Two Hearts

Two hearts, believing in just one mind
Beating together till the end of time

Those are lyrics from a Phil Collins song, for the movie “Buster”, which was, of course,  about The Great Train Robbery.  But it could just as easily have been written about the movements of the S&P and USD/JPY.  These two instruments are highly correlated – in fact, the USD/JPY is almost a proxy for the S&P.  

Have a look at the chart below.  On here you can see the chart shows the S&P500 with the USD/JPY overlayed in blue as a line chart showing the closing price of USD/JPY over the same time period. Notice how they move very closely together.  

Why is this useful information?  Two reasons.

First off, be very careful if you see a chance to trade both of these at the same time.  You could double your profits of course – but your losses will go the same way.  Be patient and trade the chart that looks the best.

Secondly.  If you have a smaller account and trading an eMini is a little rich for you at $50 a point, then trade a smaller amount of USD/JPY.  You’re going to be able to get in on the moves, but with a lower level of risk.  And there is nothing wrong with that.  Consider it a way to build up your account until you are ready to trade the eMini or just keep trading forex. 

Either way, EnigmaSignal will give you high-quality trades.  And plenty of them.

Dow drops over 1000 points. We do just fine.

Crikey.  It was a rock and roll ride on the indexes today.  More rock than roll.  FX was a little easier and we did OK.  Not great.  But acceptable. 

Our sequence of EnigmaTrades?  8 + 61.8 + 20.2 + 34.4 – 18.9 – 20.3 for a total of 85.2 points.

That’s not a bad sequence, the two losses though are a significant amount of points but happened over a number.  I should have been flat, but stupidly I got distracted by some new math and forgot to set an alarm.  Banged out at poor prices, but totally my fault.  

Not to worry though.  A good day overall. 

I go into the night carrying some positions.  I very rarely do this but we are at (I believe) a major change point and I will do it then.  My daily chart for GBPUSD is amazing.  The daily has been caught in and above two swarms for 15 trading days,  Not anymore.  It has left with a bang.  And now we have a target zone of 1.3746 to 1.3740.  That’s a long way down.  Same situation on other charts.  For that reason, I am carrying an overnight set of positions.  For me, that is crazily rare.  But so far they are looking good (look below the graph). 

Goodnight all.  See you in the room

 OK so far.  let's keep it coming please.
OK so far.  let’s keep it coming please.

A first video attempt …

We’ve had a number of people asking us to come up with a series of training videos.  So that is exactly what I have spent a few hours creating.  It’s the first attempt. 

There will be a series that cover long trades, short trades, breakout trades, rotating markets, trading stocks, indices and more …… over the next few months a complete library will be assembled for trader educationn.

But for now, there is only one.  We have pitched it at beginner EnigmaSignal traders but have included a little bit of the theory of trading.  It is about 15 minutes long.  In our opinion that is 15 minutes worth spending.  Trading is a business.  Invest the time.

Caravan dreams

Today we tried a new strategy.  Every trade that complied with all of our rules, was taken.  Small size but taken nevertheless.  There was a real flurry of trades and nine were taken overall for a total of 93 points in the end. 

It was an incredibly tough and choppy day.  At the end of it I really needed a beer and so I went for one.  I felt exhausted.  When I meet people and tell them I’m a professional trader they always start by assuming that it’s a relaxed job with plenty of freedom.  It can be.  But often it isn’t.  Trading is tough.  Mentally and physically.  

Got to be honest, one of the best trades was down to an error.  I set my stop wrong and went for a walk.  It was a damned lucky mistake. Was supposed to be a 42 stop buy I fat fingered and hit 24.  I didn’t even check my account until a few hours later when I put my next trade on, and I was blown away to see it had hit my limit, albeit via a low that was 10 points lower than my stop was supposed to be.  Sometimes the God of the markets shines on you.  Today she gave me 54.1 points of profit and saved me 20 points of stop losses.

And there we have it.  An honest assessment?  I traded badly today. 

Without pure luck, I would have had a losing day.  I didn’t but I probably deserved to. 

Tomorrow is quite literally another day.  I’m going to do what I always do when I have a bad day.  Take some time off from actually trading and just do something different. 

Professional trading?  Yea, truly it’s a dream life.  But it’s not easy.  It does have benefits though and in about 18 months time I will be living my dream.  An F150 truck.  An Airstream caravan with full 4G connectivity.  I shall travel America for a year, trading form my caravan.  Freedom.  What other jobs can you do on the road and suffer no real disadvantage over being in an office?

Surely that’s the ultimate trade? A crappy office and commuting for freedom and the open road,  I can’t wait to be long one lot of that.