EURUSD THUR. JUL 7 2011

For intraday traders especially.  We need to pay attention to the U.S. employment data at 8:30 am eastern standard time.  No matter what our analysis is the markets are fueled by news.  News is used by the professionals to surprise the retail traders and cause market motion due to panic and confusion.

Your initial analysis can be dead on accurate but when the news comes out, market sentiment can change immediately.  When The news is pro U.S. the eurusd should fall and negative U.S. eurusd should rise.  But this does not always happen does it?  This is the first major data release of the month and the first major data release is known to surprise retail traders.

At the moment, retail traders are about 57% long holders so the market should continue down initially off the news to shake out these holdouts hoping for a pullback to get them out at break even.  Therefore the analysis I posted last night should follow the script I suggested.

But here is the real point.  What does your analysis produce when you are wrong?  How does your analysis manage risk when you are wrong?  What percentage of your account will you lose if you are wrong?  That's what it's really about.  Not how much can I make? Of course you're going to make money when you are right!  But, how much do the wrongs eat off the table of your rights?

Thus, I say to you again, analysis of direction is only one component of trading and I feel the easiest to learn.  Aaahhh...but the devil is in the details of how to correctly enter and exit.  Yes, I know.  Everyone knows how to enter and exit...But do they know how to enter in such a way as to minimize risk and maximize profits.?  right now I am short 1/3 of my normal full position per my post last night and looking to get out at 4182.  That's 3 mini contracts out of a normal 1 standard lot.  If you trade mini lots that's 3 micro lots.  For you newer traders, that's called scaling in to your position in order to minimize risk.

Your method of minimizing risk and maximizing profits is not just general either.  It must fit into the context of your trading system...

It will be fun to see how the news affects our analysis.  I'm hoping for a pullback up to 4409 so I can enter anothe 2/3 position. Nother 6-7 mini contracts to complete 1 standard lot.  10 mini lots = 1 standard lot

Cheers, Jerry


jerryjstew@yahoo.com
jerry@forextradingmajic.com