Mixed Signals

Sometimes, things just don’t make sense…

Today is about mixed signals and what to do about them. As you can see in the chart above, which from top left clockwise is GBP/USD, USD/CAD, AUD/USD, and EUR/USD, all three of these majors are giving me very mixed signals. The Pound is in a confirmed downtrend looking like it will set up another trade in the near future. The Aussie has found some sort of range with a lot of space between current price and the band, and to top it all off, the Euro looks to be creating a new uptrend.

The one thing I am remembering is that trends take massive participation right, or volume we know that. But what does that really mean? To me it means that when a trend develops, there are many many traders that are all making similar decisions based on the information they have which sends price moving in a direction more harmoniously.

Situations like the one pictured above show me that there are many many traders who are not making the same decisions and price will have a tendency to be very choppy.

Here are my options at this point:

  1. Stop trading all together. I believe that a large part of the choppiness could be because of the jobs number tomorrow morning. Price has a tendency not to deviate to far from the mean in these kinds of situations
  2. Take normal Bombora trades
  3. Take normal rules trades just decrease my profit targets so that I am less exposed to these situations

For me, 3 is my normal course of action. I still want to be involved because Bombora is very robust, but I want less exposure to the unpredictability of ranging markets.

Happy Trading!!

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