A Forex trader have to be able to determine the market trend direction. By trading in only trend direction , a Forex trader will be improving a successful transaction since traders are trading with the the trend of the market behind their trend.
I suggest to use a daily chart time frame for the market trend. In this following example chart , you see an great example of currency pair that is in a strong bullish trend.
We can find that market price is trading bullish at roughly a 45 degree from the beginning , this is your first clue. In other technical analysis , the currency pair is moving above the 200 Simple Moving Average indicator, and price has been trading higher highs and higher lows. With these information , forex trade now know that we only want to find for chance to open long position.
Now let's take a look for another example
What we can see in this chart above is market price is trading bearish at roughly a 45 degree angle from the beginning. And we also can see that the currency pait is moving under the 200 Simple Moving Average Indicator , market price has been trading lower highs and lower lows. With these information , as Forex traders we now know that we only take for chances to open short position.
