Managing risk as a professional
The majority of us had double-digit percentage returns in September and entered October on a heater. Ego's fuelled, feeling like the market's boss, these are the times we need to ensure we stay grounded, humble ourselves, and continue to execute our plan flawlessly.
If you thought you were playing Pokémon this past week and you 'caught them all,' you would've been burnt. If you kept yourself grounded, stuck to your plan, managed your risk, and removed your exposure as your plan should detail, you would have closed the week relatively unscathed.Underwhelmed but unscathed.
The market has served it's gentle reminder to anyone who thinks they're the boss and has shown who's really in control. Opportunities will always be abundant, and we can't let greed take over us. The key to our world is managing our risk as professionals, ensuring we don't overexpose ourselves so that when trades don't go in our favour, our accounts stay alive to play another day.
Nothing is guaranteed
As ‘perfect’ and textbook a setup can be, the outcome is never guaranteed. We had some incredible price action this week, and out of all, one of our favourite setups was AUDUSD.
All time frames appeared clear, the weekly in need of a deeper pullback after the 180 days of bullish momentum, the daily broke down, and pulled back to a stunning area of confluence. We had a higher time frame strategy present as well as a textbook EWT pattern. The lower time frames aligned early in the week and started showing strong signs of incoming bearish momentum.
We had multiple strategy entries presented throughout the week with clear price action on the intraday charts to align with the higher time frame bias. The setups that developed were entries we would execute repeatedly; however, this doesn’t mean it’s guaranteed to play out.
There are many fundamental pressures currently present for the USD; the big C, upcoming presidential elections, conversations on upcoming stimulus packages. There are many unknowns, which is why we are currently seeing the characteristics of the market behave as they are, very reactional to specific news announcements, Trump’s tweets, and even rumours.
After initially falling in our favour, price action reversed on us later in the week, showing us even the best trades can go against us, and if you’re here for the long term, you need to be willing to accept that it doesn’t always work in your favour.
Make sure to review your own lower time frame charts for AUDUSD for more detail.
JPY: We are keeping an eye on several JPY pairs as they still have interesting higher time frame development. Our favourites include EURJPY & GBPJPY. We are looking for lower highs to form on the daily time frame, to play a wave three bearish continuation.
All eyes on Big Tech stocks
Although Major indexes show an unclear picture, some continuing back to all-time highs after a quick pullback, others breaking down on the daily charts. There are specific stocks that have got our attention coming into this new week, namely the big tech stocks.
Our favourites include the giants; Amazon, Microsoft, Google, and Spotify. We are still waiting for the right shoulders to form on the daily charts to confirm the bearish patterns we can see developing, but the overall picture is there.
Once we see these patterns develop, we will be looking for the lower time frames to align with the bearish thesis we are building for these moves, at which point we will look to execute short entries like the patient traders we are.
PS. To watch our founder, Irek, break down all these upcoming opportunities in full, plus how we plan to capitalize on them, check out our most recent Insights episode from Friday Oct 9, 2020.
There's only one Cameron Baxter
Double-digit months proved to be the norm for September, with results up above 20%+ being present within our club.
Cameron joined us around five months ago with no prior trading or experience in the financial industry. He has put his head down, worked tirelessly at developing the skill of trading using our teachings and content. Cameron closed out September with an astronomical 16.9% profit.
For those that are new to trading, Cameron should be seen as an inspiration. Within two months of joining, we could tell from his interaction within the club that he straight away picked up the concepts, strategies, and fundamentals. Five months down the track, and he's returning huge profits in single months.
We suggest keeping your eyes peeled for Cameron's name in the future. We strongly believe he will continue to grow as a person, a trader, and continue to level up higher and higher.
Coming up this week
This week's schedule for Trading MasterClass is as follows:
Monday, October 12, 2020 @ 1pm PT
Market Update - lead by Jonny Godfrey
Wednesday, October 14, 2020 @ 1pm PT
Market Update - lead by Jonny Godfrey
Friday, October 16, 2020
Chronicles Video Package for Sept 2020 - curated by Irek Piekarski