It has not been a good month as portfolio was dragged down by poor trading. Over 116 FX trades, 48 trades hit targets and 66 were stopped. Winning pips stood at 1000 FX pips while 1496 were lost. The month lost 496 pips as a whole. The success ratio dipped to 42% (under 50% for the first time). Much of the losses were contained to the third week of Sept when there were definite execution mistakes made which were ironed out later.

A pair wise analysis is as follows.

The worst pair to trade this month has been USDJPY followed by GBPJPY. The best pair has been EURJPY. Losses are but natural and cost of doing business but we have taken great pride in providing a service without any major drawdown (The above pairwise analysis only includes forex trades). While there has been bad weeks in the past but none as bad as third week of the month and it unfortunately comes 2 weeks after the start of the copier. Much of those red trades were human errors than market being difficult but those errors have now been found our and discussed and best efforts to not repeat them. The Trade copier was launched in the first week of this month.

We continue to follow the following method to trade. Nothing has changed over the last 7 months. New/probable subs keep wondering if we are using a black box. We are not. We are manual trade and we depend greatly on intermarket analysis to load our trades. It is a 3 step process:
Step 1: Analyse the bond markets. Particularly EU 10 year (Bunds), EU 2 year bonds (Schatz), US 10 year treasury and US 2 year treasury. These four bonds make up a large chunk of the bond analysis. The shorter version of the bonds determine yen pairs. We have had tremendous success trading EURJPY and EURUSD of these relationships.

Step 2: Zoom into a pair you want to trade. Assume it is EURUSD. we will see if Peripheral bonds are in a short term uptrend or not. Then we will take a look at the EU bunds if they are in a short term uptrend. Basically look at the yield differential between peripheral and safety. If that spread is widening, this will be a drag on EU for the foreseeable future and hence your probability to steal 50 pips is much higher. The above correlation is just one example on how to load a EU trade. There may be times when EU will not be trading via the differential but purely on dollar weakness which is best amplified by looking at the dollar index. Post that we will look at the technical parameters of a EU trade like vortex and stochastics and confluence points. Netlines and volume holes are studied to find our breakout points or range limit points.

Step 3: Post step 2, you have the short term trade on your hand. Step 3 helps you to place stops and targets. Watch confluence points, bollinger bands and Netlines for possible stops. Stops have to be in vicinity of 20-40 pips. Market profile (MPT) and Volume holes are techniques which allow you to get a further insight into trading balance for the day.

While steps may look cumbersome, but these get embedded in your sub-conscience as you start trading these methods.

But it is still not magic as it needs tremendous discipline to keep stops tight and focus on diligently but let me assure we are not following a black box at all. It is basic fundamental relationship that we follow to trade forex.

Important Links at Capital3x

1. The Trade Copier
2. The Sept Live Trade Sheet
3. The Live Trade Room
4. The Charts corner
5. C3X Performance FX portfolio
6. The Bond auction schedule can be found here: Bond schedule
7. The speaker schedule can be found here: Speaker schedule
8. Facebook Profile
9. Twitter Profile