Weekly review.
I found the risk environment during the week starting Monday 9 September to be mildly positive / neutral. The VIX gradually dropped below 20, the DOW, NASDAQ and the S&P all had positive weeks. The market digested the previous Friday's NFP number and speculation between a 0.5bp or 0.25bp rate cut at the upcoming FOMC meeting continued, fueled by a WALL STREET JOURNAL article suggesting 0.5 is very much on the table.
In the currency space, I found it difficult to have confidence in the 'risk on' sentiment. Partially due to the recent 'extremely changeable' environment, partially due the the JPY'S continued strength and perhaps due to an announcement of imminent US tarrifs on Chinese goods.
In other news, another rate cut from the ECB was accompanied by a conflicting message. A warning of a possible growth slowdown in the eurozone (= more rate cuts likely) but another warning of inflation rising towards the end of the year (= maybe not more rate cuts). The EUR ultimately gained strength after the decision, possibly as traders exited 'short EUR' positions from overly bearish sentiment.
A US presidential debate passed by quite calmly as HARRIS was nominated (just) the winner. And the election is certainly a lot closer than it appeared a couple of months ago.
On a personal note, it was (again) a week of just one trade. An AUD CAD long, which was an attempt to take advantage of the mildly positive environment as a 'relative fundamental' trade. I eventually closed the trade on Friday for a small profit. As it turns out, a EUR CAD long trade, rather than an AUD CAD, would have hit the +1.5 profit target. But I didn't feel comfortable longing the EUR in the aftermath of eurozone growth concerns. And I stand by that decision.
Speaking of another week with just one trade. One / two trades per week has been the norm recently. Whilst that's fine, two to three trades is preferable in terms of placing enough trades to make a reasonable amount of money over the course of a year. But you can't force trades and if I only feel comfortable with one trade per week, so be it. In which case, slightly upping the risk percentage per trade at times like this, perhaps by 0.25 or 0.5% will ensure the projected profit over the course of a year will remain similar.
Talking of projected profit. I'm a little behind where I'd like to be. But It's been a difficult year, possibly the most difficult year I've seen in my close to 9 years as a trader. The difficulty is bourne out of the BOJ shenanigans, uncertainty surrounding the risk environment...soft landing / rate cuts, combined with concerns about growth in china, amongst other things.
If, like me you're finding it difficult, I would suggest that a 'break even' result year to date means you're on the right track. Take heart, at some point it will get easier.
As for the week ahead, I begin the week 'mildy optimistic' risk on trades will be viable. But it depends if 'lower than forecast' data from china (reported over the weekend) spooks the market. And it could be a case of waiting for the FOMC meeting on Wednesday, where I suspect a 0.25bp cut, alongside 'dovish rethoric' could induce a sustained period of 'risk on'.... we'll see.
Results for week:
Trade 1: AUD CAD +0.9%
Total since start of blog = +28% (risking 1% per trade).