A new round of Brexit talks will resume next week after negotiations in August ended without any progress on key issues. On the economic data front, monthly GDP is expected to ease in July, on the back of a slowdown in industrial activity due to a smaller gain in manufacturing production. Balance of trade, construction output, and Halifax House price index will also be awaited.
On Thursday 6 PM GMT+2, I could close all my short positions on GBPJPY on 16% profit, after holding a two-month drawdown. The cost averaging allows me to get out on profits far away from the starting position.
How to deal with drawdown
- I made a spreadsheet to calculate my cost-averaging.
- I change all the TP orders on MetaTraderApp and set then all to the entry of the first level of the sequence of trades.
- A week later, if the price continues to go against the account, after checking the chart, moving average, support and resistance, I do place a pending order SELL LIMIT on resistance, usually the double of the total lot size to lover the cost averaging.
- Then need to add that trade on the cost-averaging spreadsheet, and adjust the TP orders on all running orders to the new result of the cost-averaging.
- Of course, if the price continues to go against our positions, a BUY STOP order can be considered, with the same lot size – in that way it is called a SPREAD. The profit can be taken on the next RESISTANCE.
- At the same time a SELL LIMIT with the double lot size, if the price look to reverse.
- Then re-adjust the TP orders on all positions of the sequence with the new cost-averaging.
- Patience is the key, because of FOREX rhyme with the FEAR game.
The ECB kept its main refinancing rate unchanged at 0% and pledged to buy up to €1.35 trillion worth of debt through June 2021 under its Pandemic Emergency Purchase Programme on September 10th. The interest rates on the marginal lending facility and the deposit facility will also remain steady at 0.25% and -0.50% respectively. President Lagarde said during the regular press conference the ECB discussed the recent appreciation of the Euro but the bank does not target the exchange rate. Regarding the pandemic program, policymakers consider it has been efficient and effective but did not announce any changes. Under the new economic projections, the Euro Area economy is seen contracting 8% in 2020, a slight improvement from its June forecast of an 8.7% plunge. The outlook for both 2021 (+5%) and 2022 (+3.2%) was unchanged. Inflation forecasts for 2020 were left at 0.3% but the outlook for 2021 was raised slightly up to 1%. In 2022, inflation is seen at 1.3%, also unchanged from June.
There appears to be a continued lack of progress on fisheries that are holding back trade talks.
Pressure on the Pound may begin to build, however, if there really is no hope of a deal… The arm flexing is expected to continue until the eleventh hour…
The triangular USD / JPY / GBP – post-Abe’s Japan, no-deal Brexit, and US economics are at play.
Now the summer is over for this ride up. After the NFP Sept. 4th in the US, next week onward might change the landscape.