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

3 Types Of Market Reactions – Closer Look:

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

It is important to pay attention to the sentiment of “BUY on rumor & SELL on news” For instance, today’s MPC meeting minutes where we saw GBPUSD going above the 1.5700, then it dropped abruptly after the minutes on a relatively “as expected” release.

This is where we can learn to take advantage of the market movement by taking a SELL trade from an exaggerated pre-market movement. (Traders are also taking profits at this level)