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The Market Acts Like a Girl
The market acts like a girl… fickle minded. You just don’t know what she wants exactly. Here’s the situation: Think of the market as a girl, the US as the hotshot boyfriend, and you (the trader) as the “friend.”
There are times when the boyfriend does something stupid which turns her off. You, being the “friend,” live for those instances because the girl runs to you. Well, it’s obvious that you like to go and ride with the girl. However, there are situations when you think that your secret love would lean to you because of a crazy action that the bf did. On the contrary, she even loved the guy more. What? Yeah. The antics that you expect would give the guy negative points in fact have increased his charm.
It’s jaded. I know.
So what can you do? The answer is nothing really. You just need to be around and hope that she will turn back to her sweet “friend” again.
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Generally, bad US fundamentals weigh down on the USD (bad US = bad USD). Risk aversion from the US capitals markets causes a sell-off of the USD. This is logical. However, there were several instances in the recent past that this did not happen. The USD even jumped despite some dismal economic data from the US. Why? Some say that the market hedged their money in the USD away from the US capitals markets.
The point that I’m trying to make is that it is really hard to gauge where the market is going even if you have an idea regarding the economic outlook of the US (based on preliminary estimates). Sometimes, the market will sway just as you expect it to be. Sometimes it does not.
The difference between me and the “friend” in the real world setting is that I can make the girl favor me over the other guy 99 times over a 100 (sike!). I have a hand on the outcome.
However, I cannot do that in trading forex. I can only be a “friend.” I can only wait and be prepared for the market to come to me; to work on the opportunities being presented.
Sometimes I win. Sometimes I don’t. In the forex market, no matter how well positioned you are, it is still all up to her.
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Crude Oil Looking To Set A New 2-year High
For most of us, crude oil price soaring higher is definitely unfavorable as gas price and public transportation cost will most likely rise as well and this could hurt our pockets on a daily basis but for some traders, this could be a good opportunity to make some moolah.
Chart-wise, WTI crude oil (For those who do not know, WTI means West Texas Intermediate and is a benchmark in oil pricing) was moving within an ascending channel for almost a year until it broke out last February. After which it started consolidating to what could be an ascending triangle or a cup and handle pattern. It really doesn’t matter which among these 2 patterns the crude oil chart is consolidating into since both have the same characteristic, when it breaks out, it goes up. So if the $106.94 resistance gets cleared out then we can see an upside target of $115.00. That’s almost 10%. I know this sucks but this is what my technical analysis is telling me, I hope I’m wrong… On the downside, $100.00 is a strong level of support technically and psychologically. If this hurdle gets taken out, the next support could be 95.00 US dollar.
Like what my colleague mentioned on his WTI crude oil post last week, “On the fundamental/political side, the tension in Libya has been pushing the prices of oil higher. With the US, France, UK and other countries teaming up in bombing Muammar Gaddafi’s forces and the later still not giving up, risk aversion could remain. Until peace in Libya is restored and a new government is formed, the price of oil could continue to rise”.
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