Why ‘The Trend’ Isn’t Always Your Friend

‘The trend is your friend’.

You’ve heard this before, haven’t you? You just need to start trend trading! Your broker, your guru, your moving average, Babypips, even your parents are telling you — just go with the trend!

Is it really that easy? Is this the forex trading holy grail?

We are going to find out.

This is the next instalment of my series on trading clichés, diving deeper into the soundbite phrases we hear all too often.

Which timeframe?

A natural problem of people announcing that the trend is your friend: which timeframe do you base this off of? Are you trend trading off of the timeframe above, below, or the same?

Look at this chart of GBPUSD for example, is it in an uptrend or downtrend?

I have outlined the three most obvious ways we could look at the trend. They’re completely conflicting. Long term we have an uptrend, medium term could be seen as a downtrend, short term is uptrend again.

Let’s look at a lower timeframe of the above chart: