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After taking 7 trades in the last three months, I have managed to bag a total of 286 pips!

As you probably noticed from the table above, 2012 didn’t exactly start on a strong note for me as a bunch of my trades were either not triggered or canceled.

The first trade setup that I was able to trade put a nasty 1.00% dent on my account, leaving me a bit worried that a repeat of my 2011 trading performance was in the cards.

Trading Performance

DATE TRADE IDEA P/L in pips P/L in %
Jan.04 Short USD/CAD: First Trade of the Year!
Jan.12 Will .8000 Hold for NZD/USD?
Jan.18 Catching AUD/USD’s Uptrend
Jan.27 More Upside Breakouts for AUD/USD?
Feb.02 AUD/USD: End of a Rally?
Feb.14 Eyes on NZD/USD
Feb.16 USD/CAD: Shorting at the Top of the Range
Feb.23 Shorting USD/CAD Again!
Mar.02 NZD/USD: Will the Rising Channel Hold?
Mar.08 Break and Retest on AUD/USD
Mar.13 Day Trade: Jumping on AUD/USD’s Retracement
Mar.23 Technical Play on NZD/USD
Mar.27 USD/CAD: Day Trading a Possible Reversal
Mar.31 TOTAL

However, I kept calm and carried on while making some adjustments to my trading processes. I decided to come up with both market previews and midweek reviews in my Comdoll Trading Kit, allowing me to get a better grasp of what’s moving the markets before taking any trades.

Lo and behold, that strategy worked wonders for my trading performance as I was able to score a winning streak on my recent trades. This was enough to get my account back in the black and eventually enjoy nearly a 2.00% gain for the first quarter of the year. Deliberate practice sure helps, huh?

Comdoll Price Action

It’s time to zoom in on comdoll price action! How did AUD, CAD, and NZD fare against the dollar in the last three months?

The Aussie, Loonie, and Kiwi started the year strong as newbie and professional traders flocked the forex market in search of high-yielding investments. Around this time China also posted positive economic reports, while concerns on the Iranian oil embargo lifted the oil-related Loonie.

It wasn’t until late January when the Fed inspired a broad risk rally by surprisingly hinting at a QE3 and longer period of low-interest rates. By the end of the month AUD/USD was up 474 pips, USD/CAD was down 220 pips, while NZD/USD was ahead by a whopping 547 pips.

Comdolls vs. USD in Q1 2012

February was a wild month for the comdolls as good news got jumbled together with a lot of bad ones. For one thing, it was in February when traders priced in a Greek default, and China cut its RRR for the first time in three months.

It was also in February when we witnessed the ECB successfully launch its LTRO 2; the eurozone officials approve a new bailout package for Greece and the U.S. print better-than-expected reports.

By the end of the month, the Aussie bulls won the tug-o-pip by 100 pips, USD/CAD was also down by 132 pips, and NZD/USD had risen by another 65 pips.

The trading wheels turned against the comdolls in March as concerns about China’s growth took center stage. The prospect of a “hard landing” in China soon took its toll on commodity-related economies, enough for the RBA to surprisingly turn dovish in one of its statements.

Of course, it didn’t help the comdolls that the dollar was trading on strong U.S. fundamentals. Bernanke even had to give grim speeches just to temper investors’ expectations!

Good thing that near the end of the month Bernanke’s bearish statements, disappointing U.S. reports, and end-of-quarter profit-taking limited the Aussie’s losses to 439 pips. Meanwhile, USD/CAD was up by 116 pips and NZD/USD was down 194 pips.

Market Themes

Now that we’ve closed the first quarter of 2012, I can’t think of anything better to do than to list down the market themes that dominated price action for the first three months of the year. Here are the major themes that I came up with:

1. To QE3 or not to QE3?

The Fed fired up the charts in late January when the central bank surprisingly extended its low interest rate period to late 2014. Heck, some Fed officials even hinted that they’re open to more QE! The possibility of cheap USD boosted high-yielding currencies by at least 100 pips against the dollar during that week alone.

Fast forward to March when strong employment and manufacturing reports from the U.S. started getting attention. Before we knew it, analysts were not only discounting the possibility of QE3, but there were also speculations that the Fed would raise its rates sooner than expected!

The dollar had already gained a couple of hundred pips against its counterparts before Big Ben was able to limit expectations by hinting that QE3 is not yet out of the table. Talk about sending mixed signals!

2. ABCD in the EZ: Austerity, Bailout, Contagion, and Default

Traders went back to worrying over the European debt crisis as soon as the year started, but the euro and other high-yielding currencies remained resilient thanks to talks about Greece meeting its debt deal requirements needed for a bigger bailout package.

Bailout money

Greece was eventually granted more bailout money, and default concerns were pushed to the back seat. This doesn’t mean that investors are done worrying though. Analysts are now closely watching Spain, Italy, and Portugal, as they are most likely to become the next Greece.

Spain is struggling to prevent another recession amid its austerity and deficit issues, while Italy’s Mario Monti is knocking on China’s doors for help. Will eurozone woes continue to dominate trading in the next couple of months?

3. Is China’s economy headed for a “hard landing?”

When the world’s second largest economy starts printing weak trade, manufacturing, and growth numbers, you can bet that the whole world will notice! China started the year by printing its slowest GDP growth in 10 quarters, and then followed it up by cutting its RRR for the first time in three months.

And it doesn’t stop there! In early March Premier Wen Jiabao himself announced that China is downgrading its 2012 growth targets from 8.0% to 7.5%, its lowest level since 2004. Unsurprisingly, the reports took their toll on high-yielding currencies like the comdolls.

Phew! That’s it for me today! Who would’ve thought that we would get this much action from just three months of trading? I hope I didn’t miss any major theme! How about you? What economic or market themes influenced your trading the most?

Chips, dips, and lots and lots of pips!

Happy time

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.