Forex Strategy for Beginners 1: Trading with the trend
Forex strategy: Trend trend Follow-up strategies are not for nothing the classic among trading strategies and also for beginners well suited. Trading often makes sense to choose the path of least resistance. For example, if there is a stable upward trend in a forex currency pair, the likelihood of a trend continuation is higher than for trend reversal.
How do I find out that there is a trend?
Before developing a strategy for forex, it makes sense to deal with basic principles of trend recognition. These are the prerequisites for a successful trading strategy. In principle, an upward trend is characterized by higher high points and higher low points. If the low points are connected to a straight line, a so-called trend line or in this case a upward trendline is obtained. In the downward trend, it is the other way around: deeper low points and lower between highs mark the downward trend.
In addition to trend lines, indicators such as moving averages can also be used for trend analysis. As a general rule, if the moving average increases, there is an upward trend. The combination of two moving averages with different time horizons is also useful. If the averages are almost parallel and rise or fall, there is a stable trend in the short and medium term.