EToro offers its users a convenient and simple guide to learn how to identify trends in the forex market. We review the main concepts, ideal for beginners who want to enter the profitable market of currency trading eToro offers its users a convenient and simple guide to learn how to identify trends in the forex market. We review the main concepts, ideal for beginners who want to enter the profitable foreign exchange market.
When a trend is occurring in a currency pair, the price developments begin to form peaks and valleys in the chart of that pair, which are easily identifiable.
During an uptrend, the price developments are a series of rising peaks and valleys, as shown in the following image:
This table suggests that the trader must buy the currency pair.
During a downtrend, price movements are a series of peaks and valleys downstream:
This graph indicates that the trader must sell the currency pair.
It is important to note that for a few days of operation, the trend is difficult to detect, some days do not show a trend, and of course that is required to execute a reversal from time to time, so this is not a perfect measure and accurate and can be trusted 100%.
As a general strategy, eToro recommended to operate and not following the trend in the opposite direction, which means that if the overall market trend is up, should be very cautious about taking any position based on the trend that is to the contrary.