Major global currencies, including the Australian dollar, the New Zealand dollar, the Japanese yen, the Canadian dollar, and the Singapore dollar, are limping lower against the greenback.
The long list could grow in coming sessions as momentum builds behind a sustained USD advance.
While the evidence suggests we lean in that direction, I always prepare to take the other side of a trade if and when the data changes.
So, what’s the best way to play a falling dollar?
Before I share my favorite trade setup, let’s look at the US Dollar Index $DXY:
DXY is finding resistance at the July pivot highs and a downtrend line originating with the March peak.
At the risk of sounding like a broken record, I'm continuing my theme of the past week of looking for opportunities to sell premium in mostly delta-neutral options trades.
"Delta-neutral" basically means I'm looking to collect income in sideways consolidations while the broader markets sort out this current correction.
Not only is this a good tactical bet for sideways, sloppy, and messy markets, but it also provides nice portfolio diversification if you have a book of long positions like I do.
We've got a well-known mega-cap stock to use as our vehicle today, so let's get to it.
The longer I’ve been in this business of trading, the more I’ve come to realize that “get better at smarter trading” is not the answer to the question: “How do I make more money as a Trader?”
Yes, we can all be better at regime detection, trade selection, strategy selection, optimal position sizing, risk management, and profits management. There will never not be room for improvement in these realms.
However, to me, the real answer lies somewhere off the charts. Away from the screens. Outside of our office or wherever we get work done.
The answer is located someplace closer to where we unwind. Where we exercise. Where we meditate. Where we reconnect with the important people and places in our lives. Where we rejuvenate our souls.
It’s becoming all too clear to me that one of the keys to optimal performance is to make sure our bodies and minds are right. And that ain’t gonna happen while hunched over a computer screen or mobile device.
