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  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.61% 🇨🇭CHF: 0.53% 🇪🇺EUR: 0.50% 🇯🇵JPY: 0.12% 🇳🇿NZD: -0.02% 🇬🇧GBP: -0.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/G1tbmnQXlH
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.19% Wall Street: 0.12% France 40: 0.02% Germany 30: -0.16% US 500: -0.19% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/7TV6gNkFhX
  • The Dollar's drop was not as clean against all of its major counterparts, but the $DXY's trade weighting translated EURUSD's rally into a bearish wedge break here. That said, this still qualifies as an inverse head-and-shoulders pattern https://t.co/FNg92kAOfP
  • IMF says downside risks are materializing in India $USDINR #NIFTY50
  • Dallas Fed's Kaplan: -Fed likely to achieve 'substantial progress' metric faster than expected -There are side effects from bond purchases -Still supports bond purchases but economy has improved faster than anticipated -Fed to reach full jobs, price goals some time in 2022
  • Key break higher for gold this morning as it pushes above $1800 for the first time since February https://t.co/Ih2e5I7ddS
  • Hey traders! Risk trends continue to struggle for clarity of direction. Get your Thursday market update from @DailyFX Chief Strategist @JohnKicklighter 👇 https://t.co/TYFzIJxlvR
  • This bull flag pattern on $EURUSD played out as the textbooks usually project. The break to the upside is perhaps the path of least resistance - at least until we get back to the 1.2150 high, if we get there https://t.co/h5wOcHftl2
  • Dallas Fed's Kaplan (non-voter) -Wants to see taper talks start sooner rather than later
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Silver: 2.86% Gold: 1.39% Oil - US Crude: -1.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/Q8RUbC8LNP
Trading Lesson of 2015: Know What You Don’t Know

Trading Lesson of 2015: Know What You Don’t Know

James Stanley, Senior Strategist

2015 was the year of surprises. We came in with the full expectation that we were going to see a hike from the Federal Reserve, and then spent much of the year bantering about whether or not they should or shouldn’t hike. It wasn’t just the media debating this or offering their input; we heard from the IMF, the People’s Bank of China, and the European Central Bank among many others offering their advice to the Fed. In August, they all warned that a hike would send the global economy into a tailspin. So the Fed didn’t hike in September and everything fell to shreds anyways. Multiple Central Banker speeches later, in which the prospect of ‘looser for longer’ was floated numerous times, and markets started rallying again.

‘Buy the Dip’ has been the favored strategy on US stocks for the past six years, and of late, even that theme has begun to come into question as we look at the very real prospect of a rising rate environment for the US economy. Buy the dip got up and went with the summer sell-off, and we may be seeing a shift in the market where Central Banks aren’t going to be nearly as supportive moving forward.

And this brings us to our lesson from 2015. No matter how strong a trend appears to be, no matter how long a correlation has ‘worked,’ and no matter what a Central Banker tells you - you have to realize that there are always two sides to every market. The banks and hedge funds that you compete with in the contest of trading and speculation are pretty darned good at what they do. Their job is to make money with their money. So when something is known, it’s fairly certain to get factored into price by these players. The supply and demand from such large players in the markets impacts price, and this is what creates price action formations that traders can use to keep them out of these considerably risky scenarios.

This highlights the necessity of a balanced approach. Technical analysis is good. Fundamental Analysis is good. But none of this is worth anything without risk management and a cohesive approach to markets. We will be wrong at times and we will get caught on the wrong foot. We have to be able to mitigate the damage of these situations, or we risk falling into the trap of The Number One Mistake that Forex Traders Make.

So, going into 2016, be careful of what you ‘know’ from what you don’t. While we can all get conditioned to follow behavioral patterns and trends and themes across markets, things change; and as traders, we have to change along with it or we’ll watch one ‘bad’ trade wipe away a large portion of the trader’s equity simply because we can’t lose a small battle with the goal of winning the bigger picture war. It’s this constant state of change that makes the world great, and this will continue to happen as long as Earth remains on its axis.

See the next Top Trading Lesson of 2015: Be Mindful of Stentiment Extremes...Always!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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