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| Knee-jerk Reaction |
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| Written by Al Parsai | |
| Tuesday, 24 February 2009 | |
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Knee-jerk reaction refers to the immediate reaction of the market to news release. Such reaction usually results in a significant move in one direction either short or long (see image).
Sometimes the reaction of the market to news release shows indecisiveness of the market participants as price moves quickly in both directions. Such moves usually result in false breakouts. If you trade news by straddling you could get whipsawed in one or even both directions.
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| Last Updated ( Tuesday, 24 February 2009 ) |
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