“INDICATOR OF THE DAY” - LET THE MARKET COME TO YOU
Today, we will deviate from our usual talk of a specific technical indicator and discuss risk management, something that is far more important than technical analysis. The topic of risk management is a deep and comprehensive one, so today we will quickly touch on the aspect of “not chasing trades.” Trading is difficult enough as it is and as such, our strategy is to always place ourselves in the best possible position to increase the likelihood of a profitable trade. This means that we will never chase trades and force something if it hasn’t hit our desired level. Our methodology relies heavily on a specific risk/reward that if only tampered with slightly, can result in a significant deterioration to our P&L. We always want to be in a position where if the trade doesn’t go our way (and it does happen), there is no room for excuses and we can walk away completely comfortable with the loss. If our desired entry level is not hit, than we are quite happy to move forward to the next trade as we are well aware that the market is there for us each and everyday. If for nothing else, chasing trades reflects a high degree of uncertainty and lack of discipline which inevitably will lead to a trader’s demise no matter how smart he or she is.
We are looking to buy [B]Eur/Gbp[/B]on Monday at 0.8440 and will be glad to establish the long position if and only if our entry level is hit.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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Joel Kruger publishes 6 daily pieces:
“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
Monday-Friday (between 6:30am-7:30am EST)
“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
“Midday Snapshot” – A Midday Fundamental Update, along with Technical Analysis of Selected Rates.
Monday-Friday (between 10:30am-11:30am EST)
“Scandi Daily” – A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact Nordic@fxcm.com if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)