Market Conflicted After Fed Hike – FX Analysis 12/18/15
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Euro Ranges After Initial Drop
The EUR/USD has a major support level coming that is the line in the sand mentioned earlier in the week. A break of the 1.0800 level to the downside would signal further downside. At this point I would consider the Euro as being in a cycle to the downside if the moved had not been around the Fed release. At this point though I have continued to trade with an open bias as the looming Fed news could have pushed the flow in either direction. I will close out the week with the same open bias as today’s range did not definitively support a cycle to either direction. At this point we have two upper manipulation points and one lower listed level, with the lower level being quite key for longer term bias.
GBP/USD Tanks On Higher Retail Sales
Overall it has been a rather boring week for me with the Pound. 80% of what we do stems from quality manipulation points to trade from. Just because the market is moving doesn’t mean it is offering good trading opportunities. Especially with the Pound, we have had very weak as well as very few quality points to consider a trade from and therefore the opportunities have been significantly reduced. As I always say, boredom and lack of discipline and patience are a forex traders worst enemy.
Struggling forex traders often blame the forex trading strategy they are using as the reason for their failure when in reality it is often the person looking at them in the mirror. Traders don’t blow up trading accounts by using the recommended risk per trade, taking valid trade setups, or by sticking to one trading strategy with discipline. Traders blow up because they take a loss, get irritated, and then go into an over leveraged revenge trading rage. After they blow up yet another trading account, they blame the forex broker or the trading strategy rather than looking at the real problem. When trade quantity is reduced the best thing any trader can do is follow your trade plan and wait for the proper setup. It is far better to have a no trade day than it is to have a losing day because of a stupid decision.
For those who use the forex bank trading strategy, discipline is essential to becoming a successful trader as we only consider a trade setup if the market is touching a valid pre-selected manipulation point. Because of this we are always waiting for the market to come into these pre-determined levels which requires the patience previously mentioned. Many members of DTFL trade multiple pairs as the strategy does not require staring at the screen for spit second entries. We often know at least 30 minutes before a trade becomes valid. Having that much warning allows you to trade other pairs once you are proficient with the strategy.
Anyway, I don’t suspect today will be much different on the Pound. We have yet another day that lacks a great deal of listed manipulation points I would consider a trade from. To start the day I only have one lower level from which I would consider a stop run. While we may have an upper level form during the day that I would consider, at this point I will not be listing one.
Forex News For December 18th 2015
To finish off the week there are no news items that should interfere with trading.