We’ve all heard that “The trend is our friend”, yet anyone who’s tried to trend trade has invariably said to themselves… “How low can this market go? This MUST be the bottom!”.

Don’t fall into this trap!

Let the market tell you what to do. In this following example, the persistant downtrend in the USD/CAD forex pair continues as this trend continued even further downwards, breaking into new territory.

Even with a poor entry, in just over a month this simple trend trade has racked up over 490 pips.

This is a very interesting area to be in, as support levels back to 1991 have been cleared, allowing more unrestricted movement to occur [shown below].

In an earlier article I was asked to point out how I define key support and resistance levels.

One simple way is to see where price has acted as support and resistance in the past. The longer a price level holds, with respect to time and breakthrough attempts, the more important I deem it [as shown above].

And in this example, as the price levels gives way, there is a degree of unrestricted movement, as underlying support levels, in this case, just don’t exist.

We’ll see how the USD/CAD shapes up over the coming days and weeks.

Also take a look at the EUR/USD… this chart is looking quite promising as well.

Continued Success!
Ray

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