The Forex Climb

By: Charley Warady

Well, it seems for the time being the Forex market has stopped making new lows. However, when the market climbs like this it always sends the tepid Forex trader into a tailspin. Questions crowd the brain such as, “What if this is only a setup for another drop?” and “How do I know when to get in?” and “Is this a correction in a bear market or the beginning of a bull market?” All of these are legitimate questions, and the answers are, in order, “Who cares?”, “Right now”, and “Who cares?”

You have waited around for the Forex market to stop bouncing off these lows. Now is not the time to get shy. Although you might want to jump in with both feet, it doesn't mean you have to do it blindly. Right now the charts are showing a nice support line that seems to be holding true. It may not continue ad infinitum, because nothing does in Forex, so as long as you're seeing this trend right now, this is the bandwagon you might want to jump on.

For those technicians using charts, make sure you're looking at a relatively long term Forex chart. Don't use the half hour chart, or even daily chart. The weekly chart is the minimum you should be using. It gives you a better perspective of the Forex market as a whole. It's the difference between the forest and the trees. That's how you should look at the trends and it certainly gives a more accurate accounting of actual support and resistance. Too many little things happen, or don't happen, during a day to call anything a trend. Take a step back. You'll see things better.

The market won't come back to you. It doesn't have to. If you see a trend and you missed that specific point of support on your chart, buy it anyway. What seems expensive now may be cheap in a very short time. Too many times the statement emerges, “I missed that move. I'll catch it on the bounce.” Don't depend on a bounce. You'll find yourself sitting on the sidelines while the actual players are out there making money.

The lines on your Forex chart are not etched in stone. They are meant to be guidelines. Hopefully, you're not scalping, so the extra PIP or two you're giving up are not going to make a difference in your long term strategy.

Right now the Forex news is pretty good and it looks like there won't be any new bottoms in the near term. The market is now providing opportunity to get in there and make some money. Stay focused and disciplined. Ride the trend and keep raising your stop-loss orders. Keep in mind that today's resistance line is tomorrow's support. Once the market has busted through the resistance, that line usually creates a nice support. It isn't brain surgery. On the other hand, it also isn't fool-proof. Read the Forex news and follow your charts. The storm is over. Time to enjoy the nice weather.