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asiaforexmentor

Whats Your Risk Percentage Per Trade?

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Forex Risk Management – Whats your Risk % per trade?

 

Forex Risk Management

FOREX RISK MANAGEMENT

 

Whats your risk % per trade?

Or should i say, what’s your risk appetite?

To be a successful forex trader. You will need to have a proper money management system.

It starts with identifying what level of risk % per trade will you risk.

As a guide, a safe and good risk percentage will be from 1% – 3%.

Anything higher than 3% will be relatively risky.

Why is this so.

If you understand, the forex market can do anything.

Even if you are sure this is the MOST perfect setup.

It MAY NOT end up the way you expected it to be.

Why?

Forex Risk Management – Whats your Risk % per trade?

 

Forex Risk Management

First, you must understand that anything can happen in the forex market.

Just for example, even if it is the most perfect setup. If a major institution pumps in a large sum of money at that period of time. It can change the direction of the market for a short time frame.

And when the retail investors see the market moving in the direction stipulated by the major institution, they will then follow suit and enter the same way.

WHICH causes the movements in the market.

But of course, this doesn’t happen always.

What i’m saying is, anything can happen in the forex market.

So even if you are the best forex trader in the world. You will not have a 100% winning rate as well.

You will still lose as the market can do anything.

Which is why, it is not wise to have a high risk per trade.

Forex Risk Management – For example, if a trader risk 10% per trade.

And a series of unfortunate events happen to him, (maybe it’s a distraction, maybe there’s an earthquake etc)

As a result, he made a series of 5 losing trades.

He would have wipe of 50% +- of his trading capital because he risked 10% per trade.

And with just 50% left, it will be hard for him to make back his loss.

So if you see what i meant.

Forex Risk Management – For example, if you risk 2% per trade.

With a series of 5 losing trades. You would only lose 10%+- of your capital.

Which is not to bad.

With a good trading system, we can easily make back the money loss.

Forex Risk Management – Whats your Risk % per trade?

 

Forex Risk Management

But here comes the big question.

What is your risk appetite?

You see, there is absolutely no point into asking you to risk 1% per trade.

Forex Risk Management – Eg. Capital $5000

Risk of 1% = $50 per trade.

If at the back of your mind, you do feel that $50 per trade is too little.

Then you will most likely find and trade even more trades that you usually should – in order to make more money. Right?

Therefore, the correct way to set your risk % per trade varies with different individuals.

You must ask yourself.

Forex Risk Management – Eg. Will you be satisfied with

$50 per trade or

$100 per trade or

$150 per trade

based on the capital of $5000

Once you got an answer, you got your risk percentage.

Forex Risk Management – Whats your Risk % per trade?

 

Forex Risk Management

Remember,

1) Your risk percentage cannot be too high. As mention a good gauge is 1% – 3%.

2) Your risk percentage must meet your risk appetite. There is no point in risking 1% if you find the amount too little and does not satisfy your hunger.

So there you go.

Once you have set and decided on your risk % per trade.

STICK FIRMLY TO IT!

For example, in a series of trades. You cannot have eg. 1% on 5 trades, then 3% on 5 trades etc.

Because if you play it this way, and what if you make money on the 5 trades with 1% risked, and lose money on the 5 trades with 3% risked. (which usually happens!)

YOU WILL LOSE MONEY!

Therefore, stick firmly to the risk percentage per trade which you have set.

Eg. If you set 2% risk per trade.

From now on, every trade you take – You will risk 2% per trade.

NOTHING MORE, NOTHING LESS.

This way, you will be consistent and you are on the right track to success.

This is part 1 of the 2 series of Forex Risk Management.

Stay tuned for the 2nd part.

 

See you on the other side my friend,

Asia Forex Mentor

Ezekiel Chew

 

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It's actually quite interesting that most people are aware of money management and the idea of only risking 1-3% of their starting capital, yet they don't try especially hard to incorporate it thoroughly into their trading until they have a bad patch.

 

The suggestion I would have to make is that a new trader should open a small account early on. Learn and formulate a strategy you can then become comfortable with on a good simulator(or at the very least in a live market where the size is extremely small). Once you have a the experience and a strategy, work out what your capital should be based on the strategy. Many do everything the wrong way round. They have some cash saved up as they want to trade, lump it into an account and then start trading. Not such a great plan in many cases if you were to break down the risk they were taking.

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2% is far to much per trade if you take multiple trades per day. Trading size that coincides with losing 2% or less in a day is far more prudent.

 

However, when you do get a winning trade, it is really nice when the traders you are trading against have a lot of money to lose.

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The important metric is actually the RoR (risk of ruin). Talking about risk as a fixed percent serves no real useful purpose though it can be OK as a 'rule of thumb'. To determine your 'risk appetite' (in any sort of meaningful way) you will need to know your RoR. Quite a naive question coming from a 'mentor'.

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Therefore, the correct way to set your risk % per trade varies with different individuals… You must ask yourself…Will you be satisfied with

$50 per trade or

$100 per trade or

$150 per trade

based on the capital of $5000

Once you got an answer, you got your risk percentage...

 

 

Blowfish is right. RoR is better way to come at it because…

Actually, "The correct way to set your risk % per trade" (and sizing) varies with different systems.

In risk management, most developing traders are no where near ready to access and utilize the type of 'data' coming from “Will you be satisfied with” questions.

At first (and for most, for quite a while) it is much better to establish real stats, then learn how to ask the right questions that will lead to learning how to use those stats properly … which is conservatively (most of the time) ...

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Blowfish is right. RoR is better way to come at it because…

Actually, "The correct way to set your risk % per trade" (and sizing) varies with different systems.

In risk management, most developing traders are no where near ready to access and utilize the type of 'data' coming from “Will you be satisfied with” questions.

At first (and for most, for quite a while) it is much better to establish real stats, then learn how to ask the right questions that will lead to learning how to use those stats properly … which is conservatively (most of the time) ...

 

The important metric is actually the RoR (risk of ruin). Talking about risk as a fixed percent serves no real useful purpose though it can be OK as a 'rule of thumb'. To determine your 'risk appetite' (in any sort of meaningful way) you will need to know your RoR. Quite a naive question coming from a 'mentor'.

 

This is correct actually. Trying to micro-manage each individual trade is self-defeating because you are artifically attempting to limit your risk. You may not be able to predict exactly where market will go, but by placing a basket of trades, you are much more likely to profit or breakeven when market turns around. I have posted a cost averaging spreadsheet here. that does a good job of allowing you to see for yourself.

 

Personally I'd much rather risk 5-20% of my account or more to facilitate doubling it or breaking even on a group of trades vs managing individual trades, which will not push your overall win position enough.

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its no wonder few people are making money with such abstract ideas.

 

the magical 2% that retail traders seem to use as the magic bullet of risk management was in fact taken from portfolio managers who hold a load of positions across multiple asset classes.

 

so, if you're a day trader focusing on 1 market at a time and using 2% (or 1-3%) then you're using the wrong tool for the wrong job. period. if youre trading a portfolio of stocks or futures on a 'buy and hold', maybe not.

 

 

for day trading i'd only advocate using such a low multiple when youre not yet consistently profitable. capital preservation is the #1 point after all. 2% will allow you to stay in the game and live through 1000 cuts until you turn the corner. the only other excuse for using fixed % i'd imagine is when using an automated or mechanical approach where you cant differentiate between good and bad opportunity and treat every signal as an independent event. (i dont know too much about deploying such approaches, so feel free to correct me on this)

 

when youre on top of the game and opportunity presents itself, you dont want to be dipping youre toe in with 2% - you want to be all in. good opportunities are rare. its the height of stupidity to treat all opportunity as equal. in fact, its an admission you dont understand what the market is doing. so why would your risk be the same for all opportunity?

 

however, again, thats just for day trading (imo). its easier for me to understand what the market should be doing in 5 minutes than 5 days

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its no wonder few people are making money with such abstract ideas.

 

the magical 2% that retail traders seem to use as the magic bullet of risk management was in fact taken from portfolio managers who hold a load of positions across multiple asset classes.

 

so, if you're a day trader focusing on 1 market at a time and using 2% (or 1-3%) then you're using the wrong tool for the wrong job. period. if youre trading a portfolio of stocks or futures on a 'buy and hold', maybe not.

 

 

for day trading i'd only advocate using such a low multiple when youre not yet consistently profitable. capital preservation is the #1 point after all. 2% will allow you to stay in the game and live through 1000 cuts until you turn the corner. the only other excuse for using fixed % i'd imagine is when using an automated or mechanical approach where you cant differentiate between good and bad opportunity and treat every signal as an independent event. (i dont know too much about deploying such approaches, so feel free to correct me on this)

 

when youre on top of the game and opportunity presents itself, you dont want to be dipping youre toe in with 2% - you want to be all in. good opportunities are rare. its the height of stupidity to treat all opportunity as equal. in fact, its an admission you dont understand what the market is doing. so why would your risk be the same for all opportunity?

 

however, again, thats just for day trading (imo). its easier for me to understand what the market should be doing in 5 minutes than 5 days

 

All-in? are you serious? what if you are wrong? your intire acount would be wiped clean

I think thats the dumbest post I ever read:crap::rofl:

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its no wonder few people are making money with such abstract ideas.

 

the magical 2% that retail traders seem to use as the magic bullet of risk management was in fact taken from portfolio managers who hold a load of positions across multiple asset classes.

 

 

 

I was just about to make a post stating this exact same point.

 

The 2% figure is something you'll here over and over again in books like Market Wizards. But those traders are almost invariably trading multiple markets portfolios. The Turtles, for example, used something like a 3% per trade rule, but could hold positions in countless markets concurrently. In fact, they had a seperate rule for total net exposure across their portfolio, which was something like 30%.

 

If you're trading just one market at a time, as most retail traders are, then that market is your entire portfolio. This doesn't necessarily mean that you'll want to risk 30% per trade in that market; portfolios also reduce risk through diversification, where single markets do not.

 

The Dude's advice to go 'all in', however, stretches things a little too far for me!

 

BlueHorseshoe

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All-in? are you serious? what if you are wrong? your intire acount would be wiped clean

I think thats the dumbest post I ever read:crap::rofl:

 

You'd go all-in if you were 100% certain of something, wouldn't you?

 

What if you were 99% sure of something?

 

I realise that these examples aren't too realistic (though certain forms of pure arbitrage, assuming you can guarantee perfect execution, are pretty much risk free), but the point is this - the more certain you are about the outcome of a position, the more you should risk upon it.

 

BlueHorseshoe

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I was just about to make a post stating this exact same point.

 

The 2% figure is something you'll here over and over again in books like Market Wizards. But those traders are almost invariably trading multiple markets portfolios. The Turtles, for example, used something like a 3% per trade rule, but could hold positions in countless markets concurrently. In fact, they had a seperate rule for total net exposure across their portfolio, which was something like 30%.

 

If you're trading just one market at a time, as most retail traders are, then that market is your entire portfolio. This doesn't necessarily mean that you'll want to risk 30% per trade in that market; portfolios also reduce risk through diversification, where single markets do not.

 

The Dude's advice to go 'all in', however, stretches things a little too far for me!

 

BlueHorseshoe

 

Blue,

 

You are 100% correct in that the oft repeated advice of "only risk x amount per trade" was not intended to micromanage individual trades, but was usually used for a specific strategy which normally traded multiple trading positions. There was an article (cant find it) on a futures blog a while back dealing with how even if you risk 1% per trade, a series of losers can easily set you back 15-30%. So with $10,000 to start, you are down to 8500-7000. The point is that whether you trickle down your losses, or lose

 

Most [usually newer or risk-adverse] traders like this type of advice becase it gives them a false sense of security. They don't like the idea of losing a huge chunk of their funds at once, so the idea of slow steady gains can be matched with slow steady losses sounds beautiful. However this thinking totally ignores the core strategy/overall strategy of profit. It's what i call "monetary escapism", because you don't have to put any real your money where you mouth is. See the next reply below.

 

All-in? are you serious? what if you are wrong? your intire acount would be wiped clean

I think thats the dumbest post I ever read:crap::rofl:

 

You'd go all-in if you were 100% certain of something, wouldn't you?

 

What if you were 99% sure of something?

 

I realise that these examples aren't too realistic (though certain forms of pure arbitrage, assuming you can guarantee perfect execution, are pretty much risk free), but the point is this - the more certain you are about the outcome of a position, the more you should risk upon it.

 

BlueHorseshoe

 

Exactly. All those people who put all those indicators on their charts to the point that it looks like an airplane cockpit dashboard, with all those "right" parameters, and spend hours/days studying them to identify highly profitable entries and exits, only to bet 0.5%-2% of your account? Does that make sense? If you were so sure you had a winning chance of winning the lottery (80-100%), wouldn't you purchase as many tickets as possible? after all that extensive research, i would certainly hope so. While trading does necessarily require "All-In, everytime" strategy to be profitable, why wouldn't you use 10-40% or more of your account on a basket of trades to reach your profit goals?

 

Poker is similar, except the opponent can fold when you go all in. Trading is much more objective, and the market will almost always "call".

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A bit more on the turtles:-

 

The turtles used a relatively sophisticated (for the time) volatility adjusted position sizing algorithm. i.e. A 'unit size' was determined for the dollar volatility of each market. They then 'pyramided' up to full size in four (if memory serves) steps. There where limits (set in units) for a single market, closely and loosely correlated markets and direction. Each turtle also traded on a notional account size that was determined (and periodically adjusted) for each trader by Rich.

 

The management of trades was really the heart of the turtle system, entries where a simple Donchian breakout. For those interested theres a pdf knocking about on the interwebz that describes it in detail.

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A bit more on the turtles:-

 

The turtles used a relatively sophisticated (for the time) volatility adjusted position sizing algorithm. i.e. A 'unit size' was determined for the dollar volatility of each market. They then 'pyramided' up to full size in four (if memory serves) steps. There where limits (set in units) for a single market, closely and loosely correlated markets and direction. Each turtle also traded on a notional account size that was determined (and periodically adjusted) for each trader by Rich.

 

The management of trades was really the heart of the turtle system, entries where a simple Donchian breakout. For those interested theres a pdf knocking about on the interwebz that describes it in detail.

 

The turtles experiment as I understand it, was to see if traders could be made (vs born with the skill) to trade successfully. I read a pdf about it years ago. One of the original traders gave it away after one of the other original turtles (one of the unsuccessful ones that did NOT follow the system) broke the original pact and started selling some bastardized version of the original Turtle trading system. He felt that if people were going to trade, they should trade the correct one. It goes to show that you could practically give away a system but it is up to the person to implement it correctly.

 

Trade management and money management are virtually synonymous when it comes to systems trading. Position sizing is important when wanting to maximize profitability, not mystical entry points.

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IF I was 100% sure I was going to win, wouldn't I buy as many lottery tickets as I possibly could? Yes certanly! I would be pretty stupid if I wouldn't, but guys! trading the market is not lottery, so you can't even use that example, first, the market is allways right, even when you are 100% sure and you are wrong, comon guys lets face it, how many times didn't you think that you where right 100%, you enter the market and it turned out you where wrong? every trade I make I "Think" that there is a great chance the market will go in my direction, otherwice I wouldn't even do the trade in the first place, most of the times I am right, but there is also a percentage of those times Im wrong, isn't it like that? would you do a trade if you didn't think you where 100% right, or atleast close to it? ofcourse not, but as it turns out through probabillity, we can't be right every time, a certain percentage of times we will enter trades in the wrong direction, we will be stopped out etc, there is not one single trader in the world that can do only winners and never have a loosing trade, thats a fact, so what if you where all in one of those times? you would loose most of your intire acount in one single blow, do you know how many good trades you must do to be able to dig your self out of that hole you just made? well lets say you are going to have to struggle a lot! for weeks or months, if you are trading allin you are sooner or later going to blow your acount, THAT is a 100% certanty. the internet is full of people loosing their acounts by believing they where right, it turned out 90% of them was wrong, one big reason is that they don't understand risk and money management or they are trading all in, this isn't Texas Hold'em either btw, by using money management, and allways trading a small percentage of your acount, you are ensuring something like that can never happend to you, it's a disaster and a huge blow mentally which will also affect your trading negative, by using money management you will stay in the game no matter what, protect your capital at all costs, the money are your tools, without them you are finnished as a trader, never think that you are right, or wrong, the market is allways right, all you should do is playing the probabilities.

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You'd go all-in if you were 100% certain of something, wouldn't you?

 

What if you were 99% sure of something?

 

I realise that these examples aren't too realistic (though certain forms of pure arbitrage, assuming you can guarantee perfect execution, are pretty much risk free), but the point is this - the more certain you are about the outcome of a position, the more you should risk upon it.

 

BlueHorseshoe

 

it doesn't matter how certain you are, you could be 100% 99% or 50% certain,

but if the probability says you will be wrong 30%, then you WILL be wrong 30%, period,

you won't know which time you will be wrong, and believe me, you will be wrong when you least expect it, maybe not this time but sometime you will, and if you are all-in that time,

Thank you and congrats former trader, you just blew your acount:) everything you have been building up over all these years trading gone in just one trade, I wouldn't want to put my self in that situation. I think I would kill my self:haha:

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it doesn't matter how certain you are, you could be 100% 99% or 50% certain,

but if the probability says you will be wrong 30%, then you WILL be wrong 30%, period,

you won't know which time you will be wrong, and believe me, you will be wrong when you least expect it, maybe not this time but sometime you will, and if you are all-in that time,

Thank you and congrats former trader, you just blew your acount:) everything you have been building up over all these years trading gone in just one trade, I wouldn't want to put my self in that situation. I think I would kill my self:haha:

 

No one said there would NOT be risks, but assigning preferences to how you manage the risk does not change the risk. Neither do the emotions. I would stop defending these fears and face them. You can't overcome fears conceptually (you can't solve the problem at the level of the problem). You take action, look honestly at the results, make adjustments if necessary, and do your best. Either that or take the chips off the table; then you are guaranteed to not lose anything.

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A bit more on the turtles:-

 

The turtles used a relatively sophisticated (for the time) volatility adjusted position sizing algorithm. i.e. A 'unit size' was determined for the dollar volatility of each market. They then 'pyramided' up to full size in four (if memory serves) steps. There where limits (set in units) for a single market, closely and loosely correlated markets and direction. Each turtle also traded on a notional account size that was determined (and periodically adjusted) for each trader by Rich.

 

The management of trades was really the heart of the turtle system, entries where a simple Donchian breakout. For those interested theres a pdf knocking about on the interwebz that describes it in detail.

 

There are also several good books - Curtis Faith's and Michael Covel's. I don't want to get into debates about what a poor manager Faith was after the Turtles experiment ended, or what a slithering little turd of a fraud Covel may or may not be; if you want a thorough outline of how the Turtles traded then either book does a decent job.

 

As for the pyramiding, if my memory is correct then this was combined with the trailing of a stop-loss on prior entries, so that the earliest units became risk free by the time later ones were added.

 

BlueHorseshoe.

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it doesn't matter how certain you are, you could be 100% 99% or 50% certain,

but if the probability says you will be wrong 30%, then you WILL be wrong 30%, period,

you won't know which time you will be wrong, and believe me, you will be wrong when you least expect it, maybe not this time but sometime you will, and if you are all-in that time,

Thank you and congrats former trader, you just blew your acount:) everything you have been building up over all these years trading gone in just one trade, I wouldn't want to put my self in that situation. I think I would kill my self:haha:

 

Hi,

 

Just to be clear, I wasn't recommending going 'all-in' - I was just using an extreme example to try and argue a point.

 

My basic point was that the 2% risk per trade rule has been abstracted from traders who typically hold simultaneous positions in multiple markets, and who therefore often have a greater net risk to their equity than 2%. Trying to apply this rule to the trading of one market is misguided.

 

Risk management is a personal thing anyway, so you are quite right to say 'I wouldn't want to put myself in that situation'. You should trade within your comfortable limits, as should we all.

 

BlueHorseshoe

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Quote:

"IF I was 100% sure I was going to win, wouldn't I buy as many lottery tickets as I possibly could? Yes certanly!"

 

If you bought many lottery tickets with the same numbers the government would deny you your winnings since they would suspect you of cheating. Remember Livermore's coffee trade in Reminisciences of a Stock Operator.

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Poker is similar, except the opponent can fold when you go all in. Trading is much more objective, and the market will almost always "call".

Similar yes but not the same.

 

Unless .......... you go "all-in" then it is win or (blow your account) go home.

 

But for anyone to say that a routine 2-3% risk should adjusted to 10 or 20 times that amount because the probabilitites suggest so just doesn't understand what a career in trading entails.I understand one size doesn't fill all but seriously folks.

 

A doubling of a 5% risk to 10% is reasonable or something along those lines but going from single digits to 30, 40, 50% is playing with fire.

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Similar yes but not the same.

 

Unless .......... you go "all-in" then it is win or (blow your account) go home.

 

But for anyone to say that a routine 2-3% risk should adjusted to 10 or 20 times that amount because the probabilitites suggest so just doesn't understand what a career in trading entails.I understand one size doesn't fill all but seriously folks.

 

A doubling of a 5% risk to 10% is reasonable or something along those lines but going from single digits to 30, 40, 50% is playing with fire.

 

Definitely! I made a lot of backtest experimenting with how much I could risk and get away with it, 4% was the highest I could go, anything higher would blow the acount, it's hard to say how much you can risk for any given method, I believe it is a very individual number and how good your system is and how good you are as a trader, with some trading methods you could possible risk more or less depending on profitability, win ratio, risk to reward etc, there is so many factors playing,

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Judging from the four-week average, the number of people applying for unemployment benefits was 238,750, which was lower than the previous value of 251,000 (pre-revision: 252,250). Overall, these data reflect the continued moderate growth of the US labor market, and may benefit the non-agricultural data that will be released later today. The market predicts that after the November seasonal adjustment, the non-agricultural employment population will record an increase of 555,000, slightly higher than the previous value of an increase of 531,000, the unemployment rate will record a five-month consecutive decline to 4.5%, and the employment participation rate will rebound by 0.1% to 61.7%, the average weekly working hours remained at 5.0%, and the average hourly wage rate and monthly rate increased by 5.0% and 0.4%, respectively. In addition, the market will continue to track news about the Omicron virus strain. According to foreign media reports, cases of infection with the mutant strain have been found in the states of Minnesota and Colorado. However, despite the fact that Omicron has been pointed out as having a very high transmission capacity and leading to the risk of a further surge in infections, President Biden gave the market a shot in the latest speech and said that the government will not re-impose the lockdown measures. Judging from the known clues, the current Omicron variant is not likely to cause fatal symptoms to most patients (especially those who have been fully vaccinated), but because this new variant is still relatively new, uncertainty remains for now. In addition, Treasury Secretary Yellen and Atlanta Fed President Bostic were hawkish. The former stated that it would be “prepared to abandon inflation temporarily” and that the strong US economy will prompt interest rate hikes; the latter stated that if inflation stays near 4% next year, the Fed may raise interest rates more than once. The US Dollar Index rebounded on the eve of the non-agricultural report and ended at 96.07. Today – EZ, UK, US Markit Services PMIs, EZ Retail Sales, US and Canadian Labour Market Reports, US ISM Services, US Factory Orders, ECB’s Lagarde, Lane, BoE’s Saunders, Fed’s Bullard Biggest FX Mover @ (06:30 GMT) EURNZD (+0.32%) From a high @ 1.6680 & slide to 1.6570 yesterday, back to resistance today at 1.6650. Currently MAs aligned higher, MACD signal line & histogram struggle with 0 line, RSI 56 & cooling. H1 ATR 0.0020, Daily 0.0131. 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.
    • Date : 2nd December 2021. Market Update – December 2- Sentiment swings on Omicron news. Powell reiterates Hawkishness, First case of Omicron confirmed in US – Stocks tank again under key technical levels, Yields slip again, USD mixed. Erdogan sacks Fin Min – TRY new all-time lows, Apple iPhone 13 demand weakens, GSK anti-viral drug remains active vs. Omicron   USD (USDIndex 96.08) rotates through 96.00 due to lack of firm data regarding Omicron, markets reamin on edge. Stocks fell significantly with USA100 down over -1.83% USA500 -1.18% (-54pts) 4513 (opened the day +1.1%) and broke 50-day MA first time since October 14 & USA30 off 461 pts and under 200-day MA first time since July 13 2020. US Yields 10-year rates were down over 7 bps to 1.40% before recovering to 1.434% now. Asian Markets – Asian markets have traded mixed. Topix and Nikkei are down -0.5% and -0.7% respectively. The ASX lost -0.1%, but Hang Seng and CSI 300 are up 0.2% and 0.3%. Shenzen and Shanghai Comp are slightly lower though as officials seem eager to close a loophole used by tech firms to list abroad. USOil – continues under pressure, down to $64.50 yesterday – recovered to test $66.35 today – awaiting OPEC+ meeting later. Gold Up day yesterday but remains pressured testing $1775 now FX markets – Yen rallied USDJPY dipped to 112.70, back to 113.31 now, EURUSD now 1.1312 & Cable pressured 1.3192 low yesterday – 1.3275 now. European Open – The 10-year Bund future is up 30 ticks, outperforming versus Treasuries, which remain pressured by the hawkish turn at the Fed. The 10-year Treasury yield has lifted 3.0 bp overnight, but at 1.43% remains far below the levels seen ahead of the Omicron scare, which the WHO seemed to try and play down somewhat. DAX and FTSE 100 down -1.1% and -0.9% respectively in catch up trade with the slide on Wall Street yesterday, while US futures have found a footing and are posting gains of around 0.6-0.8%. Today – EZ Unemployment Rate, US Weekly Claims, Fed’s Bostic, Quarles, Daly, ECB’s Panetta, JMMC/OPEC+ meetings. Biggest FX Mover @ (07:30 GMT) CADJPY (+0.77%) Risk-sensitive currencies remain volatile, from a slide to 87.85 yesterday, today a rally to 88.60. Currently MAs aligned higher, MACD signal line & histogram under 0 but rising, RSI 56 & rising, OB. H1 ATR 0.188, Daily 0.98. 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.
    • You should never give in to the rumors as it could lead you to bankruptcy if it isn't true.
    • Yeah, and you should never stop learning. If you wish to survive in the Forex Market, the only way to do it is by learning all the time.
    • Date : 1st December 2021. Market Update – December 1 – Taper gets a boost & Transitory gets “retired”. Powell “retires” Transitory in light of Omicron & surprisingly suggests faster taper – Stocks tank, Dollar& Yields rise on faster tightening expectations.   USD (USDIndex 95.90) back down from leap to 96.60 on Powell testimony. Saw fresh wave of risk aversion as Treasuries sold off, yields spiked (particularly the 2yr) , Stocks fell significantly with USA100 down over -2.4% (APPL bucked the trend +3.16%) USA500 -1.90% (-88pts) 4567 & USA30 off 652 pts or -1.86%. Consumer confidence saw a slump in the headline, and a rise to a 13-year high in the inflation component. The Chicago PMI fell to 61.8. Home prices increased to fresh record peaks. US Yields 10-year rates were down over 7 bps to 1.41% before closing at 1.443% before recovring to 1.468% now. Asian Markets – Equities – Topix and Nikkei are currently up 0.4%, the Hang Seng bounced 1.1% and the CSI 300 is up 0.1%. The ASX, which outperformed yesterday, dropped back -0.3%. Data over night – Japan’s manufacturing PMI came in stronger than expected and while China’s private PMI reading signalled stagnation at 49.9, that was compensated somewhat by the stronger than expected official manufacturing PMI released yesterday. AUD GDP was not as bad as expected -1.9% vs -2.7% & 0.7% last time. USOil – continues under pressure, down to $64.08 (14-week lows) yesterday – recovered to test $68.00 today – expectations continue to grow that OPEC+, will put on hold plans to add 400,000 barrels per day (bpd) of supply in January at their meeting tomorrow. Gold finally some intra-day volatility – Powell surprise spiked to $1808 – before testing $1770 with a couple of hours, back to $1788 now. FX markets – Yen rallied USDJPY dipped to 112.50, back to 113.40 now, EURUSD now 1.1326 & Cable steadied to 1.3300-1.3330. European Open – December 10-yr Bund future down -11 ticks at 172.26, slightly outperforming versus Treasury futures. Central bankers may be getting more nervous about inflation outlook, but Omicron clearly is clouding over growth outlook & in Europe at least that will boost the arguments of the cautious camp at the central banks. US yields remain firmly below the levels seen before the new virus variant hit the headlines & sentiment is likely to remain jittery, even if stocks are set to back up from yesterday’s lows, with DAX & FTSE 100 future posting gains of 0.9% and 0.7% respectively & a 1.4% jump in the NASDAQ leading US futures higher. Data releases today kicked off with a big miss for German Retail sales (-0.3% vs 1.0%), higher UK house prices & firmer CPI from CHF. Today – PMIs (EZ & UK),US Markit Final Manufacturing PMIs, US ADP and ISM Manufacturing PMI, JTC and OPEC meetings, BoE’s Bailey and Fed’s Powell & Yellen testify. Biggest FX Mover @ (07:30 GMT) NZDJPY (+0.60%) Risk-sensitive currencies remain volatile, from a slide to 76.65 yesterday, today a rally to 77.80. Currently MAs aligned higher, MACD signal line & histogram over 0 and rising, RSI dipping from 70.00 at 58, Stochastic remain OB. H1 ATR 0.172, Daily 0.84. 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.
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