Hi Guys, I’m a beginner and i am having issues with knowing the first thing to check for when i open my chart and how to know which pair is trending or how to start analysing.
that’s like 3 questions in one.
Please help me out
Have you tried out babypips market milk tool? That one’s pretty newbie-friendly!
thank you, will try it out
I love this question, not because its the hardest thing to do, but because so many traders think its so easy it isn’t worth any serious thought.
In fact, trend is the simplest and most fundamental chart pattern. You could say it is the brick that the house is built with.
In fact, to identify trend is easy but what’s more important is to be able to compare two trends and see which is better for your strategy.
For my trading, a useful uptrend is when -
- price is rising smoothly
- the 20EMA is above the 50EMA
- both 20 and 50EMA’s are sloping upwards
The strength of the uptrend compared with another uptrend comes from -
- how long is it since price crossed above the 50EMA?
- in the last 100 bars,how many time did price close below the 20EMA?
- how many times below the 20EMA?
- in the last 100 bars, how long does price spend below the 20EMA?
- in the last 100 bars, how many times did the slope of the 20EMA change from up to flat or down and back again?
etc. etc.
There’s a lot you can do with simple charts and trends to pick out the highest probability trades.
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Always appreciate reading your answers here @tommor! You really break it down and make it way easier to understand.
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thank you very much
You can use definition of a trend - for a bullish trend it is “higher highs and higher lows” or “lower lows and lower highs” for bearish. Zooming out to higher timeframe you can see which role plays the mini-trend we are talking about - is it a part of a bigger trend or it’s a pullback.
I tend to trade setups consisting of a trend on higher timeframe and pullback on lower, using key levels to bet on trend continuation.