$6,500 Richer With Your Gameplan, Were You In?

GM. This is Currencies & Coffee, the Forex newsletter that's as satisfying as hitting a hole-in-one on the mini-golf course.

Here’s what we have covered today:

☕Spotlight on Fed, RBNZ, U.K, and China

☕From Pocket Change to Trading 6-Figures

☕$6,500 USD Using Your Gameplan

🗞️Movers & Shakers🗞️

Let's rewind last week's key moments and dive into the upcoming events that could shape your trading week.

Last Week's Buzz

➡️ US Inflation Dynamics: The US CPI slightly underperformed expectations, signalling an 89% probability of the Fed holding rates steady in September. Despite this, the US dollar saw a lift as elevated core CPI at 4.7% y/y kept the market's attention.

➡️ RBA's Potential Move: The RBA hinted at possible future tightening, igniting speculation about upcoming rate hikes. Though, concerns lingered about subdued consumer spending.

➡️ UK's Resilience: The UK flaunted stellar data across GDP, construction, manufacturing, and industrial production. This resilient performance cast shadows on persistent inflation worries and BOE's rate stance.

➡️ China's Economic Signals: China's data painted a picture of lower Q3 growth, evident in sliding imports, exports, and the deflating CPI. Yet, producer prices hinted at potential changes ahead.

➡️ US-China Friction: The tit-for-tat moves between US and China continued, with President Biden restricting US investments in sensitive Chinese technologies, including semiconductors, microelectronics, quantum IT, and AI systems

This Week's Highlighted Events

📅 China's Data Pulse (August 15, 2:00 am GMT): China's economic indicators, including industrial production, retail sales, fixed asset investment, and unemployment rate, will be in focus. Watch for potential shifts in demand affecting the outlook for the yuan.

📅 UK Labor Market Reports (August 15, 6:00 am GMT): Keep a close eye on the number of people claiming unemployment benefits and the 3-month average wage growth. Surprises in wage trends could impact the Bank of England's (BOE's) rate hike decisions and GBP performance.

📅 RBNZ's Policy Decision (August 16, 2:00 am GMT): The Reserve Bank of New Zealand (RBNZ) is anticipated to maintain its hawkish bias, possibly hinting at future rate hikes. Monitor the statement and presser for potential moves in NZD.

📅 UK Inflation Data (August 16, 6:00 am GMT): Weaker household energy bills and easing food inflation might significantly dip the UK's headline inflation. Potential impact on BOE's policy outlook and GBP pairs.

📅 FOMC Meeting Minutes (August 16, 6:00 pm GMT): Gain insight into the Fed's plans post the July rate hike. Clues about the timing and extent of future rate hikes may influence USD performance.

From Pocket Change to Trading 6-Figures

Let's dive into a pivotal topic that holds the potential to make or break your trading journey—starting with a small trading account. Far too often, I've witnessed enthusiastic traders leap into the market armed with a few video tutorials, only to see their hard-earned savings vanish in the blink of an eye. But fear not, for I'm here to guide you towards a different path—one paved with prudent steps that prioritize learning over quick earnings. So, grab your cup of joe, and let's explore the art of building your trading account the right way.

Learning Before Earning: A Crucial Start: Picture this, you're standing at the entrance of a maze called the forex market. You can either rush in blindly or equip yourself with the knowledge that will light your way. Instead of diving in recklessly, your initial focus should be on learning. Understand the mechanics of the market, study trading strategies, and get comfortable with the tools at your disposal.

Backtest Your Strategy: The key to confidence before even considering a live trade is to backtest your chosen strategy. This involves applying your strategy to historical data to see how it would have performed. Backtesting instils confidence in your approach and reveals its strengths and weaknesses. Remember, a solid strategy is your armour against market volatility.

Small Deposit, Big Lessons: When transitioning to the live market, resist the urge to splash your life savings all at once. Instead, start with a small deposit—think of it as tuition for your trading education. This initial deposit serves as a stepping stone to test your strategy and gauge your emotional resilience in real-time market conditions.

Track and Analyze: The path to improvement as you execute trades with your small deposit, diligently track and analyze your performance. Keep a trading journal that details your thought process, entry and exit points, and the emotions you experienced. This journal is your treasure trove of insights, helping you refine your approach and identify areas for improvement.

Scale Gradually as Your Skillset Grows: The path to account growth mirrors your journey of skill enhancement. As you wouldn't climb Mount Everest without proper training, scaling your account requires mastering your trading strategies. As your skillset expands, so can your capital. It's a natural progression that safeguards you from impulsive decisions that can jeopardize your hard-earned profits.

Leverage Opportunities for Greater Growth: The path ahead widens once you've achieved consistent growth and honed your skills. You can choose to scale your account with more of your own capital, amplifying your profits while maintaining control. Alternatively, if you're ready for a significant leap, consider leveraging the resources of proprietary trading firms. Upon passing their performance evaluation, these firms offer capital to trade, often upwards of $200,000. It's a strategic move that aligns your potential with resources that can supercharge your trading journey.

Action Steps:

1️⃣ Prioritize learning and understanding the forex market.

2️⃣ Backtest your chosen trading strategy for confidence and insight.

3️⃣ Begin with a small deposit to gain real-market experience.

4️⃣ Track and analyze your trades using a detailed trading journal.

5️⃣ Gradually scale your account as your trading skillset improves.

6️⃣ Explore options to scale with your own capital or leverage prop firms' resources.

SIP, LAUGH, TRADE 😁

📈LATTE LINEUP📈

-AUDCAD- (Setup shared last week)

Last week I shared a sell setup with you all on this pair with the gameplan. The trade played out to plan before reversing and going against me. Nevertheless, I still managed to close out upward of $6,500 USD at my intermediate level, where I normally take half my profit, leaving the rest to run to target. On this occasion, the trade closed as the price returned to my entry price as my stop loss was at break even- the point at which your trade neither makes nor loses money.

You can check out the game plan from last week - HERE. Once we had a shift in the market structure on the lower time frame, we had a double top forming on the retest of the 15-mins support, which we wanted to act as resistance. The bearish engulfing candle confirmed the selling pressure. I placed my stop loss above the highs and target at the 8-HR lows, which we never made.

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-EURAUD-

HTF (Daily): On the higher time frame (HTF), EURAUD has made a decisive breakthrough, shattering the boundaries of its previous range-bound price action. This significant action indicates the start of a new upward trend, identified by the creation of a convincing higher high.

As the price embarks on a retracement phase, it offers a window of opportunity. The previous resistance level, now assuming the role of support, converges harmoniously with the 50% Fibonacci retracement level. This confluence amplifies the importance of this region as a potential pivot point.

Watch for buyers to make their presence felt through the presence of rejection or engulfing candles within the support-resistance confluence. This bullish confirmation indicates the resurgence of buying interest following the retracement. Once we have the confirmations on the HTF, let's look at the lower time frame (LTF) for a potential entry.

LTF( 1-HR): Once the HTF is signalling buying pressure, we eagerly await its translation into a shift in market structure on the LTF. This shift involves transitioning from the pattern of lower lows and lower highs to that of higher highs and higher lows.

Once the desired market structure shift materializes, our attention turns to a critical juncture. We're on the lookout for a break and retest of the previous 1-hour resistance level. This retest, now serving as a pivotal area of potential support, becomes a cornerstone of our entry criteria. Look to execute a buy position on the formation of bullish rejection or engulfing candles. You can place your stop loss below the previous lows and target the HTF highs.

The setup clearly needs to develop over the coming days. Therefore, make sure to keep up to date in the Nexus Hub, where updates will be sent throughout the week.