While trading in the Forex market, a large number of toolboxes is used. They are called indicators. Without any indicator, it is difficult to analyze the market. You will not be able to conduct any fundamental or technical analysis without indicators. On the platform, you can find a lot of different tools for technical analysis. Some of them are used single-handedly and some should be combined. Don’t neglect their use! They will bring you more profit.
Trend in Forex
The financial market can only be flat or trending.
Flat is a state of the market. In this market, price fluctuations occur only in a small range and there is no specific price movement up or down. In brief, the flat market is characterized by low volatility.
Trend is the opposite state to the flat. The trending market has a tendency to a rapid increase or decrease of the price of a certain instrument.
The trend is represented by two main types:
- a bullish trend as a sharp increase in the price of a financial instrument;
- a bearish trend as a rapid decline in the price of a financial instrument.
Trend is a favorable phenomenon for trading in the market. It is easy to earn big money on such movements at minimum risks.
Flat will not bring you big profits, but it has fewer risks due to absence of the sharp fluctuations.
To determine trends, traders all over the world use the trend lines. It is easy to find them on any modern trading platform (for example, on MetaTrader4).
Trend Analysis in Forex
Trend lines can be used in any market and with any financial instrument. In the heart of the trend lines lays a mathematical function that calculates the price changes of the financial instrument and geometrically displays all the results on the platform. All traders should use the trend analysis. If you are a beginner in the world of trading, you should, first of all, become a master of this indicator. It is not difficult to learn how to use this indicator, but it will become your faithful assistant in trading any financial instrument.
Trend lines and the other indicators
Trend line is a very multifunctional tool. Along with a trend line, you can use any indicator to get more accurate final results. However, the trend lines give the best results when used with the lines of support and resistance. These lines perfectly complement the trend indicators and give the most accurate analysis of the situation in the market. Trading with these two indicators, you can predict the trading signal almost exactly.
All in all, it doesn’t matter if you are a beginning trader or a professional one. There should always be a trend line indicator in your big arsenal. Your trading will be stable and easily predictable due to its presence. Check it on your own, if you don’t believe us!