November Performance Report 2007

The month of November is usually filled with directional markets leading into the end of the year which yields strong returns on most trading systems. The On Target earned over 20% in 2006 due to these flowing markets. 2007 was a different story. The Forex markets did try to look for some direction all month long running from one extreme to another. News catalysis like mortgage bank credit woes and Japanese government market manipulation of the Yen caused markets to bounce back and forth. Up until the last week of November we really saw our accounts in a tug-of-war battle with the On Target moving from up 2% to down 2% and then back up again. The end of the month loss in the On Target account was pretty much the last week of trading, getting whipped back and forth with no swing continuation which is needed to profit from this strategy. The needed focal point at the end of a month like this, is to maintain a long-term perspective. Monthly newsletters and even our website do encourage month-to-month analysis of the trading strategies in the forex, yet like all investment opportunities, the large-term picture must be the ultimate goal.

The On Target Summary

The On Target Trading System has taken the brunt of the Credit Crisis effects of the market. Being a swing strategy it relies on back and forth swings in the market, however, the swings must be sustained longer than 18 hours to realize profits. Usually 18 hours isn’t too much to ask in normal market conditions and therefore, we have seen historically 78% accuracy on this system. In the month of November 2007 we saw only 50% accuracy on the system. As you can see from our chart examples below, the market appeared to run like a mouse in a wooden box – full speed to one side then full speed back. The On Target Trading System struggles in these types of market conditions. Time will be the indicator of the On Targets success and time will also be its greatest ally. The further away we get from the credit crisis event the more we will see markets smooth out. The Forex market is the largest market in the world. Each market maker and participant has its consensus on the market direction. As time progresses these directional biases will begin to blend better and help curve the market for a much cleaner ride versus the jagged cuts the market has shown the last four months. We see 2008 also as a great ally to the On Target Trading System as institutions, banks, governments, and companies begin to implement their new strategy for the year. These strategies will provide focus to the market instead of running back and forth on any whim of news. Yes we believe that things will settle down. We strongly believe that the On Target will rise to the top. Once again, patience is the key in maintaining a long-term outlook on the markets.

The Premier Summary

The Premier Managed Account also took a hit this month primarily with one currency to take the blame – the Canadian Dollar. Last month we talked about how the Canadian Dollar made up the majority of the 18%+ returns that we saw during the month. Well, the Canadian Dollar decided to take it almost all back. The great part of this correction on the Canadian Dollar is that we have added new positions and as soon as it corrects back toward its long-term strength we will find those returns coming screaming back with more to add to the pile. Note that the losses posted are due to the carry trade positions which are the positions that are still open and have not yet been closed. Closed position returns actually yielded on average +1% in our accounts. Although we report each month on the success of the Premier trading strategy it is important to maintain a long-term perspective on this account. The goal of this strategy is long-term success using a buy-and-hold game plan. When prices drawdown, we accumulate more, then when prices move back in the overall trend we begin to take profits. The Credit Crisis has also played a role in the drawdown of this month as the EURUSD and carry trade currencies like the EURJPY and NZDUSD have threatened to tank. We even saw a mini credit crisis the second week of November causing our initial drawdown in the account. The Premier account recovered several times only to return back to its current down levels. With its strong diversification we see December being a very good month as markets usually tend to finish out the year in their overall direction. If you are not yet in the Premier account this is the time to get in as prices are cheaper at these lower levels.

2007 November Returns

On Target Managed Account

Level I :  -2.03%                Level II :   -4.06%                    Level III :   -7.7%        

Premier Managed Account

Level I :   -3.3%                  Level II:   -6.61%                     Level III:    -15.06%

Note: All loses are due to the carry trade positions which are positions that are still open and have not yet been closed. Closed position returns actually yielded on average +1% in the accounts.  *Past performance is not indicative of future results.

Introduction the EURASIA

Finally the last piece of the puzzle in a solid Forex trading portfolio – the Eurasia. The Eurasia is a day-trading strategy traded during the Asia and European session on four currencies: EUR/USD, EUR/JPY, GBP/CHF, and GBP/JPY. Pro Financial FX has been testing this system for the last eight months in live market conditions making the final tweaks and adjustments before offering the system to its managed account clients. The Eurasia is the final piece to the portfolio puzzle in creating a strong diversified portfolio with a Long-Term Strategy trading the Premier, a Swing Strategy with the On Target, and now a Short-Term Strategy – the Eurasia.

The Eurasia implements many of the same trading concepts that have made the On Target and Premier successful trading strategies, however, the Eurasia plays tighter with the market moves, switching back and forth as markets move and riding the wave on the big runs. “Trading on a 15-minute chart, the Eurasia is intense,” says the developer of the Eurasia and Senior Trader, Richard Ottley. “Yet, it is the best short-term system that I have ever created with the greatest profit potential*.” Richard further explains, “I wanted to create a system that would not only make profits in of itself, but also fit in with the On Target and Premier to create a fully diversified portfolio within the Forex to withstand all market conditions.” The Eurasia couldn’t have come at a better time with the wild market conditions that have been seen in the Forex due to the Worldwide Credit Crisis. Richard is also quick to point out that there are no guarantees in his trading and there is still the risk of loss, however, that the Eurasia will help strengthen the opportunity of profits while minimizing risk through diversification.

Returns on Level III during final testing:

October: +17.39%

November: +8.8% 

*Past performance is not indicative of future results. Certain restrictions do apply.

To learn more about the Eurasia account to answer to any questions on November performand and/or this newsletter, please contact a Forex Consultant at

1-800-557-9776.