Identifying a forex trend
It’s not that hard to do if a trend is already in a halfway. It’s much harder to identify it at the very beginning – when the former trend has finished or the price ranging exhausted. There are few things you have to bear in mind:
Moving averages. When 200, 100, 50 or smaller periods’ moving averages start to cross and the price movement is already higher or lower than all the moving averages – it’s a signal of a new trend, especially in bigger time frames (1 hour, 4 hour or daily chart).
Price channel lines. When the channel lines of old trend are broken, it’s a signal that the trend might be exhausting and new price movement is on the way.
Resistance and support. In case of a new downtrend, the highest low of a previous uptrend is broken.
These are one of the basic signals you have to bear in mind when looking for a new forex trend.
Moving averages. When 200, 100, 50 or smaller periods’ moving averages start to cross and the price movement is already higher or lower than all the moving averages – it’s a signal of a new trend, especially in bigger time frames (1 hour, 4 hour or daily chart).
Price channel lines. When the channel lines of old trend are broken, it’s a signal that the trend might be exhausting and new price movement is on the way.
Resistance and support. In case of a new downtrend, the highest low of a previous uptrend is broken.
These are one of the basic signals you have to bear in mind when looking for a new forex trend.
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