The Probabilities of So Many Minds

As the Earnings Season unfolds, the Yen has plunged dramatically with the USDYEN climbing by over 250 pips this week. However, looking at the USDYEN Daily chart going back to the Autumn of 2008, you can see that this movement is only a mere relief rally within a major downtrend.

The same can be said about the GBPUSD when its recent climb of over 300 pips is compared to the 1,000 pip drop from its last recent high of early August.

There is speculation now that the Dow Jones Index will consolidate within its 10,000 to 11,000 range as it has done so often in the past. If so, the correlated Forex will respond accordingly but do beware that there is only a possibility that this will happen and that it is not a certainty.

The Forex is not a predictive subjective because there are so many human minds, all with their own agendas, contributing to its Daily $3 Trillion turnover.

As the best that can be achieved is to determine the probability of events happening, always use a good money management strategy when trading by not risking more than 5% of your budget on any one trade.

You may think the risking so little will produce a minimum increase in your budget. However, you would be wrong as profit compounding, even with small amounts, can generate considerable profits.