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Mar 16
Market Trend Charts

 

Generally a trend represents market direction.
Law of physics states that the object in motion shall continue its motion until some external force act upon it to stop or change direction. Price trends are very much the same.  If a price trend is strong, it will continue, until there is some price reversal indicator.
In major forex trends there are three trends that have to be considered; that are accumulation, public participation and distribution. First part of the accumulation trend is all about well informed traders who will buy or sell. It means that those who are more seasoned and experienced traders will recognize that a current downward will end soon, and then they would begin to buy.
The third and final is the distribution stage, when everyone else catches on and further increase in public participation. At this point the well informed investors who have accumulated during the accumulation stage would begin to sell.
Highs & Lows
In forex trading the rule of the thumb is that the existence of a trend relies on a series of lows and highs. 2 straight highs, each relatively higher than the previous and 2 relatively lower than the previously low would complete a tentative upward trend. Relatively higher third would confirm that forex trend.  It is significant to remember that forex markets not all the time move in trends. They spend some time in ‘ranges’ there is a fluctuation between established highs and lows. Market that range bound is often referred as a ‘sideways’ market because it is moving neither upward nor downward trend.
The price throughout a sideways market is often building backup for a continued move in the original direction.
On historical price levels trend lines are drawn, it shows the typical direction where the market is leading and also renders indications of support or resistance. It works like this … in an upward trend a line should connect comparatively at low points on chart.
For a longer term position the support line will be connection lows by providing a partial floor for retracements.
The downward trend line that links the relative highs on the chart will likewise act as a resistance to shorter goes back to higher.  It is crucial to be flexible when describing trend lines and describe trend lines whenever required.
Drawing lines parallel to each other is very vital because its value depends on the price channel.
Price channels are not like trend lines and they should not be forced on a chart where they are not easily visible. When a trend line is established, draw another duplicate line that is parallel.
Then go on with this line up to relative highs above or down to relative lows far below the trend line.
If two or more than two agree with line,  so you may have placed an appropriate price channel, or market may be too fickle in the middle of a strong trend,
Note that different chart providers may different in opening and closing times and traders may find difference in chart readings from different chart providers.

Generally a trend represents market direction

Law of physics states that the object in motion shall continue its motion until some external force act upon it to stop or change direction. Price trends are very much the same.  If a price trend is strong, it will continue, until there is some price reversal indicator.

In major forex trends there are three trends that have to be considered; that are accumulation, public participation and distribution. First part of the accumulation trend is all about well informed traders who will buy or sell. It means that those who are more seasoned and experienced traders will recognize that a current downward will end soon, and then they would begin to buy.

The third and final is the distribution stage, when everyone else catches on and further increase in public participation. At this point the well informed investors who have accumulated during the accumulation stage would begin to sell.

Highs & Lows

In forex trading the rule of the thumb is that the existence of a trend relies on a series of lows and highs. 2 straight highs, each relatively higher than the previous and 2 relatively lower than the previously low would complete a tentative upward trend. Relatively higher third would confirm that forex trend.  It is significant to remember that forex markets not all the time move in trends. They spend some time in ‘ranges’ there is a fluctuation between established highs and lows. Market that range bound is often referred as a ‘sideways’ market because it is moving neither upward nor downward trend.

The price throughout a sideways market is often building backup for a continued move in the original direction.

On historical price levels trend lines are drawn, it shows the typical direction where the market is leading and also renders indications of support or resistance. It works like this … in an upward trend a line should connect comparatively at low points on chart.

For a longer term position the support line will be connection lows by providing a partial floor for retracements.

The downward trend line that links the relative highs on the chart will likewise act as a resistance to shorter goes back to higher.  It is crucial to be flexible when describing trend lines and describe trend lines whenever required.

Drawing lines parallel to each other is very vital because its value depends on the price channel.

Price channels are not like trend lines and they should not be forced on a chart where they are not easily visible. When a trend line is established, draw another duplicate line that is parallel.

Then go on with this line up to relative highs above or down to relative lows far below the trend line.

If two or more than two agree with line,  so you may have placed an appropriate price channel, or market may be too fickle in the middle of a strong trend,

Note that different chart providers may different in opening and closing times and traders may find difference in chart readings from different chart providers.