Catching Comdolls Swings in 2010

Before we go to the juicy part of my review–my stats–let me first do a quick recap of the events in the economic arena that rocked the comdolls’ socks!

One of the most dominant themes in 2010 was the Fed’s second round of quantitative easing which made the comdolls look like a ginormous Reese’s Peanut Butter Cup to a recovering chocoholic! The stimulus package devalued the dollar and made the higher-yielding commodity currencies attractive for carry trades. In fact, there was so much demand for them that we saw AUD/USD and USD/CAD reach parity, and NZD/USD tap new 2-year highs!

What made traders crave more for comdolls was the series of rate hikes that we heard from the central banks. The RBNZ hiked rates from 2.5% to 3.0% while the BOC raised borrowing costs for three consecutive months starting in June to 1.00%. On the other hand, Australia‘s cash rate settled at 4.75% which is only 25 basis points short of that juicy 5.00% I was expecting.

So those were the events that made the comdolls oh-so-yummy. Now let’s see two of the most popular events that made them taste bitter to traders.

happypip.bear.png

First is China shifting to a tighter monetary policy stance. This was bearish for the comdolls as it threatened to curb demand for goods from Australia, New Zealand, and Canada. Boo! Then there was good ole risk aversion that came and went with concerns over Europe’s debt crisis and sent the commodities into bear lairs!

Looking back at the price action for the year, it looks like the Aussie was the most sensitive to those interest rate issues. After all, Australia boasts of the highest benchmark rate among the major currencies, so if there’s a potential rise in carry trades, AUD/USD would definitely rally. In fact, the pair was trending upwards for the entire second half of the year and it’s a pity I missed out on a bunch of those nice pullbacks!

happypip.audusd.png

On the other hand, the Loonie had itself stuck in a range for the most part of the year. Rate hikes, strong economic data, and rise in commodity prices pushed the currency into parity with the dollar. As you can see, there were a lot of opportunities to short USD/CAD at tops and buy it at bottoms. I was able to jump in on a few of those seesaw moves but the ride wasn’t always smooth. A sneak peek at my stats will show you that I got my account bruised on a few of them.

happypip.usdcad.png

But, don’t get me wrong! My account did have a few good runs with the Loonie this year. In fact, my largest winning trade was a long NZD/USD play wherein my account gained 2.3%!

Overall, my account is down by 1.55% for the year, which is a bit disappointing. I was doing okay during the first half of the year until I suffered a losing streak in August. I had a drawdown of 2.9% during that negative run! Good thing I was able to bounce back and catch a couple of large wins with USD/CAD, still giving my trading performance a decent win ratio of 68.42%.

I did a quick tabulation of my winning trades per pair and I realized two things. One is that my most profitable pair is – drumroll, please – USD/CAD! Next is that I don’t do so well with yen pairs. My AUD/JPY and CAD/JPY trades burned a serious hole in my account this year. Maybe I really need to ask Cyclopip for some help or I should steer clear of yen pairs.

Anyway, here’s a quick summary of my stats:

P/L in pips: -184
P/L in %: -1.55%
Win ratio: 68.42%
Most profitable pair: USD/CAD
Least profitable pair: AUD/JPY
Longest winning streak: 2
Longest losing streak: 4
Maximum drawdown: -2.9%

Not that bad, I suppose, considering I was able to recover half of my drawdown in August. Of course I’d be a happier Happy Pip if I ended up positive, but I think that’ll have to wait ’til next year. I did end up learning a lot of lessons this year and a quick review of 2010’s events and price actions will serve as my guide for grabbing those yummy pips in 2011. Bring it on!

  • foricks

    Comdoll,
    I hope you have been able to enjoy some of those holiday sweets in recent days. Thanks for all of the suggestions this year. I think I have a similar style to you and always appreciate your insight. I only traded aud, cad and nzd against the USD all year. While I did sweat out a couple of retracements in September, I was able to ride the Aussie up all Fall.

    Here are my stats for 2010:
    P/L – 817 pips
    P/L % – 295% (!)
    Success Ratio – 60%
    Risk to Reward – 36%
    Biggest loss – 174 pips
    Biggest losing streak – 5 trades
    Biggest Gain – 516 pips
    Longest winning streak – 9 trades

    I wish you a prosperous New Year.
    Cheers,
    Frick

  • personalme

    An honest lady trader. Hoping for better pips next year. Happy New Year Comdolls!

  • foricks

    Comdoll,
    I hope you have been able to enjoy some of those holiday sweets in recent days. Thanks for all of the suggestions this year. I think I have a similar style to you and always appreciate your insight. I only traded aud, cad and nzd against the USD all year. While I did sweat out a couple of retracements in September, I was able to ride the Aussie up all Fall.

    Here are my stats for 2010:
    P/L – 817 pips
    P/L % – 295% (!)
    Success Ratio – 60%
    Risk to Reward – 36%
    Biggest loss – 174 pips
    Biggest losing streak – 5 trades
    Biggest Gain – 516 pips
    Longest winning streak – 9 trades

    I wish you a prosperous New Year.
    Cheers,
    Frick

  • personalme

    An honest lady trader. Hoping for better pips next year. Happy New Year Comdolls!

  • Firstfx

    Thanks for the update.

    I agree with your analysis regarding your expertise on the USDCAD. Maybe focus on the USDCAD for 2011.

    Happy New Year!

  • Firstfx

    Thanks for the update.

    I agree with your analysis regarding your expertise on the USDCAD. Maybe focus on the USDCAD for 2011.

    Happy New Year!