So far, the currency and index markets have been more active than traditionally so in August.
My anchor or intraday timeframe has moved out to the hourly chart. I still, however, for context, frequently view the 4 hour and daily charts. The weekly also but only to reaffirm a previously drawn crucial weekly support or resistance line, otherwise the weekly chart not so much.
With the higher timeframe, I’m able to consider many more currency pairings. More than a dozen together with the DAX, S&P 500 and gold. You will know from the news that the indices mentioned have been negatively volatile recently. Unlike your typical investment vehicle, we can benefit equally from the negative or positive price movement of all of these instruments.
Within the currency pairings, the British Pound has spent much of its time in a reasonably tight range against the US Dollar and other pairings. The Japanese Yen, however, has generally trended positively very well against many of the major players.
We discussed in the last post the importance of measuring specific criteria. Probably the most important of which, together with the per cent amount risked on each trade, is the reward to risk result (R). For example, an exit position that has a 50 pip risk, but a 100 pip reward is a positive 2R trade.
For a consistent trader, this is also a reasonable indication of market movement. August is littered usually with 1R (or less) trades. However, this week, I’ve taken a few higher trades, one of which at over 5R.
I look forward to what next week might bring.
Of note, the fund will not be traded from the close of the market on 23rd August until 12th September. Happy holidays everyone.