News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Do not pre-empt a move. Always wait for confirmation (Long USD/ZAR)

Do not pre-empt a move. Always wait for confirmation (Long USD/ZAR)

Richard Snow, Analyst

Living in the past can be a death sentence for a trader, not to mention a sub-optimal way of one living their own life. Without the ability to pick yourself up and move on, well you’re likely resigned to living with the same things that created your past.

But in trading, there’s no better feedback than failure. So, it’s important to learn from our mistakes while picking ourselves up and brushing ourselves off. And for last year, there’s one mistake that really sticks out in my mind, and that was a long USD/ZAR setup.

In a year where emerging markets (EM) enjoyed much of the ‘risk on’ sentiment that followed the global economic recovery and record low interest rates in the developed world, naturally the ZAR stood out as a strong performer against the dollar when compared to its EM counterparts. However, since June 2021, the ZAR looked to have set a new low and had started to give back a lot of its earlier gains. This brought about opportunities to buy dips at support. After prior success, the opportunity to enter just before support was too tempting to pass down as I looked to enter at the best possible level. USD/ZAR broke below support and continued lower before turning just a few pips below the stop loss level. Waiting for confirmation of a bullish continuation would have been the right play here, which in hindsight is obvious.

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

DISCLOSURES