Jolu Warrior - My journey in numbers!





















I’m in a bit of a slow-mo mode now with scribbling here about my trades. Upgrading my IT infrastructure this week and working on the January monthly stat check simultaneously, so et al is creating a time warp between trades taken and any posting about them.

So perhaps will just update my trade summary every morning till EOTW and kick-start afresh next week.

Overall, am positioning myself with buying dollar, with focus on 2 pairs - USDJPY and GBPJPY. That’s the theme am gonna participate in from this month. Got lofty targets in each of them.
Index positions, again as per opportunities, e.g. DAX30 and ASX200 open right now.
I’ll share all details in trade summary irrespective of gain/loss.

Trades are being taken when opportunities come by, but posting may not be real-time.

Attached is a link to a simple document, which compiles my trade data from the month of January 2017.

Monthly Stat Check | January 2017

Can’t attach more than 5 images here, so tagging some images, similar as the Weekly Stat Check posts, directly in this post.
Other images and some write-up is available in the document.




No deals in forex for week ending 10-Feb-2017.




Fair bit of scribbling to do here today, as there is a huge lag between trades taken and posting of the idea here. Thankfully, could get time to update the Trade Summary every morning, so as not to lose track myself, of what’s going on with my trading journey.

At the start of February, I had posted ideas about being short on JPY, through 2 pairs - USDJPY and GBPJPY. And that is the fundamental theme of my positioning this month, and going forward H1CY17 to quite an extent. I knew I would be busy this month with travels and events, so bias was to enter at good support levels and let the positions be held for a period of time, unlike January when I was pretty much grabbing every sort of move ranging from 30-150 pips. So that’s the overall adjustment for me this month.

Alrighty, I’ll list down my open trades bottom-up at the moment, and share my thoughts on them.

[ol]
[li][B]Sell DAX30[/B]
[/li]This position has been lingering for a while in my list now. Reasons - Lower leveraged holding + success of other trades making up for the daily running losses here, including hedges in same index. To me, DAX just forgot somewhere down the line, that the lucrativeness of ECB’s dovishness has been diminishing for some time now; and living off scraps from America’s 20k dream can only result in unsustainable heights, as we are not yet sure of the realistic outcomes of such dreams. So for equities, am erring on the side of caution. I’m not a fan of equity moves based on printed money, but a rather strong believer of growth based on operational performance, when it comes to companies. And my simplest understanding of equity indices says, it’s a basket of companies, so buying this basket makes me happy only if it’s flowers aren’t stale. I agree, technical charts might point to strong supporting trend(s), but when uncertainty of risk elements (P.S.: French election, Greece as well) isn’t completely settled, I’m preferring to take a cautious stance here.

[li][B]Sell XAUUSD[/B]
[/li]Funny story for this month, Dollar is up, S&P is up, and traders are buying Gold too. First one has facts behind it, second one has whims behind it, but the third one seems to be just riding along, based on BTD in tech charts. I think the trading fraternity is playing with a bit of risk here. With Fed fund futures pricing a hike in March at 46% now, I’ll not be buying here.

[li][B]Buy USDJPY[/B]
[/li]Facts in figures, faith in words and confidence in Yellen’s understanding of not letting things go out of control again. Staying long dollar.

[li][B]Buy GBPJPY[/B]
[/li]About 2 weeks back, I had posted an idea for this trade with a snap of the weekly chart. Since then, the weekly chart has been treading along well and been holding this pair with decent support. Risks remain from Article 51 stories from UK, so that may factor into holdings.

[li][B]Sell ASX200[/B]
[/li]With the situation surrounding possible Fed hike in March, positioning bearish here. H4 has some bearish divergences at the moment as well.

[li][B]Sell US500[/B]
[/li]With the situation surrounding possible Fed hike in March, positioning bearish here. H4 RSI has a possible triple top formation. Not keen too much on Trump’s “phenomenal” scenarios.
[/ol]

A couple of possibilities came to my observation, as I looked at the H4 and D1 charts of this pair now.

H4 chart first.

Possibility 1:
I’ve drawn an arrow at the current H4 candle of my chart. This is the first possibility, where a hammer could be in the formation, resulting in a reversal in price. Additional supporting factors lie at the other arrow, that I’ve drawn at the current RSI level. It has turned higher near the level, from where price launched last at sub 113 levels off Jan lows. Another supporting factor is the Ichi cloud. If this turns out, would also give a higher low on both, price and RSI, giving bulls some respite from the fall yesterday.

Possibility 2:
A possible inverted HnS in play, starting from middle of January, off the 115.3 mark. I’ve drawn the firm lines of the potential pattern that prices have mapped out already, and broken lines for the ‘potential’ part of the pattern, if it pans out. In this case, 112.5 is the level to watch out for the right shoulder.
I reckon this could be where smart money is in, with loads of pending bids at 112.5 levels. Happens to be my M/T long entry as well :rolleyes:

H4 chart below.


Clue 1
I looked for clues in the daily chart, for which possibility may have a better probability.
Have drawn some arrows and horizontal lines. The top horizontal line is the one to note. Since June 2016. that line on RSI has been acting as a good line in the sand, with the gigantic rocket launch in price from 102-103 coming off it as well at end of last year. Current RSI level could be forming a double bottom above the same line, before rising higher with price. RSI had a rising channel as well from June '16 till Nov '16, before dropping as price cooled off around 600-650 pips YTD. But from the 111.5 lows, we could as well be in the middle of another rising channel in RSI.

D1 chart below.


Clue 2
A fundamental one. Possible bullish bets on rate hike hopes next month.

I jumped onto this pair’s longer TF charts, instantly after finishing the post on USDJPY, as the possibilities for USDJPY looked too compelling to not have any possibility out of XAUUSD.

So I looked up the D1 chart for some patterns.

[ul]
[li]Have drawn 2 SR lines, SR#1, one that the price had a shallow rebound off in Oct '16, and eventually piercing it with a humongous daily red candle in Nov '16.
[/li][li]Another SR line, SR#2 is at the level that was tested heavily in December '16 and has acted as support YTD.
[/li][li]The catch is price is back at SR#1 and has been testing it for the past few days.
[/li][li]Negative divergences in RSI, since the price carved out a double top at 1215-16 levels and dropped till 1180’s.
[/li][li]Current levels could provide another potential double top with a re-test of the ascending TL, which also would coincide with 1215-16, the last mini resistance turned support level.
[/li][li]But what raised my brow was a possible HnS, that could really come into play and make contain the price in a range between SR#1 and SR#2 :13:
[/li][/ul]

An interesting run-up to the March 14-15, the next Fed meeting. And let’s not forget that every meeting is live, with current rate hike futures positioning fairly high!!

Daily chart here.


No forex deals for week ending 17-Feb.

The only trade done was in WTI. So not posting charts for last week. Just the numbers.

[B]Gain (Pts):[/B] 1.20
[B]Holding Period (Hrs)[/B] 94.72

The last time when I had a real good look at the weekly chart of this pair, I had scribbled about clues that could indicate a decent upside in it’s price.
Since then, the weekly chart stats have held well, perhaps more so as Pound didn’t have a crash as such and Dollar kept getting boosted or move in a range, if not rocket higher.

I pulled up the weekly again this morning, and with some more price points noted, I think GBPJPY could be the pair to be in H1CY17. We could be in for a massive upside if my understanding of the price points and price action on weekly works out.

[ul]
[li]A massive weekly inverse HnS could be in the making. Firm lines in the chart are for the price action already confirmed. And the potential in dotted lines.
[/li][li]149.00 could be the first major resistance if the price is to shoot higher. Tested heavily in H1CY13, broken in H1CY16, re-tested in H2CY16 and carved a higher low on weekly post the last re-test.
[/li][li] In the drop from 190 odd levels to 125, RSI quadruple-bottomed. That’s a massive base in my opinion, as since the 4th bottom, weekly RSI has maintained an uptrend. If this uptrend is to continue, I think all major SR levels of the drop from 190 levels would come into play. RSI is back at same level that it broke down from, when price broke down from 163.
[/li][li]Hiccups to this idea could be from Article 50 news and weekly cloud resistance.
[/li][/ul]


Chipping in with a long position in this pair from 113.37 levels, based on observations on H4 chart.

Price seems to have carved out the inverted HnS I had mentioned in my previous post, and now presenting a consolidation at current levels. RSI failed to make a lower low on the dip to form the right shoulder.

More importantly, RSI bounce off the SR line that I had maintained on my chart and was kinda line in the sand as the price kept charting in the 300 point range since January. We can see in the chart that in the past 1 month, every bounce off this line on RSI got the price to rise by 130-200 pips.
And I think that presents a decent trade idea, with intra-day SL below the ascending TL or below the right shoulder and S/T SL below the head.

H4 chart here.


DAX touched 12k today. H4 is showing signs of possible top for this week.
H4 indicators turning lower too. So selling into the strength today for a retracement trade.

This is another fundamental M/T trade that got triggered yesterday.
I think Aussie is at precarious levels from RBA’s perspective, especially after some of the fundamental notes that Governor Lowe spoke about in the Australia-Canada Economic Leadership Forum on 22-Feb-2017.

Here is the link to the speech/article by the Governor --> Besties

While it is good to see that some recent data originating from Down Under has been very bright, like employment numbers/rate and wage price index, it’s impact doesn’t seem to be flowing into consumption. Instead, debt levels are rising.

To me, that’s a big issue, if such historically low rates do not boost domestic consumption and keep creating a debt bubble, which eventually doesn’t get serviced by a consistent growth in household income.

Decreasing population growth – Increasing household debt-to-income ratio – Decreasing household saving ratio – Increasing gap in house price growth between major cities

This leads me to think if 77-78 cents to USD is the alert point for the RBA vis-a-vis all these stats.

Some excerpts from Governor Lowe in the tagged link:

In aggregate, households are carrying more debt than they have before and, at the same time, they are experiencing slower growth in their nominal incomes than they have for some decades.

Our latest forecasts were prepared on the basis that growth in consumption was unlikely to run ahead of growth in household income over the next couple of years

Additionally, iron ore has been on a fantastic run since Q2CY2016. Add to that stabilization in crude prices from the supply management of OPEC.

So it is worth questioning, if Australia would be able to stretch itself too far on inflationary expectations from external factors, if consumption remains in limbo.

Hence, am taking positions in a short Aussie trade from 77 levels.





This trade has been closed for following reasons:

  1. Risk/margin management due to running losses in short XAUUSD positions.
  2. Not enough appetite for it to drop due to strength in yen against the dollar, rise in Euro or rise in Gold.

And with UJ back at a major H4 support level, it is likely that a rebound might keep equities afloat. hence, the exit.

Some more notes and takeaways came up from Governor Lowe’s testimony to the House of Reps, that was worth reading in order to gather more information, which could factor into my positions in AUDUSD and ASX200.

The key takeaways for me are –

In the broader housing market, the picture remains quite complicated. There is not a single story across the country.

Wage growth has been quite subdued…We anticipate the subdued outcomes to continue for a while yet

We do not expect the rate of inflation to fall further. Our judgement is that there are reasonable prospects for inflation to rise towards the middle of the target over time. The recent improvement in the global economy provides some extra assurance on this front.

But the current high level of debt, combined with low nominal income growth, is affecting the appetite of households to spend, and we are seeing some evidence of this in the consumption figures.

I had used the phrase “in limbo” in my last post on Aussie fundamentals. Governor Lowe seems to corroborate the fact that there has been clear evidences in slowdown in domestic consumption, while whatever uptick in inflation (still below target though) has been due to extra global assurance.

No wonder why retail sales bombed during the festive period around Christmas/NY last. Now RBA seems to be additionally (apart from China + global economy) at the mercy of Aussie household balance sheets.

Could provide good results for my positions, but I think I will now start looking into possibilities of aggressive short selling the ASX200.

Another perspective - Iron ore!



Not a good end for my short positions in XAUUSD as February came to an end yesterday. So losses registered there.
Been dabbling in intraday trades last week and this week with the overall theme of my positioning continuing to be same as last month - a stronger dollar.

Another drop that caught my positions napping was that of GBPJPY. So had to close some of the positions and regain some of the running losses through positive intraday deals.

Count of Symbol
GBPJPY 1
AUDUSD 1
ASX200 1
DAX30 1





From this post on Weekly Stats, I will be adding a small snippet in the beginning capturing a Snapshot of the totals in both, Pips (FX) and Pts (EQ + Comm). The analyses that I have been sharing for previous weeks this year would continue in another section Analysis

Snapshot

[ul]
[li]Pips: 984.50 | Success Rate: 92.86 | Average holding period: 109.16 hours.
[/li]> [li]Pts: (60.59) | Success Rate: 55.56 | Average holding period: 190.97 hours.
[/li]> [/ul]

Analysis






Attached is a link to a simple document, which compiles my trade data from the month of February 2017.

Monthly Stat Check | February 2017

Snapshot

[ul]
[li]Pips: 569.50 | Success Rate: 100% | Average: 81.36
[/li]> [li]Pts: 277.54 | Success Rate: 71.43% | Average: 19.82
[/li]> [/ul]

Tagging some images in this post.
Other images and some write-up is available in the document.




Snapshot

[ul]
[li]Pips: 190.10 | Success Rate: 100.00% | Average: 47.53
[/li]> [li]Pts: 254.14 | Success Rate: 100.00% | Average: 28.24
[/li]> [/ul]

Analysis





Snapshot:

[ul]
[li]Pips (FX): 115.8 | Average: 16.54 | Success Rate: 85.71%
[/li]> [li]Pts. (EQ + Comm.): 237.52 | Average: 9.5 | Success Rate: 96%
[/li]> [/ul]

Analysis: