A trend in the Forex market is a method of technical analysis based on tracking rising and falling prices in price charts. The basis of the trend concept, based on the fact that price changes are always in a certain direction, is based on market trends.
The trend lines in the price charts of investment instruments in financial markets provide important data for investors. For this reason, trend lines, which have an important place in technical analysis, are among the concepts that are curious by people who invest in Forex. An investor who interprets Trend and trend line analysis Well can take successful steps in their investments. Forexte trend subject ‘ what is a forexte trend, how to draw trend lines’ you can find the answer to the questions you are interested in in the continuation of our article.
What Is Forex Trend?
The Trend concept is among the indicators of technical analysis in investment markets. The concept of trend, which refers to the rises and falls in the prices of investment instruments, is an indicator that occurs in the price chart of investment instruments. It is possible to determine the trend of prices when examining the price chart. But the trend line comes into play to understand whether the price movement in question is the real trend.
How To Draw Trend Lines?
The Trend line is an important element that is effective in the price analysis of the investment vehicle. The trend line above or below the price bars in price charts is obtained by a combination of three price levels. The trend line obtained by combining the Trend points is used as a support – resistance level. The Trend line helps you understand whether the trend formed in the price chart will continue.
Accurate drawing of trend lines, which we can also call boundary lines, will help in price analysis. An investor who has developed himself on trend line interpretation will increase his profit from forex investments. The trend line, drawn up and down, provides investors with important information. So how to draw trend lines correctly?
The Trend line should generally consist of a combination of 3 points.
The three points set in the graph must not be too close to each other or too far apart.
It is important that it does not cut other price points when combining these 3 points.
The more point-to-point Trend lines, the more reliable data it offers.
The length of time the Trend line spends without breaking is effective in determining how long the trend will last.
Upward trend lines are drawn at the bottom points of the price bars, while downward trend lines are drawn at the top of the price bars.
The fact that the Trend line angle is perpendicular indicates that there is an abnormal purchase or sale in the market. For this reason, the right-angle trend line is not reliable.
If the Trend line has a low angle, it means that there is no trend in the market. In this case, it is understood that the market is moving horizontally.