Discover more from Capital Flows
Trades: Long the Dollar / Short the Euro
Trade Update: HOLD!
As you know, last week I opened a trade going long the Dollar and short the Euro.
Here is the article:
The entry almost top-ticked it! I will continue to hold the position!
This is exactly how we want a trade to play out for execution. Let me explain a couple of things:
First, could the trade go against me? Sure. But when you execute your trades correctly, it gives you a little more room to allow things to play out.
Second, for those of you that don’t trade currencies as much, it’s functionally the same as trading any other asset. You identify the capital flows and execute based on your view of the future. There are plenty of ways to execute this whether you put on the actual currency trade, use futures or even use the UUP etf. And remember, none of this is investment advice!!
Third, when you have a trade on like this, most people will simply wait for it to get stopped out or hit the profit target. This is ok but there is a lot more you can do. I provided a weekly breakdown in the previous article: link . What you want to know is to watch EURUSD price action in connection with every other asset as we move through the economic releases this week, especially CPI and BoE. Connecting price action to information allows you to begin updating your view of risk reward and how you might manage the risk for the trade.
I strongly believe we are in the process of experiencing a regime shift with capital flows. This is incrementally expressing itself. I will be sharing more trades in connection with this regime shift.
We are just getting started!
Thanks for reading!