One of the best ways to identify the trend is the simple trend line in the weekly ranking. The reason why the weekly ranking is so important, is that much more needed to break a trend line on this period of time that the smaller time periods such as the classification of an hour. Following the weekly trend line, you can see where the general orientation of the market tends to go. If you draw a weekly trend line, you will notice that it is not broken very often. In fact, it is not uncommon for these trend lines to last for years. For example, take a look at that the Euro against the Dollar from 2002 to 2006. It was a shot straight up, and an analysis of the line simple trend would have said to you based on the weekly ranking.
Another common way to identify the trend is to use a moving average. While the exact moving average is questionable, some of the most common are the 50, 100 and 200-day moving averages. By drawing on a daily chart, you can see how more time that the trend is slowly moves these averages in one direction or another in movement. This shows the effects in the long term trend because ads fundamental and traders of progression in and out of markets. It should be noted that the number is high on average displacement, more it takes to move. The day of 200 moving average for example, must be a massive swing and a direction to change the slope of the moving average. This can help to keep you in a trend for a long time.
Better still, an excellent way to determine the trend is a combination of the two above mentioned tools. Many traders is only trade in the direction of the market based on where a specific moving averages. For example, you can choose the day 100 moving averages. If the price is greater than the moving average of 100 days, looking only to buy. If it is less, looking only to sell. If you align curves trend with the moving average, and both tell you to buy a currency pair, it becomes very clear that the trend moves in a direction distributed upward. While this guarantee a 100% success rate, it certainly can you pointed in the right direction and allow the momentum of market please refer.
By staying in the same direction of the trend, allow you other traders on the market to make advance your profession and you we more profits. Perhaps one of the most fundamental and basic ways to earn money on the foreign exchange markets. Unfortunately, far too many merchants don't pay attention to the trend. Don't let you make this common error.
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