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A look at the day ahead in U.S. and global markets from Mike Dolan
Wall Street has weathered an edgy start to the final quarter reasonably well this week, with the September employment report now an obvious final hurdle on Friday and firmer oil prices an irritant even as a three-day U.S. ports strike ends.
As has been the case for weeks, markets are trying to find the balance between signs of persistent growth but at a pace soft enough to sustain disinflation and Federal Reserve interest rate cut hopes.
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As noted in our Weekly FX Chart Outlook, how markets end the week will be more important than how it starts out.
The same goes for today once the dust settles on the US jobs report reaction, the question is how aggressive do traders want to position into the weekend given the risk of an Israeli reprisal vs. Iran.
As for NFP, as I noted, even a small deviation from the 149K consensus (e,g, 120K or 160K) can have an outsized knee jerk reaction.
GBPUSD 4 HOUR CHART – BOUNCE OFF THE LOW
If you are looking for the flow behind the GBPUSD bounce, look at EURGBP (lower).
Given the sharp move down yesterday, see below for retracement levels using our Fibonacci Calculator as potential resistance levels. In any case, 1.32 is pivotal (5-% at 1.3198) on the upside. Otherwise, roll the dice, NFP is up next..
USDJPY DAILY CHART – Waiting for NFP
Bounce from 141.64 performing technically, testing the next key level at 147,20 (yesterday’s high 146.25).
On the downside, the former high around 146.50 now becomes pivotal post-NFP although only back below 145 would shift the focus back on the downside.
Re NFP, in this environment, even a small deciation from the consensus can have an oiutsized eddect.
Note, when trading USDJOY, allow for small moves through key levels, such as the one described. Same occurred on the break of 141.79.
It is normal to assess why markets were the way they were after the close of any given day. Today in the US session things began with a nervous tone due to the elements noted below by other GVI members.
In relation to the US Dollar one might consider that prior sessions were significantly one dimensional and singularly directional. That is often followed by markets going sideways or somewhat sideways in the sessions that follow and that was the case with UsdJpy. Sterling was a little different, which makes sense considering the one dimensional selling of late.
There is significant data tomorrow in the US session.
Brent Crude Oil 4H Chart
Crude Oil is closing it’s Bear Trap as I stated this morning .
Update: WTI Crude Oil Closes Up More than 5% After Biden Says Discussing Attack on Iran’s Oil Sector
West Texas Intermediate (WTI) crude oil closed sharply higher on Thursday, climbing for a third-straight day after U.S. President Joe Biden said the United States and Israel are discussing an attack on Iran’s oil sector to retaliate for this week’s attack on Israel.
Both Israel and the United States said they plan to retaliate after Iran attacked Israel with 180 missiles.
Nvidia – NVDA
Nvidia Shares Are Moving Higher: What’s Happening?
NVIDIA Corp. NVDA shares are climbing Thursday. On Wednesday, CEO Jensen Huang confirmed the company’s highly anticipated Blackwell chips are in full production.
The Details:
Huang appeared on CNBC’s Closing Bell Overtime on Wednesday and said Nvidia’s Blackwell chips are in production and in high-demand.
“Blackwell is in full production, Blackwell is as planned, and the demand for Blackwell is insane,” the Nvidia CEO said. “Everyone wants to have the most, and everyone wants to be first.”
Tesla TSLA
TSLA: Tesla Stock Skids After Q3 Deliveries Narrowly Beat Mid-Range Expectations
Tesla shares drop 3.5%.
Company delivers 462,890 cars.
Growth is 515,000 units sold in Q4.
EV maker shipped 462,890 vehicles in the September quarter but failed to top the high-end of Wall Street’s expectations. Shares fell 3.5%.
Tesla stock TSLA skittered 3.5% Wednesday after a lackluster delivery number. The EV maker reported third-quarter deliveries of 462,890. It managed to hit above the mid-range consensus views of 462,000 but fell short of meeting the high-end calls for 469,828 vehicles. The Elon Musk-led company had issued its own guidance of 461,978 units shipped globally.
Nasdaq 100 – NDX
Wall St set for lower open; jobs data, Middle East conflict in focus
Weekly jobless claims at 225,000
September ISM non-manufacturing data due at 10 a.m. ET
Levi Strauss tumbles after saying it is exploring unit sale
East, Gulf coast workers’ strike enters third day
Futures off: Dow 0.28%, S&P 500 0.38%, Nasdaq 0.29%
Wall Street was poised to open slightly lower on Thursday after a moderate rise in jobless claims sparked worries about the health of the labor market, while cautious investors kept an eye on the Middle East for any escalation in hostilities.
S&P 500 – SPX
S&P 500 Falls 21.85 Points (0.38%)
Indexes ease with U.S. jobs report ahead, Middle East in focus
Weekly jobless claims at 225,000
US service sector activity accelerates to 1-1/2-year high
East, Gulf coast workers’ strike enters third day
Indexes: Dow down 0.6%, S&P 500 off 0.38%, Nasdaq down 0.2%
Major U.S. stock indexes were lower on Thursday afternoon ahead of Friday’s monthly U.S. payrolls report and as investors kept a watchful eye on the growing conflict in Middle East.
A lesson …
according to Reuters
“Toronto stocks hit record high as Middle East conflict aids oil prices”
(Reuters) -Canada’s main stock index touched a record high on Wednesday, aided by a rise in energy and mining stocks as escalation of the conflict in the Middle East stoked fears of oil supply disruption.
The conflict has made investors averse to risk due to lack of clarity on how the scenario might evolve, with the escalation of crisis putting pressure on markets globally.
nb / but it does not always work as described above, so beware
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What is Risk Management in Trading – Forex Forum
For any trader, managing risk is essential to success. But what exactly is risk management? In this blog post, we’ll explore what risk management is and how it can help you become a successful trader.
We’ll also look at some common mistakes that traders make when it comes to managing their risks. After all, if you’re not managing risk appropriately, you’re just a gambler. So if you’re ready to learn more about risk management, read on!
What is Risk Management in Trading?
Risk management is the process of assessing, controlling, and managing risk within a trading portfolio. This involves defining trading goals and understanding potential losses that could occur as part of the trading process.
It also includes identifying potential risks, such as market volatility or sudden changes in the market, understanding how these risks can affect your profits, and taking steps to limit potential losses.
In general, risk management should be a priority for all traders. By properly managing your risks and using effective strategies, you can minimize potential losses and increase the chances of making successful trades.
Common Mistakes When Managing Risk in Trading
Unfortunately, many traders make mistakes when it comes to managing their risks. Here are some of the most common mistakes that traders make when it comes to risk management:
Not Setting a Trading Plan:
Many traders don’t have a detailed trading plan, which is a key component of risk management. Without a trading plan, traders are more likely to take risks that could have otherwise been avoided. It’s important to establish clear trading goals and a plan for how to reach those goals.
Not Understanding Risk:
Many traders fail to understand the risks associated with certain trades, which can lead to serious losses if they don’t take the time to research and understand the risks involved. It’s important to have a thorough understanding of the markets you’re trading in before taking any risks.
Not Taking Advantage of Stop Losses:
Stop losses are an essential component of risk management, as they help to limit potential losses in the event of a market downturn or sudden changes in the market. However, many traders don’t take advantage of stop losses and end up taking larger risks than necessary.
Over-Trading:
Over-trading is a common mistake made by many traders. This involves taking too many trades, which can lead to losses if the market turns against you. Look, all traders love the price action. It’s exciting to take a position and watch your P/L go up and down. But don’t become addicted to the price action for the sake of just having a position. It’s important to only take trades when the setup is right and avoid over trading.
Not Diversifying Risk:
Diversification is another important part of risk management. By diversifying your trades, you can spread out risk and limit potential losses if the market turns against you.
Why is Risk Management Important in Trading?
Risk management is a critical factor in success when trading in the markets. It involves understanding and controlling what could potentially impact your trades and actively analyzing scenarios that may occur.
Without proper risk management, traders are leaving themselves vulnerable to potential losses which could be catastrophic for their investments.
Good risk management also allows traders to effectively assess opportunities and make better decisions that take into account volatility or leading indicators of future market performance.
Simply put, risk management can provide peace of mind so traders can enjoy the highs of profitable investments while minimizing losses when markets start to dip.
What are Some Common Risk Management Strategies?
Common risk management strategies used by traders include setting stop-loss orders, limiting capital exposure, and diversifying investments to minimize volatility.
Another essential approach for traders is to set predetermined targets for both profits and losses to help stabilize your exposure. To further limit potential losses and maximize gains, traders should always be aware of economic news and other world events that might affect the market.
How to Implement Risk Management in your Trading Plan
Implementing effective risk management into your trading plan is incredibly important for successful and profitable trading. It can help you to control the amount of draws you take in any given trade, and it can also protect against large losses which could potentially wipe out your entire trading account.
A good risk management plan should include determining the amount of capital at risk on each trade, setting predetermined stop-losses to limit downside exposure, and having a strict, disciplined approach towards minimizing losses:
never increasing position size
never risking more than you are comfortable with, and always controlling potential risk-reward ratios.
Taking the time to set up a comprehensive yet flexible risk management plan will put you in a better position when it comes to positive returns in the long run.
Risk management is an important part of trading. It allows you to trade with less stress and more confidence. There are many different risk management strategies, so it is important to find one that fits your trading style.
Proper risk management can help you make money in the long run by preserving your capital and preventing you from making careless mistakes.
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