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The Lazy Trader’s Forex Blog - trading news and forex trading news

Seen the Currency Charts Lately? Check August Out!

By Robert Colville on August 5, 2013

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If you haven’t you will be in for a surprise! We have just entered August and this month is a special month for us long-term traders. In fact, it has never given us a better opportunity to take advantage of the market in a very specific way… to preserve capital!

This may not be what you want to read but for many, this it’s an inconvenient truth – especially if you had your heart set on taking time off to trade throughout this month.  But the sore reality is that August has traditionally been a very tricky month to trade. In short, it sucks! Not only are markets typically lighter on volume but they are also indecisive giving a resulting choppy and mangled mess.

So put the mouse down, turn that screen off and walk away from that computer. Take a vacation. In fact, take two – safe in the knowledge that you are fulfilling the first objective any successful trader will ever need or want to accomplish: to preserve capital.

Second, of course, being to make money...but only if the conditions are right! In fact, they were right for a recent USDCAD trade (long)

On the 24th July, we had a whole host of reasons to buy the loonie(USDCAD) after the close of the bullish pin bar reversal. After all, price action was making notable higher highs (and higher lows), testing a horizontal level @ 1.0288, trendline, 100ema and we also has a  Fibonacci cluster intersecting with this buy zone.

USDCAD July Trade 2013
A Bullish Pin Bar Reversal (Buy) for USDCAD: Multiple reasons for entering the trade

On the 25th, we were triggered into the trade and over the course of the next six days we were proven correct by the market; but not before it stopped us out before going our way!  This is the stumbling indecisiveness August tends to give us –except this happened in late July, which isn’t a great omen for this month.

USDCAD July Trade Outcome 2013
What Happened: An indecisive move up without us!

 

Pin bar reversals are by their very natural as a price action set-up are reflective of a sharp rejection of a price point which is a precursor to a decisive move in an upward direction (if it is a bullish pin bar reversal) or a downward direction (if it’s a bearish pin bar reversal).

Now, you may be thinking that USDCAD could be an anomalies – and yes, one currency out of 26 isn’t exactly representative. So let’s take a look at what these are doing…or rather not doing!

Here you go:

EURJPY August 2013 Market
EURJPY Daily Chart – Summer 2013

 

 

 

 

 

 

EURCAD August 2013 Market
EURCAD Daily Chart – Summer 2013

 

 

 

 

 

 

USDNOK - August 2013
USDNOK Daily Chart – Summer 2013

 

 

 

 

 

 

GBPJPY - August Market 2013
GBPJPY Daily Chart – Summer 2013

 

 

 

 

 

 

CADJPY - August Market 2013 2012
CADJPY Daily Chart – Summer 2013

 

 

 

 

 

 

SGDUSD- August Market 2013 2012
SGDUSD Daily Chart – Summer 2013

 

 

 

 

 

 

AUDCHF August market 2013
AUDCHF Daily Chart – Summer 2013

 

 

 

 

 

 

EURCHF August Market 2013
EURCHF Daily Chart – Summer 2013

So what one thing do all of the charts in this sample have in common? They are indecisive!

Now convinced? Unless it screams out at you as a potential trade with good reward to risk, it’s probably not there. Remember:  first we want to preserve capital, second…make money.Secondly, it’s sometimes the trades we do not take are the ones that make us the money!

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Robert Colville

The Lazy Trader is a fund level Forex Trader who trades for no more than ten minutes a day. If you want to learn to trade successfully in his set-and-forget style, have a look at his online trading course

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Robert Colville

The Lazy Trader is a fund level Forex Trader who trades for no more than ten minutes a day. If you want to learn to trade successfully in his set-and-forget style, have a look at his online trading course

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