Today Market = Shakeout: What happened? What should I do now?

  • Home
  • /
  • Blog
  • /
  • Today Market = Shakeout: What happened? What should I do now?

Today, the markets experienced an abnormal price movement called Shakeout. This abnormal event can be caused by any global events, news announcements, etc. Today’s event was caused by Europe. However, it can be any global affecting event.

A shakeout bar can be easily seen from the higher timeframes i.e. 120m or higher. It is hard to recognize on lower timeframes. Attached is a 120m chart of the GBP/CAD. On a shakeout, a major trend is occurring. All of sudden, you see a movement the opposite of the trend. The opposite movement is so strong that it goes all the way to everyone’s stops and gets everyone out of the trade. After everyone is stopped out of the trade, it then goes back to where it started. You can easily see this on the 120m chart attached.

Normally, the stop on the 120m can cover the shakeout but in today’s event it didn’t. However, a 4hr chart did cover the event perfectly. The higher time frames filter out a lot of the noise but of course you have a lot more risk when you trade the higher timeframe. If you trade the lower time frame and want the lower risk, you are subject to these abnormal events.

If you would like to learn more about Shakeout bar’s i.e. how to avoid them, how to trade them, and what to do after the event, go to

EDUCATIONAL USE. Commodity Futures Trading Comission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provided on the Blog is for educational purpose