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Key Lookouts/Observations to Stay in a Trade

EUR/USD 16 May 2018

Expectations have a great impact on people’s trades – giving targets, reasons to enter, stops and visions of certain P&Ls. One expectation that is often overlooked is the expectation of how the trade will play out – a common expectation is as soon as the trade is entered, the market will straight line to the target; this rarely happens so having realistic expectations of the next move enable the trade to be monitored more rationally and added on to sensibly.

The EUR/USD set up trigger point trade giving an entry before the break of a significant low where continuation could be expected. How this continuation plays out is key to staying in for the larger move: the initial break can be expected to be fast as stops go off, however the larger move will include pull backs and slowing down of momentum. For those expecting it, this can provide opportunities to add on to the trade, for those expecting the straight line move this becomes a reason to give up.

How the initial momentum drop occurs and the absorption order flow afterwards are assessed in this live AXIA daily debrief, by understanding the short term and long-term opportunity allows you capitalise on the full move and properly manage expectations.

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