Can anyone help me out… I don’t understand why…today when Chicago pmi and cb consumer confidence reading came negative… the dollar increased… any advice on other factors I should be paying attention to
Yes,
KISS
I learned a valuable lesson from one of a hundred videos I watched on the art of Forex trading.
Keep It Simple (System).
The day I stopped trying to have an opinion about what way the market would go and why was the day my losses dropped severely and I believed I was on the right path to be able to demonstrate a positive edge in my trading.
This is only my personal opinion, but using indicators to give me a sense of confidence that I will enter a high probability trade and manage my way through it from entry to exit continuing to use indicators is the route to success. I also learned not to trade during news events. So in summary - don’t try to over-analyze the market. The goal is to win more than you lose, and I personally don’t think I can do that by trying to determine the direction of the market.
1 Like
Thing about news is, sometimes its not news. That is, it doesn’t change anything.
Good news normally has its biggest impacts in uptrends. So what I mean is that good news only affects the USD in a dramatically positive way if the USD is already uptrending. As of the weekend, I have rated the 7 USD pairs in terms of trend strength for the USD as -
- Very bullish
- Bullish
- Unclear
- Weakly bullish
- Bullish
- Unclear
- Unclear
This isn’t a deeply positive picture.
I don’t say there is anything magic about the way I am rating trends. But its important to see more detail than a mechanistic relationship between news and price.
Hi @chrissayman, Welcome back to the forum… Sometimes you will see anomalies such as this because price levels are factored in to the market… Very common with Banking Stocks around profit announcements.
You may see a Banks share price gradually rise over the weeks and/or months prior to their profit announcement, only to crash down sharply on a positive result (Profit taking).
Similar result can be expected by the market, when the result is forecast to be negative. Price may gradually slide down over the weeks and/or months to a level and spike upward even on a negative result…
Market participants may have speculated/forecast that (in this case) the Consumer Confidence Reading result was going to be lower than the released official result… Hence a bad result was already factored in to the Dollar… Resulting in spike up in the price.
Hope this is of help…
4 Likes
I have the same thoughts often, why the market doesn’t do “what it should do” on an announcement. I don’t trade the news, but look to see what impact I think it will have on any open trades I have. Often it goes the opposite way! As far wiser people have said above, try not have an opinion about the market and often results are already factored in. Good luck with your trading!