Upward trend in trading, and ways to determine it
The price movement of a currency pair always has its own direction, which is the basis for choosing in favor of short or long transactions.
If over a certain period of time the rate of the base currency only increases, we can talk about the presence of an upward trend in Forex.
Upward trend is an increase in the price of a currency pair over a certain time period; it is formally believed that in such a situation, each subsequent minimum and maximum price will be higher than the previous one.
For example, first the price of the EUR/USD currency pair rose to 1.1215, then dropped to 1.1200, then rose again to 1.1220 dollars per euro.
In relation to other markets, an upward market trend implies an increase in the price of the underlying asset, for example, in the stock market this will be an increase in the price of securities.
the minimums and maximums of the price will
not always The basis for the emergence of an upward trend is two factors, the first is fundamental, and the second is technical, both of them are closely related, and therefore should be considered together.
A fundamental factor is the release of positive news on the base currency ; it is the message about an improvement in the economic situation that causes an increase in the price of the monetary unit relative to other currencies and causes an upward trend.
At the same time, the basis for growth is an increase in demand and the number of purchase transactions, and a decrease in supply, and as you know, it is these two main indicators that form the market price.
In addition to strengthening the base currency, an upward trend can also cause a weakening of the quoted currency; for example, a message about the instability of the US financial system will affect the exchange rate of the US dollar, while at the same time the Euro will remain in place. As a result, we may observe an increase in the price of the euro/dollar currency pair. Although no positive changes were noted in the EU countries.
An additional tool for determining an upward trend are special indicators - https://time-forex.com/tehanaliz/indikatory-trenda The use of these tools significantly speeds up the analysis of the existing trend.
In addition, the trading platform itself has its own selection of indicators for determining the trend:
Trading during an uptrend in Forex
If you are a supporter of trend strategies, then if there is an upward trend in the Forex market, you should open only buy transactions, with the exception of some points.
The best entry points will be price minimums or the so-called rollback points, when the course correction occurs and its growth begins again. In this case, you should make sure that it was a correction that took place, and not a trend reversal. You can do this by looking at the latest news in the news feed and assessing the magnitude of the rollback.
The second, simpler trading option can be the so-called news trading, when after the release of positive news an upward market trend begins to form.
The main thing here is not to miss the moment the news comes out and open a deal as early as possible. When opening trades, you should not be guided by only one time frame ; it would be a good idea to evaluate situations on longer time frames. The ideal case would be if they also show an upward trend.