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Hindsight Analysis on the AUDUSD

On September 4th; the 4H chart was illuminating as the spot rate cut above the 200 day moving average of 0.9063.

More importantly, was the fact that the Ichimoku showed a cut up on September 3rd at 0.8986.

So we had the first confirmation from Ichimoku and then the second confirmation from the cut up of the MA, I should have done this analysis back on September 3rd when I did the spot trade and also the 2 day call option.  Had I done a longer dated analysis, I would have paid the higher premium to capture the BIG move.

Looking at the Daily chart the next critical level is 0.9321, if the spot level breaks the Ichimoku cloud on the upper side, then, we have a new bull trend in the AUD.

What’s important now is to learn from hindsight so that going forward we do not lose the potential opportunity if it presents itself again.  Believe you me, the opportunity will come again, this is the wold of FX.

Trade on 4 September: Short EURUSD at 1.3200 and squared at 1.3170

On September 4th, I executed a spot trade by going Short EURUSD at 1.3200 and squared at 1.3170 for a 30bps trading profit.

Trade: Bought a 2 day AUDUSD option expiring 5 September; Spot 0.8982, BE 0.9032

On the same day of September 3rd, I bought a call option on the AUDUSD for two days expiring September 5th.  The spot was 0.8982, breakeven was 0.9032 and the premium was 50bps.

On September 4th about 11pm Singapore time or 11am NY time, I decided to sell the option as the spot was at 0.9180, I made a yum yum profit of 148bps or a 2.96X payout, not bad at all.  My initial expectation was between 2X to 2.2X.

Trade: Long AUDUSD at 0.8985 and squared at 0.9035

I executed a Buy on AUDUSD at 0.8985 as I felt that it was basing at that level based on Ichimoku and Stochastics.

Took profit at 0.9035 for a trading profit of 50bps.

Performance Review August 2013

August was a busy month for me as I needed to spend time on another business involved in tocotrienol, so I didn’t really have time to trade, nonetheless, I managed to do three trades through the month and won on all three trades.

Absolute performance for the month was 10.6% and the total absolute performance year to date is now 199.1%.

Next month is going to be a crazy and volatile month with the QE tapering question being answered during the third week of September; is Bernanke going to or not going to initiate the start of the tapering exercise?

Well, let’s see, certainly September is going to be an exciting month and I will make sure I am there to capture opportunities in the marketplace.

Performance Review of July 2013

July was a mixed month for me as I was not very comfortable with the market, however, as traders we still need to be in the market to stay sharp and to be relevant.

I did 9 spot trades; lost in 1 and won in 8, ROE or absolute performance was 18.5%, adding it onto my year to date total absolute performance of 170%, I am now 188.5% for 2013.

Performance Review of June 2013

The month of June was a busy month, I did 9 trades and two options.

I lost on two trades and nearly loss big time on the EURUSD call option but managed to recover and actually made a profit.  You will recall that the two month EURUSD call option had a breakeven of 1.3175 and expiration on 28 June 2013.  I squared at 1.3268 and it hit a high of 1.3365 just before expiration.

The yum yum trade was the 2 week USDJPY call option.  I just felt the JPY strengthened too much too quickly and a significant correction was going to happen.  So I bought a call option at 94.15 with a breakeven at 95.86 and I bought back the option at 97.50 for a nice profit of 16.8%.

So for the month of June, I am up 33.3% in absolute returns.  So far, YTD trading profits in absolute is 136.7% with this month’s trading profits, it brings the absolute returns year to date to 170%.

2 week USDJPY Call Option executed on 13 June 2013, expiring 28 June and squared on 21 June 2013

I bought a 2 week call option on the USDJPY at the strike of 94.15 and breakeven of 95.86, that is, 1.71bps for the cost of the premium which is pretty expensive as volatility was high.  However, my technical analysis plus the news out of Japan and Abenomics, I was confident that the yen would weaken.

I bought back the option on the last day at 0.9750 for a nice trading profit of 16.8%.

Trade: Short AUDUSD at 0.9275 and squared at 0.9260 on 28 June 2013

I saw another quick opportunity based on technical analysis and shorted the AUDUSD at 0.9275 and squared at 0.9260.

Trade: Long AUDUSD at 0.9233 and squared at 0.9260 on 28 June 2013

Ok, time to update the last two trades I did in June.  On 28 June 2013, Long AUDUSD at 0.9233 and squared at 0.9260.