I was recently asked to do a photo shoot for the newly released “Gorilla Glass 2” from Corning – but with the realization that an entire Sunday would be lost primping and posing etc – I immediately declined. Having a plan is absolutely essential to trading success, and Sunday afternoons are sacred. I will generally look to clear my head, reflect on the week gone by , peruse my charts and take stock of the current news headlines and general investing environment.
Trading without a plan is literally – trade suicide. Anyone expecting to just casually pull up a chart, or catch a tidbit on CNBC… or even a call from their broker with thoughts of placing that “winning trade” – will more than likely (and quite readily) be parted with their hard-earned cash as fast as a 2 dollar hooker and her….
You can’t trade without a plan.
If you have no idea where a given asset has been (price wise) and even less idea of where it may be headed – then what makes you think you have any idea at all that “now” is a good time to buy? Longer term charts (weekly charts) give you an idea of where price has been, and equally important to your plan should be some idea of where you plan to exit (where price may go). You can’t honestly think that just pushing the “buy button” and going on vacation is a plausible trade plan no?
With currencies I take time on Sunday afternoons to study/read up on current monetary policy from country to country.I review my charts and look to identify areas of strong support and resistance. I plan “buys” at found areas of support – and equally – plan “sells” at found levels of resistance. I know what I am going to do BEFORE I DO IT. It’s called trading with a plan, and frankly….anything less, and you might as well just hit your local casino.
You’ve heard it a million times, and you will likely hear it a million more – plan your trade………and trade your plan.
I called a buddy and he took the gig with Corning – here are a couple of shots. I dunno…..I think he could have “used his angles more” and perhaps done a little more with his hands.
kong,
what are the major pairs that you watch? Why do you watch them? Do you look for inter-market divergences between the pairs?
thanks
J
Hi Jerred.
I watch the commods currencies against the safe havens for the most part….and rarely trade CHF.
I watch them because they offer the largest moves – coupled with the fundamental reasoning that money (globally) moves from low risk to high risk…over and over and over.
I see no point in trading two risk related currencies “against” one another…. such as AUD/NZD.
Hope Ive answered your question
Jerred..sorry……just in the kitchen.
I’m not sure what you mean by “inter-market divergence” between pairs. The root of my trading success stems from a firm understanding of the underlaying fundamentals – coupled with a keen technical know how.
Each pair will exhibit its own unique characteristics and should be approached individually – but in general I look to evaluate the overall global appetite for “risk” and plan my trades accordingly.
Without a firm understanding as to “why” a certain pair is moving (upward or down) it would be very difficult to just “trade it technically”. Volatility in one pair….may be misinturpreted as a shift in trend without understanding 2 things. One – the given characteristics of the pair. Two – the macro fundamentals driving it.
Let me know if this helps you at all – I recognize its a lot to digest.
For example. I will watch the ES and the NQ once a major decline begins (Never really paid too much attention to currency but I know large money is moved in these markets and they can offer great info at inflection points. Once the ES or NQ touch longer term support I will look to get long but I love to see the ES break support while the NQ does not test or barely tests support.
Basically – ES will show a breakdown while NQ (relative strength) will just test support. The trade would be to get long the ES because the NQ is not confirming the break. In general most when a sell off begins the indexes will be in line to sell off together.
So, I am wondering if there are pairs that reflect this type of setup. If you had 2 pairs that show risk on. Maybe one breaks lower but the other one holds. The divergence would be shown and that would add additional creditability to the risk on (long) trade.
Another idea – USD shows strength against the EUR but when you pull other pairs it shows weakness. So, the EUR strength is a divergence when it comes to the overall direction of the USD.
thoughts
J
Jerred.
Inter – market divergence between pairs got me – yes of course I watch for divergence across markets – and more commonly see the currencies lead…usually by several days.
While viewing currencies I don’t really consider the differences “divergence” – but moreso an accurate view of each currency “individually”.
I hear it all the time “the dollar is going down…or the dollar is going up” – only to find people are just viewing it against EURO…when in reality – the dollar isnt moving “in general against other currencies” – but its actually the EUR on the move.
It takes some time – but seeing all currencied moving against all others (lots of charts) really helps.
Kong – what is your take on the current dxy weakness…. we did not get a very big pop late Friday if it can be called a pop at all. Looks very weak and has broken down from the 80 mark. Do you suspect this is a head feak or this is now the move down?
I loaded up in the PM sector Friday late afternoon and still have 50% of my PF to enter. I did not think that I would be entering so soon expecting the DXY to bounce…. thoughts?
It’s funny – I had posted it at SMT last week – and got nothin back on it when I asked / suggested that the Dollar had/would roll over within the first 2-3 days max of this cycle.
Now that we are here – my tech/trade plan was to get short at the close tomorrow. Sunday nights are great for getting people all excited about the wrong thing though – I would fully expect the dollar to retrace / move within the same general price here thru tomorrow.
Frankly It doesnt matter to me at this point – I could put my trades on across the board short the buck – as ideed – the move is on.
got it…. cool… I’ll set my trades and move on…. start plannning for my trip…. if I book something in your area then we should get together for a beer… and chat if your up to it….. cheers kong..
kong – looking to make it out your way on the 26th… anything you can recommend…. no less the 5*
Riviera Maya never been…
It would depend if you are interested in staying out at an all inclusive of its own – like up the highway on its own big chunk of land….or in town in Playa Del Carmen, Tulum, or even smaller lil spots like Puerto Aventuras or Puerto Morelos. Would you rent a car and poke around a bit? – or just stay at a resort?
The Mayakoba Fairmont is a real beaut….but you’d need to take a lil shuttle or rent a car to get off the property.
Yeah we would like to have a nice place but poke around a bit… I personally like to get off the resort nad check things out…