Five Fears That Will Hurt Your Trading Results

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Five Fears That Will Hurt Your Trading Results

The Only Thing For You To Fear Is Fear Itself

Fear is one of the top two drivers of asset prices within the financial markets. Fear is so pervasive it can cause smart people to sell at the wrong times, and weak ones to buy at the worst times. The trouble with fear is that it comes in so many forms it can creep into your trading without you even knowing it. This is a list of the top five fears that may affect your trading. Learn them, know what they are, and gain an edge in your trading that will lead to better results.

The Fear of Change – Change is hard. It is easy to do things the same old way you’ve always done them and that is a good thing when it comes to trading. You want to do the same things over and over again, mechanically taking money out of the market, but when things start to not-work you need to be ready to adjust. The market is a fickle beast whose mood can change at the drop of a hat. If you aren’t prepared to adjust your strategy, or choose a different asset, or alter your stance on the market when the time is right you are going to get wiped out.

The Fear of Waiting – Waiting is hard to do, sitting around watching the charts waiting for just the right signal is nerve wracking. If you aren’t prepared to do it. Fear of waiting can also be called fear of missing out, you see a signal develop and you want to get in as early as you can. The problem is that if you get in too early the signal you are watching could evaporate and leave you out in the cold. If you can’t for proper signals you are going to waste your time and money, and drive yourself mad while doing it.

The Fear of Losing – Losing is something else that is not easy to do. No one wants to lose a trade, to lose money, to be a loser. We want to be winners and for some that may mean not taking risks. The problem with that is, if you are a trader, you have to take risks to win. If you aren’t in it you can’t win it, so to speak. The fear of losing may keep you out of trades, or it may cause you to trade too conservatively, or to take profits too soon in an effort “not to lose”. If you play not to lose you will be able to keep your capital but you won’t make big money, not like you will if you play to win.

Fear of Decisions – The fear of decisions plagues many people. They just can’t decide on what to do, even if it doesn’t matter, because they may miss out on something else. This isn’t so much the fear of losing but a neurotic fear born of insecurity. To be a trader you have to be decisive, you have to make some decisions with quickness, and hesitations will cost you money.

The Fear of Learning – This may sound like a weird fear and it is, the fear of learning, but it exists and it may impact your trading. You need to spend time learning to trade, and then spend more time learning from your mistakes and honing your skills. If you can’t approach the market as a student then you’re going to get schooled by just about every other trader there is.

Brexit fears push Irish spreads to widest in more than five months

By Abhinav Ramnarayan

LONDON (Reuters) – Irish government bond yield spreads over Germany neared their widest level since late May on Monday as worries over the economic impact of a possible messy Brexit hurt demand for Irish debt.

British Prime Minister Theresa May last week disclosed a draft agreement on leaving the European Union that met with strong opposition from within her party, that could spark a confidence vote in her leadership and increases the chances of a “no deal” Brexit.

Britain is one of Ireland’s biggest trading partners, and the border between Northern Ireland and the Republic of Ireland is a key issue in Brexit talks.

“A no-deal Brexit could have an adverse impact on Ireland’s economic picture, which would impact risk assets and have some effect on government bonds as well,” said Commerzbank (DE: CBKG ) rates strategist Rainer Guntermann.

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“It could affect the country in general, it could impact the budget position, the deficit position, and generally weigh on risk assets as well.”

While government bonds are generally not considered risky assets, euro zone government debt – especially lower-rated debt – often tends to perform differently, since individual countries don’t have control over printing money.

So while British Gilt yields dropped in reaction to the draft Brexit proposal, Irish yields increased, with 10-year yields hitting a one-month high of 1.045 percent on Friday. ( IE10YT=RR )

The spread between Irish and German 10-year bond yields hit a 5-1/2-month high of 65.5 basis points after the official close on Friday, and stood at 63 bps on Monday. ( DE10IE10=RR )

Any Brexit impact on effect on Ireland’s economy could hurt Dublin’s credit-worthiness in the long term. Ireland is currently rated A2, A+ and A+ by the three main ratings agencies Moody’s, S&P Global (NYSE: SPGI ) and Fitch respectively.

Moody’s last reviewed Ireland in early October, leaving the rating unchanged, while S&P Global is due to review Ireland’s credit rating on November 30 and Fitch on December 14.

German bonds have seen flight-to-safety demand, increasing many spreads across the euro zone, but Ireland’s underperformance stands out.

For example, the Irish 10-year bond yield’s spread over its closest peer, Belgium ( BE10YT=RR ), also reached its widest level since late May on Friday at 23.5 bps, and was at 21 bps in early trade on Monday.

Also, Irish CDS prices – the cost of insuring exposure to Ireland’s sovereign debt – rose on Monday to the highest since June 2020.

Elsewhere, trade in Italian government bonds remained volatile.

After falling earlier in the day, Italian yields rose after Economy Minister Giovanni Tria said Italy was continuing discussions with the European Commission on its contested 2020 budget, but the government had no intention of changing its plans.

“One headline that stood out was that he (Tria) said it’s hard to reach approval on the budget soon, which means more uncertainty,” said Pascal Segesser, fixed income research analyst at DZ Bank.

Italy’s 10-year bond rose 9 bps to 3.58 percent ( IT10YT=RR ), its highest in over three weeks, pushing the gap over German Bund yields to 320 bps ( DE10YT=RR ).

In late trade, German 10-year yields, were steady at 0.37 percent.

Loonie dips as trade war fears hurt commodities outlook

* Canadian dollar weakens 0.1% against the greenback

* Price of U.S. oil decreases 1.4%

* Canadian bond prices rise across a flatter yield curve

* Gap between 2- and 10-year yields hits narrowest in five weeks

By Fergal Smith

TORONTO, May 7 (Reuters) – The Canadian dollar weakened against its U.S. counterpart on Tuesday as investors worried that trade negotiations between the United States and China were unraveling, which could hurt the economies of countries that export commodities.

Global stocks added to this week’s losses after U.S. President Donald Trump in a surprise move on Sunday threatened to hike tariffs on Chinese goods this week. U.S. officials have said China has backtracked on substantial commitments made during months of trade negotiations. runs a current account deficit and exports many commodities, including oil, so its economy could suffer if the global flow of capital or trade slows.

“It’s a return to the trade war theme,” said Bipan Rai, North America head of FX strategy at CIBC Capital Markets. “That’s going to weigh on commodity exporting currencies across the globe, including the Canadian dollar.”

The price of oil closed at its lowest in over a month on doubts about the trade deal and on expectations that U.S. crude stockpiles could hit fresh 19-month highs. U.S. crude oil futures CLc1 settled down 1.4% at $61.40 a barrel. 4:00 p.m. (2000 GMT), the Canadian dollar CAD=D4 was trading 0.1% lower at 1.3472 to the greenback, or 74.23 U.S. cents. The currency traded in a range of 1.3410 to 1.3489.

The loonie edged lower despite data showing that the pace of Canadian purchasing activity climbed to a four-month high in April. The seasonally adjusted Ivey Purchasing Managers Index rose to 55.9 from 54.3 in March, surpassing analysts’ expectations for 53.0. housing starts data for April is due on Wednesday, while the April jobs report is due on Friday.

Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR rose 8 Canadian cents to yield 1.580% and the 10-year CA10YT=RR was up 49 Canadian cents to yield 1.684%.

The gap between Canada’s 2- and 10-year yields narrowed by 1.1 basis points to a spread of 10.4 basis points, its narrowest since April 1.

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