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Price Velocity Upwards Serves as Warning to Traders


Financial institutions and large speculators appear to be positioning for an election outcome they are nervous about on the 28th of May.


The USD/TRY has picked up price velocity this week, the currency pair is now traversing near the 19.77800 ratio with rather quick trading action being demonstrated. Perhaps under the current circumstances, day traders who are without deep pockets may want to simply be a bystander and watch the USD/TRY produce volatility. What looks like a potentially easy trade upwards to gain profits could turn into a landmine for the unprepared.

Getting into the USD/TRY is not particularly easy, if a trader makes a ‘market’ order, meaning they accept the fill given to them by their broker as the currency pair trades freely, the speculator should expect to get ‘hurt’ via the price fill.  This is because the USD/TRY has the capability to move fast in either direction – yes, it has been moving up in a dominant fashion, but suffers from reversals lower too – which opens the door to being given a price that the trader did not expect and making it harder to gauge and achieve their profit objectives.

The USD/TRY began trading on Monday near the 19.57500 mark approximately and immediately began to experience volatile results as it fought higher, and then was sent lower, only to return to upwards momentum in an even stronger manner.  Speculators attempting to pursue the USD/TRY with too much leverage are likely to get knocked out of trades almost immediately when price volatility is strong because the cash in their accounts is not equipped to handle moves that cost thousands of dollars in the blink of an eye.

Experienced traders with deep pockets and who use limited leverage – if any at all – can pursue the USD/TRY. The likely chosen direction for bettors at this moment continues to be up.  The Turkish runoff election will be conducted on the 28th of May. Financial institutions are nervous about the outcome and the potential of additionally questionable and problematic policy decisions regarding the management of the Turkish Lira. The USD/TRY is at record-high levels. Traders should not be overly ambitious regarding their targets while buying the USD/TRY, and they must acknowledge that quick and violent movement lower can happen, which can be very expensive if stop losses aren’t being used as price protection by traders.

  • The near-term will remain fast in the USD/TRY as financial institutions brace for the runoff election in Turkey that will decide the leadership of the nation on the 28th of May.
  • Traders who want to participate in the USD/TRY must use the proper risk management and understand betting on the currency pair is dangerous because of volatility in both directions.

Current Resistance: 19.78300

Current Support: 19.75600

High Target: 19.83400

Low Target: 19.69900


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