Trading is beginning to wind down for the holiday period. Be careful trading during periods of lower volume. I am off doing other things for a couple of weeks.
If you would like to read a good book about the psychology of trading over the holidays, I recommend Trading in the Zone by Mark Douglas.
Happy Holidays to everyone!!!
I’ll be back Tuesday January 8th 2013.
Michael Bridgman
Questions – email Michael@privateforexcoaching.com
Trading is showing signs of being quite erratic this week. As we go deeper into the holiday season, trading volumes decrease and the chart setups are less clear. When this happens, it’s best not to trade. You must be extremely disciplined to make money trading. During holiday periods, it’s harder than normal, because the largest traders step away from the market, but they will be back!
The CHF looked best to me of the majors overnight, but I could not find a satisfactory trade setup.
The market is not going anywhere. In January the trade setups will become clearer once again.
I will be travelling on Tuesday but will check for trades during Wednesday’s UK session.
Have a wonderful weekend!
Back Wednesday…
It took a while to find a trade, but after the US economic news releases were out of the way, the AUD set up nicely, allowing us to enter with a small stop and a 4:1 Reward to Risk ratio.
This trade was so easy to manage that I haven’t marked in the “take profit” areas as the trade progressed downward. Very few trades are this easy. Always remember to move your “take profit” down to protect yourself against a sudden and very abrupt reversal. This can happen when you get up and walk away to stretch or as quickly as being distracted for a few moments by a telephone call or other interruption. Be very disciplined and avoid distractions while trading. Alarms are useful, but stop losses and take profit orders entered with your broker will assure you of no surprises.
Back tomorrow to wrap up the week.
Good luck with your trading in the meantime!
EUR looked good and had an excellent Reward to Risk ratio setup of almost 6:1 overnight. These are extremely attractive trade setups and hard to resist – if everything else adds up.
The Asian session high and yesterday’s high were at the same level. When the UK traders broke this level and then pulled price back, a familiar entry setup presented itself. Price had been stair stepping higher and the trade required a very small stop of approximately 10 pips for a potential 59 pips of reward. This trade was very easy to manage and offered 25 pips of reward.
Volumes seem to be tapering off a bit. Is this due to the holiday season approaching – which will naturally slow down trading, or is it due to the FOMC statement mid US session? Who knows?
Assuming that volumes will continue to taper off as we get into the holiday season, it is best to keep stops tight and continue to manage trades prudently, as always. When volumes lighten, price tends to get erratic and chart patterns appear less clear.
Be careful trading in such an environment and be very selective with your setups.
Good luck as always!
A common characteristic of successful traders is that they have found a strategy that works for them. This strategy enables them to trade with a high probability of success. They use this strategy methodically over and over with each trade. Trading is routine and almost mechanical to them. If a trade fits their criteria, they take it, if not – they walk away.
A pervasive characteristic of unsuccessful and inconsistent traders is they lack rules, discipline and a clear trading method. Frequently they jump about mixing and matching different techniques and or chasing lagging indicators in search of a mythical trading holy grail.
Successful traders are patient, disciplined and focused.
None of the majors met our trade criteria overnight.
Know what you are looking for and when best to find it. If it doesn’t present itself, look elsewhere and if it’s not there, come back tomorrow.
Good luck with your trading this week!
Back tomorrow.
Questions??? Michael@privateforexcoaching.com
After a very slow week and a short one for us, because we never trade NFP Friday, we found a wonderful trade in the EUR. It’s been a frustrating couple of weeks as the pairs have not been moving as much as usual and nice setups have been delivering much less than we are used to. However the trading week ends with a very encouraging trade. I don’t usually show critical areas on these charts, but my students will recognize its significance.
We will not be trading tomorrow… back Tuesday.
Good luck in your trading and have a wonderful weekend!
