DislikedThis may sound like a stupid question but, are we actually trading minor reversals of the long term trend and not the trend itself?
If you look at this chart on USD/JPy it is easy to see that the trend has been down since 1982. Yet, \"the trend is your friend\".
Isn't any successful trader actually trading a reversal in the long term trend and not the trend?
Rather like looking at something that to the naked eye appears smooth but when looking at it under a microscope it appears jagged with peaks and valleys.
Are we basing the trend simply on Macro and Micro viewpoints?
Ah, so many questions.
http://img390.imageshack.us/img390/3230/trendfj3.jpgIgnored
Well, first it depends on the pair. You chose the U/J which is known to be the most manipulated pair of all the majors. If it weren't for the BOJ and this pair were completely free-floating, then it might trend more.
There are pairs that trend much more like the other JPY crosses (EUR/JPY or AUD/JPY). Also EUR/USD trend a lot!
What is meant by trend is not merely the direction, but all the strength of a trend. There are stocks that trend better than fx pairs in terms of direction. However, it wouldn't take much to disrupt a stock's trend (i.e. bad earnings, etc). In fx, it takes a lot more to knock a trend of it's course. I don't know any other market where the trends, once they are in place, are as strong as they aere in fx.