How you can Catch a Strong Trend After It’s Started
Trend following techniques are bread & butter for
financial traders regardless the type of trading or kinds of asset in question.
Trends are sustained price movements with predictable entry points and reliable
targets.
In many cases trends are slow and lumbering ; the secret to success lies in waiting patiently for entry signals to develop, not trading to soon after which expecting profits to come.
In some instances, the tendancy is fast and sharp, price movements are rapid, gains are large and entry points less evident ; as is that the case in a lot of today’s dollar pairs.
In many cases trends are slow and lumbering ; the secret to success lies in waiting patiently for entry signals to develop, not trading to soon after which expecting profits to come.
In some instances, the tendancy is fast and sharp, price movements are rapid, gains are large and entry points less evident ; as is that the case in a lot of today’s dollar pairs.
Global growth, specifically inflationary pressures, happen
to be a little weak in recent months while US data has shown enough acceleration
to heighten expectation for three more FOMC rate hikes in 2012.
This situation has place the FOMC, and also the dollar, on the divergent path from other banks and the currencies (the Bank of Japan, the Bank of Canada and also the Bank of India specifically) driving the dollar higher.
While moves during these pairs (USD/JPY, USD/CAD and USD/INR) happen to be large, They're Not over. Actually, they're just beginning. When a robust trend forms it often pays not to wait patiently as momentum can carry it forward for the extended period.
This situation has place the FOMC, and also the dollar, on the divergent path from other banks and the currencies (the Bank of Japan, the Bank of Canada and also the Bank of India specifically) driving the dollar higher.
While moves during these pairs (USD/JPY, USD/CAD and USD/INR) happen to be large, They're Not over. Actually, they're just beginning. When a robust trend forms it often pays not to wait patiently as momentum can carry it forward for the extended period.
I highlighted the USD/INR last week inside my post Three Forex Pairs With Big Gains On The Way as probably the pair has outperformed my expectations. I'd been attempting to find a break towards the upside, past $65. 75, having a target of $66. 50 over subsequent 2 months or so. The break out occurred the same next day, the pair exceeded my long-term target and it is now consolidating at a brand new resistance level.
The indicators are consistent with resistance, both MACD and stochastic have formed peaks, but both will also be very strong. MACD has formed an extreme peak convergent using the new highs indicative of underlying strength within the marketplace.
The pair is now expected to form a consolidation pattern, possibly a flag or small triangle, before moving higher. A break above new resistance, near $66. 75, will certainly be bullish having a target near $68. 75. Support is present at $66. 30, an entry point for bullish swing traders.
The pair has broken through possible resistance in the short term moving average with no trouble and in fact now sitting just below another potential resistance target at 1. 2850. This level is that the neckline of the head & shoulders reversal pattern which formed merely a month ago, the peak of which marks the highest of the likely trading range.
Also read:
The indicators are both bullish and upon the rise in support better prices so a break of resistance is most likely. Once it fails targets at 1. 2950 after which 1. 3100 enter into play.
The USD/JPY formed a reversal on fundamentals, Japan’s
economy is struggling as the US is strong and accelerating and it is extending
its gains on dovish comments coming from the BOJ. The BOJ governor Kuroda says
QE is needed for a long period, well past next year, and that's fueling the
rally.
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