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The strongest trends offer the best trading opportunities.
By Tom Long | January 9, 2008
For almost all of 2007, many students in the FX Power Courses were buying pullbacks in the EUR/USD and selling rallies in the USD/CAD and doing quite well since they were trading with the trend. But trading has become more difficult lately as there has been little follow through on any move up in the EUR/USD or move down in the USD/CAD. The difference is that they are still trading last year’s strongest trends and not taking another look at all of the pairs to judge the current trends. We have talked about the first step in finding a trade is to identify the strongest trends and to only trade in that same direction. But the strongest trends one month may not be the strongest trends in the next month. Just because you made some money selling rallies in the USD/CAD all last spring, summer and fall, does not mean that this is the pair to trade in the winter. The first step is still to find the strongest trend to trade and that means be very picky each time you check the daily charts. Check out the current daily chart of the EUR/USD and compare that to the daily chart of the EUR/GBP. Which trend is stronger? That is the pair that you should be trading as the strongest trends offer the best trading opportunities.
noneTopics: Don't Trade Like This |