In this article I will discuss about all the important steps that are included in a forex trend.
FIND THE TREND
The very first step towards forex trend trading is to determine the trend of the market. There are many different ways to recognize the GBPUSD trend, but one of the simplest is through identifying that if price is creating higher lows or higher highs. If price is moving upwards that means that the price is making higher highs, the trend is actually up. With the same theory, if the price is stepping down towards the lower lows then it means this mean price is declining in a downtrend direction. According to the above mentioned information, traders should search for opportunities to buy the GBPUSD in the current uptrend.
PLAN AN ENTRY
Once the trend is found, the traders are allowed to undertake different kinds of tactics to get in the market. One of the simplest and easiest ways to enter into a market is during the time of breakout. As the definition of the uptrend is the creation of higher lows and higher lows, traders can properly plan to enter into a market when the trend continues and also the GBPUSD breaks to a higher high.
During trading there is always a risk of losing the entire money, this is the reason that an investor has to know that when trading trends then it will slowly come to an end. In an uptrend such as the GBPUSD, traders places stops under the previously recognized swing low (higher low). In the event when the price breaks under this value, it symbolizes that at that time temporarily the GBPUSD trend may end. Traders can use Stop Order to exit at any time from the given position they were in.