Trend indicators in Forex trading

This article is for those who aspire to learn the foreign exchange market or the traders who are beginners.

identification of trends is one of the first steps the operator must take before entering a trade. This can occur in several them some who have varying degrees of usefulness depending on the time scale is used. Note not all methods for determining the trend used by all operators in the past, you must find the method for determining the trend that suits you best.

Moving Average

Moving average of the different versions of them will use grew exponentially moving average, simple moving average. All you need to know is that these indicators to create an average price of a given term. Determination of the trend in a number of moving averages is to stop is effective. The method I use is with an exponential moving average of 21:55 in September course, this is exactly what I want others to be between 12 and 26 or 20 and 50, etc., and enjoy 200 period simple moving average. Let's see, for example increasing, this also applies to the downward trend, but vice versa. First look to see if the price is over 200 period simple moving average where it is, this is my first sign that the market is increasing. Next, I look forward to more than 21 period exponential moving average of more than 55 period exponential moving average. When these two conditions are met I know that the market is up.

The degree of separation of prices from the period 200 simple moving average and the separation between 21 and 55 period exponential moving average indicates the strength of the trend. large separation, a strong trend. If, as these are really close together that I market is not really a trend, but is tied wide and flat.

Another method to determine the trend is to analyze the pure price action. A trend is defined as a series of high and low for an uptrend and less severe and less high for a downtrend. With this market analysis can be a tendency over the last few hours, not days. It is important to know what time you trade and see the trends in this context. For example, if you are swing trading is probably good for you to watch and make trades based on a graph 5 minutes. Better would be to examine trends in one hour, 4 hour or daily charts.

Remember it is always a good to trade follow the trend. recognization of trends must be one of the first things to do before entering a trade. Find what works for you and stick to it.

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