When you trade the Dow Trade you will learn most importantly when momentum will occur or where to place an entry to catch momentum. Today’s trade is typical of how this can work and not put you on the riskier side of the trade. As most Dow Traders know, the overall momentum in the market in regard to the EURUSD, our currency of choice, is risk. When you are trading risk you are going to be trading primarily in the direction of the Dollar.
If you are trading straight RSI Reversals you might have entered early in the day (London) and traded long on optimism (value). The market moved up and by the time of the Dow open, was in consolidation. Once this occurs and we see the market in NYSE (The Dow) move strongly in favor of stocks and correspondingly we see that the EURUSD has run out of gas then we know that profits will be taken in the currency market and the momentum will reverse. We took our 30 pips for the day!
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