THE LONG-TERM - One of the toughest challenges in trading markets, especially when you cover them like I do on a daily basis, is being able to separate the long-term from the short-term. I have many longer-term views that I like to trade around, but I also have short-term views that mean nothing more than a few days or even a few hours. Over the years, I have found that it is easy to mistakenly blend the two together when taking a position. What does this mean? Well, say you have a long-term view that AUDNZD is going much higher this year. If that is the case, you need to build a strategy around this expectation that proportionately matches the duration of the expectation. So if you feel it will take a year or so for AUDNZD to reach your objective between 1.1500-1.2000, make sure you aren't jumping out of the trade the minute it rallies 100 points.
THE SHORT-TERM - Or say you are trading well and all of a sudden a short-term trade comes your way that you didn't see coming. You examine and study the trade and decide it is worth a shot for the short-term play. If this is the case, don't make the mistake of letting what you said was a short-term play turn into a longer-term play. Perhaps one of the best trading sayings out there is "a long-term trade is just a short-term trade gone bad." I always smile when I think about this. As highlighted above, of course there is such a thing as a longer-term trade. But the longer-term trade needs to be defined by what you are expecting on the reward side and not by your ability to hold onto a losing position for an extended period of time. Bottom line - if the trade is short-term, trade it short-term and if the trade is longer-term, trade it longer-term. Otherwise, you risk compromising your trade management, leaving a lot of room for a major identity crisis, and very little chance for success.
THE JUICE - OK so back to reality. On the trading side, I continue to hold my exposures in AUDNZD, EURCHF, SPX500, and OIL. I like the idea of looking to consider selling the US Dollar for a short-term play, once EURUSD tests the 1.1640, 2005 base. I tried selling some USDCAD this week but haven't had any luck just yet. But I will continue to look to see if we can catch some follow through on what I anticipate should be a healthy correction lower in USDCAD. But once again, this is a short-term play with little risk. And so, I think that pretty much covers things for now from my end. Perhaps something new will come calling over the coming sessions, but right now, I'm happy to sit back and wait for the next wave.