Obsessed with lowest price
Mis à jour
Price, one of the 4 P's of marketing has been used as a differentiating tool or competitive strategy amongst businesses for centuries.
We have budget airlines, low costs hotel, lowest price hypermarket like Walmart, Targets, etc.
So, when come to trading, it is also the same with us, the humans. We are obsessed with catching the lowest price level. WHY ? It is a psychological win that the trader can triumph over others, never mind if he makes profits or not.
In trend trading strategy as shown on this chart, we do not buy as at now though we see some preliminary support at 1.03 level.
Let's run the possible scenarios :
1. The price breaks out from the bearish trend line and goes higher up
Here, when it breaks out, we will go in when it pulls back
2. The price consolidates with smaller candles to the end before it breaks up or down
3. The price may breaks down from here and go lower
Here, because it did not break out, we do not buy.
Even when price breaks out of the trend, it can also do a U - turn as many stocks have done so recently (some say is the coronavirus). But barring unforeseen circumstances, the probability of it trending up or down is higher.
Hope this helps to dispel some misconceptions for those who are keen to use trend line as a strategy.
In this case, when I indicate LONG, it does not mean I am entering now. I am awaiting for the price action to break out and expect it to trend higher. But if it does not, then there is no buying. Basically, we are followers not dictators of the price direction.
In a way, this strategy may not gel with some traders as it looks passive, reactive and boring. To each his own, important thing is find a strategy that you like, comfortable with and most importantly, make money out of it. Give it 6-12 months , try out with different time frame and different asset class.
We have budget airlines, low costs hotel, lowest price hypermarket like Walmart, Targets, etc.
So, when come to trading, it is also the same with us, the humans. We are obsessed with catching the lowest price level. WHY ? It is a psychological win that the trader can triumph over others, never mind if he makes profits or not.
In trend trading strategy as shown on this chart, we do not buy as at now though we see some preliminary support at 1.03 level.
Let's run the possible scenarios :
1. The price breaks out from the bearish trend line and goes higher up
Here, when it breaks out, we will go in when it pulls back
2. The price consolidates with smaller candles to the end before it breaks up or down
3. The price may breaks down from here and go lower
Here, because it did not break out, we do not buy.
Even when price breaks out of the trend, it can also do a U - turn as many stocks have done so recently (some say is the coronavirus). But barring unforeseen circumstances, the probability of it trending up or down is higher.
Hope this helps to dispel some misconceptions for those who are keen to use trend line as a strategy.
In this case, when I indicate LONG, it does not mean I am entering now. I am awaiting for the price action to break out and expect it to trend higher. But if it does not, then there is no buying. Basically, we are followers not dictators of the price direction.
In a way, this strategy may not gel with some traders as it looks passive, reactive and boring. To each his own, important thing is find a strategy that you like, comfortable with and most importantly, make money out of it. Give it 6-12 months , try out with different time frame and different asset class.
Note
it has now break out of the bearish trend and one can start buying at 1.03681, SL below 1.032, 1st target 1.045, 2nd target 1.052Note
target 1 hit.Note
we added long at 1.04Note
Praise Lord, congrats to those who followed. Notice the strong resistance at 1.044 has been broken? Let's hope the price continue to go up
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