“The trend is your friend” is an important trading guideline.
In 2008 we witnessed some massive bear trends in the equity and crude oil markets as well as many other freely traded commodities and currencies.
Because trends persist for long periods, a position taken with the trend will more likely be successful than one taken randomly or against the trend. Trading with the trend in a bull market means buying on dips; in a bear market, selling on rallies.
This is a good lesson to remember on why markets trend. Are we expecting some big trends in 2009? You bet we are. Look for big trends in gold, the dollar and crude oil in the new year.
By Adam Hewison
Read more under "Lesson for Professional Trader" on right colum of this blog.
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