Take a look at charts 2 and 3. These are one-minute candlestick charts of EUR/USD and GBP/USD on June 15, 2004. Here you will notice that at announcement time it dipped down strongly (for about 20 seconds) before turning around the other way. Sometimes the markets react in a “whiplash” fashion for a moment because individual investors seeing the news react unpredictably. This happens sometimes, and unfortunately it triggers one entry order and promptly results in a 10 pip loss (remember NEVER trade without stops – and sometimes when a large whiplash happens you can even profit from it if you had set your limits). Then it triggers the other entry order and keeps on going (usually). At this point you wait for your profits to be in excess of 20 pips and you immediately change your stop order to secure a 10 pip profit which counters the 10 pip loss. If anything bad should happen at this point you would exit the trade with a zero win/loss, which is better than walking away with a 20 pip loss. Then decide where to take profit from this trade as discussed below in the Advanced Strategy Techniques section. When I traded this move (EUR/USD) I immediately lost 10 pips, but later I exited the second trade for plus 30 pips, resulting in a 20 pip gain over all – not bad for 15 minutes of work. I wish I also traded the GBP/USD as I would have netted even more.
WHIPLASH forex
Take a look at charts 2 and 3. These are one-minute candlestick charts of EUR/USD and GBP/USD on June 15, 2004. Here you will notice that at announcement time it dipped down strongly (for about 20 seconds) before turning around the other way. Sometimes the markets react in a “whiplash” fashion for a moment because individual investors seeing the news react unpredictably. This happens sometimes, and unfortunately it triggers one entry order and promptly results in a 10 pip loss (remember NEVER trade without stops – and sometimes when a large whiplash happens you can even profit from it if you had set your limits). Then it triggers the other entry order and keeps on going (usually). At this point you wait for your profits to be in excess of 20 pips and you immediately change your stop order to secure a 10 pip profit which counters the 10 pip loss. If anything bad should happen at this point you would exit the trade with a zero win/loss, which is better than walking away with a 20 pip loss. Then decide where to take profit from this trade as discussed below in the Advanced Strategy Techniques section. When I traded this move (EUR/USD) I immediately lost 10 pips, but later I exited the second trade for plus 30 pips, resulting in a 20 pip gain over all – not bad for 15 minutes of work. I wish I also traded the GBP/USD as I would have netted even more.
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