What is a short squeeze and how to trade it The World ...

Former investment bank FX trader: Risk management part 3/3

Former investment bank FX trader: Risk management part 3/3
Welcome to the third and final part of this chapter.
Thank you all for the 100s of comments and upvotes - maybe this post will take us above 1,000 for this topic!
Keep any feedback or questions coming in the replies below.
Before you read this note, please start with Part I and then Part II so it hangs together and makes sense.
Part III
  • Squeezes and other risks
  • Market positioning
  • Bet correlation
  • Crap trades, timeouts and monthly limits

Squeezes and other risks

We are going to cover three common risks that traders face: events; squeezes, asymmetric bets.

Events

Economic releases can cause large short-term volatility. The most famous is Non Farm Payrolls, which is the most widely watched measure of US employment levels and affects the price of many instruments.On an NFP announcement currencies like EURUSD might jump (or drop) 100 pips no problem.
This is fine and there are trading strategies that one may employ around this but the key thing is to be aware of these releases.You can find economic calendars all over the internet - including on this site - and you need only check if there are any major releases each day or week.
For example, if you are trading off some intraday chart and scalping a few pips here and there it would be highly sensible to go into a known data release flat as it is pure coin-toss and not the reason for your trading. It only takes five minutes each day to plan for the day ahead so do not get caught out by this. Many retail traders get stopped out on such events when price volatility is at its peak.

Squeezes

Short squeezes bring a lot of danger and perhaps some opportunity.
The story of VW and Porsche is the best short squeeze ever. Throughout these articles we've used FX examples wherever possible but in this one instance the concept (which is also highly relevant in FX) is best illustrated with an historical lesson from a different asset class.
A short squeeze is when a participant ends up in a short position they are forced to cover. Especially when the rest of the market knows that this participant can be bullied into stopping out at terrible levels, provided the market can briefly drive the price into their pain zone.

There's a reason for the car, don't worry
Hedge funds had been shorting VW stock. However the amount of VW stock available to buy in the open market was actually quite limited. The local government owned a chunk and Porsche itself had bought and locked away around 30%. Neither of these would sell to the hedge-funds so a good amount of the stock was un-buyable at any price.
If you sell or short a stock you must be prepared to buy it back to go flat at some point.
To cut a long story short, Porsche bought a lot of call options on VW stock. These options gave them the right to purchase VW stock from banks at slightly above market price.
Eventually the banks who had sold these options realised there was no VW stock to go out and buy since the German government wouldn’t sell its allocation and Porsche wouldn’t either. If Porsche called in the options the banks were in trouble.
Porsche called in the options which forced the shorts to buy stock - at whatever price they could get it.
The price squeezed higher as those that were short got massively squeezed and stopped out. For one brief moment in 2008, VW was the world’s most valuable company. Shorts were burned hard.

Incredible event
Porsche apparently made $11.5 billion on the trade. The BBC described Porsche as “a hedge fund with a carmaker attached.”
If this all seems exotic then know that the same thing happens in FX all the time. If everyone in the market is talking about a key level in EURUSD being 1.2050 then you can bet the market will try to push through 1.2050 just to take out any short stops at that level. Whether it then rallies higher or fails and trades back lower is a different matter entirely.
This brings us on to the matter of crowded trades. We will look at positioning in more detail in the next section. Crowded trades are dangerous for PNL. If everyone believes EURUSD is going down and has already sold EURUSD then you run the risk of a short squeeze.
For additional selling to take place you need a very good reason for people to add to their position whereas a move in the other direction could force mass buying to cover their shorts.
A trading mentor when I worked at the investment bank once advised me:
Always think about which move would cause the maximum people the maximum pain. That move is precisely what you should be watching out for at all times.

Asymmetric losses

Also known as picking up pennies in front of a steamroller. This risk has caught out many a retail trader. Sometimes it is referred to as a "negative skew" strategy.
Ideally what you are looking for is asymmetric risk trade set-ups: that is where the downside is clearly defined and smaller than the upside. What you want to avoid is the opposite.
A famous example of this going wrong was the Swiss National Bank de-peg in 2012.
The Swiss National Bank had said they would defend the price of EURCHF so that it did not go below 1.2. Many people believed it could never go below 1.2 due to this. Many retail traders therefore opted for a strategy that some describe as ‘picking up pennies in front of a steam-roller’.
They would would buy EURCHF above the peg level and hope for a tiny rally of several pips before selling them back and keep doing this repeatedly. Often they were highly leveraged at 100:1 so that they could amplify the profit of the tiny 5-10 pip rally.
Then this happened.

Something that changed FX markets forever
The SNB suddenly did the unthinkable. They stopped defending the price. CHF jumped and so EURCHF (the number of CHF per 1 EUR) dropped to new lows very fast. Clearly, this trade had horrific risk : reward asymmetry: you risked 30% to make 0.05%.
Other strategies like naively selling options have the same result. You win a small amount of money each day and then spectacularly blow up at some point down the line.

Market positioning

We have talked about short squeezes. But how do you know what the market position is? And should you care?
Let’s start with the first. You should definitely care.
Let’s imagine the entire market is exceptionally long EURUSD and positioning reaches extreme levels. This makes EURUSD very vulnerable.
To keep the price going higher EURUSD needs to attract fresh buy orders. If everyone is already long and has no room to add, what can incentivise people to keep buying? The news flow might be good. They may believe EURUSD goes higher. But they have already bought and have their maximum position on.
On the flip side, if there’s an unexpected event and EURUSD gaps lower you will have the entire market trying to exit the position at the same time. Like a herd of cows running through a single doorway. Messy.
We are going to look at this in more detail in a later chapter, where we discuss ‘carry’ trades. For now this TRYJPY chart might provide some idea of what a rush to the exits of a crowded position looks like.

A carry trade position clear-out in action
Knowing if the market is currently at extreme levels of long or short can therefore be helpful.
The CFTC makes available a weekly report, which details the overall positions of speculative traders “Non Commercial Traders” in some of the major futures products. This includes futures tied to deliverable FX pairs such as EURUSD as well as products such as gold. The report is called “CFTC Commitments of Traders” ("COT").
This is a great benchmark. It is far more representative of the overall market than the proprietary ones offered by retail brokers as it covers a far larger cross-section of the institutional market.
Generally market participants will not pay a lot of attention to commercial hedgers, which are also detailed in the report. This data is worth tracking but these folks are simply hedging real-world transactions rather than speculating so their activity is far less revealing and far more noisy.
You can find the data online for free and download it directly here.

Raw format is kinda hard to work with

However, many websites will chart this for you free of charge and you may find it more convenient to look at it that way. Just google “CFTC positioning charts”.

But you can easily get visualisations
You can visually spot extreme positioning. It is extremely powerful.
Bear in mind the reports come out Friday afternoon US time and the report is a snapshot up to the prior Tuesday. That means it is a lagged report - by the time it is released it is a few days out of date. For longer term trades where you hold positions for weeks this is of course still pretty helpful information.
As well as the absolute level (is the speculative market net long or short) you can also use this to pick up on changes in positioning.
For example if bad news comes out how much does the net short increase? If good news comes out, the market may remain net short but how much did they buy back?
A lot of traders ask themselves “Does the market have this trade on?” The positioning data is a good method for answering this. It provides a good finger on the pulse of the wider market sentiment and activity.
For example you might say: “There was lots of noise about the good employment numbers in the US. However, there wasn’t actually a lot of position change on the back of it. Maybe everyone who wants to buy already has. What would happen now if bad news came out?”
In general traders will be wary of entering a crowded position because it will be hard to attract additional buyers or sellers and there could be an aggressive exit.
If you want to enter a trade that is showing extreme levels of positioning you must think carefully about this dynamic.

Bet correlation

Retail traders often drastically underestimate how correlated their bets are.
Through bitter experience, I have learned that a mistake in position correlation is the root of some of the most serious problems in trading. If you have eight highly correlated positions, then you are really trading one position that is eight times as large.
Bruce Kovner of hedge fund, Caxton Associates
For example, if you are trading a bunch of pairs against the USD you will end up with a simply huge USD exposure. A single USD-trigger can ruin all your bets. Your ideal scenario — and it isn’t always possible — would be to have a highly diversified portfolio of bets that do not move in tandem.
Look at this chart. Inverted USD index (DXY) is green. AUDUSD is orange. EURUSD is blue.

Chart from TradingView
So the whole thing is just one big USD trade! If you are long AUDUSD, long EURUSD, and short DXY you have three anti USD bets that are all likely to work or fail together.
The more diversified your portfolio of bets are, the more risk you can take on each.
There’s a really good video, explaining the benefits of diversification from Ray Dalio.
A systematic fund with access to an investable universe of 10,000 instruments has more opportunity to make a better risk-adjusted return than a trader who only focuses on three symbols. Diversification really is the closest thing to a free lunch in finance.
But let’s be pragmatic and realistic. Human retail traders don’t have capacity to run even one hundred bets at a time. More realistic would be an average of 2-3 trades on simultaneously. So what can be done?
For example:
  • You might diversify across time horizons by having a mix of short-term and long-term trades.
  • You might diversify across asset classes - trading some FX but also crypto and equities.
  • You might diversify your trade generation approach so you are not relying on the same indicators or drivers on each trade.
  • You might diversify your exposure to the market regime by having some trades that assume a trend will continue (momentum) and some that assume we will be range-bound (carry).
And so on. Basically you want to scan your portfolio of trades and make sure you are not putting all your eggs in one basket. If some trades underperform others will perform - assuming the bets are not correlated - and that way you can ensure your overall portfolio takes less risk per unit of return.
The key thing is to start thinking about a portfolio of bets and what each new trade offers to your existing portfolio of risk. Will it diversify or amplify a current exposure?

Crap trades, timeouts and monthly limits

One common mistake is to get bored and restless and put on crap trades. This just means trades in which you have low conviction.
It is perfectly fine not to trade. If you feel like you do not understand the market at a particular point, simply choose not to trade.
Flat is a position.
Do not waste your bullets on rubbish trades. Only enter a trade when you have carefully considered it from all angles and feel good about the risk. This will make it far easier to hold onto the trade if it moves against you at any point. You actually believe in it.
Equally, you need to set monthly limits. A standard limit might be a 10% account balance stop per month. At that point you close all your positions immediately and stop trading till next month.

Be strict with yourself and walk away
Let’s assume you started the year with $100k and made 5% in January so enter Feb with $105k balance. Your stop is therefore 10% of $105k or $10.5k . If your account balance dips to $94.5k ($105k-$10.5k) then you stop yourself out and don’t resume trading till March the first.
Having monthly calendar breaks is nice for another reason. Say you made a load of money in January. You don’t want to start February feeling you are up 5% or it is too tempting to avoid trading all month and protect the existing win. Each month and each year should feel like a clean slate and an independent period.
Everyone has trading slumps. It is perfectly normal. It will definitely happen to you at some stage. The trick is to take a break and refocus. Conserve your capital by not trading a lot whilst you are on a losing streak. This period will be much harder for you emotionally and you’ll end up making suboptimal decisions. An enforced break will help you see the bigger picture.
Put in place a process before you start trading and then it’ll be easy to follow and will feel much less emotional. Remember: the market doesn’t care if you win or lose, it is nothing personal.
When your head has cooled and you feel calm you return the next month and begin the task of building back your account balance.

That's a wrap on risk management

Thanks for taking time to read this three-part chapter on risk management. I hope you enjoyed it. Do comment in the replies if you have any questions or feedback.
Remember: the most important part of trading is not making money. It is not losing money. Always start with that principle. I hope these three notes have provided some food for thought on how you might approach risk management and are of practical use to you when trading. Avoiding mistakes is not a sexy tagline but it is an effective and reliable way to improve results.
Next up I will be writing about an exciting topic I think many traders should look at rather differently: news trading. Please follow on here to receive notifications and the broad outline is below.
News Trading Part I
  • Introduction
  • Why use the economic calendar
  • Reading the economic calendar
  • Knowing what's priced in
  • Surveys
  • Interest rates
  • First order thinking vs second order thinking
News Trading Part II
  • Preparing for quantitative and qualitative releases
  • Data surprise index
  • Using recent events to predict future reactions
  • Buy the rumour, sell the fact
  • The mysterious 'position trim' effect
  • Reversals
  • Some key FX releases
***

Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer.
submitted by getmrmarket to Forex [link] [comments]

Squeeze compete. It's now or never.

Squeeze compete. It's now or never.
Market hit 3080 on Tuesday.
https://preview.redd.it/go8in9zhcp251.png?width=775&format=png&auto=webp&s=97c855b229af057f22fa15af08d0bc8cdebd7d4a
https://www.reddit.com/use2020sbeacomments/gp6ovc/the_apex_in_now_in_sight_final_preparations_fo

And has now completed the full squeeze pattern forecast around 2800.

https://preview.redd.it/dogt0iklcp251.png?width=719&format=png&auto=webp&s=066f7e31d1cca99ea8e4e72c9f7cca1e2d687f23
https://www.reddit.com/use2020sbeacomments/gju1rv/this_is_the_bullet_im_trying_to_dodge_and_the/

Formed as a squeeze should. Parabolic into zig-zag spike outs. In the spike outs is the time to build positions and then add into the retrace after a drop signal.

https://preview.redd.it/yauc4wxadp251.png?width=1043&format=png&auto=webp&s=f587d9eadf6f48b1cca385805b2e5a72fec12e86

Also had a few false starts and spike outs, which I've explained are to be expected in the strategy.

Now we're looking for the start of the first big drop to signal the run to 10,000 on the Dow.

https://preview.redd.it/t36ozjdndp251.png?width=844&format=png&auto=webp&s=cd06f2a374bc34eccec73db62b4c5513d8a1a166
https://www.reddit.com/use2020sbeacomments/gu64sw/a_25_week_signals_the_start_of_the_crash/

SPX now trades marginally above the 1.61 expansion.
https://preview.redd.it/25qu97kxdp251.png?width=1048&format=png&auto=webp&s=ca8bb72fd28393aa4b2aed08ba4f597352c5da93
We see this before highs. It signalled the top in Feb. https://www.reddit.com/use2020sbeacomments/fwo5ut/it_shouldnt_work_but_over_the_last_100_years_this/

We'll have one last try at this;
Paid Stuff:
During the fall I’m only going to be able to continue to provide weekly and daily trade plans if people pay for it. The reason for this is, for it to be viable for me, I’m going to have to hire people to do the leg work in managing this. I won’t have time to do it all myself. I’m charging you to cover the costs I’ll incur to give it to you.
I’ll setup a discord server with;
  • Trading chat. Live updates. Limited QA.

  • Daily and weekly analysis/trade plans (Multiple markets)
  • Daily and weekly call/put spreads (For income)
  • Complex ‘Set&Forget’ pending order trade plans (Futures, commodities and Forex).
To join the paid discord server will cost you only $50. Send $50 to Paypal address [[email protected]](mailto:[email protected]) and then send a confirmation email to the same email address to be added.
There are some people here to call me a scammer. I’d suggest you do not send me the $50 if you’ve not already gotten at least $50 of value out of what I’ve shared. I’m going to keep on doing the same thing. Personally, I think i should b charging over 100* what I am, but I suppose value is very subjective.
I’ll accept payments for this only via Paypal (Much easier if I end up refunding). To join this;
1 - Send $50 to PayPal email: [[email protected]](mailto:[email protected])
2 - Send payment transaction number via email to the same email address.
Links to join will be sent to you. Please allow for some time, but should usually be within a few hours.

The purpose of the payments is to cover costs of me paying someone who've I trained to post alerts and answer questions in time I am not available. At this point not enough people joined to cover this. I'll give it until Monday. If enough people have not joined I'll close this offer. Run it for the people there until the end of the month and then mass refund everyone and close it fully. I don't have time to do it all.

A double top is possible tomorrow, but the market has now reached the full extension of where a bull trap / short squeeze should complete. I'm selling large positions 3110.

If the market is not falling within 4 trading days from now it will annul my bearish trade plan. It would trigger a system stop loss, which would mean I'm entirely finished with shorts on the market. This is the last point at which it should work, and if it doesn't work this time - it has not worked. I was wrong and this method can not be used in modern day crashes (Or I misread the setups).

I've published already a lot of detailed trade plans and strategy blueprints for how to do this. If the market starts to fall I will be almost entirely silent here in the coming weeks. I only have time to talk whist it's not happening. If it's not falling next week I'll explain the reasons I've stopped following the plan and what I learned from it not working (For those interested in such things).
submitted by 2020sbear to u/2020sbear [link] [comments]

Banks trading forex

I’ve heard online and on reddit that big banks have access to liquidity/sentiment data for forex trades. From what I’ve heard, if sentiment is severely lopsided they take the opposite position and stop out a lot of traders to create a short/long squeeze.
Can someone explain to me how exactly they do this? Im specifically interested in the strategy big forex desks use to make money based off level 3 DOB data.
submitted by nathansmith2016 to Forex [link] [comments]

Shorting Bitcoin led to my investment loss of about 1.5 million Euro within months. Entire family inheritance reserved for a special project to benefit humanity is ruined.

I signed up in March 2017 with IG Markets to open several CFD and stock trading accounts through a London based introducing broker. Not realizing that I have just made the biggest mistake of my life, I started trading with Forex and shares. Mr. Justin from the introducing broker guided me on how to trade with IG web-based platform. He requested to constantly monitor my trading accounts. Whenever I need help, he was always available to give assistance. I developed trust that he cared about my success. I was doing average with my trading and not taking risks.
Through active trading on a CFD account and gradual injection of inherited funds from my family bank brokerage accounts, my portfolio grew to about 400k within few months. I was confident that my trading strategy of holding on to positions to earn interests or dividends whenever market turn against me will be better than cutting out positions with losses. I wanted to invest short term or long term to take profits only or leave positions till losses turn to profits. I did not want to just speculate but I carefully traded with instruments that earned me interest or dividends. At this point, Mr Justin from the introducing broker took more interest in my trading and offered to visit me in Vienna. His reason was to help install L2 Dealer, a downloadable DMA platform for advanced traders. I found it very strange and felt uncomfortable that he will be flying from London to Vienna just for that. Not wanting to be impolite, I met him at Vienna airport and took him to the apartment where I worked day trading. He told me he is married with an Austrian and they have a grown-up boy. This removed my initial doubts and I developed trust and likeness after few hours together. After several unsuccessful attempts to download and install the L2 dealer on my computer, he called a technician at IG for assistance. The person instructed him to install a program on my computer that will enable him to control the L2 dealer installation from UK. After the installation was complete, Mr. Justin showed me how it works but I found it complicated unlike the web-based platform. I drove him to the airport and we kept good contact. Few days later, he sent me an email to trade with Bitcoin. I have heard of Bitcoin from friends and I was not interested since I knew very little about it. After few days of not reacting to his suggestion to trade with Bitcoin, he called me and convinced me that I should look at it with claim that the price action is fantastic. Out of politeness and trusting that he wanted my good, I checked IG Bitcoin product details, trading conditions and margin requirements which was at 12.5% in May 2017 for retail clients. I took a position which I closed same day with good profit. I was impressed and started reading everything I could find online about Bitcoin. It was few weeks before Bitcoin Cash fork.
Two major factors that led to my losses:
  1. BITCOIN FORK CONDITIONS: Statement concerning fork conditions for holders of Bitcoin was not on IG website prior to the fork. I never came across it on any of several crypto websites (Cointelegraph, Coindesk etc.) I was reading for information. Without this vital information and believing the fork shall translate to reduction of value for Bitcoin, I held several short Bitcoin positions through the fork which led to being credited with negative Bitcoin Cash positions by IG Markets. Worldwide Bitcoin communities, fans, longtime followers and enthusiasts were aware that holders of Bitcoin will be credited with free positive Bitcoin Cash after the fork. These much experienced insiders accumulated and built up positive Bitcoin positions to earn equivalent free Bitcoin Cash. Resulting short squeeze in combination with much hype and other forks drove Bitcoin price to about 20,000 USD. My trading strategy of never wanting to cut out positions at losses was playing out to be wrong. At the same time, I was convinced that the price was either being manipulated or being artificially driven up by large players that were somehow able to communicate with each other behind the scenes. I believed the price must reverse hard at a certain point. With this believe in mind, I kept pumping in more funds to secure my positions. It was at this point that a second factor I had not known or reckoned with was applied against me.
  2. TIERED MARGIN: During the run up of Bitcoin, IG had been gradually increasing Bitcoin margin requirement till it eventually reached 100%. Margin requirement was also increased on Forex and stock positions I was holding. Up to that point, I was not aware of tiered margin and the accompanying rights IG had reserved for themselves through the signup terms. As margin increase was gradually being applied on my opened positions, I was covering with hundreds of thousands of Euro in constant stress to save my positions. I sold stocks on family brokerage accounts and pumped the money to IG. My trading account exploded to over one million Euro. Slowly realizing by December 2017 that something was not right, I finally found out about the tiered margins and the negative effects it was having on my CFD trading account. Mr. Justin and IG explained the rule (which I found very unfair) that IG reserve rights to increase margin on opened positions till 100% while charging and keeping up expensive CFD financing costs. I ended up financing the instruments 100% while being charged full financing costs for positions I opened at 12.5% margin. In my own opinion and conclusion which I communicated, IG was employing these and several other methods to trade against me, to force me into giving up my positions at losses when Bitcoin reversal was imminent or obvious. Accepting my fate, I finally stopped pumping money to IG, closed the positions and ended up with about 1.5 million Euro in losses.
I am broken, devastated and sad. Who are the players behind last year Bitcoin run up? Is it possible that exchanges, brokerages and big players were combining to manipulate last year events that caused Bitcoin run up? Can government regulators be of assistance in case of foul play?
I need helpful advice and comments.
D. John
submitted by bignation24 to Bitcoin [link] [comments]

Making Profit (Avoiding Pain) in Linear Corrections

Making Profit (Avoiding Pain) in Linear Corrections
Here is a very simple way to make good trades when the market is making strong moves like we've seen on the EURUSD news reversal over the last hour.
I flagged this as a buy at the lows. https://www.reddit.com/Forex/comments/d373rf/looks_like_a_good_buy_fading_ecb_news_on_eurusd/

When we see this, all we have to do is look for false reversals that form like a failed double bottom with a false breakout. We buy these with tight stops, and we look for price to go parabolic.

https://preview.redd.it/7oy5n6u056m31.png?width=809&format=png&auto=webp&s=82b8ec93f95bcd69b70a22e0b58375dd4123fd80
I've circled my additional entries. I got 1:8 + RR on both of these in under an hour.

I've explained this previous here.
https://preview.redd.it/oydvglp656m31.png?width=721&format=png&auto=webp&s=90230adafe461ff62da087fc7da5fb3900223b06
https://www.reddit.com/Forex/comments/cvki79/shorting_noobs_fake_news_false_breakouts_and_the/

Shown another functional example of it here.
https://preview.redd.it/xoz4kkzc56m31.png?width=707&format=png&auto=webp&s=036e1f439703361a535a99fa3be299cba855e18a
https://www.reddit.com/Forex/comments/cwwe34/common_trading_mistakes_how_trend_strategies_lose/

For the foreseeable future, trading on EURUSD is easy pickings, in my opinion. All wee have to do is look for breakouts, wait for corrections, then look for a double bottom featuring false breakout. Ping, in we get. Whoosh it goes (hopefully).


Update: Took profit 1.108 and reversed. https://www.reddit.com/Forex/comments/d3a3hm/squeeze_finished_now_we_can_sell_eurusd/

https://preview.redd.it/fzgv7x1yk7m31.png?width=661&format=png&auto=webp&s=be555cd3168c6a34847aedff15297eed2fe381b3
submitted by whatthefx to Forex [link] [comments]

No conspiracy theory needed to explain the short squeeze during the Bitmex' scheduled maintenance

Bitcoin is more resilient than stocks, because stocks are traded on 1-2 exchanges (sometimes only 1), but Bitcoin is traded on many exchanges, like fiat currencies (Forex).
I think that the Bitmex downtime had some role (when it was offline arbitrage bots was offline too, causing liquidity to decrease and make short squeeze more probable), but most journalists and "Bitcoin analysts" will exaggerate it.
If Bitmex did not went down to maintenance, it's very probable that the short squeeze would happened anyway. Short positions to long positions ratio on Bitfinex were at record high (see "BTCUSDSHORTS-BTCUSDLONGS" on TradingView).
No conspiracy theory is needed to explain the short squeeze. It's obvious for all market participants that the best time for short squeeze is when the liquidity is low and short positions on Bitfinex (one of the major spot exchanges allowing shorting on margin) are at record high.
This is why "smart money" started to open long positions around the time when liquidity is expected to be low (Bitmex scheduled maintenance) and short positions at record high level.
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Support and Resistance Short Squeeze Rally AUDUSD What is a Short Squeeze? Part 1 Jay´s Short Squeeze Trade and Explanation  13 Nov 2019 What is a Short Squeeze in Forex? What is a Short Squeeze and How Can You Profit From It ... Options: Another Short Squeeze How to Day Trade A Short Squeeze!

A short squeeze can happen very quickly on small intraday moves—for example, if one trader has a large position and is forced out of it—but usually there is an “escalating” process. The price starts to rise causing some shorts to cover, which causes other shorts to cover, as well as bringing other short-term buyers who see what is happening. There are always multiple factors affecting ... A short squeeze – а situation in which a heavily shorted currency moves sharply higher, forcing more short sellers to close out their short positions and adding to the upward pressure on the currency. A short squeeze implies that short sellers are being squeezed out of their short positions, usually at a loss. A short squeeze is generally triggered by a breaks through a strong level of ... Making the short squeeze work for you. The first step here is to work out where the stock you are interested in purchasing is in a decline or a rally. Once identified you can then look for a short position on it. This will let you know if the position is crowded or not. As the number grows of short floats you are able to anticipate the occurrence of a short squeeze. However, lots of other ... The Short Squeeze: Another Short Selling Method. A squeeze on the stock market occurs when stock prices drop sharply and quickly following an adverse announcement. Graphically, it often occurs after the break down of a support or a reversal figure as a sell signal. Savvy investors then take advantage of this decline by buying the stock at a lower price en masse. The prices then rapidly bounce ... A short squeeze is when a big rally to the upside happens during a downtrend in a market due to a lack of sellers at lower prices combined with the pressure on current short sellers to be forced to buy to cover due to the reversal in the market trend creating upside price pressure. Short squeezes gain momentum as more and more short sellers are forced to buy to cover their positions at higher ... And if this happens, a short squeeze can occur, which means short sellers all try to cover their positions at once – pushing the price of the stock up even further and amplifying losses. This makes it important to have a risk management strategy in place. Why are short-sellers viewed with suspicion? Short sellers are often blamed for causing or aggravating a downswing in the market to make ... A short squeeze refers to the cases in which the short-sellers in the market trigger a sudden and unexpected rise in price on a heavily shorted stock. Once it happens the sellers are forced to buy to cover their losses and close out their short positions. This would lead to heavy demand in the market. In such cases, all short-sellers would usually clamor to get out of their positions as soon ... An investment position that benefits from a decline in market price. When the base currency in the pair is sold, the position is said to be short. Short squeeze A situation in which traders are heavily positioned on the short side and a market catalyst causes them to cover (buy) in a hurry, causing a sharp price increase. Shorts The Short Squeeze Explained. Posted By: Steve Burns on: December 02, 2014. Click here to get a PDF of this post This is a guest post by Helyn Bolanis: Founder,CEO,& Chief Investment Officer @ParlanFinancial Corp. You Don’t have to be an Investment Geek to Make Money with this Idea. Ever wonder why a stock or the market just takes off like a rocket, with no apparent rhyme or reason? Me too ... This is a derivative of John Carter's "TTM Squeeze" volatility indicator, as discussed in his book "Mastering the Trade" (chapter 11). Black crosses on the midline show that the market just entered a squeeze (Bollinger Bands are with in Keltner Channel). This signifies low … Fixed a typo in the code where BB multiplier was stuck at 1.5. Thanks @ucsgears for bringing it to my notice. Updated ...

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Support and Resistance Short Squeeze Rally AUDUSD

What Greg McLeod Scalp AUDUSD by the Forex River Strategy. Learn more about working with Greg to improve your trading by watching a free informational Master... You may have heard of the term "short squeeze" in the past - but didn't know what it meant. I'm here to tell you what it is and how you can capitalize and pr... https://www.forexreviews.info - Common question in Forex is what is a short squeeze..? I noticed a lot of traders do not even know what it is fully.. Here is my answer, I wanted to make it clear ... What is a Short Squeeze and How Can You Profit From It? - Duration: 6:42. Sasha Evdakov: Tradersfly 69,709 views. 6:42. Mix Play all Mix - Patrick Wieland YouTube; The Best Pattern To Watch Every ... With the market at extensions, some of the best trades are short squeezes. We saw that in TSLA, RH, AMD, and VICI. Now, I have my eyes set on NVRO, WGO, and LK. Check out the parameters here. Also ... The Biggest Reason Most Forex Strategies Fail (And What To Do About It) - Duration: 33 ... The Short Squeeze & Long Liquidation Explained - Trade Strategies Axia Futures - Duration: 17:46. Axia ... How to Manage your Risk in the Open - Thor's Day Trading Recap Nov 12 2019 - Duration: 9:01. Bear Bull Traders 1,366 views

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