Trends And Profitable Trading In The Forex Markets.
By Adrian Pablo, Thu Dec 8th
The basis behind using technical analysis is to find trends whenlooking at the forex charts and be aware of when they firstdevelop so you can ride the trend until it ends. The foreignexchange market is a very strong trending market, lots of upsand downs in short periods of time, and is, therefore, a placewhere technical analysis can be very effective.
But even considering the great amount of indicators available,there are still many traders every week who still end up buying(being "long") while the currency pair is in a basic downtrend,or selling short when a market is in a uptrend. This is, theyend doing things backwards.
If you want to become a profitable forex trader you will needto use as many technical indicators as you want, or create apersonalized trading strategy based off a combination ofindicators, to recognize the trend. In other words, professionalForex traders try to identify the major trend, the intermediatetrend, and the short-term trend and then construct their tradesin that direction, based on how long their
rules allow them tohold a position.
If the action of the market shows your judgment to be correct,the successful trader 'stays with the market' and endeavors tomake the maximum profit on each trade, according to his/herrisk-to-reward / equity management rules. If and when the marketgoes against him/her, the smart trader will take profits and getout. In a narrow market, when prices are not going anywhere tospeak of, but move within a narrow range, there is no sense intrying to anticipate when the next BIG movement is going to be -up or down.
In short, if you want to be in good profitable terms with theforex markets you must follow this words of wisdom: "Never arguewith the market, or ask it for reasons or explanations".
About the author:Adrian Pablo;Forex traderand freelance writer.
>> http://www.1-forex.com
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