Strategy Video: Measuring and Trading Conviction in USDollar and S&P 500
• Conviction can help determine whether a market is at risk of a reversal or more likely to hold trend
• Fledgling and mature trends - in fundamental and technical nature - are more likely to reverse
What separates a sharp rally from a lasting trend? Conviction. Measuring the market's degree of confidence isn't easy; but there are methods to improving our estimation. Technically, the maturity of the trend and the 'severity' of its development are strong indications. Fundamentally, the presence and support of a dominant fundamental trend often plays a key role. In this weekend Strategy Video, we look at means for evaluating conviction and apply it to the recent rebound on the S&P 500 as well as the exceptional extention on the USDollar's impressive run.
Sign up for John’s email distribution list, here.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.