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November 30, 2019
When novice traders look for information on how best forex broker trade in order to make a profit, then usually the trader usually finds suggestions for the following trends. If the currency pair strengthens, it's time to open a "Buy" order. If the currency pair weakens then the recommendation is to open the "Sell" order.
This recommendation is in accordance with logic. But when you start practicing, it's obviously not as easy as the theory. To be able to make profits from trading, you need more detailed instructions. This article will help you become acquainted with trend trading strategies and give you steps.
Before you start opening orders, you must know that there are 3 types of trends based on time, namely: long-term trends or major trends, mid-trend or mid-trend, as well as short-term trends. When a trader asks us "What is the trend that is happening on the EUR / USD chart?" we used to ask back "What timeframe do you mean?" That's right, if you look at the different timeframes for EUR / USD, you will see a lot of difference in the charts.
The long-term trends last for 8 months to 2 years. They show the big picture and reflect the difference in the economic strength of countries with currencies that make up currency pairs, for example, the European Zone and the United States. The middle trend is 1-8 months.
They are formed from the main long-term trends and head in the opposite direction. Short-term trends can last several days to a month. They arose because of global capital flows caused by economic and political news. Trends like this allow traders to make a profit in a few hours.
You must remember that even if you only trade in the afternoon, you still need to know not only short-term trends but also medium and long-term trends and drawing trend lines. Sometimes prices can meet resistance or support from a larger trend. If you can identify three types of trends on the chart, then you can see the market better.
The next important thing is that each trend consists of 4 stages: youthful trends, the trend is ripe, the trend is aging, and the trend reverses direction. If the trend is old, then there is no point in trading based on that trend. The main goal is to look for a young trend or when the trend is ripe. This way you can get good profits from trading based on trends.
So you need to look for trend stage 2. At this stage, you will be able to draw trend lines. For an upward trend, you need at least two low prices - the first low price and the lower price than the first. If you find 3 low prices that are related then that's even better - that means a trend has already formed.
The trend line will be a support line. For a downtrend, you need 2 high prices - the first high price and the second high price below the first. Of course, it's better if you find 3 high prices that are interconnected. If this happens then the trend line is the resistance line.
It's important not to be lazy trying to make a trend line. The lines represent an easy but efficient tool for graph analysis. They not only show how strong the trend is but can also help find areas in the future where prices will return from support or resistance.
Observe this: the steeper the trend line is, the more likely it is to pass prices. If prices rise quickly, then buyers who push higher will lose their strength, and the market will reverse direction.
If you want to get a good trend and last long, then choose a trend line that is not so steep. Salma Market's Forex broker, the best forex broker out there, also recommend that you look at correlations and consolidations that occur during a trend.
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