From Craig Cobb at Trade with Precision:
Oh yes it can! This is a lesson many traders have to learn the hard way, often through trading losses. The old saying “what goes up must come down” is true, even in markets but when they will come back? This isn’t a known thing so be careful. I have seen many people (myself included) trying to short a market that just keeps pushing higher to see their accounts get blown up; all the while they keep saying “it can’t go higher!” So learn the lesson now and save yourself the pain; the market can and will do whatever it likes, this includes going higher.
So now that we have this lesson in the bag, let’s trade that market higher and follow the trend!
A great example right now is the JPY crosses. Have a look at CADJPY daily chart (below). For a long time it has been moving higher with no significant pullback on the daily chart, this may mean there have been no trading opportunities right? No way, quite the opposite.
I will now show you the 4 hour chart on CADJPY (below) to prove my point. If you have completed the CMC Markets Premium Education Programme you will recognize that the blue arrows I have drawn indicates price pulling back into the buy zone. Please note I am not hindsight trading here, I am not saying I took all of these trades nor am I saying that there was a trade at every arrow. This illustrates my point that on the lower time frames we WILL get opportunities to trade even with these very strong trends that seemingly don’t pull back.
The beauty of being able to move freely through the different time frames allows us as traders to find trends within trends and if we have a structured trading strategy it allows us to exercise these methods on time frames that suit. On the daily time frame on many of the JPY crosses there has been very little in the way of pull backs to the averages but when we dig down a little deeper there have been many great opportunities.
My job as a trend trader is to trade with the direction of the trend until it shows signs of weakness. So with this being said am I still looking to trade JPY crosses? 100% yes I am! I currently have an order to get long as we speak. The level of my order is not of concern but let me tell you one thing, this is a strong market and I will keep hunting down and taking trades while it remains strong.