More Forex Gains

This morning I awoke to find that my USD/TRY shorts were moving to new lows, putting me in profit on several positions before the price action took both of my accounts past their respective break-even points and into total profit. Following my "Well Manicured Lawn" method, I closed all positions since they were worth more than one day's worth of the interest they would have generated if left open, then I immediately reopened them using 10% of the new account balance.

USD/TRY continued to fall, and about twenty minutes later, the new trades in both accounts triggered their 50 pip take profit orders, bringing in even more cash! So far today I have banked 2.9% on capital gains and interest since the last flurry of account-clearing capital gain events on July 18th. In turn, following my trading method, this has increased my passive interest income by 6.9% over this same period. Finally, with only today and tomorrow left to go for the month of July, and excluding my own capital contributions from wages, the value of my primary and Forex Project accounts combined has risen 8.3% (that's all capital gains and interest!).

All of the recent declines in the USD/TRY pair seem to coincide with three things: the drop in oil prices following President Bush's lifting of the executive ban on oil drilling in the Outer-Continental Shelf region, the increase in oil and oil derivatives inventories as price increases slow worldwide consumption, and daily rallies in the U.S. stock markets. It would seem that such things would cause the Dollar to strengthen against the Lira, but this has not been the case - usually it seems that the Dollar strengthens against the Lira when the news is bad for the U.S. I'm not sure why this is, but a few guesses are that traders are pulling dollars out of this pair and putting them into U.S. equities, maybe the drop in oil prices is seen as a signal of a weakening U.S. economy, etc. There are so many variables that factor into the Forex market that it's impossible to point at any one thing and say "this is the cause." I'll have to look into this some more.

The price action is now bouncing back up and away from the low of this morning, so it appears that this round of total-account capital gains events are over. I look forward to the next round!

** update (kind of funny putting an "update" into a scheduled post, but here we go!) - the price action on the USD/TRY pair went absolutely nuts soon after I finished this post and I banked even more capital gains and interest. I watched the price action swing nearly 6% in a matter of minutes and the spread charged by Oanda nearly doubled (this happens when trading in a particular pair skyrockets). This began after President Bush publicly called out the DNCommunists in Congress over oil drilling, putting pressure on them to act in accordance with the will of the people - us, the people that Pelosi, Reid, Barack Hussein Obama et al., actually work for (no matter how much they pretend it's other way around). Also in Turkey today there were some significant internal political events going on, but I'm not sure how much this would affect the USD/TRY pair, particularly given the pattern I described above. At the end of the London session (when I stop trading - spreads widen to 40 pips from 9 during the combined London/New York sessions), I ended up 3.5% in capital gains and interest since the end of the last total-account capital gains events for the period following July 18th until today.