It was an occurrence so rare, we hadn’t seen it in 24 years, we noted mid-May 2017.
The infamous fear gauge – the VIX – had fallen to an unusual low of less than 10 – something we hadn’t seen since December 1993. No one thought anything of it. Markets continued to run higher. And no one, it seems, was paying attention. But we were.
After 20 years of trading, I may think I’ve seen it all.
Then, some one surprises me with something so ridiculous even I’m left banging my head against the wall. The other day, an old friend told me he only uses relative strength (RSI) to tell him when to get in and out of trades.
“Just RSI,” he said. “I swear by it.”Read More
Since topping out at 103.81 in early 2017, the U.S. dollar has been nothing short of a slow-motion disaster. Things got so bad by May 2017 that the currency broke below the support line of the falling wedge pattern. Much of that may have been a result of Donald Trump’s weaker dollar policy, though as well as with political uncertainty.Read More
You can’t trade the news, they say.
“There’s no way to accurately gauge how a news event will play out in the markets, I don’t care what they say. Trading the news is an especially seductive trap for those who aren’t in tune with major stock market trends. They don’t realize that in most cases the market’s already baked the news “into the cake” by the time it’s reported.”Read More
“Everything should be made as simple as possible, but not simpler.”
That’s according to Albert Einstein.
Applied to trading, it simply tells us simplicity is key.
It was a rare occurrence we hadn’t seen in 24 years.
The infamous fear gauge – the VIX – fell to an unusual low of less than 10 in May 2017 – something that hasn’t happened since December 1993. In the single digits, the idea is that all is well. Calm as resumed. But it’s at these points when smart investors begin to worry.Read More
We all have a tendency to overthink just about everything.
We make things much harder than they really have to be. We’re all done it.
But let’s be honest. The simpler things are, the easier it is do just about anything, including making money. It’s the simple strategies that allow for the best results with less stress. In fact, many currency traders will only look at charts as a simplified way to identity patterns and opportunities, instead of being bogged down with the noise of the news.Read More
When it comes to pattern recognition on a chart, we could spend hours looking at daily, weekly, monthly, one-year and five-year chart.
We can examine every wiggle, every bounce, and every dip for hours.
In fact, look at the U.S. dollar.Read More
Since 2017 began, the Mexican Peso has been an absolute mess.
In fact, since January, it fell 16% from 22.
However, as you can see in this chart of the $USD-MXN, it sat at an extreme low at double-bottom support dating back to November 2016. Will support hold, or will the Peso continue to fall?Read More
Risk tolerance comes up in a lot of trading conversations.
And the usual response I give is – well… how much can you afford to lose? What’s your personal risk tolerance? It may seem like a ridiculous question, but it’s also one of the most ignored. In fact, some traders are so focused on hitting that jackpot trade, they never stop to ask themselves how much they can really afford to lose.Read More
Whether you trade currencies, commodities, or even just ordinary stocks, understanding technical analysis is crucial to your success. Unfortunately, many traders continue to fall into the same trap of ignoring the basics like resistance, channels and false breakouts.Read More
If you want strong returns when markets are on another wild ride, always keep an eye on the VIX, or the Volatility Index, which measures implied volatility of S&P 500 options. Always… It’ll tell you exactly when to go long.Read More
In early April 2017, we made a technical argument for further downside in the U.S. dollar. In fact, after drawing our trend lines, a falling wedge pattern became apparent, exposing overhead resistance at 100.95. We argued that if the currency failed at that point, it was likely to reverse lower and stay within the pattern.Read More
We’ve all seen fortunes made.
Unfortunately, we’ve also seen fortunes lost in a matter of seconds.
To this day, one of the biggest reasons for sizable losses is failure to protect profits and cut losses timely with tools, such as the trailing stop loss. But we have to realize that without any kind of exit strategy in place, emotions could come into play.Read More
When it comes to trading currencies, technical analysis is just as important as the global chaos impacting them. While the importance of such analysis varies from trader to trader, we must be aware that currency markets are greatly influenced by it.
That’s because this analysis – especially with currencies – helps to remove that urge to trade on gut reactions and what may be happening in the world. It removes the noise.
Let’s start with the USD/JPY.Read More
We wanted to bring your attention back to the U.S. dollar to highlight why technical analysis is essential. Days after the currency found double top resistance at 102.10, it began to descend rather quickly as the Trump trade began to unwind.Read More