Forex Trading: Limit order 16/07/2010. Sell GBP/CHF @ 1.5970 , SL @ 1.6145 , TP1 @ 1.5875 TP2 @ 1.5810 TP3 @ 1.5740

The pair has been  trending downwards and has made a small retracement upwards.

We want to enter the main trend which is still downwards but first wait for a confirmation the trend continues.

The entrance point is located below the last bottom the pair has made on the 4 hour chart.

More aggressive traders could try and short the pair from its current location but they should be advised the retracement upwards might continue higher and a SL of above 1.6170 is recommended for such traders.

 The RSI is near 50 in neutral territory.

SL is located above the last top the pair has made yesterday and above the 100 period moving average which is likely to act as a resistance for the pair.

TP’s are located  slightly above the support levels the pair has.

All analysis is based on the 4 hours chart.

Current rate: 1.6075

Trend trading would be an ideal choice to make money as the moves are real big and the losses are small. It depends on the trend and the Forex trade may last from days to months giving a chance to trade the trends. So what does one mean by trend and how to define the trend? Finding a trend on the longer time frame charts will be easy. When the trend goes up it is known as uptrend and when it goes down it is known as downtrend. Also one should be able to know whether the trend will continue or not. Trend can be measured in two different ways. One is through Market breadth. This is considered to be the percentage of the currencies, when the currency is being analyzed it means trending up/down against. For instance when EUR goes up against the other pairs then it is said to have 100% strength.  When the USD is weak, then one can buy the weak USD vs. the strong EUR which will be a high probability.

This is only to measure the breath of the pairs. To understand the full statistical analysis one should find out if the trends are exploding or it is somewhere in between. One can do this using the trend intensity tools or FX Multicar tools. With this one can go back 20days and can measure the average volatility. This can be compared with the today’s volatility which will give an idea on how weak or strong the pair is.

By using the Tool Strength, one can find approximately the trend’s breadth with the help of the FX Multimap intensity. It is always easy to use 2 indicators than using 1. By analyzing the pairs one can find out which one is strong and which is weak.  Nothing can be won 100 percent. There will lose in the Forex market in the trend but it will be few in the trend trades when compared to the other trades. Here one can come across HUGE wins and less loss. First one needs to find the strongest trend which is really essential. By using this one can have an entry. When one looks forward to buy, the trendlines over the high and buy when the price goes down the trendlines. This will be reversed when it comes for sale.

Trend trading is considered to be the most profitable way to earn money in the Forex market. Here one needs to buy the stock and hold it till it goes down. This type of Forex trade is totally different in two ways. Here the trade is longer and it doesn’t have any target. Here the trend traders will like the stock to go up and will wait till it breaks down.