Never Catch A Falling Knife | Forex Factory

  • Never Catch A Falling Knife

    From newtraderu.com

    When a market’s price action falls straight down making lower lows continuously without stopping or bouncing back it is considered a ‘falling knife’ on a chart because of its speed and trajectory. It’s not a good idea to buy into a chart with plunging price action that can’t find support before there is a signal or a good reason to do so. Just because something is falling fast does not mean it can’t go lower or it is an opportunity to buy at lower prices. Low prices can go much lower before finding support with new buyers at key lower price levels. A price falling dramatically is not an opportunity a ... (full story)

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RossEdwards
Apr 30, 2020 4:25pm
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You can tell this story forever to new traders, and 95% will end up thinking at least one time "well this time it will be different?" ... and end up doubling down and loosing their shirts. When folk post on this and other trading sites Im always amused by the hubris that accompanies the short term successes some Fx traders revel in. Its all bS. There are no short cuts. Fx is the dumbest of dumb sub-zero risk businesess to focus on as generator of alpha revenue return. Its importance is primarily in safeguarding and hedging broader portfolio positions.
Its most certainly possible to win at it. But Ive never in nearly 20 years seen anybody with less than exceptional talent and application with les than 10000 hours screen time achieve that.
But back to the News Story.. Good advice.
Believe it and dont do it.
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stormtrader
May 1, 2020 1:32am
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Quoting Guest
catching a falling knife can give big profits quickly even though it is also very dangerous. traders need to be able to add to a losing position, maybe 3 or 4 times, meaning you are risking up to 50% of your account on margin. helps a lot to know where support levels are and add when these levels are broken.
Those levels are not there just for you to see them...bigger sharks see them too and they know you are there ....actually...they count on it!
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Not-KPMG
Apr 30, 2020 4:31pm
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Blaaa

What are liars on about???

Don't read losers writers, broke ex-traders
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RossEdwards
Apr 30, 2020 4:39pm
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Woops!!!!
Youve not been taking your meds on time Buba..
NaughtY!


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Trader#4FB2
Apr 30, 2020 6:51pm
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catching a falling knife can give big profits quickly even though it is also very dangerous. traders need to be able to add to a losing position, maybe 3 or 4 times, meaning you are risking up to 50% of your account on margin. helps a lot to know where support levels are and add when these levels are broken.
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Trader#9E24
May 1, 2020 3:35am
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Frustrates can give any advice they can based on their experience.
The truth is despite that very brutal.
You can catch anything you like want if only you have proper gloves....
Liquid market, money management, stop loss.
You can join to the masses that are afraid to catch knife and then try catch up the train that is already on its way to the destination.

It is much more complex than just simple rule given and described there.
You can even catch a bullet from AK if you have good vest on your chest. So sorry not but be prepared for what can happen and trade accordingly
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AnniLi
May 1, 2020 3:49am
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Never hold a hand grenade with no pin. And many other helpful comments... Here the idea is to catch the handle and not the point nor blade. Intelligence, skill, common sense, experience and luck.
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Trader#EA78
Apr 30, 2020 4:11pm
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On the contrary I would buy Agressively !
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