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Forex traders who rely on a strategy called trading trends can also use various methods of technical analysis to achieve greater precision with their trades. In this post we discuss methods of technical analysis that you can use for trading trends in the markets.
Trading Trends Is Only One of Several Trading Strategies
Other Forex trading methods such as range Forex trading or breakout Forex trading are just as suitable but not as popular as trading trends.
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Moreover, trends vary depending on the type of asset class you are looking at. Generally, trends are more pronounced in commodities. In many cases this is because commodities such as natural gas, grains, are seasonal in nature. Additionally, demand for certain commodities naturally rises and falls.
However, trends in the Forex markets are not so seasonal. Instead, trends having to do with currency pairs are more dependent on economic and other factors. This makes trends in the Forex market less predictable.
For example, the EURUSD was in a clear upward trend during December 2016 through late January 2018.
But the trend for that currency pair reversed itself in January 2018 and has been descending since then. Once Forex traders become aware of such trends, they can position themselves to make greater profits from the changes in theses trends. This is the heart of the strategy that Forex traders refer to as trading trends.
EURUSD Trends How Do Traders Use a Strategy of Trading Trends?
A Forex trader whose strategy is based on