If you study any forex price chart, one thing is immediately apparent. Prices tend to move either up or down over an extended period. Every forex trader must be aware of the power of these trends. Two things to always keep in mind are:
2. Do not try to predict when the market will reverse itself.Alternatively, a market in motion will remain on the same trajectory. Many have experienced the pain of contradicting the dominant trade winds which control price action. The animal spirits as they are known – bulls and bears. Trending markets are markets where you want to be trading. They are predictable periods where volatility is relatively minimal for a given currency pair.
By limiting your trading to these times, you can increase both your win rate and profitability. Trend trading is a method which patient traders have been using since technical analysis first became popular during the mid-twentieth century. It is the most reliable path to the 7% monthly return promoted by Mr. Jordan Lindsey, Founder of JCL Capital.
Jordan Lindsey has encouraged traders to be steadfast and practical. Instead of treating the market like a lottery ticket, he advocates that forex traders think like savers and investors. Achieving small monthly gains of 7% which when compounded for a year equates to a 100 percent annualized return. Thus any trader would increase his or her account twofold each year. That is the power of compounded interest.
At the top of Jordan Lindsey’s list of things all traders must do daily is to review their goals. I suggest that traders add to their daily ledger with a bright red marker a reminder to only trade with the trend. Only go long in a bull market, or short in a bear market. More often than not this will be the correct course of action. As the Wall Street professionals say “The trend is your friend.”
However, there is a stipulation required to complete this conversation – a caveat! “ A trend is a trend until it comes to an end.”