Welcome to Forex Trading Snacks
I know it’s the GBP! And some traders are asking is it time to sell it now because of it’s recent pop up from a short term bottom? No one up to this point has asked me if it was a good time to buy it for the same reason?
So if everyone is short why is it moving up?
Truth is there is only one good reason for getting into a trade short or long...
That is to try to make money!
However there are many reasons to get out of a trade, all of which cause an opposite move in price to the majority of trade positions / trend. Example with the GBPUSD a lot of traders are selling it driving price and thus creating this trend down, but when these traders want to unwind the trade / get out / lighten up on their short positions, they must buy it! And that buying pushes the price higher until either sellers enter, or sellers panic and want to leave their short positions and try to get out at any cost. The later can cause an impulsive move or a squeeze with lots of followthrough. That option in my opinion has a minimal chance in happening at this time. Of coarse if there were some surprising new news on Brexit then anything is possible.
Barring any surprising news, my trading outlook is to the short side of this pair. Because of it’s bounce today and because of price action, I favor a short at or around the 1.2250-1.2325 area.
From its recent swing high, this down move has had at least 2 bounces retracing the trend by 250-300 pips. With today’s price action we are currently only about 50-70 pips away from my lower range. In addition we have a down sloping top trend line of the swing move that is coming in at the middle of my range as well. With the 21 EMA daily moving average currently sitting 1.2200
Seller might be looking to take profits and then looking to again establish new shorts at higher prices.
I just happen to be in that camp.
These views, trade ideas, opinions, are for training purposes only. This idea is not trading advice. If you decide to trade any ideas that are posted you also assume all risk of loss should there be any.
In trading you either make dust, or you eat dust!
All the best
I know it’s the GBP! And some traders are asking is it time to sell it now because of it’s recent pop up from a short term bottom? No one up to this point has asked me if it was a good time to buy it for the same reason?
So if everyone is short why is it moving up?
Truth is there is only one good reason for getting into a trade short or long...
That is to try to make money!
However there are many reasons to get out of a trade, all of which cause an opposite move in price to the majority of trade positions / trend. Example with the GBPUSD a lot of traders are selling it driving price and thus creating this trend down, but when these traders want to unwind the trade / get out / lighten up on their short positions, they must buy it! And that buying pushes the price higher until either sellers enter, or sellers panic and want to leave their short positions and try to get out at any cost. The later can cause an impulsive move or a squeeze with lots of followthrough. That option in my opinion has a minimal chance in happening at this time. Of coarse if there were some surprising new news on Brexit then anything is possible.
Barring any surprising news, my trading outlook is to the short side of this pair. Because of it’s bounce today and because of price action, I favor a short at or around the 1.2250-1.2325 area.
From its recent swing high, this down move has had at least 2 bounces retracing the trend by 250-300 pips. With today’s price action we are currently only about 50-70 pips away from my lower range. In addition we have a down sloping top trend line of the swing move that is coming in at the middle of my range as well. With the 21 EMA daily moving average currently sitting 1.2200
Seller might be looking to take profits and then looking to again establish new shorts at higher prices.
I just happen to be in that camp.
These views, trade ideas, opinions, are for training purposes only. This idea is not trading advice. If you decide to trade any ideas that are posted you also assume all risk of loss should there be any.
In trading you either make dust, or you eat dust!
All the best
