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Fallingknives

When do you prefer to catch falling knives- nat gas up 9%Nat gas isnt a stock, its also a weird commodity. Its almost always oversold and cheap, and then all of a sudden its wrecking shorts. Remember James Cordier? the option seller who blew up his clients selling calls on nat gas? geez. tough. Any who, there momentum divergences in nat gas, showing the selling is slowing. theres lot of volume showing interest. I saw a guy on youtube saying he likes it. I saw a guy (well respected) saying hes taking a stab at it. today its up almost 10%. From past experience, its better to be late to the party. its better to be the 2nd mouse in the mouse trap, not the first. The first one gets dead, the 2nd mouse gets the cheese.
NYMEX:NG2!
by optionfarmers
FALLING KNIVESHello everyone! Today I want to discuss with you the topic of trading against the trend. This occupation is extremely risky, while everyone wants to catch a reversal, because they can bring big profits. Why is it so dangerous to trade against the trend? We all know that the trend is our friend. And you should always remember that this friend is very strong. No one knows when the price will start to reverse, which means that if you decide to trade against the trend, you will most likely get stopped out. Therefore, trading against the trend was dubbed "CATCHING FALLING KNIVES" . Traders look at the history of price movement and it seems to them that it is easy to predict a reversal - there is a top, there is a pattern, but everything is not so simple. If you are more careful, you can find moments when the price formed peaks or patterns similar to a reversal, but there was no reversal. If you entered at such a moment against the trend, you would lose everything. Be careful! Most traders lose their money precisely because of such situations when a position is opened against the trend. This is the most dangerous occupation in Forex. You can see a lot of patterns and the price still won't reverse. Therefore, you need to analyze the whole picture as a whole, you should not rely only on patterns or indicators. Range trading When it is not clear who is stronger than the bulls or bears, that is, the market moves in a range, it is worth trading by setting small goals. And, of course, you need to trade from the levels. In range trading is carried out from level to level, there will be your goal. Range trading is harder than trend trading, but easier than counter trend trading. How to trade? The ideal situation for trading against the trend would be when, after a strong move, with large candles, a double top begins to form. A double top is a sign of a weak trend. In this case, the first vertex should not be far from the second. If the first peak is far away, then the price has reached the level. Trading from a strong level is a good idea. Here you will often see trend reversals. It is worth noting that the closer the two peaks are to each other, the stronger the sell signal. At the same time, it is worth remembering that this movement may just be a temporary correction. Do not overstay the position in anticipation of a big move. The ideal combination for entering against the trend would be the level and the formed pattern. You need to enter when the market has already reversed, that is, the second top is clearly visible on the chart. Exit Even if you entered perfectly, and the price goes where you need it for some time, you should not relax. Be aware that this may just be a correction of a previous big trend. At the slightest sign of a continuation of the previous trend, get out. It is better to take a little profit than to lose everything. If the price moves confidently enough, set a take profit according to your strategy. You can set a take profit 3 times the stop loss. Or, if you know how to hold positions correctly, you can put a stop loss at the next closest level. One good sign A candle with a long shadow is a very good sign. As a rule, after such a candle, the price goes in a different direction relative to the shadow. A long shadow means that the price passed the level, but failed to consolidate and went in the opposite direction. This is a sign of weakness in the trend and a good signal to trade in the opposite direction. conclusions Trading against the trend is the most dangerous, the most difficult thing. If you decide to trade against the trend, wait for the signals, do not rush. Watch the price very carefully, even if it goes in the direction you want. Over time, you will learn how to enter trades better and then trading against the trend will bring you more profit than losses. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
Education
by Lingrid
18
I think catching falling knives is a bad ideaGeorge Soros said "Most of the time we are punished if we go against the trend. Only at inflection points are we rewarded." Even if we go with the overall trend on a pullback, we are going against the short term trend, and this is very punishing if done mindlessly. Cruel game, I have to be patient all the time, wait months, and then I might have just a few hours to get my entry. I want certain price areas, a pullback in a trend after something specific happened, but I got hurt too much placing limit orders and forgetting about them. Only thing that works for me is when I get the price I want, keep my eyes on the forex pair I'm interested in. Like a spider. Doing nothing just standing there. But ready to bounce very quickly. You go against the herd, you get trampled. What's the wall street saying? "Don't catch falling knives" right? I don't know who first said that. Buying the dip does not mean chasing falling knives. 2018 Bitcoin "investors" wish they knew that. Some people argue, love to go for these "dirt cheap prices", good for them. My mind must be limited. As far as I am concerned investors that care about their risk reward have no business gambling on where the price will bottom. Never heard of anyone that could call falling knives bottom. If someone could do that they'd become a billionaire very soon, trillionaire even, and we would hear about it. I'm just going to drop some examples. I look at charts I see lots of dips bottoming before trend continuation or reversal, and little bloodbaths suddenly changing direction with no warning, and these V shape reversals look so random to me I see no way to predict where they happen (but I'm sure many retail day gamblers would disagree). Even with stocks I think... GBPUSD a few examples As far as I know even Bitcoin does not "just reverse" How about Bitcoin most violent (and quick) bear markets?
Editors' picks
by MrRenev
53
The unwinding of frothy speculation and the start of valuation. Trend Shift Indicator saved me from the worst of today with two weird peaks and a precipitous indicator drop that seemed scary enough to make me sell prior to the worst. Despite the very short upswing TSI is still hanging low. Volumes aren't great and the volatility is likely not over. We are exiting the speculation phase of sentiment-is-all and moving to the phase where adoption of currencies are manipulated politically and some semblance of valuation can begin in earnest. This is good for Bitcoin but likely bad for short term speculation.
COINBASE:BTCUSDShort
by BradfordFournier
30% Gain on $GSATI wish I would have remembered to post this before the move happened, but I forgot. So I will just show my entry and exit points and why I had them. I set my entry point based on the trend low of the previous uptrend. This is what caused me to catch an absolute perfect falling knife for entry. Price then steadily rose to try and test the trend high of the previous downtrend. The trend high level ended getting broken by a 12% move up. The move had high volume so I continued to hold. I ended up selling when the volume started decreasing.
AMEX:GSATLong
by A_x_A
Will Bitcoin Get Off The Pot or Take a Dump?Don't you just hate these slow drawn out days when Bitcoin seams to lay in bed all day? One thing we can know for certain. Indecisive days like this make it easier to set aside our emotions and keep a clear mind going forward with the evidence we have at hand. Typically by the end of the Elliott Wave Correction phase the final leg (C) closely represents the first (A) in it's height and breadth. Leg C will always fall below the reversal of leg A which is how the targets on this graph were derived. How much below Leg A it could fall is TBD. May be 2 points, may be 2000. Maybe it will reverse the correction (come back to it at a later time) and print above 10.350! There's something I think we'd all like to see unless you're leveraged in a short position. Not investment advice. Just my observations. Please hit the like button and add your comments.
BITSTAMP:BTCUSD
by Flatratepete
BTC Update! Game of patience!Hello fellow traders. Yesterday I discussed leaning slightly on the bearish side after a reversal candlestick on the 4 hour chart that I mostly follow for trading. A few hours later we saw the follow through with the bears crushing the bulls yet again. Here we go again wiht this being a game of patience. I am happy sitting on my hands and waiting for the bulls to prove themselves before re-entering any type of position. Our low today was $4863 and as I type this, looks like bears are about to try for another leg lower. Remember, watch for trend changes. I had given the bulls some small hope with their higher low and higher high even tho that was also the reversal candlestick which red flagged me personally as bulls bring unlikely to get another higher low and then higher high again to show the shift in trend. Currently its just a free fall. Don't catch falling knives. Don't try and time bottoms. Be willing to give up some reward and minimize your risk by waiting for confirmations. BTC can't even get a 15 minute chart to give higher lows and higher highs. Once I see that occur, I look at hourly to see if it can do the same, and then to the 4 hour. You can also use the EMAs for resistance points as bears love to pile in when BTC re-approaches these EMAs. Stay patient during markets like this. Just My 2 Sats!
COINBASE:BTCUSD
by My2Sats