When a currency pair begins strong trending movements, a trader asks about the advantages of the trading maxim, “Trade as per trend” , “the trend is trader’ friend”, what do the trends have to proffer? Why not the trades against the trends and with the trends as well as create pips that going both ways? As pips could be built the trading counter trends, they must certainly, come with a larger amount of risk.
Basically, when taking a trade in trend direction, the traders have the momentum, a “push” of the markets behind their trades. As a trading purpose is to make the risk less, one way, you may do that is, get rid of those trades which, are against the existing trends of the market.
Whenever trading counter trend, there is less and less momentum “push” in that direction. Like, a dominant trend may kick back in quickly at any time, nullifying, and some or all profits that might have been gained through trading against the trends.
Moreover, whenever traders know that, they basically have had the “markets behind their trades” and when trading along with the trends, they have had more confidence to fix with the trades and let them mature, rather than closing the trades so early or before accurate time.
Last but not least, counter trends entry need to be more exact, because, you are striving to time the entry when it is heading in the other directions, that the markets have been taking the currency pairs over time. On the other hand, when you have had the markets behind your trades, entry with the trend may be more forgiving for you.
If you want to have the most information about this concept and you also want to go in the depth of this concept, then, have had a look at “USDCHF Daily Chart”.
In this chart, you would examine, the fairly accurate numbers of pips in every move towards the downside, in trend’ direction in the market have been shown in green color. Whereas, the fairly accurate numbers of pips .In every move towards the upside, opposite the trend has been shown in red color.
While you must absolutely examine, that the pips could be built trading counter trends, 4,070 pip in the chart. There is a considerable difference in the numbers of the pips gained by the traders who just had had the trades in trend’ direction. On the base of this chart, tradings with the trends would have a mass 3685 more pips, around 47% extra with less risk, as compare to a trader who just had counter trend trades.
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