Did you know that there are actually four different kinds of trends of the forex market?
(Oh! for those who already have the basic knowledge about forex, you may skip this topic as it is intended for the complete beginners).
The 4 different kinds of forex market trend are the following:
1. Range Bound Market
2. Bullish Market
3. Bearish Market
4. Choppy Market
Range Bound Market
A range bound market is the condition of the trend where the prices touches the support and resistances lines bouncing back and forth. The best way to profit from this kind of market is to BUY or go LONG when the price goes near the support level. On the other hand, SELL or going SHORT are best entered when the price is near the resistance line.
Above is an example of a range bound market where the trend reverses its direction once it hits the support or resistance lines. The red horizontal line is the support while the blue horizontal line is resistance.
Bullish Market
A bullish market condition is when the trend is constantly going up for some period of time. It is very similar to the range bound market but the only difference is that the market is moving toward the higher prices.
Above is an example of a bullish market. You can see that I plotted the 'trend channel' which serves as the support and resistance lines. It is important for you to know never to trade SHORT on this kind of market but LONG. The best way to enter your trade is when the price goes near the lower-trend line of the channel.
Bearish Market
Bearish Market is the complete opposite of the Bullish Market wherein the trend is moving toward the lower prices. The best way to trade this kind of market is to go SHORT or SELL when the price goes up near the upper-trend line of the channel.
Choppy Market
A choppy market is the worst kind of market that you should avoid making trades. At this condition, the market is incoherent wherein it has no particular direction. Thus, stay away from choppy market as there are no clear directions that you can follow.
(Oh! for those who already have the basic knowledge about forex, you may skip this topic as it is intended for the complete beginners).
The 4 different kinds of forex market trend are the following:
1. Range Bound Market
2. Bullish Market
3. Bearish Market
4. Choppy Market
Range Bound Market
A range bound market is the condition of the trend where the prices touches the support and resistances lines bouncing back and forth. The best way to profit from this kind of market is to BUY or go LONG when the price goes near the support level. On the other hand, SELL or going SHORT are best entered when the price is near the resistance line.
Above is an example of a range bound market where the trend reverses its direction once it hits the support or resistance lines. The red horizontal line is the support while the blue horizontal line is resistance.
Bullish Market
A bullish market condition is when the trend is constantly going up for some period of time. It is very similar to the range bound market but the only difference is that the market is moving toward the higher prices.
Above is an example of a bullish market. You can see that I plotted the 'trend channel' which serves as the support and resistance lines. It is important for you to know never to trade SHORT on this kind of market but LONG. The best way to enter your trade is when the price goes near the lower-trend line of the channel.
Bearish Market
Bearish Market is the complete opposite of the Bullish Market wherein the trend is moving toward the lower prices. The best way to trade this kind of market is to go SHORT or SELL when the price goes up near the upper-trend line of the channel.
Choppy Market
A choppy market is the worst kind of market that you should avoid making trades. At this condition, the market is incoherent wherein it has no particular direction. Thus, stay away from choppy market as there are no clear directions that you can follow.
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