GBPUSD 15 MINUTE CHART – TRADING LESSON
You have seen me talk about the influence of cross on spot trading and this is how I look at it using EURGBP to illustrate:.
– When you see a straight line move down as in this chart (I look at the 15 min chart), it suggests there is a real money flow (order) driving, in this case, EURGBP lower.
– So you know GBPUSD is being bought and EURUSD is being sold.
= During this straight-line move, given the current trend, GBPUSD will be supported.
– Once EURGBP finds support, either GBPUSD will lose its strong bid or EURUSD will play catch-up.
– In this case, GBPUSD has lost its bid and slipped once the EURGBP bounced off its low.
If you ever played the game “Hot Potato” you can go with the flow until the music stops (i.e. order is filled)
A look at the day ahead in U.S. and global markets from Mike Dolan
Markets seem to have got bored waiting for today’s big U.S. inflation print and stocks zoomed to new records in advance, taking slivers of comfort from Tuesday’s producer price readout and a relatively relaxed Federal Reserve chairman.
gaaawd … wsj f/page :
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Inflation to Give Investors Latest Clues on Fed Path
Consumer-price index data is set to land after Fed Chair Jerome Powell said he still expected inflation to head lower, but was less confident than he had been on the outlook.
Powell Maintains Wait-and-See Posture
How Rising Gas Prices Complicate the Fed’s Inflation Strategy
Given how EURGBP is influencing EURUSD and GBPUSD, it seems like a good time to revisit this insightful article.
How You Can Use Currency Crosses to Trade Spot Forex
EURGBP 4 HOUR CHART – BACK BELOW .8600
If you trade EURIUSD and/or GBPUSD you need to keep an eye on EURGBP, which is trading lower today.
This, in turn, is helping to give GBPUSD a bid and so far keeping a lid on EURUSD.
Given the trends, the market is having more trouble absorbing the GBPUSD buy side.
EURUSD DAILY CHART – WATCHING A KEY TRENDLINE
EURUSD: technicals pointing up but so far just nicking its key daily trendline at 1.0831 without a clean break as it lags as it trades softer on various crosses (e.g. EURJPY, EURGBP). A firm break would expose 1.0884 as the next target.
Time now to roll the dice as US data is the next key focus.
USDX DAILY CHART – USD UNDER ATTACK
I am taking a look at a USDX chart as the USD is down vs. all major currencies as the JPY has joined in as it follows the drop in US bond yields.
As I have noted, with the EURO 57.6% of the index, I look at USDX as a proxy for the currency.
To confirm what I am seeing in the EURUSD, a break of 104.61 would be needed.
USDJPY 4 HOUR CHART – FOLLOWING US YIELDS LOWER
USDJPY correlating with a further fall in US yields to break the first support of 145.97-155.49-155.14 posted late yesterday
From a technical perspective, the pause below the 61.8% level at 156.98 makes this rebound from 151.85 a retracement that now has a third lower high at 156.74.
On the downside, 155.49 is a key support blocking 155.00-14
US data later on is clearly the next focus.
Forex Forum Ad Hoc Glossary
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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