By: Charley Warady
The official Fall Forex Trading Season seems to have started off with a Forex bull presence. With Forex fundamental news remaining the same, it doesn't look like it's going to stop any time soon. The American dollar is pretty weak and many foreign currencies remain strong against it. In the Forex market concerning a few popular pairings, this represents a major upturn in the Forex market.
The EUR/USD is the most talked about example of a Forex bull pair these days. Everyone was watching it happen and it became a text book illustration of what Forex technical charting is all about. Hopefully, you all jumped on this bandwagon and made a ton of pips.
The question now becomes, When do you jump off? This question is the eternal Forex trading and, as a matter of fact any futures trading, question. “How high is too high?” If you listen carefully to your monitor on your computer you can hear the bears screaming, “This market is overbought!” and “It's about time for profit taking!” and “Somebody ate my porridge!”
Is there going to be a key reversal soon in this Forex market? The answer is, maybe. Of course, the answer also is, maybe not. Really, the only thing the Forex trader should be concerned with right now is squeezing every little pip out of this Forex bull trend and worry about the reversal when that Forex floor suddenly drops out.
Just last week we were talking about that magical number in the EUR/USD Forex pair of 1.33. That resistance level held for what seemed to be about thirty seconds. Hopefully, you only used that point to take profits and not get short, because it now looks to be a pretty solid support level.
The Forex bull traders amongst you have your eye on that 1.38 level, don't you? You've begun salivating at the prospect of reaching new highs. And it might happen. You have to keep in mind that there is no such thing as “too high” in the Forex market. The only time anything is overbought is if there isn't a seller. However, on the flip side of the same coin is the reminder that nothing in the Forex market goes straight up. So, as always, if you're riding or adding on to a successful position, do not forget to adjust your stop-loss orders. These are your best friends in this kind of a market.
In all cases it is important to protect your profits, but when you have a fundamental opportunity such as these Forex markets propose, you do not want to create the situation where you turn profits into losses. In the meantime, you still may get a chance to buy into the market at around the 1.33 level if there is, in fact, profit taking or some kind of sell-off.
You have been waiting all summer for Forex bull market activity, and now it's here. Like your mother told you every time you were about to go into the pool, “Enjoy yourself, but be careful.”
By: Charley Warady