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What is FXTM Trading Signals?
FXTM Trading Signals have been carefully designed by the talented team of market experts to interpret movements of key assets based on pricing data.
By factoring in alternative scenarios, popular technical indicators and more, this tool will take your trading to the next level.
FXTM Trading Signals combines an assortment of tools in one such as:
- Popular Technical Indicators
- Choice of 4 Take-Profit Levels
- Explore Different Scenarios
- Protective Stop Loss Recommendations
- Daily updates before EU and US markets open
Enhance your trading potential with FXTM Trading Signals from today.
To get started, you just need to follow the simple 5 steps here.
- Register or log in to MyFXTM
- Access FXTM Trading Signals via ‘Trading Services’
- Select your preferred instrument
- Explore scenarios and interpret price movements
- Buy or Sell to capitalise on an opportunity!
FXTM Trading Signals will alert you when significant trends or patterns appear in the market.
It can also reflect in a timely manner whether potential high-quality trading opportunities are being formed in the market.
When a trading signal appears in the market you follow, you can choose whether to trade with reference to the signal.
In this article, we will get into more about “Trend Trading” which requires you to know the current market trend.
Making profits with Trend and Price Range trading
Being an international currency exchange platform, the Forex market has a fundamental difference from other trading systems in that it is decentralized.
And, nevertheless, the lack of a specific location and a central exchange allows its participants to make good profits.
The process of exchanging money takes place through an electronic network of various participants: central and commercial banking institutions, brokerage organizations and traders.
Naturally, successful trading requires special knowledge, which novice and experienced traders should receive regularly.
Knowledge of the terms of the trading dictionary and the basic principles of trading is also necessary to exclude the possibility of large financial losses when trading.
What is Trend trading?
A trend (tendency) in Forex is considered to be a unidirectional price movement that is valid for a certain period of time.
For example, the famous theory of Dow technical analysis is based on two basic concepts: support/resistance levels and trend movement.
Market trends can be classified according to various criteria:
According to their direction, ascending (“bullish”) and descending (“bearish”) trends are distinguished.
A “bullish” trend is characterized by the fact that each subsequent local extremum (minimum or maximum) is higher than the previous one.
In a “bearish” trend, each subsequent extremum is located below the previous one.
By duration, trends are divided into short-term (from one to several trading sessions), medium-term (from one to several weeks) and long-term (from a year or more).
“The trend is your friend” is an expression many traders have heard.
Therefore, experienced traders strongly recommend opening positions only with the trend.
Some traders compare the trend with a huge heavy “skating rink”, against which it is not recommended to “go”.
How to create the support line
Analyzing the uptrend on the example of the GBPUSD pair and connecting most of the lows, you can get a support line.
Moments of touches and rebounds from this line are the most favorable for opening long positions.
Similarly, but exactly the opposite, traders open sell orders when the price rebounds from the resistance line in the case of a bearish trend.
To make the right decision and open a buy/sell order at the right time, you should always initially analyze the price movement on a higher timeframe.
For example, while trading on H1, they initially analyze the price movement on H4, and even better on D1. Thus, the duration of the trend and the possibility of obtaining more profit are more accurately determined.
When the price crosses the support (resistance) and goes down (up), the trend direction is considered complete.
How to predict the trend reversal?
It goes without saying that a trend move in one direction cannot last forever.
It is very important for every trader to determine the trend reversal, namely the breakdown of the trend line and subsequently the movement in the other direction.
Both the profitability of transactions and the possibility of preventing losses depend on this moment.
You can determine the trend reversal with or without indicators, using classic technical analysis figures, trend lines and other methods.
Any accumulation of candles on the chart of the asset chosen for trading is of great importance for determining further price movement.
The figure clearly shows how before the breakthrough of the price level, consolidation was indicated.
There is no pronounced price movement. There are slight, barely noticeable fluctuations.
After a certain time, having gained the required volume, the “bears” break through the trend line and turn the trend down.
Now the support line has turned into resistance for a certain time.
Another way to determine a trend reversal is to use technical analysis patterns.
One of the classic reversal patterns, the Double Top, is clearly visible on the chart. Outwardly, it resembles the letter “M”. You can see how it formed at the top of the bullish trend, after which the price movement turned down.
Another way to determine a change in trend direction is to use Japanese candlestick analysis.
In this case, on the hourly chart of the GBPUSD asset, there is clearly a “Bearish engulfing”, after which the price direction after the upward movement reverses.
Correctly and timely identified reversal movement allows the trader to enter the market at the very beginning of a new emerging trend and get the maximum profit from the transaction.
Knowing a price range is extremely important
Trend trading can be more successful if the trader has a clear price range.
This price range is located between the support and resistance lines.
Usually, all traders are willing to buy an asset when the price bounces off a support line and try to sell it when a bounce is made from a resistance line.
Such trading method is preferrable in a sideways trend movement with a sufficient level of volatility.
Determining the exact limits of the range is extremely important, since they serve as a guide not only for opening long and short trading positions, but also for placing Stop Loss orders, as well as determining possible targets (Take Profit).
For successful trading, it is clearly not enough to know the classical methods for determining a trend movement and its possible reversal points.
In addition, it is necessary to study in detail the assets chosen for trading, be able to use technical indicators, apply various trading strategies in practice, and use fundamental factors in trading.
It should be remembered that the market does not stand still, it is constantly evolving.
However, the basic concepts of trends are fundamental.
Without them, the further improvement of any trader in trading is unthinkable.