looks and maybe should have not hesitated a couple days ago, but, I am not as familiar with this pair as I am with the rest of the majors.

End of Day.

Not a whole lot happened today. Took one trade home for a loss of 40 pips. Just a sloppy day.

-40 points