The trading saying "The trend is your friend" is as true today as it has ever been. The FOREX market (the FOREX) has long been recognized as one of the most consistently trending markets of all. There are trend-following opportunities for every trading time horizon. Look at a weekly or daily chart of any major cross-rate, and you will see trends that last several days, weeks, months, or even a year or more.
FOREX TRADING THEORY
Technical traders have long acknowledged the value of market trends in profitable trading. As far back as the early 1900s, successful traders wrote about trends. Despite the universal acceptance of this concept, despite the historical and experiential proof that it is the single most profitable trading tool, and despite the ease with which one can spot an ongoing trend and a reversal (the inception of a new trend), doing so remains the most difficult thing for most traders to do. Why? We believe that the problem is often two-sided, in that it is most likely a combination of psychological and technical deficiencies to varying degrees, depending on the individual trader's system application. This is the impediment that makes it so difficult to use trends in the profit-taking formula.
FOREX TRADING THEORY
The psychological side may involve excessive fear, greed, or both. The technical-deficiency side may be a failure to learn a trading system well or not having the patience and discipline to execute it flawlessly.
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