by Intex Neville | Dec 20, 2019 | Uncategorized
• EURO DECLINES
• CANADIAN RETAIL SALES DISSAPOINT
• US CORE PCE & GDP IN LINE WITH EXPECTATIONS
A couple of big moves came today with the EURUSD dropping from the weekly/daily pivot resistance level of 1.1120, on the back of the UK House of Commons voting on PM Johnson’s Brexit deal and a stronger US dollar. US 10 year yields were down on the day whilst US equities continued to make all-time highs.
This afternoon the disappointing data out of Canada with a fall in Retail Sales MoM (Oct) -1.2% v’s 0.5% Expected, sent the Canadian dollar crashing. There has been a fall in economic results this month out of Canada and this Retail Sales number combined with a poor employment report will give the Bank of Canada concern. Earlier the US House voted 385 v’s 41 to approve the USMCA trade agreement and the BoC will need trade to pick up if it is to keep rates on hold as they did earlier this month.
US Core PCE rose in line with expectations with healthcare services inflation helping it to rise +0.1% MoM and +1.6% YoY. Increased consumption, rising wages and a narrowing trade balance are all positives for the US economy and earlier today the US Senate passed a two-bill spending package; which firstly avoids the need for a government shutdown but is also a fiscal expansion, with President Trump signing a $738 bln Defense Spending Bill.
by Intex Neville | Dec 18, 2019 | Uncategorized
• CABLE RETRACES ALL OF THE ELECTION MOVE
• US EQUITIES AT ALL TIME HIGHS
• US INCREASED SPENDING TO AVOID GOVT. SHUTDOWN
ECB President Christine Lagarde is first up today. It follows her first speech last week that caught some market participants off guard. The Euro has outperformed other currencies this week and it could be Lagarde now shifts to a dovish tone to avoid too much strength in the single currency.
Focus then shifts to UK CPI that is set for released at 09:30 and is expected to show prices to have risen by 1.4%. Political uncertainty triggered a Sterling sell off this week as fears of a no-deal Brexit are reignited. Sterling has dropped from 1.3520 to 1.3072 on the back of this and poor economic data released this week has done little to stop the selling. Any hints inflationary pressure is easing will weigh on the pound further.
In the US – President Trump is most likely now to become the 3rd POTUS to ever be impeached and he has gone on the offensive to remind his voters that not only has the Stock Market hit a record high it has done so 133 times in less than 3 years. Yesterday the House of Representatives added to their already increased spending plans by approving a further $1.4 trillion spending package.
by Intex Neville | Dec 17, 2019 | Uncategorized
• CABLE TOUCHES PRE-ELECTION LEVELS
• A MIXED UK JOBS REPORT FAILS TO PROVIDE RELIEF
• EUROPEAN EXPORTS RISE
• CANADA MANUFACTURING SALES DISAPPOINT
Robust US economic data was the main theme of today. US Job Openings, Industrial Production, Housing Starts and Building Permits all beat expectations that gave risk appetite a boost with stocks trading close to record highs. The Dollar continued to outperform with the Euro the
only exception.
US President Trump, who had been quiet this week took to Twitter today to add pressure on the Fed to shift to a more dovish stance. Trump stated "Would be sooo great if the Fed would further lower interest rates and quantitative easing. The Dollar is very strong against other currencies and there is almost no inflation. This is the time to do it. Exports would zoom!"
Earlier in the day, the UK labor market remains robust with unemployment falling to 3.8%. Despite this, there still seems slack in the labor market with little signs of wages to rise. The Pound in response to political news has given back all the post-election rally gains with traders now focused on the psychological 1.30 level.
by Trader_001 | Aug 27, 2019 | Forex, Uncategorized
Opposition MPs say they have agreed to try to block a no-deal Brexit by passing legislation in Parliament.
A meeting between those opposed to no deal was called by Jeremy Corbyn.
A joint statement afterwards did not detail how or when legislative attempts would be made, but Green MP Caroline Lucas said it was the best way to stop a PM "careering towards" no deal.
The statement also made clear using a vote of no confidence to bring down the government remained an option.
The UK is set to leave the EU by 31 October and Boris Johnson has promised to stick to that date even if he cannot agree a deal with Brussels.
Ms Lucas said "the legislative way forward" was "the most secure way to try to extend Article 50, to get rid of that 31 October deadline".
by Trader_001 | Aug 7, 2016 | Uncategorized
If you missed part 1 you can read it Here.
No Trading Plan
“Make money” does not constitute an intelligent trading plan. A trading plan is a map that clearly outlines how you are going to be successful. It spells out what your edge is and should be understandable to someone who has no knowledge of trading. If you don’t have an edge, you don’t have a plan, and likely you’ll wind up a part of the statistic pool (part of the 95% or more of new traders that lose money and quit).
Your plan should also include things like how you will track your results and how you will go about adjusting your results. And don't forget proper risk management of course.
Trading too Short-Term
If you’re profit target on a particular trade is less than 15-20 pips then you might want to consider finding another trade with higher profit potential. The spread or commissions you pay to enter the trade eats away at these tiny profits.
Also, consider your stop loss distance. It doesn’t make much sense to take a 15 pip profit while using a stop loss of 150 pips. It would make even less sense if you weren’t using a stop loss at all. You would need to have a 10:1 win ratio just to pay for the losses which is nonsense. The best traders I know win somewhere between 40-60% of the time not 90+%.
Lack of Conviction
This is a massive one!
Conviction only comes from successfully trading over a sustained period of time. If you lose money early in your trading career it’s very difficult to gain true conviction because you will likely not stick with your trading system for very long. This can lead to a cycle of switching trading methodologies before you ever have a chance to gain any real momentum.
Learn the business of trading before you trade so that you give yourself a professional head start. You would not try to open up a restaurant without some very good and detailed plan would you? Trading is no different than any other type of business and should be treated with the same level of professionalism. Study hard, get a qualified mentor, make a trading plan and PRACTICE PRACTICE PRACTICE.
If you want to know more on how I view conviction you can view my article on How to Build Conviction in your Trading.
Part 3 to follow shortly!
by Trader_001 | Aug 4, 2016 | Uncategorized
This article is a follow up to my previous article Recency Bias and Why it can Kill Traders. In this article I will offer some helpful solutions that I have seen work for many traders.
The first step in fixing a recency bias is simply having an understanding that it is a real phenomena that can definitely cause problems not just for trading but also in many other areas of life.
Conviction
Conviction is confidence and the best way to build confidence is to succeed at something consistently over a sustained period of time. In trading the only way to succeed over time is making sure that you never deviate from your trade plan. This is something that you must do more than just a few times, you literally need to place dozens if not hundreds of trades in order to truly understand how your trading edge will perform.
If you allow recency bias to cloud your good judgement then you run the risk of altering your edge in an adverse way. It is incredibly difficult to succeed at pulling profits out of the market over the long run if you are constantly changing the way you enter and exit trades.
I have written 2 other articles that go a bit deeper into conviction and your trading edge which might be helpful if you think that recency bias is affecting your trading.
How to build Conviction in your Trading
Having an Edge in your Trading
Understand the Bigger Picture
One trade does not make you a good or bad trader. Rather, it's how you perform over months and years that makes you a good or bad trader. You need to understand that your trading results will be a random distribution of winning and losing trades.
It's definitely not any fun for any trader to lose 8 trades in a row but if you are an overall profitable trader and you zoom out and look at your last 200 trades you will see the bigger picture. Those 8 losing trades may look insignificant in the grand scheme of your entire trading career. Losing trades are and always will be a part of the game but you have to remember that sometimes losing streaks happen and that doesn't mean that you are a losing trader.
I have heard people refer to recency bias as looking at individual trees rather than the forest. If you think of your entire trading career as the forest and the individual trades as the trees then you can see that a few losing trades are just a couple trees in the vast forest of your trading career. You should not let a couple bad trees burn down the entire forest.
Keep a Trading Journal or Diary
This is a great idea for helping you keep track of trades that you inevitably forget about over time. It will help you to view your overall career rather than just focusing on a few annoying losses that happened recently.
Keeping a trading diary or journal will allow you to look back and see the mistakes you might have made and then bring them into your conscious mind. This is helpful because often enough the mistakes you make in trading (or the rest of life) are subconscious (like switching systems of tinkering with your edge).
This also is a track record of how you felt while you were in your trades and can offer many useful insights into how you might go about improving your trading performance or simply understanding that losing streak happen from time to time.
Tune into what is Happening in the Market Now
It’s not enough to just scan the news now and then. If you want to be successful in the long run you must be constantly focused on what is moving price and how the fundamentals and sentiment are playing out each and every day. The speed of information is incredible these days and you need to make sure that you are not making a trade based on yesterday’s news when today there was something that negated that prior news.
If you are a technical trader you should still be aware of what news is coming out and how it could potentially impact your trades. Keeping up to date on the flow of information can give you more conviction in your open trades and help keep you in when you are supposed to be in and out when you should be on the sidelines.
Be Self-Aware
Being self-aware is more than just knowing that you are breaking your trading rules and suffering a bout of recency bias. It's about being completely honest with yourself and removing your ego. Take you ego out of trading and enjoy a slice of humble pie.
If after a series of losing trades you have a tendency to grab at profits far too early from what your plan states then you need to be completely honest with yourself about why you are doing that. Could it be that you have carried over those emotions from the recent losses into new trades that have nothing to do with those losing trades?
Each new trade needs to be completely removed from previous trades whether they were winners or losers.
I don't mean to say that any of this is easy because it's not and trading profitably is not easy either. I have been trading for about 10 years now so how I react to a series of losing trades will be completely different to how someone who is just starting out will react.
My best suggestion for new or struggling traders over and above anything else I have written on recency bias is this:
- Find an edge that is proven and learn everything you possibly can about it.
- Once you know how to trade your edge practice, practice, practice and track everything you do including how you felt before, during, and after each trade.
- Focus on becoming self-aware with the goal of being the world's most disciplined trader.
- Once you have learned your edge and have some practice focus your efforts massively on good trading psychology.
A huge part of what I teach my students is trading psychology because once you have mastered your edge the most important thing to your trading success will be your state while you are trading. You can contact me about that or check out the many amazing books on the subject of trading psychology for more help.
Find an edge, master it, practice the heck out of it, track it, keep calm and carry on.
Thanks for reading and I hope you found some value here.
