Oil prices rallied hard this morning mainly due to headline: “OPEC ready to talk to other producers to achieve “Fair Prices””. The pair to trade during volatile oil news is the USD/CAD. I’m still smashing my head on the table for not trading too aggressively on the pair, but at least I ended positive, right? I was too focused on trading my main basket of pairs: EUR/USD, GBP/USD, and USD/JPY, that I was, or at least thought I was, too late for the USD/CAD party. I scalped in and out of the pair too quickly when I should’ve held and forgot about it till closing. Lesson for today, always be alert on major macro news.
Prices action today seemed a bit choppy. The USDOLLAR index is right below a substantial resistance. In fact, I think the resistance would only be able to break from a great NFP number or a confirmation of a September rate hike. I’ll be looking for entries on going short dollar tomorrow, unless there are any drastic price action during London’s session.
Also, as the low volatility summer days are coming to an end, I’m planning on increasing my trading capital. It’s almost a year I’ve been trading and I feel like I’ve grown so much. Doesn’t mean I’m confident on not making mistakes, but I want to bring my trading to the next level. I won’t be increasing my capital too drastically as I’m not too funded, but I am planning to deposit a couple hundred dollars more to prepare for the Fall.
Check out the oil rally that boosted the Canadian Dollar.
The Feds have been very mysterious and secretive about giving clues on their next moves. They’re answers are mixed with hawkish and dovish responses, and they’re doing a good job on keeping the rate hike an enigma. Today, Fed Fischer came on CNBC and was more hawkish on a September Rate hike. His comment gave the already strong dollar a nice little boost in the afternoon. Although the percentage of a September rate hike decreased drastically over the past few weeks, Fischer’s comment reminded the market that anything can happen.
My trades today consisted of longing the dollar. When dollar has such a powerful momentum, it’s wise to just ride with it. Going against the dollar and testing it’s strength is not the smartest decision at the moment. With that in mind, looking at dollar’s powerful rally after Black Monday looks very interesting. The dollar has risen up tremendously this week but has hit a familiar resistance area. Below I’ll post a chart of the dollar. You can really see the powerful rally and the strong resistance it’s approaching.
Can the dollar blow pass this infamous resistance, or will we see an end to the dollar’s rally.
I didn’t have time to trade much yesterday due to being on a family vacation in Washington D.C. Because I wasn’t in front of the computer, I had some messy trades in, which didn’t end so pretty. The losses were pretty bad because I hastily placed my SL, and put it too far by mistake. The dollar continued to power through resistance above and rallied overnight.
Luckily this morning, I was back home and trading in my room. I was able to profit off by longing dollar in NY opening, then shorting it towards the evening. Interestingly enough, it did look like EU’s and GU’s plummet finally came to a halt. While I’m still unsure whether it’s a reversal or a temporary bounce, dollar is almost at it’s previous peak and is at an important structure. So currently, dollar has run out of steam and is due for a pullback; or it’s just catching it’s breath from the long marathon, however, dollar pairs are starting to look long.
One trade I’m still in is a long AUD/USD trade. The price fell down hard from Black Monday, made a huge wick on the bottom, then shot a bit back up. I spotted a Head and Shoulders pattern trade and got a nice entry in. I have my trailing stops activated and will take profit at the end of the blue line, which is also a 200 MA resistance.
Today was a recovery day from yesterday’s mess. Dollar is finally showing some strength, while China is still causing apprehension. The markets are still very sensitive and fragile right now; any big event or news can make it or break it for some sectors.
Trading was exceptionally fun for me today. I’m having a mini-vacation in Baltimore/Washington D.C and was able to trade away from home. Trading remotely and having that freedom is always fun for traders. Working distant can be distracting, however, it’s nice to get out of the mundane home-office environment. I made most of my profits from longing dollar, then shorted it late in the afternoon for a reversal. Tomorrow will also be the last day trading away from home, let’s see how the dollar finishes.
A portable USB monitor and laptop is a must for traveling traders.
Chaos would be a understatement to describe today’s market opening. Not only was the Forex market in disarray, it was the whole financial market as a whole. From equities to treasuries, commodities to the vix, market volatility has been absoutely disastrous. In fact, today was so chaotic, #BlackMonday was trending on social media. I personally have not seen, nor imagined such violent moves across the Forex market. The closest thing I’v witness would be the Swiss Franc crisis, but even then, it was just a single currency. However, this whole situation is very messy, it can actually be healthy for the US economy. The dollar was in such a rally mode, it needed a pullback for further growth. Not sure if the dollar drop is done, but I definitely learned my lesson on calling bottom.
During the weekend, I was holding onto some long dollar trades, in a hope for a bounce. I account got burned a bit. Kinda mad about today because the failed long dollar trade scared me into longing the dollar for today. Long and behold, dollar actually had a bounce this morning, which I missed from being scared from the weekend. I had the right intentions, just at the wrong time. As for tomorrow, let’s see if the panic is worse or lessened.
One major currency pair, EUR/USD, has been sky rocketing ever since the FOMC minutes meeting. A pair that’s loved and hated by traders, may have seen it’s halt in appreciation. Since the 19th, EUR/USD has soared over 300 pips! Many traders have been burnt by calling tops, and it’s showing no signs of weakness. Although I know it’s a risky move to counter trend here, I think EUR/USD has topped, or at least over due for a small pullback. Structure wise, the EUR/USD has hit a substantial resistance area while the DXY chart has hit an important support. This week’s dollar slump may be continued next week.
Today trading wasn’t as easy as yesterday. Lately with the dollar sliding down, I’v been trying to get my feet wet amongst many currencies. Yesterday was simple because all the dollar pairs behaved in the same way, today was a little different. There was major divergence between pairs; USD/CAD went higher and higher, GBP/USD was wildly confused, and EUR/USD continued it’s rally. Most of my profits did come from shorting the dollar again. However, although I had a lot of fun shorting the dollar this week, it might all come to an end. DXY is on a major support and this week’s bearish trend may not follow through next week. I’ll be holding onto my long dollar trades for the weekend; of course with very tight stop losses. It’ll be interesting to see how far EUR/USD pullback.
Ever since yesterday’s dovish FOMC meeting minutes, the dollar has been officially slaughtered. Was the FOMC statement really that dovish to push the dollar into oblivion or will the dollar soon reach support? The Euro especially has been enjoying the weakened dollar while the other pairs has put up a good fight during London’s session. With yesterday’s initial push and today’s tackle to the bottom, the dollar may find support and put the EUR/USD rally to an end.
I’v had a great day today shorting the dollar. It was no surprise that the dollar slipped today as it was foreshadowed yesterday. We had a slightly lower than expected Unemployment number, which initially pushed the dollar up a bit, but then the dollar had a monstrous drop down from he rest of NY’s trading session. I was short dollar on multiple pairs including the Euro, Pound, Yen, Aussie Dollar, Canadian Dollar, and even the New Zealand Dollar. I wasn’t sure which pair would be the most volatile with the dollar short, so I “hedged” and shorted it amongst an array of pairs. One solid winner today was the AUD/USD. As dollar dropped, gold rose; with gold rising, AUD rose. Australia is one of the top Gold exporters in the world which makes them dependent on Gold’s prices just like how Canada is affected by Oil’s price.
Here’s a diagonal trend line which may stop the EUR/USD rally.
One would imagine how secure the Fed keeps it’s announcements, but today there was a headline leak in the much awaited FOMC meeting minutes. Bloomberg is taking the blame for such carelessness. Few minutes before the scheduled headline, the markets started to move fast and strong. Dollar initially had a spike up, then a harsh move down. If you were short dollar today, you could’ve made some serious money; disregarding which dollar pairs you were trading. When it was finally time for the meeting minutes to be officially announced, the damage was done and the dollar fell deep below. In short, the FOMC said while September rate hike is not off the table, the U.S data is still unclear for a rate hike.
Unfortunately, I did not hit jackpot today during the announcement, however I was able to break even and give myself a small profit for the end of the day. In the morning I had great trades shorting dollar expect for USD/CAD. When oil inventories number as 2.6M vs -0.6M expected, the dollar shot up against the Canadian dollar disregarding of the falling dollar trend. The crude oil count was such an outlier compared to expectation; USD/CAD rose well above 100+ pips. Fortunately, the huge loss was negated with my profits of shorting dollar. I’m still holding onto some short dollar trades and will probably close them tonight or tomorrow. Although some banks are still hoping for a September rate hike, I’m skeptical and see a bearish future.
Check out how USD/CAD got tossed around today by the oil inventory number and the FOMC leak.
Traders and investors are familiar with the old adage, “Sell in May and go away”. The quote refers to the equity market and how they preform subpar compared to the months excluding summer. The idea is that liquidity dries off as Wall Street takes it easy during the hot vacation months, starting in May. Due to this cliche, I was hesitant on trading during summer months. Luckily, summer is close to end and I’m here to report that the Forex market is still tradable during the summer periods. However, with exception, the month of August is posing a challenge. Not sure if the corporate managers are using their last remaining vacation days, but August has been the most slowest trading days yet. There are seldom big movements and the majority of the time, the market is stuck in consolidation; I mean hours and hours of sideways movement. While August is not completely un-tradable, my advice would be to take quicker profits and have a good book to read.
Today for me has been a boring, but successful day. I attempted to ride strong movements, but price action was rather choppy and short lived. The dollar especially is trying to find back it’s groove. It’s still bullish due to the upcoming rate hike, however, there’s not enough liquidity to give it that good push. I’m currently reading “Liar’s Poker” by Michael Lewis, to entertain myself during slow market periods. Trading right now almost feels like fishing; I see a possible trade, execute and wait, what seems like for an eternity.
On Friday, I opened up a short GBP/USD to hold for the weekend. Today I’m here to report a successful hold. One error I made today was for not holding onto the trade for it’s full potential. I have to admit, it scared me a bit once price continued to go up toward my SL. Once I woke up and saw the negative numbers turn to profit I was tempted to take early profit. I was able to hold until I got faked out and price spiked a bit, only to continue down. Regardless of where I took profit, I’m glad the trade work, it’s structured trades like this one that has a great R/R.
Dollar is slowly, but surely climbing back up to it’s peak. September is still rumored to have a possible rate hike, however, traders are gradually losing hope. I think we can see the dollar recover in the next few days, but nothing too strong. I don’t even see dollar getting near the price of it’s previous highs before having a downward move again. I’m short term long but long term short dollar for now. If data shows promising results, I’ll look into longing the dollar.
Here’s the GBP/USD result in 4hr TF. That wick is what scared me and what caused me to second guess my trade. What a beautiful drop, no?