How to identify market trend in forex trading - Forex trading has a high risk of losing funds, everyone who enters this business must be prepared to lose their invested funds, Like the slogan commonly heard by most people, "High Risk High Return". However, the science of forex trading can be learned, so that when you enter the forex market you already know when it will come out. A good trading technique is being able to determine when to exit the market before we enter the forex market.
In this article, we will discuss how to identify trend in forex trading, the goal is that we know the direction of the price and are not dragged into excessive losses. When we know the direction of the market trend that is happening, trading will feel comfortable because it is in accordance with the current trend. Detecting forex market trends will make it easier for you to be able to open positions more accurately. How to know the current market trend, let's discuss it further.
Identify market trend using Moving Average
Moving average is an indicator available on the Metatrader 4/5 platform, this indicator can be used as a means to see the direction of market trends. However, it is necessary to underline that this indicator is not for open positions, but only for seeing the direction of the market trend. There are many other indicators that we can use to see the direction of the current market trend, and the simplest is the moving average.
To identify the direction of the trend, you can use moving averages 21 & 34. If the market is below the 34 & 21 moving averages, the trend is bearish / down dominates, whereas when the price is above the 34 & 21 moving averages, the trend is very bullish / upward dominate.
By using the knowledge of how to identify forex market trends, as a trader you will feel calmer when trading. When you experience a loss, you can determine how much loss you receive, while when you get a profit it can be maximized by following the correct market trend. In order for science and trading position entry to be more accurate, the knowledge of reading this trend can be combined with support & resistance strategies and price action. Hopefully this article is useful for readers