Master Sive, you asked me what I am struggling with.
I mentioned it a few weeks back with my question about how much money needs to change hands to move the EURUSD one point or 1 pip.
Recently with these huge moves I try to understand what causes these huge swings, like today it suddenly dropped on an enormous red candle after the Poland missile issue came out, just to fly back up within an hour after the news broke. Who are the players in these moves, what and who to watch for, as trading the last couple of weeks has not been a walk in the park and as a trader one needs to be very much aware of exposure to this.
Maybe for myself was to much pinned on your expectations that we will see 0.90 levels soon and that suddenly changed dramatically. What did I miss?
It is important and big topic for discussion, I could just take a few important points. All quotes on FX market comes from the big banks. Others just translate it with own added spread. Thus, swings come from Top banks. There are always a lot of surprising moves on the markets based on news. But in recent time, global economy stands in turbulence, and the number of these events have increased in times. Volatility has raised significantly. This brings big discomfort, increases risks, etc.
By your post it seems that this recent swings on missile news are sensible to your portfolio, although they were not as strong, take a look at 1H chart. As a rule this happens if trader uses either too big leverage or too big time frame for trading.
In perfect situation trader has to take the position value so that it easily absorbs fluctuations that make no impact on major direction. For example, if you would trade on monthy chart with 0.9 target, you even do not recognize this "missile" swings.
How in general position structure works. You have one time frame for direction and one time frame for entry. That's all. The scale of time frame is chosen based on account value, leverage etc. If you have 1000$ you can't trade full 1.0 lot on a monthly chart. This is obvious.
Let's return back to 0.9 target. If we use monthly chart as "directional" time frame, our trend is bearish. And we use weekly as "entry" time frame. Until monthly trend stands bearish you chose potential entry levels on weekly chart and make decision on entry every time when market hits them. You do not care too much what happens on daily and lower time frames.
I suppose confusion comes from strong weekly upside action and doubts on 0.9 target. But, monthly trend is still bearish and EUR has not shown even 3/8 pullback, thus, technical picture puts no shadow on 0.9 target by far, despite, that pullback might be even to 1.08.