General

Despite being a short one, this Week was a great start to the Year and racked up quite a few profits across day trades and the EUR:AUD short term swing trade taken on 1st January. After a few Weeks away from the Markets I'm normally a little apprehensive when jumping straight back in to trading, yet the first Week following a break has consistently been a good one for me. Could be luck, but it's happened so often over the last few Years that I have to consider it could be a benefit of having a break away from the Markets once in a while.

Hope you have had a lovely Christmas, I for one certainly enjoyed my break from the screen, and in all honesty going through the charts now I'm doubtful I'd have made many pips had I been trading. Initially the plan was to go through a random list of 2012 swing trades to identify where improvements can be made going forwards but in all honesty there were only a couple of trades where obvious improvements could have been made.

The only action taken this Week was to close existing swing positions. No new positions were opened for reasons I will explain in a moment. The DOW swing long from 12,870 was performing very well initially, but price kept finding resistance at the 13,045 region which was expected, so I closed half of the position for a profit of 177 points leaving the second half to run with trailing stop loss.

A number of swing trade candidates I've been watching have closed the Week at resistance or support. Buying and selling at these levels is usually sensible but before committing to new trades I've been waiting for further confirmation as some Markets have shown enough potential strength/weakness for those supports and resistances to possibly get taken out. So in the mean time I continue to watch and wait.

The only new Swing trade taken this Week was the EUR:CAD swing long which I've held over the Weekend. The trade is based solely around the 200 MA on the 4 hourly time frame where many pairs exhibit bullish tendencies above the 200 MA and bearish tendencies below it. It's a simplified method of swing trading and defies my normal logic of requiring at least 3 independent solid reasons offering support for a trade before considering entry.

As mentioned in last Week's update, my eye has been off the ball over the last few Week's due to a number of commitments I've needed to make in my personal life outside of trading. Don't get me wrong, I've still been following the markets and day trading, but not had the time to really go into detail with new analysis. Some Week's ago I posted analysis on both EUR:GBP and CAD:JPY, and felt both those trades were still valid to enter despite them heading towards oversold territory, the implication was simply just a less good risk/reward.

Due to other commitments outside of trading my attention has been predominantly elsewhere though I have tried to follow Market movements where possible. Firstly, a brief outlook of Stock Markets based specifically around the DOW which may look like it's going to plunge, but I'm not sure about pre-empting that move for the following reasons:

Unfortunately I don't practice what I preach, possibly because trading Indices helps me get a feel for what's going on in the markets overall. But, based on my experience, ignoring Indices completely and just swing trading currencies with wide stops and small positions is the most profitable way for retail traders like ourselves to make money in the markets.