| DAX analyses the performance of Germany's 40 largest blue chip companies traded on the Frankfurt Stock Exchange. Some traders use the DAX as a "tell" and indication for US stocks. In the following DAX technical analysis video, and trade suggestion, I present a low probability but high return vs risk possible trade, wherein a support that many people (primarily trading algos) are monitoring. When a support breaks, fresh bears start shorting and bulls are stopped out. This increases sales. They must sell their contracts when they sell. Buying? Many institutional corporations perceive retail traders as fish they wish to devour. Big sharks purchase order-flow data from RobinHood. Most merchants short a broken support. This implies new sell orders will be herded. They might be correct or wrong. Nobody knows, even myself. We may suppose that the sharks want to steal the fish's chips, so they control the price. Contrarianism is the opposite way. This viewpoint goes against the masses. If purchasing pressure was so high, buyers wouldn't wait for price to breach support. Beforehand, buyers would swarm. Going against the trend means the odds of winning are below 50%. A low-probability transaction must have a high reward-to-risk ratio. Why bother? I strive for a 4 to 1 benefit versus risk ratio in this circumstance. The accompanying DAX technical analysis video should be followed on ForexLive.com as updates may later be provided on that page, sh make sure to check it out, inlcuding the comment section (and let me know what you though please!). https://www.forexlive.com/technical-analysis/dax-technical-analysis-trade-idea-contrarian-long/ |
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