I am the ShadowTrader (fx)

www.shadowtrader.net

I've got a secret...I've been hiding...

To quote Mr Roboto, I I've got a secret...I've been hiding...Can you guess what it is? We will be revealing the secret next week. For those interested, can you guess what it is? and yes it is trading related.

The "Right Question"

I love the book by Isaac Asimov, i Robot. In the movie, there is a repeated pattern of interaction between Detective Spooner and the hologram of Dr Lanning. In the interactions, the detective can ask the hologram questions but many times the hologram responds, "I am sorry my responses are limited, you must ask the right question..." and when the detective asks the question that will lead him to the information he needs, the hologram answers, "That, Detective, is the right question." The hologram never gives the answer just tells him that he has asked the right question. So let me propose some thoughts with a recent report I saw on CNN and leave it up to you to ask the right question.

In 2008, the FOMC has been approved to spend 7.2 trillion dollars and spent 2.6 trillion dollars. Having spent 2.6 trillion dollars, how will this affect the economy?...I am sorry my responses are limited. How will the 2.6 trillion dollars spent affect the strength of the dollar?...I am sorry my responses are limited. How will the 2.6 trillion dollars spent affect the world economy?...I am sorry my responses are limited.

So faithful reader, what is the right question?

(feel free to post what you believe is the "right question" here and I will let you know detective(s) if that is the right question or not.)

Back with some trades

Busy, busy week last week. Busy week this week. Lots of announcements including the Fed and Bearstears being bailed out by the Fed, I mean the government, I mean your tax dollars, I mean JP Morgan (whew I almost said what I thought).

Anywho, last week I lost about 14k in just over 2 days and clawed all the losses back and netted out 3.5k so all in all I was happy with last week, we shall see what this week holds.

No color coordinated images, just longs and shorts.

Feeling a little guilty..but only a little

I feel a little guilty because I didn't get yesterday's positions posted. It was a very very busy day. I did however take all of my trades. As such I had a nice winning day. To prove that I am not making this up, I have included the positions and an image of my account realized P/L and the unrealized P/L. My guilt comes from anyone that may have been trying to trade all of my trades.

The reason I feel very little guilt is because, as you can see here, trade signals are only good if you can execute on them... they are also only good if you understand how the signals are coming so you can trade them when the trade giver misses a posting. I also feel little guilt because the $$$$ are like salve to my guilt, it is hard to feel sad on a good trading day.

Sorry for the miss, I will strive harder to get today's signals posted later this afternoon.

Please also note that the positions in my account are 5 minis per position (the Eur/Jpy is 2 -5 mini positions). The gains posted today are rougly equivelant to seeing $330 realized P/L and about $290 unrealized P/L per mini contract.

Morning update

I may get stopped out in the next few minutes on many of these trades as new home sales come out and as Ben Bernanke talks (adding volatility) but... here they are as is. We have given a few hundred back from last night but considering we had gained about $1000 (based on 1 mini) I am good with today's move so far.

New Forex Trades for 02-26-2008

Here are the new trades for today with the ones not closed out from previous day.

Remember you can click on the image to blow it up bigger.

Update of yesterday's

This is the update of yesterday's positions, closed out and open P/L. The new trades will be published shortly. It was a great day.

This is based on 1 mini contract so making nearly $1000 in one day with minimal risk it is pretty dang good.

quick update, things are moving

Here is what we are looking at now. Eur/Usd limited out (could this be the break out?). Everything else is looking great. I am tempted to widen my profit targets (it is ok to widen limits not to widen stops) I will leave things alone for the next couple of hours but it was looking good so I thougth I would get hisupdate out. I will not be surprised to get a couple of additional limits in the next few minutes.

Great Book to Read

I read a new book over the past 3 trips. It is called Confessions of an Economic Hit Manand I must say it is one of the more compelling and intriguing books I have read in a long time. I am sure there is some embellishing that goes on in the book but I am also fairly sure that even though all of it didn't necessarily happen to the author, most if not all of it did happen to himself or colleagues. Very good book and definitely worth the read.

what a great 8 hours it's been

Here is the update from last night's positions. As you can see I am tightening all the positions stops, we are risking next to nothing of our account but we are risking about $500 if we include the profits gained from last nights'/this morning's move.

Depending on how the next hour orso goes, I may just take profits and call it a good day, many of these are next to resistance or support areas.

Here are the trades for today

As you can see I have added a column to try to make this easier for me to track. If anyone wants to assist in tracking the results we can get these posted in a reasonable time frame. I am up a little for the last week but I am really liking what this week is looking like. We could see the channeling I feared would last 8-10 months come to a quicker end. I am personally watching for a short term break out in these channels against the dollar before a pull back to retest the top or middle level of these existing channels. Just a thought.

Update from yesterday trades

Here is the updated positions. In addition to the limited out trades, I am currently sitting on $254 of unrealized profits. All of the stop adjustments in yellow are very tempting to get out and take the profits as it got so close to the limit target and are showing some signs of pull back. I will look to place more trades on Monday morning, possibly pre market open.

Though it has been win a little lose a little win a little more lose a little more, I am very content with the results so far. It has been a rough market of sudden swings and changes. The fact I am up slightly taking so many intra-day scalps makes during a volatile market give me confidence when we see some directional days we should makes some good, solid returns.

OUCH what an ugly day

The gbp surprised and rallied on good retail sales, the dollar got crushed a lot of surprise reversals set us back about $300 for the day so far. I will get that update shortly but here are the new trades for today.

Back from NY

Just got back from NY late last night. To catch you up on the scalping methodology, we had some winners and some losers and we are back to about break even, rather than trying to catch up 5 trading days and 60 trades, we will start again with tonights. All of these are market orders to get us going. Just look at the hourly charts from roll over to determine that you haven't moved too far from the daily roll over rate.

Here are the trades

pre market adjustments

stops and entries adjusted pre market open in the US

New trades and yesterday trade updates

Here they are, 24 hours later, 12 new trades, 10 exited trades from yesterday and 2 trades still open. If you have questions about how I am tracking them, please put it in the comments.

Morning update of Feb 12th positions

Just to clarify again, the yellow shows changes. In other words we tightened our stops on two trades. The USD/CHF entry was a typo from yesterday, it was suppose to be 1.1030 entry limit long, similar to the other trades. Now if you had typed it the other way you would not have been entered in the trade. If you were following along, this is one to kill and not chase.



This system is built on creating numerous long and short positions on similar pairs and counter positions on specific currencies.

Some of the trades are not closed out as of yet but those that are closed out are up $100. I know this is only about $12 per trade net profits but it is $12 per trade after all the losses and $100+ for one day and about an hour of week.

Later I will post the new trades for today and I will include a separate running total of gains and losses(just the dollar amount, not a recurring list of the trades). There are some interesting dilemma with this methodology but I will address them when we encounter them.

New bracket trading methodology

The long term trades are trying to shake out. With volatility in the stock, bond and futures market, many traders are uncertain. While the world wonders what will happen next, I am adjusting my trading process to fit the current times. While waiting for long term trends to continue, I am trying a methodology that is based on bracket trading for shorter term targets and profits.

I will post the initial trades and adjustments as shown in the colors below. If you can figure out my methodology, more power to you. In the past month the methodology has worked great in intermediate trends and has been close to break even in rough times (meaning this past week for me). You should be able to click on the image and view it bigger.

Diverging dollars and $145 billion stimulus

I would guess that most of the intelligent readers that visit my blog are fairly intelligent and probably already know the meaning of diverge and divergence but just to be sure. di·verge / [ di-vurj, dahy-] verb, -verged, -verg·ing. –verb (used without object)

1.to move, lie, or extend in different directions from a common point; branch off.

2.to differ in opinion, character, form, etc.; deviate.

3.Mathematics. (of a sequence, series, etc.) to have no unique limit; to have infinity as a limit.

4.to turn aside or deviate, as from a path, practice, or plan.
–verb (used with object)

5.to deflect or turn aside.

I am going to use the first definition to describe what I believe happened and the other 4 I will use in a sentence and reference the definition by # at the conclusion. What happened this week? The dollar strengthened against most pairs (except for the yen) why is that? I have heard many people say the dollar is over extended, I highly disagree.

The commodity market pulled back significantly. There have been a lot of concerns about inflation, so when the market sees a5% pull back in gold a 10% pull back in oil and an almost 13% pull back in the commodity related indices, many have felt, wrongly as it may be, that the inflation concerns may soon be over.The dollar move was driven by commodities falling and nothing more.

The bearish dollar trends are continuing and the antidollar fundamentals are still strong. This week alone, the US economic data was mediocre at best. The "good" new or upside surprises were nothing more than someone trying to lose weight and saying "hey, sure I ate three big macs but I had a diet coke, that's a positive right?" The economy is slowing (probably due to eating those extra big macs and falling asleep at the wheel), the housing market is still pulled over to the side of the road blowing chuncks from the nasty hangover from last night's party(think real estate boom, you know the climbing housing prices had to be alcohol and drug induced) and paramedics are still trying to use the jaws of life (see FOMC rate cuts and Presidential Economic Stimulus package) to get our credit market out of the tangled wreckage it is trapped in.

If the dollar is gaining strength when the dollar should not be gaining strength this is a divergence (1). It has extended in a different direction then where it should be. Add to this the FOMC rate cuts and Presidential Economic Stimulus Package. What is going on here? Fed Fund Futures show 50 bpp cut in Jan and a 100% of another 25 bpp in Feb and an almost 30% chance of a 50 bpp cut. Add this to the announcement by President Bush today. Our executive branch has asked for a stimuli package to the tune of 1% of GDP, in case you didn't know GDP is over 14 trillion, therefore a cash injection into the market of about $145 billion dollars.

***DRAMATIC PAUSE***

That's right, flood the market with US dollars, weaken the dollar further, in the midst of inflation concerns, go the wrong direction, cut rates which will drop demand for theUS dollar (first time in 15 years the US rate will be lower than the european interest rates) which will further weaken the dollar, making everything that much more expensive, making it less possible for us to have expendible income (despite the capital injection, $800 won't go very far when the dollar's value is cut in half) making us Americans buy less things, making companies produce less which will induce them to lay off workers, and further increase unemployment, drop GDP, and put the final nail in the coffin of the economy ("put away the jaws of life boys, there is no hope, time of death…").

OK enough already, the other definitions.

If you diverge (2) from what I have just written, you need to understand my intelligence is divergent(3- that's right having no finite limits). So ifyou so choose to diverge(4) from truth it will be very easy for me to diverge (5) your poorly backed opinions.