Well what to say about today? It all fell apart. I had genuinely expected the risk aversion sentiment in the market to be slightly eased today. I could not have been more mistaken.
After being open for a grand total of 15 minutes this morning, the Chinese had to close their equity markets after they crashed 7.8%. This, as it would, made the markets panic and the safe haven bids commenced. The result? For a fourth consecutive day, the JPY defies the fundamentals of its weak economy (whose growth is among the most fragile in the developed world at this point in time, if not the most fragile) and strengthens against the other majors. If today has taught us anything, it is that concerns over Chinese growth are not going away and may persist until Chinese GDP is released on the 19th of January and possible even after that. I had hoped that positive employment data from the US would put everyone’s fears at ease, but clearly this is not the case. Of course, it also does not help that Oil also reached 14 year lows.
With regards to the account, despite all efforts to protect it with existing resources (and believe me we tried by closing our profitable trades etc over the last few days to free up equity), I am concerned that we no longer can and so I increased my original account equity by 35% to be able to get through this safely. I really do not want to have to worry about being a few pips within getting stopped, I have worried enough over this hobby of mine the last 6 weeks while watching it all fall apart after a series of unforeseen global events, economic and political have come in series one after the other to effectively derail fundamental rules.
There are people advising me to change my strategy, but I do not see that as a solution, I see that as the ultimate disaster and the only thing that could possible make things worse is breaking into a new routine that we are unfamiliar with. I will not do that just to make people happy. If we fail (and yes I realise we are circling the drain at the moment), I would rather it be done in a way where I can honestly say that I did my best rather than simply bending to pressure. With that said, if you feel that taking other measures can help, please feel free to implement them yourselves, I hope they do work for you. My approach is that I have deposited a little more (as mentioned above), will extend the SL’s comfortably far away and wait till this risk aversion passes and things return to reflect the true facts in the economy. Whether that start tomorrow with US employment, on the 19th with Chinese GDP or towards the end of the month when the BOJ revises its inflation outlook downwards, I do not know. However, I do know that like all disasters and turbulence, this will pass and I am positioning myself to capitalise on that. As things return to normal, I will shorten the Sls and initiate multiple trades on a weekly basis, as I used to before we got locked in at mid-December. At this point, I see this as the best course of action available to me.
Sorry that this could not be more positive news, I really hope I can stop posting doom and gloom soon. After 6 weeks, it is getting depressing,