As you guys know I have been very active trading FX using EURUSD and I have to admit I am a bit ashamed I have not been able to profit from this move lower here. What a move this has been, 3.5 months worth of gains wiped out within a matter of 1.5 weeks. staggering to be honest.
I wanted to address a question that was brought up last week in regards to FX. When it comes to FX, those markets behave very different from standard equity markets - yes they all follow technical patterns just like any market but the moves can be much more drastic and swift - due to the high leverage in FX (even if you trade small sized lots) one HAS to respect stops - as you can clearly see form the above chart - once a currency has setup for a strong move or breakout there is no stopping it. On the above chart its especially visible - there is no chance to get in on the short side unless you have a much wider stop which is quite difficult to manage.
For me personally, being new to FX, on the above chart it has been VERY difficult to get a short position as I am used to tighter stops and EURUSD has given traders like me no chance to get in and profit from the down move. Its a matter of style and my style does not fit well with the above chart.
Now whats very interesting is the weakness in EURUSD and no effect on the market - if and when the dollar makes a turn and retraces or resumes the primary trend (if that is still the trend) we can expect equity markets to move higher. Seeing such a large decoupling is a bit worrying and can be a preset to a much larger correction in equities - however due to seasonality its quite difficult to commit too a larger short exposure during this month - at least for me it is.
As I will be getting ready for XMAS I may not be around much for the rest of the year so if I do not see you before ....
Happy Holidays for everyone
out of long break even lol
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