How does that Take That song go …’Have a little patience’, which is just what is required sometimes when the markets are uncertain and look a bit of a mess. With all the uncertainty surrounding the Greek Debt issues it is little wonder that trading currently may seem difficult. We have a ‘Risk Off’ situation in the stock markets too with a potential Greek Exit from the Eurozone and the slowing of the Chinese economy.
If markets are lacking a certain impetus it is probably due to traders de-risking and sitting on the sidelines and being patient and only entering a trade when it is starkly either relatively cheap (buy) or relatively expensive (sell). When markets are ranging or tightening up it also can be another sign of uncertainty. Plus we also have the US Non-Farm Payroll figures out tomorrow (Thursday 2nd July 2015) and then US Independence Day holiday on Friday followed by a potential Greece Austerity Referendum on the Sunday which = lots of uncertainty!
So if you start to get a little frustrated because either you can’t find a decent trade or you have had several losing trades, then stop, take stock and see if you can find out the bigger picture and then wait until clarity returns. It is far better to sit on the sidelines and maybe go and do something else, like enjoy the current sunshine, than stay staring at your trading terminal screen getting frustrated.
Currently we are waiting for GBPUSD to fall to around 1.5500 to 1.5540 area and setup what looks like some Daily Bullish Hidden Divergence, if it finds support here then we may add to our long term long position again. However, if it falls further or starts to turnaround earlier then we will reassess. Here is the Cable Daily chart:
Top Trading Tip: When the markets become difficult to trade there is normally either one or a multitude of reasons, try and find out why and assess accordingly, don’t try and force the market to give you trades because you will likely get burnt, instead accept the market conditions and sit on your hands until it passes, however, long it may take. At least by having a little patience and discipline by sitting on your hands you will not be losing any money from your trading account.