Update on the CNBC Challenge

It's been a volatile 3 days to say the least. Normally, I don't trade currency around major economic press releases but I kept positions on for the CNBC Portfolio Challenge and it cleaned my clock. I had a great position in the Usd/Chf currency pair that has been trending up for some time now. Unfortunately, my gains quickly evaporated today and then, just to make it worse, the currency pair turned around and closed the day up quite a bit. Fortunately, I did re-enter the trade and capitalized on some of the turnaround. Here's a chart that shows the massive drop that occurred after the Consumer Price release.Notice the red circle...that's the volatility. Now look at the blue circle...that's volatility but it's what I consider in the realm of understandable volatility. Oh well, that's how markets behave...they go much further than we expect, and at the opposite extreme, they will not go further than we expect. It's a real son of a b****. Fortunately I did re-enter the same trade and it not only regained the losses but it made up for some of them. Here's an up-dated chart of the Usd/Chf.This volatility just re-affirms why I don't trade before and after economic releases in my real accounts. Unfortunately, with the way the CNBC Porfolio Challenge is set up, it seems that you have to take dumb positions in order to have a chance of winning. In fact, if you're not over trading, you don't have a prayer of winning. This has created much turmoil in my trading because I've been really working to overcome the kind of mental handicaps that this challenge forces you to embrace. I guess that's just the nature of these things.

In case you're wondering...I'm in the top 2.1% of all of the contesting portfolios and I had a great return of 9.7% of my portfolio for today alone. Too bad I'm still aways away from being near the top. Oh well, I'll keep it up and see if it all pans out later. Those currency positions can really pay off with just catching one major trend.

Good luck out there.

TLT