Forex Trend Lines

Know how to draw a trend line. Advantages of using trend lines in Forex charts

Trend vs Trading Range

Traders may get confused telling a trend from a trending range while it is very simple to distinguish both.

Trading range does not present a clear picture of the market direction. It makes it difficult to tell whether the market is heading up or down.

That's because traders could not find those familiar patterns of higher highs and higher lows (for uptrend) or lower lows and lower highs (for downtrend). What traders do see is randomness in tops bottoms formations order.

Let's look at trading range pic:

So what we can see is that trading range is actually a sideways pattern. It can be spotted often after a strong market move or near important support resistance levels where the market is trying to regain its strength to advance to the next level.

It is quite difficult to take right trading decisions in a ranging market. Therefore once spotted, it would be a good idea to walk away from charts for a while.

Profitable trading!

Copyright © 2006 — 2008 Jeff Boyd Authors & Publishers Inc. All Rights Reserved