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I POSTED THIS IN OUR BLOG YESTERDAY AND IT TURNED OUT TO BE A TIMELY ARTICLE.
LOOKING ACROSS CURRENCIES AND OTHER MARKETS TODAY SOME WILL CALL IT A CORRECTION DAY.
i CALL IT A LIQUIDATING MARKET DAY, ONE THAT NEEDS TO BE TRADED DIFFERENTLY AS YOU WILL SEE IN THE ARTICLE.
BTC 4 HOUR CHART – HAS THE AIR COME OUT OF THE BALLO0N?
As I pointed out previously, BTC was not seeing safe-haven flows despite the current geopolitical situation.
This may have been a clue that the air was coming out but looking at this chart the blue AT lines dominating showed a risk on the downside.
What amazes me about BTC is that is when a technical level or pattern holds in something that can move 7% on a Saturday.
With that said, the move below 60000 came close to a key level (see chart) which if broken would leave a void until around 50000.
This shows the importance of 60000 as a pivotal level and the key support line below it.
Balance for EurChf has adjusted to flat now so sell waves should be expected to be under normal until Israel hits. UsdChf could hold here temporarily at 9100 which could give EurChf enough to hold. Risk aversion is growing and so Chf itself is only a matter of time for hard downside moves once Israel hits in my view. This includes options.
IMF WORLD ECONOMIC OUTLOOK
STEADY BUT SLOW: RESILIENCE AMID DIVERGENCE
APRIL 2024
… “the global view can mask stark divergence across countries. The exceptional recent performance of the United States is certainly impressive and a major driver of global growth, but it reflects strong demand factors as well, including a fiscal stance that is out of line with long-term fiscal sustainability (see April 2024 Fiscal Monitor). This raises short-term risks to the disinflation process, as well as longer-term fiscal and financial stability risks for the global economy since it risks pushing up global funding costs. Something will have to give.” …
what and when could that be ?
EURUSD 4 HOUR CHART – TRYING TO CORRECT BUT…
Looking at this chart the key level on the upside is clear at 1.0665.
Often, when in a sharp trend, there needs to be a squeeze on weak positions to run some stops )e.g. above 1.0665) before setting a fresh run at a new low or high.
This is the setup after an invisible hand held its finger in the dyke at 1.06.
Whether it materializes or not is still up in the air so just pointing out a risk.
Otherwise, the trend is still your friend.
Margin impact on the EurChf shorts is minimal so almost surely the right side. Israel could wait for the weekend in a behind the scenes handshake deal with UK, France, US, Canada to not disturb markets and allow time for assessment before Monday but they will strike when the tactical advantage is determined. Not today likely.
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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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