Here is what I learned this week from the markets

Being a successful trader is about making the right choices. And sometimes the best we can do is to stay on the sidelines.

You’ll see what I’m talking about in the next chart:

What you see on the yellow box is how the EURUSD traded this week.

It started with a very slow Monday and Tuesdays (the range for some currencies in those two days were around 30 – 50 pips).

Then on Wednesday, we had an important announcement, the FOMC statement (#1). On Tuesday Draghi’s speech (#2) and then today, the NFP report (#3).

The only day I saw an interesting pattern was on Wednesday I put an order to go short on the EURUSD, but had to cancel because it didn’t get triggered before the FOMC announcement.

Anyway, I don’t see any “tradable” pattern in this chart. Do you see one?

There are no clear support and resistance levels, if we don’t have these levels we don’t know when the market is likely to reverse, if we don’t know where the market is likely to reverse, we don’t know where to set stop loss levels, entry or even take profit levels.

Do you agree with me here?

So trading, at least for me, is about making the right choices, about trading only when the odds are in your favor, if we just keep doing this, sooner or later, the results will come (good results I’m talking about).

And you know what I think about trading fundamental announcements, I think it’s crazy.

Now it’s your turn…

I’d like you think about this, and when you are done, leave a comment.

Do you agree with me? What did you think about the markets this week?

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Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .

  • Smi

    three indicators , I find, useful in locating the important support/levels are ”Fractals and Zig Zag and of course the fibs…

    • Raul Lopez

      Good… I just use price action, but on sometimes it is difficult like the chart above… 

  • Smi

    eur/usd (chart end of Thursday)…showed clear support and resistance lines to me ..on 15 min chart..for day trading strategy

  • Elmcityintl

    Reguardless of any new report… The dealers ( market makers ) Hit the high twice the just hit stops and set traps… they use the news to create this type of enviorment. I went long the the pound… I pulled 80 pips… No big deal. 

    • Raul Lopez

      Nice trade in the Pound… And you are right, I bet they caught plenty of stop loss levels above the resistance level… Cheers

  • Tonyosita

    The market for the week has been that of staying action by investors and waiting for the ECB conference outcome and US Employment report culminating in low volatility.  We only witnessed the ballistic response of investors merely on the ECB conference which did not add up in terms of real value addition to the single currency.  Clearly, the market is difficult to comprehend but the uncertainties are rising by the day and I will request your suggestions on the possible indicators that give better direction since I discovered that the likes of MACD, RVI, RSI, Stochastic and ADX are all misleading.  Please revert.

    Orah Tony O

    • Raul Lopez

      Hey Tony, I do agree with you, uncertainties are rising by the day… 

      I wouldnt recommend you to use indicators to determine the direction of the market. I’d focus on classic support & resistance levels off the 4H and daily charts… Give it a shot, it’s what I do… Cheers