Groundhog Day was one of my favourite movies starring Bill Murray back in the early 1990’s. I feel that with this week’s blog, it’s Groundhog day once again, in fact since after the flurry of activity last August, I feel that at every weekend since the initial move higher in the cable that I have been mirroring the Bill Murray character in the movie.
It’s really hard to come up with a subject in this section of the blog to really get my teeth into. We have sleeping equity markets that are slowly grinding higher. FX markets are trapped waiting for a CHINA / U.S. trade deal (Phase 1) to be announced, which in my opinion must be, by now, priced into current market prices.
Is the CHINA trade deal going to be signed?
Who knows? I am literally sick of hearing BLOOMBERG, CNBC and FOX BUSINESS talk about it. In fact, listening to all Financial Expert analysis on the U.S. media, I think that they can be broken down into two groups about the trade deal outcome.
- Those who just don’t know.and
- Those who just don’t know that they don’t know.
I spent a little time with my groups in HONG KONG on SKYPE and FaceTime this week. 90% of the conversations were talks about the violence and the continued protests. The FX market was secondary, even though these ladies and gentlemen were still actively trading. I wrote last week about the tight FX markets, with very little volatility and tight range bound conditions being effectively trading in “THE NEW NORMAL”.
During this period of range bound markets, I have been getting prepared for 2020. I even thought that I had better communicate with my FX PREMIUM subscribers to advise them that whilst I was preparing for revisions next year, I was still engaged in 2019.
This got me thinking. Inside the subscriber area of my website I have a section called EDUCATION and in the drop-down menu is a section called “TRADING ESSENTIALS”. I had this section packed full of PDF files coving a vast range of topics associated with FX trading. In fact, during 2014-2017, I used to add what I called an educational piece into every DRIVE THRU blog. I built up quite a library that I took down last year with the plan of re-writing and revamping each article to re-load it back to the website.
One of these articles was called: –
8 QUICK REMINDERS BEFORE SETTING YOUR 2015 TRADING GOALS. It is never too early to start planning ahead. There is absolutely no harm in my opinion carrying out as much research as you can. There is no better way to actively manage your FX business than to think, schedule and plan well in advance and get your strategies on point.
I have decided to place the original article here, re-worked and revamped. I hope that this helps in some way.
8 QUICK REMINDERS BEFORE SETTING YOUR 2020 TRADING GOALS:
Ready for another year of making pips?
It is important every year to consider some basic disciplines for trading the Forex Market.
For both Forex newbies and those traders with more experience out there, here are a few things you should remember before you set new trading goals for 2020.
FOR THE NEWBIES:
- FOREX TRADING IS NOT AN AVENUE FOR MAKING QUICK MONEY.
Hate to burst your bubble so early, but this is something that you have to learn right off the bat.
It’s possible to make fast money, but odds are probably 99.99999% that you are NOT in the less than 1% camp of naturally born, financial wizards who can sustain a 100% gain a year for an entire career, let alone even for more than one year.
Fact is, Forex trading is more like a business, and it’s a long, grinding business of highs and lows.
You put up Capital, you make and lose money while you improve your skills, and you SLOWLY learn to be consistently profitable.
- ONLY TRADE MONEY YOU CAN AFFORD TO LOSE.
One of the most common newbie mistakes is risking money they can’t afford to lose.
You need to take out the fear of losing money so you can focus on your trading skills.
If you don’t have enough capital yet, you can start with small accounts or try trading a demo account
- YOU WILL PROBABLY BE A BAD TRADER IN THE BEGINNING.
THAT WON’T CHANGE UNTIL YOU KEEP A TRADING JOURNAL
Because you are new, you will likely make a lot of trading mistakes that takes experience to overcome. Even a simple, well-kept trading journal could speed up the improvement process by showing you what’s working and what isn’t, and if you are making the right changes.
What’s not measured cannot be managed.
- DON’T HESITATE TO ASK FOR HELP.
No trader is an island.
All pro traders were once newbies. If you subscribe to the WEEKLY FX PREMIUM, you can ask me for an alternative view.
FOR THE MORE EXPERIENCED TRADERS:
- NEW IS NOT ALWAYS BETTER.
Before you explore new strategies this year, take a second look at your old ones and check if a simple adjustment in stop losses, position sizing, or indicator settings would have changed the outcome of your trades.
I don’t believe that “new is always better” Also, check your journal to see if you consistently executed your strategy.
Even the best strategies can’t be made profitable with poor execution.
- SET REALISTIC EXPECTATIONS.
Just because you caught a 200:1 reward-to-risk trade last year does not mean that you should aim for a 1,000% gain in your account this year.
Set your goals and expectations based on your average performance, available time for trading and capital limitations.
- WINNING CAN BE AS DANGEROUS TO YOUR ACCOUNT AS LOSING.
Psychologically similar to how losing streaks can make you fearful of taking trades, winners can also cause psychological damage by making you overconfident.
This can lead to lack of preparation and over trading, which is worse than being too fearful because you are most likely taking unnecessary risk.
No matter how big your wins are, remember to be consistent with the final point:
- FOCUS ON THE PROCESS, NOT THE PROFITS.
All the points above can be summarized into this one.
Forex trading is a marathon, not a sprint.
Like any worthy endeavor, becoming consistently profitable requires consistent practice and self-development.
You are kidding yourself if you think it requires anything less than that.
Don’t be distracted by one-time profits and losses.
Keep your eyes on the prize, and stay focused on doing the right things, the right way, at the right time.
I hope that the above revisited article was of some use, and at least I hope it prompted a few pointers to note and action into the year end.
With regards to what to do with your trading?
You have got to sit tight, do not force trades let prices come to your entry levels.
We live by ALGO’S, TWEETS and SPIN at the moment. I cannot see this changing. I have made changes to the way I am going to approach the markets next year. Will these changes be effective? I am not sure at the moment, but we are in THE NEW NORMAL so get used to it and adapt.
Finally, in this section…
My subscriber promotion “TAG ON” is launched.
Subscribing now on an annual basis will have to set up through to the end of 2020. The remainder of this year can be used to get familiar with the system and have you ready to hit the ground running in 2020.
My goal this year on net new pips was 10,000. I have so far achieved 16,788. Next year there is an aggressive 15,200 pips target
Even trading single mini lot trades only on the most liquid pairs and maybe only as little as 2 or 4 micro lot trades on the more volatile pairs, there are some great opportunities available.
Details are in section 5 of this blog and they can also be found on my home page at www.weeklyfxdrivethru.com
FOREX REVIEW
FX – FORWARDS, BACKWARDS & SIDEWAYS:
1: – THIS WEEK’S ECONOMIC DATA:
2: – BIAS CHART – USD MAJORS SUPPORT and RESISTANCE:
3: – USD INDEX (DXY) OVERVIEW – MY THOUGHTS:
(The Daily DXY chart is below and my thoughts, ideas and comments regarding the DXY are contained on the chart)
4: – USD MAJORS – TRADING CHARTS and MY THOUGHTS:
4.1. EUR/USD:
I posted the chart below to twitter on November 5th stating the TRIPLE TOP would be in play on a break thru 1.1075. We are now in the middle of that pattern playing out down to 1.0980.
We stopped short of the TRIPLE TOP measured move at 1.0993, the 61.8% retracement level. From this level we have bounced about 60 pips but, so far, we have yet to test the breakdown level of 1.1075.
Germany did not fall into recession last week, but the numbers produced are hardly those that would have economists dancing in the streets! The 14 DAY SMA (Light Blue Line) comes in c. 1.1070 and I think this is the test to see do we break higher or retrace lower once again.
The 14 DAY SMA = 1.1070
The 200 DAY SMA = 1.1177
4.2. GBP/USD:
We have a BULL FLAG still in play with a measured move of 1.3530. A break of 1.3020 in my opinion sets this up.
Despite quite a large 200 pip sell off from the recent highs, the DAILY Chart below still looks bullish. Last Friday on the back of a move from Nigel Farage’s BREXIT PARTY to pull out of more seats so as not to dilute the BREXIT vote supported the cable higher and it broke through 1.2900 once again.
The UK General Election is not until December 12th. We therefore have about 4 weeks of fun ahead. The cable I think will be a prisoner of the process through to the ballots being counted.
I think we will move sideways in the range of 1.2750 to 1.3000.
14 DAY SMA = 1.2868
200 DAY SMA = 1.2702
4.3. AUD/USD:
The range is set in my opinion from 0.6670 to 0.6930.
The 200 DAY SMA is at 0.6940.
The 14 DAY SMA is at 0.6868
The last move upwards basically stopped at the 61.8% retracement of 0.6926.
The chart below was one I posted to twitter earlier in the week via @pipaccumulator, I claimed it to be the ALTON TOWERS (UK), SIX FLAGS (USA) pattern. Basically, moves with this pair represent a “ROLLER COASTER RIDE”.
There was a good chunk of poor CHINA data and really weak Australian Jobs data last week and this pressured the AUD across the board.
I am now of the opinion the CHINA / U.S. trade deal Phase 1, must be almost priced in by now so after an initial spike I think there are many currency pairs prime to be faded and this pair is one of them.
The word on the street is that the RBA will cut interest rates once again pre end of 2019.
I am sidelined on the AUD/USD at the moment.
4.4. NZD/USD:
There is yet another inverted Head and Shoulders pattern in position for this pair. It triggers at 0.6460 and the measured move is to 0.6690.
Last week the RBNZ fooled the markets by not cutting interest rates, which really boosted the NZD across all pairs…argh!!
I always think that the Kiwi is messing with my mind….
In my opinion, apart from the AUD it is the second currency to have the greatest number of false moves. I like being short this pair but I am very skeptical irrespective of chart set ups to be long.
I am sidelined waiting on the U.S. / CHINA trade deal outcome.
14 DAY SMA = 0.6370
200 DAY SMA = 0.6570
4.5. USD/CAD:
No change from last week…
We are operating inside the range but my overview for now remains.
I still hold my CORE SHORT position.
This pair is as always, a bit of a frustration.
I see looking forward, well at least I thought that this was the case: –
- USMCA deal signed off = CAD strength.
- Phase 1 TRADE DEAL signed off = strength for commodity currencies.
Longer-term and a bit away from current prices, I see 1.3014 is a key level for me. The range is STILL 1.3014 to 1.3350.
4.6. USD/CHF:
The triangle on the WEEKLY chart below still holds in play. The trading range as I see it is, 0.9650 to 1.0240.
Longer-term, I am looking to go long in the area of 1.9720. 1.9600 would be even better.
4.7. USD/JPY:
I STILL hold a CORE SHORT position.
My bias is still lower, but there is an inverted Head and Shoulders pattern to consider. The measured move with this chart pattern is 113.50.
We are bouncing around at the moment and any moves with this have not been convincing at all.
I would like, but there are no guarantees a move to stick below 1.0840.
Long-term, I am still bearish this pair and my targets are between 100.00 and 102.00.
5: – THE WEEKLY FX PREMIUM TRADING SUMMARY:
November 2019 so far: +367 net profitable pips.
2019 year to date: +16,788 net profitable pips.
The WEEKLY FX PREMIUM is my subscribed based FX support option, which offers, subscribers’ full access to my suggested trade set-ups and my market commentaries.
If you go to my website you will see more information about the WEEKLY FX PREMIUM, including the “SUBSCRIBE” tab at the top of my welcome page.
My website www.weeklyfxdrivethru.com has full details of my trade projection for 2019 along with reasons why you should consider joining my other subscribers at the WEEKLY FX PREMIUM. You will find this information under the “History and Performance “tab
Plus, my website also contains full details of the subscription options available. You will find this under the “Subscriptions” tab.
FINALLY: I have just recently launched CORE POSITION trades. These segregate my longer-term trades into a category that may appeal to part-time traders and those who cannot access their trading screens more than two or three times a day.
This year I am now operating within my TRADE PLAN three categories of longer-term position trades: –
- CORE POSITION TRADES*
- NON-BREXIT POSITION TRADES*
- BREXIT RELATED TRADES*
*All categories have specific goals and objectives and vary on position sizes, RISK and RISK TOLERANCE.
Next year in 2020, there will be a revision of my TRADE STYLES, but I will still be retaining my macro views as a longer-term POSITION STYLE trader.
6: – WEEKLY FX PREMIUM SUBSCRIBERS ONLY:
6.1: MY TRADING REVIEW & GENERAL THOUGHTS ON THE FX MARKET:
6.2: LOOKING AHEAD – TRADING THOUGHTS FOR THE COMING WEEK:
6.3: PERFORMANCE SUMMARY OF EXISTING CORE POSITIONS:
7: – THE FINAL SHOT:
Nothing more to add here, I have said enough except,
As usual…
Always remember longevity in Forex trading can only be achieved through trading with good RISK and MONEY MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility.
Finally, Be GRATEFUL for your wins and COUNT THEM. Be positive, keep a POSITIVE MINDSET in play at all times, regardless of the market conditions.
Scott Pickering
The Pip Accumulator
Twitter: @pipaccumulator
https://weeklyfxdrivethru.com/disclaimer/
BLOG VERSION: #344 FREE NEWSLETTER
DATE: 17th November 2019