Michael Bridgman

The EURUSD was more appealing with a risk of 13 pips for a potential 75 pips to our daily target at 1.1338. An entry short was taken, price moved down to yesterday’s low where it began to retrace in advance of the U.S. open closing our trade for modest gains well short of our target.

The AUDUSD and NZDUSD were very active today but I didn’t like the reward for the risk in either pair.

There are some mixed signals appearing once again which makes trading trickier and riskier than usual. The GBPUSD is extremely volatile, so be very cautious with it. There is some appetite for risk today but if this changes and U.S. equity markets start to decline substantially watch for flows to the safe haven yen. There are some major economic news releases tomorrow to be aware of.

Good luck with your trading!

It’s getting very interesting again. In Britain all eyes are on the outcome of the parliamentary vote with wide expectation of defeat for Teresa May. Whenever the GBPUSD rallies, I wait for it to turn and look for a short setup.

Today with growing negativity and uncertainty ahead of the parliamentary vote, the GBPUSD set up for a modest short. However, it ran further going into the London close. When the U.S. session got underway, price retested its Asian session low and was rejected. Risking 11 pips for a potential 33 pips to our daily target at 1.2809, we went short.

Price moved down as traders considered Britain’s quagmire. It’s very difficult to know how Britain’s exit from the E.U. will transpire and resolve itself, and in the meantime this pair and its crosses will be in the crosshairs. Ultimately Brexit will be resolved and the GBPUSD will climb higher. In the meantime, optimistic rumours will help move it higher and vice versa.

As price moved to our target today, we allowed it to retest yesterday’s low where sellers continued to emerge and we rode it down, closing it at the U.K. close.

Analysts have been making a case for a lower USD and I understand their reasoning, but I don’t agree with it…at least not yet. The Euro remains vulnerable as Mario Draghi hasn’t swayed in his belief that a significant amount of monetary policy stimulation is still needed. Previously, he stated that there would be no interest rate hike through the summer of 2019 and now one might think possibly longer. The U.S. Federal Reserve is likely to raise rates this year if inflation gets above it’s target, regardless of President Trump’s wishes.

So far, the U.S.-China trade talk rumours continue to be positive and if progress is made, not rumoured to be made, look for the USDJPY to rally and JPY crosses to weaken.

It’s always a two-way market with new information coming to light each day.

Good luck with your trading!

There are a number of conflicting signals in the markets this week – making it difficult to find high probability trade setups. The market has a lot to digest to begin 2019.. as it looks forward.

Equity markets continued higher today along with gold, oil, the U.S. 10 yr yield but the USD dropped. The Nikkei was up over 1% today, but the USDJPY set up for a short. Even the AUDJPY moved lower usually implying a risk off tone.

After the U.S. traders got underway, a short was taken in the USDJPY risking 15 pips for a potential 30 pips to yesterday’s low. As price began to move down, we took the risk out of the trade by moving our stop loss to plus 2 giving the trade some room to test and retest its Asian session low. As price moved lower, we locked in more profit and gave it room to retest yesterday’s low. Price continued lower and as it moved toward the 108.00 figure, we closed the trade just above at 108.10 – the low from May 29, 2018.

Even P.M. May’s Brexit defeat today in parliament didn’t sink the GBPUSD which suggests how weak the USD is today. U.S. – China trade talks are continuing and rumours are positive, but the USD is moving lower. If it all seems a little confusing…it’s because it is! Traders now awaits Jerome Powell’s comments tomorrow for further guidance.

Good luck with your trading!

Equity markets were stronger today as was the USD. Early in the U.S. session the USDJPY made a lower high and began moving down. We entered short risking 16 pips hoping to get at least 32 pips before the London session ended.

Price moved down to yesterday’s high and we moved our profit stop just above this level to allow for a retest. Price continued lower to test its Asian session low and found buyers leaving a candle with a long lower wick. Not wanting to give back too many pips, we moved the profit stop just above the Asian low and as price moved higher the trade closed just before the U.K. close.

As the new year begins, traders will be focusing on the U.S. – China trade talks and Jerome Powell’s speech on Thursday. There are a number of significant economic news releases scheduled this week so be careful of the potential for volatility.

Like the Federal Reserve be flexible in your outlook.

Happy New Year and good luck with your trading!

I will be returning the week of January 7th.

Equity markets continued to sell off and the U.S. 10 year yield continued lower today as did the USD. It was no surprise that gold moved higher and money flows were moving to the yen.

The EURJPY fell during the Asian session then retraced upward where it ran into sellers around 128.25. As it broke to the downside and closed back beneath its Asian session highs a short was taken risking 22 pips for a potential 66 pips to our daily target at 127.45.

In trading we define our risk by setting a stop loss and accepting that if the trade moves against us, and our stop loss is triggered, that is where we want to be out of the trade. By defining our risk we accept the possibility that if the market moves against us, how much of a loss we are comfortable taking. The purpose of a stop loss is to define our risk and prevent our account from potentially suffering catastrophic damage.

As price moves in our desired direction, we can take the risk out of the trade by moving our stop loss to a profitable position. Each time we move our profit stop from that point forward, we are locking in more profit. If the trade reverses and closes, then we have a profitable winning trade. From that point on whatever the market does…it does without us.

Today with the EURJPY price moved down and we took the risk out of the trade by moving our stop loss to a positive position in advance of the U.S. open. Price continued downward and we locked in more profit…accepting that if price reversed we would still have a positive winning trade. Price did reverse for one candle and closed our trade before descending to and through our daily target.

We never know in trading where the next candle will close. We have control in defining our risk when we enter a trade, and removing risk from the trade as we lock in profit. Acceptance of this concept can be useful for your trading success. It also reduces a lot of potential stress.

Good luck with your trading!