Why I hesitate to short USDNOK
Updated
A follower sent me this link and was excited to short it and ask for my views.
Looking at the daily chart, we can see that this pair has fallen more than 20% from the peak at
12.00 in mid March till now.
As the price has fallen quite a lot within the channel, there is a higher probability that it might pull back (see the blue turquoise candles) before it resumes its downfall. Remember, if you had for some reasons missed selling it at 11.00 plus, you are inching closer to the profit target (8.25) from current price than before. That presents a higher risks as well.
It could also continue to fall further to revisit the support at 9.08 level before correction takes place.
If I have to short this pair, I would wait for the breakdown of the price action from the channel before executing. Or, if the price does pull back, I will wait for a few days to see how strong the correction is. It may resume its downfall midway within the channel as well.
Just like we do not chase price when it is already trending high up, we do not chase price down when it has already fallen much. The concept works the same. The higher you have to set your SL , the higher the risks you have to bear. Always consider the risks factor and not the reward (8.5) first.
Everyday, there would be analysts, bankers, hedge fund managers selling you their piece of advice to buy or sell something. It is for their gains , not yours so read the news with a pinch of salt and be selective else you will be all over the place and lack focus in your strategy.
Looking at the daily chart, we can see that this pair has fallen more than 20% from the peak at
12.00 in mid March till now.
As the price has fallen quite a lot within the channel, there is a higher probability that it might pull back (see the blue turquoise candles) before it resumes its downfall. Remember, if you had for some reasons missed selling it at 11.00 plus, you are inching closer to the profit target (8.25) from current price than before. That presents a higher risks as well.
It could also continue to fall further to revisit the support at 9.08 level before correction takes place.
If I have to short this pair, I would wait for the breakdown of the price action from the channel before executing. Or, if the price does pull back, I will wait for a few days to see how strong the correction is. It may resume its downfall midway within the channel as well.
Just like we do not chase price when it is already trending high up, we do not chase price down when it has already fallen much. The concept works the same. The higher you have to set your SL , the higher the risks you have to bear. Always consider the risks factor and not the reward (8.5) first.
Everyday, there would be analysts, bankers, hedge fund managers selling you their piece of advice to buy or sell something. It is for their gains , not yours so read the news with a pinch of salt and be selective else you will be all over the place and lack focus in your strategy.
Note
moving along the blue line
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