Forex Trend

Finding the Forex trend is one of the most important things you can do when trading in the Forex market. Why is it so important? Well, the trend is your friend. And couldn't we all use some more friends in life?

Finding the Trend

Figuring out which way the market is going is obviously one of the most important things you can do when trading. Sometimes it's easy to figure out the trend and other times it can be a bit more challenging. Sometimes the trend is that there is no trend. I know, it's a little The Matrixy, "there is no spoon" type-thing, but really...there may not be a trend at a given moment.

When you correctly figure out which way the trend is going, you can hop on that bad boy and ride it to victory. Or at least to a few more bucks in your bank account. Whichever.

Looking at the Chart

When you want to figure out where the trend is going, look at the chart. Forex charts help you see visually what the market is doing. If you're looking at a chart and you can't see a trend, try moving up to a bigger time frame. For example, if you do not see a trend on the 15 minute chart, move to the 1 hour chart and one may become visible.

You probably shouldn't place a trade based on only what the chart looks like, but it's nice to use a visual confirmation from time to time.

Indicators

When using the Forex chart to determine the trend, indicators can play a vital role in this process. For example, the relative strength index helps you determine when the market is about to form a trend. On the RSI, the 50 is about where you can tell a trend is forming. When it passes 50 in one way or the other, this tells you that a trend is starting to form.

Another trend indicator is the MACD. When using the MACD, you'll see three lines. When the faster moving line crosses over the slower line, it tells you that a trend is starting. When you see this and then check the RSI and any other indicators that you use, this can be an easy way to confirm the trend.

Paying for Help

Many Forex trend indicators such as the two we just discussed, are free. You simply open up your trading platform and then load them on your chart. In some cases, you may feel compelled to pay for special indicators or systems that help you determine the trend. While there is nothing wrong with this, just be sure you get what you pay for.

Do some research and find out if the indicator or system is worth the money that you are being charged for it. The Forex market is full of scams and you do not want to get caught up in an overpriced system scam.


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