Trading with the Trend

Many Many traders never really participate in the big trends in the FX market, rather they seem obsessed with small counter trend moves, all you hear is but it has to bounce soon. The truth is that it will bounce eventually but why do we as humans feel the need to always be right by trying to predict it where the bottom/top is. The phrase "The Trend is your Friend" is often thrown around but how many traders really take this on board, in reality very very few, maybe this is why the failure rate is so high in FX.

I would like to post three charts for the EURJPY which illustrate my point about determining the trend. I am only going to point one thing out on this chart (this is by far not a complete technical analysis) as I want to keep my point as simplistic as possible. The moving average is probably the best indicator for determining the trend, to reinforce my point I will post a 1 hour, daily and weekly chart. The 100 Day MA (moving average) is in aqua green and the 200 Day MA (moving average) is in morone, please take note which way they are pointing.








They are all pointing down, now I ask you is this worth buying into in my opinion no, now there will be relief rallies short covering, but until the fundamental issues of Greece and the Euro Zone in general are put to bed and the market is satisfied with the outcome, dont fight what the charts are telling you, see every uptrend (in this case) as an opportunity to short, at least until the fundamental factors and the technical tools start telling us something different.

One of the best ways to get clues in a trend change is to look at the weekly chart, often when the market reaches the end of a run it will give nice candle formations on the weekly charts and hammers and alike will be seen.

Good Luck Folks, don' t try and beat the market get on board.

Simon