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On Target Review
 The
month started with a good run of 473 pips the first two weeks.
Our goal is 800 – 1000 pips to reach our targeted returns per
our leverage levels. The week of the “Credit Crisis” didn’t
really hurt the On Target Trading System, we just found
ourselves sitting on the sidelines. As the On Target waits for a
retracement before entering, it sat and waited all week with not
even a hint of retracing. So the “Credit Crisis” didn’t make us
lose anything, but we didn’t earn much either. We were on target
to hit our profit goals until our last week where we got caught
in some strong channels on all currencies where we ended up
losing 143 pips our last week. Here were the weekly totals:
July 29 – Aug 3 +334 pips
Aug 5 – 10 +143 pips
Aug 12 – 17 +63 pips
(Credit Crisis week)
Aug 19 – 24 +150 pips
Aug 26 – 31 -143 pips
The returns were a bit skewed as all the currencies were running
together in the exact same pattern. The goal with the On Target
Managed Forex Account is to maintain good diversification among
the four currencies that we trade: GBPUSD, EURUSD, GBPJPY,
EURJPY. Usually if the currencies run at all together it is the
US Dollar crosses sticking together and the Yen crosses sticking
together – Not this month as everything ran side-by-side. When
this happens, the risk level shoots through the roof as
diversification is no longer in effect. If we win, we win big.
If we lose, we lose big. Due to this risk factor, we spent most
of the month using Money Management (cutting our lot sizing in
half). We could have easily reached our goals if we would have
maintained full lots, but the swings in capital and the
potential risk was too great for our trading rules. The last
factor that minimized larger return growth was the fact that
most of our losing trades were the US Dollar pairs. For each pip
on the GBPUSD and EURUSD we yield $10, where on the Yen crosses
we yield only $8 - $9. When most of our losers were the US
Dollar pairs and most of the winners were the Yen pairs, this
kept the overall return a bit on the low side.
When all was said and done, and in retrospect on this wild month
that saw volatility that hadn’t been seen in the forex market
for over 20 years, we felt we turned a nice profit for the
month. Here are the net profit returns*.
Level I: +1.433%
Level II: +2.865%
Level III: +5.73%
*Returns do
not include the Performance Fee.
Premier Review
 The
Premier Managed Forex Account took the brunt of the wild market
fluctuations in August. The Premier System is a long-term trend
following system and there wasn’t a long-term trend that held
its water this last month. In the first two weeks we were up as
much as 12% on Level III – the month was setting out to be a
record breaker. As mentioned earlier, the foreclosure panic hit
the markets worldwide and the only currency that anyone cared to
own was the Yen. Unfortunately, our system hasn’t liked the Yen
and we paid the price with a +12% high to a -20% low in our
carry trade positions. We developed the Premier system to
withstand major events like this one and it did. The key to the
system is the dollar-cost-averaging component that holds the
losing position in wait of a correction, but adds new positions
at the lower prices. Finally after freefalling for two to three
days we saw the market bounce on Friday, August 17, to begin the
process of bringing our account back up to ground zero. Although
our initial positions were negative for the month, our overall
account balance became positive and the diversification helped a
great deal to maintain capital and build profits. The daily
fractional positions that have been placed caught small 60 – 70
pip profits time-and-time again. Once we see the overall market
correct back in the long-term trends we will see large profits
on the Premier. Here are the net profit returns for the month:
Level I: +1.368%
Level II: +2.735%
Level III: +5.47%
*Returns do
not include the Performance Fee.
Trade of the Month
 We
did several good trades on the On Target Managed Forex Account.
Here is one on the GBPJPY on August 22, 2007. Notice that we
used Money Management to cut our lots in half for a net pip
profit of 161 pips. There was a lot more that could have been
earned in this trade if we hadn’t cut our lots in half, however
stop losses on the currencies were huge as so was the magnitude
and potential of the markets. Our rule based system required
that we cut things in half to minimize the risk exposure.
0% Performance Fee
Since the August 1 we have offered to all
new accounts a promotion of 0% performance fee until the end of
trading in October. This promotion will continue for all
accounts opened by September 20, 2007. Save big in your account
with this promotion. Contact us today at 1-800-557-9776
to open an account or
click here to follow the online instructions. |
