It has often been said that from time to time when things are going really well, in Forex, usually when everything you trade does as you expect and that nothing goes wrong and you become overconfident, a reality check is required. I know from trading in the Forex market for over 10 years now that some traders do have huge egos. I listen to several webinars each week, like many of you probably do and the ego’s stand out like a “Pork Pie” at a Jewish wedding. On many occasions I leave the webinar early vowing never to return because the high self-opinionated views really started to grate on me.
Do I have a huge ego?
I would say no. I have turned down webinar interviews, turned down internet TV interviews. Would they help my business? Probably yes; but it’s just not me. I am really happy with my individual subscribers and my trading groups in Asia.
Do I still require reality checks from time to time? Yes... most definitely. I need to keep my feet always planted firmly on terra nova. Last week was one of those moments.
I was hit hard on pips with the change from RISK OFF back to RISK ON. I really suffered with JPY related trades. I had opportunities to cover positions fairly early on and decided to let trades run to the next resistance level to then make a decision. Then CHINA yielded on tariffs a little, a gesture to which TRUMP reciprocated... need I say more.
I took at 1,060 pip loss across 7 trades and in the week added 385 pips from positive trades, but the net result last week was a loss of 575 pips. My biggest weekly loss, since I was taken to the cleaners with JPY trades back in 2015 and the EUR/CHF peg being removed (apologies for reminding traders of the “peg”)
It’s not about how and why you fall it’s all about how you get back up again.
I am ready to get back in the saddle again and I am looking forward to the coming week, which is big on high event news.
1. FX - FORWARDS, BACKWARDS and 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:
The DAILY chart below shows a DOUBLE BOTTOM pattern in place off the lows of 1.0927. The measured move is to 1.1240. There is, however, trend line (BURGUNDY) resistance at 1.1110 that needs to be broken to get momentum moving.
It is hard to trade the EUR at the moment. We have just had an ECB Press meeting and Press Conference where Mario Draghi threw yet another kitchen sink at the EUR. The market accepted the support, and then in spectacular fashion reversed the initial downside move on the back of Draghi’s call for more government fiscal initiatives as the ECB cannot do everything by itself.
Was Draghi’s move a policy mistake?
Without doubt the economic fundamentals in the EUROZONE are poor and the RISK’s remain to the downside, but that does not mean that the EUR/USD could not rebound maybe as high as 1.1500.
The FED announces this week and are expected to cut rates which one would think should drive this pair higher.
As you can see from the attached DAILY chart from a false breakdown move (circled) we are now breaking higher above a bull channel (also circled).
There was a great deal of positive commentary towards the end of last week regarding amendments to the BREXIT Withdrawal Agreement centered around the IRISH BACKSTOP. It remains to be seen if any of these rumours are concrete or not and that will take some time to appear. However, with Boris Johnson meeting with Juncker on Monday this week, a very positive spin has been played by the UK Government on this move. Who knows?
The 200 DAY SMA is at 1.2740, technically a great target for the GBP bulls.
My thoughts are clearly seen on the DAILY chart below.
I think that the 61.8% retracement at 0.6926 offers up a good opportunity to look to enter short.
The caveat to this is of course the CHINA / U.S. trade deal. As long as both sides are “best buds” this should keep the AUD bid.
In stark difference to the AUD/USD, the NZD/USD is suffering despite the positive news vis-à-vis the U.S. / CHINA trade talks.
This has surprised me to be honest, I was fully expecting a move into the 0.6480 area. We touched the lower end of my sell zone at 0.6440 and rejected a move higher.
We are now back below 0.6400
How would I trade this pair?
I would look for a move higher possibly on the back of a U.S. / CHINA trade resolution that would allow me to sell into strength.
The divergence between the AUD and NZD can be seen clearly through the AUD/NZD cross-rate. I had an entry at 1.0650, which I cancelled last Friday, it missed triggering by about 20 pips. This pair is really moving higher and having a direct effect on the NZD.
I still hold a CORE SHORT position.
This has been a frustrating CORE POSITION to hold of late. The announcement of a Canadian Federal Election has also muddied the waters a little.
I was quite happy with the fact that the USMCA deal would soon be ratified and my thought process was that this should provide CAD strength, however will it be signed off before the Late October election date?
On the WEEKLY chart below as you can see we have a nice reversal candle. The rubber meets that road at 1.3285, the old 23% Fibonacci level which confluences with the old channel support trend line which should now act as resistance.
A messy looking chart from my perspective.
We appear to be trapped between the 14 DAY SMA at 0.9875 and the 200 DAY SMA at 0.0.9950.
I want to enter long c.0.9720... guess I have a bit of a wait unless the USD weakens after the FED this week and/or the EUR/USD RIPS higher.
I have a CORE SHORT position.
When I covered all my JPY trades last Thursday, I left my USD/JPY trade in place.
A good decision?
Time will tell but the WEEKLY chart below does look extremely bullish at the moment. The 61.8% Fibonacci retracement lies at 108.40 and I am looking for “old faithful” to put a stop to the move higher and send this pair lower once again in line with the last years trend.
Long-term, I am still bearish this pair and my targets are between 100.00 and 102.00.
2. THE WEEKLY FX PREMIUM TRADING SUMMARY:
September2019 so far: - 135 net profitable pips.
2019 year to date: + 12,861 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 find 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.
FINALLY: I have just recently launched CORE POSITION trades. These segregate my longer-term trades into a category that may appeal to part-time traders and those who cannot access to their trading screens more than two or three times a day.
This year I am now operating within my TRADE PLAN three categories of longer-term position trades: -
- CORE POSITION TRADES*
- NON-BREXIT POSITION TRADES*
- BREXIT RELATED TRADES*
*All categories have specific goals and objectives and vary on position sizes, RISK and RISK TOLERANCE.
3. WEEKLY FX PREMIUM SUBSCRIBERS ONLY:
(Content in this area is for fee-paying WEEKLY FX PREMIUM subscribers only and is only visible via a separate version of this blog)
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: #FREE NEWSLETTER
DATE: 15thSeptember 2019