Oct 14 – Market Analysis

Personal reflections

I am suffering from a lack of self-confidence with my FX trading – it’s something that I will need to address. Part of it is that it’s difficult for me to build faith in my trading abilities with such a low regularity of trades.  Since the beginning of June I have had 25 trades (6W, 15L and 4BE) and am down 1.27R.  The low point has been -2.27R and the high point +2.46R – so basically I am trading flat at the moment.  But I consider 25 trades a very small sample size.

When I was playing poker, I had hundreds or thousands of hands every week, and as such, I felt that I was getting into the long-run more quickly, and that the actual results verified my edge more quickly.  I am struggling with that with my trading right now.  My coach tells me that I am completely heading in the right direction and that I am more or less doing everything right.  My prior experiences in trading (say the 2011 year) and the poker play (and competitive sports experience) all play strongly into my favour, so does the size of my trading account – but still I am scared or worried, and I am lacking confidence.  I am going to try to work on that, with one specific tool being the use of visualizations.

I have managed to get hold of some specific Visualization-related advice from one of the TradersForum3 speakers – so I will work/digest on that in a more relaxed environment (aka Tate Modern) this afternoon.

Market Analysis

Equity markets (globally) rallied strongly on Thu and Fri.  Apparently all of it focuses around the US government shutdown and the raising of the debt ceiling.  Gold and oil fairly steady.

FX Market

CAD, JPY and USD continue to be the weakest.  CAD gained 1 point.  USD lost 1 point.  NZD continues as the strongest pair (12), EUR and CHF on 10, and GBP on 9 (but losing a little), with AUD on 7 and gaining.

Have been corresponding with Wayne who has managed to edit the STAM dashboard on MT4.  I will review the potential setups by categorising the currency pairs into three groups, one for each of the weak currencies.  (I just realised some discrepancies involving the Weekly Momentum – I am going to have to investigate that on Wed).

Yen pairs – only AUDJPY and NZDJPY are now in S1 setups – presumably because NZD is the strongest, and AUD has good momentum right now.  For all the other JPY pairs, the momentum has changed in favour of Yen as at the end of last week. There have not been any retracement with AUDJPY or NZDJPY.  No setup.  Regarding the other Yen pairs, there is an issue with the weekly momentum reading on the MT4 dashboard.  On my MT5 the momentum is still in favour of the non-Yen currencies, on MT4 the momentum is with Yen, however in any case there is no STAM setup in terms of retracement & price action on those pairs.

USD pairs – EURUSD, NZDUSD and USDCHF are in S1.  Cable and AUDUSD are in S2.   Missing retracements and/or relevant price action on these pairs.  Therefore there are no STAM setups.  Did take another good look at USDCHF.  As I commented at the end of Friday, shorting this pair on Friday was most likely not a good trade – there was no good 4H corn-trade setup.  Looking at the pair again now – USD continues to weaken, CHF is still a strong pair – price is consolidating but did put in a very nice bearish pin bar on the 4H chart.  There is no news on CHF or USD until Thursday of this week – good.  However the pair can obviously be great influenced by things going on with the US government shutdown/debt ceiling issue.  Entered order to sell @ 0.9100, stop 0.9140, target .9020 – risking ½ unit of R because I am low on confidence.  (Update 1.50pm: Unfortunately my order was not filled, and the pair rapidly declined to 0.9065 – but that’s how it goes – I have removed the order now).

CAD pairs – AUDCAD, EURCAD, NZDCAD and CADCHF are in either S1 or S2 environments.  However all pairs are either trading sideways and/or there is no significant retracement.  AUDCAD has fallen around 100 pips from its previous high and could set up for a 4H corn-trade by 7pm, but at that point it would leave a great distance to the previous high.

Actions required later today

Nothing to monitor for the rest of today, as nothing (other than USDCHF) is close to a STAM setup.



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