Types of Market Reactions: 2. Reversal Trade (Part 1)

3 Types Of Market Reactions – Closer Look:

2. Wait for Market to move to a range and take a reversal trade

It is always important to know the long-term market bias of a currency pair and the expected movement from a news release. If the news release is expected to move 50 pips and it did move 50 pips, then probably there aren’t any more momentum for it to move further, especially when it is going against its long-term trend.

So we will wait for it to stall (support/resistance levels), and then we will enter a reverse trade based on the stall.