| Physics. That haunt of the nerd and the may be | | | | of the conditions. They enter a dead market with no |
| occasional weirdo? | | | | volatility and enter a volatile market against the trend; |
| Well, have I got news for you! If you are a trader, | | | | big mistake! |
| physics could make you a lot of money and you do | | | | A bigger mistake is that they often set tight stops that |
| not have to study black holes and string theory to | | | | are sure to be taken out! |
| reach your goal. | | | | This is the lesson to take out of this article. Be slow to |
| Just think Time and Gravity. | | | | take profits when you trade with the trend and be fast |
| Let these be your friend. Study these two and you are | | | | to take profits when you trade against the trend. |
| home free. What does time and gravity have to do | | | | The reason? Time. |
| with trading you say? Have you ever heard of "the | | | | The passage of time is favorable to the trend trader |
| trend is your friend until it ends"? To use physics, you | | | | and a killer to the counter-trend trader. |
| have to then apply one of Newton's Law of Motion - | | | | Take the following steps: |
| the one that says, an object remains in motion until it is | | | | 1. Plot a Simple Moving average 49 on your chart |
| stopped by a greater opposing force. | | | | 2. When price crosses it to the upside, trend is up and |
| Then if the trend is up, you have to keep buying until | | | | to the downside, down |
| you can no longer buy. And if the trend is down, you | | | | 3. Buy when the trend is up. No sells |
| have to keep on selling until you can no longer sell. To | | | | 4. Sell when the trend is down. No buys |
| be successful at trading forex, you have to then know | | | | 5. Attempt counter-trend trades only after price has |
| the trend and trade accordingly. When you trade with | | | | made a considerable run away from the 49 MA. |
| the trend, Time then becomes your ally. You can enter | | | | In the GBP/USD I wait for about 100-120 pips before |
| at a crappy price and time will probably bail you out | | | | attempting a counter-trend trade. |
| and make you profitable if you understood how it | | | | The 49 MA is a special MA with a peculiar behavior |
| works. | | | | that you can learn to exploit. |
| First of all, many traders jump in the market regardless | | | | |