The USD/CHF currency pair has weakened considerably in 2009 and looking at the price chart this is plain to see. You can clearly see that this pair has been in a strong downward trend for the last seven months or so. So why is this important?
Well the point I want to get across is that if you have serious ambitions to become a successful currency trader, you should always try to spot the trend and trade in the same direction as this trend. So in the case of the USD/CHF pair, you should only have been looking for shorting opportunities for most of this year.
If you had attempted to call the bottom of the market and trade against the trend, you would have found it tough going because there have been very few meaningful pull-backs. Every time there has been a slight pull-back, the trend has resumed and the price has continued moving downwards.
This is why whenever you purchase a forex course or ask for advice on one of the forex forums, you will always be told to trade with the trend. The trend is your friend is a popular saying, and it’s absolutely correct.
By identifying the overall trend, you only need to concern yourself with your entry point, and even if you get your timing wrong, the trend may still come to your rescue. So it’s worth bearing this in mind when trading the forex markets.