Trading Plan – Monday 11th May 2020: Markets await effects of easing of Covid-19 restrictions

Mark NugentDaily Alert, May 2020

Trading Plan – Monday 11th May 2020: Markets await effects of easing of Covid-19 restrictions

Last Week

Events and Calendar
Golden Week in Japan and other holidays elsewhere saw a lot of market participants absent, hence quiet markets.

Risk Sentiment
Sentiment was essentially indecisive Monday to Wednesday and then moderately risk-on on Thursday and Friday.

Asset Classes
Although there was some bullishness towards the end of the week, global equity indices are consolidating.
GOLD consolidates for the fourth week at its eight-year high.
WTI rallies for the second week from its 18-year low.
Forex – it became apparent on Wednesday night that currencies had been less choppy than over the last few weeks. However, risk sentiment then changed to risk-on for the rest of the week, reversing most currency moves. Exceedingly difficult to trade.

Trades

I traded T29 EURJPY short just as sentiment changed. Stop loss hit for a loss of 1.00%.

This Week

Trading opportunities are similar to last week. They are based on fundamentals and I will wait until the sentiment catches up and becomes aligned with these fundamentals. The markets have been quiet as most countries move from the initial reaction phase to Covid-19 and into the second phase of gradual easing of restrictions. I am aware that I have placed only one trade so far this month and that makes me want to trade but I will resist this emotion (there may have been a bit of that last week in my losing EURJPY short). Instead I will wait and only take the high probability trades that have a sound rationale.

Happy trading.

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