Looking at some examples of great trends to make a case for the new purpose of this blog, I’ve attached three interesting charts.
The EUR/USD weekly chart is a top-notch example for what trendfollowers are looking for. The downtrend you can make out went on for 1,5 years and was finally closed in early 2015. It yielded a profit of more than 2000 pips, based on one lot. Once the market has taken the first fractal sell signal, all we care about is moving the stop into profit when possible, and then the markets just run for themselves. We have no control over how far, in what manner and how thankful the trend will run and be. In this case, the markets were very good to us, obviously.
The Platinum chart shows a trend that had numerous entry points already. However, it is a move that is still going, even though prices have come close to the moving average lines which could eventually be an exit point. Regardless if you were able to enter on all three of the indicated signals or if you had to exit the market and now you are only short from entry #3, profits in this downtrend are decent. This is of course due to the nature of this move, it is long-lasting and doesn’t have too many rallies in the opposite direction. The EUR/USD from above is still a more thankful trend, because it just went down wihtout touching the average prices of the past candlesticks, but as I have mentioned: it is not in our control to demand how the market should move, we should much rather adapt to what it’s doing by executing perfectly. In this regard, the Platinum short is also yielding good profits so far.
And for the last example of today’s update I want to show you a possible trend starting. As of now, we have no reason to believe at all, that there could be a trend soon on the Dow Jones Industrial Average, but a fractal sell signal is about to be hit. It’s location is below the moving averages and therefore a breakout point to sell. It’s part of the trendfollower’s job to enter market upon market, when about 60% of the time entry signals will fail and NOT yield into a trend. That is part of nature, that is part of the markets. It is because of this, that the aforementioned Risk Management plays a very significant role in trading. If more than 50% of your trades fail, you will have to manage your trading capital in a way, that your account still exists when the big market move finally comes. It is that move that you need, in order to make up for the small losses and gain a decent % amount, too.
Other markets also show good entry opportunities on a weekly basis right at the end of 2015. New blog updates will shed light on new opportunities for the coming year – let’s be positive for many trending markets :)