2014-06-10

EURUSD: +11 pips

GBPUSD: +22 pips

USDCHF: +07 pips

EURJPY:  +22 pips

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Total:        +62 pips  |  100% win rate

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For the past two weeks and now into a third, I have been working with Forex markets using our CM Patterns method in dual-charts filtered mode, seeking +20 pips or better while using -12 pips initial stop to limit loss. When price moves +10 pips or more in favor, trail stop from -12 to -5 and when price goes +15 pips or more in favor, trail stop to +1 pip. Then manage profit exits according to individual choice.

So far the overall results have been 0 (zero) net-loss days, win rate of 80+% on individual trades. In other words, very impressive to me and my expectations. This includes sessions of sideways congestive chop, early trend moves that begin prior to my start and a couple of two-way swings sessions where price action made the best moves at/after 8am est.

Optimal FX

There are a few key features involved here which are absent from futures markets and therefore make it impossible to replicate this type of performance in the eminis or any other futures world. That would include…

NO commission costs to trade

no slippage on fills

no partial fills on entry orders

blended results from a “basket” of symbol pairs

plethora of semi-correlated and non-correlated FX pairs to choose from

more straight-line, deliberate price action in FX compared to futures

We could go on and on about the variances between FX and various futures markets but suffice it to say that FX is hands down far superior for small swings or “scalping” type efforts. I am purposely trading micro-lots size myself at this time for one reason: proving personal viability. There is absolutely no question at all that our CM Method kicks absolute a** in the market. That fact is black & white, objective and visible on the charts to everyone who knows the outline of our approach.

The only question left in my mind is what world do I actually belong in?

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Hours Of Operation

Optimum hours for FX trading are from 3am est to roughly 10am est. That seven-hour block of time is where the vast majority of volume and therefore price movement occurs. Within that seven-hour stretch, optimal hours for the start of directional moves would be from 3am to 5am est. That was certainly true today as the best trade entries of all happened between 3:30am and 4am est. I managed to catch some continuation moves for modest gains after the real swings had passed.

In order to be a 100% dead-serious, short-term FX trader, one would really have to begin each trading day no later than 5am est and preferably 4am at that. The benefit is, most sessions offer opportunity and action inside the key time zone of trading.

But the dilemma is trying to balance FX trading with futures trading. No serious professional can (or even wants to) sustain a work schedule from 4 or 5am est straight thru to 4pm est when futures markets close. Ten to twelve-hour trading days are too grueling and quite frankly to imposing on real life for serious consideration. Only the most addicted at-home gamblers (they certainly do exist) would try to sustain such a pace. Business minded traders want no part of that.

Balancing Act(s)

So the question I pose to myself: do I want to focus on the various futures markets and navigate their perpetual cycles of high and low opportunity? Do I want to focus on various FX symbols where potential for constant, steady gains is much higher? Or do I want to balance somewhere in between? That might mean trading both from say 5am est until noon est and then shut it down, walk away and to hell with whatever the markets do from noon est thru the overnight and into following day 5am start all over again.

For now, right this minute, I don’t have my answer for myself. I would stay in the futures markets with my current focus on TF and live the endless cycles of volume, volatility and trends. I could easily see myself working with FX solely in the early mornings and most days be done with work entirely before much of the U.S. population even sits down to breakfast.

Now that kind of time freedom potential really appeals to me, no doubt. Who wouldn’t like to book +50 to 100+ various pips in an hour or three with the rest of that day free to live freely as you desire? FX markets offer that type of potential more often than any futures markets by comparison.

Meanwhile, I’ll continue to press the morning action in futures markets and soon scale up in size with FX markets. Rather than make any deliberate choices at all, I will probably let trading results make my decisions for me

Trade Well
Austin

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