Today is a typical Monday – dull, choppy, waiting for direction. I think we’ll get direction soon enough with the China PMI data tomorrow (for AUD) and GDP data later in the week for GBP and US. I got scared out of my EJ short which is now down over 50 pips, but I don’t regret it. I reckon it is just too risky to be short the yen pairs. The risk is too much for relatively little reward.
The system was short EU, GU from Friday, and I followed the system short in the AUD. The EURJPY has just produced a short signal at around 129.70, but I will sit that one out. The yen pairs are likely to see a sharp reversal when it happens and any little gain in the short would be offset by the loss and anxiety of holding the shorts.
I’ve been re-reading an old favourite trading book – The Disciplined Trader by Mark Douglas. I am re-discovering just how good this book is. I believe this is the book that put me on the path to understanding markets, psychology and what is required to succeed in this business. From understanding to actually achieving success is a long journey and I am still far from the goal. But this book lays out the rules very clearly and I would recommend this as required reading for all serious traders.