CAC40 still in the red YTD. The index has not closed end-of-week above 2016 opening level at 4563.75. A major resistance with very attractive risk-reward ratio.
Looking at NZDJPY and NZDUSD weekly charts showing prominent setups. This is my preparation for RBNZ official cash rate in 2 days, expectation of rate cut.
In earlier post on USDJPY, a reader thinks it was a breakout trade. It was not. My play was based on retracement and risk principles and I show you why.
This article is a must-read if you are 1) Good at trading but somehow always lose big. 2) Can score 3-4 winners each time but end up with net loss because of 1 loser. 3) You apply uneven positioning sizing to your trades. 4) You have the uncanny ability to be overweight with losers.
A stack of winning trades can become a loss suddenly if forex traders do not mind the average entry price. We explain the concept and demonstrate 2 charts.
I ran a spontaneous experiment/game during 4M class. Volunteers are invited to take part in a challenge to hold a position until it reaches target or is stopped out. Participants are those who tend to close their positions prematurely. This challenge helps them to understand themselves/ master their psychology while I cover their risk.
The better the risk reward ratio, the less winning trades needed to be profitable but higher total profitability too. Tables: 1:1, 1:1.5, 1:2