 Good afternoon traders and welcome to today's live analysis session with me Patrick Manley and if you can hear me loud and clear and you can see the Tickmill welcome screen if you type of why in the chat box Good stuff. Okay. Let's get going before we jump in to today's discussion First and foremost we want to adhere to the risk disclaimer Trading any financial instrument carries an inherent risk and you can lose more capital than you put on deposit and Secondly and most importantly for today The views expressed here are solely mine. They are not indicative of Tickmill UK limited or Tickmill Europe limited So now we understand the risks just a brief introduction to myself My name I can say is Patrick Manley. I have been involved in the financial markets for 15 years now wasn't always involved in markets prior to Getting involved. I did a startup Technology executive search start up the one suit through some pretty rapid growth over a four to five year periods I cashed in my stake in the business through a merger and Then I decided I wanted to explore my passion for markets I've had a pretty much a front row seat to the dot-com boom and bust of the late 90s early noughties and And I got was hooked on on financial markets and the psychology really behind Financial arena and I started day trading the S&P 500 late 2004 2005 Trending market. I caught some lucky early breaks and Experience some solid and then quite significant gains But as is often the case with the uninitiated and the beginner the luck ran out and Market size of the reverse. I didn't really realize what was happening and I just started averaging down into positions Pretty quickly gave back all the gains I've made and then and then actually ended up taking a Six-figure hit on my my own personal capital, which to say was a gut-wrenching experience is an understatement But it was a wake-up call Unfortunately for me at that stage. It wasn't a terminal loss But it was significant enough for me to have to take a step back and think whether or not I could really make it in The markets whether I could actually derive a sustainable long-term income from trading So I said about looking at people who were doing that and I identified a mentor and through some networking Got involved with a guy in the States worked with him for 18 months to two years pretty intensively he He not just up to my technical game my technical skills But he really made me focus on my my mental game and my my issues With respect to money with respect to fear of missing out fear and greed with respect to money as well and It was a process through which I became far more self-aware one of the major major I Guess revelations to me at that stage was that I'd been through throughout my earlier career I'd been a pretty goal orientated individual. So I was You know looking at winning new clients winning new business delivering fee income and I always had goals in mind and I could immediately set out how I was going to achieve those goals Whereas The markets is a complete are a completely indifferent Environment you have to you have to actually move away from being a goal orientated individual and you have to become a Process orientated individual. What do I mean my process? Well, I mean you have to have a trade trade plan business plan That needs to be back-tested and forward-tested extensively so that when you trade Lied capital in the markets, you have sufficient conviction in your strategy that when you go through a small period of drawdown It doesn't mean that you give up or throw in the towel or start looking for another strategy that you think might work better It's it's really anchoring yourself to your your trading process and knowing that That that that then in turn allows you to experience drawdowns with relative psychological ease because if you Once you get past the stage of being emotionally invested in individual trade outcomes or even, you know A series of ten trade outcomes once you start thinking about the next hundred trades It really frees up your your mental space and your headspace to just focus on the trading process and not to be concerned Or disheartened by near short-term outcomes on the screen at the moment you can see some trading data from 2013 The reason why it's from 2013 not from 2008 when I went back into the into the markets Is that this is when I started manage account service initially? It was for friends and family It's grown organically now to To a multi-million dollar portfolio and you can see quite clearly on the screen here There are periods where I go through drawdowns where I have losing Losing months and consecutive losing months, but that again is just part of the process because No strategy is going to fit every every phase of the market And so you just have to stick stick to your plan keep hitting the trades and know that if you've done the work If you've done if you if you've extensively tested your plan your trade plan and for tested that over that extended series of outcomes Your age will demonstrate itself again. So This is I share that just to show you that you know, it's You know, I live and breathe what I talk about here. It's It's a it is a really for me It's about process over outcome and I'm simply just playing probabilities Trading is really a numbers game. The most important numbers for me really on this screen. I'm down here in this in the corner Average losing month 2.3 2% with an average winning month of 7.96 percent So if you extrapolate that out, you can see I'm making on average two to three times what I lose And that's really the most most important figure for me in terms of in terms of my Track record so aside from my my account management responsibilities and managing my own capital and obviously the one of the Resident market experts for Tick Mill I provide them with a daily market outlook and a set up each day that I'm Looking at and then the other project, which is really a passion project for me is its effects career swap business designed to develop retail trading talent to take them from From the basics through the basics through to learning the strategies I've used over the past past 12 years to successfully navigate the markets and Ultimately take them through to having the opportunity to overcome What is one of the biggest challenges for retail traders and that's capitalization because you can have a great trading plan and you know back Test and forward test But believe me when I say this if you're what you've got is a thousand or a couple of thousand dollars You are going to find it very difficult to make a sustainable income from that level of capitalization And more often than not what will happen to a trader is they will Initially adhere to that their plan and manage their risk correctly. But once they start to See that they're not getting the financial returns. They tend to overextend themselves Over-leveraged and it's it's those times when they experience a small drawdown and that's what tends to wipe accounts out So what we offer is a as a funded account that you can grow in and develop into us into a sustainable business That you can derive an income from And we're offering I think I mentioned before a free trial on this. I'll put the Link into the chat now for anyone who's interested in finding out more about That opportunity So that's that's really a flavor of who I am and and where I'm coming from with respect to the markets So before we jump into the charts as always just want to check in with some Seasonality flow data and some some options stuff that I think's interesting. So we're in August Expecting Some weakness to develop into these equity markers not quite seeing it yet, but as I'm going to talk about shortly We're at some pretty pivotal levels where we could start to see the potential for at least a correction Heading into the the second half of August also looking for weakness in some of the risk FX pairs as well Which tend to perform Don't we tend not to perform as well in August and the dollar index which Which normally hasn't has an okay month So always just want to again these these these seasonality data is not a core Driving factor behind a trade But if I get a signal through one of my strategies and and it starts to move in my favor a bit then I might I might be inclined to take off the take profit target and see if I can ride this trade Knowing that I have an additional factor with respect to seasonality in my favor So always just paying attention to or being cognizant of what the seasonal factors are and then it's Positioning stuff was always I don't hear from credit. I recall Again, they're stressing that they're seeing a a big stretch at the moment in terms of euro positioning and they They have a model I share this with the guys in the in the Team chat, but their model shows that we're well above two 2.5 standard deviations away from a mean in terms of euro positioning and more often than not that precedes a correction This is supported further. This is the euro data versus The Reuters data so this is positioning data in purple and This is a this is the euro dollar in the orange line here So you can see trading around well We're trading a bit higher than that now, but the positioning data suggests that The market is hit is stretched on the long side in terms of the euro at the moment And when we've seen similar types of levels What we tend to see is at least a a corrective phase Develop highlighted by these stretches here and these stretches here And you can see the stretch we've now got versus current price, which is which is verging on Sorry, I'll just come back to that which is verging on almost a record stretch in terms of in terms of the euro at the moment So we we certainly want to be cognizant of positioning data because what what that means is for those who who aren't Experiencing this is that the when a position becomes stretched And everyone's loaded the boat on one side We tend to get at least a snapback or correction to allow some of that positioning data to unwind Doesn't necessarily mean that we're going to see a reversal in the trend the trend You know the trend may be set in stone and can develop further But certainly what you tend to find is once the positioning and certainly this speed of positioning that we've seen here It tends to proceed a little bit of a squeeze in terms of the the price action another market concept that I follow Pretty religiously it is FX options in terms of understanding where the sentiment is in the market and at the moment This is these are these are the FX option expires now out through the end of 2020 and And at the moment we can see that 120 is a pretty significant barrier here and if we can breach 120 because of the lack of positioning to the upside This could fuel quite a big quite a an increased Move to the upside into the the latter part of this year. Obviously at the moment. We're trading well below 120 1837 at the moment so You can see the big the big barrier at the moment is this 1850. That's where the options are and as explained here typically the options are hedged So we're with cash to limit exposure Which which can contain FX volatility when the impending Maturities are large so this 118 50 is relatively large at the moment But if we can start to chew through 118 119 is the next one and then we've got more around 119 50 but certainly the big one to watch heading into the the next part of this year is 120 And if we can get a day a couple of days closed through 120 Then that that should fuel a move as As options traders will be forced to to cover their positions in the cash markets so that Oh, and actually just to revisit something we talked about last week in terms of gold Similar since so here's the same situation talked last week about the gold situation the gold market being stretched We'd had record almost record inflows Into the into gold funds just at the back end of last week And then and then lo and behold we had that big squeeze To the downside so this is that so there's a real term Sorry a real-time example for you in terms of how positioning functions in the market Once the boat is heavily loaded on one side Then we tend to get these pretty violent Violent corrections and that's not to say that the trend won't resume But once we reach these positioning extremes more often than not we need to get a shake out Which is healthy for for the market Okay, so let's start with a couple of charts. I wanted to Check in here today with some of the higher time frames these are monthly charts And just to get a perspective on where we are in the higher time frame And what the scope for in terms of potential moves can can still be because it's I know a lot of retail traders are trading intraday charts or You know even smaller time frames and that and Tinson losing perspective on on the bigger picture and where the bigger opportunities are where the the structural moves could be and so This is the dollar index the broad dollar index versus six of the major currencies And you can see we've taken out all we are potentially going to take out on a closing basis this month The the ascending trend line from the 2011 lows and if we can do that then that is going to open up to my mind An equality objective. So when I talk about equality, I'm talking about price has a tendency To swing at a minimum inequality move. So you can see that like there and if we overlay it here You can see that this will put us down into the 87 level As the as the quality objective With respect to the dollar and that's not to say we won't back and feel we you know, we if we can get a monthly closed and through Last month's closing low Then that should trigger further downside But again, we could still see some back and filling then at some point as we potentially retest this trend line from below in a snapback move But ultimately the path of least resistance now for the dollar is going to be to the downside and in terms of targets Certainly the 90 level will have Has a psychological magnetism to it, but any correction from 90 Whilst we hold below 94 50 We should still see further downside to ultimately test certainly retest these prior loans at the 88 30 But we've got this quality objective 87 49 and then if for whatever reason the market really gets going on the downside and And you can see, you know, we had Similar double top type move here. We have this leg Let's just bring this over here You can see that leg there is almost equidistant And so we could see that we can see this move some correction But then, you know, we can easily extend lower here as many of you'll know that I perceive that we could be heading into a significant dollar bear market and There's certainly potential for us to get back down into this 78 area or 80 handle And potentially lower depending upon the outcomes with respect to the us elections Biden has gained more traction now with the Announcement of his his female VP. And so if Biden gets in Historically when a republican incumbent has been removed by a democrat That does not bode well for the dollar So we could be at the start here of a major a major dollar downtrend But as I say to the guys I work with it's step by step So, you know, we don't need to start heading out too far into the future For now we're focused On the monthly time frame anyway at this 87 level as the downside downside objective And more importantly what we want to see is this close ideally at or below current levels to really encourage that view Now if for whatever reason we get a close back through And the this trend line resistance. I'm still still be bearish Certainly, but you know, we could back and fill quite significantly We could be back up into this area to put in Let's just draw this in So then we could be looking at But a head and shoulders type scenario here I mean, this is to my mind at this stage is a less likely scenario, but Whilst it's not Not highly probable. It's certainly possible And so we could be looking at this pattern Like so before I'm heading into later Into into potentially next year So if you know if we do get a shock in terms of these elections, so let's say for example Trump gets back in then we could see some back and filling that ultimately I still do see The path of least resistance is down for the dollar But this is why it's really important to pay attention to these monthly closes because this is what the big money flow in the market is watching You know, they're not watching the five minute chart or the 15 minute chart big Capital is focused on these higher time frames monthly weekly daily to give them confirmations of potential signals So keep an eye on that monthly close in the dollar index. Similarly in the euro Let's blow this up So the euro is testing Major trend line resistance here. This has contained the euro For since the fight out of the gfc great financial crisis Now if we can get a close through This resistance here one 1850 a monthly close then the immediate target similar to the to the dollar Is is a move up to test the equality objective at 18128 14 So, you know heading into the back end of this year. There could be another 800 pits of upside here in the in the euro and again using that same process of looking at the equality swings You can see how that move could play out. We break. We could pull back get a retest of the broken trend line resistance as support before we power higher into the the back end of this year and only next year so Please again watching these closes. We need to see that close above this trend line to encourage this view And certainly we could date once we get through there We we probably get a break higher run some stops But you can see we could test up into 125 and then get a pullback Before getting the next layer higher So we've got some key levels to be watching 118 50 on the close on the monthly close opens A test of 125 50 pullback enroute them to 128 50 is how I've been looking at things and then who knows if we are you know if this debt recovery fund and some debt mutualization in Europe, which is always hampered Investment in Europe and we are starting to see inflows into Europe and I'll talk about Japanese in a minute Japanese investors are putting money into Europe at the moment quite a click and so You know, this this could be a structural change in terms of how the european union is viewed at least over the next maybe one to three years So Watching the close and obviously again here If we get a bit if if we start to roll over here and we're back down below 115 If we look at where the rsi stochastic momentum studies are that would be a concern because what we've been looking at there is a third touch And a hold of that trend line and if we saw that Then we would then that would that would be an issue and would would elicit a monthly sell signal Well, we'd have to get quite away the monthly VWAP at the moment is 113 50. So I mean we'd be looking at 500 pit reversal Who knows anything can happen obviously, but it's again possible But not probable But if it did happen then all bets would be off and we would be we'd be focused on the downside In the euro, but if we think about the positioning data, etc market sentiments heading into the u.s elections For my mind at this moment in time anyway path of lease resistance is going to be higher for the euro And then just as I was mentioning about Japanese investors and we're seeing a Power forward here in terms of the the euro yen And again, it's got a major Sending trend line resistance coming in if we can get a close through Through 129 in the euro yen Next stop in terms of the equality objective Let's just Yeah So again, we could be looking at a move up to 141 in the euro yen and again, like I said, if you I mean, I share this information on a daily basis with the The traders who I work with their effects career swap But we're seeing a lot of Japanese investors who've been sitting on a lot of cash Are starting to look to Europe to put that cash to work And so as they do that obviously that's going to see inflows into into the euro And we potentially see the yen lower and so we We could be looking at a significant breakout here if we can take out Take out this 129 on the closing basis Again, if we fail there then there's there's another trade setting up We've got the RSI stochastic pretty overblown You watch the reject watch you to get a rejection there because you can back down at 116 in quite a clip But like I say the my preferred scenario at this stage or the the base case is that we move higher in Europe in the euro and That could be where we're heading in terms of 141 the one I've been watching is the euro card similar story here symmetrical triangle And we look like we could be on the verge of a significant breakout here in the euro card if we can take out the 158 15 on a closing basis through through 160 and it's it's pretty much open water then up to 175 again It's not going to happen in a straight line But certainly in terms of thinking about structural positions and looking for those daily pullbacks to trade into Then we've got some key levels we're approaching here with the euro card which could open up Quite a significant move to the upside. Let's just see What's i'm looking at that? So we have this So yeah, watching one 164 is the near-term object if we can clear the 159 on the closing basis get through 160 164 is the near-term objective um, well from on a monthly scale from there we could We could be looking at a bit of back and fill retest the trend line from above before moving higher Entogting that 175 Euro Aussie similar type of story trying to get bullish here in this channel RSI stochastic supported um, we could be looking at uh at a bullish reversal here and uh, I'm again targeting higher levels in the euro Aussie sterling similar story Looking for a test now the major Sending trend line 135 is the is the upside objective. I'm going to talk in a minute once we go to the daily charts I'll I'll talk you through what I see in terms of potential trade in sterling Um sterling kiwi this one tested the trend line. I posted this previously and again what I've been watching for now Um, forget this monthly close it For my strategies it that flips the monthly chart bullish That's the higher time frame and I've been looking on the daily time frame for a pullback On the daily time frame to set long positions. I think we can be trading uh back into prior highs here 217 in euro sterling Aussie similar type of story um a little bit different with the with the Aussie and the Kiwi because they're so heavily related to its risk sentiment with respect to the equity markets We're going to take a look at those in a minute. I could see a bit of a pullback there before higher, but I'd certainly um looking at buying buying dips in uh in the Aussie Kiwi Kiwi's looking to break out of its major trend line resistance we're backing and filling a little bit here but We'd be encouraging if we saw a strong close in terms of the Kiwi and I think we've got a run Minimum to this 170 area we take a look at the prior swing here So 6820 would be an uh a symmetry swing level through there and uh, and uh, yeah, I mean we could be going 75 would be the next objective Um, well, it's got gold So we saw the the gold move through the highs and we're now back retesting We'll take a look at this on the daily chart in a minute. I suggested that we we could Last week we we break through and we pull back and then we try and base for the run higher to 21 52 is the next objective that I've been looking at um before uh meaningfully higher 24 54 in terms of a uh a sequence move But we'll take a look at that on the uh on the daily charts now Are we gold? So yeah, we're trying to back and fill here. Um, if we don't hold if we can't hold On a closing basis the prior highs So if we could if we get a bullish inside candle today It doesn't look like we're we're headed that way at the moment But if we do then that would be constructive and gold and I think the setup there is to to be long then And you can you get much better risk reward using these inside candles So it'll be long through the break of 1950 and you'd be using 10 with pupits below as your stop and you'd be certainly talking retested of highs But like I say 21 46 is the next interim upside objective I've been looking for in gold But again, you have to wait for it and certainly for my trading strategy anyway trading these these daily time frames I need to see the close before uh before I do anything Let's uh, let's just go to sterling here quickly. So sterling Consolidating similar consolidation to what we saw back in july and And I posted this as a as a chart of the day On the tick little blog this week. I think we're in the what should be a fourth wave correction here If we can get a close through 31 then I'm going to look at long positions Initially looking for 133, but then that 135 target There's a caveat to this obviously brexit talks recommence next week. Um, we've had some You know positive new music out today With the uh, the uk team saying they they believe a deal can be struck by september. So that's so that's that's Encouraged this move higher in terms of sterling. Um, it's always tricky obviously trading around these brexit brexit headlines because you're all you're only one one news wire flash away from a cratering But the the risk reward looks good on this. Um, and we could be up at At 135 into the back end of this month and certainly next week if we got if we did get some Encouraging news out of the brexit negotiations that would power this this move higher and sterling So I'm watching sterling the close tonight and see if we can get that that Close above 131 Risking 130 looking for 130 Three is a minimum which is the equality objective versus the initial move off the lows But then 135 is that major descending trend line that we just talked about in the monthly charts, which will be the next magnet to the upside In terms of other trades for this evening, I believe that is all that I am I'm looking at at the moment Let's just look at the dollar index quickly The dollar index you can see we're kind of mapping exactly what we did in the last correction here We got this move off the off the lows Three or four candles, which we've got got this shallow pullback Which allowed the rsi stochastic to roll over here Then we got another leg higher Another pullback. So, I mean, I'm still looking at the moment In the interim for this dollar index to test 94 50 Whilst we hold these current lows at 92 48 If for whatever reason we roll out we take out those lows, then I think we We'll probably more than likely going to take out the channel support then which will be down to 92 Or we hold or the If we did get into this area or another bullish reversal, then that again could set up the corrective move, but understanding where we are from a positioning perspective and And the bullishness in terms of equity markets, etc It looks at the moment as As if we could potentially hold this area and like I say get a repeat of the move that we saw During the june correction. It was chopping very difficult to trade But we could see a repeat of that pattern before rolling over Then into the back end of this month and into september october and into those elections in the us So keeping an eye on the dollar index as always and last but not least, let's check in with the equity markets I wanted to just show you on the monthly time frame You can see there's the potential here for us to be trading in a big broadening pattern here Which more often than not will will lead to another move lower at this stage Given the funding that we have in the market and the the amount of dollars flowing around That's difficult to see but be it this is this is part and parcel of this game you need to be aware of these key areas and Watch because if we do get those reversals, then they could be pretty meaningful. So if we go back to the daily chart here we're coming up to test prior highs at the 33 98 What do we do overnight? 33 38 so we're just a point away So you've got to watch because a lot of people will have been praying to get back to this level to get out of the market and Never have to sit through something like this again. So It has a big impact on investor psyche when we retest these prior breakdown levels So certainly going to be paying attention today tomorrow because we know Fridays and Mondays are the other times when we are more likely to experience meaningful Or interim highs and or bottoms in the market. So certainly want to watch this quality objective here 3402 so any bearish reversal patterns into tomorrow's close on Monday Through the Sunday open. We've still got quite a bit of momentum divergence here And we could see a correction again. I'm not I'm not predicting the end of the world stuff here But we'd have some immediate quality objectives to track So from there, we could you know quickly be back at these prior highs 32 37 and that would have an implication for the dollar and also for the the riskier effects pairs Okay team that's uh, that brings you up to speed with what I'm looking at the the the trade I'm looking at for this evening is is that sterling position? We have to see where we close But there are like I've said you really want to keep in mind these It's high time frame charts because they can show you the scope and potential of the moves that lie ahead And then what you're looking at is your your trading time frame to try and align with With those higher time frames and give you the setups to move into into those bigger trades So that's that's where I'm up to guys with respective markets. Does anyone have any questions? If you want to type into the chat box, or we've got a q&a box, I think here Or if you want I can unmute your microphone and you can you can ask me Over the audio If you don't have a question an n in the chat box will be useful and then I can I can tell when I need to I can wrap this up Okay. Well, look, thanks very much for your time today. I hope you found this helpful and uh, we'll reconvene sometime next Thursday Thanks very much. Bye now