Steve Teunis

Author Archives: Steve Teunis

How to take your trade entry at First stab

Do you take your trade at 1st stab or do you rather wait for confirmation?

First stab will give you the best opportunity to manage and remove risk out of the position much sooner compared to waiting on confirmation.

To be successful with first stab entry, you will need a comprehensive understanding of price and the market.

First stab explained

It is important that we understand the meaning of first stab.

First thing to keep in mind is, we are never chasing price, we are always waiting on price to come to us.

In the Mastering Course we explain this very clearly, this concept alone can be difficult for traders to adopt. In order to take a trade at first stab we must:

  • Buy into the face of a bear candle
  • Sell into the face if a bull candle

We are not interested in the type of the candle or its name but we are interested in is price delivery thus how price arrives to our entry level.

Discover your key level

A First stab entry needs to be supported by a key level and as price comes into the level you take the trade on the first hit. This is by nature not what we do as humans. Most times in life we desire confirmation before committing to a situation. This also plays out in trading and it is something that most traders need to adjust to before becoming successful at trading.

Considerations when taking First stab

Nothing in trading is as simple as just an idea. All things need to be considered and trying to get everything to line up is near impossible.

Some of the factors that you should consider regardless if you are taking a trade at first stab or waiting for confirmation.

       1 – Time of day

       2 – Liquidity

       3 – News events

      4 – Price delivery. How price arrives to your entry

      5 – Price patterns (These are not traditional patterns but price liquidity patterns)

      6 – Key level

      7 – Definition at the key level (strong or weak)

      8 – Support – Resistance

Discomfort will create comfort

There are ways to become comfortable trading first stab, we discuss these methods within the Mastering course. Over time you will turn the discomfort of trading first stab into a comfort.

It is realizing that you have a much greater chance of survival by waiting for price to come to you and take it on first stab.

A metaphor for this is if you watch a documentary on an animal that stalks its prey.

The stalker will wait and wait until the prey is near enough before pouncing. This process increases the chance of a win for the stalker as well it saves energy.

In trading if you are chasing the price or waiting for confirmation, it will become mentally taxing.

The video included is from the Mastering Course. 1st stab Entry part – 1

https://eurusd-fxtrader.com/course/1st-stab-entry-part-1/

Happy trading,

Steve T.

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How to Break The Losing Cycle

Why Most Traders Fail

Let’s define what failure is in trading terms. There really is only one event that signals failure and that is when the trader has detached themselves from self-discipline and the result is to blow up your trading account.

Most traders know having a string of losing trades is not a failure. It might be because of poor trade selection and over trading, but these are often signals for you to be aware of to adjust your approach.

Profits need to be added to your account gradually. Losers taken in the same way, gradual. Either way, it should not have any huge impact on your trading account or your trading psychology.

For most, there is the need for more. We all want more money, more things, more stuff, more time, etc. Traders want more gains. With the gains comes more exposure. The exposure then eats away at your trading psychology and your self-discipline becomes fractured.

The fractured mind is now struggling to see the reality and the process that is needed for disciplined trading success.

The Big Fail

What I am about to tell you is something that is the number one reason for retail traders failing. It is not because of anything else but this.

We need to talk about what is going on in the trader’s mind that causes this number one failure.

Traders fail because of one big trade. It is the one trade that they believe will reverse and take them back to break-even or a tiny loss. The same trade gets added to or better known as “averaged down”.

The initial trade in your mind would always be a winner. You never gave it a thought it could be a loser. This trade is worthwhile investing in due to various supportive reasons. As the trade moves against your original entry, you pin point another level to enter the trade. This now gives you an improved average entry.

At this stage, any money management rules have been broken, but you have quickly justified the position. Reality is, your judgement is clouded and very biased.

As the trade continues to work against you, your stress and frustration levels build as you identify another trade entry to average the entry level. Price only needs to pull back 50 pips to get you out of jail.

Your rotten luck continues and price has moved several hundred pips away from your original entry point and a margin call is nearing. You are in no state of mind to make any sound trading decisions. I liken this to a person who has had way too much alcohol before driving a car.

Getting out of this hole will take time, money and patience, these are the very things you are short of.

The outcome of the big fail normally leads to a trading account that has been smashed to pieces. Let’s look at why this happens.

Why it happens

Below is a list of reasons. Most traders will have most of these issues and thus the big fail.

  • A need to be right

In life most people do not except that they are wrong. They find ways to justify their position and prefer to blame people or circumstances rather than taking full responsibility for their situation.

This will play out in your trading even though you are not aware that this is happening. A need to be right makes us humans feel better about ourselves. Stripping back to self-reflection is not one of our better human traits.

  • Greed

I have mentioned in other blogs the need for more. Trading offers a great opportunity for more. It is the very thing that makes traders break money management rules.

Profits for most traders grow very slow but blow up their account in a brief moment.

The patients to build a trading account in a methodical manner is difficult for most. Once the greed function takes over, leverage is abused and the account is demolished.

  • A polluted mind

When you are in a situation that is not considered “normal” your body functions in a different state. If you have ever been in a road accident, physical fight or put out of your comfort zone, your brain will start to starve from oxygen. The result is that you do not think and respond to the situation that is best for your outcome. You become a different person. Fight or flight takes over.

When you have strayed away from self-discipline, your mind and physical state change. You now can no longer see clear, think rational and make trading decisions that will support you in a positive state.

Instead you look for the short term, quick turn-around home run solutions.

  • Letting go

To trade, you need to let go of outcome. As traders, we are looking for a high odds trading opportunity. There is no certainty of the outcome.

Day to day we try to control many of our daily events. The time we eat, go to bed, how we communicate situations, etc. We are conditioned to control, and the result is that we cannot let go.

Death for most is scary and we fight death. Perhaps this is because we have no control over when, where and how we die so we fight it our entire lives. What if we were to “let go” and allow nature to play out of its natural course, perhaps then we would have little fear of death and view it as a cycle of nature as one person makes way for the other?

Traders do not want to let go of outcome, They want to somehow influence and control the event. This is done by averaging into the trade with a do or die attitude.

  • Do not take it personally.

We view that our trade outcome (win or lose) reflects our own existence or who we are. By doing this,this we now apply this thinking upon our trades. If the trade is a winner, we are personally winners and if we lose; we are personally losers. We think the trade reflects who we are. It should not.

The trade is only a transaction with a chance of winning or losing. It is nothing more than this.

Because of us taking things in life personally, we take the losing trade personally as a negative of our being.

Many people say they do not take things personally. It is very difficult not to do so. Start thinking about how much we take personally. Every day we react to various situations because we take things personally.

Our trades are a simple financial transaction with a win-or-lose outcome. There is nothing personal.

We need to manage the trade with discipline and a focused approach, let the outcome be what it will be.

The book The four agreements’ has many helpful hints for traders.

  • We assume we know what will happen next.

The cycle continues. By using the need to be right, greed, polluted minds, unable to let go and taking things personally, we now assume that we know what will happen next.

By thinking this our mind is biased towards an outcome. It is an outcome we cannot control or even influence but yet we assume we know where price is heading and how it will respond.

By assuming what will happen next makes us feel good when the event is proven correct. This very endorphin release is a drug. This drug impedes us trading with the focus on execution, and instead we look at outcome.

Consider how often we make daily assumptions and how many of those assumptions can be wrong. How can we think that making assumptions upon the financial markets can be positive to our trading.

The Real Work

Trading will push you and shove you from one end of your mind to the other. You must be mentally stable whilst trading. You also do not want to overthink everything. Try to be in the flow without forcing yourself to be someone you are not.

Discover your discipline strength and weaknesses.

Successful trading is a road of self-discovery that is expressed through your trading results.

The Losing Cycle

You finally believe that you have shifted your trading ability to a level of profitability and consistency. After all, you have been trading with discipline and a small portion of good luck for several months.

The last time you had a major drawdown on your trading account was when you abused your leverage allowance and averaged into a trade. It was only a lapse in concentration otherwise it too would have been a winning trade and you swore that you would never make that same mistake again.

Over time, the pain of the “out of control” losing trade softens. We don’t forget but we believe that we have moved on and matured as a trader and will manage the situation better if this ever happens to you again.

Five Survival Techniques

Remaining grounded and in touch with your own emotions can be the most difficult situation to manage as a trader. Every trader will have a unique manner in how they view and trade the market. There is no right or wrong.

The real difference between success and failure will be how you manage yourself. The list below will give you hints on where you might need to develop as a trader to avoid the large drawdowns on your account.

  • Quality trade selection (Understanding the market)
  • Tight money management and risk control (Risk management model)
  • Excepting the trade outcome before you enter the trade (Understanding the flip of the coin)
  • Remaining humble win or lose (No room for ego)
  • Strong focus on process and not outcome (Manage pips not dollars)

Note that the five survival techniques above have everything to do with YOU. If a trader can become excellent at all five techniques, then success will follow. If the trader fails at just one of these, then it will be a race to the bottom.

Can you for a moment imagine that you have all five techniques mentioned totally anchored within your trading psychology? What type of trader would now be or could become if you mastered the list provided?

This is the secret to trading. Every trader will have a method or an approach that works for them, but without the development of your own mind, you will only lose at trading.

As a guide, it will take most new traders two to three years to be comfortable with a trading approach, trading platform and the market. It is after we have established this, we move towards self-development and this is where the true challenge for the trader begins.

Traders are polluted with advertising rubbish that offers traders an easy road to success. The truth is, there is no easy road to success. The success needs to be earned and if you hang in there long enough and become a well-rounded trader and person, success will gradually feed into your trading account.

The Forex Trading Greed DEMON!

I want to discuss percentage gains (and losses) traders broadcast on social media and within Facebook groups.

Retail traders push to gain 4% or more each week and see themselves in the window of success. Yet professional traders believe 1% or 2% gain per week is massive.

This overconfidence and pushing towards big gains is dangerous.  I warn about this in my E-Book,  control your account gains if you want to trade long term.

Professional traders see 1% - 2% as a solid success!

Retail traders scoff at this, arguing this is insignificant. Yet professional traders are around a long time while retail traders drop as flies. Do you wonder why? It's called leverage.

Retail trader and professional trader

There are usually differences between both types of traders. The professional trader will use a much lower level of leverage and sometimes no leverage at all, meanwhile the retail traders have a much smaller size account to trade from, and use leverage to bloat gains.

Most retail traders will counter saying, “How else can I make money unless I use leverage?” That’s a valid question; however, first thing to remember is that to play, you must stay in the game!

Most retail traders will blow up their trading account for these two reasons.

  • Abusing leverage
  • Average down the loss

Most traders will slip up and do both simultaneously.

Becoming conditioned to the gains

In our society we become conditioned to all circumstances; trading is no different. A trader on a good winning streak can easily add 1% or more to their trading account each day by using leverage and averaging down. The situation can even be positive to your energy system as you believe that price will at some point return to your break-even level.

It is at this point that you have lost almost any control over your trading mind; you are no longer doing your trading, and your inner demons now possess your thoughts and decision-making.

When you make 10% - 15% etc. per month, it’s only a matter of time before you wish that you had scaled back the amount of trades and the leverage that you have been abusing.

Old-fashioned word in trading? Discipline

We are riddled with greed. We move from buying one house to buying an investment property and so on. We seek better returns and become conditioned to wanting more and more.

In trading this plays out, but the effect is much quicker and with less warning.

To be disciplined means to be shy with your trade choice and to keep integrity within your position size. By combining both quality trade choice and integrity with position size you will not be tempted to grow your account at an unreasonable rate.

It is much better to develop the skills and mindset that trading will demand from you rather than building your account at a rapid rate for several months before it all caves in on you. When that happens, your mental integrity and your account will both need rebuilding.

Slow and very steady will win the race.

Think of what you could achieve over five years rather than what you want at the moment. Over time trading will almost become boring as you carefully select your trades and up hold your trading integrity.

If you are winning and adding over 3% to your trading account week, you must regroup now.

Professional traders believe 1% or 2% gain for the week is massive, professional traders are around much longer than the average retail trader. How do you want to mirror your trading towards, the average (crashing) retail trader, or the professional trader?

Take this as a warning and protect yourself from greed and inner demons.

Trade well, Steve T.

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Sticky Currency Pairs explained

More than likely you have never heard of this terminology "sticky"

Understanding the individual characteristics of each currency pair will be crucial for your trading success. Taking trades on technical levels but not understanding the currency pairs personality is a big mistake. Much like people, currency pair characteristics do not change, we will discuss and show you what are sticky pairs. 

EURUSD & GBPUSD

Both the EURUSD and GBPUSD pairs respond well off key levels if the overall drivers of price are one directional. Let us assume that the market was very bullish the US dollar. We will still see these two pairs respond of key levels. Perhaps the response is not as deep compared to when the market is trading in a balanced state however you can normally trust a response when your trade selection is selective off a key level.

Naturally this will not always be the case, especially if the market is making major adjustments such as a flight to safety or risk because of political situations or central bank talk. By understanding the market as we often discuss, you will identify these events.

Our preferred trading environment is when price is range bound and staying within or near its average true range.

Sticky AUD and NZD

When these two pairs trend they trend well. I consider both pairs risk currency pairs because of their higher interest rate status. They are both reliant on China and can be sensitive when the market is in a risk-off phase. For many years both pairs had a positive carry against the US$ however over recent years this has not been the case. The positive carry allows inflows to the currency and stock market thus keeping both these pairs well bid. Both pairs still have a positive carry against the JPY and this would be unlikely to change.

Unlike the EUR and GBP, both AUD and NZD have a much smaller daily range. AUDUSD can still be traded for intraday trades, but the NZDUSD is more suited to swing trades rather than day trades.

Let's get sticky

Sticky is best explained by saying that when price is trading in a direction either up or down, the response off key levels is often muted. This is never going to always be the case as the market continually trades in phases. A phase might be between two or three big figures or a very tight range. Another phase might be when price does not respond of a key level with any conviction thus sticky. Our job is to pick up on these characteristics as they happen.

Chart example

Below is a NZDUSD 60-minute chart. I circle the important possible reaction points in blue. From the base at 0.6480 we can see how price responded and into each of these blue circled levels. Each response or in this case was very limited. In most cases at best there was simply a pause but nothing noteworthy of a manageable trade reaction.

Described is a very common characteristic seen on both AUD and NZD. You need to be careful when looking for a response from these pairs. Try to trade each of these at their extreme level for each day, when the Average True Range has been stretched and allow some wiggle room within your trade management and equity management. They can be very stubborn once we find a direction. 

We cannot explain and give you the entire structure of this sticky event situation, but hopefully this will give you some awareness to the behavior.  Much of the trading approach we teach you is about price action; however deeper component of price action is price characteristics as we are discussing within the article.

Happy Trading, Steve.

Course on computer screen

The Three Pillars for Success

  • Understand the market
  • Price Action, and 
  • YOURSELF

Understand the market

You need to look wider than just the currency market. Scrolling through your charts on various time frames is important. You should also look at the equity markets, oil, gold, 10 year treasury yields and the Dollar Index. You need to form a view of the entire market much like you do with your currency pairs. Sniff out the big picture.

Price Action

After you have completed your many hours of screen time using the study of price, you will have the characteristics of your chosen currency pairs edged into your brain. The benefit will give you an understanding of price behavior. 

When price is trading within its trading range and responding off key levels, our connection with the market falls into place quickly. When price trades outside of these parameters we can become quickly challenged. The change in the market environment can change discreetly. It does not give us any great warnings but will need to think on the moment and respond.

Use the various other market instruments to help you find the warning. Below serves as an example of that.

Below is a daily image of the S&P 500. We know the market is nervous at the moment with China-US trade tensions. There is a level of uncertainty, more than normal.

On the daily chart we see that 2800 is a very strong key level and below this level we have a 2735 area. If price trades heavy towards 2800 and slips through, we can assume that 2740 will be the next key level for the market. With this we are likely to see volatility in the FX market pick up. This means that we need to reconsider our key levels, trade selection, stop and profit levels.

                                                                                  S&P 500 Daily Chart - Image May, 24, 2019

YOURSELF

In other blog posts I have already extensively discussed why YOU are the biggest stumble block on your way to success. I suggest you read these articles to get a better idea.

Ignore this at your Own Risk!

Why Big Gains will Cost You!

I have a whole chapter dedicated in my Ebook, it's a FREE download, so I suggest you read it!

IMPROVE YOURSELF

You can only move forward if you are willing to change and learn from industry leaders. I have been trading for many years and very grateful to find myself in a position where I can pay it forward with a very clear and cheap trading course on Price Action. It's one of the best course you'll find out there.

Happy Trading, Steve.

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This valuable video ($259), includes:

  • Exclusive and High Value Trade Setups!
  • 3 Hours of Video Content
  •  5 Training Modules
  • 14 Videos
  • Hand Book & 50 Slides

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ONE MONTH ACESS TO MASTERMIND INNER CIRCLE  FREE!

For a whole month you will be allowed to walk among the best traders, and get access to all the resources they have at their disposal. Of course, if you want to stay afterwards, your are more than welcome!

Excl​​​​​usive Weekly Webinar 'Wednesday Ask Me Anything

Every Wednesday, 1 hour Q&A Webinar, 2pm ACT-Canberra

Daily Session Previews with Trade Levels

Access to closed Mastermind Facebook Trading Group

Live Updates during Trading Sessions

Access to Live Updates in closed Mastermind Facebook Group

Weekly strategy video

Outlook on the coming trading week with insider tips

Fundamentals newsletter

Insight in long-term market trends and indicators on a bullish or bearish outlook

EXCLUSIVE BONUS THREE  

100% MONEY BACK GUARANTEE 

If this course somehow does not live up to your expectations, we will give you a FULL REFUND within 14 days of purchase!

Fundamental News May 20

Important Topics to consider this trading week

  • Trade War - Tariffs
  • European Parliament Elections
  • Brexit
  • USD – Fed Minutes
  • AUD & RBA
  • Australian federal election result
  • CAD
  • Important data for the coming week
  • Charts
  • Risk disclosure

Trade War - Tariffs       

Tariff is a tax that most politicians dream of. It is an in-direct tax that is passed onto consumers. Wage earners hate seeing their weekly pay packet deducted with income tax however, most modern tax systems peel money from citizens in a much greater manner via the in-direct tax system. In the case of the current trade wars situation it is supported by the “protection of American jobs” and “Buy American”.

Tariffs are now up 15% to an average of 18.3%, this is whole lot of new federal income that is being added to the coffers thanks to the consumer.

The trade wars situation can still escalated further. Europe is not exempt either and perhaps for now Trump is wanting to focus on China or send China a message that if you play ball with me, I can be nice to you as long as you do what I want.

The S&P is only down 3.2% from the peak, this means that stocks might have some catching

up to do. 2700 could be the next down leg. Volatility for the equity markets are still relatively low. Caution needed in a low liquidity environment.

Overall the trade wars is bad for the entire world. Chinese exports to the US are about -13% y/y. That is 0.5% of Chinese GDP but the effect on confidence is a worry.

 

In Europe the car industry is on tender hooks. The weakness in the European economy towards the end of 2018 was largely driven by the car manufactures. Changes such as emission certificate issues and overall confidence are weighing in and any restrictions on exports to the US will have greater impact.

From a political stand point President Trump will want to be the president that gets this sorted before the 2020 election campaigns are underway. He wants to be known as the President that sorted this and not the president that made consumables more expensive for the American people. If he fails to sort this then the Democrats will have some real eggs to throw at Trump. The Democrats will do anything to get rid of Trump, they hate him. Democrats have spent their entire energy since Trump became president on trying to get him impeached. Trump does not belong on Capitol Hill according to the Democrats and they will do anything to remove him from office. If the trade war is not solved by 2020 elections, this will be music to the ears of the Democrats.

China has a much longer view on trade outcome and unlike America it’s time span is much greater. They are looking out into the future. They do not have the issue of elections determining policy. This might explain why Trump is going hard at this and is focused on China. Within China the trade war is not being spoken about with the same spirit we see in America.

Trade wars will continue to dominate the headlines now that the threat of tariffs has become a real event. Most think that the situation will get sorted within a fair time frame and manner. What needs to be considered are the two different cultures. My experience tells me that the Chinese are not easy to deal with and what you see in one hand is not necessarily what you will see in the other hand.

In short.

America is playing the here and now game, we want a result our way.

China is playing the long game and will play their card close to their chest.


European Parliament Elections

The European Parliament Elections will be held between 23rd and 26th. The wave of nationalism that looked to be a threat to the current parliament looks as if it will not take effect in the numbers as first thought. The euroscepics will do well but will not have a huge impact. This for now will support the Euro rather than the Euro being smashed. It looks like that the Brexit party will have a voice in the parliament.

 

Brexit

Brexit is ongoing and continues to drive the pound lower against the USD.

Most recent events have been about the timeline for Theresa May’s departure. Keep in mind that May is a remainer and she has not been working for the people to resolve this.

She has not been flexible with her plan thus the situation has been like quicksand. 

UK political risks are building.

23-26 May EP elections. Polls predict a Tory defeat. May could resign or could be forced out if sufficient numbers of cabinet ministers were to resign or change the committee rules.

 

4 – 5 June. May intends to still be in her current role, she will attempt to bring forward her exit deal. If this was the case it would be more than likely rejected by the Labour party.

15 June.  National Conservative Convention could pass a vote of no confidence in Mrs May. She may consider that this might happen thus depart before this date.

Parliament summer recess, 24 July. If May is somehow still in her role as PM, then she could use the gathering from June 15 to arrange a deal to present her Brexit deal before 31 Oct.

 

With all considered a No deal is likely and this will continue to worry the markets. The next Tory PM will be a hard Brexiteer who will try to push the new deal but fail. A no deal could be seen better compared to May’s deal which would have been seen as a bad deal.

The flip side is that parliament has a clear majority to oppose the No deal and could pass a law to revoke article 50. If so then a general election or a 2nd referendum could be held.

Only politicians get away with all of this.  For many politicians they do not want Brexit as it is bad for their own future. The Euro zone supplies them with a good legs on the table jobs. Well paid jobs for the boys and girls.

EC is happy to see this drag out for as long as possible. Whilst the in fighting continues, the EC are giggling. The bottom line is it creates a “Hotel California” situation. You check out anytime you like but you can never leave.

 

USD – Fed Minutes

The Fed minutes this Thursday will be out dated when you consider that the trade war tariffs have been added to $200bn of Chinese goods. As well we now have trade talks that have broken down. Any tilt from the Fed should be looking at the global risk.

Powell will be commenting on Monday and this might have more impact given the updated trade situation and tariffs.

More than likely the trade situation will not escalate in the coming weeks and Fed Powell will express caution.

Given the tariff situation US growth could be softer in the near future as global growth and tariffs impact the data.

USD has the highest carry of any of the G10 currencies and should remain strong.

 

AUD & RBA

Labour market in Australia is showing weaker market ahead. Last week’s labour market data disappointed the markets and the unemployment rate climbed to 5.2% vs 5% consensus. 

The RBA pointed out great emphasis on the labour market noting, “The board will be paying close attention to developments in the labour market at its upcoming meetings”. For any future rate decisions will be heavily reliant on this data. This is a very clear signal to the markets from the RBA.

Governor Lowe will be speaking May 21. Look out for any further policy signals.

National Australia bank sent out a note last week that they are pricing in 2 rate cuts for this year and some sort of stimulus for 2020.

Australia will be heavily impacted from any trade tension talks between China and US.

 

Australian federal Election result

At today’s open of the markets the AUD found some support after the shock election result from the weekend. The Labor party of Bill Shorten was expected to win rather easy but failed to even come close. The sitting government regained power. The economy and taxes will always surface to the top. The opposition party was very focused on climate change and taxes. This did not go down very well with low income and middle income workers. The upper class are all for climate change taxes as it does not impact them to the same level as the majority and this was seen in the voting.

The opposition have a lot to think about. Do they reverse their very strong climate change and tax reform or do they start to water it down before the next election in 3 years.

Regardless of who is government, the coming years will give them many issues to deal with such as employment, lack of wage growth, declining property market in Sydney and Melbourne as well the global decline of growth. In this instance the current government will do a better job at managing the economy.

The labour party which is the backbone of the union movement, literally moved away from its supporters for the sake of climate change and higher taxes.

On top of this you also have the personalities. The Liberal leader and prime minister is friendly and connecting in an Aussie manner that connects with the public. On the other side was Bill Shorten, who often appears uncomfortable and not always transparent.

The worldwide knows that personalities play a role. Bill Shorten would never win a public personality contest.

Wanting to apply bulk reforms at this given time within the global economy was just a bad call. Both parties are totally aware of the headwinds that lie ahead for the economy. Introducing bulk reform now was just stupid.

 

CAD

Bank of Canada flagged ongoing uncertainty related to trade conflicts. They expect the risk to continue and signal caution until the bank meets again on May 29.

Canada does not have as much risk to China as Australia or the US. In March, nearly 75% of Canadian goods were exported to the US.  Exports to China were just 5%.

 

Important data for the coming week

  • Fed Powell speaks
  • AUD monetary policy meeting minutes
  • UK Inflation report
  • FOMC members Evans – Rosengren speak
  • NZ Retail sales
  • AUD Gov Lowe speaks
  • UK CPI y/y
  • CAD Retail sales
  • US FOMC meeting minute
  • EUR Various flash service PMI
  • EUR Parliamentary elections
  • UK Retail sales
  • Core durable goods

 

Charts below


USD Index

  

USD Index Daily

Price has been trading within this upper channel for some months and still holding. Looking at price to hold this pattern for now. Over 50% of the EUR makes up this Index thus always consider this index when trading

S&P500 Daily Chart

  

2800 held during the risk off situation from last week. Price might consolidate for now as volatility in the equities space has been low.

A challenge of 2800 and then 2740 looks more likely before a challenge of the most recent highs.

 

EURUSD Daily Chart

 


Things are starting to look heavy again. Keep in mind that the USD index daily chart is at the upper level of the daily band.

1.1100 will be the next most natural area for price to hold or break.

1.1250 area has proven very difficult to break.

 

AUDUSD Daily chart

 

Given the recent election outcome that is positive for AUD, we might see a relief rally back towards 0.7000

Lowe will be on the wires this week thus any future rate indication could be leaked during his talk.

 

Westpac Exchange Rates

 

Above is future exchange rates from Westpac. Do not trade this information as it is based on today’s climate and anything can change at any time.

Risk Disclosure

The information provided within this newsletter from EURUSD-FXTRADER is meant for educational purpose only and not to be taken as trade advice.

EURUSD-FXTRADER or any of its partners will not take responsibility for the information or trades you take.

Dealing with FX carries a very high exposure to risk and you may lose your trading account.

It is recommended to seek professional advice before you proceed using the information supplied.

We advise that the use of leverage and leveraged products can carry big loses.

   

Ignore This at Your Own Risk!

Exploring the behaviour of our mind is a massive undertaking, and you need to blend it into your trading model. Many novice traders only start giving their trading psychology the attention it needs as a last resort. For some, this is many years after they have started and already lost a considerable amount.

Your mindset should be the first subject you address when you start out. 

However, many of the inner demons do not surface until you make trades and you find yourself in various situations because of trading.

The very elements and successes you have had in the real world will more than likely be your biggest hurdle when trading. 

For example, when I think of some very successful business people and reflect how they might apply themselves to trading then the outcome would be obvious. Many of these people are alpha males/females…. and letting go of control and outcome is not their forte in life and unless we prepare them to make massive psychological changes, their trading account will rapidly decline and require ongoing top ups.

Often a sports person’s mindset is ideal for trading. When you listen to successful sports people during an interview they give away their mindset and how it’s applied to the individuals sport. You will often hear them say things like “ I can’t control what the opposition does but I can manage my performance” or ‘I am just focusing on the process and I can’t control the outcome or ‘I have prepared to my full capacity and I am now ready to perform”.

The above quotes are exactly what your mindset needs to be when trading however this is often not the case and emotions will drive your trading rather than you managing your emotions.

The nice part of trading is that your account P&L represents where you are in your trading cycle. Small profits, lots of break events and loses managed within your equity management rules is a great place to be because you are at the point where you are just about to turn a corner and all that is needed is a bit of fine tuning and direction.

For most people trading is the most difficult endeavour that they will ever undertake. All of your demons will be exposed even if you can’t identify them, your trading P&L will be talking to you.

In my new Ebook I dedicated a whole chapter to explain how to avoid getting emotional and lose focus while you are trading.

I suggest you download and read it; it's FREE!

Happy Trading, Steve.

Avoid Costly Mistakes - Read my E-book!

This EXCLUSIVE E-Book "Best 5 Ways to Avoid Blowing Up Your Trading Account" (value $59.99), is NOW FREE for you for visiting my website, BUT ONLY IF FIT BELOW CRITERIA:

VALUED @ $59.99, NOW FREE!

Stop Losing Money

Find Direction and the Right Path

Stop frustration and Self-Doubt

Build Solid and Strong Foundations

Why Big Gains Will Cost!

man Trading forex

Big risk will lead to big rewards, ... and big losses. People will often want to tell you about their wins and less about their losing trades. Firstly, you should just keep your trading results and returns to yourself as they are nobody else’s business but yours unless your ego feels that it needs to express this to others and if you do, then you need some serious work on your trading psychology.

When you take big risks either on selected trades, it is possible for your account to grow at a rapid rate. Your equity curve is very steep, and you feel great because you have finally mastered the markets. You may even hang onto trades that are going very much against you because you are banking some good winners along the way.

Not understanding your mindset will fracture your trading results!

The demons from within are removing any clarity you started out with when your curve was steady and reached in a methodical manner.

Have you noticed how we become conditioned to situations or circumstances? Governments do this to us all the time eg a gradual increase in taxes for certain items and once we have excepted the conditions in our head we view it as normal and no further action is taken.

When trading it is the same, your account will explode and this becomes normal. Now that 7% each week is reached the 4% from the previous week now looks below average. The calculator is used a little more often so you can work out how much money you will make each and every month.

What has happened here is that the trader is focused on the wrong thing and that is the money.

Your focus needs to be on the process and not the outcome. 

When the focus is on the outcome (money) rather than process (trading and controlling risk) then you will only ever end up with this disappointing result, things will cave in for you, it’s only a matter of time.

You have  been conditioned to except very high returns whilst taking a high level of risk.

I have known traders who have sold their houses to trade and have ended up losing it all. Others who have gained 30% in a few months and​ focussing on the outcome only ever ends in the same scenario, tears.

When you are trading and chasing  money eventually it will run you down and will need to pay up.

This is what happens when ego and greed take over your trading rather than focus on process. In my new Ebook I dedicated a whole chapter to explain how to avoid getting emotional and lose focus while you are trading.

I suggest you download and read it; it's FREE!

Happy Trading, Steve.

Avoid Costly Mistakes - Read my E-book!

This EXCLUSIVE E-Book "Best 5 Ways to Avoid Blowing Up Your Trading Account" (value $59.99), is NOW FREE for you for visiting my website, BUT ONLY IF FIT BELOW CRITERIA:

VALUED @ $59.99, NOW FREE!

Stop Losing Money

Find Direction and the Right Path

Stop frustration and Self-Doubt

Build Solid and Strong Foundations

The Perfect Forex Trade! or not?

Forex trading US Dollar

The perfect trade exists but let us not invest too much effort into the perfect trade or trading system. Reality is that every trade will look different and your results more than likely will also differ.

Your preparation and management of each trade really matters, if you are a high frequency trader you will have less time to mentally prepare for each trade.

If you find yourself in and out of trades all the time then more than likely your trading style is gambling rather than trading to a plan. Gambling is not a very good strategy for trading the financial markets.

Over the many years I have been trading I have only ever had two very brief conversations about trading with my father, keeping in mind that trading has been a big part of my life. He is very quick to point out that trading is just gambling and that can be true for some traders and those that have little or no understanding of the subject.

The perfect trade is not the result but your approach to preparing for the trade and how you manage this trade. Let’s list some components that make up the perfect trade regardless of win or lose.

  • Determine your risk as per your personal risk model.
  • Place your opening STOP as per your risk %
  • Make your trade entry as accurate as possible.
  • Know where you need to take initial profits to fund the trade.

By getting the above in play you stand a good chance to be profitable. There is much more that needs to play out within the big picture but by managing a few basics as mentioned you avoid many of the errors made that lose equity from your trading account.

Do not go chasing the perfect trade or perfect system just focus on the process on how to prepare yourself for each trading session and managing the trade.

I have written a comprehensive Ebook on trading and how to avoid most of the mistakes you can make. What many beginning traders don't realize is that psychology plays a crucial role in your success. Failing to realize that will lead to disaster and hence the title of the book.

Happy Trading, Steve.

Avoid Costly Mistakes - Read my E-book!

This EXCLUSIVE E-Book "Best 5 Ways to Avoid Blowing Up Your Trading Account" (value $59.99), is NOW FREE for you for visiting my website, BUT ONLY IF FIT BELOW CRITERIA:

VALUED @ $59.99, NOW FREE!

Stop Losing Money

Find Direction and the Right Path

Stop frustration and Self-Doubt

Build Solid and Strong Foundations