Section 1 – Trends The myth of market trend
Trend following has been the best style of trading for the past 30 years . There were times when traders made fortunes just by following the trend or following a simple system based on two moving averages crossover . The “ buy and hold ” strategy that was so popular by traders about a decade ago is dead today .
Look at the EUR / USD chart from January 2001 until July 2008 . The uptrend was pretty strong most of the time . If you pushed the “ Buy ” button , you would win most of the time even with a poor trading system . The consistent rise of the euro over the dollar was giving you a clear sense of the overall trend .
Since July 2008 , it looks like everything has changed . The trend direction is unclear , nobody knows what is going to happen next and people are seriously preparing for the coming collapse of the single European currency . By the way , for us ( Forex traders ) it would be nothing but another opportunity to make a profit , so keep smiling .
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