subject: The Anguish Caused By Contradictory Signals When Expecting A Significant Move [print this page] Most successful Forex traders resist dread of Futures Fright. Find below descriptions of overwhelming apprehension prior to movement in price. This writing reflects on the worm of doubt that traders try to keep at bay.
Traders are watching the Australian - U. S. Currency pair. It is walking a circus wire. AUD-USD is trading almost as high as in the past year. Three moving averages EMA(52), EMA(26) and EMA(15) trend upwards and have good separation. This pattern suggests higher levels to come.
Factors in the general economy conspire to push the currency pair lower. Pitiful employment numbers and problems in Australian housing sector want to move the pair downward. Fundamental and technical analyses point in opposite directions. It is hard to feel confident about trading, uncertainty exposes one to vulnerabilities. Wealth lies exposed. Uncertainty over future price levels is to blame.
Futures Fright
Now traders really start to feel Futures Fright. Futures Fright is an after effect of trying to combine dual thoughts that cannot dwell together, in this case the Forex market is the topic. It is overwhelming uncertainty of hope. The hope is that putting on a position will siphon cash. Delaying the outcome of a calculated risk presses badly upon nerves. Time stands motionless.
Worm Of Doubt
Most successful Forex traders remember at least one battle with the worm of doubt. The worm of doubt consistently tries to gnaw. No one is confident all the time about trades. Self doubt and self questioning abound in risky investments. Most people have felt Futures Fright, even panic. The worm eats anyone who notices that certain moving averages are trending upward but selected supply and demand figures are down.
Offsetting Influences
We can contrast Forex trending indicators with market fundamentals using this pair of currencies. Quite often it helps to divide fundamentals into two groups. One half of the market fundamentals help push the trend higher. The other half causes the trend to decline. Trends using technical analysis suggest that the Aussie dollar will continue to rise against the U. S. Dollar. Eventually, some analysts say, it will rise to a new yearly high.
Here listed are some influences causing the trending upwards of this currency pair, according to analysts. A central bank which is loosening tight controls in Australia but tightening the supply of money in the US. Next, currency traders which help determine demand of both foreign currencies. All these increase the strength of Aussie currency more than U. S. Currency. Employment and housing numbers, on the contrary, offset the prediction coming from upward sloping moving average trends.
Most successful Forex traders overcome Futures Fright. This article explores the angst caused when technical analysis conflicts with fundamental analysis. Read about the tortures inflicted by that old nemesis, the worm of doubt.
