Trading forex today has been very frustrating with most pairs oscillating in a relatively narrow range and creating a variety of doji candles on the daily charts. “Doji days” can be extremely trying and are always a sign of market indecision and tend to emerge on days with little or no fundamental news as traders scratch around for reasons to buy or sell. This morning’s price action, at the start of the London session, seemed to start positively as overnight markets had closed with a mildly bullish tone which is usually positive for the risk on currencies. My indicators confirmed this view and I looked to trade the Aussie Yen using tick charts rather than time charts. However, after a great deal of sitting around (& plenty of dog walking in between) it soon became clear that no trade would actually emerge. Maybe even the wonderful weather we’ve had today also played a part as traders simply enjoyed the autumn sun!
Fortunately, once traders in London had left their desks to frequent their favourite watering holes the late afternoon New York session proved a little more rewarding as the recent rally in equities began to grind to a halt with traders citing worries over the eurozone (again) and the threat of transaction taxes. This seemed to spark some life into the forex market with the US dollar rising as a consequence. As a result I was able to take two trades, the first a short trade on the 5 min chart of the Aussie dollar which netted 37 pips. The second was a fast scalp trade on the dollar canadian on my tick charts for 12 pips. Not big wins but good nevertheless given the price action earlier in the day.
Tomorrow should be more interesting, not least because we have a raft of economic data and we are also heading towards the end of the month and end of Q3 – so lots of squaring of positions. For Yen traders it is also an important half year accounting period so extra vigilance is required.
The great thing about forex trades is that they are like buses – you can miss one, or even several, but you know another will soon be on its way!