Talking Points:
• Picking tops and bottoms is a dirty phase to experienced traders and yet a lure for speculators
• Trading reversals is possible, but it requires an appreciation of the mechanics
• We look at the simple mathematics of trading reversals and look at S&P 500,
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Some think picking tops and bottoms is a fools errand and others consider it the center of their trading approach. Correctly identifying and trading reversals can be lucrative, but they also can be severly costly. As with any other trading approach, success comes from a proper appreciation of the circumstances surrounding the method and and a robust strategy (identification, entry, risk management and behavior control). In the weekend Strategy Video , we discuss mechanics and mathematics of reversals with a view specifically to some of traders current favorites: S&P 500, USDollar, EURUSD and USDJPY.
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