Best and most powerful Forex trend techniques have always been every forex trader’s dream to determine forex trend strength as well as identify trends and determine their
relative strength. This is what allows us to trade with momentum rather than against it, and in turn, it actually increases the odds of a favorable or successful outcome.
Sadly, knowing the strength of a forex trend is never straightforward as it’s usually complicated.
This is because despite the fact there are lots of
forex indicators and forex techniques, the forex world over the years has unnecessarily complicated a relatively simple task.
The good news is that these two best and most powerful forex trend techniques that I will show you today, they will make or help determine forex trend strength a manageable task for you to handle.
You will also have the opportunity of understanding trend characteristics too as you would know whether to look for a continuation of a current trend or an imminent breakdown thanks to the best and most powerful forex techniques that would be used to determine the forex trend strength.
Characteristics of a Trending Market
Basically, we need to know how to identify a Forex trending market.
A Forex trending market is one that shows or it’s making higher highs, followed by higher lows(bull) or lower lows that are followed by lower highs (bear).
NOTE: as long as the new high crosses the previous high and does not violate the recent reversal low then we can comfortably say that’s a
"higher high and higher low formation". As it continues to make consistent highs.
What I’m about to show there is a possibility that 85% of Forex traders don’t know how to look for what I’m about to show you.
So it would be best for you to stick around.,for you to know the best and most powerful forex techniques to determine the forex trend strength.
Now, we turn to
Principle of Technical Analysis.
1. Distance Between Subsequent Retests
2. Clustering Price Action
1. Distance Between Subsequent Retests
There is a misconception among forex traders in all markets that technical analysis is seen as a traditional method of trading.
In fact, someone came up to me with the notion that support and resistance levels become stronger with each additional retest.
To be honest with you, that’s a complete misconception.
This is because multiple retests of the same level make that level more visible, they don’t make it stronger.
NOTE: visible and strong are in no way synonymous.
I want you to think about it carefully, if this were true, that a level became stronger with each additional retest, in essence, it would never break. This is because it didn’t break on the third retest, so why on earth would it break on the sixth when it ought to be twice as strong?
It just doesn’t add up.
But if we can agree that multiple retests of a given level do not make it stronger, Then we can just conclude that it makes the level weaker, right?
Well, not fully. This is because a market that continually revisits the same area can eventually break through, this is because we don’t have enough data to conclude that it is likely.
For that,( I believe you guessed it ), we turn to highs and lows. To be specific we turn to the relationship the highs and lows have with our key level as this makes it one of the best and most powerful techniques to determine forex trend strength.
2. Clustering Price Action Is One Of The Best And Most Powerful Forex Trend Techniques To Determine Forex Trend Strength
This is actually an early warning sign because it is when
price action clusters near a key level. I most times call this the “heavy” price action.
This is because it is when a market begins to put constant pressure on a certain key level over a short period.
Although, believe it would be best to come up with a better word for it, especially since heavy only applies to a pair that is putting pressure on a support level.
Otherwise, that would make the opposite “light” price action, which doesn’t fit into the system or have the same ring on it.
Nevertheless, the idea here is to carefully watch how the market responds to support or resistance within a given period. A good or best period would be a few days or maybe a full week if you are trading from the daily time frame.
NOTE: When the forex market begins to cluster or group for an extended period at a key level, there is a chance that the trend is about to break down and reverse, this makes it one of the best and most powerful techniques to determine forex trend strength.
Summary Of The Best And Most Powerful Forex Trend Techniques To Determine Forex Trend Strength
1. Determining or knowing the strength of a trend ought not to be a complex operation. This is because the two techniques we discuss will help you understand whether a trend is likely to continue or break down.
2. It’s very important for you to know that the best and most powerful techniques above are useful in
bull and bearish market.as they can also determine the forex trend strength
3. In my own opinion and experience, the best way to identify trends is to use
simple price action.As this will always continue to be one of the best and most powerful techniques to determine the Forex trend strength I said before Higher highs and higher lows signal an uptrend, while lower highs and lower lows represent or signal a downtrend.
I hope we have been able to brighten your mind, if this article was very helpful, please let us know in the comments, and lastly please subscribe for more by Signing up. Thank you!
You can also check out:
How To Control Your Emotions When Trading Forex
Webbikon Blog is owned by Efevwia Efemena, a Web designer/Developer who started his designing and coding journey in his first year in college, and he started by taking a course from a digital marketer at a bargain.
To know more about the garden of knowledge and innovation,
Please click here