Having an attachment to any single market is an unhealthy approach to the market. Many who venture into the world of trading usually end up building an unhealthy day trading attachment and approach to the FX market.
In a previous blog, I wrote about how to manage a watchlist and how good traders have the FX, stocks and commodities markets on their watchlist and then simply move to where the money is i.e. where the trends are.
FX, for many months now, has been very difficult to trade and that is simply because it has been range bound. In consolidating markets, our emphasis as traders is on capital protection and where we stand aside. But remember, when one market is in a range (FX and commodities) another is in trend (UK and US stocks right now).
Many will assume it is “easy” to trade consolidating markets by simply using the high of the range as resistance to go short and the low as support to go long. This approach, as is soon found out, is short lived due to the numerous other support and resistance levels that exist between the high and the low. Trades are short lived, whipsaw moves are frequent and there is no edge. This is how accounts are blown.
Below is the daily chart of the EURUSD where I have highlighted all the support and resistance levels one would have to deal with if trading this.
The EURUSD is a good example of how the FX market has been stagnant now for a long period of time — since March 2015. The trend prior was when I traded the EURUSD and extracted just under 16 000 pips on 5 compounded trades which I held for circa 9 months.
Once the trend ended and my trailing stop loss was hit, I took my profit and moved on to where the next trends appeared. And that has been in stocks (which is why my Medium blog is currently very stock-heavy in posts).
It is often said that the EURUSD is the most heavily traded currency in the world and if most private traders struggle to gain any consistency, what does that tell you about having an attachment to this currency pair? Question what you are told and read on social media as it is loaded with ignorance and misleading information. It is your money and time on the line.
The AUDUSD, GBPUSD and USDCAD are also range bound as shown on the monthly timeframes below. Their respective crosses will all be range bound too.
Gold has been rang bound now since 2013. A break above 1500 to go long or below 1000 to go short will interest me but until then I will stand aside. Gold is another example of a chart where losses are made my many due to an unhealthy attachment to to this shiny “precious” metal. I see many profiles with the term “gold expert” and multiple day trades being taken. A true gold expert would know that gold is range bound and to stand aside.
As a reminder, those who are quick to show their winning trades and money made will also be quick to hide their losing trades and bigger losses occurred.
Meanwhile in stocks, I have repeatedly talked about NVDA, AMAT, BOO-LON and many more stocks that have all trended very well and handed out excellent profit since last year. These have also all gone on to add further profit since the last blog written on each one.
So, if you have an unhealthy attachment to FX and are also day trading and wondering why your results are inconsistent or even if you are blowing account again and again, then you need to stop and step back and question your current approach.
The wealth and lifestyle you desire is very achievable but for private traders, this can not be achieved through a short term approach to FX, as is often peddled by the many experts out there. A long term approach across all the markets is the way forward and my embracing compound growth. Trading is a business and not a lottery ticket to riches.
Any comments and questions, do not hesitate to leave them below.
If you have enjoyed what you have read, I’d be very grateful if you hit the heart button below.
Any questions or comments, please leave them below.
The Dynamic Trader Apprentice Live
Date & Location: Friday 16th of June At The Eight Club, Bank. Spaces Limited.
To register please click on the following link:http://www.zaheer.live/seminar
- Training on technical analysis from a trend trading perspective
- A pullback and a breakout strategy
- Access to a live community of full time traders and like-minded individuals
- Access to some of our cutting-edge tools
- Live weekly Sunday webinars where we prepare for the week ahead
- Scanned watchlists and training in FX and Stocks saving you £1000s.
- A grounding in compounding / risk management / exit management / entry points / stoploss calculation and management / portfolio management
- A trading plan
- Access to some of our cutting-edge tools
- An advanced trade log to track your trades
- A significant discount on eSignal subscription
This is value, training and support you will not find anywhere else and which can be followed with the option of bespoke 1–2–1 training.