Do you have “FOMO Traders” Characters?

FOMO is Fear of Missing Out type of traders, which influences our daily trading habits and decision making capability in Forex Trading.

There are following causes which leads FOMO Traders:

High Expectations

FOMO Traders thanks that one needs to double the account by next month and you are missing out if you do not make a lot of money as soon as possible. This leads to higher risk and large position sizes. One wrong trade and you will regret of choosing wrong position sizing and trade.

Over Confidence

When you come from a winning streak and feel invincible and then take random trades or too large positions because you think we can “feel” what the market is going to do.

Lack of Confidence

After a few losing trades, many traders will try to play catch up and then enter random trades just to get into the market and hopefully somehow generate a profit.

No Rules

When you do not have a system or rules, to begin with, then FOMO is your default mode, always jumping in and out of the market, not really knowing what you are doing.

Lack of Long Term Perspective

When you do not understand that there will be hundreds and thousands of new trades waiting for you. Many amateurs put way too muchimportancet on one trade alone and want to force this trade to win whatever it takes.

Impatience

When you do not want to wait for the setup and just want to get into a trade because you fear that the price might run away.

Wrong Mindset or Too Emotional

Every Forex trader wants to improve their forex trading success. Successful trading is difficult and building the correct attitudes and beliefs is the way to develop the habits and skills necessary for profitable trading. Without a profitable and successful trading mindset, you will be swimming upstream against your emotions/fears, thoughts, and unconscious habits which undermine your success.

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Trading is an art of making handsome amount.

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What are Currency Pair Correlations?

What is Currency Correlation?

Currency correlation depicts an extent to which two currency pairs have moved in same, opposite, or totally random directions over a period of time.

Thought Process:

Why a certain currency pair rises, another currency pair falls?

Why same currency pair falls, another currency pair seems to copy it and falls also?

This is because of correlations between currencies. Correlation is the numerical measure of the relationship between two variables. The range of the correlation coefficient is between -1 and +1.

Positive Correlations: A correlation of +1 denotes that two currency pairs will flow in the same direction.
For Example: Correlation between EUR/USD and GBP/USD is an epitome as if EUR/USD rises then GBP/USD is moving the same direction.

Negative Correlations: A correlation of -1 indicates that two currency pairs will move in the contradictory direction 100% of the time.
For Example: Correlation between EUR/USD and USD/CHF is an epitome of negative correlation, if EUR/USD rises, then USD/CHF falls.

Zero Correlation: The correlation of zero denotes that the relationship between the currency pair is completely arbitrary.

Currency correlation is strongly connected with risk management, and can help you to better understand the market when trading.

Some of the highly correlated currency pairs are:

Positive Correlations:

EUR/USD and GBP/USD (+ 0.89)

EUR/USD and AUD/USD (+ 0.81)

EUR/USD and EUR/CHF (+ 0.93)

AUD/USD and Gold (+ 0.75)

Negative Correlations:

EUR/USD and USD/CHF (- 0.85)

USD/CAD and AUD/USD (- 0.88)

AUD/NZD and NZD/SGD (- 0.78)

USD/JPY and Gold (- 0.78)

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Trading Psychology and Methodology

1. Currency Pair Analysis: Perform a world class analysis to determine which currency pairs have the greatest profit potential.

2. Trade Management: Trade management techniques to take the most of each trade when the market moves on their favor.

3. Study the Market: Entry system adapts to the current market conditions, follow the market instead of guessing.

4. Risk Management: Risk management techniques to set stop loss and take profit orders at optimal levels. Accept risk and feel comfortable with their trading, they know it’s the only way to get consistent results.

5. Money management techniques to allow the geometric growth of their account and avoid the risk of ruin.

Long-term analysis: Methodology to determine which currency pairs have the greatest profit potential.

Short-term analysis: Entry systems: breakout, retracement and continuation price action entries.

Capital management: Determine the formula that you will use to decide how much capital to risk on each trade.

Trade management: Strategies to manage trades, when to scale in and scale out of trade and more.

Risk management: Optimal levels to set stop loss, take profit levels, trailing stop to help you reduce risk.

Trading Psychology: what needs to know to accept risk and feel comfortable about every trading decision made.

All the above qualities are being taken care in Equidious Research.

Join 300,000+ traders who stay ahead of the market, submit your details with us by filling our CONTACT FORM.

For the Best Forex Signal| Accurate Stock Signal| Profitable Comex Signals, Try Equidious Research Services. We have a team of best and well experienced Research Analysts.

Trading is an art of making handsome amount.

Enjoy Trading!

Forex Insights-20-Sept-2018

EUR/USD:

Headlines: Euro dwells in the tight range in lack of fundamental impulses

• Euro is trading on the upside while remaining trapped within the tight range at around key level as lack of fundamental data see German Bundesbank President Weidmann speaking as a major headline of Thursday.

• EUR/USD appears consolidated in the near term, while further upside is poised to face formidable resistance above 1.1700 the figure for the time being.

GBP/USD:

Headlines:Sterling moves higher after UK retail sales rise above expectations

• Sterling is trading on the upside ahead of the UK retail sales report and the unofficial European summit on Brexit in Salzburg.

• The Uk retail sales rose above expectations on both total and core retail sales basis in August pushing Sterling above key level.

• Sterling rose to a fresh multi-week high after UK inflation rose above expectations in August, but the news of the UK Prime Minister set to reject EU Irish border proposal saw Sterling retreating lower on Wednesday.

• The correction out from the 2018 low has accelerated, with the market pushing through critical shorter term resistance at 1.3000, while trying to set up a higher platform around 1.2800 along the way.

USD/JPY:

Headlines: USD/JPY on the defensive, but holds above 112.00 handle

• The USD/JPY pair traded with a mild negative bias for the second consecutive session, albeit has still managed to hold above the 112.00 handle.

• Rallies continue to be very well capped, with the medium-term outlook still favouring lower tops and lower lows. Look for a daily close back below 109.75 to strengthen the bearish outlook, opening the door for the start to a move back down towards 108.00 which guards against the 104.60 area 2018 low.

CRUDE OIL:

Headlines: WTI consolidates around $ 71, focus shifts to OPEC + meeting

• WTI (oil futures on NYMEX) has entered into a phase of consolidation near two-week tops of $ 71.34, as the bulls await fresh impetus for the next push higher.

• Iran’s Oil Minister Zanganeh was on the wires last minutes, speaking about the output policy ahead of the OPEC+ meeting in Algiers this weekend.

• Oil at $80 per barrel is a suitable price.

GOLD:

Headlines: Gold edges lower, but holds above $1200 mark on softer USD

• After an initial uptick to fresh weekly tops, gold prices turned lower and eroded a part of previous session’s goodish up-move.

• Spot prices inched higher on Wednesday and jumped back above the key $1200 psychological mark, shrugging off a strong rally in the US Treasury bond yields.

• Fails to capitalize on overnight up-move, despite retracing US bond yields.
  • Risk-on mood/Fed hike prospects seemed to collaborated towards capping.
  • The prevalent USD selling bias helped limit any immediate sharp downside.

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Impacts of Trade War

Traders are struggling to place trade concerns into a coherent narrative. As the instigator of the recent trade tensions with most of its major partners (China, Canada, Mexico and the EU), the U.S. economy could soon see exports take a hit from multiple directions. From another perspective, the U.S. economy is outperforming most of its global peers and therefore may be best situated to weather a protectionist-driven economic slowdown.

Currency war, also known as competitive devaluations, is a condition in international affairs where countries seek to gain a trade advantage over other countries by causing the exchange rate of their currency to fall in relation to other currencies.

Trade war risks becoming a dangerous currency war as China weakens yuan the most in 2 years.

Not only does the threat of a trade war impact the day-to-day of the currency markets, it is also related to a currency war where countries devalue their own currency so exports can be sold cheaper overseas in order to jump start the economy at home. The problem with currency wars – just like trade wars – is that more often than not there are no winners.

The United States’ trade deficit to China no longer seems the top issue in the trade war: A deal for an additional $70 billion in Chinese purchases of US goods was reached after rounds of bilateral negations in May and June. Yet, that didn’t stop US President Trump from abandoning the deal.

For China, it can no longer rely on high growth rates that it enjoyed for decades; the need for industrial upgrading and developing new momentum, such as high-technologies, has become inevitable. In 2017, China announced it had shifted emphasis on quality over speed for economic growth. The Chinese government will support innovations and technologies industries further, as well as promoting the “Made in China 2025” plan.

As the world’s largest economies open up a new front in their increasingly acrimonious game of brinkmanship, the consequences could be dire — and ripple far beyond the US and Chinese currencies. Everything from equities to oil to emerging-market assets is in danger of becoming collateral damage as the current global financial order is assailed from Beijing to Washington. Risk assets and oil prices would likely tumble as worries about growth arise, hitting currencies of commodity-exporting countries particularly hard — namely, the Russian ruble, Colombian peso and Malaysian ringgit — before taking down the rest of Asia.

The present currency war started in January 2010. The problem with currency wars is that all advantage is temporary and is quickly erased by retaliation. Trading partners retaliate with their own devaluations. Currency cross-rates end up back where they started, with costs imposed due to the uncertainties. Not only is the world not better off but it is worse off because of the costs and uncertainty resulting from the currency manipulations. Once countries realize that currency wars don’t work, they turn quickly to trade wars through tariffs and other trade barriers.

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