Giles Coghlan LLB, Lth, MA
Financial Source
One of the weaknesses in macro trading is that you have a clear bias for a currency pair, but how do you manage risk properly?
For example, one central bank is on a rate-hiking cycle and another one is on a rate-cutting cycle. In this case, the medium-term direction of the pair is simple to predict. However, that doesn’t mean that there will not be short-term movements in the pair that are against the main medium-term direction. So how do you manage this?
Always be aware of what your risk is and use key technical levels to determine that risk. You can always re-enter at better prices, so don’t make the mistake of allowing a scenario where you are in large amounts of drawdown and have no idea about where and when you would exit the trade. This will impact your trading psychology and hinder your ability to make trading decisions.
Macro, fundamental trading is a great philosophy for trading the markets, but always make sure risk is known and managed from the start of the trade.
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Editors’ Picks
EUR/USD holds above 1.0650 amid renewed selling pressure in US Dollar
The EUR/USD pair edges higher to 1.0672 on Thursday during the early Asian session. The recovery of that major pair is bolstered by renewed selling pressure in the US Dollar and a risk-friendly environment.
GBP/USD remains capped below 1.2470, eyes on US data
The GBP/USD pair trades on a softer note around 1.2450 during the early Asian trading hours on Thursday. The softer UK inflation data prompted the expectation that the Bank of England will start lowering interest rates in the coming months, which weighs on the Pound Sterling against the Greenback.
USD/JPY Price Analysis: Dominant uptrend continues
USD/JPY extends its uptrend into the 154.00s. It may be forming a Measured Move pattern with an end target of 156.11. RSI is overbought, however, warning a correction may be on the horizon.
Editors’ Picks
AUD/USD remains under pressure above 0.6400
AUD/USD managed to regain some composure and rebounded markedly from Tuesday’s YTD lows in the sub-0.6400 region ahead of the release of the Australian labour market report on Thursday.
EUR/USD holds above 1.0650 amid renewed selling pressure in US Dollar
The EUR/USD pair edges higher to 1.0672 on Thursday during the early Asian session. The recovery of that major pair is bolstered by renewed selling pressure in the US Dollar and a risk-friendly environment.
Gold retreats as lower US yields offset the impact of hawkish Powell speech
Gold prices retreated from close to weekly highs during the North American session on Wednesday amid an improvement in risk appetite. The bullish impulse arrived despite hawkish commentary by US Federal Reserve officials.
Bitcoin price uptrend to continue post-halving, Bernstein report says as traders remain in disarray
Bitcoin price is dropping amid elevated risk levels in the market. It comes as traders count hours to the much-anticipated halving event. Amid the market lull, experts say we may not see a rally until after the halving.
Australia unemployment rate expected to rise back to 3.9% in March as February boost fades
Australia will publish its monthly employment report first thing Thursday. The Australian Bureau of Statistics is expected to announce the country added measly 7.2K new positions in March after the outstanding 116.5K jobs created in February.
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