🎯Accurate FX Analysis

2020-02-06 18:37:59 Open / Comment

2020-02-06 18:37:42 INTERMARKET CORRELATION

Day 2) How Oil Moves with USD/CAD

Let’s talk about the other kind of gold… the black one.

As you may know, crude oil is often referred to as the “black gold”, I call it, “black crack.”

One can live without gold, but if you’re a crack addict, you can’t live without crack.

Oil is the drug that runs through the veins of the global economy as it is a major source of energy.

Canada, one of the top oil producers in the world, exports over 3.5 million barrels of oil and petroleum products per day to the United States.

This makes it the largest supplier of oil to the U.S.!

This means that Canada is United States’ main black crack dealer! Open / Comment

2020-02-06 13:20:24 AUDJPY D1 Analysis

AUD/JPY broke below the ascending channel that we checked out a coupla days ago! Question is, is the “breakout” legit?

Break and retest traders would want to know that AUD/JPY is currently having trouble trading above 74.00, which is near the broken channel support and a 50% Fib retracement on the daily time frame.

Watch this one closely, yo! If AUD/JPY finds resistance at the level, then we could see the pair drop back down to its previous lows near 72.50. Heck, it might even make new February lows!

If AUD/JPY blasts above the Fib retracement and SMA resistance levels, however, then Aussie bulls could gain enough momentum to retest 75.30 or 76.00 previous resistance levels. Open / Comment

2020-02-06 13:16:06 EURUSD H4 Analysis

First up is a basic support setup on EUR/USD’s 4-hour chart. See, the pair is chillin’ like a villain at the 1.1000 major psychological handle that’s been limiting the bears’ momentum since early October.

Is EUR/USD in for a bounce? Stochastic certainly suggests so with its oversold signal.

Buying at the first signs of bullish momentum would get you a nice reward-to-risk ratio especially if the euro bounces to previous areas of interest like 1.1100 or 1.1200.

If you’re still firmly on euro bear camp, however, then you might want to wait for a clean break below 1.1000 before you execute them short trades. 1.0950 and 1.0900 are low key support areas to watch if you’re shorting the euro against the dollar. Open / Comment

2020-02-05 14:16:24 AUDJPY H4 Analysis

I’m bearish on this pair mainly due to risk-off flows stemming from coronavirus contagion fears, which would likely make a dent on Chinese and global growth. In turn, this could keep traders away from commodities and higher-yielding currencies, favoring the safe-haven ones like the yen instead.

However, the relatively optimistic RBA policy announcement is propping the Aussie higher these days as markets are pricing in lower odds of a rate cut anytime soon. I’ve still got doubts that this sentiment could last, though, given how most authorities are adjusting their outlook on account of the virus.

With that, I’m looking to hop in on a short position if the 50% Fib retracement holds. This lines up with the broken trend line, neckline, and an area of interest.

Given the pair’s average daily volatility, a 100-pip stop should be wide enough to weather the usual price moves. I’ll be aiming for the swing low as my target for roughly a 2:1 return-on-risk. Open / Comment

2020-02-05 13:50:24 2. Know your limits

You also need to find out your tolerance for risk. There are two opposite sides in the trading spectrum with one extreme being risk-seeking and the other being risk averse. Do you know where you stand?

Although most traders risk a fixed percentage of their account on a trade, there’s no one-size-fits-all method to go about it.

Before you even get to the mathematical aspect of it, you first need to determine your psychological limits for risk. If you’re unsure how to go about it, take it slow. Adjust your position sizes according to the potential losses that you know you can sustain. The basic rule is to keep them small enough so that even when you lose, they don’t evoke any strong emotional response that could derail your trading.

Often times, traders make the mistake of focusing solely on finding the perfect entries and exits. But what really spells the difference between successful and unsuccessful traders is risk management. It’s something that should never be taken it for granted. And the first step towards smart risk management is proper lot/position sizing. Open / Comment

2020-02-05 13:47:00 1. Identify and Acknowledge

Nobody does something just for the heck of it. Binge eaters don’t just overeat just so they could eat a lot. In one way or another, they get something out of it. Some sort of self-fulfillment perhaps.

The same is true for a trader who always finds himself betting too much on his trades even when past experience tells him it’s not a good idea. Why does he keep on doing it?

A little introspection can make one realize that it’s more than just about being greedy. For most traders, they realize that their aggressive behavior is tied to their self-worth. They bet big in hopes that they win big. The prospect of massive gains consequently makes them feel good about themselves.

The problem though is that they don’t fully understand how much they could lose and they find themselves being unable to control their emotions when price goes against their way, even by just a few pips.

In order to address it, one has to acknowledge that there is indeed a problem and that will make a trader realize that this mindset is flawed. With time and conscious effort, he will eventually realize that his trading positions don’t measure his worth as a trader. Open / Comment

2020-02-05 13:40:28 Trading Psychology

How to Avoid Risking Too Much

I believe that proper position sizing is THE single most important skill a trader should have. Yup, that’s right – it’s THAT critical!

But before we get down and dirty with the details of lot size or position sizing, let’s define it first.

Simply put, proper position sizing means setting the correct amount of units to buy or sell a currency pair. In other words, it involves finding the lot size that will keep you within your risk comfort level.

Proper position sizing is a key element in risk management. And as I’ve told many times, risk management can determine whether you live to trade another day or not. It can keep you from risking too much on a trade and blowing up your account.

Sure, when you bet big, you can win big. But what happens when you lose? You don’t need to be a brain surgeon to figure that one out – you lose big, too.

Without knowing how to size your positions properly, you may end up taking trades that are far too large for you. In such cases, you become highly vulnerable when the market moves even just a few pips against you. Here are a couple of tips to avoid risking too much: Open / Comment

2020-02-05 13:20:31 NZDUSD D1 Analysis

A couple of days ago we thought that NZD/USD would bounce higher after breaking above a descending trend line on the daily time frame.

Well that was a fail. NZD/USD is now back below the trend line and it looks like it will find support at 0.6450 or 0.6500 instead. As you can see, the area lines up with a 50% Fib retracement and 100 SMA retest on the chart.

Buying at current levels would get you in at a good spot if NZD/USD ends up returning to its December highs.

If you’d rather short the Kiwi against the dollar, however, then you’ll want to wait until it makes new intraweek lows and aim for the .6325 and .6250 previous areas of interest instead. Open / Comment

2020-02-05 13:18:36 EURAUD H4 Analysis

EUR/AUD is on a free fall after finding resistance just below the 1.6600 handle. Where will the bulls step in?

The 1.6300 major psychological handle is a good bet as it lines up with a strong resistance area that the pair recently broke. What’s more, it’s also around a 61.8% Fib retracement while stochastic fell to oversold territory.

A long trade at the earliest signs of a bounce would give you a good reward-to-risk ratio especially if EUR/AUD pops back up to its January highs.

If you think that EUR/AUD will see more selling before popping higher, then you can also watch out for major handles such as 1.6200 and 1.6100 as potential entry levels.

Not sure that EUR/AUD will bounce at all? You can wait until the pair firmly closes below 1.6300 and short the pair until it consolidates around an area of interest. Open / Comment