A great question from Puks…
Q: As you know every man, his barber and his dog are short cable and euro. Now, being a retail trader, if we join the trade and market starts to go up, they will blame that retail traders buy tops and sell bottoms.
And if we fade the trend now considering its extremely one-sided, and if market keeps going down, they will also blame us that we lose money because we fade the trend.
What should we do? What would be the best bet for a retail trader now, in your humble opinion?
My reply: In strongly trending markets like we are in now, you really can only trade in the direction of the trend or remain square. I never recommend trying to pick tops or bottoms. Think of how many were washed out overnight, buying ahead of 1.2330…
If and when the market turns, it will not be a one-day event. Let the market turn, look for some closes above important levels (above 1.2510, say) and above moving averages…those will be the signs the the bounce, when it comes have legs…You won’t catch the turn, but if you are patient, you should catch “the belly” of the move…
