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

July 9, 2012 by Kelvin Ching Leave a Comment

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.

About Kelvin Ching

I'm a professional Forex trader and I have been trading for over 7 years. I was a series 3 broker and a registered CTA with the NFA, the main regulatory agency in the United States, and I have been involved at the highest levels in commodity trading. I also have a background in Information Technology, graphics design, and programming... I'm the co-founder of CurrencyNewsTrading.com, a site dedicated to fundamental analysis and news trading.