THIS IS INSANE - Technically speaking the market in general is in a downtrend. a recession or correction. it should not matter. what is insane is am taking a Long trade on such a downtrend market. As any trading Guru would say "dont swim against the Current" dont trade against the trend. But I did. well I make exceptions. let me explain.
The Long-term(M) is in a downtrend. the price is coming strongly overselling into a fresh DZ. I set my ENTR at 27.xx with STP-LOSS below the DZ; small risk with plenty room for profit to run. my risk to reward ratio adds up. I always calculate my estimates Rs (risk) before I calculate my estimated Rw (Reward)
When price enters the DZ: there are three possible outcomes;
- Trend Reversal - The DZ will hold & trend changes. Big win & small Loss
- Correction - The DZ will hold for sometime, giving small win and small Loss
- Breakthrough - The DZ does not hold at all, giving a small loss; I am OK taking that small loss; it is within my trade plan
What I was looking for was a correction, happy to take this small Long profit in such a downtrend market. to do this type of trade & swim against the current one much be very vigilant; tight STP loss is key.
What I did here, price entered the DZ, the correction began; I covered 1/2 of my position; I took $3 of each share, & let the rest (other 1/2) run; sadly but predictably, the correction lost momentum in a heavily bearish market. I readjusted my STP LOSS to exit trade at breaking even.
The Long-term(M) is in a downtrend. the price is coming strongly overselling into a fresh DZ. I set my ENTR at 27.xx with STP-LOSS below the DZ; small risk with plenty room for profit to run. my risk to reward ratio adds up. I always calculate my estimates Rs (risk) before I calculate my estimated Rw (Reward)
When price enters the DZ: there are three possible outcomes;
- Trend Reversal - The DZ will hold & trend changes. Big win & small Loss
- Correction - The DZ will hold for sometime, giving small win and small Loss
- Breakthrough - The DZ does not hold at all, giving a small loss; I am OK taking that small loss; it is within my trade plan
What I was looking for was a correction, happy to take this small Long profit in such a downtrend market. to do this type of trade & swim against the current one much be very vigilant; tight STP loss is key.
What I did here, price entered the DZ, the correction began; I covered 1/2 of my position; I took $3 of each share, & let the rest (other 1/2) run; sadly but predictably, the correction lost momentum in a heavily bearish market. I readjusted my STP LOSS to exit trade at breaking even.