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Old 08-27-2008, 01:25 PM
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Trading in the Direction of the Trend
Subject

Trading in the Direction of the Trend


Student's Question

Does this sound okay?


Power Course Instructor Response

You definitely have the right idea here.

Since the pair is in an uptrend, and the price action is currently at support, a long position could be taken with a stop just below the lower channel line.

Your thought about waiting until price reaches resistance is sound but that level is about 250 pips away. If a trader chose to enter now, the stop would be very close to the entry level providing a very solid Risk Reward Ratio. If the trade moved in your direction, to the upside, those 250 pips could be captured prior to resistance being reached. If the trade moves against you, with tight stop, sensibly placed, any loss would be quite minimal.
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Last edited by Thomas Long; 08-27-2008 at 01:35 PM..
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