After a lot of moving and shaking it looks like BREXIT is going down to the wire.
Last week’s trade action was as instantly forgettable as the previous 2/3 weeks and frankly having always been able to find something to write about in this blog, of late subject matter has been as elusive as an Everton FC victory in the English Premier League.
In the coming couple of weeks, I suspect it will be looking a bit like turkey’s voting for Christmas regarding those in the House of Commons vis-à-vis the way certain fractions on both sides of the house will end up voting, if only, to stop another splinter group with an opposing view getting in through the back door, so to speak. It is a right mess. I am still very heavily involved with my BREXIT related trades.
At the time of posting this blog I have 11 x live BREXIT trades and 16 limit orders stacked ready to trigger. My TRADE PLAN approach to BREXIT so far has generated well over 7,500 pips in 2018 and this year so far.... Happy Days.
In a complete move away from talking about BREXIT, TRUMP, CENTRAL BANKS or the EUROZONE, I thought this week I would write about my initial thoughts on adjusting from a SWING to POSITION trader.
MY INITIAL THOUGHTS
ADJUSTING TO LONGER-TERM TRADING
Having now made the transition from basically a “jack of all trades” except short-term, trader into a POSITION trader with a longer-term perspective on trades, I have found myself not as tied to my screens, which, has allowed for more research, analysis and increased media time. This could, if I am not careful, lead to procrastination in trades and I think that I was guilty of such a thing last month vis-à-vis the USD/NOK. I removed a profitable trade and hesitated adding back; the rest is history as they say as I watched a further 250-300 pips drift away that I could have taken advantage of.
Trading longer-term however, procrastination doubts to one side, does give an increased clarity to trades.
It is hard to quantify at times, but I think that it can be best summed up as follows;
- When trading shorter time frames your entry level is the b-all and end-all of what can make a good trade become an outstanding trade.Because one is trading in tighter ranges the profit opportunity is less and therefore the need to get the entry more precise has greater importance.
- Trading over an extended time horizon. I am starting to realise that 15-25 pips too early or too late is neither here nor there as long as the overall direction is correct as I will generate pips and bank $$$.This has to be the actual goal of trading when its broken down into basics.
I prided myself on good Fibonacci levels, chart patterns, pivot points basically all the requirements of high probability trades, great to have in my back pocket and still used but not really a pre-requisite to POSITION trading success.
I have heard many traders argue you can trade FUNDAMENTALLY and always have trading success as long as your stops are really wide. I agree with this, however, combine FUNDAMENTAL thoughts with some SWING TRADER traits and bingo, you have a recipe for potential success.
Pre 2019, I used the ATR (Average True Range) to help give me additional perspective on stop placement for trades that I looked at as potential longer-term SWING to POSITION in outlook.
My goal with my 2019 POSITION trades is to use the Monthly ATR as part of my toolkit along with Fibonacci to set stop limits to trades. I used the future tense in the last sentence, as so far in 2019, I am yet to place what I call a true POSITION trade that in my mind is one that will stretch across a couple of months.
So far this year, I have been caught in the range bound FX market that frankly has me bored. Were it not for the BREXIT related trades, I would be really struggling to get going generating pips towards my 10,000 net target.
As it is not yet at the end of February and I have over 3,500 net pips banked for 2019 I cannot complain, but I am not yet doing what I thought I would be doing. As I mentioned to subscribers last week on twitter, you have to play with the hand that you are dealt and move on.
So, am I adjusting to longer-term trading?
I know what I should be doing, I am just not doing it yet, so the jury is out on trading statistics.
From my TRADE PLAN disciplines, I am spot on.
- I have my existing BREXIT trades related TRADE PLAN, working perfectly.
- My POSITION trades TRADE PLAN is there and ready to go. At the moment I am still trading a pseudo SWING TRADE set up.
I still performance measure myself and I know that BREXIT trades will be around for at least another two years and whilst my trading approach to BREXIT may alter as time moves forward, there will always be two TRADE PLANS in one for the foreseeable future.
1. FX - FORWARDS, BACKWARDS & SIDEWAYS:
1.1. THIS WEEK’S ECONOMIC DATA:
NOTE: Only the items that interest me are listed here.
1.2. BIAS CHART - USD MAJORS SUPPORT and RESISTANCE:
1.3. USD INDEX (DXY) OVERVIEW – MY THOUGHTS:
The Daily DXY chart is below and my thoughts, ideas and comments regarding the DXY are contained on the chart.
1.4. USD MAJORS - TRADING CHARTS and MY THOUGHTS:
Just when I think that I have this pair sussed out... it goes into the range, not that it has actually broke free of 1.1250 to 1.1360.
Moving forward, nothing new in what I can write here, the EUR/USD is the most liquid in the FX market and as such it remains range bound so in real terms most of the FX market remains in tight ranges. Until this pair breaks out, my thoughts are its break out move will be lower, despite a descending wedge now seen on the attached chart, we are held hostage.
The weekly GAP FILL of 1.0780 shines like a beacon to me and when I look at the EUROZONE economic data, I just cannot see any good news for the single currency moving forward.
However, only huge USD weakness coming through the market can change my FUNDAMENTAL view that this pair will be heading lower.
From a trade perspective, I therefore want to be short. I have tried once so far and was stopped out on a spike higher above my stop. My aim now is to sell a rip higher. The question is at what level?
In my opinion, there is not a lot to do here with this pair pre-BREXIT.
Theresa May is heading into a week where, yet another vote takes place in the House of Commons, this time it was set to allegedly take place upon amendments and guarantees she had secured to the “IRISH BACKSTOP” segment of the BREXIT deal on the table so far.
From what I have read bugger all has been achieved in Brussels and therefore she faces a further test. The word on the street is that the Commons will have a motion in place to extend A50 and remove the possibility of a CRASH OUT BREXIT.
In my opinion this action, if it happens should be GBP positive. Anything that creates a softer BREXIT will be GBP positive.
As you can see from the attached chart, we are in a down sloping channel and trading well inside a sideways range.
I am short this pair.
A very strange week for the AUD currency. In the space of 5 minutes great job numbers spiked the AUD/USD to 0.7200. Within two or three minutes of the data release Westpac announced that it sees two RBA rate cuts later in 2019 and the pair dropped like a stone. It then stabilizes and an hour or so later low nose-dives again on the back of reports that CHINA is stopping AUD coal imports into one of its sea ports.
Next, it bounces on potential news of a positive outcome from the talks currently being had vis-à-vis the CHINA / U.S. trade deal.
This is a roller coaster trade, but I do want to remain short. I see the only winner from the trade talks being the U.S. and this will in my opinion be at a cost to Australia.
I am ready to add to my short position should the opportunity arise.
I am short this pair and I am holding. I am also prepared to add to my short position.
I am in the court that believes that the RBNZ are in denial. The recent monetary policy statement from the RBNZ just does NOT sit well with me. Not wanting to sound stubborn in a trade strategy but I see this pair potentially much lower.
The CHINA trade deal fallout will also affect this NZD currency.
The NZD economic data is also very mixed at the moment hence I could not comprehend the stance of the RBNZ.
We are still in a trading range as shown on the weekly chart below. Whilst I am not overly concerned at the moment as I do believe ultimately this year the NZD fair value especially with the USD is nearer 0.6000 than 0.7000. It is just a frustrating pair once again in 2019 as it was for most of 2018.
I do not know what to do with this pair at the moment.
I am still sidelined. We are not too far from a sell zone as indicated on the chart below, just not sure how to approach the CAD.
This is usually the time that this currency has a huge move in my longer-term direction, which is lower towards 1.2800. I have to admit a short around 1.3360 – 1.3450 does appeal, although climbing to those levels could be difficult based on the current price action.
I have a limit order in place to enter long this pair. Whether I get the level I want to enter long remains the $64,000 question.
I will continue to wait until my entry level comes into view and I still believe this pair will be back towards 1.0500 by the year end.
My thoughts longer term are that this pair will be closer to 105.00 at the end of 2019. In my eyes this pair offers a great opportunity I just want to achieve the best price to stick with it as it moves lower.
I am now looking around 110.90 the 61.8% Fibonacci retracement as seen on the chart below.
2. THE WEEKLY FX PREMIUM TRADING SUMMARY:
February 2019 so far: +1,310 net profitable pips.
2019 year to date: +3,555 net profitable pips.
The WEEKLY FX PREMIUM is my subscribed based FX support option, which offers, subscribers’ full access to my suggested trade set-ups and my market commentaries.
If you go to my website you will see more information about the WEEKLY FX PREMIUM, including the “SUBSCRIBE” tab at the top of my welcome page.
My website www.weeklyfxdrivethru.comhas full details of my trade projection for 2019 along with reasons why you should consider joining my other subscribers at the WEEKLY FX PREMIUM. You will this information under the “History and Performance “tab
Plus, my website also contains full details of the subscription options available. You will find this under the “Subscriptions” tab.
3. WEEKLY FX PREMIUM SUBSCRIBERS ONLY:
4. THE FINAL SHOT:
Nothing more to add here, I have said enough except,
Always remember longevity in Forex trading can only be achieved through trading with good RISK and MONEY MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility.
The Pip Accumulator
BLOG VERSION: #314 FREE NEWSLETTER
DATE: 24th February 2019