Have you ever heard of words saying “the trend is your friend”? Yup, everybody keeps saying that when they enter the market. Especially in forex which is running in 24 hours in every work day.
This article is discussing how short-term trend is being developed. First of all, let’s us know that “bullish” means upward trend and “bearish” means downward trend.
Bullish trend is occurred when series of market price that represented by candlesticks/bars on chart are showing upward movement.
And vice versa, bearish trend is occurred when series of market price that represented by candlesticks/bars on chart are showing downward movement.
And the next question is what are we going to do in bullish or bearish trend?
Since I trade by following the big trend, then I only buy in bullish trend and only sell in bearish trend. But this is not what swing traders do (let’s talk about this some other time).
Now, we’re going to determine bullish and bearish trend by drawing diagonal line on our chart. Use 1H time scale to draw short-term trend line.
Connect opening/closing price at low levels which are making upward pattern to make bullish trend line and connect opening/closing price at high levels which are making downward pattern to make bearish trend line.
In bullish trend, we buy just above the line but not too far above the line. And in bearish trend, we sell just below the line but not too far below the line.
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Richie is a forex trader and forex technical analyst. You may read my articles at: Forex Library and my daily technical analysis at my brother's blog: Brian Signal Article Source: http://EzineArticles.com/?expert=Ramano_Richie |