Frank – As long as the US Bank Index holds 3610 its all good. Millennial crypto fanatics all over the net are hoping it means, and are sure it will, mean the end of the US Dollar and in April when Bitcoin halves they believe it will double in price almost immediately. So they can tell mommy and daddy they are smarter than they were. So, of course I got rid of all of my US Dollars and have zero cash and only bitcoins. The problem is no one wants them when I want coffee. What to do.
My overall sense is a bit like this – US tech stocks suffered the largest outflow on record in the week ending March 8 2024. Virtual confirmation that the Fed will drop govt lending rates in June, which speaks of a moderately slowing economy and inflation cooling due to demand slowing up. Demand for labor is slowing as well. Portfolio flows are reducing risk appetite and re-allocating into money market funds, gold, and other assets, including crypto and foreign exchange, so the areas where risk appetite is strong is adjusting gradually…economy should cool a bit in spots coming up.
This is one agonizing day if you trade EURUSD – it goes nowhere , for now…so sitting and watching as the grass grows…
I remember clearly the days when we could switch from USDDEM to DEMITL and just ride it….or from USDDEM long to USDFF short , holding Long USDDEM and take advantage from both sides.
Bah….yeah, those were the days 😀
BTC – I can see 50% retracement, and an ugly one – sharp and merciless.
But the problem is there is no enough data to support anything…
Problem with BTC is that people are seeing it as a currency , but it is really a merchandise of a kind…useless in my opinion- but who am I to judge it….millions of people are buying it like there is no tomorrow…without thinking that it is a Profit game and not lifelong investment.
Plus it is an open ended game , without firm rules and real backup of it’s value.
Someone makes and will make huge profits on it, but not the small fish…
BTC Daily Chart
When Bitcoin first was created I called it a Ponzi scheme. While I have not changed my mind about cryptos I would be an idiot to trade on that view given this rocket to the moon.
BTC rose about 4% to a new record high before backing off a touch but maintaining above the former record high (blue AT line).
By contrast, EURUSD has traded a 19 pip range so far today.
For the record, I do not trade BTC and have no intention of doing so.
Knez, there is a huge difference in strategy when trading anything bellow 30 min chart.
With 30 min, I follow what’s happening on 4h and Daily, and decide on entry depending are we actually moving Up or Down.
On smaller time frames ( and I find 3min the ideal one ) I don’t care where are we moving…just follow signals that I am getting . Of course, everything is smaller – Profit but also S/L .
I do it last two decades, so I have kind of feeling for it, but wouldn’t recommend it to anyone without huge experience – it can easily drive you crazy 😀
p.s. had to add that last sentence because of other visitors .
Forex Forum Ad Hoc Glossary
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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