Wednesday, September 9, 2015

Short Covering Rally

A Short covering rally would be when the market has sold down to a price level were Higher Time Frame traders either want to take profits or remove some risk, they come into the market and start buying off the open creating a "p" shape profile suggesting we are seeing old business in the market also creating a day type senario.

On the other hand the market might have got too short and with price openeing higher margin calls can force higher time frame market participants to liqudate there inventory creating an "inventory correction".

These types of infomation are key parts to the stories the market is telling us provinding key market generated information.

This is a trading glossary term series of blog posts. You can take a look at all the terms we post with the Trading Glossary label.

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