Exchange trend trading, strategy, indicators and templates
Trading with the trend is one of the most common and safest on Forex; there is nothing simpler than making a deal in the direction of the prevailing trend and waiting for the profit to reach the planned level.
But everything is simple only at first glance, because the trend does not move in a straight line, and it is quite difficult to choose the direction of the transaction.
In addition, you should take into account a lot of other indicators that characterize this trend, the main one being the strength of the existing trend, how long it can last and what caused this movement.
We also must not forget that for any of the time periods there is its own direction, which can simultaneously be a rollback for a longer time frame.
It is about the features of trend trading that we will talk about in this article.
A trader does not always enter the market at the very beginning of a pullback and does not always correctly assess the size of the resulting correction. Therefore, for the safety of transactions, it is advisable that trading is carried out only according to the trend.
Trend direction.
This indicator should be considered only by analyzing the direction of price movement on several adjacent time frames at once; only in this case can errors be avoided.
For example, let’s take the time intervals in M15 and M30. On M15 there is a downward trend, and on M30 there is an upward trend. In this case, with a high probability we can say that on the 15-minute time frame there is a price correction in relation to M30 and it is advisable to refrain from opening a transaction.
The best option for entering the market when trading with a trend would be if there is an upward trend on M5, M15 and M30, in this case, feel free to open a buy deal.
True, there are no rules without exceptions; an opposite price movement on a shorter time period may indicate the beginning of a reversal. Therefore, to avoid mistakes, it is best to use Forex technical tools such as trend indicators.
In practice, it is trend trading that allows you to get the greatest profit as a result of long-term transactions, because you take the maximum range of price movement, but before opening an order you should always analyze the market and forecast its further behavior, taking into account fundamental and internal factors.
Using Fundamental Analysis
In order for stock trading along an existing trend to be more effective, it is helpful to know where the current trend came from and what caused this trend. Take into account the so-called fundamental factors that caused the reversal or strengthening of the existing trend.
For this reason, it will be easier not to search for the desired event in the news history, but to trade along the trend after new news has come out.
You can also use the economic calendar for work; it often prints a forecast of an expected event; this factor also influences the market and can be used in work.
At the same time, news against your existing position will be a signal to close it, as it may change the trend.
Indicators for trend trading
In order to correctly determine in which direction the trend is moving and react in time to changes in the direction of this movement, you should use trend indicators:
- Trend determination indicator - http://time-forex.com/indikators/opredelenie-trenda
- Trend indicator - http://time-forex.com/indikators/trendovyy-1
- Strength indicator of an existing trend - http://time-forex.com/indikators/ind-sily-trenda
Such tools will make your trend trading simpler and more profitable; it is best to use two scripts in your work, this will allow you to more accurately assess the market situation.