How To Specify A Current Trend On Forex? Part 2
How to determine a trend, and what trend to choose, if on one pair it can be almost in both parties simultaneously? Choose a trend point of an exit (position closing) and the purpose on which to specify most simply. It simply means that other part of your system which is responsible for determination of the purposes and time of life of position should show more probable variants of succession of events for this trend. For example, a trend on a day schedule ascending, and on hour schedules the falling. But on hour schedules support level, the purpose for the price, and on day schedules the purpose also was obviously generated.
Let’s consider the problem direct determination of a trend. Here besides it is possible to enter two categories for all indicators which show a trend. In the first category indicators to which for calculation are necessary given only that currency pair a trend on which they count. Such indicators are in the majority. Other small part of indicators takes into consideration and the data of other currency pairs.
What for, how it is possible? Those who in the market any more the beginner (I hope, beginners too have begun with bases), of course, understand that quotations of currency pair are formed by the relation of value of currency in pair numerator to value of currency in a denominator. How many there is a Dollar shares on Euro cost, the quotation of currency pair which we see in the terminal as a result turns out. The dollar and Euro, in general, are the independent currencies, which cost changes are independent for various reasons.
Theoretically, it is possible to take the schedule of change of cost of Euro and also to find on it trends. But separately in the terminal it is impossible to see costs of each currency; it is possible to see only relations of cost of two currencies.
The steadiest and strong trend on currency pair will be when cost of currencies constituting changes in different directions. For example, the ascending trend on eur/usd is a “trend” when Euro cost grows, and Dollar falls. When still we can observe an ascending trend on this pair? Even then, when both the Dollar and Euro grow or fall simultaneously! It is possible under condition of different speeds of change of cost. Why a trend steadier and strong under the specified conditions? We do not forget that cost of separate currencies in itself changes smoothly, therefore if the Euro currency grows, then its growth will be slowed down, then will stop, cost falling, then speed of falling then will begin will be made even to speed of dollar downing and only then the trend on eur/usd will change the direction! This process will be, in general, to last much longer, than we will tell simple change of speed of falling of Euro, and a trend eur/usd in both cases can look identical.
For those who want to participate in forex trading must start from learning the basics of this market to make sure you do not have problems with this industry.