If economies are falling, should you always sell?

Beginner Questions
1

Strawberrystan with another stupid beginner question but looking forward to your thoughts! :strawberry:

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No. Study the chart for the market you’re interested in, study the related charts (e.g. other pairs featuring the same currencies) for additional evidence, study the longer-term time-frame charts in both cases - then make your decision.

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Hi sir! Thank you for your reply! But won’t you say that with the situation of economies, a long-term sell position would be a good idea for most currencies? :strawberry:

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In long term, forex is strength meter for economies. If single is dropping in relation to others - you should probably sell it. If multiple economies are suffering - well it’s hard to predict result of 1:1 battles (eg. EUR vs USD in EURUSD pair).

In case of stock market, each stock has it’s intrinsic value. If stocks/indices plummet - it is more like special offer on the market :slight_smile:

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I am still trying to learn more about economies and their relationship with currencies so any help would be berry much appreciated! :strawberry:

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Thanks sir for your reply! It’s a bit easier to understand. By any chance, have you noticed whether you’ve bought or sold more in your recent trades? :strawberry:

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If you want to hold positions long-term, forex pairs are not the right market. go back to the tried and tested methods of long-term buy-and-hold shares, preferably dividend-paying shares, or stock market indices (long only).

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Hmmm. :thinking: I don’t think this is the case. :blush: In fact, I’ve been hitting my TPs for my past buy trades. :blush: It also varies. Is it a day trade? Scalping? Cause for these types of trades, you have to look at the movements on the corresponding charts. Also, I think, you have to remember that there will still be an economy that’s stronger than the other. And so, this will be reflected by the strength of their currency. For example, if the economy of the US is in decline right now, I think EUR’s primed to rally. :thinking: Not sure if I made sense, but quick answer is no! :smiley:

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I think it a combination of been aware of the economic s or news, at the same time looking at the big buys/ selll off s

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Yes, you should basically sell a falling currency/economy. But would were life that simple. Firstly you need to be sure that the economy is falling - is this a long term trend or just a wobbly, bad-news day? Also, if you trade short term charts, even if the currency is in free-fall there can be some very strong pullbacks if you don’t mind trading against the trend there is profit to be made there. It’s safest I suppose to trade long term charts and go with the long-term trend - make money slower but more dependable. I like EUR/CHF - boring but a it more predictable than most currencies - nice straight lines of trend without too much whip-lash. In fact - that’s the only currency pair I trade these days, personally.

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No such thing as a stupid question, by the way! (Can’t vouch for my answers though…)

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Forex is economy-driven so daily financial news has an impact on Forex’s movement. Traders should learn how to view the market from the fundamental eyesight because it helps traders anticipate market movement. In crucial times, traders should stop trading to avoid losses.

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Do not sell “safe-haven assets” dude… the rest… yes

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Thanks for the honesty sir! I’m reflecting on this and I’ll be sure to take this into consideration! :strawberry:

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Thanks for the simple examples! Berry much appreciated! :strawberry:

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Thanks for your response! Interesting choice of currency. What indicators do you use on your chart to trade this pair? :strawberry:

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EUR/CHF for me reasonabley predictable and tends to move in nice straight lines without too much zig-zagging. I don’t really use many indicators while trading it. I always pay attention to the moving average, but that’s about it. RSI not great in my experience for EUR/CHF cos its moves tend to be long-term and very powerful and will keep moving in same direction like an oil tanker no matter what RSI tries to tell you!!