Strength of the trend.

When trading Forex, you often hear the phrase "The trend has weakened, the likelihood of a reversal has increased." This makes it clear that to make money, you should only open trades during a strong trend.

The strength of a Forex trend is the price movement of a currency pair, combined with its liquidity and the volume of all trades.

These indicators should be analyzed to determine the sustainability of an existing trend and the likelihood of its reversal.

If you trade on the interbank exchange, all the necessary indicators for trend analysis are publicly available; with Forex, it's becoming increasingly difficult, requiring some effort to obtain the information.

• Price movement speed - is determined empirically, for example, by looking at how much the rate has moved in an hour and comparing it with the average for the previous day. You can also analyze the dynamics of movement on different time frames.

• Liquidity - the more popular the currency pair, the higher its liquidity, the most popular are usually those instruments for which there is currently a rush demand or supply. Determining the latter is not difficult, just open the latest news and find the most significant events, then conclude which of the currencies they put the greatest pressure on.

• Trading volumes - a fairly important indicator is the growth in volumes confirms the existing trend. You can get information about the number, and most importantly, the volume of transactions on the interbank currency exchanges, sometimes individual forex brokerage companies also provide such data to their clients.

• Fundamental factor - fresh news is also proof of a strong trend, especially if it confirmed the current trend.

After determining and analyzing the listed indicators, we can say that a strong trend is observed when the following conditions are met:

1. The price moves faster than usual.
2. The currency pair is experiencing increased demand (in an uptrend) or supply (in a downtrend).
3. Trading volumes for this asset are high.
4. News has recently been released that has caused a trend reversal or acceleration.