What to do when the chart looks like this?

Here’s todays EURUSD’s movement after the speaking event in Europe. (four hour chart)

So, I know it depends on the news and information within, but generally what’s the best thing to do? Stay clear and let things normalize for a few bars or jump it at key support areas to try to catch the bounce?

[URL=http://img593.imageshack.us/i/sschart.jpg/]

I try to stay out of these trades, but most of the time I fail :slight_smile: Eventually you’ll probably want to test the waters on extreme moves, just remember to use VERY small lot sizes until you know what you are doing. You can lose a lot of money very quickly if you take these a trades.

Your first option is the better one.

Moves like this are game changers. Sometimes a bounce DOES happen, but the recent stall just under 1.50 was a big clue.

Unless you have a really tight trade plan, trying to play the bounce game is an account drainer.

Thanks, that’s what I figure, it’s just to unpredictable. And I suppose it will take hours+ to begin a stable trend, that’s when I would want to look for opportunities.

This was a crazy day for sure, I took several small scalp trades in the direction of the trend and came out pretty good. I wouldn’t want to go long trying to catch a falling knife in these conditions, that is for sure.

Stick to a plan. A system. Analyze everything to develop a good system and if you know your system works a single trade is unimportant. Your system will then also tell you what you have to do. Entry, SL, Exit, etc. etc.

Forex is like building a house. Do your homework and then you will get your house later.

I wouldn’t give a bet on one single move. It can go right or wrong. Tormorrow is nfp. It can go up and down then or hoover around “zero” line. I see w/m still bullish and a lot of other bullish indicators in the long run. But that doesn’t mean nothing. You need numbers for stop loss, exit and so on. Entry alone is not very much.

Lets say you are working with tls, then you could wait until the price hit a tl for bouncing.

Just my 2 cents, lol.

Agreed, the bears still have it but thats a pretty robust 1.45 support area. I’ve stuck a 0.1% of bal trade long on the assumption it’ll take a 50’ish point bounce? Yep just 0.1%… sums up the depth of my conviction! LOL

I just stay away from moves like the one in the OP’s chart, and avoid NFP day each month. I like to think of Forex trading as an annual return, so I find it pays to remove as many variables as I can. So I just avoid big news, and unusual charts, and stick to regular charts where my strategy keeps paying out regular money. Big moves might be exciting to watch, but I would rather not have my money swirling around in there. A regular income gives me latitude for plenty of excitement in my non-trading life! Respect to those of you who have the stomach for the roller coaster stuff.

Absolutely agree with you Simon… ‘no contest’… I too stayed out of the big drop and thought long and hard about a long off the bottom, especially given NFP! But a drop of that magnitued coupled with robust support I figure is worth a modest play, I’ll be out at 50 points either way. :15:

I absolutely see where you are coming from. I just try to keep my trading very mechanical, helps keep the psychology under control, I find, so I always risk 1%, never more, never less. That helps me resist the temptation to have a flutter on big news days, as I know the losing would be painful!

LOL. Right now it seems, we have a hoovercraft at zero line (1.4500). I have the advantage now that I am “in”, because I wouldn’t go out now, lol. Which can turn to the disadvantage, if it drops furhter, lol. Anyways, I don’t risk much. Just my 400 pips I got in April while the eur jumped high. My bot3 told me to buy. Unfortunately I sold too early (I guess). So, I try now to use that dip to get in again.

The point for me is: It makes no sense. I mean, this 1.49xx and never touched the 1.50. Not even once! We have seen already the 1.51 and 1.6 not far away at the monthly chart. Then all signs are still bullish on the long term. That’s why I try this now. A long trade, because I guess the 1.50 is still open to be checked. I have an hawk eye on the eurusd since decades (german marks before euro) and I guess those are the “mechanics” of the pair.

If I’m not wrong, then we have a range 145-150 with slightly up tendency right now. Several of my indis show that the price is at the lower border of this channel up.

However, I agree with both of you (Simon reading). I use my 3 bots now. Just mechanic trading. They trade however, no matter if you have NFP or anything else. Just after statistics. Then, my bot3 trades just on the monthly. That means, approx. 1 big move a year with a 90% chance. The point with this is right now, that I am still in the move. I just try to wait for such drops, to get back what I have missed because I had too much fear earlier and got out too early.

I am trading live for over six months, but I am running a bit unlucky or struggling a bit, whenever I take trade my stop loss (17 or 20 pips) gets hit, as it takes sudden U turn and 90% of my trades close in loss, however I always take correct & perfect trade but when my trade is wasted then the market revers/moves back in the direction for which I intended that trade?

My goodness… this is an old thread! LOL!!! Ok, so first off, 90% is pretty poor, even for a newb. What time frame are you trading? All below are longer players, so 17-20 pips is very tight if your requesting advice? Price action, even if you’ve nailed the entry and direction of a trend never moves in a strait line. You must consider that price action will move through high and low in a given trend. Perhaps setting your stop accordingly on your chosen TF with appropriate money management on the trade.