What is sectior rotation?
Sector rotation is an active investing strategy that involves moving money between stock sectors to keep it in the best-performing sectors. Investors and traders use this strategy in anticipation of the next stage of the economic cycle, when most industries and their companies will either thrive or struggle….AI Overview
July 12 (Reuters) – A look at the day ahead in U.S. and global markets from Mike Dolan
A violent rotation from Big Tech into small cap stocks followed the surprisingly benign June U.S. inflation report, while U.S. borrowing rates and the dollar plunged and Japan’s yen stole the currency show.
EURUSD DAILY CHART – POWER OF 50
1.0852 breakout targets 1.0916 next as long as it stays above this level.
It is why I csaid earlier 1.0850 sets the bias.
Only below 1.0850 would postppne the threat
The high so far has been 1.0899, only GBPUSDD has so far extended its high..
Above 1.0916 would expose potential for 1.10
A market view
Markets are saying what Powell can’t: Morning Brief
After this latest, reassuring inflation reading, markets were pricing in an 84% chance that the Fed will begin cutting rates at its September meeting, up from 73% a day prior, according to CME FedWatch.
“A September rate cut should be a done deal at this point,” said Lazard chief market strategist Ron Temple.
USDX DAILY CHART – KEY SUPPORT ON THE RADAR
USDX IN A DOWNTREND THAT STILL NEEDS A 103.93 BREAK TO FULLY CONFIRM
SO FAR, THE BREAK OF 104.27 HAS NOT FOLLOWED THROUGH, BELOW IT IS NEEDED FOR A SERIOUS RUN AT 103.93
NOTE, WITH EURUSD 57.6% OF THE INDEX, USDX WOULD NEED CONFIRMATION FROM A BREAK OF YESTERDAY’S 1.0899 HIGH (YET TO OCCUR)
EURDLR 108.92
Puppy is likely reflecting political betting – but I could be wrong
On the euro the betting would be on lagarde’s intentions and
On the USD the betting would likely be on biden (and not so much on Jerome anymore atm)
I am trying to take my bead off the US bond yields (as Jay points out) and USDCHF
GBPUSD 4 HOUR – MARCHING FOR 1.30?
GBPUSD so far extending its high by one pip tp the “50” level (1.2950)
Should 1.2950 become support, expect a run towards 1.30
Major technical target remains at 1.3141 following the break of 1.2893
Downside contained as long as it trades above 1,29
Note GBP strength on its crosses as well
USDJPY DAILY CHART – TRENDLINE BROKEN BUT…
Was it intervention or some hedge fund exiting short JPY carry trades when US yields fell after CPI?
All that matters is the market could not absorb the selling.
Key daily trendline was broken but without a close below it.
On the upside, the BoJ will not want to see it back above 160.25
In any case, the market will assune the high is in for now, but would need to get through 167.41 to put 155 in play.
Look for choppy trading but a limited upside while below 160.25.
EURUSD 30 MINUTE CHART – MY MOTTO
My motto: When logic says one thing and The Amazing Trader says the opposite, don’t ignore what THE AMAZING TRADER is saying
What’s it saying
In this case, falling blue lines are saying the intra-day risk had shifted to the downside. Those looking to buy the dip are trading the last episode when a new one had begun. Note I said intra-day as the dollar is still down on the day except vs the CAD,
Similar patterns are in other currencies as well after the CPI dollar dive ran out of steam.
GBPCHF 4H
Kind of a strange choice of instrument for me – Yes, it has never crossed my mind to play with this cross 😀
But one of our new members brought it up to my attention, so I added some of my own recipe to it and Voila…
Robinson saw it on time and together we are now bringing it up to your attention.
Supports at : 1.15350 , 1.15100 & 1.14950
Resistances at : 1.15550 , 1.15750 & 1.16200
We should start paying attention to it….
Thank you Robinson for this little gem 😀
Forex Forum Ad Hoc Glossary
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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