EUR/USD – This Is How You Approach A Trade: Discipline, Patience & Process
Good morning traders.
Today I wanted to focus on how you approach a trade. Specifically, the process. There is a lot of misinformation out there on this, so allow me to provide my perspective.
The last ‘official’ trading of Summer 2019 is underway. What is encouraging is how prices are set up as we head not only into today but next week.
While we likely missed the EXACT turning point lower/higher for DXY and EUR/USD respectively on August 1st, our patience waiting for the correction is proving to be wise.
Yesterday’s break below 1.1660 (noted below) has now seen prices move about 30 pips lower and into forecast support at 1.1566-1.1465. Perhaps we will not see the lower end of that range, but I will want to be building longs as we begin approaching that zone.
My hope is that clients have been able to see, in real-time, how approaching a forecast and subsequent trade plays out. Too often we expect the market to offer us up a ‘trade of The Day’ once our feet hit the floor in the morning. Markets do not work like that.
Rather, what has been on display for the last week is a disciplined and patient approach. Each day provided a few more clues that then got factored in. All the while there was no angst or feelings of looking for some hot price action somewhere else. I do not know about you, but showing up to the party late once it becomes obvious usually does not provide me with a deep level of conviction. And without conviction, my staying power in a trade is really low.
This set-up in EUR/USD is the complete opposite. I/we have been monitoring it for over a week now. Sure, the forecast may not play out, but a deeper level of intimacy of the price action has unfolded….and that is key. Additionally, I have no reservations about walking away from my screen mid-morning AFTER my analysis is done. What more can I possibly do? Not much. Instead, many mountain bike rides have unfolded and other fun activities. When I get back in front of my screens a few hours later, my mind is fresh and I then take in what may or may not have changed. Simply another step in the discovery process to the next trade set-up.
My hope is that you have felt and seen this over the last week and understand how the trade process should look, not the one that has been sold to you by the carnival barkers out there.
Thursday’s Analysis (worth 30 pips thus far for those who were willing to trade it)
Patience has been the buzzword all week as I have been waiting for a correction higher in the Dollar Index (DXY) and thus a push lower in EUR/USD. That appears to be playing out finally.
Short-term oriented clients might find a short set-up in EUR/USD if prices break below 1.1660 as that should allow for prices to move lower towards 1.1566-1.1465….the Fib support levels I had noted yesterday.
I will personally be using this pull-back as a way to build long positions as the dominant trend is UP and I want to align myself with that.
EUR/USD – downside in the near-term
Have a question for me? Just ask.