Today is the first trading day of the month. Let’s review the markets going forward.
Equities & Traditional Safe Haven Instruments:
We see that there was a continued sell off in global equities. The VIX fear index is trending up and global market indices are trending down. This means there is still risk aversion in the markets. Typically this should create demand for safe haven assets like Gold, and US Treasuries. However, if you look closely at Bonds & Bullion, it seems there is also selling pressure on US bonds. What this tells me is that investors are generally wary of trading anything that is dollar denominated.
This makes sense given that the market is waiting for Yellen’s interest rate decision this month, so, in view of this, I would be focusing on trading EUR and trading gold or other assets like equities and crude oil. I also have a proprietary way of gauging the flow of value in crude oil, i.e, a value flow trading approach for crude oil.
My immediate bias for the Euro is a buy. Resistance has become support and my other value flow instruments are confirming that the buy may be sustained at least till this time tomorrow. So, we look for good entries with tight stops and risk to reward ratios of 1:2, minimum to buy the euro.
This is my analysis and bias for direction. But note that if the market gives us reason to believe that bullish sentiment for the euro has ended, then we get ready to do a fresh analysis to sell euro. But for now, buy looks like a better higher probability trade.
Please remember that before you buy any asset, you must confirm 2 things on the 1minute chart of that asset.
1. Is the 1minute giving you higher highs and higher lows?
2. Are previous resistance levels flipping to become support levels?
There are 3 parts to a successful trade:
1. Research/Analysis: to determine what asset to trade and what direction to trade it in.
2. Trade Execution: to determine the best price and best entry, using technical analysis concepts of support & resistance flip zones as well as higher highs/lows for uptrends and lower highs/lows for downtrends.
3. Risk Management & Compliance: to determine the best exits. Best exits can mean exiting at minimum losses, or exiting at maximum profits.
This being said, keep working on perfecting these three areas of trading activity and you are well on your way to becoming a successful private trader.
If you would like to be taught how you can achieve financial freedom by trading the global financial markets, feel free to contact me. Or register at http://www.valueflowtrading.com.
I will be glad to mentor you in the areas of Forex Trading, Binary Options Trading, Value Investing in Nigerian stocks and wealth management advisory.
Yours in the quest for significance, beyond success.