Welcome back to our weekly update on the tumultuous world of trading. In this journey, we set sail with the US10Y Yield, an asset class often regarded as the captain of all markets, as it steers the course of global financial tides and offers crucial clues about what’s unfolding elsewhere. US10Y Yield Surge Our voyage commences with the US10Y Yield, the undisputed behemoth of the financial world. With relentless upward momentum, it continues to chart its own course, casting a shadow of uncertainty over other markets. The ever-increasing sell-off of US debt is a red flag, and rumours abound of China divesting its holdings. The implications are far-reaching, demanding immediate containment measures to prevent a broader financial tempest. Dollar Dominance Our journey next takes us to the world’s primary reserve currency, the dollar, which remains a powerhouse, relentlessly ascending week after week. The world clamours for dollars, driven by the urgent need for liquidity amid the looming global recession. The Dollar Milkshake Theory ( world wide dollar liquidity) remains in play, but we stand on the precipice of a potential pivot. Before embarking on a higher ascent, the dollar may pause for a pullback or consolidation this week. SPX500’s Rollercoaster The SPX500 comes into view as we navigate the financial seas. A persistent sell-off continues, marking the second consecutive week of substantial declines. Lower lows are now a stark reality, potentially signalling the onset of a broader downtrend. Whether this decline persists into the coming week remains a question mark. Gold’s Rocky Road Our course then shifts to the enigmatic realm of gold. The week began with a sell-off, but a partial recovery ensued, leaving us in a state of equilibrium. A further decline in gold prices could trigger a ‘risk-off’ sentiment, possibly igniting a broader market panic. However, gold has yet to embrace its role as a safe haven asset, failing to incite a flight to safety in assets like gold or cryptocurrencies. Oil’s Calm Waters Amid the market’s turbulence, oil presents itself as a haven of tranquillity, remaining relatively flat for the week. Though it teased a continuation, it gracefully executed a pullback before inching back toward recent highs. This price action is indeed the woes for consumers and continues to fuel inflation talk. Bitcoin’s Uncertain Course As we approach the end of our voyage, we encounter Bitcoin. It rebounded after flirting with a downward trendline but appears fragile. A descent to as low as 23K looms on the horizon, possibly in the coming week. It may stall momentarily around 25K, but it would require a critical event such as bank closures or profound market fear and policy shifts to stir significant action. Even then, Bitcoin is likely to initially succumb to the broader market turmoil. A bounce towards strength could signify a crucial level at 23K, and should that line break, the road to 10K may open. Charting Our Course as Traders So, what does this all mean for us, the traders? It’s a matter of vigilance in tracking the ebbs and flows of capital. As traders, we are both buyers and sellers, but a nuanced understanding of the prevailing direction can enhance our ability to identify continuation opportunities, especially in intraday trading. If this aligns with your trading persona, we currently witness a flow of funds into the dollar, where it holds court as the ‘prettiest pig in the pen’ amidst the financial menagerie. Therefore, our journey this week is marked by the relentless ascent of the US10Y Yield, the commanding presence of the dollar, the tumultuous seas of the SPX500, the enigmatic course of gold, the placid tides of oil, and the uncertain path of Bitcoin. As traders, we stand as captains of our own ships, navigating these waters with knowledge and insight, ever-ready to adjust our course in pursuit of profitable trades. Until our next voyage, fair winds and following seas. Want to paper trade with a $50,000 account click on the banner below.
Cultivating a Consistent and Disciplined Mindset for Day Trading
Developing a set of morning affirmations can be a powerful tool to cultivate a consistent and disciplined mindset as a day trader. Here are some affirmations that you can use to reinforce your trading discipline and success: Repeat once a week or every morning, whatever you feel you need to do to start the belief system going. “I am totally empowered by being the one who chooses your results and makes them happen” “I am the cause of my results. And take the responsibility to do what is needed to be successful in my trading.” “I journal all trades and get better results from my analysis.” “I am a disciplined day trader, and I make well-informed decisions based on my trading plan.” “I embrace the ups and downs of the market with confidence, knowing that consistency leads to long-term success.” (RULES) “I am in control of my emotions while trading. I remain calm and focused under all market conditions.” (RULES) “I trust my analysis and stick to my trading strategy without succumbing to impulsive decisions.” (ANALYSIS) “Each trade is an opportunity to learn and grow. I am committed to continuous improvement.” (ANALYSIS) “I approach risk intelligently, and I only take trades that offer a favourable risk-to-reward ratio.” (RULES) “I am patient and understand that waiting for the right setup is essential for profitable trades.” (RULES) “I am adaptable, and I adjust my trading plan when market conditions require it.” (ANALYSIS) “I practice proper money management to protect my capital and ensure long-term sustainability.” (RULES) “I release attachment to outcomes and focus on the process, knowing that consistent execution yields results.” (RULES) “I am resilient and stay positive, even during challenging trading periods.” (MINDSET/NLP) “I surround myself with supportive and like-minded traders to stay motivated and inspired.” (COMMUNITY) “I am grateful for each trading opportunity, regardless of the outcome, as it allows me to grow.” (MINDSET) “I maintain a healthy work-life balance, nurturing my physical and mental well-being outside of trading.” “I approach each trading day with enthusiasm, knowing that my dedication leads to success.” (MINDSET) Remember to say these affirmations with conviction and repeat them daily, especially during your morning routine or pre-market preparation. Consistency is key in reinforcing positive beliefs and developing a disciplined mindset for day trading success. Good luck on your trading journey! Click here for some great books on unlocking the secrets of the mind Want to paper trade with a $50,000 account click on the banner below.
The Limitations of Dollar-Cost Averaging in Trading
Dollar-cost averaging (DCA) is a well-known investment strategy employed in various financial markets, including stocks and cryptocurrencies. It is touted for its ability to reduce risk by consistently investing a fixed dollar amount at regular intervals, regardless of market conditions. However, when applied to forex trading, DCA encounters a different set of challenges that need careful consideration. Understanding Dollar-Cost Averaging Before delving into the limitations of applying DCA to forex trading, it’s important to recap the core concept. DCA involves systematically investing a set amount of money at predetermined intervals, aiming to mitigate the impact of market volatility and emotions that can lead to poor investment decisions. Using DCA in trading comes with its own set of issues: High Volatility Forex and other such markets are known for their high volatility, with currency pairs subject to rapid and unpredictable price movements. Unlike traditional investments where DCA can smooth out market fluctuations, in forex, it can potentially expose you to more risk. Lack of Control: In traditional investments, you can choose assets based on fundamentals and historical performance. In forex trading, the factors influencing exchange rates are multifaceted, including economic indicators, geopolitical events, and central bank policies, which are often beyond individual control. Emotional Discipline DCA is designed to minimize emotional decision-making, but forex trading can be emotionally taxing. Sharp price swings and unexpected news can lead to impulsive trading decisions that defy the disciplined approach DCA advocates. Risk of Overexposure Consistently adding to a losing position in forex trading can lead to overexposure. Unlike traditional investments, where assets may eventually recover, forex trades can incur substantial losses if not managed prudently. No Fundamental Analysis Forex trading relies on technical and sentiment analysis rather than traditional financial metrics. DCA’s strength lies in its ability to invest in assets with underlying value, which forex trading doesn’t offer in the same way. While dollar-cost averaging can be an effective strategy in certain investment scenarios, it is not necessarily suited for trading. EG. Forex markets, characterized by their unique dynamics and high volatility, present distinct challenges that DCA may not effectively address. If you choose to engage in forex or any other form of leveraged trading, it is essential to understand these challenges and develop a trading strategy that aligns with the nature of those markets. This may involve a mix of technical analysis, risk management, and a disciplined approach to trading rather than relying solely on the principles of DCA. Trading can be profitable with the right strategy and education, but it is not a one-size-fits-all approach like DCA in traditional investments. Want to paper trade with a $50,000 account click on the banner below.
Free Trades – September 2023
This months trade setups for SPX500 levels, both the buy and sell side. CFD (SPX500) which can be translated into futures if this is what you have access to instead. Subscribe to the newsletter for more charts and zones across the spectrum of assets available, including Commodities, Crypto and Forex pairs. SPX500 both Buy and Sell zones for this month. SPX500 – 4:1 risk reward plays for the month- probably the week by DesktraderUK on TradingView.com Join our free newsletter to get weekly trades like this Subscribe * indicates required Email Address * /* real people should not fill this in and expect good things – do not remove this or risk form bot signups */ Risk Management is important please read our article before trading a live account. Want to paper trade with a $50,000 account click on the banner below.