The first day of March concludes one of the most difficult to trade and volatile trading weeks that I have seen in awhile. With very little significant European economic news, the market used the British Manufacturing PMI as the catalyst for some very large moves to end the trading week.
The GBP exploded to the downside in advance of the release…hmmm… and more than doubled that move after the release.
The EUR being quite tame by comparison offered a very tempting entry short, but it did not meet our minimum Reward to Risk ratio of 3:1 to our Target 2. Price subsequently moved to our Target 2 without us. The cheap stop loss was about 25 pips above the entry candle and a better stop was about 35 pips above the same entry. With our preferred target being only 51 pips away and risking 25-35 pips to get it, experience has taught us to walk away from such trades. If you are not disciplined in your trading methodology, you won’t last long in this marketplace.
The current theme seems to be US dollar strength and we are seeing increasingly better economic numbers coming out of the US.
Let’s see where we go from here.
Good luck with your trades!
Enjoy your weekend!