Trading Plan: Monday 3 November

Trader’s self-review

Despite having intention to purposely lower my VaR, I started the week by adding sizeable positions to take advantage of patterns I deem will translate to profits. The feeling was: “I gotta go in now. If I don’t, I’m going to miss the move.“ Classic FOMO.

While I did end up with profits, a lower position would have allowed me to avoid printing sizeable drawdowns and allowed for entry at better prices.

Was able to close sizeable positions to the extent that overall position went from 10-12 lots to 5-6 lots. It has not yet translated to noticeably lower VaR and Darwin risk (risk ratio). The plan is to bring the overall portfolio to 3-4 lots and see if I’m happy with the Darwin risk ratio.

I held through NFP and all economic releases in the week sticking to my decision to let my technical analysis dictate positions. I held view that dollar will remain strong given the elevated 10y and 2y yields. This could have resulted in a total disaster given the big letdown in the jobs report. Post-release reaction was muted, so a lucky break there. Still thinking how I should play the next jobs report. ADP was strong so that supported my leaning towards strong dollar.

Trader statistics

Analysis: GBPUSD to remain volatile and could re-test 1.28600

Potential direction: Down. Closed 1.29132 on Friday session.

Overall momentum: Pessimistic.

Asset review:

GBP/USD, GU, is still in a downtrend. It’s the most obvious thing.
The Move down was stronger in early October and did begin to flatten a little coming up to this most recent week. Asset was at 1.33770-ish at the start of October.
Asset continues to struggle to overcome the MA line on the 2H view. Friday saw buyers trying to push price up and stay above the MA line for the 7th consecutive time only to fail in the American session.
Price action is impacted this week by reaction to the UK budget 2024 which was not received well (GU initially strengthened but buyers could not keep up the momentum).
I expect GU to head lower but allow for a retest of 1.30000 level again.

Price chart: