USDCAD 4 HOUR CHART – PRE-BOC JITTERS
As posted in our FX Weekly Chart Outlook
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‘Look for the focus to be on the BoC meeting on Wednesday where a rate cut is widely expected.
In the meantime, 1.35 is one of those pivotal levels that would need to be solidly renewed along with a break of 1.3515 to suggest the bottom is in for now.
Given the absence of nearby resistance after the straight line move down, use our FIBO calculator for retracements to find levels of potential resistance beyond 1.35..
US ISM MANUFACTURING CHART
(Click on any item in our Economic Calendar to see a chart for that item)
USDX DAILY CHART – SOME WAYS TO GO
Looking at a USDX chart shows it would have a ways to go before testing key resistance levels (103.20-55)
Using the index as a EURUSD proxy (57.6% of the index), you can see how its bounce coincided with the EURUSD retreat.
Scroll down this page to see key EURUSD levels.
For today, one focus is on how markets react to the US ISM data,
USDJPY 4 HOUR CHART – TYPICAL FALSE START?
As I noted in the Weekly FX Chart Outlook
Note the start of a new quarter and post-summer often sees false starts and whipsaws until market settle on a theme and recover full liquidity.
Well, there was one already in USDJPY after it failed to reach 147.34 (high 14t.20) as has since back off.
Catalyst: Weaker equities (risk off)
This ;leaves 145 as the ultimate bias setter in a market that will keep an eye as to whether this correlation continues.
TUE: Swiss CPI (Aug), Swiss GDP (Q2), Turkish CPI (Aug), US ISM Manufacturing PMI (Aug), Final Manufacturing PMI (Aug)
How markets react to data this week will give a clue as to whether the dollar can regain its legs and/or stocks can extend the end of august rally.
How these markets end the week will be more important than how they start it.
Here are the key events and detailed previews:
Summary
Swiss franc more appealing in carry trades after yen blow-up
Investors hope for stability, aided by central bank
Yet safe-haven status can lead to big rallies
LONDON, Sept 2 (Reuters) – As investors turn to the Swiss franc as an alternative to Japan’s yen to fund carry trades, the risk of the currency staging one of its rapid rallies remains ever present.
Swiss franc carry trade comes fraught with safe-haven rally risk
EURUSD 4 HOUR CHART – 1.1050 Sets the tone
On this chart 1.1030 is a key support, 1.1095 a key resistance.
Here is the EURUSD update in our Weekly FX Chart Outlook
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Assuming the high is in at 1,12, what is the risk on the downside?
Start out by using 1.10-1.12 as a range to the post summer market with 1.11 as the neutral mid-point and the ultimate bias setter for this currency.
Currently, 1.1050 will set the tone if trading between 1.10-1.11 but expect a limited upside unless 1.11+ is renewed
US ELECTION AS TRADING THEME
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When can one expect markets to start to trade on odds of next w/house inhabitant ?
Don’t Look Now, but Trump’s Back to Being the Favorite – NATHAN SILVER
THIS WEEK’S MARKET-MOVING EVENTS (all days local)
The Bank of Canada on Wednesday is expected to cut its policy rate by 25 basis points for a third meeting in a row, this despite better-than-expected second-quarter growth of 2.1 percent. The US employment report on Friday is the other big event, expected to rebound 160,000 for nonfarm payroll growth following July’s disappointing 114,000 gain.
Other data will include Swiss consumer prices and GDP on Tuesday, both expected to remain unchanged at 1.3 percent year-over-year and 0.5 percent quarter-over-quarter, respectively. German manufacturing orders on Wednesday are expected to fall back in July after jumping higher in June with German industrial production on Friday likewise expected to fall back after rising in June.
Econoday
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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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