"Always Follow The Trend"

[mohsinqureshii 10]

If you ask a hundred professional traders their strategy, you'd likely get a wide-range of responses. One of the best parts of markets, the fact that there is not Just one way of being a profitable trader. it can also be one of the most difficult for new traders to grasp.

Observing a chart can lead to numerous ideas, one of which may give traders a clue for how they want to approach the market. Lets take, for instance, the daily chart of EUR/USD in the attachment.

Going back to price action taking place in April of 2009 (the beginning of Box 1), I've identified 5 distinct periods on this chart.

What do these Periods have in Common?

One of traders' best Friends, "The Trend" is moving in one direction creating a clean, smooth movement with which I, as a Trader, can look to trade.

IN Box 1-- the rampant run-up on the Euro. I want to look play long positions Only. Could Short positions have worked out in BOX 1?

Maybe.

But the bias appear to be to the upside (as price is continually thriving higher). As a trader, I want that or any potential biases that may be in the market to work in my favor, so i am only going to look to trade long positions during Box 1.

This strong uptrend leads us into Box 2, Which is reversal of the previous up-trend to the downside.

In Box 2, now we have clean movements to the downside. Just as we had above. It appears that the bias is to one side (however this time the bias is to the downside as opposed to the upside).

Now, just because we have a clean trend, it does not mean that ALL price action will be to the down side. there will certainly be days in which prices go Up. we are just looking for the general trend: the tide of the ocean.

After an extended run in Box 2 ,price finds support, and eventually moves back up (in Box 3). Although this movement is relatively short lived compared to what we were seeing in the previous 2 trends, we have the same strong movement in one direction that can give me a potential way of playing the trend.

Boxes 4 and 5 give us more of the same thing; Price moving with what appears to be concerted bias in one direction, and this is where traders can look to stage their approach.

While the future is unpredictable, and nobody knows what the price will be, trading with the trend can bring numerous potential benefits to the trader's approach.

One of the beautiful parts of the FX market that does not Exist in Other markets. With over 40 Currency pairs available, there is almost always a clean Trend SOME WHERE that can be traded.

Thank you very Much for Your time.