Hello trader friends, on this occasion we will share interesting information for all of you related to Forex trends. There are still many people out there who do not understand well what forex trends are and their functions in the world of the forex market. Because this is very important as your first step in the world of trading, so on this wonderful opportunity we share complete information so that you have a better understanding of seeing price tracks or a series of chart cramming records with a certain level of inclination, both pointing downwards ( downtrend ) and which is pointing up ( uptrend ). At first glance, you must be full of questions, what exactly is the function of this forex trend? Is it crucial enough for a trader to know? Let’s see the full discussion below to answer your curiosity.
Understanding Forex Trends in the Trading Market
Forex trend is widely interpreted as one of the movements that cannot be predicted by every trader, which can indicate the direction of currency values in the Forex market (prices). Meanwhile, the movement is not formed like a straight diagonal line in one direction, but usually moves like a series of zigzag lines . Well, we often see terms like this in everyday life, moreover, many people use this method to express a certain situation. This also applies to forex market trading conditions, when currency is favored by many people, these graphs and lines will be shaped like a zigzag, up and down according to market conditions at that time. Usually, a falling currency condition is followed by a downward zigzag line following the market price. This also applies when currency conditions are rising and are referred to as (uptrends).
In general, this zigzag-like movement has a series of waves that are basically sequential but for the level itself it is divided into several parts such as peak levels ( High / H ), higher peaks ( Hihger High / HH ), higher valleys ( High Low / HL ) and Valley ( Low / L ) . From here you should have enough class that the direction of the low and high is a definite indicator when the market trend is happening in real conditions, while for this high and low it will move up and down and there are several stages to go sideways with the term (Sideways). This direction can later provide information to a trader as a consideration in making trading decisions later.
Important Functions of Knowing Forex Trends
In general, every trader who jumps into the world of forex must understand well the market conditions before opening or exiting, the important function of knowing the first forex trend is clear from the price of each currency market that is always changing and cannot be stable, therefore every trader must able to understand well the terms up and down line to determine the next step. Many people say something like this ” don’t fight the trend ” but just follow the trend “which means this is very important for you to understand when you start trading, never fight the trend but just follow the flow according to market conditions at that time.
In the world of forex, terms like this are indeed quite important for us to learn, especially if you are still having trouble determining the right currency market. Conditions like this also occur when there is a trend (term conditions that are trending), so many traders are vying to have it. Meanwhile, in the world of forex, prices that are trending or rising upwards must be a lot of trenders who have opened positions to ” buy ” or buy. If you do this based on the right trend strategy, we believe you will get profit until you reach the highest level, namely Higher High / HH . Meanwhile, if the price is always going down and down, many people will take cell positions to reap the benefits of the price decline that occurs. Conditions like this are actually quite common in our lives, both have situations where people will choose to do something that is trending. This can be clear evidence that forex is one of the markets that can really give you the experience of picking rupiah with the trend method. In fact, when people own shops and sell goods at low prices, we believe hundreds of customers will come over and over again. As with forex, both prices go up and down for quite a long time, this is a golden opportunity for many traders.
Even so, not all traders really want to follow the trend well, there are some who choose to go against the flow because they may have different strategies. When the trend is up, many traders choose to sell and when it goes down they choose to buy. Why did that happen? What is the reason they do that? Of course, this still has something to do with future market strategies in which prices may reverse direction. As we said at the beginning of this article, if the market conditions go up and down like a Zigzag, this condition is difficult to predict but it is quite certain that it will continue to rise or vice versa. You have to be really careful if you follow a trend that you don’t know will reverse direction. The concept of forex trends is indeed very common as an initial learning for beginner traders, if you look back, understand and study forex trends, including one of the technical analysis approaches that you have learned indirectly. There are many tools that you can use to calculate the value of an up and down trend such as (Price patterns, Moving averages, resistance and support levels).
How many types of trends are there in Forex trading?
The following are 3 types of trends that are enough for you to know in the forex world.
- Ranging / Sideway
It can be said that this type can show price consolidation which is currently attracting the attention of the buyer vs. seller. This condition is very difficult to know the best point to buy and sell because the direction is not clear.
This condition shows a periodic downward movement
Conditions where the chart will always follow the movement of prices that are rising periodically.
In the world of forex, trends do have an important role for every trader to make the best decisions for them, it’s just that if it is not considered properly it can bring losses to you. Some information from us. Thank you.