The reality is trend following is never easy. For US Dollar Bulls the reality became very clear yesterday. The US Dollar became Swiss Cheese yesterday. The US Dollar fell 5% as in a flash crash. Virtually every trend follower was long US Dollar and short virtually every other currency. This is the reality of trend following and trading. It was very similar to what happened with the Swiss Franc a couple of months ago.
The veracity of the move caught so many off guard. So how does one prevent this carnage?
The truth is you can not. All you can do is have a complete trading plan. Know what to trade…both from the long side and short side..Know where the trade does not work and exit…and know where to take profits…
If one wants to succeed in trend following the only way is to have a full trading plan!
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Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts, commodity options or forex can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results. You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.
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