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MDS37RB

Great on Paper - Not with Real Money

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Hi all: I'm relatively new only having been trading for about 8 months. I learned a price action method for day trading the e-minis a few weeks ago. The problem is when I'm using paper money, I do great and make great decisions on entries and exits. When I switch to real money, it all goes down the tubes and I generally lose money.

 

How do you overcome this mental obstacle? I know what I have to do and do it well when it doesn't count. When it counts I think I'm so fearful of further losses in my account that I don't make the same sound decisions as I do when its just paper money. I think I have psyched myself out.

 

Another problem I'm having is if I have a losing trade, I am frequently too anxious to get back in with another trade to get the poor trade "behind me" that I don't have the discipline to wait for another good set up, even though it may be hours away.

 

Thanks!

 

David Skerritt

Clearwater, FL

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It's a cliche but it's called "scared money"

It is highly unlikely that you will not blow out at least one account,and more likely several.That is generally accepted to be part of the learning curve.If you have traded for 8 months without blowing out that is a good start,particularly if you have been day trading.It would also hint that you are well capitalized to begin with and that you are not over leveraged on a trade.The problem though is it sounds like you are slowly bleeding the account and if it was smaller you would already have blown out.So how much money do you want to lose on your first blow out? Less as possible.

It might be worth reducing your account to an amount that will let you focus on trading and help you view the money as merely a tool.

The first step towards losing your fear of loss is to accept that you will lose all of the account anyway and consider it money well spent on learning the lessons that the market teaches you.With this mindset you should not be so concerned about the outcome of any single trade.This should reduce the temptation to "revenge trade" which you admit you do.

So decide on an amount you're willing to spend on this part of your education,because,as you are finding,the mental game is a lot harder to master than learning a method.

However,if things go well do not be tempted to add funds to your account.It is highly unlikely that you will buck the trend and not blow up.Overconfidence can be just as detrimental as under confidence.

Instead,take a break to assess what you need to do to rectify the weak areas and come back again with a small account until you can prove you're consistently winning over a long period through varying market conditions.The journey is,unfortunately,going to be much harder and longer than you anticipated.On the one hand,it is not rocket science and can be done,on the other,you wont know for sure if you are able to do it for quite some time.

 

All of the above will be in vain though if the method you are using is not as good as you believe it is.Can't comment on that as you provide no details.

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Welcome....sorry to hear about your problem....but you can take small comfort in knowing that you aren't the only one who has this problem....

 

The skill that you need to learn is called "emotional regulation"....in simplest terms it is the ability to manage the negative responses that might distract or cause you to make poor judgements...

 

By chance there is a recent thread where you can read some comments on this subject

 

http://www.traderslaboratory.com/forums/psychology/14410-saboteur-mind.html

 

I have my own opinion on this (post 7) and of course you can read more about it by simply researching the subject through google...or any search page for that matter.

 

and of course there are vendors who will (for a fee) provide you with magical incantations of all kinds that are guaranteed to turn you into the next Bill Gates or Warren Buffet....

 

Good luck

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David Skerritt

Clearwater, FL

 

a tough obstacle......you may have to do a trial and error type of experiment to overcome this, as one size solution often does not fit everyone.

a few things that maybe worth trialing as an experiment....(disclaimer....these might also not suit you or be harmful)

 

1....in your paper trading account trade the exact same setups, but with 10 times the size you would in the real account....it gets you used to the swings in PL, and you will be less worried about the real money.

 

2....trade the paper account AND the real account at the same time, using the paper account to take trades, and then replicate it in the real one.....it might reveal exactly what you are thinking when switching between accounts as opposed to one on and one off.

 

3....it sounds like you have done some analysis on the reasons why you think differently....maybe you need to really reduce the size the real account. If its already so small only a one lot is traded, then it may simply be that you are undercapitalised, in which case every loss is going to hurt too much - too much heat - you need more money :(, (i dont think there is spreadbetting in the US like the UK to reduce size, and then build it up from there - but I would continue to paper trade while building up a bank, but trade larger size, get the mind used to it, and then reduce when using real money - ingrain good habits at least if practicing)

Edited by SIUYA

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I am assuming that you are discretionary trading.

 

It sounds like you are having a problem with execution. You either are having a problem executing your plan or you simply haven't defined your plan and are winging it, thinking you are smarter than the market. Additionally, you might be trading with too much size and the swings bother you.

 

You need to start with baby steps. Begin simply with a target and a stop and learn to stay in the trade no matter what. Right or wrong, winner or loser, you have got to learn to execute a simple set of rules. In the beginning it was helpful for me to walk away from the screens and deal with the fear away from the trade while I was in a trade. When you come back, either you had a winner, a loser or the market was up or down some from your entry. It helped me tame the fear I would feel and put it into perspective; it's an illusion. When the fear dulls, then add rules. Add them one at a time if you have too.

 

If your trade size is too big, then trade smaller. It might mean that you will have to abandon the instrument you are trading if, for instance, one lot is still too much for you. I have been doing this for a while and if I traded too much size I would probably have the same issues that you have. It could very well be that your account is too small to make enough money and you might have to put off trading.

 

You have to manage away your issues through properly executing rules and managing risk.

.

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Please listen to Mitsubishi aka livermore II. He openly claims to have blown 6 accounts. Experience speaks here..he he ha ha

Edited by Patuca

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or you could listen to mr steve46 and never blow another account LOL. with his reversion strategy you will soon be "in the money". just be humble and show no superior intelligence..

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So Pissooka, do you ever have anything useful to say to people asking for help, or is this idiotic crap the full extent of your knowledge?

Edited by steve46

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So Pissooka, do you ever have anything useful to say to people asking for help, or is this idiotic crap the full extent of your knowledge?
oh shucks! I thought i was helping by referring him to two of our finest posters on TL.

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Hi all: I'm relatively new only having been trading for about 8 months. I learned a price action method for day trading the e-minis a few weeks ago. The problem is when I'm using paper money, I do great and make great decisions on entries and exits. When I switch to real money, it all goes down the tubes and I generally lose money.

 

How do you overcome this mental obstacle? I know what I have to do and do it well when it doesn't count. When it counts I think I'm so fearful of further losses in my account that I don't make the same sound decisions as I do when its just paper money. I think I have psyched myself out.

 

Another problem I'm having is if I have a losing trade, I am frequently too anxious to get back in with another trade to get the poor trade "behind me" that I don't have the discipline to wait for another good set up, even though it may be hours away.

 

Thanks!

 

David Skerritt

Clearwater, FL

 

FWIW:

 

Try 1 of these:

 

A. Keep paper trading in sim until you can make money in your sleep with out thinking about it. This could take another 3 months +. Dont put a time limit on this. It will happen eventually. Think of this drill as similar to the ones marines do when they can de-assemble, clean and assemble their rifle blindfolded perfectly. When you feel you are there, keep doing it for another month - just to make sure. You still wont make as much money when you go live, but it will be a big help.

 

B. Get a simpler set up. One thats really black and white. One where there is no guess work involved at all.

 

C. Just ditch the friggin' charts and all this 'price set up/price action/price pattern' stuff. Learn to read the order book. Just sit and watch for a month or 2. You will start to see the patterns and tricks that are played. Then start paper trading from your observations. Trade US 10yr notes, while watching 30 yr bonds. If you really must, trade ES. Dont bother with FX - fine for position/swing trading, not so great for true day trading.

 

All of these will seem like a lot more time & work. However it will save you time and work in the long run.

 

Option C will feel like you will be throwing away the last 8 months of effort. C will also take another 8 months until you start making money in all likely hood. This is why most cant be bothered and use charts - also why most lose.

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The biggest reason for this, is comfort. So get comfortable with you system of trading.

 

The more you know about your own system, the better. This may sound silly because you likely created the system.

 

I assume you do trade journalling and hopefully something more active. So, get to know the statistics of your system. Learn how many trades you are supposed to win/lose, you're avg profit/loss, std deviation of wins/losses.. to name a few... Knowing typical and maximum drawdowns. Personally, I like to perform a Monte Carlo to learn the extremes.

 

Then follow the statistics! If you lose 100 trades in a row, you won't care b/c the typical draw down is much greater. Obviously, this will be specific to your system.

 

Know your leverage! Knowing your leverage will prevent you from going bankrupt waiting for a draw down to be over. Not to mention, black swans.

 

Remember that a lot of the best systems lose more than 50% of the time. This can be demoralizing if you let it. Our society is trained to shoot for percentages, this is definitely not the cause in trading.

 

This provides you the psychological relief of worrying about what's going on around you and you can focus on trading.

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oh shucks! I thought i was helping by referring him to two of our finest posters on TL.

 

Puker doesn't like people who openly admit things,neither does he like those who talk about their methods.

In fact,it is quite difficult to get the environment here just right for him.

No,i guess he feels happiest on his bicycle with the wind in what is left of his air tearing up the highway on the way to his next accident.

Apparently,he only comes here to practice playing with the little cartoons.

If he ever posts something..anything of any value whatsoever before all of us die,i reserve the right to post these before anyone else :shocked:. followed by...

:rofl::rofl::rofl::rofl:...and...:sleep::sleep:: before ending with..:roll eyes:

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Hi Dave,

 

I don't post much, but I can tell you every new trader is going or went through what you are experiencing. I went through it as well.

 

I suggest that you set aside a small amount of money that you can afford to give to charity, for example, $100.00 and paper trade it. Set aside .43 cents per contract round trip for commissions and $5.00 for every point lost per contract. Trade until you double your 100.00 investment covering commissions. Then, start trading real money. If you lose the hundred, donate it to whatever charity you support, and start over.

 

You can use any $ denomination you want depending on your trading strategy (single, multiple contracts, etc). I used 10% of what the /ES and commissions cost to trade.

 

A little skin in the game keeps you honest and helps psychologically. If you double your money, you get to trade your account funds. If you lose the money, you money is going to a good place instead of another traders pocket. You gain confidence and that gives you an edge

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Puker doesn't like people who openly admit things,neither does he like those who talk about their methods.

In fact,it is quite difficult to get the environment here just right for him.

No,i guess he feels happiest on his bicycle with the wind in what is left of his air tearing up the highway on the way to his next accident.

Apparently,he only comes here to practice playing with the little cartoons.

If he ever posts something..anything of any value whatsoever before all of us die,i reserve the right to post these before anyone else :shocked:. followed by...

:rofl::rofl::rofl::rofl:...and...:sleep::sleep:: before ending with..:roll eyes:

hello Mit. I see you and steve46 are in good moods today. I refer the 8 month trader to the two posters that can help him navigate through this malarky he has found himself in and i get attacked. mr 8 month trader i am hereby withdrawing my recomendations. DO NOT and i repeat DO NOT follow the advice or systems that my two fellow posters make. as you can see they are quite emotional and we all know emotions do not work in the markets for successful traders. i expect more unsavory posts about me as the two kiddos pitch a fit. i may just have to get on moto and ride away into the setting sun which would probally suit them just fine. however..."i'll be back" as the movie actor says from your neck of the woods steve46

 

steve with his endless reverting back and mit with his e mini cooper and many math calculations make the perfect pair to keep the comedy show going but alas there is a huge pond that separates them. I leave it to 8 month trader to decide when one of them receives the "top rooster" trader of the month award. work hard boys if you want the reward! all you have to do is take a real beating in the market like you did last month or was that the last 24 months?:missy:

5aa711550139b_plucked20rooster.jpg.3455485d44168736f2437a4813418663.jpg

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Hi Dave,

 

I don't post much, but I can tell you every new trader is going or went through what you are experiencing. I went through it as well.

 

I suggest that you set aside a small amount of money that you can afford to give to charity, for example, $100.00 and paper trade it. Set aside .43 cents per contract round trip for commissions and $5.00 for every point lost per contract. Trade until you double your 100.00 investment covering commissions. Then, start trading real money. If you lose the hundred, donate it to whatever charity you support, and start over.

 

You can use any $ denomination you want depending on your trading strategy (single, multiple contracts, etc). I used 10% of what the /ES and commissions cost to trade.

 

A little skin in the game keeps you honest and helps psychologically. If you double your money, you get to trade your account funds. If you lose the money, you money is going to a good place instead of another traders pocket. You gain confidence and that gives you an edge

May I suggest the Patuca motorcycle fund as the charity to receive your funds? Thank you!

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Close to where I live is an expansive mining operation that has this one building with a very large writing on its side. It simply says “THINK”. I believe this is very profound when it comes to trading.

 

For me, I am not interest in learning by blowing out an account or giving money away. Yes perhaps that will happen, but my plan of attack will not include a per-defined procedure involving such steps. I am prepared to accept it may occur but it’s just a curve in the path along the journey.

 

In “live” mode I have lost money very quickly. So I went back to sim, then back live, then back in sim, then back live, then back in sim etc…and will continue to repeat this process until I prove to myself I am consistently profitable. Seems like an easy question to answer, but as example, do I count an unforeseen spike for or against me in this consensus? Am I reading the market correctly? Am I controlling my emotions? Am I taking trades that make sense in both hind sight and real time? I believe (mathematically know) all indicators are lagging, the move has already begun, but based on these can I still see at a HPLR trade (risk/reward)?

 

Keeping logs of your trades is important, but even more important is to review these notes. As example, I found in sim I was not as “true” as I thought. Sometime I would have a winner and let it ride. In “live” mode I found there was no way I could hold for an extended period of time. I learned I am most comfortable being a scalper, 5 minutes to me is an eternity. Thus I adjusted my trading plans accordingly. I believe If you are true to yourself in sim, treating sim as real, then live will be more in line with your experience, but with that said, live greed and fear are very strong emotions to control, done so by gaining confidence with yourself, with your approach.

 

I also found/learned that trading is extremely “personal”, what works for me most likely (more like absolutely) will not work for you. And furthermore what works for you, while interesting, I cannot not allow it to affect what I “do”. I will fine always tune what is working for me, I will adjust if it make sense to me, but only after THINKING. Adjustment thinking occurs after hours, not during trading; trading is a time to “do” not a time to alter the plan(s).

 

I know my goal –being consistent – this differs from perfection as perfection implies predicting the un-predictable. I believe one profits from adaptability in real time to what the market is doing, using predefined plans of action, an approach you only gain confidence in from 1000’s of hours of real time interaction.

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Hi all: I'm relatively new only having been trading for about 8 months. I learned a price action method for day trading the e-minis a few weeks ago. The problem is when I'm using paper money, I do great and make great decisions on entries and exits. When I switch to real money, it all goes down the tubes and I generally lose money.

 

How do you overcome this mental obstacle? I know what I have to do and do it well when it doesn't count. When it counts I think I'm so fearful of further losses in my account that I don't make the same sound decisions as I do when its just paper money. I think I have psyched myself out.

 

Another problem I'm having is if I have a losing trade, I am frequently too anxious to get back in with another trade to get the poor trade "behind me" that I don't have the discipline to wait for another good set up, even though it may be hours away.

 

Thanks!

 

David Skerritt

Clearwater, FL

 

Hello Buddy,

 

I am trading paper money on ES as well. And its all emotional and second guessing yourself.

 

What I just added in my revised plan is to only look for 2-3 trades per day. I really want to scale it down to 2 trades per day.

 

By scaling down to less trades per day, it will force you to wait for the setup. But stay on it and realize your mistake and correct it. You are doing fine. Don't leave sim til you got it together.

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A set-up should be well defined.. Typically homework is done, areas of interest identified and then depending on the open, range, rotations, etc...execute your plan.

 

(Many) Most successful traders do their thinking outside of market hours... homework. During the market typically it is a matter of executing based on several potential scenarios that have already been planned out and then unfold. The plan should not, imho, be hatched during the heat of battle.

 

When the markets open then it is waiting for the market to approach your area to do business and then execute based on your pre-defined set-ups. After your entry, then risk control, scaling to lay off risk and then target/exit management.

 

One thing that is important is to have a non-random entry/trade mgmt, exit process...

 

Example: One of the hardest things to do is to trade a 1 - lot... It is really important to trade at least 2.. The idea is to have a consistent/high probability scale out to reduce/eliminate risk (depending on your stop).

 

Typically the average rotation in the ES is 1.5 - 3.00 pts... Therefore it would make sense to enter potentially after a rotation greater than 3 pts (or more) if your setup shows and then assuming apx 1.5pts rotation you can get a scale to give your trade room but also take the pressure off.. Just a thought.. There are many ways to do it...

 

Assuming you are not trading randomly then you either have a fixed $ exit or a descretionary target for exit...

 

Just 2 cts here ... there are many here who may help... Trading is a very individualistic endeavor...it must become yours and fit your psycology. The mental game is the true obstacle... Good luck..

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[quote name=roztom;

A set-up should be well defined.. Typically homework is done' date=' areas of interest identified and then depending on the open, range, rotations, etc...execute your plan.

 

(Many) Most successful traders do their thinking outside of market hours... homework. During the market typically it is a matter of executing based on several potential scenarios that have already been planned out and then unfold. The plan should not, imho, be hatched during the heat of battle.

 

When the markets open then it is waiting for the market to approach your area to do business and then execute based on your pre-defined set-ups[/color']. After your entry, then risk control, scaling to lay off risk and then target/exit management.

 

One thing that is important is to have a non-random entry/trade mgmt, exit process...

 

Example: One of the hardest things to do is to trade a 1 - lot... It is really important to trade at least 2.. The idea is to have a consistent/high probability scale out to reduce/eliminate risk (depending on your stop).

 

Typically the average rotation in the ES is 1.5 - 3.00 pts... Therefore it would make sense to enter potentially after a rotation greater than 3 pts (or more) if your setup shows and then assuming apx 1.5pts rotation you can get a scale to give your trade room but also take the pressure off.. Just a thought.. There are many ways to do it...

 

Assuming you are not trading randomly then you either have a fixed $ exit or a descretionary target for exit...

 

Just 2 cts here ... there are many here who may help... Trading is a very individualistic endeavor...it must become yours and fit your psycology. The mental game is the true obstacle... Good luck..

 

Good General advice like this is far better than advising a trading style that works for one trader is the best way to trade imo

The OP stated:

 

Hi all: I'm relatively new only having been trading for about 8 months. I learned a price action method for day trading the e-minis a few weeks ago.

 

Some of the posters should read what MD actually said more carefully.Fear is partly based on not fully understanding the nuances of the method one is using.

MD,if this is someone else's method that you have learned,that in itself has problems.

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To the Original Poster,

 

Almost every trader will experience the problem of not executing properly. There are many subtle reasons for this, and it occurs at all levels (not just beginner).

 

However, the underlying reason for this is lack of confidence.

 

In your case particularly, you state you have only been trading 8 months, and more importantly only been trading a new system for a few weeks. I know if I were to switch to a new system, it would take me a lot more than a few weeks to be confident in that new system.

 

Your system may be solid, but at some level of conscious you don't believe that to be the case, and thus you undermine the system by trading differently when trading live.

 

My recommendation would be to head in the direction of building your confidence in your chosen system. One way this can be done is by trading the sim successfully for months and/or 100s of trades. There were other great suggestions of how to do this earlier in the thread.

 

Good luck, and keep us posted with your progress.

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I suggest you begin automating as much of the task of your trading strategy as possible. Or adopt a separate automated strategy that you can observe personally exactly how it works over and over. By seeing clear repetitions of your strategy working consistently, this will build your confidence to follow your trading plan manually over and over.

 

I am comfortable with drawdown after seeing it over and over again. It is a part of winning. Trading the same strategy consistently, your risk will actually decrease as your equity increases.

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Hi all: I'm relatively new only having been trading for about 8 months. I learned a price action method for day trading the e-minis a few weeks ago. The problem is when I'm using paper money, I do great and make great decisions on entries and exits. When I switch to real money, it all goes down the tubes and I generally lose money.

 

How do you overcome this mental obstacle? I know what I have to do and do it well when it doesn't count. When it counts I think I'm so fearful of further losses in my account that I don't make the same sound decisions as I do when its just paper money. I think I have psyched myself out.

 

Another problem I'm having is if I have a losing trade, I am frequently too anxious to get back in with another trade to get the poor trade "behind me" that I don't have the discipline to wait for another good set up, even though it may be hours away.

 

Thanks!

 

Clearwater

 

Disclosure: David, the OP, is probably long gone now so this post is targeted to those few who are in quest of thriving at pareto of pareto levels.

If you check my posts re: sim’n, you’ll find me to be one of the foremost sim-bashers on the planet. Sim-bashers are in the minority… that right there should tell you something… ie 'normals' can ignore

 

Sim’n is the epitome of under training. Period.

Undertraining usually leads to as much ‘injury’, pain, and diminution of performance as does overtraining.

So here’s some advice. Sim has its place – but you should never revert to sim because of ‘performance’ issues again … reframe your game… play for real to start with ...

 

No matter how unambiguous your ‘rules’ are, the markets always has ways to make them seem iffy and the markets always have a way of belying the odds of your edge

:haha:… and guess when the odds of the markets doing those things are ;) ???

For the first few ‘epochs’ in a trader’s development, the odds are always with the first few trades after he goes live :crap:

… it seems perversely diabolic … until one day you realize how you’re actually setting yourself up by not getting fully in touch with your own internal ‘runs’ of perception and adaptation … and you can never really get in touch with them if you sim.

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First, take my advise for what you will but I'm as someone who trained in the simulator extensively and went live and have did well (as well or better then I did in the simulator) also trading the eminis.

 

Generally speaking if you're getting different results then it is likely because you've changed some parameters (or the market has changed -- which it does all the time). As an example, if you set soft stops on simulator then you may be missing micro excursions that are taking you out in the real money. Most people become more risk averse when moving to live trading which can make it more difficult to capitalize on opportunity.

 

Also, if on the simulator you trade several contracts but only trade 1 live then another tendency is to adjust the targets to try to make more money -- which doesn't always work.

 

The stuff about blowing out accounts is absolute nonsense and the way that losers talk. It can be more difficult to obtain the results from highly discretionary trading when going live. You may benefit from a more systematic/mixed approach during transition phase.

 

One technique I found that worked well was to trade both sim and live at the same time. This way I can evaluate how I feel about types of trades.

 

What I advise instead of switching back and forth is to start trading live and sim at the same time... this will take some of the pressure off... get into the flow on the sim and then just transition to the live for the best trades..

 

In general, you should keep everything exactly the same in your sim training as it will be in your live trading.

 

 

 

Hi all: I'm relatively new only having been trading for about 8 months. I learned a price action method for day trading the e-minis a few weeks ago. The problem is when I'm using paper money, I do great and make great decisions on entries and exits. When I switch to real money, it all goes down the tubes and I generally lose money.

 

How do you overcome this mental obstacle? I know what I have to do and do it well when it doesn't count. When it counts I think I'm so fearful of further losses in my account that I don't make the same sound decisions as I do when its just paper money. I think I have psyched myself out.

 

Another problem I'm having is if I have a losing trade, I am frequently too anxious to get back in with another trade to get the poor trade "behind me" that I don't have the discipline to wait for another good set up, even though it may be hours away.

 

Thanks!

 

David Skerritt

Clearwater, FL

Edited by Predictor

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    • 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.
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