To learn Forex trading, one needs to determine the relationship of price bias change of different currencies. The knowledge will be helpful in the determination of price uptrends to a down trend or vice versa. Having an idea on Price sequence reading and a trend line break will be helpful in learning Forex trading.
Chart Details Discussion:
The up-trending chart from 3 December to 18 December contains series of swing lows and swing highs. The chart illustrates a higher rate of scoring in both the swing lows and highs marked in green and red.The higher rate of the swing low and swing highs imply that the trading price has not yet been broken up to 18 December. There is an up-trending price up to 18 December. Technically the breakdown of the uptrend on 18 December implies that we should no longer be looking for longer trading traits.
With a comparison of the lower swing high on 16&18 December(marked in green) and the highest swing lows(marked in red) on 16 December , we realize that there is a down price trend caused by a breakdown in the upward trend. With the downtrend, you should not expect a higher rate of interest no more due to deflationary economic measures. A good contingency plan is to search for short interest rates.
A perfect confirmation in order to search for a short interest is by the use of a trend line breakdown. The trend line is drawn by the linkage of different support points with a straight line. It’s a confirmation of the mode through which the price is scoring lower swing lows and highs. The more areas a trend line touches, the more significant the trend line becomes and its break line too.
A break down in the trend line leaves no support which will stop price from falling. With the close of the uptrend, the downtrend period begins on 18 December it will be the perfect time to search for short investment opportunities. You need to put three factors into consideration.
1) Determine the breakdown of the price sequence since at this period we will be no longer scoring higher swing highs anymore.
2) Determine the break out of the outer trend line. Ascertain that there is no other trend line aside the base trend line.
3) Be able to determine the trending swings after the breakdown. The trending swing lows and high will help to determine if the sterling pound against the dollar or vice versa is down trending or up trending. By drawing a straight line from the lowest swing low from 18 December, the trending price of the sterling pound to the dollar is 14895. The price is down trending when compared to the adjacent swing lows.
In economical problematic situations, the swing lows and swings high will not be at the same horizontal position. At this point, it will not be advisable to take any form of trade. The determination of the price bias change will be help to determine the uptrend period and price of the sterling pound against the dollar or any other currency. Take your pen and paper for make not and start watching video lesson.
In this Learn Forex Trading – Module No 1 – Video 005 (Forex Price Sequence Reading) Forex video lesson will cover:
- What is Price Sequence?
- How to read Price Sequence?
- How to determine a potential Forex Price?
- How potential price change market buyer to seller?
- The turning point that show uptrend to downtrend
- The trend line breakout
Previous video lesson post link : Video 004 (Fx Chart Price Reading)