MoneyTec.com Traders Community Forum - View Single Post - what to do if exchange rate approach the levels

nazzdack · 02-09-2004, 04:36

For illustration purposes, let "50" be a support number. (1) If I already have a bearish opinion of the market, I prefer to sell-short at 59,58,57,56,55,54,53,52,51 and cover the entire position at 50, the FIRST time the market gets there. 50 becomes an irresistable target as the market approaches it. I expect the market to rally off the 50 level, that's why I cover the short position. (2) Assuming the market later breaks down below 50, I look to re-establish short positions at 49,48, 47, 46 & 45 because I'm hoping/expecting the market to re-test 50 to the upside as a resistance level. Ideally, the market rallys back to 50, trades a tiny bit at 50 and then promptly continues downtrending. (3) It has to do with the old saying; "what was once support is now resistance". (4) Maybe it can work for you too.

02-09-2004, 04:36	#3 (permalink)
nazzdack level 1 Join Date: Aug 2004 Posts: 9 Rep Power: 0	Expectation vs. Reality For illustration purposes, let "50" be a support number. (1) If I already have a bearish opinion of the market, I prefer to sell-short at 59,58,57,56,55,54,53,52,51 and cover the entire position at 50, the FIRST time the market gets there. 50 becomes an irresistable target as the market approaches it. I expect the market to rally off the 50 level, that's why I cover the short position. (2) Assuming the market later breaks down below 50, I look to re-establish short positions at 49,48, 47, 46 & 45 because I'm hoping/expecting the market to re-test 50 to the upside as a resistance level. Ideally, the market rallys back to 50, trades a tiny bit at 50 and then promptly continues downtrending. (3) It has to do with the old saying; "what was once support is now resistance". (4) Maybe it can work for you too.