Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

jackb

Paul Tudor Jones V. Dr. Alexander Elder

Doubling Down With A Loser?  

25 members have voted

  1. 1. Doubling Down With A Loser?

    • Yeah, no biggie. Can't say I won't use this when warranted.
      4
    • PTJ has it right. I have no need to throw good money after bad.
      18
    • Double Down? Shoot, I'm all for tripling, quadrupling, etc until I'm proved right.
      1
    • Money management...what's that?
      2


Recommended Posts

if your first analysis was faulty,

which got you into a bad trade,

what make you think doubling down will somehow correct a faulty analysis?

Share this post


Link to post
Share on other sites
if your first analysis was faulty,

which got you into a bad trade,

what make you think doubling down will somehow correct a faulty analysis?

 

Good question. I don't know if I can answer. All I can say is that it has corrected a faulty analysis more times that it has failed. At least for me. Faulty analysis is hard to put a finger on because even the most perfect analysis do not always work out. I see intraday stops as not carved in stone. I am not the slave of intraday stops. They are simply a tool I USE. The only thing I must be a slave to is PA. If PA has turned momentarily against me but I have good reason to believe it is quickly going to turn back in my favour then I have no problem adjusting my stop and even doubling at what I think is the precise moment to do so. Since I trade almost pure price action I feel I can do this. I have and always will be a discretionary trader. All of my rules are rules but they are flexible to some degree simply because the market is flexible. I can live with that.

Share this post


Link to post
Share on other sites
You are much better off stopping out and re-entering if you still like the trade.

 

Dr. Elder has created some excellent Indicators. I use them constantly.

PTJ has certainly manages a vast amount of other peoples money.

Doubling Down can only be done in fluid trading instruments.

I seldom double down but do maintain tight stops.in short-term trading.

Scaling out of a winning Trade is a tool if the directional bias is strong.

O

Share this post


Link to post
Share on other sites

 

Contrast this with Paul Tudor Jones' statement: "Only losers add to losers.:

 

Let's see how TL members feel about this topic...

 

 

Hi Jack,

 

Seeing how Paul Tudor Jones is soooooo much more successful a trader than Dr. Elder...

 

You decide.

 

 

Luv,

Phantom

Share this post


Link to post
Share on other sites

This story might help, you decide.

 

After I proved to my father I could trade he backed me with a large amount of money, late 08-mid 2010. I traded well made money more than I could ever have imagined. One day I got into trouble and thought I would use my size to bail me out. I ended up exiting +1 tick but I had the most harrowing 2 hours of my life, I thought I was going to have a heart attack and I was not yet 30. I could feel my heart beating throughout my body. I was very very very lucky to get out but learned from the experience and changed my risk management to not do this ever again.

 

Also, who is Dr. Alexander Elder, I don't know but I would bet he is a vendor of some sort and if I am right about that why is he not just trading. I am sure selling whatever takes up time he could be working on entries. Averaging losers will always catch up to you, check out the threads about Robert Hoffman with his -312k in a day.

 

Best of luck to you.

Share this post


Link to post
Share on other sites
in day trading doubling down has saved me from a loss many times more than causing me a further loss. however, it all depends on where it takes place. if price reaches a support level and hold and turns bullish then it makes sense to do it. The basic idea is price has to travel less distance back up to my breakeven point. And it should be before price reaches my puke point stop. For me it makes sense to use an intraday somewhat flexible stop but have a trade management stop at puke level. Of course one could argue just let the intraday stop take you out. How many of you have seen your stop get knocked out and seconds later price is back up and you are in the money if you wouldn't have gotton taken out. With all the HFT going on nowdays the computers algo's create some problems. I prefer to use an intraday trading stop that is adjustible within certain guidelines and a puke point stop that nevers gets moved.

 

if your first analysis was faulty,

which got you into a bad trade,

what make you think doubling down will somehow correct a faulty analysis?

 

Good question. I don't know if I can answer. All I can say is that it has corrected a faulty analysis more times that it has failed. At least for me. Faulty analysis is hard to put a finger on because even the most perfect analysis do not always work out. I see intraday stops as not carved in stone. I am not the slave of intraday stops. They are simply a tool I USE. The only thing I must be a slave to is PA. If PA has turned momentarily against me but I have good reason to believe it is quickly going to turn back in my favour then I have no problem adjusting my stop and even doubling at what I think is the precise moment to do so. Since I trade almost pure price action I feel I can do this. I have and always will be a discretionary trader. All of my rules are rules but they are flexible to some degree simply because the market is flexible. I can live with that.

 

ever heard of the Hoffman effect?

Share this post


Link to post
Share on other sites
I googled him, he goes to traders expos and writes books, does he trade? PTJ does, and spends his free time counting his billions.

 

no he does not trade,

he gambles, with the martingale method.

he had a spectacular blowout recently -- He over extended by keep adding contracts to a losing trade. Eventually he ran out of money; the broker shut him down and he lost 312K in a single TF trade.

Share this post


Link to post
Share on other sites
no he does not trade,

he gambles, with the martingale method.

he had a spectacular blowout recently -- He over extended by keep adding contracts to a losing trade. Eventually he ran out of money; the broker shut him down and he lost 312K in a single TF trade.

 

ah yes Hoffman, have you seen his youtube video where he says losing 312k is a learning experience! He promises another where he goes over the trade, I look forward to it.

 

I googled Dr. Elder, I don't know if he trades/gambles or not.

 

Is what Hoffman doing even legal? I am sure most of his "students" have very small accts. and are unaware that martingaling always leads to a blowup and most cannot afford to average losers like him I assume.

Share this post


Link to post
Share on other sites

This whole business of entering a position based on whether you already own the stock or not seems a little childish. Does anyone seriously think that the stock knows that you own it? Do you think that a stock's behavior is influenced by whether or not you own it? I certainly don't.

There are times when, based on rules I've developed, it makes sense to buy a stock. And, 5 minutes later when the stock is at a lower price, it makes even more sense to buy it.

Share this post


Link to post
Share on other sites
I googled Dr. Elder, I don't know if he trades/gambles or not.

 

Well, they all claim to trade, right? And they all imply they do it well.

 

It doesn't cost anything to make a claim.

 

-optiontimer

Share this post


Link to post
Share on other sites
This whole business of entering a position based on whether you already own the stock or not seems a little childish. Does anyone seriously think that the stock knows that you own it? Do you think that a stock's behavior is influenced by whether or not you own it? I certainly don't.

There are times when, based on rules I've developed, it makes sense to buy a stock. And, 5 minutes later when the stock is at a lower price, it makes even more sense to buy it.

Exactly! I could not have said it better. I do whatever the market is telling tell me to do. Sometimes that means doubling up.

Share this post


Link to post
Share on other sites
no he does not trade,

he gambles, with the martingale method.

he had a spectacular blowout recently -- He over extended by keep adding contracts to a losing trade. Eventually he ran out of money; the broker shut him down and he lost 312K in a single TF trade.

 

he had no puke point stop.

Share this post


Link to post
Share on other sites
Exactly! I could not have said it better. I do whatever the market is telling tell me to do. Sometimes that means doubling up.

 

To each his own.

 

If it works continue obviously

 

My way of trading does not involve this and I was sharing my point of view.

Share this post


Link to post
Share on other sites
To each his own.

 

If it works continue obviously

 

My way of trading does not involve this and I was sharing my point of view.

I agree everyone has to float their own boat. I too was simply sharing my point of view. I would be the first to say it will not work for everyone.

Share this post


Link to post
Share on other sites
in day trading doubling down has saved me from a loss many times

 

Just to be picky but I have to point out the obvious flaw here (as Tams does) - you already have a loss so doubling down does not save you from a loss.....

 

disclosure - I go with the PTJ method

 

While every one has their systems and everyone can and should do what works for them.....there is one thing that often most users of martingale systems dont recognise or want to admit - and this is what riles others up, and this is ....

 

at some stage you will blow up (or even if using puke stops) the losses will be large and these are often large enough to either close and account or at least do enough mental damage as to impede future trading.......if you can accept that then great, but if you fail to even recognize that and then you are deceiving yourself (and possibly others if that view is "sold" without the added risk disclosure.)

Share this post


Link to post
Share on other sites
Just to be picky but I have to point out the obvious flaw here (as Tams does) - you already have a loss so doubling down does not save you from a loss.....

 

disclosure - I go with the PTJ method

 

While every one has their systems and everyone can and should do what works for them.....there is one thing that often most users of martingale systems dont recognise or want to admit - and this is what riles others up, and this is ....

 

at some stage you will blow up (or even if using puke stops) the losses will be large and these are often large enough to either close and account or at least do enough mental damage as to impede future trading.......if you can accept that then great, but if you fail to even recognize that and then you are deceiving yourself (and possibly others if that view is "sold" without the added risk disclosure.)

 

I have done it many times. Double up and it has to go back up (in case of a long position)` a lessor amount to breakeven and soon you are in the money again. Of course, as I stated I would only do this if PA turns bullish and I think it may not be bullish enough to make it back up to my original entry point but it will travel back enough for me to get out at a gain (even if slight). If I think it may well do that then I will not hestitate to double or even triple up. If I am wrong then I will immediately take all losses. It has to move up right away after doubling or I am out. So, I have, many times thrown good money after bad (and I know it breaks all the orthodox rules) and many times..more often than not I have come out with a profit. Doing this has never caused me to blow an account that I can remember and I have been trading since the late 80's.

 

Perhaps it has to do with my method of trading??? I average an 87% to 90% win rate.

 

Anyway it works for me and I am not afraid to use it anytime I think there is a legimate reason to do so. If I don't think there is a reason to do it then obviousley the best thing to do is to take the loss immediately.

 

BTW I don't use a martingale system. This is not standard operating procedure for me in my trading. However, it is a tool I will use if I think conditions warrant using it. I have my rules but none are carved in stone. Only price is the dictator I listen to. This makes my trading highly discretionary and sometimes a gray fog but I am ok with that and it works for me. The market can change my opinion on a dime. I will not hesitate to adapt to it.

 

For others this may not ever work and could be dangerous. I don't know.

Share this post


Link to post
Share on other sites
I have done it many times. Double up and it has to go back up (in case of a long position)` a lessor amount to breakeven and soon you are in the money again. Of course, as I stated I would only do this if PA turns bullish and I think it may not be bullish enough to make it back up to my original entry point but it will travel back enough for me to get out at a gain (even if slight). If I think it may well do that then I will not hestitate to double or even triple up. If I am wrong then I will immediately take all losses. It has to move up right away after doubling or I am out. So, I have, many times thrown good money after bad (and I know it breaks all the orthodox rules) and many times..more often than not I have come out with a profit. Doing this has never caused me to blow an account that I can remember and I have been trading since the late 80's.

if your original analysis was faulty,

what makes you think your second analysis cannot be not faulty?

I am not saying it could not be good, I am just asking a rhetorical question.

 

 

Perhaps it has to do with my method of trading??? I average an 87% to 90% win rate.

Hoffman had a 100% win rate -- 535 straight days without a losing trade !!!

 

 

Anyway it works for me and I am not afraid to use it anytime I think there is a legimate reason to do so. If I don't think there is a reason to do it then obviousley the best thing to do is to take the loss immediately.

 

BTW I don't use a martingale system. This is not standard operating procedure for me in my trading. However, it is a tool I will use if I think conditions warrant using it. I have my rules but none are carved in stone. Only price is the dictator I listen to. This makes my trading highly discretionary and sometimes a gray fog but I am ok with that and it works for me. The market can change my opinion on a dime. I will not hesitate to adapt to it.

 

For others this may not ever work and could be dangerous. I don't know.

 

In early June this year, I predicted that Hoffman will have a blowout within 12 months.

It happened in 5 weeks.

 

I wish better luck to you.

Share this post


Link to post
Share on other sites

High win rate is a sucker's game; it is only a number, a meaningless number.

But noobie suckers will suck up to it.

 

as you can see, Hoffman had a 100% win rate -- 535 straight days without a losing trade !!!

yet he blew out spectacularly.

 

High win rate can mean 2 opposite things...

 

1. you are sooooo gooooood, you don't lose.

 

2. you are afraid to lose, so you hang on to your losers until break even.

 

 

if we drill down deeper, we will find out that:

 

1. if you don't know how to trade, you will be afraid to lose.

If you are afraid to lose, you will hang on to your losers.

One of the strategy to accomplish break even (or small profit) is to double down.

 

2. high win rate accompanied by a history of high draw down simply means one thing -- Hope is your main strategy

 

3. high win rate accompanied by high commission to profit ratio means your are either a scalper, or gambler. You don't really know (or care) where the market is going.

 

4. high win rate accompanied by occasional blow out... means you are really a nobody.

 

... and the list goes on...

Edited by Tams

Share this post


Link to post
Share on other sites
if your original analysis was faulty,

what makes you think your second analysis cannot be not faulty?

I am not saying it could not be good, I am just asking a rhetorical question.

 

 

 

Hoffman had a 100% win rate -- 535 straight days without a losing trade !!!

 

 

 

 

In early June this year, I predicted that Hoffman will have a blowout within 12 months.

It happened in 5 weeks.

 

I wish better luck to you.

 

Again I am not doing what hoffman did/does. I do not double up everytime the market turns against me. And of course I could be wrong the second time too. If so, then the answer is to cut losses immediatley. How many times have you dutifully taken the loss to see the market turn on a dime and shoot right back up. Those kind of losses can add up too.

Share this post


Link to post
Share on other sites
... high win rate accompanied by occasional blow out... means you are really a nobody.

 

That was a great post! ...right up to the part about "really a nobody." Tams, None of us are nobody's . Not a single one of us.

 

Still, a great post... telling it like it is.

 

You are pointing out the inevitable destruction waiting for a trader who is doubling down for psycho-neurological reasons instead of reasons related to actual market actions. Been there - done that :crap:. I think Patuca is talking about reasons related to actual market actions. From what I can tell skimming the posts, I have systems similar to Patuca's. Also very high hit but rates, but since mine are only applied under certain market conditions, they aren't a high percentage of the whole bottom line. They are at once extremely precise for some aspects and almost totally imprecise for other aspects - like where and when subsequent add ons will be. Anyways, in these systems I 'double down' all the time. Sometimes when price comes to a good buy or sell point, it will turn immediately. But other times so it will make more thrusts down or up. If the first thrust is a good quality signal, then subsequent thrusts are also good. Adding more and more is warranted (again, only in certain market conditions). I want to be in any which way the turn occurs, so I don't skip the first and wait for more better entry. I get in, willing to get in some more all the way down or up to a certain precise / stop point. ( ie I shouldn't be deprived if it takes certain 'crowds' a little longer to catch on ;) )

 

A real time example from this morning is attached. It does not have any examples of thrusts that go way past the first entry point and still being good for piling on size - but those happen all the time too. In any case, I would add more if the signal is there - whether next entry price is better or worse than first entry price.

In the first example on the attached, the price went further than the first short entry signal shown at far left arrow. Add more at 2nd red dn arrow.

In the next example price went beyond first entry twice. Add more each signal, 2nd and 3rd green up arrows.

In the next two, price did not go higher than first entry, Still add more at the 2nd red arrow in middle of illustration.

In the final two, again price did not go beyond first entry. Still add more at the 2nd green arrow.

The first signal of each of these trades qualifies the subsequent entries. If they are at even better prices - fine. If they are not at better prices - also fine. None showed on this example and I'm not taking time to go cherry pick one in history. but if they are at far better prices (as long as it doesn't go past stop loss point) - even better! Even if it looks like stupid doubling down !

addingMore.thumb.jpg.0f969b9e80537b76809594f7f6deb1c5.jpg

Share this post


Link to post
Share on other sites
That was a great post! ...right up to the part about "really a nobody." Tams, None of us are nobody's . Not a single one of us.

 

Still, a great post... telling it like it is.

 

You are pointing out the inevitable destruction waiting for a trader who is doubling down for psycho-neurological reasons instead of reasons related to actual market actions. Been there - done that :crap:. I think Patuca is talking about reasons related to actual market actions. From what I can tell skimming the posts, I have systems similar to Patuca's. Also very high hit but rates, but since mine are only applied under certain market conditions, they aren't a high percentage of the whole bottom line. They are at once extremely precise for some aspects and almost totally imprecise for other aspects - like where and when subsequent add ons will be. Anyways, in these systems I 'double down' all the time. Sometimes when price comes to a good buy or sell point, it will turn immediately. But other times so it will make more thrusts down or up. If the first thrust is a good quality signal, then subsequent thrusts are also good. Adding more and more is warranted (again, only in certain market conditions). I want to be in any which way the turn occurs, so I don't skip the first and wait for more better entry. I get in, willing to get in some more all the way down or up to a certain precise / stop point. ( ie I shouldn't be deprived if it takes certain 'crowds' a little longer to catch on ;) )

 

A real time example from this morning is attached. It does not have any examples of thrusts that go way past the first entry point and still being good for piling on size - but those happen all the time too. In any case, I would add more if the signal is there - whether next entry price is better or worse than first entry price.

In the first example on the attached, the price went further than the first short entry signal shown at far left arrow. Add more at 2nd red dn arrow.

In the next example price went beyond first entry twice. Add more each signal, 2nd and 3rd green up arrows.

In the next two, price did not go higher than first entry, Still add more at the 2nd red arrow in middle of illustration.

In the final two, again price did not go beyond first entry. Still add more at the 2nd green arrow.

The first signal of each of these trades qualifies the subsequent entries. If they are at even better prices - fine. If they are not at better prices - also fine. None showed on this example and I'm not taking time to go cherry pick one in history. but if they are at far better prices (as long as it doesn't go past stop loss point) - even better! Even if it looks like stupid doubling down !

 

zdo:

 

thank you for your reply and comments.

 

there are 2 types of doubling down:

 

1. double down to average up, or accumulate more position.

 

2. double down as a bail out technique.

 

 

we should not be confused with our intent when executing such.

 

I am sure there are times when doubling down can save your skin,

I do wish you luck.

 

for the mere mortals,

we should just slow down a minute and think:

if your trading technique is so good that you can use double down as a bail,

I am sure if you just stand aside and wait for a minute,

your trading prowess can also get you into the next major wave and make a major killing.

Edited by Tams

Share this post


Link to post
Share on other sites
That was a great post! ...right up to the part about "really a nobody." Tams, None of us are nobody's . Not a single one of us.

...

 

Thanks

 

the nobody part was said tongue-in-cheek.

 

Honestly, only the market can tell you if you are a nobody or not.

Share this post


Link to post
Share on other sites
only the market can tell you if you are a nobody or not.

 

... taking it from the sublime to the ridiculous now...

The market can not tell you if you are a nobody or now.

Nobody is a nobody...

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date : 12th December 2019. Lagarde prepares ECB debut – 12th December 2019.   Policy unchanged Projections unlikely to change much Clues about review sought Style in focus Presiding over her first presser of the European Central Bank today, Lagarde is expected to confirm once again the current policy setting, giving time to ECB to focus on the planned review of its overall policy framework.Final Eurozone GDP and PMI readings broadly supported this neutral picture, while the confidence that a deep recession can be avoided is strengthening (Figure 1) despite the fact that German manufacturing and production numbers still look weak. The exports and the overall trade are actually holding up much better than expected, which together with still strong labour markets is underpinning hopes the net exports and consumption will continue to support growth not just in Germany.Figure 1 : December German ZEW investor confidence outcome, end the year firmly in positive territory at the highest level since February 2018.As there is nothing in the data really to challenge the ECB’s overall policy stance, the focus firstly turns into the tone and presentation style that President Lagarde will have. The “risk” is that the presser will be equally uneventful as her testimony before the European Parliament. Lagarde’s team building exercise seems to have worked and at least in public there has been a pretty consistent message since she took over, which is very likely to be confirmed today. Additionally it will be interesting to see whether she will back fully Draghi’s package.Citi Bank: All key interest rates will likely be left unchanged, and the forward guidance reaffirmed. The main interest at this meeting will be the new Eurosystem staff projections, extended to 2022, to gauge whether the September package will be sufficient to bring inflation back into line with the ECB’s target over the forecast horizon. If not, investors’ attention will quickly turn to the ECB’s toolbox and what instruments the Governing Council would be willing to use and when, in order to defend its credibility in the absence of large fiscal support. The upcoming strategic review of monetary policy will also likely be the focus of many questions.Hence as reported by Citi, other than Lagarde’s style, ECB projections could also monopolize the attention. Even though, the ECB remains ready to act again and tweak all its measures if necessary, it has already done a lot and now needs to keep an eye on the side effects of the very expansionary monetary policy, while politicians need to do their bit to support the economy.The central bank won’t be reducing the degree of stimulus any time soon with many analysts supporting that this will continue until mid-2020 unless there is a major change in circumstance.Central bankers will be conducting a comprehensive review of the policy framework, however, with a special focus on the inflation target. A more symmetric definition, which stresses that the ECB can see through lengthy inflation overshoots as well as periods of too low headline rates is likely to come in the first quarter of next year. The inclusion of owner-occupied housing costs into the HICP number also remains a challenge especially as house prices are rising rapidly in some centres, also thanks to the low interest rate environment.Bund yields have nudged higher over the past week, but the German 10-year so far failed to move lastingly above -0.3%. Uncertainty on trade and Brexit are keeping a lid on yields, although there is the risk that if things go the way markets want and a phase one trade deal is confirmed and in the UK PM Johnson gets his majority, there could be a sharp rise in yields, if markets price out further easing and start to look ahead to central banks removing some of the stimulus.However this is far away for now, while central bankers are not looking eager to add further easing.Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • USDJPY Remains Biased To The Downside   USDJPY faces further price weakness despite its price hesitation on Tuesday. On the upside, resistance comes in at 109.00 level. Above this level will turn attention to the 109.50 level. Further out, we expect a possible move towards the 110.00 level on a break of that area, A cut through here will open the door for more gain towards the 110.50. On the downside, support lies at the 108.00 level where a break will target the 107.50 level. Below that level will turn focus to the 107.00 level and then lower towards the 106.50 level. On the whole, USDJPY faces further downside threats.        
    • Sterling Advances Barely Hours To UK Elections As Latest Poll Predicts Conservatives Win In just two days from now, a major event that will set the trend for the currency market for the year 2020, the UK elections will be held. In the face of a Brexit extension, UK prime minister had pushed for an earlier election in the hopes of having a majority conservatives win in the parliament which will make the Brexit deal pass through easily. As the clock ticks, with barely less than 48 hours to this epochal event, the newest poll by Survation conducted for ITV’s good morning Britain show predicts a Boris Johnson win by 14 pts. ahead of Jeremy Corbyn‘s Labour party. The Brexit deal seemed to give the conservatives an edge as it accounted for 32% of the vote decision while NHS gave Labour party a slight edge. On the overall, a majority vote of 42% was predicted for the conservatives while Labour had 28%. Market Reaction as the Clock Ticks Optimism looms in the market as the prediction of a conservatives win will ease Britain’s exit from Europe by January 31 deadline. The EUR/GBP pair continued to fall till the early hours of today breaking the 0.8411 trend line targeting the 0.8149 resistance level. GBP/USD pair rebounded to consolidate briefly targeting 1.3381 resistance levels. Technical analysis within a 4-hour MACD shows that both pairs may likely touch down. CAD edged slightly higher advanced by USMCA news but yet to consolidate gains. The USD against a basket of five major currencies held steady awaiting FOMC’s minutes due out tomorrow. Against a basket of currencies, NZD’s dominance is the highest. Sterling also gained momentum firmed up by approaching UK elections. The safe-haven, the Japanese yen, and Swiss franc remain pressured as major events that will shape the market for 2020 are been anticipated. On the Asia side, significant market activity wasn’t recorded as most currency pairs held steady within a day’s range. In the Asian stock market, not so much activity was recorded being weakened by recently released Chinese PMI numbers. Most of the indexes closed a little lower while US stocks rose swiftly after Friday’s release of US non-farm payroll reports. The outcome of the December 15 deadline set by the US for the signing of a preliminary trade pact will determine the week’s direction and even further into the year 2020. Also due out later in the week is UK GDP figures and ZEW released out of Germany.
    • Date : 11th December 2019. FOMC Preview – 11th December 2019. FOMC Preview No policy changes or surprises are expected with today’s announcement (19:00 GMT) and Chair Powell’s press conference 30 minutes later. It will be interesting to see if, as expected, the voting is unanimous this time round. The FOMC members have expressed significant differences of opinion during 2019 as three rate cuts were implemented.  The apparent paradox of low unemployment and low inflation, the new “norm”. The two-digit unemployment rate (U-3) in November edged down to 3.53% from 3.56% in October, and a 3.52% cycle-low in September, all below the 3.58% prior cycle-low in April and a 4.00% rate at the beginning of the year. Current readings remain much lower than the 4.2% long-run unemployment rate projection noted in the September SEP, it is expected that this estimate will be trimmed today. Headline CPI rose 0.4% in October while the core index rose by 0.2%, for respective y/y gains of 1.8% and 2.3%, versus September figures of 1.7% and 2.4%. Today the November headline is expected to fall again to 0.2% and the core remains flat at 0.2% too. The Fed’s favoured inflation gauge, the PCE chain price measure, rose 1.3% y/y in October and expectations are for an uptick to 1.4% in November. The core PCE chain price measure rose 1.6% y/y in November, versus 1.7% in September, and expectations are for the pace to hold at 1.6% in November. The FOMC’s latest median estimates for 2019 inflation are 1.5% for the headline and 1.8% for the core. Hence, the focus will be on the Fed’s new quarterly forecasts, with expectations raised and likely to be mostly bullish results with a bump up in the median growth projection and a drop in the median dot to reflect a steady stance through 2020. However, the individual dots are likely to show both, forecasts for cuts and hikes. Chair Powell is expected to reiterate the US economy and policy are in a “good place,” (a phrase he has used a number of times lately) and could sound a little more upbeat after the strong jobs report. But, he will continue to warn of downside risks. The FOMC isn’t likely to announce any new measures on reserve management operations (QE?) or a repo facility. All steady into 2020 and beyond. USDIndex remains biased to the down side but has support around 97.40 and the 200-day moving average. A breach of this key support zone brings in 97.00 and the October low of 96.85. A break over 97.80 (the confluence of the 20 and 50-day moving averages) and 98.00 would be required before a re-test of the recent high at 98.50 could be considered. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HotForex Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Stuart Cowell Head Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.