@faithmight, Author at FaithMight

August 22, 2014November 17, 2014

FM CAPITAL GROUP

I can finally help you MY WAY. I have been hugely humbled by folks who have reached out to me for help in their journey to build wealth. Most of these requests have been from traders. However, a few requests are looking for advice in how to build their investments and their wealth. But I made the mistake of focusing too much on the risk and turned folks away. Success scared the shit out of me. But I love trading and I love the markets. No one wakes up in the middle of the night and not do what they love. I began translating my trading into portfolio building. I started with family and friends. I’m happy to say I’m refocused on the incredible good that comes from putting money to work. I’m only sorry it took me so long. Residing in the U.S., much of this delay was working through the regulation. That has been a learning experience in and of itself.

So I bit the bullet, produced the paperwork, passed the Series 65 and raised an advisory firm – FM Capital Group LLC. I want a company that understands that in order to grow wealth it is necessary to allow you to keep as much of your capital gains as possible. No account minimum. Everyone has to start somewhere. We are also a firm that takes the time to educate. That is a natural extension of the trading tweets and blog posts I have been producing the last 5 years on Twitter. My dream to give individuals access to their own wealth who have traditionally never had access before. We won’t turn away an inquiry, we are specifically targeting people of color. As a woman of color, I know firsthand that we have a significant amount of wealth harnessed in all the wrong ways. I am on a mission to change this trend and feel very well positioned to do so.

So thank you again to all that follow me to seek knowledge. My hope with FM Capital Group is that I can provide the most comprehensive help that you need with the understanding that you may not even know the full extent of what you need. I’m ready to help you and that excites me!

Screen Shot 2014-08-25 at 5.42.07 AM — Website coming soon. Reach us on Twitter.

August 8, 2014

Massive Reversal Potential in EUR/GBP

Do you see what I see? Despite Draghi’s best efforts, the $EURGBP continues to hold support. Remember the importance of 0.7920. This week, buyers have supported euro at this level. The first resistance is the neckline at 0.7982 but 0.8000 is decision-making time.

Now my question to my chartist friends, what is the target on a daily chart inverse head and shoulders?

Trade what you see.

August 8, 2014September 8, 2014

The Sterling Digest, 8 September 2014: divorce jitters

WSJ chart - closing in on the vote — When traders are buying insurance on currency, you know things just got real

The markets have known about the upcoming Scotland referendum for months now. And it was largely ignored because it didn’t seem like anything could break up this unhappy union. Now GBP sterling is looking like a currency union all out of nowhere. No one calculated that kind of government risk from the Old Lady. The market has been taken for a loop. This extreme market reaction may only the beginning because it is yet another changed expectation in sterling’s long-term sentiment. Traders are starting to believe that the market could get more volatile still. What I had thought was a non-event just months ago has thrown another interesting fundamental twist to the landscape. A currency crisis could give this reversal some real legs to undo last year’s sterling rally.

The options market saw this drop coming last week. (WSJ)
Scotland has to make a clean break. (The New York Times)
Super Mario is fearless leading the ECB down the yellow brick road of bond purchases. (Bloomberg)
Speaking of fearless, have you met Wonder Woman Yellen? (The Washington Post)
This is not a new issue. Did markets miss it or is it actually adjusting to a new reality? (Credit Suisse)
Scotland may not be Quebec or Texas. (BK Asset Management)
A good look at cable just before today’s gap and drop lower. (Forex Live)

Image credit

August 7, 2014August 7, 2014

Pay Attention to Supply and Demand

The GBP has experienced a selloff that I believe may be the beginning of a reversal. Data misses at a time when the market has gotten used to better-than-expected data is probably the biggest reason for a reversal to take hold. You can look at the market’s reaction to good news the past 2 days versus yesterday’s manufacturing miss in the chart below. The Bank of England’s hold on monetary policy today was expected to be a non-event. They delivered. Consequently, they have given markets an excuse to sell pounds short term. Traders are already looking ahead to the August Inflation Report that Mark Carney will deliver next week. If BoE telegraphs concern for a weaker economy going forward, we could see sterling really start to give back the gains of the past year.

Even with $GBPUSD now trading well below 1.7000, I came into the week skeptical of this reversal. So I’ve been watching this week. Not much tweeting. Much more watching. What has developed is $GBPUSD having a hard time getting above 1.6880. This difficulty has given more evidence to the huge support level this level really was. It wasn’t just a 61.8% Fibonacci level. It is a level where supply meets demand. It is a level where buyers and sellers alike must make a decision. It looks like sellers are now in control with the break last week and the hold this week of 1.6880. And those capital flows are moving throughout the market as we see selloffs in the $GBPNZD, $GBPCAD and $GBPJPY. I expect bounces to be met by offers at 1.6880 and, on a break higher, at the more obvious 1.7000 psychological level.

Trade what you see.

Read also: The Sterling Digest Special Edition (FXStreet)

August 4, 2014August 4, 2014

Mental Stops

Back on with Benzinga, I mentioned mental stops quite a bit in my segment. But mental stops are a topic that deserves a little more explanation than I gave on the show. We all know what stop orders are. If you don’t then stop reading now and read this. We call them hard stops. I’ve always used them in my trading. Always. Then some years ago, Raghee Horner said something about stops that really resonated with me.

“If your stops are not set, your broker will never know about them.”

While that statement did resonate with me, I didn’t really understand why she said it until recently. I believe the reason now is high frequency trading (HFT). Undoubtedly, there is HFT in the forex markets now too. If the broker-dealers can see your orders, you better believe the algos, black boxes, dark pools and other sinister machines see them too. Sound trading plans, which dutifully included hard stops, have been chopped to death in these markets. And I’m not the only one who thinks so. Pro veteran trader Peter Brandt wrote about this some years ago and the change he made to mental stops in order to remain competitive. However, despite these pros’ thoughts, I still used hard stops in my trading. Using bracket orders (limit orders in which both or either the stop loss and target limit are set too), stops were placed as soon as I entered a position and adjusted to break even once the trade was in the money.

stop sign — No matter the basis, use stops in your trading

This sounds like a sound and prudent strategy. However, it was not yielding the results that they once were. So, very recently, I made the move to mental stops as well. It wasn’t until the Benziga show appearance that I reflected on how this trading strategy is working for me and what it might mean for newer traders.

Using mental stops mandates a disciplined approach in your trading. That is why novice traders cannot use them. As a novice, one is training to be disciplined in developing a trading plan and system. Once that hurdle is crossed, the newbie is then training to properly execute that plan and manage the emotions and ego that comes with trading in the markets. The practice of determining risk and sticking to exits is learned very practically using stop and limit orders.

Until your trading psychology is tight, I do not think you can successfully employ mental stops. Again, if you are a novice trader or a trader struggling with your mental capital, use the hard stops. Using mental stops does not mean we are no longer using stops in our trading. On the contrary. If you use a mental stop, you already know the level at which your trading plan is wrong. It’s just not being telegraphed to the market. Rather, we want the market to move as it should without the temptation to run orders that the HFT ilk is fond of doing. Mark the stop loss level on your charts and develop a rule for when you will manually come out of the trade. Will you get out on a break of the level? On the close? After a couple hours? A couple days? You will need to make that determination way before you think about using a mental stop in your trade. Mental stops can only be utilized within a well-defined trading plan. Fail to plan and you ultimately have plans to blow up your account. Be smart.

Image credit

August 1, 2014August 1, 2014

NFP Quick Look

Headed into the non-farm payrolls, $GBPUSD has put in a significant correction back to 1.6822. Huge level. Not only is the 50% Fibonacci retracement level, it is also a former resistance level now serving as support.

While the $EURGBP is staging a corrective bounce, it is still contained by its former zone of support now acting as resistance.

The market’s reaction to the NFP may determine a new direction in sterling. Keep an eye on both pairs into this morning’s news release. Trade what you see.

July 29, 2014July 29, 2014

My Appearance on Benzinga’s #PreMarket Prep Show

I was back on last week with the guys at Benzinga’s #PreMarket Prep Show. I had a blast. Some highlights from our chat include:

The market reaction to recent UK news releases
How to trade this current selloff in the GBP
The use of stops in the current market environment
Interest rate expectations going into 2015

Listen to the full interview below.

July 28, 2014

Not Yet A Change In Tide

The $GBPUSD finally returned to 1.7000 and closed last week below the big psychological level. Many would find this a bearish signal. And I don’t blame them. Many a trader know the rules of support and resistance. So it is not surprising to find that as the new trading week opens today that we find price meeting offers lined up at the 1.7000 big fig. And that would certainly seem like another bearish signal: price finding resistance at the former support level.

The problem with these technical signals is that the fundamental picture remains pretty much the same. Despite the neutral tone and backpedaling from the Bank of England, sterling fundamentals are still strong enough. Yes, the market is reacting to a less-hawkish-than-preceived Carney. But as long as the economic data remains robust, traders will bet on the fact that Carney & Company will have to respond with some type of monetary tightening sooner rather than later. When that realization hits the market, the bulls will step back in.

Read also The Sterling Digest, 25 July 2014: define safe (FaithMightFX)

July 25, 2014July 25, 2014

The Sterling Digest, 25 July 2014: define safe

Here’s Britain’s “top of the world” GDP performance in the appropriate context: pic.twitter.com/Ko3n43D4Q9 — Ben Chu (@BenChu_) July 25, 2014

It seems to me that the bulls are still safe. Despite the stalling at highs 2 weeks ago and the inevitable selloff this week, sterling looks well-poised to begin its move higher from current levels. The charts look great with the selloff in $GBPUSD right into 1.6950; and the rally in $EURGBP capped by 0.7950. If these areas of support for sterling hold, it could be off to the races as sterling pushes higher again. But has there been a fundamental change that would support further GBP weakness? This rally has been fueled, first, by economic growth and, now, by interest rate hike expectations. The market will, however, pay attention if the data misses reported throughout this month become a trend. And such a trend will temper the market’s expectations for interest rate hikes. What happens when the BoE decides instead to taper its QE program? Or if the $FED does raise interest rates? How safe really is this GBP rally? Consider it is safe for now.

Don’t hold your breath (The Economist)
3 Takeaways from the BOE Meeting Minutes (Baby Pips)
Risks to sterling may not be appreciated (FT)
EUR Not A Safe-Heaven; GBP Is The New CHF – Morgan Stanley (eFXnews)
Great British manufacturing is rising from the ashes (Forex Live)
GBPUSD monthly (StockTwits)
GBPUSD Aiming at 1.73/1.74 zone (Twitter)

July 18, 2014July 22, 2014

Something Had To Give

Last week was a seemingly anti-climatic week. The $GBPUSD had wild swings in both directions only to really have gone nowhere. It ended the week slightly lower. The $EURGBP has broken lower but no follow through yet. $GBPJPY is also lower after it failed to make a new high after its correction but no new lows. The $GBPNZD broke its range to the upside only to be capped by the larger 1.9750 resistance level.

As the new trading week opens, sterling is on the back foot. Last week’s lackluster was indecision and the market can only remain “stuck” for so long. Something has to give and something always does. But GBP is a mixed bag. While the rally in the $GBPUSD has given way to risk for a bigger sell-off, the $GBPNZD looks poised to move higher.

The $GBPJPY has also bounced nicely off the lows.

And the $EURGBP has become a battleground between $EURUSD weakness and $GBPUSD weakness.

The release of the Bank of England minutes, retail sales and Q2 GDP this week will either sink or boost sterling. If the minutes reveal any hawkish hints, particularly any votes for a rate hike, any chance for a correction are over. However, if the minutes turn out to be another non-event, retail sales and GDP become much more important. I think it would take a miss in both those releases to turn the tide on sterling. Watch the charts. Mind the calendar. Trade what you see.