Fatbeetrader | Profit.ly

Small Account Challenge Update - Still short $EURUSD

Good morning all.

Just providing a quick update on two trade currently open on the $EURUSD, for those participating in the small account challenge, as I'm getting a number of question on the thought process behind the trades.

In the past when growing a small account I have had success following a fundamentally themed swing trading system, that basically boils down to looking for trading opportunities in the direction of the central bank bias and then executing them at a key technical level.

With this style of trading I am more than happy to keep trades that go against me open where the fundamental bias continues to be relevant. In this case a strong US economy with the certainly of near term rate rises and a weak EUR zone economy with zero change of rate rises.

Sometimes this means carrying a losing trade for a few days. Now of course this is done with a very small trade size so an individual trade is unlikely to affect the overall outcome on the account.

The only time where the above guide doesn’t apply is when we are scalping or trading counter to the bias or trend, in this case if it goes against me I tend to eat the loss quickly.

Currently the state of play in the account is one trade is at a loss and the second trade is at breakeven.

USD Updates: The USD remains the strongest currency in the longer term as the market expects rate rises and they expect those soon late 2015 to early 2016 at the latest. The Fed has an inflation target of 2%, with current core CPI being 1.9%. Latest commentary from the fed and futures market pricing suggest that rate rises are a 60% chance for December. Resulting in a stronger $USD.

EUR Updates: The Euro zone remains very weak in the short to medium term, quantitative easing is place and is expected to continue in the medium term. Lacklustre inflation and growth numbers show that QE still hasn’t started to take effect yet. QE will most likely be expanded at the December ECB meeting. Resulting in a weaker $EUR.

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Trade Well

Most traders start with between $2,500 and $10,000 trading capital the small account is about growing a small account both in percentage and dollar terms.

Currently I'm using the challenge to test and evaluating Pepperstone as a broker and Ctrader as a platform. Regular trades will still be taken through FXCM.