Thin summer markets at their worst

13.55 gmt

The sudden reversal in EU and GU shows thin summer markets at their worst. When the first move down happened many assumed it was caused by the Syrian situation. But after this reversal action, it becomes clear in hindsight that the earlier drop was nothing but a big clearing-out of the stops. I expect the pairs to become range bound again after the 10 am NYT options cut.

Can you imagine the advantage conferred to bank traders who know where the big stops are!!

Wait and see.

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6 thoughts on “Thin summer markets at their worst

  1. Johannes

    This is a nightmare…. I am following your trades, but smaller positions, and yesterday there was a moment when the combined profit of the AU, EU y UJ positions was near 140 pips… and this morning i found aud was stopped, eu was in loosing position… plus the spike in au y eu this morning… just hell….

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    1. ZenFXTrader

      I’m sorry Johannes; I am also pretty frustrated with the markets. Mostly I am following my rules, but next year in August I am going on holiday. August is not my kind of market.

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  2. Johannes

    I am not saying your trades were bad defined… indeed, i think they had potential… i am just tired of this summer market….

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  3. fxgai

    I think the fx trader who can totally go on holiday in August is the ultimate pro. I came into the month telling myself to do nothing, but still end up fiddling around and not really getting anything for it this month.
    Probably not a bad idea to write ‘Rule no. 1: be flat by the end of July at the latest and do not open positions until after September 1st’ at the top of one’s trade rules!
    Of course every year it is easy to tell oneself that there are worthwhile trading opportunities, but overall there is probably little point.

    The thing I am really waiting for is the big wedge on the USD/JPY chart to resolve. This might be good for a big 10 figure move.

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    1. ZenFXTrader

      True, fxgai. I will make that my rule next year, unless I discover a way to trade such markets. Re USDJPY, I guess you’re referring to the daily chart – to me it looks more like a symmetrical triangle than a wedge and as such it argues for a continuation of the move upwards. The move is now past 2/3 of the length of the triangle, so the likelihood of an explosive move out of it has decreased. Nevertheless, we should see lucrative fireworks when the triangle is finally broken!

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  4. fxgai

    Ah true, triangle was the jargon I was grasping for.
    I’m going to try to keep it simple myself next August – watch lots of sport and drink beer. No forex!

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