Although it looks like I had a negative day today, I actually made a good amount of profit. The past few days were rough; go ahead and check out my previous posts if you don’t believe me. My P/L only looks negative today because of how much I was down the past couple of days. I didn’t write what my losses were since I was still in the trades hoping my losses will turn around. I’m so glad I was able to recollect most of my losses today and I’m ready for the new month. September was harsh…really harsh but that’s not going to stop me. I have to continue to be humble with my trades and play things smart.
A couple days ago I posted that USD/CAD was due for a pullback while oil can go for a breakout. If the move happened sooner, I wouldn’t have lost so much money but at least the shorts on USD/CAD happened today. I mainly traded USD/CAD this week and right when I was about to call it quits, I made a couple executions today. At first what scared me was the great ADP non farm employment change and the oil inventory count. However, Canada’s GDP came out positive and oil was able to recover from the high inventory news. News about Hurricane and Russia bombing Syria may have impacted oil positively. I was in and out of USD/CAD short until I saw that oil was still bull, which made me short more aggressively. This may or may not be a start to a bigger move for the USD/CAD short. Keep your eye out for this pair, it is hot. If oil breaks out, expect this pair to drop more.
It’s in a potential reversal zone as we speak. I closed my short position, but I’m ready to jump back in if it breaks.
My trades haven’t been doing so well recently and so is my trading psychology/confidence. I’ve been getting killed by the short USD/CAD call and things aren’t going too well. I’m actually contemplating whether or not I should take a break but that’s still up for decisions. I’ve been talking to other traders too and they have not been doing so well either. I guess it’s either a coincidence or the market is too wild right now to make any calls. Hopefully once the Fed’s reaches their decisions on this rate hike and when the global market settles down, trading will be much easier.
My account got drained recently with this USD/CAD short trade. Once it started to head down a bit, I stacked up on the shorts just to see it go right back up making new highs. I repositioned another short on top which I’ll hold overnight. I’m also in a long EUR/USD trade which gave me some profits this morning. The whole flow of the markets are changed from the summer and I guess I need to accustom to it. I’m sure October will treat me better.
We had three Fed members that spoke today, all with different views on the rate hike. Confusion in the market is never taken well. Both the equity market and dollar had a sell off. It was interesting to see the Euro and Yen rise with the uncertainty in the dollar. Investors are flocking to safer currencies due to this confusing Fed announcements. The rate hike looks like it can come anywhere between October or even mid 2016.
Recently, my trades have been very rough. My good trades are cut short, and my bad trades are left running. It feels a little weird trying to hold onto long EUR/USD for long term, but it can become a possible trade if the market continues to dislike the dollar confusion. One chart I don’t look at often but eyeing right now is the Oil. Oil has been recently dropping and been staying low for a while. Right now it looks like it’s coiling up for a breakout. I’m speculating that oil is due for a bounce and will breakout north. USD/CAD is the pair to trade when looking at oil so I’ll be short USD/CAD in the hopes that oil will rise.
Today was a tricky day because it was a battle between fundamentals vs technicals. Final GDP numbers were revealed today and they were excellent, 3.9% vs 3.7% expected. Anything above 3% would’ve been considered a great number. However, as stated in yesterday’s post, dollar is at an exhaustion point hitting a diagonal trend line along with a double top. Although fundamentally, the GDP number would’ve made the dollar rally, the technicals kept it down. This battle between the two sides created confusion and awkward price action throughout the day, a nightmare for a scalper like me.
I started off the morning on a bad foot. I saw the 3.9% GDP number and was quick to jump on the nonexistent dollar rally. Luckily I was aware of the technical resistances the dollar was at, I was able to switch to short dollar after seeing the failed wick. I broke-even by shorting dollar, but as the afternoon approached, liquidity died down and the dollar refuse to head down any lower. The suspension and choppy movement made it hell to scalp. The dollar was all over the place and eventually I called it quits when EUR/USD decided to make lower lows than rally up to break today’s high. Ultimately, I’m not too sure where the dollar will go from here. Technicals are pointing down for a pullback, but fundamentals are keeping the dollar strong. Hopefully next week we see clean long movements instead of choppy up’s and down’s.
Dollar hitting both diagonal and horizontal resistance, creating a double top. Will it break or will it drop?
So something interesting happened this morning. It looked like the dollar was about to drop heavily, AUD/USD and NZD/USD being the true winners. All the dollar pairs were strengthening against the dollar and it looked like the dollar finally hit it’s exhaustion point. As I was loading in profits, especially shorting the USD/CAD after reaching a new high, the market made a reversal mid way. The profits were too easy and the money was too good to be true. Suddenly the rising foreign pairs began to fall down and dollar began to make its way back up.
I had a very good run shorting the dollar. I was playing safe and was making profits quickly. I thought there was a shift in the market and the dollar sell off would be good for a while. Just when I got comfortable shorting the dollar, the market changed things up and decided to reverse. There were multiple bottom wicks that should’ve been a red flag to me and thus I should’ve traded a reversal. I was scalping my trades so I didn’t lose my profits, however, I continued to short the dollar as it was keep going up, which slowly ate a piece of my profits. Yellen also had a speech in the evening and pretty much stated that she was insisting a rate hike within this year. Her comments made the dollar rally for a short term but didn’t create any major change. Tomorrow is when the final GDP number which will be very important. Estimates have already been made by banks and they’re aren’t so promising. The dollar is at a important location, and if the GDP number does come out short, the exhausted dollar is bound to retrace.
Here’s the bottoming wicks that warned against a reversal.
This would be the awkward post where I’d be a hypocrite from yesterday’s losses. I thought, or at least I thought I had learned my lesson on risk management from such a painful lost yesterday, but here I am today posting about another huge loss. There’s not much explanation except for the fact that I’m still an idiot who makes horrible decisions despite trading for almost a year now. I should’ve known better, it was only yesterday where I got burned by the market. I know what the market can do and what is capable of, but why did I continue to be so reckless? I don’t know. The only poor excuse I can think of is revenge. I guess I’m still butt hurt about my losses yesterday and it obviously clouded my judgement. I’m questioning myself if I even respect money and my trading account right now. I’m treating my capital as some meaning-less number when in fact it’s hard earned cash. I need to re evaluate and find my mojo back. This can’t continue any longer.
My rouge trading started early morning when Draghi had a speech. Seeing the markets alive and volatile from Draghi speech made it really tempting to trade. I started off with a smaller position and scalped my way through the 1 min chart. It was such easy money I thought I had it in the bag. I closed for a easy profit then continued to scalp more, expect with bigger lot sizes. After trading for a bit, the EUR/USD was behaving uncontrollably like a whipsaw, pumping up, then plunging down, in a haphazard pattern. Before I knew it, I was buying at top, then selling it at bottom; I was getting wrecked. Embarrassed of my outlandish decision to scalp, I wanted to break even. I wasn’t even thinking about profiting, I just wanted to break even from this news driven chaos. Eventually when the NY session opened, and Draghi finished his speech, I was left with no sense of direction of the market, a huge loss on my shoulders, and a dry liquidity. I again failed due to my emotional trading.
I tried my best to hold my short dollar positions, but bad news from the Europe and Britain just kept driving the dollar higher and higher. Just goes to show that fundamentals aren’t the only driver in the market. Ask any fundamentalist and they would’ve claimed that a dove Fed with no rate hike would’ve made the dollar drop far and long. I was too eager and blinded by my ego that I disregarded all the important supports the currencies made.
I called it quits today on hoping for the dollar to reverse and continue to drop. I was not expecting such a rally to come after the Fed announcement. It stresses me out on how aggressive I was, instead of playing it smart. I once again learned my lesson and will be back to my normal day trading/scalping tomorrow. I’m keeping my head up and will use logic instead of being emotionally driven.
This dollar strength is starting to surprise many investors and myself. The equity market today reversed from a drop on Friday, but the dollar continued it’s strength. I’m still in my short dollar trade from last week, hoping this is a pullback for a greater drop. The disappointing rate hike wasn’t harsh enough to drown the dollar. I’m still planning my exit strategy but I’m still adamant about this short. However, Draghi is scheduled to speak this week and so is the final GDP on Friday, which may move the dollar drastically.
My P/L has gotten more negative since Thursday. I was expecting the dollar to reverse today, but the markets were horrifically slow today. There’s a Japanese holiday that might have contributed to the lack of liquidity but today was painful to watch this slow market especially in a negative P/L. I’ll still hold onto my short dollar trades, I don’t feel like comfortable longing dollar here just yet. This is why I’m mainly a day trader/scalper. I absolutely hate holding onto positions for long terms.
Once again I’m stuck in my account from closing my positions and calling it a day. I hate leaving trades open, especially for the weekend, however, I can’t accept this lost after such a positive day yesterday. I’ll hold my short dollar for the weekend instead of closing. What happened today in the equites and forex market was really surprising. Not sure why the markets moved unexpectedly; maybe due to it being expiration day or some other reason, but it sure surprised many investors and traders. The equity market took a plunge while the dollar soared. Even until London session, the dollar was falling from the Fed’s dovish announcement. It was only until NY afternoon session where the dollar picked up strength and continued to move higher and higher. I think this is a false pullback in an anticipation to fall lower than before.
I’m still kicking myself on deciding to hold for this long. I could’ve called it a day early on and ran off with profit, but I’m looking at a loss again if I do close out now. With that said, next week, I’m looking forward to the dollar falling again, if not I’ll come up with an exit plan. This just goes to prove that the markets does not behave in a “textbook” manner. Anything can and will happen while trading.
All but one Fed member unanimously decided to not hike rates today. The Fed’s outlook on the U.S economy is still unchanged, however, they do want to see a better labor market, rise in inflation, and a calmer global economy. I actually agree with Yellen’s move today. If there are no major risks in keeping a low inflation, why not just hold until things are a bit safer. While other countries are lowering rates, the U.S rate hike would create major instability in the financial markets. With that said, the Feds ultimately did not raise rates but also did not really hint when the liftoff would be. Although there are a lot of debates on whether Yellen was hawk or dove, I took it more of a dovish tone. I won’t be looking to long the dollar anytime soon, unless interesting things start to happen. The markets are still in the dark when it comes to the next rate hike. Whether it’s next month or next year, we don’t really have a clue.
The markets was actually not surprised of Yellen’s passive move. The dollar was already slipping this week, and it just fell a bit more once Yellen announced of a no hike. The movement wasn’t as wild as I thought it would’ve been, EUR/USD rising just above 1%. Although I stated in my blog I was planning to hold my long EUR/USD and GBP/USD positions until today, it was unfortunately stopped out. Had I held on, I would’ve had some massive gains today. I admit, although I was skeptical on a rate hike, my fears led me to put a really tight stop loss. Although I was able to scalp some pips during the news announcement, I’m planning to hold my EUR/USD and GBP/USD until tomorrow. My losses scared me on trading too aggressively today. I have a feeling the pairs will make new highs tomorrow and during London’s session.