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EURUSD
As you can see, the euro pushed off the support of 1.1100 and is trying to start a new wave of growth.
The first target is 1.1200, which is a break above and closing of the day above this level. This is a strong signal to start the trend upward for the euro.
We still keep purchases from 1.1035 and stop in the profit zone of 1.1065.
In case of a downward sell, we sell from 1.1065.
The main problem of trading
There are many theories of technical analysis. This is a huge number of tactics and strategies for trading in the financial markets.
Therefore, there is a logical question - "Why are there so many unsuccessful traders and why is it sometimes difficult to make money in the market?"
The answer is simple: price behavior is poorly predicted, very unpredictable.
If someone does not know, there is a theory of an effective market (FER). This theory claims that at any moment in time the probability of a price moving up or down is absolutely equally probable. Information about a traded instrument, asset, and previous price behavior does not add to your chances of winning since the market takes into account all available information and includes it in the price instantly.
Of course, many traders and investors would argue with the FER, and I am no exception. However, the FER has received Nobel Prizes in economics and the theory of optimal portfolio, the theory of calculating option prices (Black-Scholes formula) are based on FER. These things are considered very effective in practice.
The truth is that, despite its rapid development, the modern economic science has not created such a theory of calculating the price of goods and assets that could at least roughly predict quantitative data on prices for the medium term. A famous example is that of in the summer of 2008 where the most famous analyst, Goldman Sachs, forecasted oil at about $200 per barrel for the summer of 2009 and has, in fact, received $40.
Furthermore, the question "Why is there no correct price model?" is reasonable. The answer is psychology. The modern economy is largely dependent on the psychology of participants in the economy and the market which are businessmen, consumers, and investors, respectively. But mass psychology is still very poorly predicted quantitatively. Therefore, there is no theory of price.
As a result, the price is highly susceptible to random fluctuations. FER says that it is 100% random and this, of course, is an exaggeration and an ultimate assumption. Because, actually, the price behavior is randomly 80-90%.
Such a high degree of randomness makes any trading system/strategy work probabilistically, in some periods it is better, in others worse, and in some periods it makes the TS deeply unprofitable at a given time interval.
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