In trading, the mantra etched into the back of our minds is, ‘keep it simple, less is more’. Always pare it right back, emotionally and technically. Don’t get bogged down in predictions and over analysis; just execute a proven strategy when the signals tell you to. There are plenty of voices out there espousing forecasts. We traders must block our ears to the clamouring that can pull us in multiple directions and focus on the business of identifying only the best set-ups, then execute them and let the market do the rest.
So we trade with conviction, with belief in the validity of our strategy, but that is all. We don’t extrapolate this to conviction about the outcome of our trade. Our conviction is focused, not far reaching. It is about the strategy and set up, not about the outcome. If our conviction in a trade extended to its outcome then we could quite possibly find ourselves on a nasty losing position, hanging on with firm conviction that it would come good in the end. Many have come unstuck with that approach. It is conviction in your strategy that tells you when (and how) to get out, as well as when to stay in. It has nothing to do with conviction in the outcome.
Of course news can dramatically affect the market, but no matter how great a storm is whipped up a focused conviction in our strategy will mean that we can ride it, taking advantage of set-ups and opportunities to ride a wave. Conviction that the market is about to spiral or charge through the roof is not in itself a valid reason to jump on a trend or reversal. Yes, we trade the news, but we play the reaction.
Trading is often touted as a means of making a quick buck. Many have come unstuck trying to do just that. This is not to say that it is particularly difficult, it just depends where your conviction lies.
So we trade with conviction, with belief in the validity of our strategy, but that is all. We don’t extrapolate this to conviction about the outcome of our trade. Our conviction is focused, not far reaching. It is about the strategy and set up, not about the outcome. If our conviction in a trade extended to its outcome then we could quite possibly find ourselves on a nasty losing position, hanging on with firm conviction that it would come good in the end. Many have come unstuck with that approach. It is conviction in your strategy that tells you when (and how) to get out, as well as when to stay in. It has nothing to do with conviction in the outcome.
Of course news can dramatically affect the market, but no matter how great a storm is whipped up a focused conviction in our strategy will mean that we can ride it, taking advantage of set-ups and opportunities to ride a wave. Conviction that the market is about to spiral or charge through the roof is not in itself a valid reason to jump on a trend or reversal. Yes, we trade the news, but we play the reaction.
Trading is often touted as a means of making a quick buck. Many have come unstuck trying to do just that. This is not to say that it is particularly difficult, it just depends where your conviction lies.
Editors’ Picks
EUR/USD climbs to daily highs near 1.1820
EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.
GBP/USD trims losses, retests 1.3460
After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.
Japanese Yen gives back half of early gains against USD ahead of US PPI data
The Japanese Yen (JPY) surrenders half of its early gains against the US Dollar (USD) during the European trading session on Friday. The USD/JPY pair rebounds to near 155.90 as the JPY falls back, but is still 0.15% down.
Editors’ Picks
EUR/USD: Fed calm, ECB steady, but the Dollar still leads Premium
EUR/USD is still struggling to find real traction. The pair has tried to stabilise, but momentum keeps fading, leaving the door open to further weakness.
Gold: Falling US yields, geopolitics help XAU/USD hold ground Premium
Gold (XAU/USD) gained traction and climbed above $5,200, ending the fourth consecutive week in positive territory. The next round of US-Iran talks and crucial macroeconomic data releases from the US will be watched closely by market participants in the short term.
GBP/USD: Will Pound Sterling defend key 1.3450 support ahead of US jobs data? Premium
The Pound Sterling (GBP) entered a bearish consolidation phase against the US Dollar (USD), after having tested critical support near the 1.3450 level on several occasions.
Bitcoin: Another month of losses, and it’s been five
Bitcoin (BTC) price is stabilizing around $68,000 at the time of writing on Friday, but the Crypto King is poised to close February on a fragile footing, marking its fifth consecutive month of losses since October and a rare start to the year with back-to-back monthly corrections.
US Dollar: At a crossroads; Fed steady, tariffs in flux Premium
The US Dollar’s (USD) upward momentum from the previous week seems to have encountered a tough nut to crack in the 98.00 region, as measured by the US Dollar Index (DXY).
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