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Part of what is keeping Dx buoyed is apprehension in stocks ahead of the FED. The conviction is lukewarm in dollar though, hence a bit of two-way motion including other markets-wide components. It is important to remember a lot of pricing in has already transpired but there are also ongoing global transactions taking place in import/export and the like so this is fluid.
Wsj’s timiraos is trying a last pro – kick at 50 pt cut in this morn’s edition claiming that 50 bps is not reserved for “severe” condition
only at 2pm will we be able to see the strenght of his “whispering”
with market significantly pricing odds of 50 pointer, I got me some popcorn to see if the FED plies to these plaeyrs
Worth noting USDJPY touched 142 but went no farther (last 141.72)
GBP getting some flows after inflation data… EURGBP extending its low (last .8409)
Otherwise it is a wait and see until Fed time, USD is a touch softer
Bond yields a touch higher
Stocks holding up
But a new ball game after the Fed decision
Until then, market bets are still for a 50bps rate cut, not sure if it is based on hope, prayer or a stronger conviction.
FOMC
Besides the size of the rate cut and accompanying statement, keep an eye on the dot plot.
What is the dot plot?
The Federal Reserve’s (Fed) dot plot is a chart that shows the projections of the Federal Open Market Committee (FOMC) members for the federal funds rate. The dot plot is published quarterly, and is a tool used to help the public understand the Fed’s thinking on interest rates and the economy.(AI Overview)
A look at the day ahead in U.S. and global markets from Mike Dolan
There’s little left to say about the dominant event of the day – other than how to game markets’ reaction to the size of the Federal Reserve’s interest rate cut later and what Fed policymakers project over the horizon.
Few, if any, doubt the first Fed easing of the cycle is now at hand. Wall Street’s S&P500 (.SPX), opens new tab hit a new intra-day record on Tuesday ahead of the decision – lapping up the prospect of lower borrowing costs even as the economy picks up some steam. Stock futures held firm overnight into the big decision.
Morning Bid: Flirting with records as Fed rates finally fade
USDJPY 4 HOUR CHART – WAITING FOR THE FOMC
Whatever “real money” flow that drove USDJPY higher yesterday seems to have run its course for now after a stall below 142.50.
This leaves the focus on the pivotal 142 level as the current bias setter in a market that is on hold now waiting for the FOMC decision.
Intra-day range so far 141.22-142.46 (124 pips) vs an 18 pip range for the EURUSD
As we wait for the Fed to make its widely anticipated interest rate decision, this is one that could go either way. The debate is not whether the Fed will cut rates but by how much.
As any trader knows, it is the reaction to news (e.g. economic reports, monetary policy decisions0 that counts. This is where the saying Buy the rumor, sell the fact comes from. It also reminds me of the old trading adage, It is the reaction to news, more than the news itself that matters.
Nasdaq – NDX
Nasdaq composite: Once again, it’s make-or-break for breadth
Dow futures up slightly, S&P 500 slip, Nasdaq 100 off ~0.5%
Sep NY Fed Manufacturing index 11.5 vs -4.75 estimate
Euro STOXX 600 index off ~0.1%
Dollar down; bitcoin off ~2; gold edges up; crude up >1%
U.S. 10-Year Treasury yield ~flat at ~3.66%
NASDAQ COMPOSITE: ONCE AGAIN, IT’S MAKE-OR-BREAK FOR BREADTH The Nasdaq composite IXIC is still down more than 5% from its record highs. That said, the tech-laden index is on a five day win streak, and just posted its biggest weekly rise since early-November 2023.
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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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