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EURUSD 5 MINUTE CHART – WHY I LOVE THE AMAZING TRADER
Look at the bounce off AT support at 1.11918… this is no coincidence…why it is called “Amazing”… same support on a 15 minute chart
Case in point on market internals – Yields opened up strongly moments ago but immediately began pulling back which carried over to UsdJpy seeing a sudden, albeit small shot downhill. I would pay attention to those internals today, which are mixed with a slight tint to the downside in the pair. Again, however, the geopolitical element today should have stocks apprehensive and buoy USD unless it becomes dramatic and we see safe haven flows into CHF and such.
UsdJpy remains dominant on the buy side until 143.95 is compromised definitively. Why not just 143? This time, only this time, my cycle oriented system simply has that number this time. It is not stagnant. Entering the US day stock markets are apprehensive with the geopolitical turmoil and rightfully so. What could change that? Either some significant development or global markets simply revisiting the rate reduction effect in my view. Right now some components behind the scenes are negative Dollar so entirely possible. Yesterday they were decidedly positive but there was a delay in those orders filling through the market, which caused UsdJpy to run uphill overnight.
A look at the day ahead in U.S. and global markets from Mike Dolan
The unexpected downturn in U.S. household confidence this month and growing anxiety about jobs has spurred aggressive interest rate cut bets anew – dragging Treasury yields, the dollar and stock futures lower into Wednesday’s open.
Morning Bid: US confidence wobble weighs, China buoyed
USDJPY WEEKLY CHART
Let’s take a look at what technical traders are looking at.
Last week was an outside week and close to an outside week key reversal although I was told many years ago that it doesn’t work well with currencies.
I just took a look at a broker’s sentiment and it shows 50% of trader positions are short USDJPY.
So, looking at the COT report as well, short USDJPY positions no longer look extended so it might take a move outside of 140-145 to expose key levels.
In any case, this can still be considered a retracement phase with FIBOS for 161.93-139.58 shown below
EURGBP 4 HOUR CHART – BOUNCE FROM MULTI-YEAR LOW
If trading EURUSD and GBPUSD, it pays to keep an eye on EURGBP, which is firmer today… weighing on GBPUSD while EURUSD follows with a lag
This follows a bounce from ,8317, lowest level since early 2022.
Supports: .8339, .8317
Resistance: .8389 (this week’s high)
I have been scanning the news looking for reasons for the bounce in USDJPY back to 144
I have so far come up empty but this caught my eye
The COT (futures) report showed a huge drop in long positions, which explains some of the recent USDJPY support
Open interest fell -47%, fastest weekly pace on record
177k contracts closed
Open interest at 376.5k contracts in the prior week was its second highest level on record
The Commitment of Traders (COT) report is a weekly market report that summarizes the holdings of participants in the US futures market. The Commodity Futures Trading Commission (CFTC) publishes the report every Friday at 3:30 PM Eastern Time, and it covers the previous Tuesday’s trading day.
(AI Overview)
I have been scanning the news looking for reasons for the bounce in USDJPY back to 144
I have so far come up empty but this caught my eye
The COT (futures) report showed a huge drop in long positions, which explains some of USSDJPY support
Open interest fell -47%, fastest weekly pace on record
The -177k contracts closed
Open interest at 376.5k contracts in the prior week prior was its second highest level on record
The forex market is largely controlled by interest rates. In fact, the interest rate is generally the single most important factor when it comes to determining the value of that specific currency. Investors will constantly look at how the interest rate on one currency compares to another, and they will use this information to take action in the markets.
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What is Risk Management in Trading – Forex Forum
For any trader, managing risk is essential to success. But what exactly is risk management? In this blog post, we’ll explore what risk management is and how it can help you become a successful trader.
We’ll also look at some common mistakes that traders make when it comes to managing their risks. After all, if you’re not managing risk appropriately, you’re just a gambler. So if you’re ready to learn more about risk management, read on!
What is Risk Management in Trading?
Risk management is the process of assessing, controlling, and managing risk within a trading portfolio. This involves defining trading goals and understanding potential losses that could occur as part of the trading process.
It also includes identifying potential risks, such as market volatility or sudden changes in the market, understanding how these risks can affect your profits, and taking steps to limit potential losses.
In general, risk management should be a priority for all traders. By properly managing your risks and using effective strategies, you can minimize potential losses and increase the chances of making successful trades.
Common Mistakes When Managing Risk in Trading
Unfortunately, many traders make mistakes when it comes to managing their risks. Here are some of the most common mistakes that traders make when it comes to risk management:
Not Setting a Trading Plan:
Many traders don’t have a detailed trading plan, which is a key component of risk management. Without a trading plan, traders are more likely to take risks that could have otherwise been avoided. It’s important to establish clear trading goals and a plan for how to reach those goals.
Not Understanding Risk:
Many traders fail to understand the risks associated with certain trades, which can lead to serious losses if they don’t take the time to research and understand the risks involved. It’s important to have a thorough understanding of the markets you’re trading in before taking any risks.
Not Taking Advantage of Stop Losses:
Stop losses are an essential component of risk management, as they help to limit potential losses in the event of a market downturn or sudden changes in the market. However, many traders don’t take advantage of stop losses and end up taking larger risks than necessary.
Over-Trading:
Over-trading is a common mistake made by many traders. This involves taking too many trades, which can lead to losses if the market turns against you. Look, all traders love the price action. It’s exciting to take a position and watch your P/L go up and down. But don’t become addicted to the price action for the sake of just having a position. It’s important to only take trades when the setup is right and avoid over trading.
Not Diversifying Risk:
Diversification is another important part of risk management. By diversifying your trades, you can spread out risk and limit potential losses if the market turns against you.
Why is Risk Management Important in Trading?
Risk management is a critical factor in success when trading in the markets. It involves understanding and controlling what could potentially impact your trades and actively analyzing scenarios that may occur.
Without proper risk management, traders are leaving themselves vulnerable to potential losses which could be catastrophic for their investments.
Good risk management also allows traders to effectively assess opportunities and make better decisions that take into account volatility or leading indicators of future market performance.
Simply put, risk management can provide peace of mind so traders can enjoy the highs of profitable investments while minimizing losses when markets start to dip.
What are Some Common Risk Management Strategies?
Common risk management strategies used by traders include setting stop-loss orders, limiting capital exposure, and diversifying investments to minimize volatility.
Another essential approach for traders is to set predetermined targets for both profits and losses to help stabilize your exposure. To further limit potential losses and maximize gains, traders should always be aware of economic news and other world events that might affect the market.
How to Implement Risk Management in your Trading Plan
Implementing effective risk management into your trading plan is incredibly important for successful and profitable trading. It can help you to control the amount of draws you take in any given trade, and it can also protect against large losses which could potentially wipe out your entire trading account.
A good risk management plan should include determining the amount of capital at risk on each trade, setting predetermined stop-losses to limit downside exposure, and having a strict, disciplined approach towards minimizing losses:
never increasing position size
never risking more than you are comfortable with, and always controlling potential risk-reward ratios.
Taking the time to set up a comprehensive yet flexible risk management plan will put you in a better position when it comes to positive returns in the long run.
Risk management is an important part of trading. It allows you to trade with less stress and more confidence. There are many different risk management strategies, so it is important to find one that fits your trading style.
Proper risk management can help you make money in the long run by preserving your capital and preventing you from making careless mistakes.
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