Bullish Equities In Charge

Good Morning,
It is dumping snow outside and it is definitely time to break out the powder skis. It has been a long wait as we haven't had snow in over 2 months - thankfully there are amazing snow makers and groomers out there!! Those amazing teams helped me to stay PATIENT and wait for the snow without complaint. We knew the snow would come and now is the time to ski it, so thank you groomers/snowmakers. Oh yeah, the disclaimer: I work as a Mountain Host at Deer Valley giving tours to our guests on the weekends and so if you are in the area, say hi to me on the mountain!

Why the snowy prelude? Well, I included a key word in there: PATIENCE. If a trader is to survive, patience is one of the most important characteristics that they must display.
These markets can try your patience, but you can't let them get to you. I posted similar thoughts on the IBFX Connect Site under "thelocalstake". If you are looking for intraday help, please follow me on that unique social site.
Why do they try your patience? Well, take for example today's range in the EUR/USD since American equities opened at GMT 13:30: 1.2884 on the low end and 1.2950 on the high end for a total of 65 pips. That isn't what we are used to. We are used to ranges of 150 pip and more, but more importantly, we are looking for trends, retracements, more trends, retracements, etc...
Right now we are seeing a trend and then sideways consolidation. The VIX is low (not pricing in much "movement", the equities are on a tear (no sellers in sight) and volume has been lower.
BUT, there are opporuntities. You just have to be a little more PATIENT as we wait for opportunities. As you know, I am an intraday trader but I also understand the larger fundamental drivers and how to read a chart with longer timeframes than my normal 5 and 15 minute charts. So, using PATIENCE, I am ADAPTING to lower volatility markets and looking for opportunities.
Here is the setup and I talked about this in previous posts: You know I love Fibonacci's (I basically can't wake up without thinking about Fibonacci's) and so as long as I understand how to use them, what is the difference if I use them for a 5 minute trade or a 3 day trade. Check out the EUR/USD as it got weaker and weaker and then hit the "line of death". I mentioned a week ago that if the equities hang in there and the relationship between the USD and equity prices comes back into play, maybe the EUR is oversold compared to the USD. We all know what equities are doing over the last week and here is what the EUR/USD did over the last week:

Past performance is not indicative of future results
The point here is, I have an understanding of the fundamental drivers, how to use technical analysis through a diverse toolbox and more importantly, PATIENCE to wait for what I think are overbought or oversold areas. The most important component is that I built a TRADING PLAN and patiently waited to execute it and then planned to manage it from beginning to end using "trade massaging/management". I do not execute anything and then walk away. I am constantly monitoring the drivers affecting market movement no matter if it is a 5 minute or a daily chart.
You know I always give a fundamental view: equity markets are on cruise control. Fundamentals are improving and until "new surprises" come, I am neutral to bullish the equity markets over the next quarter (but, as you know, that opinion could change in an instant).
Technically, until sellers come in, be very, very careful of over-protecting your account if you are hedging your equity investments/401k's/IRA's/pension plans/etc..  Soon though, I may think about getting ready to maybe "stand in the way" of the equity bull run with some portoflio protection strategies - but that depends on the next week or so of action.
No matter the reason for the trade, the length of the trade, the size of the trade, please develop a sound trading plan and manage it from beginning to end. It is essential in these markets to always put stops in place as the entry order is executed.

Happy Trading and Be Environmentally Cool
Coach Brian
Forex  is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.