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For forex trading, a long-term trend is composed of several intermediate trends. The short-term trends are components of both major and intermediate trends. Take a look a . Our daily technical analysis feed provides key insights on current market trends in forex, cryptocurrencies, commodities and indices. Our in-house experts assess relevant technical FX information.
Many traders spend countless hours and dollars on trend-following trading systems or on indicators that just end up confusing them and making the process of trend discovery a lot more difficult than it needs to be. I have always been a strong proponent of visual observation of the raw price action of a market, as you probably know.
Let me make a quick note before we proceed: However, just randomly jumping in with a trending market is not an edge or a strategy. As a market moves higher or lower, its previous turning points, or swing points as I like to call them, become reference points that we can use to help us determine the trend of a market.
The most basic way to identify a trend is to check and see if a market is making a pattern of higher highs and higher lows for an uptrend, or lower highs and lower lows for a downtrend. If you do not see a pattern of HH HL or LH LL, but instead you see sideways price movement with no obvious general up or down direction to it, then you are probably looking at a range-bound market or one that is simply chopping back and forth.
Most traders make trend discovery WAY too difficult. Trending markets tend to make strong moves in the direction of the trend followed by periods of consolidation or a counter-trend retrace before the next leg in the direction of the trend. You will notice this pattern happens in almost any trend you can find. Typically, what happens to many traders is that they will make some money during the periods of strong directional trend movement, but then they continue to trade as the market takes a breather from the trend and consolidates.
In the diagram above, we can see that a trending market tends to move in spurts, moving in the direction of the trend and then stalling to take a breath before another leg in the direction of the trend. Now, all trends are obviously not exactly the same, but we do typically see the general pattern described above; a forceful move in the direction of the trend followed by a period of consolidation or a retracement in the opposite direction.
Now, these retraces are when we have the highest potential for a high probability entry within the trend. Often, a market will retrace to approximately the level of its previous swing point before the trend resumes. In an uptrend these swing points are support and in downtrends they are resistance.
These support levels resulted after the market began to retrace lower within the structure of the broader uptrend. These same principles apply in a down trending market but we would be looking for price action setups from resistance rather than support. As we discussed previously, a trending market will tend to surge in one direction and then slow down and either consolidate in a sideways manner or retrace lower or higher, depending on what direction the dominant trend is.
My primary mission as a price action trader is to watch for obvious price action setups that form after a market retraces back to a confluent level in the market. This can be a swing point like we discussed above, a moving average level, or some other support or resistance level. By value, I mean from an optimum point in the market that has proved significant before.
I use them as a general guide and a helper to find confluent points in a market. For example, often the 21 day EMA will align with a swing point in a trending market, this would be considered a confluent level since you have multiple factors lining up together. Then, if we see a price action signal there, we know we are seeing a setup form in a very high-probability area on the chart.
We only use them as a helper to see dynamic support and resistance levels to add confluence and for trend direction. Instead, we want to enter closer to key market levels, swing points, EMA levels confluent levels in the market…always with confirmation from a price action signal.
One aspect of trend trading that I want to touch on briefly is that trends in Forex tend to differ from those in other markets, especially equities.
In Forex, bearish and bullish trends are typically equally as violent and potent…whereas in equity markets we tend to see slower moving price action in a bull market, along with lower volatility. Down-trending markets tend to be fast and volatile in equity markets. Forex trends tend to be the same in their volatility and price action whether the trend is up or down.
Thus, in Forex, your trading strategy and plan will generally be the same for both up and down markets. In the equity markets, traders typically need to adjust their strategies or systems as a market moves from bull to bear or vice versa.
Take advantage of trends when they happen — There is never anything concrete with trends…meaning you never know how long they will last for, so try to take advantage of them when they do occur.
The trick is to learn how to identify a trending market so that you can get the most out of it and get on board as early as possible. Trend following is a large part of my Price Action Forex Trading Course and of my general trading strategy.
Thank u mr for the lesson,as am still new i do get you point here and ther, what make me confuse is the price different. If it is not like this, we shall not understand u, and we shall look for similar information in our native languages.
Plz try to understand this and try to solve the problem of a lot of students of your fantastic price action. Nail, I have learned something from this lesson and am willing to start with visual power to look out for trends very well before any trade ambition. Hello Nial, You have a brilliant and unique way of teaching forex trading which makes you stand out from the crowd.
And anyone who really wants to take forex trading serious needs your lessons which I think are priceless and generous of you to give. Thanks and God bless you. Thanks for the trading formula. It will be helpful and effective. Straight to the point to keep focused on choosing quality trade set ups.
To me your teachings has being remarkable so far. I will be trading real money next month but unfortunately starting with just dollars account. Though I already had the knowledge of japanees candle stick signals but your teachings has really made me to know key areas to use them on daily time frame,one trade per week,at confluence level and strong money management which I have decided to risk just 20 dollars per trade per week to make 40 or more out of my dollars account.
Nial indeed I can really confirm you are truly a prof in the world of forex and if I really succeed in it,its in fact directly as a result of your lack of greed in disclosing to the world the best way to make it in forex.
Ones more thank you so much. Perhaps I will let you know my progress when the time comes. I m still reading thru n trying to implement these into my demo account. I hpe to get it right soon. Nial you are the Main Man! Thanks you for this email , it is very fruitful to me, call it mental Armour! Thanks you Nial God bless you over and over! You are an indeed good mentor I have ever seen that expose the Golden mystery of forex trading.
A million thanks to you sir. Excellent article, thanks Niall. I have been following your site for the last few months. Although only trading with a dummy account, I made a profit in the last 5 months by only following your basic price action strategies. Eager to enrol on your course when my live account is set up. Nial like to thank you for the nice article on trading trends. A good article on trend trading…you told about price values as deterministic factor to make an entry but would like to know when to exit before the retracement and how to find it…Thank you very much.
Thanks Nial, for the great article as evidenced by all these comments. Now that we know how to identify a trend lets put our knowledge into practice. The challenge is that trends not as common as we would want them to occur! Lets also add patience to the mix and sharpen the Sniper mentality. What I like to do is look at the Forex market in real time and see the raw trend.
And i would like to be professional and inspirational as you are or even better if i may say.. Thank you to sharing this article. I follow your site every day that help me for trading in the market. Now i am a perfect trader of price action. All of your articles carefully study week and put into practice.
I believe in a positive result. Your article is fundamentally changed my attitude to the trade. My heart was calm and quiet confidence in the results. Your words about trend are very important for me. I am brazilian, so, my english not is very expansive. I love that part. Thanks Nial for this Great Article. May the Lord God of my fathers continue to bless you in Jesus Name. Thanks Nial, you are the best…. As I practice in my trading, I will not trade until I confident with the price direction trend.
I am currently trading only pin bars in trending markets and this article has given me insight into my way of trading. You continue to build a great resource library that is growing in knowledge and if used appropriately will turn to gold! Thanks very much Nial, I think without your web I would be stucked on nearly the same place where I was before I found it about half year ago. Thanks Nial, great article. I love this way of trading with the inside bar strategy.
But patience is the key here. Thanks loved this article heaps. NOW I know why all my profits are gone before I can even start bragging about making them! Excellent article, direct and concise on how to identify the trend. Thank you once again. As you said, many times I have given back my profits in the retracement period. Great article as usual. After a year of hard work and many hours of learning I can say with confidence, that You are probably the best teacher that one can find on the internet, price action is the best way to trade, and indicators create only confusion in market analysis.
Take care and best of luck to You. Your article is really amazing. At this position whether we have to wait for the confiirmation of the uptrend continuation or we have to decide tat the trend ends up and the downtrend started? Grow up to be patient enough to sit tight and wait for this triple combination.
What an excellent information for us to clarify and make our mind clearly while we are trading. Many thanks Nial, you have a articulate way of explaining your approach to trading. This transfers into my enthusiasm for your next posting. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDJPY-bullish contrarian trading bias.
The number of traders net-long is 3. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias.
The number of traders net-long is 0. Be sure to check out our Bitcoin Trading Guide if you're new to cryptocurrencies! We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin prices may continue to fall. Recent changes in sentiment warn that the current Bitcoin price trend may soon reverse higher despite the fact traders remain net-long.
In fact, traders have remained net-short since May 03 when US traded near The percentage of traders net-long is now its lowest since Sep 04 when US traded near The number of traders net-long is 8.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests US prices may continue to rise.
Although traders are further net-long than last week, the combination of current sentiment and recent changes gives us a US bullish contrarian trading bias. A demo account is intended to familiarize you with the tools and features of our trading platforms and to facilitate the testing of trading strategies in a risk-free environment.
Results achieved on the demo account are hypothetical and no representation is made that any account will or is likely to achieve actual profits or losses similar to those achieved in the demo account. Conditions in the demo account cannot always reasonably reflect all of the market conditions that may affect pricing and execution in a live trading environment. Technical Analysis Our daily technical analysis feed provides key insights on current market trends in forex, cryptocurrencies, commodities and indices.
David Song Currency Analyst. Forex Trendy is a much more sophisticated application capable of recognizing the most reliable continuation chart patterns.
It scans through all the charts, on all time frames and analyzes every potential breakout. After considering the reliability of the pattern it tells you something like this:. And you see the chart with the trend lines forming the triangle and the breakout point — all that clearly drawn for you.
The trend line looks solid with many touching points, so you are prepared for the massive breakout. Something you would miss unless you have supernatural powers to watch and analyze all the charts!
Such events happen very rarely in one single chart. It's not just drawing trendlines, but it's actually looking for reliable patterns formed by strong trendlines having more than two touching points at a certain distance. Not familiar with chart patterns and these fancy names? After considering the reliability of the pattern it tells you something like this:
Swing High Swing Low: Trend Analysis 1 indicator, 2.
Hi Nial Nice work you have teach me a lot Reply.