You may have heard the saying A Trend is your Friend until it Bends. Technical Analysis helps us to identify a trend so we can jump on and ride it until it changes. Since the Forex market has very strong trends, technical analysis is a very effective technique.
Some traders still persist on trading against the trend, they argue with it even though price movements are obviously in a trend. Buying when the currency is in a basic downtrend or selling when its in an uptrend, instead of buying.
Our primary purpose is to identify the major trend, intermediate trend and the short term trends and place trades in that direction. We then hold position until our calculations suggest otherwise.
Heres a quote from Jesse Livermore, a tenacious, flamboyant and profitable Forex trader,
“We know that prices move up and down. They always have and they always will. My theory is that behind these major movements is an irresistible force. That is all one needs to know. It is not well to be too curious about all the reasons behind price movements.
You risk the danger of clouding your mind with non-essentials. Just recognize that the movement is there and take...
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