Wednesday, May 9, 2012

Forex Trend

Forex Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future.Although this may seem pretty basic, being able to identify when a pair is in a trend and when it isn't will help you to increase your chances to profit consistently in the Forex market.

When you can identify a trend, you can estimate what direction the rate of a currency pair is going to go in. You should exploit the direction of the trend you identify by placing a trade in that direction.

If it's an uptrend, meaning that the rate is increasing, buying the currency pair will give you a better probability for profit. If it's a downtrend, meaning that the rate is decreasing, selling the currency pair will give you a better chance of making money.

How do I identify a trend? What are the characteristics of a trend?The simplest way to identify a trend is through the distinct patterns that the price forms. These can tell you if the market is moving in an uptrend or downtrend.