Trading news and sentiment with technical analysis

just closed 14 pips profit on nzdusd

looking to short eurusd - its is battling to break this resistance

17 pips bagged in shorting eurusd. I have said on many occasions that if price fails to break a level and the longer it stays there the more chance it has of not succeeding.

50 pips for the day across 3 trades - that's me done for the day. It has been a relatively quiet day on the news front it has all been sentiment trades except the eurusd trade that was an obvious reversal trade.

a good listen (Thanks Fader123 for sharing with me)

The art of taking a loss. This subject is probably the most overlooked aspect by retail traders. From what I have seen there are different camps when it comes to this.

1) wait for a set stop to be hit
2) use no stops and losers become investments
3) have complex stacking strategies that have dozens of open trades that have no stops

I don't do any of these and I am not advocating any because its a personal choice. What I want to do however is discuss some points that you should consider. The system I built employs the same mechanism for cutting losers as it does for profit. I built it like this because the market is not rigid and you need to have the real-time feedback from the market to make an informed decision.

A stop if hit will take away previously earned profit. Think about the ramifications of this because its a major factor in traders not being profitable. Why watch price move against you and take you out when there are clear indicators of it happening. You will often see me cutting trades sometimes minutes into a trade. I trade with momentum and if its absent I do not want to risk a full stop. This strategy means I am out sub 10 pips on most losses and this protects previously earned profits more than a stop does. I believe this strategy along with my profit taking strategy is key to my consistency. I bring in between 10 and 20 percent each month consistently and I do that by being strict on exits regardless of profit. By protecting profit and maximising profit, I am able to achieve steady and good account growth.

Spend time and consider these factors on your trading and see how you can maximise protection and profit.

Hi EcoTrader,
thank you for your posts, they are very informative.
Would you mind to be more precise regarding this 'quoted' part.
Any example/analysis of your previous trade which was managed this way, and the way how you managed it on chart would be great.

ATB

Here is a trade i took on Friday and terminated. now even though the trade would have eventually given profit, the parameters of a successful trade were not met. I require market feedback confirming the trade immediately and have a timer set (i use 5 minute bars as a timer). By the 3rd bar if price isn't going my way the trade is terminated. Sometimes i wait a little longer sometimes less but that's the approximate process. The stop would be 25 pips away but its just there in case the shit hits the fan and i can't react fast enough. The longer price sits there not doing what i want, the more it confirms the trade is wrong. The same mechanism is applied to targets where price is expected to push through support if sufficient interest is there. If it doesn't then the longer price hangs about the greater the chances of it reversing. The last trade i took on Friday (post 103) shows this elegantly where price tried several times to break and every time failed. Entering at the end of the EMEA session i was waiting for profit taking to drive momentum and stops to get hit which provided the momentum needed to reach the target.

The takeaway here is using the market to provide you clues on whats happening and making a decision on that. By cutting your losses this way you save yourself a full stop being hit which does a better job of protecting capital. The same applies for profits which yields more profit than a trailing stop

Thank you for your detailed answer, I appreciate that.

You're welcome.

So the fed are undertaking a review for changes to their policy tools, strategy, and communication. They intend to communicate this in H1 2020. Here are some details from their communication on this.

Perhaps most significantly, neutral interest rates appear to have fallen in the United States and abroad.Moreover, this global decline in r* is widely expected to persist for years. The decline in neutral policy rates likely reflects several factors, including aging populations, changes in risk-taking behavior, and a slowdown in technology growth. These factors' contributions are highly uncertain, but irrespective of their precise role, the policy implications of the decline in neutral rates are important. All else being equal, a fall in neutral rates increases the likelihood that a central bank's policy rate will reach its effective lower bound (ELB) in future economic downturns. That development, in turn, could make it more difficult during downturns for monetary policy to support spending and employment, and keep inflation from falling too low.
Another key development in recent decades is that inflation appears less responsive to resource slack. That is, the short-run Phillips curve appears to have flattened, implying a change in the dynamic relationship between inflation and employment.A flatter Phillips curve is, in a sense, a proverbial double-edged sword. It permits the Federal Reserve to support employment more aggressively during downturns‑‑as was the case during and after the Great Recession--because a sustained inflation breakout is less likely when the Phillips curve is flatter. However, a flatter Phillips curve also increases the cost, in terms of economic output, of reversing unwelcome increases in longer-run inflation expectations. Thus, a flatter Phillips curve makes it all the more important that longer-run inflation expectations remain anchored at levels consistent with our 2 percent inflation objective.

Here are 3 questions their review with industry will look to answer

1) Can the Federal Reserve best meet its statutory objectives with its existing monetary policy strategy, or should it consider strategies that aim to reverse past misses of the inflation objective?

2) Are the existing monetary policy tools adequate to achieve and maintain maximum employment and price stability, or should the toolkit be expanded? And, if so, how?

3) How can the FOMC's communication of its policy framework and implementation be improved?

Activities and Timeline for the Review
The review will have several components.The Board and the Reserve Banks will be conducting town hall-style "Fed Listens" events this year. We will hear from a broad range of interested individuals and groups, including business and labor leaders, community development professionals, and academics. The first of these events will take place Monday in Dallas. Another is scheduled at the Federal Reserve Bank of Minneapolis in early April, and other Reserve Banks will host events over the course of the year.
In addition, we will sponsor a System research conference on June 4-5, 2019, at the Federal Reserve Bank of Chicago, with speakers and panelists from outside the Fed. The sessions will include overviews by academic experts of themes that are central to the review, including the FOMC's monetary policy since the financial crisis, assessments of the maximum sustainable level of employment, alternative policy frameworks and strategies to achieve the dual mandate, policy tools, global considerations, financial stability considerations, and central bank communications. Other sessions will feature panels of community leaders who will share their perspectives on the labor market and the effects of interest rates on their constituencies.
We expect to release summaries of the "Fed Listens" events and to livestream the Chicago conference. Building on the perspectives we hear and on staff analysis, the FOMC will conduct its own assessment of its monetary policy framework, beginning around the middle of the year. We will share our conclusions with the public in the first half 2020.

I doubt the fed are alone in this boat and we could see other central banks follow. We should be concerned because they wouldn't be doing this if they weren't concerned about their ability to handle crisis and downturns without significant consequences. It could also mean changes in the way we study their policy. Something to pencil in at least and should be interesting to follow (well for me at least I know many of you get bored of this stuff)

Mr pivot point, the only reason you see any charts of mine is because I use it to explain. I don't need charts to make money in fx. The other day you said only smart people use pivot points and then referred to everyone else in a derogatory manner. You arrogant waste of oxygen, you banned me because I made a point that made yours look like a pig with lipstick. Your excuse is as lame as your ability to understand fundamentals. That silly commentary and calendars you put up is a complete and utter waste of time, and by the way, the cad business survey is actually a leading indicator of future economic activity. You dismiss it in an environment where there is no central bank direction. In this environment, the market latches onto all leading indicators, amongst other market changing dynamics. Forecasts are often wrong, why would your silly calendars be any different. Anyway you did me a favour. I started getting tired of the sloppy work and arrogant outbursts. You really are a work of art, no pun intended.

Looking at short audjpy. Rba set out the requirements for a rate cut amongst the dovish minutes. Other economists have been piling in stating there will be a cut after the minutes. Waiting for things to line up for a short.

short on eu central banker news - wow not a pivot in sight i must be lucky

Short audjpy - last nights dovish RBA minutes + EU central bank news this morning should drive a more risk off sentiment for the session

Just to let you all know this is my last post on this forum. I wish you all well and hope you find success in trading. I am not going anywhere else, maybe a private group of traders. I hope I have provided some insight and do wish you all well on your journey. Keep working at understanding central banks and fundamentals and you will find success.

Over and out

Eco,

Not sure if you will get to read this; I was going to send you a PM, but it's been disabled, hence this post.

Anyway, I just wanted to say that imho your FA is topnotch and that I've enjoyed reading your posts, albeit as a silent spectator.

I'm sorry to see you leave, and I wish you all the best.

David

Sadly this thread was the most progressive with different view on market sentiment and FA. I wish you great trading and advancing with your trading style

So sad to hear this. Thank you Eco for sharing your insights and I believe you are welcome to come back if you want to.

Alex