This week has been quite really erratic in the FX markets. Movement has been changing direction on a whim, there has hardly been any stability. There haven’t been many(if any) trades that have been worth entering into where you would feel absolutely certain that the trend would not change in an instant. In this business, to be profitable, it is not good to be too risk averse but at times it is important to realize when it isn’t worth putting on a trade. It is better to miss out on a trade than you lose your money. Never trade out of desperation. Also, never trade what you don’t see, meaning don’t make a trade hoping that it will do what you want it to do, instead of what the chart is actually showing you. It is so so vital to realize the difference between the two because when trends are ambiguous and unstable, at times we may force trades to produce the results we want. I have made this mistake in the past and have tried my hardest not to make it again, which seems to be working. We should always keep our emotions in check before entering a trade, not only when we are in one.
So, today, I wanted to share with you my pick for Chart of the Day. This is based purely on pip movement. The overall trend of GBP/AUD is down but the market has consolidated all week so like I said before, the spectacular trades are virtually nonexistent at the moment. Look at the chart below:
From 2am – 1pm PST, this pair dropped approximately 300 pips. It was definitely one of the best trades out there today(if not the best) pip-wise, not counting the pullbacks.
We will have to see what tomorrow brings. Keep an eye on NZD/JPY, it has been up since early February and has moved about 8 pts in the past 2 weeks. Slowly but surely.