Trend Following or Guess Work?

Trend Following or Guess Work

…A good trade in the current market conditions is pretty hard to come by; one can sport a trend and miss entry by a few pips. Problems is we usually rush in after that to avoid missing out.

Long term trends at the moment are not positions that traders like me should be taking but it does not hurt to follow a trend when trading.

An important fact that we should keep in mind is that you need to define yourself either as a trader or an investor. Many people today in the market today are simply traders; investors are the big boys that usually spoil our day at times because they can actually effectively influence direction in a few minutes. And let’s face it they hold positions for a very long time.

Below i came up with the assessment of how the GDPUSD might perform as it seems to me there is a raising trend line after a triple bottom check out the graphs below.

First we can look at the Hourly chat, i always like to follow a trend that shows gradual directional movement rather than spike up or down as they normally have to pullback and it could be very aggressive.

Remember this is only my opinion it could change at any time as fundamentals do not really seem to support market action at the moment

After looking at that we can also look to something that has not been talked about for a while because it did not work for the EURUSD. The head and shoulder pattern, in the pair GBPUSD it seems the patter is still being formed and even if it’s not at least you could have an idea as to how high the price action might go.

Keep in mind that markets tend to move on economic data and may force temporal market bias movement. It is up to you to follow direction you are comfortable with. I personally have followed several commentators that are sure the market will go one direction this day and it does exactly the opposite.

Always remember even if you have a trend to follow read into the mood and direction of the market for the day, unless you want or are a long term investor and are set to follow the trend, in which case just look for entry points.

Also keep in mind that the pound is in overbought condition so it will possibly go up and down and at times just a little below my defined trend line. Last time i saw a similar pattern form such as this one was in March for the AUDUSD, better after a few not so promising market data it pulled back and so did a few other pairs.

Should you have any trade ideas or wish to see the chats which i have seriously failed to upload  please send us an email i will be happy to hear from you and share ideas.