What do you know about Forex Trend Analysis? If nothing, then I would really be surprised to know that you are a successful trader. Forex trend analysis is life-needed part of Forex trading, the one that helps you really see the support and resistance levels, analyze the investment market and see the bare nature of Forex, so you can always know what horse are you taking bet on.
So, what do you need to make the successful Forex trend analysis? Well, you should at first know what a Forex trend is!
Forex trend is the general direction of the market or of the asset’s price. So, if you trade with the trend, your trades will have a higher win probability which means you will make more profit and loose less trades. You see, the Trend (your friend) is doing a lot for you to help you to archive higher returns.
Technical definition from a trend: Lower lows and higher highs during a certain time period.
What Tools to Use for Forex Trend Analysis
Forex trend lines are divided into simple lines (drawn vertically, horizontally and diagonally), Fibonacci lines (very popular now, there are different variants of drawing), pivot (drawn on the market fluctuation's basis) and speed lines (very similar to Fibonacci, but a little different).
If you’re already an experienced trader, you can self create the Forex trend analysis diagrams, but if you’re a beginner, you need a help and guidance by those who have the experience in this. The situation on market can change in any minute, so you should be ready for everything.
The easiest way to make the Forex trend analysis is to draw a trend line right onto the Forex chart. The trends can be upward (a diagonal line growing up), downtrend (diagonal line going down), or sideway trends.
The trend consists of three stages, which are needed to know to go into Forex trend analysis: stage one, initial, when the market trend is shaped up; stage two, developing one, when the trend holds strongly as it is; and third, final stage – when the new trend is about to suggest. If you are missing the capturing of market trend, then you can surely buy at the highest and sell at the lowest or vice versa, so it’s important to analyze and keep the hand on pulse of Forex trend analysis accurately.
Ok, so you understand how the Forex trend analysis is done, but what if it’s too hard for you? Don’t be worried. Things like that happen and it doesn’t mean that you’re the one who will lose the opportunity to work with Forex trend analysis. There are always some tools and programs to help you. Metatrader trading platform comes with large number of drawing tools what are very helpful for manual Forex trend analysis. However, if you don’t want to spend hours every week to determine actual trend direction but prefer manual trading over Forex expert advisor you should have a closer look to ProFx. It does all analysis for you and provide you with easy to follow entry and exit signals.
