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    Forex trading systems

    Forex trading can be a really profitable way of making money even for people, who are not very familiar with internet trading (https://freshforex.com/encyclopedia-forex/internet-trading/). There are some simple rules that are help to develop trading strategy and perform market analysis even for newbies.

    Beginners traders quite often read the piece of advice “Never go against the trend.” This is the first rule of trend-following Forex trading systems. On one hand, It’s a common place, but on other – just a few number of traders understand it properly and use in their daily trading. It’s worth having a closer look at this rule.

    Before starting put trades, a trader should identify the prevailing trend. A trend is the direction where prices have been going until now and possibly will continue to go in the future. There are three types of trend on the market. It can be uptrend (bullish), downtrend (bearish) and also a ranging trend or a sideway trend. Every type of trend has its own condition to appear.

    How can we decide which trend we are dealing with? The answer is just have a look at the chart! A bullish trend has consecutive, higher significant lows and the same type of highs or highs that are located near similar price levels. It can fail only when we have a new low under the previous significant low on the chart. The development of a lower high or the break of the trendline doesn’t mean that the trend is changing.

    We are talking about a bearish trend when there are consecutive, lower highs on the chart. Moreover, it has to include consecutive, lower lows near similar price level. If we have a new high over the previous significant high, the trend fails. If we have a higher low or the break of trendline, there is no change in the trend.

    The third type of trend is called a sideway trend, but it’s difficult to call this price movement ‘a trend’ at all. If the price moves between support and resistance levels, we don’t have any trend at all. Support and resistance levels are points where the price has previously stopped and turned around in the past and where it can do the same again in the future.

    The knowledge about a trend can help you make a proper market analysis and earn on Forex quotes easily even if you don’t have a lot of experience in trading.