Before we discuss the markets, let’s take a recap of the Trading Cup Leaderboard.
Mao Long Yang's sole focus on trading Gold continues to pay massive dividends, as he moves even higher up the leaderboard, hitting 860% as per the screenshot above.
In reviewing Mao’s trading style, it is clear he understands the ins and outs of trading Gold, relative to his trading strategy.
His strategy seems to involve taking small positions in Gold in the direction he believes it will move, only to then add to the position aggressively once he is clear on the momentum.
Every great strategy can benefit from strong intraday moves, but it is knowing how to identify the momentum that catches people out.
This is as a result of having several small losses in a row as you get a feel for the direction the instrument is heading.
Often, traders get disheartened by the high number of early losses, which go against their initial positions.
But it seems Mao Long Yang can brush off those small losses and not remain fixed to any one direction. Instead, preferring to ride the momentum either long or short, depending on what the day’s trading session throws up.
Something traders have been missing over the last few months are large down days.
The S&P500 index fell 5.89% as what can only be described as a bloodbath across the global markets.
According to a Bloomberg article, more than 6- of the index’s members lost at least 10%.
Taking a look over the S&P500, you can see the technicals are suggesting it is now sitting at the lower end of the recent range.
Will we see traders resume their buying confidence, as fears of a second wave start to hit the United States?
The Aussie dollar hasn’t been the most popular trading instrument among the top 10 leaders of the Trading Cup, but it is clear to see the momentum has been favouring the bulls.
But, with US dollar strength dominating the trading action overnight, the Aussie dollar, Euro and British Pound, all dived lower.
The Aussie dollar has fallen 243 pips since the intraday high posted two days ago.
As you can see from the stochastic indicator, the Aussie has been overbought for several weeks now. Profit takers decided to lock in profits, starting at the 0.7000 level.
British Pound falls back within resistance levels
It almost appears many traders have been caught offside recently, as the Aussie, Euro and British Pound have all rallied above resistance. This could have resulted in a steady amount of short-covering, as short traders were wrong-sided.
As you can see from the GBPUSD chart above, the Pound has now fallen back into the range, breaking through potential support. This is now turning back into resistance and will be a crucial level for traders to watch going forward.
How is your trading going?
When you see 1st place sitting at over 800%, it is easy to get disheartened. But remember, you are also setting your new trading standard and will have a monthly figure to bench your monthly trading results on going forward.
It is not so much about feeling like you are not good enough, but instead, it is more about setting a standard, learning from the lessons, and taking those lessons to Stage two of the trading competition.
Ashley Jessen is the author of CFDs Made Simple and Head of Marketing at ACY Securities. He has been in the financial services industry since the year 2000 and worked for some of the leading companies in the CFD, Forex and Online Trading space.