Trading a "Falling Knife"
Thursday saw the DAX fall in value by 600 in the space of a few hours, following the ECB's decision to drop the minimum bid rate to zero percent. Crazy stuff but a fantastic opportunity to bolster the trading account if you're careful; or to wipe it out if you're not.
We're all told to be wary of trading the "falling knife" - and quite right too. Look at the H1 chart below and you might well ask how anyone could possibly know how to short where the arrows are shown.
Apart from being able to short the top, after the news,, there were four or five superb shorting opportunities that were low-risk high-reward but not very obvious using the H1 chart.
Now add a BRN indicator (there is one for free in the Free Indicators page - help yourself) and drop to the M1 chart - you might just kick yourself if you were sat on the sidelines on Thursday watching price drop like a bomb without getting a slice of the action.
The ,move started with an eWaves W5 at the 10,000 level - the BBRN (Big Big Round Number).
Then price plummeted providing further opportunities to add on and join the sellers, as simply as this ...
Who says trading has to be complicated?
Who says the M1 time frame is just noise?
It started with an eW5 at the 10,000 BBRN and finished with an eW5 at the 9400 BRN. And that's pretty much why eWaves is the only technical indicator that I use for trading.
Here's a useful little tip to quickly clear objects off your charts, including old trade history, lines, fibs, text, etc.
When ever I want to clean all the lines off my chart I just press ALT C - a lot quicker than deleting objects one by one or re-applying your template. The script allows you to keep objects with defined name prefixes, so you don't have to delete everything if you don't want to.