This Is Your Signal That An Upward Trend Is About To Start

Category: Finance, Currency Trading.

Trend trading is where the big money is in the Forex market.

Trading when the market trends is where there is the opportunity to make( and if you re on the wrong side without a stop- loss, possibly lose) major money. While there is money to be made in counter- trending markets, there is only so much that can be made when the market is essentially moving sideways. A market goes into a trend anytime there are more buyers than sellers or more sellers than buyers over a prolonged period of time. There is money to be made regardless of which way the trend goes, since all trading is done with pairs. This trend can be with prices going up( more buyers than sellers) or down( more sellers than buyers) . Figuring out the best way to trade trends involves knowing extensive technical analysis, so having a proven and profitable trading system helps immensely.

While there are all sorts of technical tools for analyzing trades, the simplest way to spot a trend, or what might be the beginning of a trend, is to watch and see if each time period s high keeps getting higher, indicating the market is steadily trending up in price, or if each period s low continues to get lower, indicating a downward trend in price. Without a prove and profitable trading system, it s very unlikely that over the long run, you will profit from Forex trend trading. If you decide to use bands to help your trend trading, remember that a basic rule when using bands is to wait and see when the high price penetrates the upper band. You want to buy when that price penetrates the upper band and go long, with a trailing stop loss. This is your signal that an upward trend is about to start. There s a good chance the market will make an upward trend that a long position can profit from. The basic goal of trend trading strategies is always the same.

When the price penetrates the lowest band of your corridor, you want to sell and go short, watching the market for any confirmations on any further trends, counter- trends, or pivot points that indicate a trend reversal. While you don t want to be the first to test the market, once a market trend reveals itself: join the move early! This is where using a trailing stop loss can help maximize the profits you earn from any market movement. Then hold your position, making as much money as possible, until the trend reverses and then get out. Trend trading is where the big money is at, and recognizing and getting in on trends early will make you a very happy( and wealthy) trader in the Forex market.

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