Common Advice is Ineffective

“Plan the trade, and trade the plan!” is perhaps the most common advice given to traders. As far as advice goes, it’s well meaning, but unfortunately falls well short of addressing the problem most traders actually face.

Looking at the advice, it has two parts. The first part says you need a plan. No argument there. But the second part, about executing the plan, that’s when the problems arise. Why?

The two parts to the advice, ‘plan the trade’ and the ‘trade the plan’, involve two very different skill sets. Without understanding the different skills required, it’s highly likely that you will continue to regularly veer from your plan.

Here’s the disconnect. Planning the trade depends on your intellect (prefrontal cortex, the area directly behind your forehead) And most of the time, the development of the plan does not occur in the heat of battle.


Euro erases losses as the resilience continues

Euro back above 1.19

Euro back above 1.19
No one seems to like the euro as it struggles with another covid wave and an inability to conclude a collective fiscal passage.
Yet someone is buying. EUR/USD has climbed to 1.19 from 1.17 at the start of the month. Today it dipped back to 1.1867 but has rebounded to unchanged. Barring a surprise in the next few hours, it will close near the highs of the week.
We’re a universe away from the old days of 1.60 and Gisele Bundchen wanting to be paid in euros but the negative sentiment and reality that eventually Europe will get the vaccine is a recipe for a contrarian trade.
There are also signs that the eurozone is coping with covid better than expected. The surprise index from Citi for the eurozone is currently the highest in the world at +150.

CFTC Commitments of Traders: EUR longs continue to get covered. JPY shorts remain steady

Weekly forex futures positioning data for the CFTC for the week ending March 30, 2021

  • EUR long 68K vs 74K long last week. Longs trimmed by 6K
  • GBP long 20K vs 25K long last week. Longs trimmed by 5K
  • JPY short 58K vs 59K short last week. Shorts trimmed by 1K
  • CHF long 3K vs 4K long last week. Longs trimmed by 1K
  • AUD long 4K vs 12K long last week. Longs trimmed by 8K
  • NZD long 3K vs 4K long last week. Longs trimmed by 1K
  • CAD long 3K vs 7K long last week. Longs increased by 4K


  • All net positions trimmed
  • The new positions show long currencies, and short the USD with the exception of the JPY which shows short JPY and long the USD
  • The AUD long was trimmed the most (8k).
  • JPY, CHF and NZD only saw positions trimmed by 1K
Go to top