I am pissed off.
I spent today watching conversations about EUR/USD on a very popular Forex forum. The forum in question is full of self-proclaimed gurus giving half-assed trading advice.
….advice that is hurting new traders.
I Make Mistakes
I make mistakes, I sometimes make dumb mistakes, we all do. However, I never enter baseless trades on a whim and tell everybody to follow me.
That is what happened today in the forum I was watching.
The Bad EUR/USD Short
As you know EUR/USD rocketed up today on news from the Euro summit. Price shot up 170 pips in one hour.
So what did the gurus in the trading forum do?
THEY WENT SHORT!
And they told everybody else to short too!
Why?
As soon as I saw these dumb shorts I made this video:
Why was the trade bad?
There was no reason to short…. price action was neutral at the time. Most of the so called experts in the forum entered short below 1.2600 and had stop losses of 80 pips or under. With price hitting 1.2690 there stops were easily taken out.
The image above tells the story. The long upper wicks on resistance scream SELL but the massive support area screams DO NOT SELL.
People who shorted broke one of the golden rules of trading. Do not sell into support or buy into resistance.
The other reason not to short is that there was bullish news out on the wires. Why sell when the news is positive?
How to avoid idiotic advice in the future
Take any trading advice with a grain of salt. Even when I give you trading advice on this blog….. be skeptical. As a trader you need to learn to do your own analysis. You need to be self-sufficient.
You should also learn to read and understand Price Action. By simply reading the Price Action you saw me conclude in the video above that the short trade was flawed. Learning to read Price Action will give you a huge leg up.
And Now I Pass It To You…
What do you think about self-proclaimed experts giving half-assed trading advice?
Are they idiots, or are they right?
I’d love for you to share your opinion.