Summer Dangers

Trading over the past week has been a bit of a struggle for me. I dare say I didn't make any mistakes in terms of taking impulse trades. The struggle was more so due to seasonality. As summer approaches, humans have a desire to go on vacation. In turn, markets experience less volume overall.

As a result, I experienced a slight dip in my equity curve. Unfortunately, I didn't fully recover as last week's trading session came to an end.

EdgeWonk Performance Chart

Regardless, I'm not too bothered by this dip. As long as I follow my process, I anticipate that my equity curve will follow the desired trend.

However, I realize that I do need to proceed with caution for the months ahead. Summers tend to be slower so I anticipate choppier prices. This can be observed even now.

For example, GBPAUD was a pair that I really struggled with. Based on the daily timeframe, I anticipated a breakout to the upside.

GBPAUD D1

In early April, price hit a low of 1.71740. This was tested again at the beginning of May. Since then, price traded around the 1.78175 upper boundary without any indication of strong selling momentum.

After I dropped down to the H1 (hourly) timeframe, the choppiness was a lot more noticeable.

GBPAUD H1

The range started on May 11th and then began narrowing starting on May 18th. Timing for a pre-emptive long entry opportunity has been a lot trickier than I had anticipated. However, believe it or not, this is still a pair I'm watching for the week ahead.

This is just a quick example of the ranging conditions I anticipate we'll be seeing for the week ahead. However, this summer won't be entirely boring. 

I also anticipate that Japanese yen pairs will strengthen, especially against the US dollar. This is macro related. The United States is currently facing recession fears. On the other hand, demand for yen may gradually increase as Japan is cautiously opening up its borders for tourism. This macro thesis is supported by the daily price action as well.

USDCAD D1

No immediate action on this pair. The two key levels I'm watching are 128.635 and 127.550. Once price breaches below them, I am predicting that selling momentum will accelerate.