     |
Price CorrectionEarlier this week I found myself on the wrong side of a trade and as you know if you have studied my strategy, I prefer to "ride out" most trades that go against my position. There is always a correction, the big question is... When will the Correction Occur?Of course no one knows for sure when to expect the correction, but it will usually happen within a few days of some major price action.Large moves in currency prices are often the result of a data release that goes against market expectations. Traders will jump on the bandwagon as prices start to surge and the result is a rapid change in the market price. Once the market digests the information completely, prices will experience a 'technical correction" and tend to return to the previous levels, or at least a short term support level. This will occur even when there is no evidence that the current price action should subside. Prices Move in WavesCurrency prices move like waves on the shoreline. They will move ahead, then recede.How long is the cycle? We're talking about trader's emotions and perceived value... no one knows. In my case, I'm hoping for a short cycle ;) . Wishing you trading success,
|
