Hi traders! Last week must have been quite a nasty week, isn't it?
The dollar was moving strong and steadily and suddenly, it just kept heading south.
I must admit I was also too caught up in the dollar domination mentality, but with good risk management, it did not hurt my trading account much.
This is why risk management is so important despite a trader has a very good trading skill.
Because events like this will hit you one day, and risk management is here to prevent you from losing more than what you should and allows you to recover and reanalyze the market to make a better trading decision.
So why did the dollar head south? It was not without a good reason.
The answer is simply overbought. The volume of trend harmonically is about 2.3 dollars, and this time around, it has hit 2.7 dollars, about 0.4 dollars more than the usual.
There could be more retracement during this week as the dollar has yet to find a landing place for a good support, but will find one very soon.
The dollar was moving strong and steadily and suddenly, it just kept heading south.
I must admit I was also too caught up in the dollar domination mentality, but with good risk management, it did not hurt my trading account much.
This is why risk management is so important despite a trader has a very good trading skill.
Because events like this will hit you one day, and risk management is here to prevent you from losing more than what you should and allows you to recover and reanalyze the market to make a better trading decision.
So why did the dollar head south? It was not without a good reason.
The answer is simply overbought. The volume of trend harmonically is about 2.3 dollars, and this time around, it has hit 2.7 dollars, about 0.4 dollars more than the usual.
There could be more retracement during this week as the dollar has yet to find a landing place for a good support, but will find one very soon.
There could be more retracement ahead and it would be more advisable to observe further to determine not just a good reversal point, but the timing as well.