Wednesday, February 01, 2012

Onwards and upwards?

The price action of the last few days has had some people suggesting that a market top is now in place. The alternative point of view that this may a small consolidation/pullback before the uptrend resumes. If you asked 100 different traders, you would probably get 100 different answers, with many of them giving differing targets (either in an upward or downward direction), along with pretty sqwiggles drawn over some charts showing how prices will move over the coming days and weeks.

As far as trend followers go, we do not look for price levels as targets before exiting a position. We also do not predict how price will move within a trend. We simply identify a potential new trend, enter a position in accordance with our rules and stay with it until that trend has ended. Currently, the trend remains up, and as I have very little market exposure at the moment, I will continue to trade new positions on the long side as and when they appear.

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