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EA-Selling as Stage 1 - TP - Thurs-Week 49
 

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Euro Slips on Weaker PMI Reports The euro is trading lower at the onset of European trading following a round of weaker PMI reports. According to the earliest releases of Manufacturing and Service sector data, slower global growth and a strong currency could finally be weighing on the Eurozone recovery. The latest report on analyst and investor confidence showed increased pessimism about future conditions but more optimistic about current conditions. However judging from the PMI reports, we may finally be seeing the slowdown that analysts have feared. Although all of the PMI reports still reflect expansionary conditions in the service and manufacturing sectors, the pace of expansion has slowed. The Eurozone composite PMI index dropped from 56.2 to 53.8 in the month of August with the service sector activity index falling to 55.9 from 53.6. The expansion in the manufacturing sector also slowed by a similar degree with the index falling from 55.1 to 54.6. Manufa...
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Stops are a crucial tool in trading. They allow us to control the amount we risk on a given trade and often prevent a loss from spiraling out of control. In fact, I can't imagine placing a trade without a stop. That is how important they are. Keep in mind we are talking about directional trading like we do. There are other ways the markets can be used where stops wouldn't make sense. However, if you are simply speculating where the market will go next, stops are essential. Occasionally there are some traders (who usually have very little experience) that are against using stop orders. There are various excuses these traders use, but there is really one driving force behind a trader's reluctance to use stops. That reason is that these traders do not want to admit the possibility of being wrong. By placing a stop order when you enter the market, you are admitting there is a chance you could be wrong. Of course, traders are wrong all the time. No one wins all...
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