How to identify a trend?
How to define this same trend?
What is the trend?Trend - is the general direction of the market. No market moves in a straight line, so we need to identify a general trend: upward or downward.
Opening of the transaction with the trend helps to increase the chances of success. Of course, the setup Price Action against the trend also fail, sometimes very good, but only trading with the trend, we can be more relaxed, because significantly reduced risk of a loss.
There are plenty of forex indicators, systems and theories to determine the current direction of the trend in the market. But trade by Price Action involves precisely the rejection of indicators to monitor the situation on the market on the basis of only the behavior of the main indicators - the price itself. Therefore, in determining the trend will be guided only by the price, based on the interpretation of the classic trend in the currency market.
The upward trend
The upward trend - a series of rising peaks and troughs.
That's the basis of this rule, we determine whether there is a bullish trend in the market. Once the presence of the rule of rising highs and lows is broken - we are looking for sales.
On the rising market after breaking the previous low can be considered a possible change in trend to bearish.
The upward trend - a series of rising peaks and troughs.
That's the basis of this rule, we determine whether there is a bullish trend in the market. Once the presence of the rule of rising highs and lows is broken - we are looking for sales.
On the rising market after breaking the previous low can be considered a possible change in trend to bearish.
Downtrend
Downward trend - a series of highs (highs) and troughs (lows).
We deduce from the rule:
A reversal of the downtrend can say when the market broke through the previous high.
Downward trend - a series of highs (highs) and troughs (lows).
We deduce from the rule:
A reversal of the downtrend can say when the market broke through the previous high.
I do not understand what the trend is, what to do?
Quite an important point - if you can not understand what is the trend, as it often happens in periods of consolidation, when the market moves in a horizontal direction, then simply do nothing.
So many make the mistake of assuming that they always have to trade. No, not at all. If you take only the "beautiful", clear and simple set-ups, it will be much more profitable than trying to snatch a point. Be selective in your trades do not understand where the market is moving - do not trade, wait for clarification.
