Trading with trends in the market can not only add accuracy to a trading strategy but can also add to the risk-reward ratio of that same strategy, overall increasing the profit potential of any strategy you use.
These are the top three ways how to actually identify a trend.
1. Using Two Different Moving Averages
This is the most simple way to identify a trend and by far the most non-subjective. And what I mean by that is that it’s very easy to identify when it comes to this way of identifying a trend. So for me, the two that worked best in my own personal trading was the 200-day moving average and the 100-day moving average. As you can see on the picture, the red line being the 200-day and the blue line being the 100-day moving average.
Now, with this being the case, the reason this is so non-subjective and frankly hard to mess up is that all you’re looking for is your 100 day moving average to be below or above your 200-day moving average in order to identify this market as in an up or a downtrend.
A lot of people, whenever they consider moving averages in trading, think about crossover strategies and actually placing trades based around a moving average. That is not a very good way to trade because of how these indicators lag.
Moving averages are going to be a lagging indicator and these are going to be lagging even when it comes to identifying a trend. But when it comes to the easy, non-subjective way to look at the market and identified as either in an uptrend or a downtrend, these moving averages can work really well, especially for beginner traders that have trouble identifying market trends using only market structure.
You can see an example of a crossover on this picture.
This is a moving average crossover and I’m not talking about trading when the market crosses over. That’s not a very intelligent entry reason. But what I’m talking about is waiting on that cross of those moving averages to identify the market afterward as downtrend as soon as this cross happens.
What you can do is say after the cross, if my 100-day moving average, the blue line is below my 200-day moving average 100 below the 200, then I only look for short trade to using my specific entry reason.
But that’s how you would use this specific way of identifying a trend in order to trade in the markets. And as simple as this sounds, it would add a ridiculous amount of accuracy to most of your trades.
And it’s not even the fact that you have a difficult time identifying trends, using structure, maybe you just see it as a little bit too subjective and you can’t come up with the perfect set of rules in order to do that.
If you can if you look at a chart and you can’t automatically tell what trend it’s in, then you probably need to try to find a new way to identify a trend for now until you get a little better at identifying mark market structure and identifying market trends.
And it really doesn’t matter what the moving averages are when it comes to the numbers, you can use a 50 and 100, you can use a 20 and a 50. As long as one is smaller than the other one, this will work.
The 100-day and the 200-day exponential moving average is what I chose to use in this scenario as you can see on this picture. Where the first crossover is, you can see that while the blue line is above our red line, what we’re looking for is long trades, looking for the market to continue that trend in the upper direction. And on the spot where the second crossover is and while the blue line is below our red line, we’re looking for short trades and a continuation of a downtrend.
So that’s our first and most simple way of identifying the trend that I’ve used in my own personal trading.
2. Using One Moving Average
Now we’re going to take a look at a different way of identifying trend still using a moving average. But instead of having two moving averages, what we’re gonna do is just take off the 100-day moving average. And this is going to be the second most simple way to identify market trends.
And in this case, instead of waiting on the moving average crawls, as you can see on the picture, that moving average cross happened right there where it’s marked. So this way of identifying a trend, although a bit more complicated and subjective than using a moving average cross to identify a trend, will give you a faster trend identification. As you can tell, the market breaks below the 200-day moving average and this is where our downtrend started when using the moving average cross.
So it gives you a little bit of a faster signal, but it can also be a bit more subjective because you don’t want to be trading trend continuation while the market is consolidating. And in this area, as you can see in the picture, these consolidation areas can be extremely tricky to find when using just one moving average in order to identify a trend.
The moving average that I used when only using one moving average has varied between the 20 one hundred and 200-day moving averages. For this example, we’re going to use the 200. What I would do is just test strategies with each of those. Being your trend ID if you’d like to use this non-subjective way of identifying the trend and see which one works best for you.
So using just one moving average to identify trends is an extremely simple process. All you should be doing is looking for price action above the moving average or below the moving average. And when the moving average is going sideways like on the picture.
Choose not to trade. When price action is touching and bouncing off of the moving average multiple times, that’s when you should stay out of the market when using this way of identifying a trend. Stay out of the market at least for trend continuation trades and for counter-trend trades such as advance patterns and other things.
This type of market right in here works really well. But today we’re talking about trade continuation trade. So in that case, what I’d be looking for is this moving average to be moving up or down price action to be above or below it and then looking for into reasons based on that trend ID. In the case of the above, we’d be looking for only long trades. In the case of below, we’d be looking for only short trades.
3. Using Only Price Action
So now, we’re going to move on to the third way of identifying a trend, and that is going to be the most complicated to understand and learn. But for me, in my own personal trading, it has also proven to be the most profitable, that is using only price action.
And as I said, this can be extremely tricky. It can also be much more subjective. So it’s very important to have very specific rules when identifying trends, using only price action.
The rules that you should be using is called the break and closed below and above rule.
As you can see on the picture, what you should be looking for in this case is for a market to create a low, then a lower high, followed by a breaking close below that previous low. And in order for the trend to be a continuation of the trend, you should continue to look for the same thing over and over.
So, yes, you can see on this picture that we would still be considered in a downtrend because we’ve had this low be broken and closed below after a lower high. Then we had this low that was broken and closed below after lower high. What we’re expecting now is a continuation of that trend, a lower high, followed by breaking close below this previous low.
And this is the way you would identify a trend using only price action, using only structure. This definitely gives the fastest signals of a possible reversal, gives the fastest signals of trend continuation, and is proving to be one of the more profitable ways for me to identify a trend in my own personal trading.
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In today’s world, stock market is indeed one of the greatest ways to multiply your wealth, but it takes commitment, patience, and smart decisions to succeed as a stocks day trader. So, forex and crypto enthusiasts should look for ways to not make it any riskier. One such way is to keep trac k of the live exchange rates all the time to make your investments safer. Well, this is the exact reason why FXtok was invented in the first place. This app allows you to listen to the most variable parts of the real-time forex rates and crypto prices anytime, anywhere.
The forex market is open 24 hours a day, 7 days a week – which naturally means there will be continuous fluctuations in the market rates. So in order to be a successful forex trader, it is essential for you to keep yourself updated about the market, which seems like a difficult job in this busy and constantly changing world. But, the FXtok app is here to save you the trouble; you don’t need to worry because all the forex market fluctuations will be easily available to listen via this app. You won’t need to look up live prices on the internet or Metatrader and to open charts all day.
The FXtok app is available for both Apple and Android users and lets you track 70 financial instruments (indices, forex, crypto, commodities). It contains all the top global currencies including, but not limited to: EURUSD, GBPUSD, NZDUSD, USDJPY, USDCAD, and AUDUSD. Similarly, live cryptocurrency rates allow listening to live Bitcoin price, Ethereum price, DASH, and many more. In commodities, you can listen to live Oil rates, as well as Gold and Silver.
FXtok aims to have a global presence so it is available in multiple languages namely English, Español, Português, Deutsch, Français, 日本の, 한국의, हिन्दी , 中 國, Pусский, ,العربية and Indonesian. In case you don’t want to listen to the rates, you can set a specific duration of time to read live exchange rates about any cryptocurrency or forex.
By this time you will be thinking that this is the easiest way to keep track of the lives rates. Well, it gets better! The quick search feature of the forex rates app lets you quickly find what you want to hear. You can set any particular currency, commodity, forex, or indices to get updates. This feature helps to sort out and get details about your desired instrument.
And the best news yet: FXtok app is available for trial for free.
For any further information, you can visit: https://fxtok.com/
Automated Trading Software
The complexity and amount of data in financial markets means
that we are inevitably turning to computers to do a better job. Automated
trading, isn’t new. It has been around for several decades.
What is new is the rapid evolution of these algorithms as well as their
widespread use. Recent studies estimate that over 80% of all trading in the forex
market is software driven.
What they do
First it helps to understand what automated trading is and
what it isn’t. Many of us already use some form of algorithms in trading. These
are the chart studies otherwise known as indicators that most of us use on
popular platforms like TradingView.
These types of charting tools use software to process
underlying price information, sometimes aggregating it with other data like
volumes, to create a useful signal for the trader. That signal might be an
overbought flag which suggests a selling opportunity or an oversold flag that
could represent a buying opportunity.
Some of the most frequently used chart studies include the
moving average lines, stochastic oscillators, relative strength index (RSI), Fibonacci,
Ichimoku and MACD. There are also many variants of these.
These are the most basic types of trading algorithm. Not
surprisingly, computerized trading gets a lot more advanced than this.
A basic trading robot reads the outputs of indicators and
other data feeds and generates automatic buy or sell orders that are entered
into the market via a connection to the broker. This takes the evolution of the
indicator one step further.
A trading robot does not need a human to operate at all. It
can run as an automaton, just obeying the trading rules it’s programmed with.
More advanced trading bots take this a stage further. These
may use advanced pattern matching techniques and more specific rules that
can adapt better to changing markets. Some even aggregate information from different
sources like news feeds, indicator sets, and from multiple markets to improve
Advantages and disadvantages of automation
Those who intend to use trading software should consider the
pros and cons of each approach. They also should understand that any kind
of trading involves the risk of financial loss.
- Trading software is non-emotional
- It will obey trading rules and money management accurately
- It can be backtested on historical price charts
- It is hands-off just requiring monitoring
- It won’t get distracted or deviate from the strategy
There are drawbacks to software as well.
- Trading software can be expensive to develop and maintain
- It needs dedicated computer hardware
- It can be unpredictable
- The code can contain bugs
So what are the solutions if you want to go ahead and use
trading software? There are a number of off-the shelf packages that are advertised
on websites like Metaquotes.
Their marketplace lists hundreds of trading expert advisors
and indicators. These tools can be created by anyone and sold or rented for a certain
The source code is locked so you will not know how the
system works besides the general description that the seller gives you on their
listing page. Because this is an open
market, with anyone being able to sell, the quality of these systems does vary somewhat.
The better-rated tools can be expensive.
For those who are already skilled in software development,
there is always the possibility to create your own system. Most trading
platforms have their own scripting language that allows you to programmatically
interact with price data and automate account functions like placing orders.
For non-programmers, there are platforms like Tradoso. This platform has a graphical tool
that lets you create an automated strategy, bypassing the coding stage altogether.
You can use indicators as building blocks and pull various inputs and feeds
together. It lets you backtest your system so that it can be refined and
All trading carries risk. Automated trading is no different. An automated agent is only as good as the rules it’s programmed with. That’s why it is important to know the rules
that your system is following, and the range of possible outcomes.
Trading with a black box piece of software will carry high risk because you can never be certain what rules that system is following. Creating your own system is the only way around this.
In this way, tools like Tradoso and others that automate the whole development process are likely to become more prevalent in the future.
While coding will always be important, the sophistication of algorithms out there makes it increasingly hard for the part-time-coder
to compete on the same level.
Forex Scams – How to Avoid Them
Scammers try to imitate the approach of legitimate investment firms and sales representatives. Thus, the fact that someone can contact you in a specific way – by phone, mail, email or even referral should not in themselves be seen as an indication that the investment is or is not shady. Many reputable companies use exactly the same methods to identify individuals who may be interested in their investment products and services in an effective and economical manner. Keeping in mind that “investigating before you invest” is good advice regardless of how to contact you, Forex Scams are here to help you in this regard… there are many ways that scammers use to scam but we will tell you how they do that, so you can be aware of
Telephone boiler room telephones remains a favorite way for scammers and their sales squads to quickly communicate with large numbers of potential investors. Even if a scammer has to make 100 or 200 phone calls to find a mooch (one of the terms scammers use for their victims), they believe that the opportunity to save thousands of dollars from someone’s savings is still a good pay for the time and cost involved.
Mail Some fraudulent investment deal sellers buy mailing lists in good faith – names and addresses of people who, for example, subscribe to a particular investment-related publication, who have responded to previous direct mail offers or who have other features scammers look for. In the hope of avoiding notification by postal authorities, mail order scammers cannot make a direct or immediate launch for their money. Rather, they often seek to entice you to write or phone for more information. Then comes a call from the seller or the person closing the deal. Some may call even if they did not reply to the email.
Forex Scams on The Internet
Internet access has increased dramatically in recent years, and consumers have become more comfortable doing business. (Shopping, banking, or investing) online, but crooks are aware of the potential of cyberspace. The same scams that are conducted by mail or phone can be found on the internet and new technology creates new ways to commit crimes against consumers.
Advertisement Advertisements in newspapers or magazines may offer profitable opportunities. (Or at least with implications) that are more interesting than general investments Once you have taken the victim, the scammers will try to “hang up”. Although investors know that the regulatory agencies regularly check advertisements in major publications, there are some who use famous publications. Said in the hope that it could be hit and run before the other detectives appeared. Advertisements in the narrowly spreading print media, they think regulators may be less likely to see.
One of the oldest plans involves paying fast, big profits to initial investors. (Indeed, from their own investments or those of other people) knowing that they tend to recommend investments to their friends and these friends will tell their friends soon. Scammers do not want to find victims. New ones anymore They will meet him.
The “Reputable” Business
Some scammers go to the first floor. Take profit from scams. Previously, they rented a luxurious office, hired an interior decorator and professional receptionist, sounding and opening things that were similar. (But not the truth) of a reputable investment company, You may have to call to make an appointment and when you don’t have to wait. (Which is intended to make you more enthusiastic). The success of this type of scam depends on how long he can prevent his victims from knowing that they have been cheated. Investors are confident that their big profits will be reinvested to receive even greater profits. Such swindlers may join local civic groups, participate in charities, and generally play stable citizenship. There are some best forex brokers in the market, which forex scams will let you know about that, stay tuned with us to check it before investing your hard money into them.
Techniques for Using Forex Trading Scammers
Their techniques vary according to how they communicate. However, what they have in common is their ability to persuade. The skills that make them successful are the same skills that help salespeople succeed. But con artists have an advantage in their decisions: they don’t have to fulfill their promises. In the absence of this responsibility, they do not hesitate to make any promises that will persuade you to divide your money. Here are some techniques to figure out the forex scam in the market, please see below:
Expectation of Large Profits
The money flying through the air, the profits that con artists speak of, are big enough to make you interested and eager to invest. But not too big to make you believe it Or he might mention the profit numbers he thinks you will consider credible, and then in further temptations suggest that the actual profit is even greater. Of course, the latter numbers are something that he hopes you will focus on. In general, if an investment proposal sounds too good to be true, it is possible.
Low risk Some people are clear that it suggests that there is no risk – investment is a sure-fire source. Clearly, the last thing a scam wants you to think of is the possibility of wasting money. (If you ask how you can be sure that your money is safe, you can trust that the answer is trustworthy. He also believes that you believe what you want to believe) to make him confident. Con artists may admit that there may be a risk – then reassure you that you will definitely get the least profit. Con men may become impatient or aggressive if they have questions about the risk – perhaps suggesting they have. Better things to do waste time with people who lack courage and farsightedness in making money! With this, he hopes that you will not bring this story back.
There are generally interesting reasons why it’s necessary for you to invest now. It may be because the investment opportunity can be “offered only to a limited number of people” or because the delay in investment can mean missing a big profit (after all, when the information they have told you becomes generally known, the price will Higher, right? Urgent is important for con artists. He wants your money as quickly as possible, with the least effort on his part, and he doesn’t want you to have time to think about it, talk to someone who may suggest you to wonder or check out his or her proposal. With regulatory agencies. In addition, he may not plan to stay in the city for very long.
The scam is confident in the money you make, so you are confident enough to release your savings. Their message is that they are doing your favorite things by offering investment opportunities. Con artists may intimidate (Happily or something else) to end the conversation by suggesting that if you don’t really care, there are many others that will When you protest that you are interested, he will keep your savings in his pocket. Even if you can’t see a man the way he speaks But most people are determined, clear, and determined people who will control the conversation. The more you talk, the less likely you are to ask questions.
FXtok.com Listen to real-time prices
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