The ebb and flow of the market: It's important to read everyday.

Once again, it was difficult a week to form a conviction in the direction of the currencies. I don't think (in 9 years of trading) I've ever known such an environment whereby there were so many market moving narratives at one time. I don't think the market itself knew how to form a conviction. Let alone myself.

The recent environment highlights how important it is to 'gather information' on a daily basis. By studying charts and reading articles everyday, you absorb information without realising. Over the last three weeks I've been more and more inclined to place a stop loss behind 'a cluster' of 1hr swings. Highlighted by my two most recent trades which have essentially been 4hr support and resistance trades....4hr support and resistance trades don't come along all that often, but they are one of my highest conviction trades. And it's a trade whereby there isn't necessarily a 'fresh cause', more of a confidence that the underlying recent strength of a currency means it would be a surprise if it weakened enough to break through a 4hr swing area.

I can't give a defining moment I came to the conclusion of waiting for more support to place a trade, it's something that naturally made sense, due to having the ebb and flow of the market ingrained in my consciousness.

Similarly, I'm not sure when I'll feel comfortable with just a 1hr swing (or less) to place a stop loss behind. It could well be my next trade. It's just a feeling of comfort achieved by understanding the narrative and making a decision I feel to be the best decision I can make in the moment.

So, the next time you are struggling to make sense of the market, feeling frustrated because the currencies aren't moving how you'd expect. Take heart, the information you are absorbing will still serve you well somewhere down the line.

Weekly review to follow: feel free to email any questions.

johnelfedforexblog@gmail.com