Recommendations that can change your life
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| Weekend Straddle |
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The weekend straddle is a novelty trade that has made many people lots of money. In general when you expect the price of a currency to have a volatile breakout but you are unsure of the direction it is not a bad idea to hedge your bets by placing both a buy and sell order above and below the current price. Should the price break upwards the buy order is activated and the sell order can be cancelled and the other way round for break downwards. The technique is successfully used for volatile news announcement breakouts, breakouts out of price patterns (e.g. Symmetrical triangle) or to a lesser degree weekend price movements. .
The major risk involved in straddle trades is a whipsaw where the price does a mock breakout to the wrong side and reverses strongly in the other direction taking both the buy and sell order in the process. Sometimes this is not the end of the world as the proceeds from the last order could exceed the loss on the 1st stop out. Straddles should be thoroughly demo traded to make sure that you are happy with the concept. .
For a practical example of a weekend straddle please click here> Weekend straddle |
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