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Dead Cat Bounce in Forex Markets (Thats it)

Dead Cat Bounce.

A popular Forex trading term appropriate to many Financial instruments. This well known phrase is said to originate from Wall Street within the financial markets. The "dead cat bounce" means a brief and small recovery in the price action of a declining FX market. The basic idea is that even a dead cat will bounce if it falls from a great height. Also applied to Foreign Exchange  Markets where the currency pair encounters a brief resurgence during or following a severe decline. 
A good Forex strategy to counter the Dead Cat Bounce is MTFA.
Multiple Time Frame Analysis will form a rounded view of the market opposed to having a tunnel vision outlook at a stock or currency pair.
Forexmospherian Forex Trader Sir Gissachance charts display multiple instances of Dead Cat Bounce. The Multiple Time Frame Analysis strategy is also explained throughout this FX Forum. DCB are also known at Forexmosphere and described by Sir Gissachance as DC or Deep Continues.
Dead Cat Bounce or DC's play an important part in FX Technical Analysis and can be called a Chart Pattern for Technical Analysis.
Sir Gissachance description of a DC is far stronger than the term Dead Cat Bounce because Deep Continues are shown to exist in Bull or Bear Markets. This gives rise to opportunities in all FX Market conditions. Whereas DCB is a technical analysis term used exclusively for bear market price action conditions.

Multiple Time Frame Analysis (MTFA) Forex Trading Strategy

Shorted currency pair AUDUSD @0.7622

S/L @B/E

M1 AUDUSD LH and Support circa @0.7585

M30 AUDUSD Support @0.7540

Holmes
Forex Trader
Previous Contributor: SFS, FXstreet, Forexmosgate, Forexmospherians.com
Currencies: Various Scalp, Swing, Trend Trader
Fundamental and Technical Market Analysis

Comments

  • Great Foreign Change blog and thank You for sharing this valuable FX knowledge Holmes.

    Also a great call to trade ;o) It is just a pity that I can't be awake 24/5 to check your posts guys and trade FX with them all hehe.

    This made my day btw :D "The basic idea is that even a dead cat will bounce if it falls from a great height"

  • These are great Foreign Exchange Trading tips Holmes and thanks for the mention. Excellent FX analysis and on the money trade AUDUSD and Live call, to the pip! Wonderful and really helpful to Forex traders, whether scalper, Intraday and longer Term Traders. Not many will know this but Holmes is an FX specialist and expert trader. Looking forwards to more posts from another seasoned Forexmospherian Trader.

    Best Regards,

    Sir Gissa

  • Thanks Sir Gissachance but I can only credit you with teaching me an extraordinary FX Trading style complete with Forex Videos, charts and the Forexmospherian Currency Kraken market alerts. Thanks for everything and the continued support you offer everyone here. As far as AUDUSD currency pair Trade goes, I am following your live charts and am 98 pips short. The Amazing Sir Gissachance, Forexmospherians and the Data. It is quite clear the Forexmospherians are Easily the best Forex Traders on the internet for decades now. Holmes

  • Hi Daniel Stasziek, you are welcome and Sir Gissachance Forex educational material has allowed me to intraday trade and analyse live charts in this way. Takes time and patience as well as finding a reliable time proven, consistent, Forex educator like Sir G and some great daily Trading buddies which we have right here. Holmes

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"Keep a Record of the Business or Currency Pair Traded. Reasons why the Trade was taken. When was the Exit. How and why the Trade turned out the way it did"

"It's my pleasure to be part of this forum, which is always different than other places & with a friendly environment. Glad to be in this team"

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"I figured this was a legitimate break, so I went on the hunt for evidence, so here in succession is the list of clues I used to make my decision:

Rejection of market and weekly pivot at ema confluence.

Complete and broken head and shoulders on 1hr time frame.

Broadening formation on daily with test and rejection of 200 day ma

Bull hinge on daily and Renko stochastic.

Positive momentum on 5min, 1hr, 4hr and daily chart"

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"Forex Market analysis relies on two types of analysis much like Stock Markets:

Technical Forex Market Analysis views the data on a chart and considers that the News and Data is built into the Price already (economic, political, social, sentimental and psychological). Various tools and indicators will be used by technical traders, for instance MACD, Bollinger Bands, Moving Averages and more.

Fundamental Forex Market Analysis also uses indicators, for instance reports, Gross Domestic Production (GDP), Retail sales, Consumer spending, Industrial Production, Consumer Price Index, Commodities, Economic Calendars, Balance of Trade levels which could identify Trends between other Nations and more."

"Short rapid bursts and quick glimpses of an entry, trigger activated, trail in place and exit strategy and plan already set. Within a blink of an eye, instinctively the buy/sell button is pushed. The hammer falls and clanks decisively, echoing, sparking, like steel upon steel and the trade is executed. A Traders heart beats on with perfect set up, closely aligned with strict parameters, ready to continue the attack or recoil on a wire. Wrap the profit and then stand down, ready for the next hunt"

"When we are talking about sentiment it is very hard to say that this sentiment will prevail another 6, 9, 13 hours. Sentiment is not a constant line. Main trend is bearish, tech picture on daily is bearish, even intraday neutral. Nobody restrict to play long eur short usd position with the target at 1.12 or even 1.1361, this is every traders individual choice as always"

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