Tag: forex trends

How to use RSI to determine trends

How to use RSI to determine trends

Trading Strategies
Determining trends is one of the basic blocks of technical trading. As the saying goes, the trend is your friend. Trading without knowing what the prevailing trend is can prove to be disastrous. A simple way to define a trend is one where price makes higher lows and higher highs in an uptrend and when price makes lower lows and lower highs, it signifies a downtrend. However, determining trends depends on many factors, one of the most important and often a point of confusion is the time frame the trade is looking at. It is well possible to see an uptrend on a daily time frame, while the one-hour charts might show a downtrend. In order to overcome this 'trend paralysis' it is often advised that traders should identify the trend on higher time frame and trade in that direction. A simple wa...

Trend Following

Trading Strategies
In my opinion, the best trading strategy for trading the Forex market is probably trend following. Different markets behave in different ways and the Foreign Exchange market is one of the few markets left that still tends to experience long and fairly clean trends. Trend following has slowly lost it's effectiveness as a trading strategy on most markets in the last few decades as markets generally only tend to trend well when they are being driven by real economic fundamentals and not by speculation. And as speculators have gained access to ever increasing amounts of capital over the last 20 or 30 years as more and more wealth is poured into hedge funds and the likes the influence of speculators has increased. But speculation still doesn't rule the Foreign Exchange market in the way t...

A brief lesson to spotting chart set ups

Trading Articles
You can find low-risk, high-probability trading opportunities by trading with the trend. The trick is to find the end of market corrections, so you can position yourself for the next move in the direction of the trend. This excerpt from Jeffrey Kennedy's free 47-page eBook How to Spot Trading Opportunities explains where to find bullish and bearish trade setups in your charts and how to zero-in on these opportunities. If this lesson interests you, the full 47-page eBook is free through July 6. On the left-hand side of the illustration below, there are two bullish trade setups. As traders, we want to wait for the wave (2) correction to be complete so we can catch the move up in wave (3) – this is the trade. What we are trying to do in this bullish trade setup is anticipate the potenti