Retail forex traders are the ultimate counter trend traders. They tend to counter trends until their accounts are wiped out…
In a market trending as strongly as this one, you can really only be long dollars or flat. trying to pick tops in the dollar (or lows in the euro) can be very dangerous. As a wise man once said (Sean Lee, I think), he who picks bottom gets smelly fingers…
Better to go with trends and opportunistically lighten up positions upon the approach of major resistance. The DXY (dollar index) is a case in point; we are approaching the 61.8% retracement of the March/April 2009 fall.
Lighten up on longs on the approach of 83.80 and look for dips to reestablish longs, improving your average price along the way. The index trades at 83.42 at the moment (reference June futures) and traded as high at 83.4650 earlier this afternoon.
