Okay folks, understand that if I were to get into specifically discussing my “thoughts” on market movement, I would then move into a realm dominated by voices “full of sound and fury signifying nothing.” Don’t get me wrong, I believe market analysts who tell us what will be are a necessary and integral part of the trading world. Their function is to provide information in the form of analysis, meaning, they may draw a conclusion, but the more important aspect of the analysis is the information they used to arrive at the conclusion. The facts are what matter. Thus, I saved this question for today because my answer has more value after the fact than before.
What is your stance on USD/CAD in view of a possible rate hike on Tuesday? I am holding a short position and I am not sure whether to hang in or close it.
If you are seeking direct guidance from me on specific market movement, or any other “voice” out there for that matter, be advised that no matter what we say, no matter what we feel will happen, the market will move directly proportional to those who buy and sell the market. And, as I have said many times before, a market moves on the collective “mindset” of those who trade it. Thus, the best we can ever do is to gather as much information as we can, formulate solid strategies, and then execute the trade with the highest probability of success. As we have all seen time and again, the logical or reasonable outcome of market analysis often is not the outcome we get. Simply, the human mind is fickle because emotion plays a huge role in the decision making process. Lest we forget, it is we humans who are making most all the trading decisions. I say “most” because, as we have recently seen, high-frequency trading and other algorithmic software trading programs can move markets based on their own set of criteria, which may or may not have anything to do with fundamental or technical analysis.
In the end, as traders, we all arrive at our trades from a process of our choosing. If that process works and you consistently win, terrific. You are there, baby. No, the larger point the above question raises is that no matter how you select a trade, once you select those trades, you cannot have doubt or uncertainty about how to handle it. You either keep it and let it flow with certainty or you let it go decisively with certainty. Just as uncertainty tends to create ambivalence in the broad market, which results in schizophrenic behavior, so it is with the individual trade. Don’t second guess your trade. Remember, quoting again with equal merit to that of the Shakespearean quote in the opening paragraph, “Always dance with the one that brung ya.” By the way, for all of you, here is how the trade panned out yesterday, and how it is doing today.
Yesterday:
The Canadian dollar softened against the U.S. dollar immediately after the rate announcement to C$1.0574, or 94.57 U.S. cents, compared with Monday’s finish of C$1.0549, or 94.80 U.S. cents. It later recovered.
Today:
|
1.0430 |
-0.0006 |
-0.0558% |
13:02 |
Trade in the day; invest in your life …
