Weekly Trading Update - 10-14 May 2010

Well it's been a very dramatic week with a new government being formed here in the UK - one that no-one really wanted. I think I'd rather have Gordon Brown back than have to pay the 40% Capital Gains Tax that the Lib Dems are pushing through. Oh well never mind. Back to the markets and there have been loads of trading opportunities this week. I opened five trades in total.

The most profitable trade was on the EUR/USD pair. This was a perfect trade in many ways. The price had bounced back but the Supertrend indicator was still red on the daily chart and there's still an awful lot of negative sentiment surrounding the Euro. So when the EMAs crossed downwards on the 4 hour chart on Monday evening I was more than happy to go short at 1.2800 exactly.

I let the position run overnight and set my stop loss at 40 points and my target price at an ambitious 150 points. I woke up the next day to see that the price had almost reached this target. However it bounced back and I closed half the position for 100 points and let the other half run. I ended up closing this second half of the position at my initial 150 point target. I should really have been a little more patient as I thought there may be some further weakness, but it was still a good profit.
There were also two trades on the GBP/USD pair. I'm looking to go short now because not only is the Supertrend indicator red again on the daily chart, but I think we may get a credit downgrade in the near future.

I went short at 1.4870 first of all after the first downward EMA crossover on the 4 hour chart and let it run overnight just like the EUR/USD trade. I made a bit of a mess of this one because I closed half at 1.4800 the following morning, when I could have banked a lot more, and then watched as the price came back and closed out at break-even.

The second trade wasn't all that successful either. I went short at 1.4874 and managed to close half for 50 points but the second half was also closed out at break-even after the price spiked upwards.

Finally the two other trades were on the USD/JPY pair. This pair's been driving me nuts this week. It just will not move!! I opened two short positions after two downward EMA crossovers and ended up taking a loss of 30 points on the first one, whilst I managed to close the second one for a profit of 30 points last night out of frustration more than anything. It was also nice to ensure that I would come out even (or nearly even taking the spreads into account) on this pair.

So overall it's been a very busy week and quite a profitable one as well. In hindsight I should have just used maximum stakes on the GBP/USD and EUR/USD trades and left the USD/JPY alone because these were the ones I was most confident about, but it's too late now.

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