Currencies:
Our view on the USD is the same as last weeks; we are awaiting the breakout of the consolidation phase we are currently in.
This week contains various high impact fundamentals across the board. This may add the volatility needed for us to breakout of this range and start trending again.
Upcoming fundamental releases we have are:
Tuesday 1st June
- USD, ISM Manufacturing PMI
- GBP, BOE Gov Bailey Speaks
Wednesday 2nd June
- AUD, GDP Q/Q
Thursday 3rd June
- USD, ISM Services PMI
Friday 4th June
- USD, Fed Chair Powell Speaks
- CAD, Employment Change
- CAD, Unemployment Rate
- USD, Average Hourly Earnings
- USD, Non-Farm Employment Change
- USD, Unemployment Rate
Traders Tips: ‘‘Why Being Attentive Helps With Longevity’
We have spoken a little bit about probabilities in a previous blog post, however there are some other elements of this I want to explore.
As all of us should know – we are gamblers. We have an edge in the market which means that we know that, for example, 60% of the time we are right and 40% of the time we will be wrong… there’s no avoiding that.
An element of this which most people don’t look at is the ‘cycles’ the markets go through. One quarter your edge in the market has a 70% winrate, but the next it’s a 40% winrate (when taking out any psychological errors). This has nothing to do with your edge – but has everything to do with the cycles the market goes through.
This is why I want to talk about being ‘attentive’. You must be able to identify what type of ‘cycle’ the market is in right now – you want to double down in the good times and take your foot off the pedal in the slower times.
This is easier said than done. However, this skill of identifying the ‘change of effectiveness’ of your edge is key. Market intuition plays a big role in you having that deep rooted feeling about what the current market conditions are like. Market intuition is a whole new blog post and is something that I will cover in depth in the future.
Another, more objective, approach to being attentive is the analysis of your statistics and recognising patterns within this. An example of this may be that you have noticed on the week after the NFP release, a lot of trades you take which align with your edge goes your way to start with – but soon after goes against you. With this information you now know not to trade or reduce your risk during that time. A different example could be that you have noticed every trade you take on a Monday ends up being a loser – and now you know to be cautious trading on this day.
Check back within your trade journals and see if you can identify patterns, or if you currently have a deep-rooted feeling that the market is either ripe with opportunity or we are in a slow period – then this is likely your market intuition coming to the surface. It is key to note that these patterns are always changing like the market – previous patterns you may have noticed might not be applicable to the current market environment. Being attentive would allow you to notice this and implement changes into your trading.