Would you believe it snowed another eight inches the night this picture was taken? Today marked an important event at the O’Keefe household. Thanks to a county snow plow and a lot of shoveling it was the first day in nearly fifteen we were able to leave the house!

How did we spend it? PF Chang’s, Nordstrom and Barnes & Noble following a brief stop to ensure we would be seen with the obligatory cup of coffee, it is like an admission ticket in Seattle.

David, thanks for the hand shoveling snow this morning!

Thoughts for the Final Week of Trading in 2008

The economic calendar is riddled with bank holidays beginning Tuesday in Japan which might make it a bit boring this week but there is one pair which has piqued my interest.

Trend Line Gap Short on AUD/USD?

It is no secret this pair has been punished over the last quarter so I was interested to hear a trading relative of mine was long the AUD/USD during a phone call last week.  Doing some research I found some arguments for a long bias. If you look at the excellent Commitment of Traders Sentiment Indicator that John Jagerson maintains on his website, LearningMarkets.com, you’ll see institutional contracts appear to be moving toward the long side, potentially even going net long soon. There is also some interesting research posted over on DailyFX.com but it seems to be equally balanced.

I’m just not convinced this pair is done ranging yet. On December 16^th the pair rallied to the high end of the range following a breakout from triangle consolidation but was quickly stymied posting a large bearish engulfing candle.  AUD/USD may continue higher but as of right now my opinion on this pair is bearish. I’m watching this trend line gap for a potential short trade to the bottom of the range.

Classic Remora Trade Example

I want to point out a classic Remora example trade from the 19^th of December on EUR/JPY. Please note, I did not take this trade, wish I had, but I think this example still has educational value.

Remora is a trend following system which attempts to join the prevailing trend on whatever time frame you prefer to trade by buying pull backs in an uptrend and selling rallies in a down trend. There are a couple of filters I use which will be explained in the upcoming video but that is the general objective of the strategy.

Earlier this month EUR/JPY moved into an uptrend on the daily chart following a consolidation breakout around $123.00. The system gets long when the market closes below the Hull Moving Average which it did on the 19^th of December. This was a Friday so the entry would have been Sunday evening perhaps around $124.97. Placing a stop below the signal candle low the risk was about 150 pips. Targeting the high of the uptrend gives you a Risk-To-Reward ratio around 1:4 (150:600).  The market is currently trading at $128.10 or about 300 points in the money.

Link To Trading Post Webinar

I finally have the link to Decembers webinar at Trading Post Financial. If you missed the live event and would like to watch the recorded session follow this link:

http://breeze.tradingpostfinancial.com/p45379694/

I don’t know why the first 15 minutes of the presentation are missing but the bulk of the content is still there. You will miss out on my bio information and several forex disclosure statements which were really well read if I do say so myself.

Thanks Doug for finding the link!

Best of luck,

Ryan

Having spent the last twenty years in California and Texas I haven’t seen this much snow in decades! Another strong storm is expected to arrive today so I thought I’d close out 2008 with this post.

To all my readers, I wish you a wonderful holiday season and a healthy, profitable New Year!

Looking Back at 2008

This year has been quite enjoyable for me. Over a thousand people now visit this blog each month and I have enjoyed getting to know those of you who emailed or left comments. Most enjoyable were the webinars I did with Trading Post Financial. Speaking live is a lot of fun and I hope you enjoyed them as much as I did. I’d like to extend my thanks to Sam Araki for inviting me to participate in TP Tuesday and Katie Chambers for helping me get setup on their platform.

My personal trading wasn’t as sharp as I’d like it to have been with a few loosing months this year, including December which I’m off around 40 points.

In the last two months I’ve spent a large amount of time making arrangements for 2009 which slowed down my blog but it should make 2009 a lot of fun.

Looking Ahead

In January I will start releasing the video content I’ve promised. I’m not the best audio / video guy in the world and it has taken me some time to figure out how to create, edit and host this stuff but I think you’re going to like the educational videos.

For trading we are going to focus on my Remora system.  There are several flavors of Remora that I will trade with all results posted at the end of each month.

Final Thought

My trading style was forged around the fact that I needed to trade around a day job and I didn’t want to kill myself trying to session trade London or New York. If you take anything away from reading my blog I want it to be this:

You can trade around the demands of your day job and family commitments until you’re ready to either quit that day job or work other interests while trading full-time.

In 2009 I will continue to share my thoughts, trades, profits and losses with the hope that it may shorten your road to profitability and help you to define your own ideal trading lifestyle.

I appreciate your readership. I hope I’ve helped you this year and I look forward to hearing from you in 2009!

My Best Regards,

Ryan

Well you can’t win them all and yesterday’s trade idea was stopped out overnight.

Even with a downtrend, round numbers, descending trend line a potential Fibonacci zone sometimes they just don’t work out which is why we use stops.

Moving on to the next one…

Two weeks ago I got a wild idea in my head to place a USD/CAD sell order at $1.30 with a 100 point stop, but then I figured no way, that would be too obvious; bummer.

Last week I told myself; self, watch this USD/CAD trend line gap setup because it could be a good short. I managed to forget about the pair until yesterday; double bummer.

In my opinion, one of two scenarios are about to play out:

1. We have already seen a decent bounce off this daily trend line and the pair may rally again.
2. Loonie is preparing another assault on the trend line which if broken could lead to further Dollar losses since the next meaningful support is around $1.1450.

So tonight I’m looking for a way to join this down trend because I’d like to be short if the market makes another run at the daily range trend line again. The pair may end up rallying but another test of the daily trend line could happen first. Here is the trade idea…

I’ve split the difference between the 50% and 61.8% pull back levels and placed an entry order to sell this pair at $1.22. If the pair moves against me I’ve placed a 100 pip stop order to limit my risk at $1.23.

My first profit target is the daily chart trend line at $1.18 for a risk-to-reward ratio of 1:4 although I’d like to catch any break below the trend line with a trailing stop.

Best of luck,
Ryan

I am participating in Trading Post Financial’s “TP Tuesday” event next week on Tuesday the 16th!

I’ll be sharing an improved version of my presentation “Trading Around Your Day Job” including more long term trading topics and as many have requested, more Remora content!

Click here to see the schedule of speakers.

Registration is free and if you would like to join us please register using this link:

http://www.tradingpostfinancial.com/form_tptuesday.php

I heard some folks had trouble with the registration email last month so if you do not get a login link after you register,  email me and I will help you out.

Trading Post puts on a good event and I hope you can join us!

I hope you had a profitable week and have a great weekend!

Ryan

By the time I settled behind my trading desk this morning EUR/USD had blown through both “short” entries I had planned earlier this week, fortunately I didn’t have any orders waiting at those levels. I went back to the daily chart and drew up a new plan to short the pair at $1.33 which was promptly stopped out with a 50 point loss.

There was a day I would have thrown my hands in the air, cursed the pip gods and walked away with a loss which is where successful traders are separated from unsuccessful traders.

Today I simply traded again; same plan but 100 pips higher and shorted the pair at $1.34 which I decided in hindsight was a much better resistance level on the daily chart to short than $1.33.

I ended the morning +15 which is much better than being hacked off with a loss any day.

If you’re going to survive as a trader you must train yourself to keep a cool head after taking a loss. The advice is simple but personally I’ve always found losses frustrating, even when I trade a demo account. It took me many, many frustrating losses to build up a sufficient callus. Trust me on this, if you don’t give up you will make it, be patient and keep at it.

If you’re curious, yes I could have bought the $1.33 level after it failed since the daily flow was so bullish but I trade the “00″ levels intraday as a contrarian, just my preference.

I don’t have any long term trades to share with you tonight, best of luck tomorrow!

Ryan

Overall I am pretty happy with the EUR/USD long opportunity I posted last night. This morning my entry order was tagged and the pair shot up to $1.2950 pretty easily. I actually took profit a little early at 102 pips because I was concerned the Dollar would strengthen more as the equity markets dropped but ultimiatly I was wrong and could have had another 48 pips, oh well still a little rusty I guess, what is the saying? Plan the trade, trade the plan.

I have returned to my trading desk following a few weeks of needed vacation over the Thanksgiving Day holiday. I hope all of my readers who observe Thanksgiving enjoyed the day with friends, family and far too much food!

There are very cool things happening behind the scenes which I will be able to share soon but in the meantime; I am settling into my normal pattern of planning and posting trades after the New York close.

The One That Got Away

This morning I was trading the New York session and had an experience I thought you would get a chuckle out of. I like to trade moves between round numbers while trading an active session whenever they correspond with logical support or resistance levels. I missed the bounce off $1.50 which would have been juicy and had an entry order waiting at $1.4800 to buy the pair with a 50 pip stop. The trade plan was to ride it back up for at least 150 pips (1:3 RTR) but I lost faith in the support layer for reasons I can only chalk up to being rusty after vacation. I removed the order and the screen shot tells the rest of the story, oh well, I’m sure you can relate.

EUR/USD Thoughts

Every trader on the planet is following the consolidation range that has set in since late October and I’m still keen to sell this pair but I’m waiting for $1.3070. About an hour ago resistance at $1.2950 was smartly rejected but I suspect the pair will find some support around $1.2800 for another attempt at a break out from the triangle pattern that has formed.

I’m 100% in range trading mode right now with the following trade plans:

Best of luck and I’m glad to be back trading again!

Ryan