You sit down to check the markets. You review recent price movements and consider potential trade ideas. But what happens next?
- You may quickly stumble upon what seems like a great trade idea but feel uncertain if it's too good to be true.
- You spend 30-60 mins delving deeper into the markets only to find yourself trying to figure out what to do next.
- Or you're putting in a lot of effort and mental sweat to craft a high-odds trade but it's not working out.
Sound familiar? If so, now there's a temptation to skimp on crafting a trading catalyst and game plan and jumping straight into a pattern or similar, right?
But you've now inadvertently killed the golden goose. Why's that?
Let me explain. Aside from the meaningless "noise", price movements are reactions to events. And as a trader, it's your job to uncover them.
Example ideas:
- A counter move occurs in the market you trade when XYZ market opens. Not an elaborate idea, so not a large payer. But it's a catalyst that leads to tradable price movement.
- Lifting COVID restrictions in China is a boost economically. A move up in markets, even if short-lived, is likely. But difficulties of investing in China mean traders look to express the trade via a proxy market. Look for the idea, followed by the proxy market to move in tandem. The second idea is more advanced hence it provides a higher payout catalyst to the first idea.
Watch a real-time catalyst on the AUD/USD: Using live trading mentoring to illustrate, you'll see a catalyst with depth and substance crafted on a big news day when explosive fireworks in price are the norm. A high-impact economic release is chosen because if you can craft high-odds trades on the toughest days, you can nail your trade ideas daily. Right?
Forex and derivatives trading is a highly competitive and often extremely fast-paced environment. It only rewards individuals who attain the required level of skill and expertise to compete. Past performance is not indicative of future results. There is a substantial risk of loss to unskilled and inexperienced players. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent
Editors’ Picks
EUR/USD accelerates losses, focus is on 1.1800
EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.
GBP/USD turns negative near 1.3540
GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.
USD/JPY holds gains near 154.00 ahead of the Fed’s minutes
USD/JPY retraces Tuesday's losses and returns near weekly highs in the area of 154.00. The US Dollar trims losses in quiet markets with all eyes on the Fed's minutes. Weak Japanese GDP data resurfaced concerns about Japan's fiscal stability and halted JPY's recovery.
Editors’ Picks
EUR/USD accelerates losses, focus is on 1.1800
EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.
GBP/USD turns negative near 1.3540
GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.
Gold picks pace, flirts with $5,000
Gold is back on the front foot on Wednesday, shaking off part of the early week softness and pushing higher towards the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.
Fed Minutes to shed light on January hold decision amid hawkish rate outlook
The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.
Mixed UK inflation data no gamechanger for the Bank of England
Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.
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