Forex Guru

You can look at most charts and see that in some time frame, securities prices
tend to move in trends, and trends often persist for long periods of time. A
trend is a discernible directional bias in the price — upwards, downwards, or
sideways. If you can’t see a trend, widen the time frame from a few days to
many months or narrow the time frame from a few days to an hourly basis.
The trend is your friend. If you identify trends and trade with them, you can
make more money trading securities than if you ignore trendedness. Trend
identification gives you an advantage and helps you perform two functions
near and dear to the heart:
✓ Create capital: As a general rule, you want to buy securities only when
their prices are rising, called an uptrend. Buying into an uptrend usually
improves the probability of making money, providing you can figure out
at what price point to sell.
✓ Preserve capital: You tend to make fewer mistakes and preserve capital
by not buying a security when the price is falling (a downtrend) — no
matter how charming the salesman or fascinating the story. In addition,
you preserve capital by selling your security when it starts downtrending.
You don’t know where or when a downtrend might end.