Viable opportunity Vs trade.

With US markets closed for labour day (I hope you're enjoying the long weekend) it may be a slow Forex day. So I'd like to touch on a little psychology, and the difference between a viable opportunity and actually placing a trade. A good example of this is last Friday, you can see a big move, in this case USD and CAD weakness. You know the cause of the moves, highest unemployment rate for 18 months in the US and poor GDP from Canada. And you think the moves are fundementaly likely to continue. But what is the difference between saying yes, I'm going to enter a trade now, or, no, it's not the right time?. For me, it's a case of assessing the risks, meaning what could potentially stop out a trade? In the example of the trade I placed on Friday, ISM was due to be released, which had the potential to move the market. Also, the stop loss I placed wasn't behind a swing, I much prefer 1hr swings to place a stop loss behind, but this trade didn't even have a 15min swing. In hindsight, placing a trade with a stop loss that wasn't behind any swings with an upcoming data release was poor decision and if I could go back to that moment I would wait for the ISM release before making a decision. I hope this highlights the difference between a viable opportunity and actually placing a trade.

Moving forward, it's been a difficult trading environment lately, with moves that occur but don't last long before reversing. I expect this environment to continue, most likely until we get clarification of when the Fed will reduce interest rates. Which could be a while yet. So it's a case of accepting slightly less trades per week if you want true acceptance that if your stop loss gets hit, that's ok, you would still have taken the trade anyway. I'm happy with two trades per week  at the moment.

Fundemental currency overview to follow...enjoy your day