🌊 What is actually a Trader's job?🧐

Howzit Pip Surfers! This is our debut post, our objective is to help you get smarter about your trading in 5-minute reads.

What’s the plot for today:

• A trader, what is actually your job 🫣

• Latest US CPI results and their importance 📝

A Trader, What Is Actually Your Job 👀

Traders will often argue that the need to be right is important in trading, however, this is a far cry from what being a trader is all about. Being stubborn in trading has caused some of the largest losses, for myself included.

So.. what is your job?
Your job is to recognize signals and act upon them.. simple right? However, your signals need to stem from a proven system.

To do this effectively traders need to think in probabilities, as probabilities are all we have, we don’t know if the trade is going to win but with our win rate we can determine the probability of our system winning. Probabilities are like a guiding hand but are not always probable.
Such are most things that we utilize in our trading arsenal from patterns to fundamentals.

The financial markets are the wild, it’s a place of limitless potential where you can truly express your creativity in a way most other careers don’t allow. This can be a blessing but also a demise. Understanding your job is the first part of successfully navigating the markets.

US CPI Results and why they are important 📈

The down low:

Yesterday’s results shook up the markets but not enough to give too much confidence to the Fed to begin its easing cycle later this year.
However this does tell us inflation is slowing down at a brisk pace, so keep an eye out on the Fed’s speeches regarding rate cuts.

How does this impact us, traders?

The markets (SP500 and other major indices) have been growing substantially after Powell announced the Fed is not looking to continue hiking rates in the US.

It looks like the initial reaction was in line with what you would expect GOLD 📈USD 📉 was quickly stopped and retraced all gains/losses on the possible fact that this reinforces the Higher for Longer (Powell).

Meaning the cut is still in play but nothing to make it come any sooner.

Key Points for trading data: 

1. High Rates = Bad For Stocks 📉 Good For Dollar 📈 

2. Low Rates = Good For Stocks 📈 Bad For Dollar 📉

However, we can't get too excited, as if the Fed were to Pivot too early this would jeopardize most of the work the Fed has been instilling to reduce inflation, therefore; creating a substantial risk that inflation will be a runaway train. Due to inflation being on a slowdown, this does increase the likelihood of the Fed introducing rate cuts soon, possibly in September.

Breakdown

• Inflation is slowly coming down increasing the likelihood of rate cuts

• Highly doubt we will see any more rate hikes

• Market sentiment is expecting rate cuts in September

Memes because why not 🍿