A look at the day ahead in U.S. and global markets from Mike Dolan
Markets have recovered their poise this week on a potent mix of U.S. ‘soft landing’ hopes and interest rate cut speculation and now turn their attention back to U.S. politics ahead of Tuesday’s big TV debate.
EURUSD DAILY CHART
No change from what was posted in our Weekly FX Chart Outlook other than while within 1.10-1.11, 1.1050 will set its trading bias.
From the Weekly FX Chart Outlook
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Last week I said the EURUSD range was 1.10-1.12 with 1.11 setting the trading bias.
Well, that didn’t change after a whipsaw end to the week following the US jobs report
Looking at this daily chart, it would take a break of 1.0949 to fully negate the upside risk.
Highlight: ECB decision on Thursday
US500 DAILY CHART – Retracement
As markets seem on hold waiting for tonight’s US presidential debate, equities remain a focus as a measure of the risk on/risk off mood.
Looking at this chart, despite the impressive rebound yesterday, moves to the upside are to be treated as a retracement unless 5522 is taken out.
Figuring out what is going on behind the scenes can be quite a test of will and dedication. This is one reason I like Bobby’s style who is quietly sticking with technical and really on top of Sterling. I spend hours analyzing money flow and listening to people. If you are novice or intermediate it is best you lean more toward technical attributes and do the education part over time. Right now UsdJpy has flows eyeballing 143.45 again before running into dominant sell pressure.
There is risk flow going into Japan, think Nippon Steel. Economy is not that bad.
The flows in Yen are moving in 2-3 day swaths, with the weaker side being long UsdJpy which gets nailed in stiff fasihion every time they bring it up. Long side was better before recently, it will take quite a bit to change the sell cycle overall. We could find a stalemate and more leveled off condition in a week or so.
Jay I don’t think, other than China, the rest of the major sovereigns are as unstable as people are thinking. Japan will move again soon, US inevitably, Europe is a maybe. There is still a chase for risk, the sky has not fallen, to conditions are softening but not dramatically. So in totality the swatch of varied markets is reacting more in USD as the driver but with spots of the others making adjustments. Bottom line is Usd is still selling and I don’t think it should be a surprise if Euro closes the week over Dollar.
Jay in my experience EurJpy is a better barometer as it runs very closely with Dow.. The pair is down so sticking with UsdJpy which I would wager is continued pricing in and adjustments to rates dropping .25 ahead of the curve and so if it is 25 we see a rally if it is 50 all heck breaks loose. No reason for 50. I still feel they don’t want to sabotage Harris chances and wait for December hoping for stability and strength but if Trump is in they fire the guns ahead of him taking office and cause trouble on purpose either way.
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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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