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Trend and Momentum


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11 replies to this topic

#1
ellliottt

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Trend and Momentum

There is a trader friend who after reading the articles and blogs about forex later commented: forex is easy ... do not have contrived meticulous ... doing too many-many theories, just get those green pips ... hehehe.

Let's see ... I agree that that was actually easy to not have made meticulous. It is not meant to make your heart think that forex is so meticulous and make dizzy. I agree with a friend who believes that if he could be understood with simple, why should contrived intricate? But anyway, I still recommend for prospective traders for at least understanding the basics of the analysis in forex trading, so do not make trades based on a hit and miss

Well, because the most basic of forex trading is to determine when to buy and when to sell, this time for discussion I will try to discuss about the trends and momentum

Why the trend?

You see, in the simplest forex trading benchmark in the deal is buy when prices rise and sell when prices fall. Of course this will be better if equipped with an understanding about things other support, such as an understanding of the support-resistant or psychological limitations, over-Bought-over sold, divergence and others. But OK is ... accordance with the motto: make it simple, while we save the first terms that make intricate. We will discuss first the simplest case, namely: the trend.

What is the trend?

One of the "wise words" in forex trading is: follow the trend, the trend is your friend. Hehehe ... Well, then we need to understand first, what is the trend?

Let us consider the following picture:


Posted Image

Well, from the picture above, it seems we got clear view about the trend ...

So in general, the trend of a chart can be divided into: uptrend (trend rising), a downtrend (trend down) and Sideways (alternating trend in a certain range)

As a trader, we must know what the current trend trend is to take the right position.

There are several indicators to look at trends, among others, and Moving Average Parabolic SAR., Trned line and others.

Momentum

Completing the discussion of trends, let us discuss a bit about momentum.

Simply put, momentum is the "strength" of a trend.

Ideally, we not only know the direction of the trend, but also how much the strength of the trend. It means that we are not "late" entry into a trend. For example we know that the trend is rising, so we decided to buy ... uh, it turns out, not long before the trend turned, so the loss was that we could. More is definitely more when it turns out we are "trapped" sell at the bottom of the valley or "buy" at the top of the mountain ... aka we had sell open position when the price or buy at the lowest point when the price on the highest point, red alert ... hehehe ...

Well, so we're not one go in the middle of the trend, you should first identify the ongoing strength of the trend, if strong enough to continue, or is already weak, so going to immediately change direction ...

There are many indicators to see the strength of the trend, among others, there are RSI, MACD, ADX, W% R and others.

To this end I hope you've started to understand the most fundamental thing in forex trading, that is when to buy and when to sell. Of course, should keep in mind also our discussion earlier about the time frame, because after the decision to buy and sell at the same time could be different if we look at charts in different time frames. About how to read and interpreting indicators commonly used in forex trading, including the indicators that I alluded to above, we will discuss in following post.
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#2
yogesh

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Though i am not expert but as per my experience i had with euro-usd pair i feel trend is very important in forex
I usually go with trend and so most of my trades end in profit, in initial days when i tried to chase the trendz i had to bear losses.
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#3
boniez

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A good explanation, I too was interested in trading techniques such premises. because if they can understand trends then, the profit gained can also be very large
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#4
ethilihop

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Hi GT3RS and everyone,

In the past Ive received similar questions about timing.
Id say next, while we stick to the original rules which everyone likes to stress on every time , I dont want you to be locked in a box.
As more and more traders begin to pay attention to market hours, behavior of many trading strategies and styles which are tailored to certain hours changes over the years. All WE have to do is to adjust while keeping the main trading idea alive.

As I said in my old posts, Ive been experimenting with shifted hours to address this early breakout question.
The idea Ive been working on goes as follows:
- we draw trend lines using 5 candle range after midnight AND now also 3 hours before the midnight if there is a valid swing to use.
- if we ended up using a swing before the midnight, we only draw a trend line which would allow us to trade a breakout in the direction of the main trend.
- our main trend is suggested by 200 EMA: price above 200 EMA - uptrend, below - downtrend.

So, keep the breakout idea, try shifting hours and compare results.

Best regards,
Edward
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#5
stezz

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thx for explaining abut this trend and momentum
since i'm newbie in forex thing its very useful for me
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#6
standart

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simple and profitable method in trading actually is ride the trend. but many traders complicate them self and not consistent in ordering position simply just because they unable to see the trend clearly or even not use trend direction as their main analysis foundation.
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#7
euro

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Trend is everything to me. I only trade when there is a good trend. Good trend will help us in profit. I always look for a bullish trend of course before I jump in to buy and there are plenty during good business hours. Now, there are plenty during business hours and not during weekends or anything like that. I think it helps a lot cause other things do not help at all. You can see if there is a chance for a profit and then you jump in and trade. I only read trends in order to trade and I read all of them. 


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#8
Decub

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Trend movement always has something to do with the momentum too. That is basically the reason why there are indicators specifically for dictating the trend while there are still others meant to observe the strength or the momentum of the trend. It's really a two way thing that works hand in hand with each other.
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#9
standart

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momentum trend created when traders agreed about the pressure. we know about bullish and bearish terms. if market bullish, mean pressure is buying. at such situation trend momentum going to north and many traders take buy position. in opposite, when market heading down or going south, mean pressure is bearish or sell. it explain that many traders open sell position.


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#10
myregister

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That is for technical analysis. Trend and Momentum that they should know is based on the charts and also some indicators. If you are fundamental traders the trend and momentum lying on the news. I trade in most of high impact that have clear result or trend. My momentum is usually around 4-7 minutes.


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#11
bearhugs

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Trend and Momentum are the very basic way to trade with this market. For that you need to understand the chart with different indicators which are quite simple and easy to find with any MT. It is the most common way to find trade in market.


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#12
silent192

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I'm a trend trader because I found I got most results out of it and its interesting.


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