“A bad trade is a bad trade. You shouldn’t need a large loss to prove it.” – Steve Beaumont
Hello:
The goal in trading should be in sustaining as little loss as possible, while trying to gain as much as possible (your broker will hate you for this). It means we shouldn’t pretend that trading strategies are the key while risk management is. Of course, like many professionals in other walks of life, professional traders’ often fail in their attempts. But their success rate is generally much higher than that of their novice competitors. This is the central truth: Adequate knowledge and application of risk control keeps your account permanently safe.
Here, you’ll notice that AUDNZD and GBPCHF have replaced EURAUD and AUDJPY. Below is the summary of some of my trading activities this week.
AUDUSD
Primary Trend: Bearish
After a sharp sell-off, this pair has been in a ranging mode for most of this week. There’s a support at 1.0180, from which the price has been attempting to go up. If this support is to hold, some bullish dominance would be expected.
NZDUSD
Primary trend: Bearish
The price level at 0.8120 has been interesting because it has acted as a good support, which would be more justified with the time. Having patience in these choppy markets where returns are hard to find is the toughest game that traders play.
AUDNZD
Primary trend: Bullish
The Aussie is currently trying to show it’s stronger than the Kiwi, whereas there was a bearish move this week. Although long-term trend changes few times a year, they’re ignored only at a trader’s peril.
EURCAD
Primary trend: Bearish
Last week, I said that the bullish outlook was seriously violated on this cross. Yes, the bulls were rendered powerless – the price fell by over 600 pips before finding a good support at 1.3460. There’s been a minor rally since then.
EURNZD
Primary trend: Bearish
The price on this cross is above the SMA 50, but below the SMA 200. The ADX 20 is moving along the level 30. +DI has moved above –DI, indicating some new buying pressure. One way of speculating could be buying at a demand zone.
GBPCHF
Primary trend: Bullish
The bears’ power has been rendered conspicuously invalid. It looks dangerous to hold a long-term short position on this instrument right now. This is also true of other CHF pairs. Correlation between instruments becomes much stronger during periods of large-standard deviation moves (when potentially diversification/non-correlation would be required most).
Conclusion: The foregoing analyses, of course, are swing trades and they’re something a trader would be expected to hold for many days if not weeks as long as the trade is going their way. Some people can’t handle this pressure of ‘sitting on a trade’ but it’s a habit that’s important to develop. The best thing a trader can do many times is nothing. Just sit on your hands.
I’d like to conclude this article with the quotes below:
“...and remember, trading is a 100% mental game. If you don't have mental and emotional tools in your tool box, it's like hammering a nail with your fist; it's not only painful, but causes lots of damage.” – Dr. Woody Johnson
“Regretting missed profits is one of the most powerful psychological forces at work to make you change your trading plan. Armed with the knowledge that his system has a decent exit efficiency, however, a trader can maintain the willpower and discipline to stick to good trading rules in the future.” – Ken Long
Your questions and opinions are highly welcome.
Thank you.
With best regards,
Azeez Mustapha
Forex Signals Strategist, Funds Manager &Coach
Senior Analyst
FX Instructor, LLC
Email: amustapha@fxinstructor.com
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