The Aftershock Hits the On Target

The aftershock of the “Credit Crisis” in August hit us in the month of September on our On Target Managed Account. We saw a losing week the last week of August and that trend continued all the way through the end of September. With some very tight channels and quick trend switches we strived to keep things together by applying our Money Management strategies and minimizing our leverage on each trade. The Yen currencies caused us the greatest headache as position traders went back-and-forth buying and selling the Yen. The Pound/Yen (GBPJPY) was the most effective enemy to the account as it never did break out of its channel until the last day of the month. The EURUSD and GBPUSD, however, did break out of their channels with the EURUSD hitting Target 2 every time with 100 percent accuracy. We did hit a streak of bad luck the third week of the month with three trades hitting Target 1, closing half our position for mild gains and moving our stop loss up to break even, the set-ups looked great and the market was on our side, but the magnitude of the market was just too large and before we had a chance to run at Target 2 we were stopped out at breakeven. I say “bad luck,” because once the market stopped us out at break even, the trades ran according to our predictions and hit Target 2. This equated to a miss opportunity of almost 6 percent in the Level III account.  Among the trials, the market did figure several things out this month with the Fed adjusting interest rates and a better feel on the risks associated with the Credit Crisis. All-in-all we saw within the last week that the currencies began to come back within their normal magnitude levels whereupon the system was created. These normal levels will smooth out our risk versus reward ratios that went a little crazy in September.

 

Things look good for October and as of this writing, the 2nd of October, we have already seen two winning trades (EURJPY hitting Target 2 and GBPJPY hitting Target 1). All currencies have broken out of their channels which will clear things up for better trade set-ups and more accurate Targets.

 

Premier Holds on Positive
Amongst the doom and gloom of the On Target Managed Account the Premier Managed Account stepped up to the task and made consistent profits all but the last week of the month. We did sit as high as 13 percent positive on both closed trades and carry trades before the market pushed a run against our commodity currencies namely the Australian Dollar and New Zealand Dollar. As we teach in our online webinar and share with new clients, diversification is key to the consistent growth in any market. We developed the Premier to take up the slack when the On Target is lagging behind. Although the Premier did give back a big chunk of its carry-trade profits the last trading week of September, it did its job in maintaining the value of our clients’ accounts whom where diversified between the two strategies.

 

Here are the numbers:

 

On Target Managed Account September Net Returns*

Level I = - 2.033%                 Level II = - 4.065%                Level III = - 8.13%

 

Premier Managed Account September Net Returns*

Level I = + 1.153%                Level II = +2.305 %               Level III =  +4.61%

 

Combined Average Return on 50/50 Diversified Portfolio*

Level I = - 0.44%                   Level II = - 0.88%                  Level III = - 1.76%

* Net Returns include all spreads, commissions, and performance fees. Past performance is not indicative of future results.

 

0% Performance Fee Extended Until January 1, 2008

We started our accounts with a promotion of 0% performance fee until November 1, 2007. Due to the losing month on the On Target Managed Account this month we would like to offer to our current clients an extension of the 0% performance fee until January 1, 2008. If you are a current client then you are automatically qualify for this extension. We look forward to making you profits into the end of the year, and now you will have the opportunity to keep all the profits made in your account without any performance fees until next year!

 

Trades of the Month

 

Here is the killer GBPJPY for the last month. The channel was quite large which caused stop losses to be huge. You may ask, “What keep trading?” As soon as it breaks it will break big and we want to be there for the ride. Usually you will only see a currency channel like this for 1 – 2 weeks, not 5. Our system weakness is a trend change within 8 – 18 hours. You can see why the GBPJPY attributed to ¾ of our losses this month.

 

 

Click to see larger image.

 

Here is the Trade of the Month. The EURUSD only had two trades this month. Here is one on September 18 hitting both targets.

 

 

For questions or to open a new account, please visit us online at www.profinancialfx.com or call us directly at 1-800-557-9776.