There are number of basic skill a trader needs to have. Identifying the trend is one of the most important ones. The goal is to identify which direction price moves and make trades along that movement.
Sometimes identifying the trend may be a confusing task. But overall it is easy. Anyone can see in what direction price is moving. Therefore anyone can learn to identify the trend on any time frame. If you are new to this I recommend you to start with higher time frame charts since they have less noise.
One of the techniques to identify a trend is to identify the local maximums and minimums of the price. Those points sometimes are called swing high and swing low point. A line connecting those points basically will give you an idea about the trend.
Another phenomenon that called sideways market. You can see it when the price moves sideways between support and resistance levels without breaking out of them. Therefore there is no trend upwards or downwards.
A good part of the such horizontal movement of price is that sooner or later it will break out the support or resistance. If it breaks the support it will create a downtrend. If it breaks the resistance price will go in up trend. Either way it is a good opportunity to take a trade.
Many traders use this horizontal movement of the price directly by scalping the Forex. The straight forward way to do such trading is to enter short at the upper level and exit at the lower level. When price reverses do the opposite. There will be only one losing trade when price breaks out the range.
Whatever strategy you use to trade currency remember that you need to thoroughly test your system. Use back testing as well as forward testing on a demo or even better on a small live account. Also keep in mind that there is no such thing as a 100% wining system. The most profitable system will give you the loosing streaks from time to time. You need to understand the risks before going with your trading system to trade real money.
As I described you before identifying the trend is not a hard task. Anyone can learn it and make money trading currencies. On the other hand the hardest part is to be objective while identifying the trend or any other parameters of the price. It seem not that easy when it comes to real hard earned money.
When it comes to trading our real money we either hesitate and lose the good trading opportunity or we jump anxiously int a trade when set up was not formed yet. That's why you need to develop self control and be objective in estimating the market conditions.
Albert Schmidt has been in the field of Forex Trading for quite some time by now. Visit his blog about Forex trading where you can get answers to the rest of your questions about how you can learn Forex trading.
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