User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday May 19, 2023 - 12:33:59 GMT -

Share This Story:
| | Email

Exclusive: How to Trade a Liquidating Market

This is a must-read! I have written several articles on how to trade a liquidating market and given the price action over the past week, including yesterday, it is worth reiterating. Understanding the dynamics of a liquidating market, recognizing when in one, and having strategies to trade it can make the difference between having a good day and a painful one as I will explain in this exclusive report. 

To put it simply, liquidating markets are different animals and have to be treated as such. One of my favorite tips is to identify the market and when it goes into a liquidating mode you need to adjust accordingly. 

So once you recognize the market is in a liquidating mode, how do you trade it?

The way these type of markets tend to trade is that they move in spurts as orders get executed and positions liquidated. Once the order is done, you may see some backing and filling as selling (as in the above case) is done and buyers come in looking to catch the low. This often gives a false sense of a bottom as the market backs away from the low until the next wave of sell orders. This leads to a squeeze on those trying to pick a bottom as they get stopped out by a fresh wave of selling and a new low. The extent of the move depends on whether key technical levels get triggered as this can accelerate the move and bring in fresh selling.  Liquidating markets will exhaust themselves and finally reach a bottom, either by a key technical level holding or by the selling just running out of steam.

The way to trade a liquidating market is either to sell on the backing and filling (blip up) but that is often difficult as it is hard to find a nearby stop if the chart is like a one-way street. Another way is to put a stop entry at the low or high to go with the next wave of sell order liquidations. The other way is to wait it out and only go against the move if you sense it has completely lost steam. However, the tendency is to buy at each pause, hoping to catch the falling knife after a new low. The danger in this approach is that by the time a low is in place you may be too beaten up to catch the bottom.

The key point is to recognize the type of market you are in and that the hardest trade is often the right trade.  The wrong trade is to buy the easy-to-get filled at what looks like an attractive level trade.

Note I used a market that is liquidating long positions as an example. The same principle applies when short positions get liquidated.

Feel free to ask questions or comment by sending an email

Jay Meisler

[email protected]


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered LIVE to YOUR charts

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 27 May 2019
AAGB/US- Holiday
Tue 28 May 2019
A 14:00 US- Consumer Confidence
C 13:00 US- Case-Shiller
Wed 29 May 2019
A 08:55 DE- Employment
AA 18:00 US- BOC Decision
A 18:30 US- EIA Crude
Thu 30 Mar 2019
AAEZ/CH- Holiday
A 12:30 US- Weekly Jobless
Fri 31 Mar 2019
AA 10:00 EZ- Flash HICP
A 12:30 US- Personal Income, Spending, Deflator
AA 14:00 US- Final Univ of Michigan

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
The Amazing Trader
Forex Opportunities
Forex Affiliates
Forex CopyTrading
GVI Forex