That should be one of the best example about why people are losing in forex: overthinking and imagining things. Some dude on InstaForex is advising traders to look for buy, despite the obvious downtrend that we have and the nice channel that he-himself drew. Now, let’s analyze this a little:

1. The broker says BUY – at this point you don’t even need to analyze, just do the opposite: SELL  🙂

2. We have a downtrend – I suppose we should sell, right?! (rhetoric question)

3. See the down channel? Price is on top, you should sell, right?! (rhetoric again)

4. See the higher-low formed?! Means you should sell.

5. RSI overbought = sell.

6. Why wonder “what if” and wait for the head-n-shoulders that might never happen? You have a sell signal NOW.

Even if the price moved up, and the trend changes – as this guy is trying to make you think – it would mean that he wants you to pick the bottom of this downtrend, which is a dangerous thing as you probably know. Further more, IF the price goes up and this “analyst” proves to be right (by pure luck ‘cause everything he says makes no sense whatsoever) you can wait for the second higher-low to form to enter long, after you will be sure that the trend, indeed, changed and the price is rising.

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