I Don't Know If I Should Be Regretting This?

Back when Lehman happened, I spent some time trying to catch falling knives as well. HWD turned out to be one of the knives I caught.

The question now is how scared should everyone be about Obama's idiotic proposals?

And is this going to be as bad as Lehman?

I was careful with MS and BAC (partially), but once I had some cash, I wanted to trade.

Should I have just kept my trading legs closed? Earlier in the week, I was congratulating myself on having some sort of trading discipline when I didn't do a USD/CHF short since it hadn't broken out yet. I saved 100 pips because of that.

But now, the prevailing mood in the market is obviously sell, sell, sell. So I am trading against the trend. Moreover, does DFS have too much idle cash? TIF just announced a share buy back programme and a dividend increase when it has far more debt than cash. I think DFS should do a share buy back and dividend increase too. It's got enough cash.

Poor BAC! Even with all the Fair Weather Friends on Capitol Hill owning BAC shares, it still got killed.

Is This Chart Full of Innuendo Or What?

The trading week has just begun and after work, I'm going to pore over lots of charts to look for major profit potential. I think it's better to be a follower this week unless you're a billionaire already.

I thought this USD/CHF 15 minute chart was rather interesting. It is full of innuendo according to me...

ForexDiva's 2010 New Year's Trading Resolutions!

Ah, a New Year waiting to happen!

In 2009, I had some hits and misses. I suppose more misses than hits, but amongst my biggest misses were:

1. not trading my Shut Up & Trade strategy
2. choosing NYX instead of TIF
3. Citi Frog
4. CPB... thought it could test $41, but has become more like the Little Engine That Couldn't
5. OMG, ABK! Bonds and shares... double band-aid.


Some of my 2009 One-Hit Wonders:

1. AMD... that was a good one. Luck and averaging in at the right time apparently played a key role in this. I thought it would test $10 by EOY 2009 and it did, but it's not due to any remarkable brilliance on my part, I've got to admit.
2. HWD, the High Beta Alpha Male gem that gives my portfolio meaning.
3. ED


Stuff from 2009 That Could Make My Portfolio Six Figures+ Waiting To Happen In 2010... or 2011?

1. Citi Frog
2. BAC
3. HWD
4. JBQ Strategy (Good Six Figure Face Value Awaiting Recovery)
5. And will hopefully make some more progress with my forex trading.


And looking forward to 2010, my New Year's Trading Resolutions:

1. My ulterior motive: profits, profits, profits (I could go on and on, but then I'd bore people even more...)
2. ATAA (All Talk All Action)
3. Chase profits, but not prices.
4. Learn to think for myself, but at the same time listen to the right people. Ultimately, though, if we have to blame someone, blame only yourself.
5. Turn many three or four figure positions into five figures + consistently and the majority of the time. This is the only way to make real money in the markets.
6. Play the right role at the right time... Miss Equities 2010, HRH JBQ, ForexDiva, DiamondDiva, some lucky guy's Agent Provocateur Dream Come True. In other words, be in the right market at the right time.
7. Discover some more frogs that are just about to turn into princes. Undervalued and overlooked is what we're looking for.
8. Some more smokin' hot trading strategies, please!

Am I Better Off Today Than A Year Ago?

Getting into the global financial crisis, my portfolio was in really bad shape. I had committed financial suicide with:

a. shopaholic tendencies
b. a substantial forex trading loss
c. terrible portfolio diversification
d. all of the above

Now, a little over a year after Lehman collapsed, I am asking myself whether I am better off today? Did I learn enough? Did I do enough?

Throughout the crisis, I invested another high four figure sum into my equities portfolio. After all this, I am better off percentage wise (+6.93% to be exact), but not in dollar terms. However, if I had just sat back and let the market take its course, my entire portfolio would be -70% today with no recovery in sight. That's a scary thought.

I've had some winners and some losers. But all in all, when I had averaged into a position, I ended up better off the majority of the time with the exception of C. I've got to turn this one around.

When I think about it, I still might have got it all wrong. I mean, I spent more on my Big Holiday than I did investing in my portfolio.

The bigger question, I suppose, is will my JBQ strategy work? And that takes time to ascertain.

I wish Rusty would say something - anything...

In the meantime, I keep telling myself that the darkest hour is right before dawn.

Shut Up & Trade, Trade Review Volume 061009

Oh, dear God! Considering that I'm the woman who brought you the Tossed A Pair of Diamond Earrings Down the Drain Incident, it should come as no surprise that I managed to do something really bimbo with this trade - and that is not to get into it.

I guess I could toss you an excuse such as, well the breakout only occurred at 2:30 am my time, which leads me to ponder... am I really that serious about trading? And why am I using my bimbo-ness as an excuse again?

Well, the highest USD/CHF got to was 1.036 - so this is like losing 77 pips for me. Missing out is just as bad as losing.

I did cover my assets by doing the whole double take with my analysis, but I think I'm starting to like that approach. How many times have I not taken a trade because I was set on a bullish or bearish standpoint? Now, I'm emulating my forex broker's fine example and not really being so opinionated on direction, but levels. Speaking of my forex broker, he just started hosting trading webinars on Thursdays. He did a really good job last week - such a smart guy!

Anyway, 77 pips might not seem like a big deal to you, but usually, I get out with 10 pips and under. Yes, I'm running a dime store with my trading. Can't buy Harry Winston, but that's OK. Speaking of Harry Winston, I think I might be in love with him again? +1.14% so far - no wilted flowers there, but not exactly moonlight and candles either. Oh, but he had me at bonjour!

At the very least, the brown paper bag can come off now. I'm going to now test out my new trade setup some more, but all I really want to do is dream about Harry Winston, really.

Retirement & IRAs...

Ever since I officially got Age 30 stamped on my forehead, I've been feeling a lot more pressure with regard to establishing and developing my financial security. Considering that I'd like to go for the Early Retirement option as well, I now have at least 70 years of financial responsibility on my shoulders due to the need to reverse 30 years of fiscal irresponsibility as well as 40 years of retirement income to be built up. That's a lot to achieve in a very short amount of time.

Whilst I look forward to the day that I will no longer be able to contribute to my Roth IRA as that would mean that my salary has skyrocketed, I am still taking every advantage of it whilst the option is still available to me. And why shouldn't I? It's obviously got a lot of perks.

Looking back, I've committed some IRA mistakes I wish I hadn't made, including:

1. starting too late. I was only able to contribute to tax years 2007, 2008, and 2009 so far. I should have done it sooner.
2. imperfect asset allocation. In hindsight, I should have allocated more Roth IRA funds to low beta / high dividend stocks. Additionally, I should have placed some of my bond purchases in my Roth IRA rather than my regular brokerage account. In the future, when I perfect my forex trading strategy, I might also consider allocating a good amount of capital to a Roth IRA forex account.
3. not trading enough. I am a firm believer that the buy and hold strategy should not be applicable to an IRA account. Even with a low beta / high dividend strategy, I believe there are times when it makes total sense to rebalance the portfolio by cashing in on some investments and waiting for another buy opportunity.
4. not including CDs, Municipal Bonds, and Treasuries in my asset allocation. Though the yields are usually lower on CDs, Municipal Bonds, and Treasuries, due to the tax benefits, these asset classes could make a lot of sense in a Roth IRA at certain points in time. However, current fixed income yields at this point aren't at the irresistible levels they once were earlier on in the year. We're now looking at less than 7% yields on long term bonds, which to me isn't sufficient ROI - especially on corporate bonds, considering the higher default risks.
5. placing a junk bond in a Roth IRA. When I first started out in junk bond investing, I thought I did the right thing by placing Ambac bonds in my Roth IRA. Whilst I was able to collect some tax-free interest on this bond, due to Ambac's failure to pay interest on this bond issue, the cash is now not only idle, but I wouldn't be able to write it off as a loss and take a tax deduction on it. This is because it is much more difficult to take tax deductions on IRA accounts.

It might be wishful thinking, but I wish the government would get rid of social security for Gen X & Y and just enable us to contribute unlimited amounts of money to our Roth IRAs.

I Can't Be In A Long Term Trade...

Recently, I added a few new partial positions - including C and NYX. This is in addition to the BAC and HWD positions I was already nursing.

I get so anxious once any part of the position breaks even. Yesterday, I really felt so nervous. But I'm proud of myself for having the self-control not to call my forex broker 50 times. I didn't even call once! I really wanted to think about some solutions on my own and test out some of my own theories.

So, I decided I had to take a bit of a break from my usual routine today to get a fresh perspective, which my Big Holiday was also supposed to help me do. I went out for dinner and ordered something I usually wouldn't.

Doing something different made me realise that in addition to being a diva, I am such a fraidy cat too. I can't be in a long term trade without being at my computer and having access to real-time pricing. It kind of really gets to me.

I think part of me is still not over the fact that I blew up my forex trading account when I first started trading. I have to find a way to get rid of this feeling of loss.

A few years back, I was going through a setback in my career. I took it quite personally at the time. I started having some more free time at work and rather than doing nothing about it, I started preparing myself for the next big project. I realised that whenever I needed to get started on a new project, I would feel as if I didn't have enough time or resources to complete the project. It always got me anxious. So, I used this free time to build up my own working palette. I put together anything that I felt would be useful in any sort of project that I could potentially be working on in the future so that I can be as unemotional as possible when approaching future projects. I add to this on a regular basis so that my working palette is always up to date and always relevant.

I mentioned a while back that I was going to use any downtime I have during my trading hours to do practice trades. I need to get into this routine and play catchup since I essentially missed out on three weeks of trading due to the Big Holiday. I need to develop my own trading palette and build it up extensively and feverishly.

One of the key reasons we feel anxious when uncertainty presents itself is that we feel unready for change and therefore unready for action. However, when we strategise in advance like a lawyer would, we give ourselves a chance to put the anxiety aside and just implement.

I might have missed out on a number of potentially profitable trades because I've been such a fraidy cat.

So I'm sharing this quote to remind myself that sometimes, it's necessary to be proactive.

"Only those who dare to fail greatly can ever achieve greatly." - Robert Kennedy

Is This Another Colossal Failure of Common Sense?

Over the past few days, I've had no trading conviction whatsoever. I was bearish one day and bullish the next, but I did manage to see my portfolio advance towards a good double digit recovery. Not that anyone takes my trading very seriously, but I did meet someone recently who told me that all accounts need to start from somewhere, which was slightly encouraging.

I was tempted to sell some of my equity positions during extended trading hours around my lunch time - prior to 8 am Eastern time. But I was watching GBP/JPY and noticed something strange going on. Nikkei and FTSE were down anywhere from 2-3%, but GBP/JPY hadn't moved that much by GBP/JPY standards.

I was talking myself into staying in my trades at that point - never a good position to be in.

Is it actually fear that's driving the downwards trajectory today or is it profit-taking?

Finally, I decided to sell part of my C position out of a combination of uncertainty and impatience. I recently just received more proxy materials from C in relation to the reverse split they are proposing. First, they want to increase shares. They then want to do a reverse split somewhere down the line. I voted against all of this, but have a feeling it will still go through.

How am I ever going to get out of this entire C position with any bit of financial dignity?

This is clearly a case when it's only funny when you're not the one in the situation.

I used the cash from the partial sale to purchase some more Finlay bonds. I figured if I'm going to be trapped either way for a prolonged time period, I might as well invest in something with a better risk:reward level. I'm quite certain Finlay bonds are worth much more than their current trading price. So, I'm actually saying here that I believe more in a company that's already filed for bankruptcy rather than an equity position in C. How's that for confidence?

Is this another colossal failure of common sense? If it is, then it wouldn't be my first.

But what if C retraces drastically after more shares are issued as I expect it to? That would then be the ideal time for me to plan my escape.

Something to ponder...

Oh, I want to be free already!

I've Been Thinking About Cheating On My Forex Broker...

I hate to admit it, but I've been thinking about cheating on my forex broker.

I know... I know... after all they've done for me.

But the NFA regulations have me all apprehensive and concerned.

I'm thinking if my account becomes five or six figures in about a year, should I move my account elsewhere... to either Citi or DBFX where I'm guaranteed FDIC coverage?

The major long term opportunity here is for some of the larger spot forex brokers to step in and prove their innocence and compliance. They've got to be the ones initiating a change in the game. Trust is a major issue right now and they've got to actually do something about it practically pronto. FDIC coverage or even a comparable private insurance that beats FDIC would be a necessity. Don't turn to AIG though. LOL. Then, they've got to be all FINRA as well. In addition, they should offer the new CME e-Micro Currency Futures.

Or am I really as bimbo as the APRSAM (arrogant, pompous, rude super alpha male) thinks I am? Have I really been sold the sizzle and not the steak, which would mean that the brokers won't be doing anything until and unless the NFA forces them to?

I hope I won't have to cheat on my forex broker and move elsewhere, but at least my poor forex broker won't have to deal with my ongoing diva trading tantrums and stalking any more.

The ForexDiva Verdict On the Las Vegas Forex & Option Trading Expo

I suppose I've been spoiled. In my day job, I've been involved in much larger trade shows comprising of large budget luxurious booths and tons of visitors. If we get about 8000 visitors, we complain and our usual expectations would be at least 25000 visitors - if not more. The Las Vegas Forex & Option Trading Expo was quite small in comparison. I doubt there were more than 2500 attendees overall and this might be an exaggeration.

What the show organisers should have done was to host the event in an upscale hotel such as Bellagio or the Wynn and then place signage throughout the hotel to get visitors into the show with on-site registrations. If I were an exhibitor, I would be complaining, but I digress.

Nonetheless, I've attended a few good presentations, including Tim Morge, Kathy Lien, Boris Schlossberg, Todd Gordon, and James Chen, who turned out to also be surprisingly good. I missed out on Ed Ponsi due to the session overlaps and ended up attending two Tim Morge presentations.

I did achieve much of what I came here to do, which was:

1. learning more about how other traders trail their stops, which was my main objective. The Tim Morge and Kathy Lien & Boris Schlossberg sessions really helped here.
2. learning more about the new NFA regulations. When I stopped by their booth, it seems even their representative didn't know what was going on. So I'm going to have to do further research about this on my own.
3. learning more about trading frameworks that could potentially help me improve my trading. This I received from the Tim Morge and Todd Gordon presentations. I was surprised that Todd Gordon's Elliott Wave analysis actually helped. A lot of it is very time-consuming, but I learned a few rules that I can apply in my trading, which I'm going to start testing out. However, I am not going to deviate too much from my little black dress / little red dress strategy. What I am going to do is to use those principles to enhance my existing strategy.
4. secretly looking for a potential future boyfriend. This was a total disaster as it seems everyone's married or too young or too old. Whatever. Once I get rich, the tables will be turned. You know what they say about an heiress always being beautiful.

I did miss out on the recent GBP/JPY action though, but I'm expecting some more volatility and trading opportunities over the next two weeks, so I'm not worried.

The most unexpected thing was obviously the arrogant, pompous, rude super alpha male incident detailed below. In hindsight, that guy has me really ticked off and I'm now really looking forward to proving him wrong.

For anyone who didn't attend, they didn't miss out on much except for the beautiful weather and the great shopping.

Introducing the Arrogant, Pompous, Rude Super Alpha Male: And I Thought I Was Crazy!

I was having a conversation with a money manager from Southeast Asia at the Las Vegas Forex & Options Trading Expo when some arrogant, pompous, rude super alpha male basically tried to usurp our conversation from out of left field - grilling us about our trading strategies whilst deliberately not revealing anything on his trading strategy. We had quite a heated debate after he essentially told us that we were being sold the sizzle and not the steak.

His whole theory is that anyone who works for a broker is not profitable enough to trade independently and that is why they continue to work for a broker. Then, he referred us to ForexFactory.com and said that the real traders are there, not at the expo. He even told me that I've got a trading ego that's going to cost me tremendous tuition.

What hypocrisy! He indicated that his scalping strategy was yielding him 83% accuracy with 10 pip gains and 20 pip losses. Just why was he at the expo then? He explained himself by saying that he was visiting his broker.

Well, if he's really got the large account he says he's got, then why does he need to visit his broker rather than vice versa? And just what was his motive in intruding on our conversation? Moreover, where were his Hermes tie and Thomas Pink shirt?

If there's anything I hate, it is an arrogant, pompous, rude super alpha male. After getting really quite ticked off about the whole incident, I decided to stop allowing it to affect my state of mind. After attending all these sessions at the expo, I realised what I've been doing for the past 10 months is on the right path. I know this, no matter what anyone says. I've tested out my strategy and have consistently been trading it. I've managed to keep my losses to a minimum, but now need to let my profits run. Who is he to tell me that my strategy is not going to be successful?

We've got to do our own homework here and trust ourselves and our statistics above all else.

Having said that, I do rather like proving arrogant, pompous, rude super alpha males wrong.

My New Schoolgirl Crush: Tim Morge

So taking the schoolgirl crush analogy a bit further, Tim Morge is totally schoolgirl crush material. I spent most of yesterday attending his workshop at the Las Vegas Forex & Option Trading Expo. Almost every minute sent my heart soaring because I'm admittedly nerdy in that way. And when someone with 38 years of trading experience walks in the room, you have to listen even if you're a diva in every other way.

Aside from his technical and money management style, what I really found very interesting was his consistency and his insistence on not chasing prices if your intended entry level no longer meets your initial risk:reward target. I've noticed this with the really serious traders. Brian Dolan definitely also has this quality. Simply put, it's about having your standards and basically adhering to those standards. Don't be afraid to do it.

It is now the second day in a row that I've had to get up at about 5:30 am Las Vegas time and I'm a total zombie, but attending the Tim Morge workshop was such a good decision. I really feel a lot more inspired and I even feel like I can tone down the bimbo factor of my trading with a bit of conscientious effort.

I am however going to skip the live trading event of the Expo, which is not hosted by Tim Morge anyway, and opt for a really good and leisurely breakfast instead. How serious am I about trading, right? But that part of the event doesn't seem worth my time, especially since Tim Morge had us looking at charts all day yesterday.

I suggest that anyone who hasn't heard of Tim Morge to check out his articles and videos on MoneyShow.com. He is definitely someone to learn from aside from Brian Dolan.

What's Your Excuse?

Lately, I've been thinking more about my forex trading money management strategy. I have yet to implement my new money management strategy below, but was my old one a double edged sword? Is my new one better? Am I contradicting myself to my detriment?

I'm always getting out of the market with at best + 10 pips. This happens on the majority of my trades. I know the more serious traders out there probably think this is really bimbo and maybe it is. However, I've done much worse in the past. Before, I was one step forward, five steps back. Now, I'm one step forward, two steps back. Is that ideal? No, but it's an improvement - so one gold star for me, although I'll hold off on the couch-jumping until I actually start making serious profits.

My best win YTD was +249.08 pips. My worst loss YTD was -74.33 pips.

I haven't had a really good trade since January.

Technically, I'm losing 74.77 pips this year. Don't forget I also blew up my trading account about two years back and am still not breakeven.

There's no turning back now. I've got my work cut out for me. If I keep trading little black dress (bearish divergence) and little red dress (bullish divergence) and finetune my money management strategy, my strategy is going to be sustainable. I have stopped the downwards trajectory and that's a small victory.

I know I have to keep at it - it's boring and I'm going at the pace of a turtle, but turtles are known for their longevity.

I honestly asked myself, am I still making excuses for myself for not being a better trader and for not going faster?

Well, I've now got:

1. a better strategy than coin flipping
2. a much more level-headed perspective on the market


What have I got to improve?

1. continue to keep my discipline
2. do the analysis and trade my plan - don't get into any more impulse trades (what really killed me was trading FOMC and the stop & reverse & reverse thing I did back in May when I was experiencing total emotional volatility)
3. my money management - particularly where trailing stops is concerned (i.e. what is the best way to trail your stop whilst staying in the trade?)
4. figure out exactly when my strategies will work best - under what market conditions should I use little black dress (bearish divergence) vs. little red dress (bullish divergence)?
5. stop making excuses for myself. If I'm just scared of getting into a trade, I need to confront those fears. And if I'm going to condemn myself for not getting into the trade in the first place, at least I should make it a real learning opportunity.


This week, I'll be travelling, so I won't be trading or blogging all that much. Perhaps the extra time to reflect on my trading is just what's required at the moment.

Boris Schlossberg: Anatomy of A Scalp

Interesting video from Boris Schlossberg on how people run stops - seems quite an alpha male strategy to me though... I think the politically correct term is aggressive strategy.

GBP/JPY Meltdown Party Started Without Me...

Why don't I ever take my own advice??

I have no excuse this time other than I'm attending the E*Trade webinar.

But that is a very lame excuse indeed. This webinar is kind of funny because they're having some technical issues. Not only are the PowerPoint slides not working, the presenter had to run to another room to finish the presentation. Oops... ok, now they've corrected the issues.

Wow, this is one of the fastest descents in GBP/JPY I have seen in a while. -50 pips in basically a few minutes. This has now moved too far beyond my ideal entry point, so I'm just going to let it run on without me. With the crazy way that DJIA rallied today, I'm not sure how good my original short GBP/JPY idea was anyway. Reading mixed signals... not my forte.

Maybe there's another GBP/JPY flight tomorrow?

Arbitrage & E*Trade Offering CME e-Micro Currency Futures

You know how you could be looking for something all around the world and it turns out it's right in your backyard? Me neither.

But I just realised my lovely broker E*Trade is offering CME e-Micro currency futures. If they take delivery on the actual currency, then I could be doing some arbitrage with this.

Why doesn't anyone talk about arbitrage strategies in forex?

Is it actually a viable strategy?

It'll be a lot more boring, but a lot more profitable I'd imagine.

I Am So Tempted to Short GBP/JPY...

But it seems like the bulls are in control today. I'm going to have to wait and see. I know this is probably not a good time for me to be all contrarian. If it stays above 157, I might contradict myself and go long.

It's like there was a surprise party that I wasn't invited to and I'm even all dressed up!

I'm glad I added to my NYX position yesterday. I'm +3.87% on that part of the position so far and am really looking forward to a full recovery of that position plus a good four figure profit.

All my other positions are basically status quo though. So one tree doesn't make a forest.

Not So Smart Afterall, ForexDiva! Trailing the Stops...

Rather than laughing at the GBP/JPY nervous breakdown, the smarter thing to do would have been to join in the downtrend. Hindsight is always 20/20 and it wasn't like I saw my classic bearish divergence little black dress setup.

Right now, I've got two trade setups I can trade with a fair amount of confidence - little black dress (bearish divergence) and little red dress (bullish divergence).

So, I'm going to do what Warren Buffett advises and just stick to what I know.

It did get me thinking though. I'm always trailing my stops haphazardly, doing this pretty much on a whim. I'm going to start experimenting with moving my stop in a more consistent way. What I'm thinking of is moving it based on a percentage of risk, which would also be linked to the probability of the trade.

Getting into the trade, I would need to set an initial fixed stop. Once the trade starts moving in my favour, I'll start trailing the stop.

I'll calculate my trailing stops as follows:

x = Initial Fixed Stop expressed in pips
y = Probability of trade
Trailing Stop = xy

So, if my initial risk is 50 pips, and I feel that this trade has a 70% probability, then my trailing stop would be 35 pips. If my initial risk is 50 pips, and the trade has a 45% probability, then my trailing stop would be 22.5 pips.

I would only start moving my stop when my profit level is equal to my trailing stop.

Essentially, the more confident you are on the trade, the less you'll move your stop.

I'll experiment with this for a while and see how that works with live trading. The question remains: how fast can I move my stops?

Blessing In Disguise of the Day: Bernanke & Moving My Stop

Hahaha... I can't stop laughing at the downwards trajectory GBP/JPY has been on since I got out of my long GBP/JPY trade.

Clearly, there's a benefit in moving your stop - especially where Bernanke is involved!

Even if I end up with lots of 10 pip gains the majority of the time, that one time you don't move your stop could end up killing you.

Still, I need to now figure out which trades I can actually get more than 10 pips and stick to my limits as well.

In this case, discipline trumps greed! <3

And unfortunately, it's only ever funny when you're not the one in the trade...

The Brian Dolan Line

For the other Brian Dolan fans out there, I recently named a trendline after him! I've learned so much from him really - such a modest gentleman.



Anyway, I've been following his webinars for a while and have noticed that he draws out lots of ever-flattening or ever-steepening trendlines. The trendlines on his chart usually then end up looking like a peacock or a fan.



The idea is to first draw out a major trendline that the market seems to be respecting at the moment. This would mean that there are lots of points touching that trendline, but never breaking it. You would then look for minor trendlines that are forming. If it's an uptrend, the minor trendline would need to be above the major trendline. If it's a downtrend, the minor trendline would need to be below the major trendline.



If price action fails to touch the major trendline, then this means the current trend continues to be strong.



It's such an interesting and compelling concept. Here's an example of one of the applications. You'll notice that price action broke above the Brian Dolan Line, after which prices started moving counter-trend with a lot more momentum. If I find a better chart example, I'll repost.