Lately has been interesting reading in the forums. Many people are a bit bewildered. The dollar goes up on bad data and down on good data. All the while leaving stop losses in its wake. It is particularly hurtful for many because the 3rd quarter trained them differently. This has left many would be champs face down on the canvas.
Merlin is often quick to point out when currencies show strength or weakness in the face of opposing data, however, many folks continue to donate stops to the market. While we have to play our your strategies, when the market is in a contrary mood, we have to have capitol preservation in the forefront. I have read some posts where traders have held against the obvious sentiment because the data favored there positions. Unfortunatley for those traders, the price did not.
I have learned that price contrary to data can be just as strong or stronger signal than price moving with the data. I try to keep in mind that all kinds of traders, entities and institutions all buy and sell at different prices for all kinds of different reasons. What may drive my trade decisions is completely different than what may drive a large corporation's hedge or a large funds position shift. I would offer that prices can turn on simple trader sentiment or large players entering the market sensing a value. All this is said to relate the idea that it is truly impossible to know all of the factors at play in overall price movement. knowing this, we must accept what we see.
Many traders have made the statement that they only look at price. Expounding that they do not try to interpret anything. They just watch the prices reaction. While I do not follow this style strictly, I am a strong advocate of what they are saying. I love to work out fundemental information to gain insight. In the right market conditions, I will even jump in just based on a release. However, I constantly keep an eye on what type of market I am in. Nobody wants to get caught throwing a left hook against a lefty who is known for a straight right knockout punch.
Merlin is often quick to point out when currencies show strength or weakness in the face of opposing data, however, many folks continue to donate stops to the market. While we have to play our your strategies, when the market is in a contrary mood, we have to have capitol preservation in the forefront. I have read some posts where traders have held against the obvious sentiment because the data favored there positions. Unfortunatley for those traders, the price did not.
I have learned that price contrary to data can be just as strong or stronger signal than price moving with the data. I try to keep in mind that all kinds of traders, entities and institutions all buy and sell at different prices for all kinds of different reasons. What may drive my trade decisions is completely different than what may drive a large corporation's hedge or a large funds position shift. I would offer that prices can turn on simple trader sentiment or large players entering the market sensing a value. All this is said to relate the idea that it is truly impossible to know all of the factors at play in overall price movement. knowing this, we must accept what we see.
Many traders have made the statement that they only look at price. Expounding that they do not try to interpret anything. They just watch the prices reaction. While I do not follow this style strictly, I am a strong advocate of what they are saying. I love to work out fundemental information to gain insight. In the right market conditions, I will even jump in just based on a release. However, I constantly keep an eye on what type of market I am in. Nobody wants to get caught throwing a left hook against a lefty who is known for a straight right knockout punch.
Profit is where readiness meets Opportunity