AUDCAD – Headed for 1.0000?

AUDCAD – Headed for 1.0000?

Chart Of The Day

AUDCAD – Headed for 1.0000?

After selling off aggressively on Friday, AUD/CAD extended its losses for the third consecutive trading day. There was no data out of Australia but AUD lagged behind as investors expect continued caution in this week’s RBA minutes. The Canadian dollar on the other hand benefitted from Prime Minster Trudeau’s comment that Trump seems enthusiastic about getting a NAFTA deal. USD/CAD experienced strong gains over the past month and while the Bank of Canada is in no rush to raise interest rates, we could see USD/CAD pullback to 1.30 as oil prices rise and NAFTA concerns ease

Technically, AUD/CAD has fallen below the first standard deviation and the next support level isn’t until the March 9th low of 1.0010.

USD/JPY – Will 100.00 Hold?

USD/JPY – Will 100.00 Hold?

Chart Of The Day

Tomorrow the market will get a look at the marquee event of the week -- the NFP report from US. After last month’s disappointing results, the June data is shaping up to be a possible rebound in job growth. Both the ISM Services reports as well as the ADP numbers suggest that the report could be in the 150-200K range.

A print anywhere in that vicinity is likely to prove supportive of USD/JPY which has been basing around the 101.00 level this week. While a strong employment report is unlikely to motivate the Fed on rates, it will pacify the market about the state of US economy and may push the yields on the 10 year Treasury bond higher helping USD/JPY along.

Another weak report however is almost sure to push the pair to a test of the 100.00 barrier, but given the already jittery state of Japanese policymakers any dip below that level could invite an intervention next week.

What I Learned From Making 10,000 Trades in The Currency Market

Boris Schlossberg

A few years back Malcolm Gladwell wrote a book called Outliers which became an instant bestseller forever etching the value of the 10,000 hour rule in our social consciousness. In the book Gladwell stated that practice far more than talent was responsible for a person’s success and that to achieve mastery in any field it was necessary to practice the skill for at least 10,000 hours.

The 10,000 hour rule has since been proven to be bunk (sorry talent and luck really do matter more), but it’s easy to see how in our Puritan work ethic society the concept took a life of its own. In any case practicing something for 10,000 hours certainly doesn’t hurt and does in fact make you at least proficient in your field of study so Gladwell was on to something.

The other day I realized that I had completed approximately my 10,000th trade since I started in the FX business, so I thought it may be worthwhile to see what if anything I learned from the experience. I can’t say I’ve discovered the secret to a perpetually rising equity curve or that I have learned how to fully master all of me demons, but after so many trades there are a few tricks of the game that I think are worth knowing.

First and foremost most people will ask -- do I really need to do 10,000 trades to learn how to day trade? The answer is yes. It’s not that 10,000 trades will give you the magic answer to how to master the markets, it’s more that after 10,000 trades you will learn just about every way you can possibly fail which is a value in and of itself.

The most common trading mistake -- and one that I still make to this day ( though far less frequently) -- is moving your stop. The Murphy’s Law of Life and Trading is that no matter how far or how frequently you move your stop, the market will always rise or fall just to the point of taking you out and will then snap back in your direction. You may escape the market’s sting once or twice or even three times, but in the end the stop will always get you and usually at the worst possible moment and at the biggest possible cost to your equity.

That’s why if you are daytrading and losing it is always better to stop out and get back in with bigger size that to continue adding to your position in hope of a turnaround. Stopping and starting may not feel good and may not even turn out to be profitable -- but trust -- me it will be far less un-profitable than adding to a trade.

After years and years of trading I have narrowed my stop down to just 25 pips. If you stick to that level it’s amazing how well you can survive in the market long enough to maybe even become profitable.

The next common mistake is that most traders start out way too large and get even larger if they add to the position. My starting trade is never more than one times my equity and I never scale up to more than four times equity at any given time. That means my biggest loss should never be more than 1% (25 pipsX4). Again, you can do a lot of foolish trades at 1% max and still live to fight another day.

Lastly, the key to winning as a daytrader does not lie in your ability to forecast direction (in fact the less you think about direction the better) but in your ability to maintain proper market posture. That means you let the market come to you rather than chasing it like a dog.

I am old enough to have survived the 1987 stock market crash and what almost no one remembers about that day is that it was the single biggest stock market rally in the history of S&P. A little after noon that day stocks stabilized and started to stage one the most vicious momentum rallies ever. If you had gotten long at that time and let it run until about 2PM New York time the gain was more than 10%. In daytrading it’s not important if you are long or short. The only thing that really matters is the quality of your entries. The better your entry, the better your trade.

Which is why after 10,000 trades in the market I still spend all of my time researching and trying to improve my entries. It’s not glamorous, it’s not thrilling but it’s what works. Every thousand new trades I get better.

AUD/JPY – Heading to 100.00?

AUD/JPY – Heading to 100.00?

Chart Of The Day

AUD/JPY -- Heading to 100.00?

Fundamentals

The Australian dollar hit 4 year lows today and the pain for longs may not be over. RBA Assistant Governor Lowe suggested that the central may consider lowering rates if it felt that the economy would slow materially over the next few quarters. Certainly the rapid deceleration of growth in China is starting to weigh on the prospects of Australian growth and the latest rate cutting move by the PBOC can be viewed more as a sign of weakness rather than strength for Australia. Meanwhile, despite positive US data USDJPY has failed to rally and has in fact started to correct off the 119.00 highs. Any disappointment in US data can taken as a sign for profit taking and could push AUD/JPY to a quick retest of 100.00 over the next few days.

Technicals

Techincally AUDJPY pair has turned in a major reversal off the 102.00 level and now targets 100.00 as the near term support. A break there opens up a run to 98.00 while only a close above 102.00 negates the bearish bias.

AUD/JPY – Heading for 100.00?

AUD/JPY – Heading for 100.00?

Chart Of The Day

Fundamentals

The remarkable events of Friday with BOJ opening up the floodgates of more QE created a massive rally in yen crosses and that rally may continue into this week especially if US and Chinese data remain supportive. If US data shows that expansion continues at a steady pace the case for policy divergence becomes even stronger and USD/JPY is likely to push higher. In the meantime the Aussie will hold its own especially if Chinese data shows that Asia’s biggest economy continues to expand as well. Monday’s Chinese Manufacturing PMI data as well Tuesday’s RBA rate decision could reinforce the fact that Australian rate will remain steady and that could create fresh flows in AUD/JPY taking the pair to 100.00

Technicals

The pair is now facing the key resistance at 99.00 which if it fails would create a double top in the pair. A break through 99.50 however would put it on a path towards the key 100.00 mark.

Will USD/JPY Take 100.00? Forex Daily Technicals 09.04.13

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USD/JPY Retake of 100.00? Weekly Forex Technicals 7.01-06.13

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Like to trade the EUR/USD? So do we!

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USD/JPY Back to 100.00? Forex Daily Technicals 06.11.13

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Like to trade the EUR/USD? So do we!

At BKForex, a large part of our trading is short term and the EUR/USD is one our favorite currency pairs to trade.

The EUR/USD is the world’s most actively traded currency pair and for many forex traders, this activity provides opportunity.

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10,000 Trades

Boris Schlossberg

Yesterday, during dinner my son asked me what was the most important quality to succeed in business. Without hesitation I replied, “Perseverance.” Intelligence, talent, good looks, creativity are all great.. But all of them combined cannot act as a substitute for perseverance.

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I have lived long enough to see some extremely bright ,Ivy-League-educated friends flounder through life while others less intelligent, less attractive and less talented succeeded beyond their wildest imagination.

Many of us have read the famous book by Malcolm Galdwell which argues that any great skill requires at least 10,000 hours of practice. I think that idea is especially true in trading, but I would amend it a bit. I think that if you want really understand daytrading -- especially in the FX market -- you need to make 10,000 trades before can get comfortable with the market.

That’s 10 trades per day for 1000 days before you have enough experience to begin to understand price action. Mind you 10,000 trades will in no way guarantee you success, but will hopefully provide you with enough mistakes so that you can start to develop more intelligent ideas that may actually work.

Perhaps I am wrong. Perhaps it is only I who is dim witted enough to need so much time to become competent in trading. I have always been a slow learner, but my perseverance has always kept me in the game.

I do know one thing however. Most people who try trading quit much too quickly. Three, four losing trades in a row, a blown account or two and suddenly trading doesn’t look so appealing anymore. The get rich quick fantasy that was supposed to help you escape the drudgery of your regular job, suddenly turns into yet another complicated, difficult .activity that requires real skill and discipline.

That’s why the most successful traders, the ones that have survived the longest, are not in it for the money. They love the challenge of the markets.Trading to them is a lifelong pursuit of intellectual, emotional and physical perfection. It is perhaps the ultimate irony that those who do best in markets are not really motivated the money, but by the pursuit of excellence. Ultimately their perseverance is what off in the end.

USD/JPY 100.00 Hold or Fail? Weekly Forex Tech 6.03-07.13

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USD/JPY Goodbye 100.00? Forex Daily Technicals 4.26.13

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Like to trade the EUR/USD? So do we!

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The EUR/USD is the world’s most actively traded currency pair and for many forex traders, this activity provides opportunity.

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100.00 in Yen? 2950 in EUR/USD? Forex Daily Techns 4.24.13

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Like to trade the EUR/USD? So do we!

At BKForex, a large part of our trading is short term and the EUR/USD is one our favorite currency pairs to trade.

The EUR/USD is the world’s most actively traded currency pair and for many forex traders, this activity provides opportunity.

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