My FX Journal - 80% Fundamental 20% Technical

[FXX]

Today I am starting a journal to track my progress. I have many years experience working in investment banks and work with market data on a daily basis. I have always been keen on the markets and decided to give it a whirl. I have a small account to get rolling £400 and trading nano lots until I manage consistency at which point I will begin to grow the account. I understand all the jargon and I am familiar with everything so not a newby in knowledge but a newby in trading.

My strategy is based on studying fundamentals and tracking the news for opportunities. I track the following economies:

• 
  United States
  United Kingdom
  Europe
  Japan
  Australia
  New Zealand
  Canada
  Switzerland

I only use technical analysis to work out entry levels, stops, and targets and my approach here is simple support\resistance and fibs for confluence levels.

I plan on being completely transparent in wins\ losses and will show my account and give analysis. The objective is for me to have a place to track my progress and allow input from experienced traders. I am looking at a handful of trades a week and might hold trades over sessions or longer is the opportunity for a swing is there.


Brad

 

[Lee Shepherd]

Hi Brad,

Good luck to you posting your results.

I feel compelled to ask the following unless you have missed off some zeros from your trading account:

As you worked in investment banks and are not an inexperienced trader, my question is this:

How many people do you know against those you do that have been successful on an account of such value - £400.00

Lee

 

[FXX]

EURUSD trade

Analysis:

USA has been selling off since April on low inflation and expectations of dovish hikes from the fed. This has been seen as transitory factors but it has exceeded the window where the fed expected inflation to pickup. Employment has been strong however and over the last 3 months inflation has been steadily picking up. Yesterdays producer price index beat expectations and today there is CPI which is expected to be better and I agree with this expectation. There is a rate hike probability in December and this has been marked as a dovish hike but if numbers continue to show improvement then the dovish element to this is weakened making it more hawkish.

The EU have also shown improvement but wage growth is sluggish and unemployment high amongst southern states. Spain is in a bad state and has broken its convergence criteria and needs to bring that back but with 17% unemployment and a host of other economic issues, this is going to be tough on their economy. Yesterday news hit the wire that the ECB is going to reduce QE to 30bl in Jan until September. The Euro strength has largely been based off economic improvement and QE ending so this news adds a dovish tone.

I took a trade yesterday at the highs on EURUSD and closed before the PPI news
[ entry 1.18740 out 1.18446 ]

I entered again after the news and looking for a continuation of $ strength and EU weakness. I am planning on holding this trade through the inflation news today.
[ entry 1.8338 with a target of 1.7446]

 

[FXX]

Hi Brad,

Good luck to you posting your results.

I feel compelled to ask the following unless you have missed off some zeros from your trading account:

As you worked in investment banks and are not an inexperienced trader, my question is this:

How many people do you know against those you do that have been successful on an account of such value - £400.00

Lee

Hi Lee

The objective of this account is to prove I can make profit and would rather do it on a live micro account than a demo account. I don't know any successful retail traders but have gained a lot of knowledge from traders at the firms I have worked. I am trading with 10:1 leverage with a trade size of 0.01 per pip. If I can prove to myself that I can do this then I shall start injecting more cash. I am targeting 30 to 80 pips per trade depending on many factors such as session time, news, sentiment, and my time. I know successful trade will get me 3-8 pounds profit which really isn't much but enough to prove out a viable strategy and improve my process. If I can grow the account over the next year to 600 then I shall begin to inject cash at 1k increments each month.

My goals in this endeavour is to give myself another source of income and maybe in years to come I could potentially give up work and earn off trading and income from a trade copy service.

Brad

 

[FXX]

opened another nano lot on EURUSD at 1.8677 short post news (prev high). CPI data didn't beat expectations but is continuing the theme of improvement and is really only marginally behind expectations. Also sales beat expectations which is a precursor to more inflation ahead.

 

[Brumby]

opened another nano lot on EURUSD at 1.8677 short post news (prev high). CPI data didn't beat expectations but is continuing the theme of improvement and is really only marginally behind expectations. Also sales beat expectations which is a precursor to more inflation ahead.

Fed members are currently concern about low inflation and that it may be non transitory as expressed in the FOMC minutes earlier this week. Whilst there is general view of a Dec rate hike, they are more dovish beyond 2017 and will look to data. The CPI numbers today had average weekly earnings coming below expectation and is the main drive of current USD weakness.

 

[FXX]

Fed members are currently concern about low inflation and that it may be non transitory as expressed in the FOMC minutes earlier this week. Whilst there is general view of a Dec rate hike, they are more dovish beyond 2017 and will look to data. The CPI numbers today had average weekly earnings coming below expectation and is the main drive of current USD weakness.

hi Brumby

Thanks for popping in and adding some commentary. I think the fed are focusing on the data points without considering common sense. I know this sounds somewhat arrogant and ignorant of their intelligence but you only need to look at the credit crunch to see that even the most intelligent experts lack common sense.
I took a look at the personal debt data and it is shocking the amount of debt that's been accumulated since the early 2000s. high levels of debt limits peoples spending so this is why I believe inflation has been slow to pick up. Looking at the prints this month it makes for good reading outside of the inflation numbers

ISM = prev 58 exp 57 act 60
ISM prices prev 62 exp 64 act 71
car sales prev 16m exp 16m act 18m
ISM non man prev 55 exp 55 act 59
unemployment prev 272 exp 266 act 260
avg hourly earnings prev 0.2 exp 0.3 act 0.5
emp rate prev 4.4 exp 4.4 act 4.2
core ppi prev 0.2 exp 0.2 act 0.4

and then todays data which is less than expected for core but is ultimately a lagging indicator. Core sales as you know beat expectations with retail sales coming in 0.1 off expectations at 1.6 which isn't negative when contrasted with the previous stamp of -0.1

In summary, I am not focusing on the current inflation numbers but rather the leading indicators for future inflation that has been released this month so far. A note on price action - it has failed to break the high made a few days ago and every test of it fails which does seem to agree with my thinking of the $ being over sold at the moment. Please do continue to add your commentary since I don't see many people on here even speak of fundamentals let alone give a nice summary as you have.

 

[FXX]

opened another nano lot on EURUSD at 1.8677 short post news (prev high). CPI data didn't beat expectations but is continuing the theme of improvement and is really only marginally behind expectations. Also sales beat expectations which is a precursor to more inflation ahead.

Exited this position at 1.8251 for a profit. Holding the other position for a larger move.

Sent from my SM-G950F using Tapatalk

 

[FXX]

[ entry 1.8338 with a target of 1.7446]

Exited the position 1.7930 (word on the wire there is a large amount of bids just below it.

Sent from my SM-G950F using Tapatalk

 

[FXX]

news wire release:

"Global banks and international bond strategists have been left stunned by revised ONS figures showing that Britain is £490bn poorer than had been *assumed and no longer has any reserve of net foreign assets, depriving the country of its safety margin as Brexit talks reach a crucial juncture..."

looking to take advantage of this on top of Brexit uncertainty. Pair chosen is GBPCAD with CAD being well supported with recent economic data and oil prices. Entry 1.65717 target 1.65349 stop above 1.66221

Brad

 

[FXX]

short AUDUSD @ 0.78545

RBA minutes state rate hikes abroad have no mechanical implications with domestic policy. There has also been several bad data points released putting the central bank in a neutral to dovish state. USD has been supported and somewhat oversold so looking to take advantage of a correction + weakness

 

[FXX]

looking to take advantage of this on top of Brexit uncertainty. Pair chosen is GBPCAD with CAD being well supported with recent economic data and oil prices. Entry 1.65717 target 1.65349 stop above 1.66221

closed for just over break even taking advantage of Carney dovish tone and risk assessment of Brexit. The trade no longer has merit.

 

[Brumby]

closed for just over break even taking advantage of Carney dovish tone and risk assessment of Brexit. The trade no longer has merit.

I think the current weakness in cable is due to Ramsden's dovish view that the growth in employment has no sign of second-round effects onto wages. I think that puts a damper on a prospective Nov rate hike.

 

[FXX]

short AUDUSD @ 0.78545

RBA minutes state rate hikes abroad have no mechanical implications with domestic policy. There has also been several bad data points released putting the central bank in a neutral to dovish state. USD has been supported and somewhat oversold so looking to take advantage of a correction + weakness

closed trade at 0.78260 for a profit

 

[Brumby]

"Global banks and international bond strategists have been left stunned by revised ONS figures showing that Britain is £490bn poorer than had been *assumed and no longer has any reserve of net foreign assets, depriving the country of its safety margin as Brexit talks reach a crucial juncture..."

I saw that coming through my real time news feed and I noted the GBPUSD pricing. There was hardly any price movement as if the market took it as a non event. There were subsequently no analyst commentary on this news. One of those strange disconnect.

 

[FXX]

I saw that coming through my real time news feed and I noted the GBPUSD pricing. There was hardly any price movement as if the market took it as a non event. There were subsequently no analyst commentary on this news. One of those strange disconnect.

What feeds do you use Brumby? I have ransquawk but also use forexlive, FX street, Reuters. If I reach consistency I definitely am going to get a Xenith subscription to add to the toolbox.

 

[Brumby]

What feeds do you use Brumby? I have ransquawk but also use forexlive, FX street, Reuters. If I reach consistency I definitely am going to get a Xenith subscription to add to the toolbox.

I use Xenith and Forexlive. Isn't Xenith cheaper than Ransquawk?

 

[FXX]

I use Xenith and Forexlive. Isn't Xenith cheaper than Ransquawk?

It is 1.5 times more expensive. I had Xenith before, loved it. Ransquawk do a lot of the graft for you and their news feed and commentary is excellent plus you can instant message their analysts if you not sure why a currency is moving or need analysis on something. It enables me to trade while I work more discreetly than Xenith and is pretty darn good at getting the right info to you without noise.

 

[FXX]

I forgot to mention, they also provide some cool data sheets. One of them being the general sentiment of central bank members which is very useful during speeches

 

[FXX]

Didn't have time to post today but took at trade in EURNZD off the back of euro being somewhat supported and had no tier 1 data coming out.

The news on ransquawk that provided the opportunity for a trade was uncertainty on NZ central bank reforms. This was the in the EU session open article this morning which I managed to read at 6:30am on the bus on my way to the office.

Entry 1.69578 targeted just shy of a previous high at 1.7039 for a profit.