Let’s take a look at a downward trending market – the GBP/JPY hourly chart.
You can see the downward channel we’re in and it seems there is still enough power to keep the trend continuing down. However, a clear indicator would be a break of one of the downward trend lines.
Another line which comes into play is the horizontal trend line from the previous lows spanning from May – September. Watch for these lines to act as a loose support target.
Also – for those that will be in Las Vegas for the International Trader’s Expo on November 17-20, 2010 at Caesars Palace in Las Vegas, be sure to stop by my seminar where I’ll be giving a seminar on trading strategies.