Analys från DailyFX

Hesitation-When Technical Clarity is Overshadowed by Noise and Doubt

Published

10 år ago

31 december, 2013

DailyFX

Talking Points

-Lost opportunities can be costly to mental capital

-Allow price action to speak and listen to it carefully

-Markets are not structured and picture perfect, learn to adapt

Every year we are charged with writing a piece on our worst trade or lessons learned and when reflecting back on this year, it was hard to pinpoint a singular event. The one main theme that kept coming up was that my worst trades in 2013 were the ones I didn’t take. That’s right- lost opportunities. Whether it’s on account of a lack of clarity, headlines, or just being trigger shy, hesitation was my biggest obstacle this year. Although a true trader has no time to entertain the notion of regret, it’s important to note not only mistakes, but also lost opportunities when attempting to objectively assess one’s own performance.

We say it all the time, “plan the trade, time your entries, stay disciplined, wait for conviction, etc.” All valuable lessons one should strive to adhere to. However it’s important not to lose sight of one simple fact- markets don’t operate in a vacuum, nor do they adhere to a set structure. As such, we need to be prepared to act when the situation changes or things don’t go exactly as planned.

Hesitation_When_Technical_Clarity_is_Overshadowed_by_Noise_and_Doubt_body_EURAUD_DAILY.png, Hesitation-When Technical Clarity is Overshadowed by Noise and Doubt

Chart Created by Michael Boutros using Market Scope 2.0.

Consider the EURAUD daily chart above. We spoke about this setup at length in DailyFX on Demand and the technical breach above channel resistance early November reinforced our topside bias. While the break looked contentious at first, the subsequent rally on the 21st achieved our primary objective at 1.4585. I took a buy on the pullback / break of resistance approach on the pair as we eyed objectives at 1.5020, 1.5118, and 1.5237. However the pullbacks were extremely shallow and although the technicals on both the EURUSD and AUDUSD respected such a bias, I refrained from pulling the trigger, always looking for a better entry lower down- which never came. Breaks of resistance were another opportunity to get long but headlines were littered with bearish views on euro and how the ECB was getting ready to ease policy even further. Although my technical approach warranted action, skepticism held me back and in hindsight, there were numerous entries that if taken with a 38pip stop (1/4 of the daily ATR) would have put this trade in the black. When all was said and done, the pair had come just shy of key technical resistance at 1.5440 by early December when this piece was written.

While you never want to chase a trade, short-term traders such as myself relish these moves because when the directional bias is clear, it allows us to maintain core positions as we scalp the broader trend. The old cliché holds true: you have to be in it to win it. However when the market makes a decisive move, respect it- when that move is further validated, trade it – and when everyone doubts the move, press it. The moral of the story here is when the market speaks, we should listen. If you have a valid game plan and conviction in your strategy, trust price action. It will never lie. Lost opportunities were the highlight of my mistakes this year.

Written by Michael Boutros, Currency Strategist for DailyFX.com

Contact and follow Michael via Twitter: https://twitter.com/MBForex

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

7 år ago

30 september, 2017

DailyFX

What’s inside:

EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
Resistance in vicinity of 11825/80 likely to keep a lid on further strength
Targeting the low to mid-11600s with more selling

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.

Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.

Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).

Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.

For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.

EURUSD: Daily

—Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email bysigning up here.

You can follow Paul on Twitter at@PaulRobinonFX.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

7 år ago

29 september, 2017

DailyFX

Euro Bias Mixed Heading into October, Q4'17

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

7 år ago

29 september, 2017

DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form