Daily Alert – Friday 28th May 2021: Very profitable month closes quietly

Mark NugentDaily Alert, May 2021

Daily Alert – Friday 28th May 2021: Very profitable month closes quietly

The month of May draws to a close with barely a whimper. On the weekly charts, equities, WTI (oil) and GOLD are up. The EUR and GBP rise, and the USD is flat. The JPY falls across the week, driven largely by the Bank of Japan indicating they may extend the covid relief programme by 6 months at their forthcoming meeting. (This helped the Japan225 have its biggest daily rise of the week. The extension means that interest rate hikes just got pushed further into the future which is bad for the currency and good for corporates.)

How is my trading-currencies-on-the-weekly-chart experiment coming along? Well, both GBPUSD and EURUSD are in the money but only just. I might get out at the close with a total gain of 0.3 percent. Still, considering the lack of volatility and my very wide stop losses, this is positive. Even a meagre 0.3 percent a week compounded over a year gives a gain of 16 percent. But I only have one data point so let us not get carried away. I will continue the experiment next week.

I have already reported my WTI long gain of around 1.7 percent. My S&P500 long remains open at just over 2 percent gain. Finally, I got lucky with my Japan225 long. I almost put the stop to breakeven at the Wednesday close, but it was not quite 1x risk in the money, so I did not move it. If I had, an intra-day spike down yesterday would have taken me out. The trade remains live and currently 2.5x risk in the money.

All being well, I should escape the week with around 6x risk, or a 6 percent gain. The month should be over 20 per cent. I look at this and I think it is remarkable but then I remember for years I used to risk only 0.25 percent per trade compared to today’s 1.0 percent. I trade fearlessly now, in that I truly have no emotional attachment to each trade. Win or lose, it does not touch me. This is trading in the zone. Someone even wrote a book with that title. It is on my shelf. The years at 0.25 percent per trade got me to the zone.

Hindsight trade of the week (opened Sunday night, exited tonight) looks like being EURJPY long, returning around 2x daily ATR, or 4x risk. Once again, I did not trade this asset! Just goes to show, in trading you do not need perfect foresight to win bigly.

Monday is a holiday here in the UK so no video, but I will be back on Tuesday with the May Performance Report and then the normal schedule as of Wednesday.

Have a great weekend.

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