1. What are your recommendations on how to trade Forex this summer? What should be the trader's tasks in August? What should we prepare before leaving for holidays?
As we’ve seen this summer, we can experience high volatility and wild trading at any time of the year. A common mistake made at this time of the year is for some traders to “load the boat” - take large positions, in other words - because they want to profit in a market that isn’t giving them many opportunities.Instead of this path, it’s important to enforce discipline; if the market isn’t giving you a good chance to turn a profit, you have to sit tight or walk away. Traders get bored during the summer and try to “force” a trade where there is no real opportunity. It’s really easy to fall into this trap, and I’ve made the same mistake numerous times in the past.
Also, beware of rumors in the summer. Bored bank traders trying to create market movement will attempt to spread rumors in order to get into/get out of positions. So, if you hear any rumors that you cannot confirm, on days when the market is very slow, those rumors are likely to be false. Even false rumors can move markets, but these movements tend to retrace.
2. What book do you recommend us to read this summer?
If you haven’t yet read “Fooled By Randomness” or “The Black Swan” by Nicholas Nassim Taleb, pick them up, they make great beach reading and teach us why so many traders “never see it coming.” Taleb teaches us to expect the unexpected, and to gain from it.3. What should we do when returning to the markets in September and what is your forecast for the major currencies in Q4?
EURUSD
Regarding EURUSD, we saw a tremendous move lower during the first half of the year, from above 1.5000 to below 1.2000 - a move of greater than 3000 pips. I expect the pair to trade in a range between 1.20 and 1.35 for the next six months, finishing the year near 1.27.
GBPUSD
I’m a bit more bullish on GBPUSD, which has crossed above its 200-day moving average for the first time since January. Look for this pair to grind its way higher to finish the year above 1.6000.
USDCHF
USDCHF is testing major support at 1.0500 and appears to be headed back toward parity. The Swiss Franc could be a big winner during the second half this year. My year-end target for USDCHF is 1.0000.
USDJPY
The most interesting major currency pair right now is the USDJPY. This is not for technical reasons, but rather due to the possibility of intervention by the Ministry of Finance/Bank of Japan during the second half of the year. My year-end target for USDJPY is 90.00.
EXCLUSIVE! [Read Ed Ponsi's Full Forecast]
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Ed Ponsi is the president of FXEducator.com. Author of the brand new book: “Ed Ponsi Forex Playbook”, Ed is an experienced professional trader who has advised hedge funds, institutional traders, and individuals of all skill levels and experience. [More about Ed Ponsi]
