“Panic Selling” In Forex Trading

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Understanding the Nearer “Panic Selling” In Forex Trading

The term panic selling in forex trading may sound unfamiliar to a beginner’s ear. If simply interpreted, panic selling is a condition where traders or investors are afraid of the financial and economic crisis that occurred. The traders and investors got various information from various sources that made them decide to sell, such conditions are called panic selling.

When traders are caught in panic selling conditions, there are a lot of currency pairs or stocks they sell. This is certainly very influential on stock prices or currencies that decreased in value.

In the discussion this time, we will review the complete about panic selling in the forex trading. Not just a basic about panic selling, but we will also discuss about various types of panic selling and when the right time to take advantage of this moment in order to get the optimal benefits.

4 Panic Selling Category

1.Phoney Panics

This condition occurs when traders are too easy to receive information from various sources without checking its validity. As a trader you should check the validity of an information received, never to swallow the information in a rough

Phoney Panics many occur by traders who follow-along or the beginner traders and not too understand the market conditions.

2.Self Induced

This condition usually occurs and is caused by the trader himself. Let’s just say he sees the traders start selling the currency and he finally begins to follow the steps that are done by other traders.

Such actions are done by traders because they feel afraid to suffer losses if they keep their own currency.

3.Contagious Panics

This situation occurs when you participate infected by panic that occurred, it is called the Contagious Panics. Traders or investors will sell stocks heavily after he sees many other investors doing so.

4.Real Panics

While the last type is real panics caused by the situation that really happened, such as an economic crisis. This panic occurs when the crisis is really happening, not like the kind we have mentioned above.

One of the underlying real panics is the factual information and requires a trader to sell his currency.

Panic Selling In Forex

Panic Selling occurs when prices move down quickly at high volumes. Conditions like this happen because the market players begin to enter to neutralize the market or when traders begin to take a sell position that makes prices start to fall away.

Understanding Panic Selling Process In Forex

In the first stage something happens and causes the price to move down quickly with high volume.

Furthermore buyers and sellers start entering into the market to control the existing trends, under these conditions the most powerful trend that will win.

If the above has happened, then the process of movement will begin to continue until confirmed by technical and fundamental factors.

Currency Sales Currency

The condition of the currency sale will stop when the price starts to reach the support level. Conditions like this you can see by using a combination of trend indicators. There are many indicators you can use to confirm that the trend has changed.

As a trader, you are required to select some indicators that can confirm the trend as you wish. With the fewer indicators you use, the higher the risks you face and the greater your potential profit.

Rules to Understand When Utilizing Panic Selling Moments

First the declining price must be fast with high volume. Volume will start to jump up and will create a new low level to then reverse the existing trend.

The third rule is that you should be able to see higher low price waves, because this is the moment you use to open a buy position.

Helpful Tips That You Can Use When Facing Panic Selling

When the condition of panic selling occurs, then as a trader or investor, you should not be reckless and should really pay attention to his position. If you have a position on a currency, then you should not be silent alone. You may remain silent when you are confident that the price will rise back to the previous position /

If you see market conditions that are not possible and a lot of credible information that requires you to sell, then do the sale of the currency immediately. Because if you continue to hold the currency, then the greater losses will potentially get you.


Conditions panic selling can provide opportunities or opportunities for traders to open a buy position with a larger number of lots. A trader who understands well when there will be panic selling conditions have the potential to gain greater profits.

The thing you need to know is to know well, when the best time to predict the price starts to decline to further buy the currency in larger amounts of lots.

With the above discussion we hope you can take a more appropriate decision when facing panic selling conditions. Hopefully the information we have conveyed above can provide many benefits for traders who are reading.

If you are still confused with the above topic, please just ask us through the comment column below. We will be happy to answer any incoming questions for you.

Please share this article with more people through your social media channel. In order for more people to know how to deal with panic selling and how the right strategy to generate profits.

Hope it inspires!

Forex4Live.com is a forex trading system website that started to be published since 2011 and has been used by thousands of traders around the world. The system is very simple and accurate, priced at $ 167 for a lifetime membership with no monthly fees or hidden fees. Our team created this system by testing thousands of indicators then selecting 23 indicators and combining them into one great trading system.
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