Excerpt from http://tfc-forum.tradingcharts.com/forum/index.cgi/page/1/md/read/id/559413/sbj/euro_rally_greenback_correction_at_hand.html

"Last year I passed on any short-term counter-trend signals and just waited to buy dips in the U.S. Dollar, and or sell rallies in the Euro. After all the golden rule of trading is: “Buy dips in uptrends, and sell rallies in down trends”. I’d be suspect of any strategy where this was not at the core.

Four Years to 50%

This year however I will trade those shorter-term, counter-trend signals my method produces, and here is why:

1. Cuz I can. If you have a method which produces well statistically in both long-term and short-term time frames then by all means take advantage of it.

2. We are nearly at the 50% retracement level of the previous down cycle in the dollar and the current cycle is in its 4th year -- see Figure 1. (If we take the 2011 low on the Monthly Dollar Index chart as the beginning of the new bull, then this cycle is going on 4 years. (We always want to start a cycle on a higher low or a lower high, and not on the absolute low or high). Given the rally is starting to mature it becomes natural that at some point the rate of acceleration will slow which means more corrective behavior, i.e. more retracements.

3. Market corrections are faster and more violent than the trends they are retracing. As most traders know it is hard to find fault with profiting from a fast market".