Forex Trading: Four Ways to Identify Trends In Forex Currency Pairs

TIM THOMAS TIM THOMAS Learn more

Trends In Forex Currency Pairs – There’s an old saying “The trend is your friend, until the end when it bends.”

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Top Techniques to Detect Trends in the Forex Markets

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Spotting Highs and Lows

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Using ADX to Identify a Trend

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Using A Single Moving Average

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Using Multiple Moving Averages

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Forex Trading: Four Ways to Identify Trends In Forex Currency Pairs

Trends In Forex Currency Pairs – There’s an old saying “The trend is your friend, until the end when it bends.”

Top Techniques to Detect Trends in the Forex Markets

Keep in mind this process should be part of a larger strategy such as swing trading forex chart patterns but whatever your strategy, it should be backtested and show promise.

Spotting Highs and Lows

The first method aims to help you identify a trend with your naked eye. We can spot an uptrend on the charts with “higher highs” and “higher lows.”

Using ADX to Identify a Trend

Average Directional Index (ADX) is a momentum indicator used to determine trend strength. Developed by Welles Wilder, it indicates that a strong trend is in place if the value is above 25.

Using A Single Moving Average

Trend following strategies uses MAs to spot significant movements in price. The simplest way to use MAs is to plot a single instance of this indicator on the chart.

Using Multiple Moving Averages

Multiple MAs lined up in the right manner are a more decisive confirmation of a trend in place. In an uptrend, the price should be above the MA.

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