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Basic Technical Analysis
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Trend


Trend is the overall direction prices are moving either, UP, DOWN, OR SIDEWAYS.

Up Trend

As the trend moves upward, the U.S. Dollar is appreciating
in value.

Assume: Buy U.S. Dollar, sell Japanese Yen.

Down Trend

As the trend moves downward, the U.S. Dollar is depreciating
in value.

Assume: Buy U.S. Dollar, sell Japanese Yen.

Sideways Trend

Prices are moving within a narrow range.
(The currencies are neither appreciating or depreciating.)

Assume: Buy U.S. Dollar, sell Japanese Yen.


In the Foreign Exchange (FX) Market, it is possible to profit from Up and Down movements, because of the buying of one currency and selling against the other currency. For example, buy US Dollar and Sell Japanese Yen--e.g.The Up Trend chart.

Note: Charts shown herein are examples only and are not necessarily representative of actual market conditions at any paticular time.

Trend Classifications


Within any trend, there are other shorter trends that make up the whole trend. To distinguish these shorter trends, traders classify the shorter trends relative to their position within the whole trend.


Drawing Trendlines

The basic trendline is one of the simplest technical tools employed by the trader, and is also one of the most valuable in any type of technical trading.

For an up trendline to be drawn, there must be at least two low points in the graph where the 2nd low point is higher than the first.


Drawing Bullish Trendlines

After prices hit the trendline for the 3rd time, the trader should be confident that the trend is established.

Price Accelaration

As prices accelerate upward, a 2nd or 3rd trendline may be drawn to follow the price trend.

 
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DISCLAIMER: Forex (or FX or off-exchange foreign currency futures and options) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee by B.I.G. Forex, LLC or any of its subsidiaries and affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.