I am always confused, how to define reversal? Then I recall Ayumi had a similar doubt. After re-reading the table quoted from Investopedia, I'm still wondering.
While it's easy to always assume market moves in my preferred direction. At this moment, I just think everything is going down. But to be a trader, it's important to "trade what you see, not what you think!"
Some traders were already calling for an uptrend of some pairs like EURUSD and GBPUSD, while I was thinking anything that goes up is merely "retracement".
But after seeing EURUSD and GBPUSD running loose like bulls, I was left wonder, what should my strategy be?
From the area highlighted blue in the chart above, should I call it a retracement from what I labeled White L1? Even yes, should I trade against the major trend, i.e. trading the reversal?
If the retracement wave is a big one (across at least 1 or 2 weeks), what's the pros and cons of trading the retracement?
Trading a retracement wave of a 4H chart or less might be strenuous, requires much attention, what about something larger than that?
Another point to ponder.
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