How Do You Define a Forex Trading Trend on Charts?
How Do You Define a Forex Trading Trend on Charts?
A trend is the tendency of prices to move in one particular direction for a certain period of time.
Forex prices generally move in trends, the trend direction can either be upwards or down-wards.
Forex Traders use forex tools such as forex trendlines to identify trends.
Trend Lines help to define entry & exit points for trades which are open by traders.
The trend line define the trend & as long as prices continue to move within the trend line the traders will keep their trade open. Traders only will close their open trade once the prices stop moving within trendlines.
The 2 types of trends are:
Upward Trend - Drawn using an upwards forex trend line
Downward Trend - Drawn using a downwards forex trend line
Upward Trend
Forex Tutorial: How Do You Draw & Trade Upward Trend
Upward Trend on Chart
Downwards Forex Trend
FX Tutorial: How Do You Draw & Trade Downward Trend
Downward Trend on Chart
The MetaTrader 4 provides charting tools for plotting trends on charts. To draw trend on charts traders can use the trendline drawing tool that's provided on MT4 software that's shown below.
Definition & Definition of a Trend and How Do You Trade a Trend
To draw a trend line on MT4 platform & choose point A where you want to start drawing and then point B where you want the it to touch. You can also right click in trendline and on properties option choose option to extend ray by checking 'ray check box', if you do not want to extend it, then untick this option in your platform.
The trend is your best friend. Is a popular saying among traders because you as a trader should never trade against it. This is the most reliable fx method to trade Forex because once prices start to move in one direction they can move in that particular direction for quite a while in what is known as a trend.
Principles of How Do You Draw & Define Forex Trading Trend?
Use fx candle charts
- The chart points used to draw the market trend are along the lows of price bars in a upward market. An upward bullish forex trend move is defined by higher highs and higher lows.
- The points used to draw are along the highs of the price bars in a falling market. A downwards bearish forex trend move is defined by lower highs and lower lows.
- The chart points used to draw the trend lines are extremes points - the high or the low price. These forex price extreme are crucial because a close beyond the extreme tells forex traders that the trend of the instrument may be changing. This is an entry trading signal or an exit forex signal.
- The more times a trend is touched by price but it's not broken, the more powerful the trend signal.
How Do You Define a Trend on Charts?
