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XAUUSD 4 HOUR CHART – HAS THE BUBBLE BURST?
The jury is still out in XAUUSD as the bulls need to keep closes above 2300 to maintain a 2300-2400 range and a pattern where moves outside of it lack follow-through.
As I noted yesterday, bias within this range is tilted down as long as it stays below 2350.
Now it needs to hold 2291 and keep closes above 2300 or risk points lower.
There was a Global-View member. a bank trader working for Japanese bank who gave the JPY a nickname I never forgot. He called the JPY “The Devil “ The reason, as he said was because “the YEN had destroyed more trading careers” than any other currency.
Currency Intervention and Why the JPY is Called : “The Devil”
Currency Intervention and Why the JPY is Called : “The Devil”
EURGP 30 MIN – Now faces resistance
Following up on my earlier post where looming support proved too tough and now EURGBP is facing resistance at the .8561 level cited in that post. So far .8555 resistance is holding, needing to stay above .8545 to keep its bid.
Take note of the two red Amazing Trader (AT) lines highlighted, otherwise known as an AT Directional Indicator, signaling a potential shift in directional risk that played out.
EURGBP 4 HOUR CHART – MONTH END
As I noted, there are often some erratic month-end flows in EURGBP, especially around the 4 PM London fixing.
EURGBP has been under downward pressure (note blue AT lines) to start the week with key supports looming below at .8520 and the key .8484-.8502 lows (not shown on this chart).
USDJPY 1 HOUR CHART – THE DAY AFTER
With the BoJ interventions being digested and verbal threats to act at any time, 24 hurs per day, it is not a surprise to see some caution in this pair.
The BoJ, meanwhile, looks at the same technicals that we do, such as FIBO levels for 160.16-154.49
157.32=50%
157.99 = 61.8%If I was in the BoJ’s shoes I would try to keep USDJPY below 61.8% and 158
On the other side, 155 remains the pivotal level in keeping the downside contained.
EURUSD 1 HOUR CHART – STUCK IN A RANGE?
EURUSD has been stuck so far for a second day within a 1.0674-1.0753 range set last Friday with attention mainly on the JPY after BoJ interventions and verbal threats overnight.
Range so far this week 1.0686-1.0734
As I noted yesterday, it is month end, and while not an exact science the theory says if US stocks are lower on the month there is USD buying to adjust forex hedges. As I said this is not an exact science so just something to keep an eye on.
Also, month end often sees EURGBP erratic swings so watch into the 4 PM London fixing as it can impact EURUSD and GBPUSD.
Otherwise, markets seem to be on hold ahead of the FOMC decision tomorrow.
A PROFESSIONAL TRADER SHARES HIS APPROACH TO TRADING
A Professional Trader’s Strategy for the Retail Forex Trader
A Professional Trader’s Strategy for the Retail Forex Trader
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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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