Educations

Morgan Stanley does not like the USD.  What about the technicals?

Morgan Stanley does not like the USD. What about the technicals?

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Some overhead resistance to get through. Adam posted Morgan Stanley's view that the dollar would head lower.  They cite some plausible reasons for their assessment, but as most people realize, what we think most times does not play out the way we think.   That is especially true when we face things like China/US, Brexit, US/Europe,…
Fake news isn’t just a problem for the public, it’s a problem for algos

Fake news isn't just a problem for the public, it's a problem for algos

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Algos are reading headlines, but what if they're wrong? Algos are all over the newswires and twitter. The straightforward way is a race to trade on news and economic data. As a result of an arms race that's lasted the past 15 years; it's gotten hyper-competitive and now the moves are unbelievably fast. The next…
FX Trading Education: GBPUSD trend stays alive for the day.  Here’s why…

FX Trading Education: GBPUSD trend stays alive for the day. Here's why...

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Corrections are modest is the clue. The GBPUSD has trended lower today after the pair peaked against it's 200 hour MA a 1.27586.  Since then the price has moved to the downside.   The move has moved 255 pips from the high to the low. The corrections have been modest.  That is what a trend move…
WSJ: Details of US/China to include large purchases in coming weeks

WSJ: Details of US/China to include large purchases in coming weeks

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Tech issues not so easy. The WSJ is reporting some details of the US/China trade talks from Buenos Aires. Included are: Negotiated period of 90 days during which the US would not raise tariffs on the $200 billion of goods to 25% China would purchase a large amount of goods and services including soybeans and…
What is Goodhart’s law

What is Goodhart's law

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When everyone is looking at something, it changes In quantum physics, the observer effect is the theory that simply  observing a situation or phenomenon necessarily changes that phenomenon. Economics has something similar, called Goodhart's law. It's named after British economist Charles Goodhart who observed that when a measure becomes a target, it ceases to be a…
The role of luck in trading

The role of luck in trading

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Where does luck come in to trading markets? In the previous article, we talked about trading and probability. Continuing to develop this topic, let's talk about trading and luck. What is the relation between these two concepts? Can a trader count on luck to get profit? Is it possible to suffer from bad luck in…
EURUSD choppy but higher.  If the dollar is going lower, what do the charts have to tell us?

EURUSD choppy but higher. If the dollar is going lower, what do the charts have to tell us?

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If the dollar has peaked, what do traders want to see? For me the price action and technicals help tell the story. Today the price action shows a rebound from yesterday's sell off, but the price action on the hourly chart shows choppy up and down trading.   What I see technically though is that the…
Trading and probability

Trading and probability

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Embrace the odds in your trading "Probability is not a mere computation of odds on the dice or more complicated variants; it is the acceptance of the lack of certainty in our knowledge and the development of methods for dealing with our ignorance." ? Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance…
How to find a great entry price and reduce your stop size

How to find a great entry price and reduce your stop size

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Placing stops: Mastering trade management and risk control Trade management is a key skill to grasp and a good entry price will enable you to reduce your stop size. Entering a stop is simply where you place an order in the market where you will 'exit' the market if your trade goes against you. You…
How to best view the emotions you feel while trading

How to best view the emotions you feel while trading

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Learning the role emotions play in your trading How are you trading at the moment? Or, more specifically, how are your emotions affecting your trading at the moment? Take a moment to ask, 'How do I feel when I am trading well as opposed to how I feel when I am trading badly?' Trading is…