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  • ...but before you write off H&S patterns because more have fallen apart rather than catalyzed lately, consider the monthly chart of $AUDUSD as well. That 0.8000-0.7925 zone is no joke as its historical midpoint, trendine and other technical points confluence https://t.co/dB6edmmA1d
  • While there are other Dollar pairs getting more attention lately, I think $AUDUSD deserve a spot in the rotation. It's currently working out whether it is going to abide 2021's range as a consolidation reversal risk (H&S pattern)... https://t.co/M7dG0a8Isw
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Gold: 0.31% Oil - US Crude: -0.18% Silver: -0.50% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/AS3CtSNbr4
  • Fed's Evans: - Tepid April jobs report was a 'head scratcher' - Welcomes wage growth as sign of a healthy jobs market - Fed has room to overshoot inflation target - 'It will be a while' before US has made enough progress to talk about tapering
  • US 10-Year Treasury yield extending to session highs and steering the Nasdaq to new lows of the day $NDX $QQQ $NQ_F https://t.co/ReXcLVpGy8
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 88.77%, while traders in Wall Street are at opposite extremes with 78.12%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/wI1kMvJkwU
  • The price of gold extends the series of higher highs and lows from the previous week even though the 10-Year US Treasury yield retraces the decline following the US Non-Farm Payrolls (NFP) report. Get your $XAUUSD market update from @DavidJSong here:https://t.co/kyW7ukihdY https://t.co/keRXgNxmyp
  • Fed's Evans: - Very optimistic US will get back to strong job numbers - Still expects unemployment to fall below 5% this year $USD $DXY $TNX
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.67% US 500: -0.15% France 40: -0.18% Germany 30: -0.20% FTSE 100: -0.27% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/f9gTcPN7Ev
  • EUR/USD holding proven support level. Pullback may be over, but hurdles yet to cross. Get your $EURUSD market update from @PaulRobinsonFX here: https://t.co/o6LAHTn29c
Stochastic Trading Signal Breakdown for the Week

Stochastic Trading Signal Breakdown for the Week

Tyler Yell, Trading Instructor,

For the week of October 14, 2012, here is the breakdown of our Slow Stochastic trading signals.

Tuesday’s Signal: AUDUSD overbought stochastic sell signal chart.

Result: Stopped out at 1.0390

Original Chart:

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Current Chart as of Friday 10/19/12

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Lesson:

This trade didn’t work out which is OK. It’s OK to have a signal not work out as it will correct our attitude about the risk of taking a trade.

The first key of every trade is to understand and accept the risk inherent on every trade. Yes, the rewards of trading well are great. However, the reality of trading well is being able to take a loss where a small part of your equity is risked and them moving on to the next high probability signal.

Because there is no guaranteed outcome we recommend risking 2% or less of your account equity per trade.

When you accept the limited risk of a trade, taking a trade that meets your requirements should be simple, easy and stress free. If the trade closes out for a loss, that’s OK and that’s the cost of doing business. A book store owner wouldn’t get upset when the time comes for him to buy books to put on the selves. To him, it’s a cost of doing business that will bring him closer to revenue. A trader would do well to see a losing trade in the same light.

An article was put together on how professionals approach accepting a loss and how an amateur who is not successful approaches the loss here.

The Bottom Line: The trade didn’t work out so we must move on to the next signal that meets our requirements.

Wednesday’s signal – NZDUSD oversold stochastic buy signal on the daily chart.

Result: Staying in the trade as the signal is still engaged and we haven’t hit our profit or loss target

Original Chart:

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Current Chart as of Friday 10/19/12

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Lesson: We are still in the trade as our profit target or stop exit has not yet triggered.

An article was written about this trade here if you want to see what other components encouraged us to enter a long trade.

Join us next week as we introduce the Moving Average Convergence Divergence (MACD) and provide two trading signals from the indicator from our @DailyFXedu handle.

---Written by Tyler Yell, Trading Instructor

To be added to Tyler’s e-mail distribution list, please click here.

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