Forex For Anyone @forexforanyone-blog - Tumblr Blog

Is It Time to Jump Into Euro-Dollar?

I don’t think so! The water is freezing and it’s blowing a gale.

Up until Thursday last week the euro looked fairly appalling. Seven out of nine down weeks is not a good tally for euro optimist. I was happy, as I am not one.

However, Thursday and Friday’s trading have taken the pressure back off the euro and put it on the dollar.

The euro ended in New York, close to the highs, and posted it strongest weekly performance since January.

So is that it? The euro is going to trundle along in a mindless pattern of consolidation around 1.3000. A repeat of what we saw for much of 2012.

No! Not in my view!

This year the market is trading on clear bearish sentiment. A pause in the euro storm is not cause for celebration.

Have you seen anything out of Europe that encourages you to invest in its currency?

I haven’t! And I don’t expect much before the German elections later in the year.

My strategy is to look for weakness 1.3015 and 1.3170. Strong selling in this area would be a good signal that euro strength is just temporary.

I think the dollar is good value in this area.

Why is trading so difficult? Because you have to dismantle all the logic you have learnt to be successful.

Most people are brought up to be cautious. We are programmed to look for signs of danger and avoid it wherever possible.

Since you were a toddler you have been told…

- Stay away from the fire,

- Be careful of the traffic,

- Be home before it gets dark.

Trading turns everything we have ever been thought on its head.

Opportunity and danger go hand in hand! The opposite is also true!

When the market is at its most volatile and dangerous – it’s time to jump in.

When the market is quiet and safe – it’s time to avoid trading and sit it out.

When everyone is buying its time to take a profit – or look for a selling opportunity.

When everyone is selling its time to take a profit – or look for a buying opportunity.

When you have a large profit and you are feeling confident, instead of doubling your position, it’s time to close it.

When you have a large loss and you feeling everything is hopeless. It’s time to reassess all the information and struggle to keep you nerve, if your reasons for taking the position remain valid.

To unlearn a lifetimes programming is extremely difficult.

If the last 15 years have thought us anything – it must be to be skeptical of amazing booms and be confident when everything is hopeless.

There is a big bear sitting on the euro. Is it Russia!

No it’s everyone who is fed up of being told fairy stories about stability, unity, co-operation and solutions by European politicians, the ECB and the IMF.

Resolution by policy ineptitude can only bore the market into a slumber temporarily

It may seem like a long time, but reality is beginning to dawn that the EURO is not working.

Emergency steroids have begun to wear off, as the euro has once again committed a fatal crime against its original ideals – freezing the free flow of capital.

What is a euro really worth against the dollar?

I believe we will get a much clear idea over the next few weeks.

The break of 1.3000 was not clean cut. However, with all eyes on 1.2659 the stakes are rising for anyone who believes that the euro can be held frozen in the boring wastelands of the high 1.2000’s and low 1.3000’s forever.

My next target beneath 1.2659 is 1.2041.

I may be accused of flogging a dead horse. These days, in fact, that could mean trading in burgers supplied to almost any large high street chain. I am as ever negative on the key sterling cross.

The euro continues to weaken and sterling is making healthy gains s a result. The sustained break through 0.8500 yesterday is a promising development.

Now we need to see a similar drive beneath 0.8445 to open the path to 0.8250 and 0.8150 in the next few days.

It is rare for the cross to maintain this sort of selling momentum for long. A poor performance over the next two to three days is the extent of the near term weakness I see in the cross.

The Cypriots have been robbed.

Unauthorized attacks on individual saving accounts, is a development in public theft, not seen since the days when Dick Turpin terrified the highways on his horse.

Surely you’ve been in this situation? When you are under pressure to make time and you’re stuck in a lane of frozen traffic.

Tempers are beginning to boil over, and soon lots of cars try to change lane to the free flowing traffic, passing by you on the inside.

For the past few weeks I have been stuck in traffic. I have been talking down Euro-Sterling at every opportunity. For most of this time, the traffic has been jammed solid.

Over the weekend, the sterling finally got into gear. The cross, gapped lower by a penny by Monday’s open, on the back of events in Cyprus.

This happens a lot in FX. Sometimes you are just wrong, but before admitting defeat, you have to give your ideas a chance. The temptation to jump lane is huge, however this maneuver can double your frustration.

I am glad to see this trade developing. I continue to like the downside. A break beneath 0.8445 would target a further euro decline to 0.8250 and even 0.8150 very quickly.

Lets hope the traffic keeps moving.

If your mortgage payment is based on your intra-day trading on the second last day of the month, then the risks are insurmountable.

In a dealing room of a 1000 traders and sales people there are only 5 or 10 guys on the prop desk. Now there is not even a prop desk in most institutions.

There are still plenty of opportunities in the FX market for retail traders. Money can be made!

But being a full-time retail FX trader is like dreaming of playing golf like Tiger Woods.

It’s a nice fantasy… but in many cases completely unrealistic.

Lesson 2 – How to Succeed in FX… Get another Job…. The benefit to really clear thinking and insight, is not to be under too much pressure. A steady income will allow you make the most of your chances when they come along, as you trade FX as a second job or pastime.

The easiest money you can speculate with, is the money you do not depend on.

Euro Dollar 1 Month Target 1.2500

Euro-Sterling 1 Month Target 0.8050

Cable 1 Month Target 1.5500

Winds of 100 miles an hour?

A storm surge of 15 feet?

Widespread property damage?

Danger to life and limb?

2013 is not like 2012 !

There is more than enough volatility in the markets.

Multiplying the impact of each move in the forex market with excessive leverage, will only end in tears.

500 times leverage is lunacy!

One bad trade and you will be eaten for breakfast.

Brian Kiely

#Hurricane #2012 #2013 #Forex

A few years ago my attention was almost totally devoted to three different projects.

I was also day-trading Euro-Dollar CFD’S on the side.

This could have been a very stupid idea.

I didn’t have a lot of time to watch the markets. I’d make my call and take my positions, always entering a target and stop loss, at the inception of every new trade.

Maybe once a day, I glanced at the rates for less than five minutes, I closed a trade or and looked at the possibility of opening a new position.

During this spell, I chalked up twenty successful trades in a row. My best every run.

The reason I believe! Neglect!

Over thinking a position is futile.

Some of the greatest sportspeople have not been wonderful speakers or students.

They have been gifted with an exceptional talent, which they didn’t over-think when the pressure was on.

With so many complex forces that can change the direction of a currency, it is easy to get lost in the ‘what if’s’. Or consider too many variables, which leaves you what I call an impotent strategy.

Your theory may sound clever but is about as useful as an umbrella in an avalanche.

Brian Kiely

Watching monopoly money on a practice account, a trader feels immune to the pressure of losing or winning significant amounts of their cash.

A $100,000 or $200,000 stake, in a fantasy currency trade with no consequences, is like being allowed to visit Fort Knox with a carrier bag and no security.

When you move to a live account everything changes.

A new HD TV or weekend away could have been yours, instead of pointless hours of anxiety and frustration.

There is no trill in watching the bid and offer of a rate you cannot control, move slowly away from you entry level. Every pip, twisting your arm behind your back, pushing what was a tolerable ache into a level of pain you had never considered you would tolerate.

Then your mind begins to play tricks on you. First, thoughts of your past successes in you practice account emerge, then you think of all the other accomplishments in your life.

You are a winner! You believe in yourself! You are not afraid of anything!

Then the market lurches even deeper into the red, compounding your losses.

It is now too late to back out you have to stick with it.

Eventually, the terror has to stop. Any price is worth paying to end this tragedy.

If you have a reason to put on a position and events change so your reason proves to be false… GET OUT.

If you have a price beyond which you are unwilling to loose money and it is reached… GET OUT.

The market does no care about your emotions.

Stay cool! Stick to your plan. Over time your trading will settle down.

Brian Kiely

The Worlds Hottest Chili – The TRINIDAD SCORPION

All chilies are not the same. Add a little shaving of a really explosive chilly to your pizza and suddenly your taste buds are eviscerated. Your body goes into shock, sweating profusely and gasping for water. Your eyes water and you cannot see clearly. If you’ve done this once its not something you’ll easily forget.

A move from 1.3651 to 1.3650 is not the same as a slide from 1.3000 to 1.2999, in Euro-Dollar.

The danger for traders is that they can sometimes read too much into each currency move. Constant pressure to make a profit leaves players prone to building a never-ending sequence of new scenarios, where the market explodes in their favored direction.

Watching the market too closely is exhausting and generally a waste of effort.

Euro-Dollar’s sustained break below 1.3000 is really important. A clear drive through 1.2954, this week, will reinforce the growing bearish sentiment in the euro. Attention will then shift to 1.2875 and 1.2645.

The euro swallowed a cruel chilly on Friday and the consequences will be felt for some time to come.

Trending Blogs

Recently Viewed Blogs

Forex For Anyone