Browse Stacks: Patterns: Pivot Points: Blanks of the trader
Blanks of the trader
As it very often occurs coming back to trading after holidays is normally followed by the time of adjustment and resharpening. It is not different this time, since holidays comeback i had 4 losers in a row that kept me busy managing losses. Again it is critical during those times not to get overemotional and chase the losers, instead keeping cool and analyze mistakes if any was made, knowing how many losers in a row trading system can handle. I believe these kind of moments make or break traders, the ones that could handle losses with calm head and minimize the damage done by bad run as oppose to the ones that start panicking while there is no valid reason for it yet. When the bad run comes, it is very important to remain focused while managing losing trade so the loss does not become bigger. By cutting the losses trader provides opportunity to take advantage of potential profitable trades that may come along next. Not many traders can deny that managing winning trade gives much more pleasure than losing one, however as irrational as it sounds if trader can switch the mindset and manage losses with the same enthusiasm as winner much more capital can be preserved and more losses avoided.
Next week has some good potential setups, the first is CAC40 index has two potential advanced patterns setting up on 4 hour chart. Gartleys pattern (in blue) looks better in my book in terms of R multiple as target 1 will give R mupliple of 2, while Cypher (in red) needs to hit target 3 at least to get the same number. If market will get to 4130's area will be looking to buy while keeping eye on ATR reading making sure it remains within acceptable range for entry to be valid. If this area will be broken, it will make sense to look for buying opportunities a bit lower, however the entry conditions must be carefully analyzed as much more risk has to be taken on board with this setup. Overall CAC40 index looks very bullish at the moment, the current anticipation is that it will drift slightly sideways before taking off to the upside again.
FX side of my portfolio has two potential setups as well. EURUSD pair had formed clear bearish divergence @1.3560's area. If the market open below that level this week it is clear sell in my book with very good R multiple on target 1 can be higher than 2. On a side note this market is still clearly in the bullish trend at the moment, therefore selling it will be against the trend, with more conservative position size to be taken on board in my book.
GBPUSD has counter-trend bearish setup as well. 1.6190's area is where Shark pattern is about to complete. What makes this setup less attractive that earlier mentioned EURUSD is the fact that there is no point of reference there, therefore in my book market has to stall there initially before this short position can be considered as valid setup.
This will sum up this week, have a good one traders!
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