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10-yr 4.504
apparently “slip” as hope (haha) for FED rate cuts increases after latest us jobs data (cnbc)
so players not heeding goolsbee’s (gentle ?) hint and so are now pricing a 25bps cut in sept and so we are now gaming relative yields (ie. spreads)
Not much of potential moving consequence this week
voter barkin and voter Williams are yakking little later today
follows Loan Officers Survey after
I am impressed with the durability of Bitcoin to sustain waves of apprehension before and after the “halving.” Enthusiasts were sure it would cause the not-yet viable instrument which is a not-yet viable asset to bolt to 100,000. Seeing how the non-instrument is the most ripe non-instrument for fraud and crime, such as terrorist money being transferred without roadblocks, one might expect the next major case of fraud similar to the FTX matter to cause some strong decline into the 30,000 area. Would like to see that as I would put money into it again down there if so. At this point it appears the 50,000 area might hold for a while.
a show: dog stepping on the tail – and the meaning ….. https://www.axios.com/2024/05/05/israel-us-ammunition-shipment-hold – maybe
–
maybe last Friday’s goolsbee interview was meaningful to peasant traders.
with reference to the jobs print and player ethusiastic reaction:
… one thing is daytrader timetable reaction but the FED marches to economic timetable …
—
as if pre-planned … two FED suits on yak deck on FED’s policy
A look at the day ahead in U.S. and global markets from Dhara Ranasinghe.
The relief across world markets as signs of a softening in the U.S. jobs markets strengthens the case for Federal Reserve rate cuts to start later this year remains palpable.
Not only did U.S. 10-year Treasury yields end Friday down 17 basis points , in their biggest weekly drop of the year, but the S&P 500 stock index had its best day in over two months.
GBUSD 15 minute CHART – Better bid but consolidating
GBPUSD is a bit of an outperformer so far today (note firmer GBPJPY_ but consolidating with the UK closed today for a holiday/.
As this chart shows, there are layers of support ahead of the pivotal 1.25 level with key resistance above 1.26 (Friday’s high).
This suggests little to go for within a 1.25-1.26 range other than intra-day levels as show on this chart.
EURUSD 4 HOUR CHART – CONSOLIDATING
EURUSD has so far traded in a tight range as it consolidates below Friday’s 1.0812 post-USjobs report high.
A key level to keeping a bid is to stay above the 1.0752 mini breakout level (Power of “50”) with support at 1.0724 below it.
On the upside, the key level is obvious at 1.0812 as only above it would add legs to the upside.
USDJPY 4 HOUR CHART- Is BoJ lurking?
When you see 2 currencies moving in opposite directions vs the dollar you can assume there are real market flows in a cross.
This is the case so far on Monday with USDJPY moving higher and currencies like the EUR, GBP, AUD, etc up (marginally so far) vs the USD.
Given what happened last time Japan was closed for a holiday (i.e. intervention) expect some caution pushing USDJPY higher but if I were in the BoJ’s shoes I would not want to become predictable.
Looking at this chart, the key level is not until above 156 and BoJ will likely want to see USDJPY stay below 155, suggesting 152-155 is sort of a no man;’s land for trading.
THIS WEEK’S MARKET-MOVING EVENTS (all days local)
Both the Reserve Bank of Australia on Tuesday and the Bank of England on Thursday are expected to keep policy steady. Inflation in both countries remains above target with improvement slow especially in Australia.
China’s merchandise trade surplus on Thursday is expected to show a sharp jump on an April rebound in exports. Chinese CPI for April on Saturday is expected to remain near zero.
Underperformance is the call for German manufacturing orders on Tuesday and German industrial production on Wednesday.
The UK will post the first estimate for first-quarter GDP on Friday and modest growth is the consensus. Canada’s labour force survey on Friday is seen rebounding modestly in April following disappointment in March.
Econoday
Bobby – very, very nice touch indeed. And exactly (although he was doing very well) a Co-Chairman of the now closed Pacific Stock Exchange told me over lunch one day in San Francisco after we walked through the exchange for a while told me he was moving to Mexico to grow the plants and produce tequila lol. Yes, different times. Most of the same principles apply as you point out.
I felt urge to concur with our California colleagues from Monedge , regarding possible Longs in USDJPY above 155…
Back in days when I was trading OPM ( Other people’s money J , the sheer sizes of the positions held didn’t let me play on small time frames, paired with spread at the time and clients expectations , not to mention that every stop loss could have been yet another signal for a client or two to withdraw their funds…
Executing a stop was like inviting the Devil to take your soul…
We have used hedging as a first aid , but again – different times…we had all different European currencies that were pretty much pegged to each other , so USD could have been bought and sold at the same time, with the same margin , and you could even make money just sitting hedged…
HOW you’re asking…well, interest rate differentials…Long USDCHF, Short USD FF – in both cases you were earning interest….there have been some even more drastic examples , but not really hedging…
I remember when a client of mine didn’t want his profits to be calculated any other way but in USD – Dollar was rallying up like crazy…so those of you who are or were on that side of the game surely understand the problem – for those of you who have no idea what am I talking about – If your Home currency is the one that is appreciating the most, all the profits that are going to be made will lose some ( at least in percentages) till year’s end….Got it ??
So in one moment of genius ( or maybe that was just a desperation on my end) , after deep research and some help from a friend ( few of them to be exact – all on the dealing desk of SA Central Bank ) I went Short USDZAR – interest rate differential was about 16% in my favour .
It was one extremely risky move on my part, but within next 4 months paid me truckloads – 8% on Traded amount , plus about 15% of ZAR appreciation vs USD….Mind you, Leverage was not nearly as high as today and we could go as much as 1:10 . But in this devilish trade I made around 215% on funds held. Call me a lunatic, but that’s how the game was played back then…eat or be eaten..
Have to admit that it was kind of easier to trade then, with pretty clear positions of Central Banks and Gov’s in general, not to mention that we had Alan Greenspan 😀
So you got the hint of my experience – and I am going to tell you what No sane advisor, analyst, influencer or a Guru won’t:
When caught with your pants down, but still breathing a bit, use every and any move in your direction to exit the doomed position. Book the loss. And never turn back again. If market decides to go your direction further, well hell…it is not on you – it is on that guy who entered the original trade in the beginning…But that is the only way to survive for sure , to be able to fight another day…
Or just let it be, kiss your margin good buy and start doing something else…like tomato growing plantation…
Monday Economic Data Calendar – UK Bank Holiday
I see (hopefully) one more round of USD buying which I expect will run out of steam around or above UsdChf 9100 where I like the sell side for duration. Same with UsdJpy in kind.
Note to those of us who have limited experience in forex trading — Macd and Stochastics will remove you of your money. You are better off listening to people in here with experience.
And for the love of God if you think some youtube or facebook “guru” is going to make you money with “signals” on your cell phone you are in for a rude awakening. Monedge, for example, was formed by CTA’s and other industry professionals, GVI is frequented by real bank traders with real experience. Big, big difference.
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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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