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Written by admin admin
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Monday, 11 February 2008 |
TREND
Technical analysis attempts to gauge the strength and direction of a trend, once the trend is inmotion it will continue in that direction for some time. Once the trend is determined early, thetrend can be followed and more profit can be made.The trend is your friend - Never fight a trend. In the above example of AUDUSD, the break of uptrend is followed by a long down trend. The topping of price action is followed by a price break.Apart from high volatility in the Forex market, you will also notice that it also trends well bothgiving perfect opportunities to make money.The markets can only move in one of three ways; up, down, or sideways. Thats it. Prices howeverdo not move in a straight line, they move by zig-zagging up-down-up-down, so you will have-- An up trend- A downtrend, and- A sideways movementTrends happen when traders worldwide believe that a price is either too low so you will now be inan up trend as you have a buying pressure, or traders feel that the prices are too high so you willbe in a down trend as there is selling pressure. Sideways movement happen when traderseither believe that the
current price is more or less right, or when they are undecided. Thisnormally happens when there is major news pending, for example prior to release of say NonFarms Payroll data.The FOREX market trends very well, and that is the main reason why traders love FOREX. If allyou knew was how to follow trends properly, then this alone could make you a very nice income.As they say, a trend is your friend or never go against a trend! The trendline is the mostbasic technical analysis, and all traders use it. It is amazing how price repeatedly bounces offthe trendline.An up trend will have a series of higher highs and higher lows, whereas a downtrend will have aseries of lower highs and lower lows. When you draw a trendline, whether an up trend or adowntrend, so long as prices keep bouncing off a trendline you can keep making money. All trendswill eventually end. A good indication that the trend is ending is when the pricesignificantly penetrates through the trend line and takes out the previous low (up trend) or thehigh (downtrend). Easy Forex Trading Strategies Share Your Opinion. (0 posts)
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Last Updated ( Monday, 11 February 2008 )
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