Tuesday, April 8, 2008

Forex Roadmap

Do you have a roadmap?

Over time it is easy to lose your way. You may forget the current trading ranges of some currencies. You may forget long term position viewpoints that you had previously determined. Frankly, things get hectic at times, and you don't always have the luxury of spending all day reminding yourself about previous conclusions. Some pointers can be very helpful.

Here's an abbreviated version of mine:
PairIntTypeHistStrategy Notes
GBPJPY030(L)HighTrade -- expect GBP up long term
AUDJPY020(L)MidTrade -- overloaded, reduce risk if possible
GBPCHF017(L)LowAcquire -- expect GBP up long term
EURJPY016(L)MidTrade -- expect EUR down long term
GBPUSD016(L)LowTrade -- buy on 1 day lower bollinger hits
AUDUSD013(L)HighTrade -- expect USD up long term
CADJPY009(L)LowAcquire -- expect CAD up long term
EURUSD006(L)HighTrade -- expect USD up long term
EURCHF006(L)MidTrade -- expect EUR down long term
USDJPY005(L)LowAcquire -- expect USD up long term


PairIntTypeHistStrategy Notes
EURTRY062(S)HighAcquire -- sell on large spikes
EURAUD015(S)HighAcquire -- sell on 1 day upper bollinger hits
EURGBP006(S)HighWait -- consistent uptrend for over a year


Here is what it means:
  • Which currency pair am I talking about.
  • Carry trade interest ranking.
  • Long or short positions.
  • Position relative to prior year.
  • Things to keep in mind while trading.

Notes:
  • I'm a carry trader. I like to find buying opportunities in currency pairs that pay positive interest.
  • Interest rates change. Don't assume this roadmap will remain static for any length of time.
  • Your opinion may conflict with my strategy notes. That is fine.
  • Remember, opportunities will come to you from time to time as long as you don't overtrade.
Finally, I think it is worth mentioning that even when my strategy is to acquire positions, this does not mean I will simply continue to buy. It means that if I can put a protective in-profit stop loss above a position it is okay to acquire another when an opportunity presents itself. Strategy notes simply aid in decision making they don't replace rational trading tactics.

1 comment:

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