WHICHEVER WAY - Everyone has been trying to figure out the next move in the Dollar. Doesn't matter which pair. But if we use EURUSD as our example, what becomes very clear from a short term trading perspective is that nothing is clear. On the one hand, the major pair is locked in an intense downtrend an tracks relatively close to recent multi-year lows at 1.0462. On the other hand, the weekly chart is well oversold and shows plenty of room for a healthy correction. So where does that leave us? Well again, if we are looking short term, it should leave us on the sidelines and waiting for more clarity rather than playing a guessing game.
NOT LIKE OTHER JOBS - But for many, the idea of seeing swings of a few hundred points and not being involved is too hard to swallow and instead of realizing that these swings are meaningless, these traders force positions with the hope they will be on the right side of the next swing. Tempting as it may be, this just isn't the way to do it. Wait for your spot and take it when it comes. Don't get sucked into the price action and let the market dictate your position. It's a mistake. I have talked a lot about psychology this week and it is important to remember just how much having a sound mind means in this business. The other day I said that while in other professions, a person's skill and expertise is determined by their ability to be proactive and do, in trading, the opposite applies.
ASK THE EXPERTS - In trading, a lot of one's success comes from the discipline of holding back, sitting tight and not doing anything. I wouldn't be surprised if the saying "easier said than done" was inspired from this very point of being able to exercise restraint when looking at the market. So you all want me to tell you whether to be long or short EURUSD right now and it just doesn't work like that. My feeling is that I am happy to take a shot at buying on a very overextended intraday move, resulting in extremely stretched technicals, and I am happy to take a shot at selling a highly extended rally, resulting in severely overbought technicals. Anything in between, I'll leave to the experts. :). As a side note, keep an eye on the Australian Dollar today to see how it digests this latest Aussie employment data.