How to identify forex trends

I think even a day trader, would follow the daily chart. Because identify and trade with the forex market trend is the basics of forex trading.

I often use the following tricks to determine forex trends. 

• Use my eyes to feel the market.
• Draw a trend line to identify the main trend
• Use moving average crossovers to enter trades
• Use Bollinger bands to gauge trends
• Use ADX indicator to identify trend

Then I will put these FX indicators into a Pre-trade checklist.


Forex trading tools to identify the direction of a trend

I often use my best forex trading checklist to identify the major trend on the daily chart. It can help me follow my trading systems and plans. I think you should also make your own checklist before trading forex.

• Date
• Which market will I trade? Stocks, options, futures or forex? It is better to trade in only one market. I am going to day trade the forex market.
• What is my day trading strategy? Forex grid trading system or RSI day trading strategy.
• Check the Economic calendar on the forex trading sites.
• Closing price on the daily chart
• Daily high and low
• Support levels on the daily chart
• Resistance levels on the daily chart
• Are ADX 14 readings above 25?
• Has it crossed 20 exponential moving averages, 50 EMA, 100 EMA and 200 EMA?
• Are ADX 14 readings below 20?
• Are Relative Strength Index 14 readings below 30?
• Are Relative Strength Index 14 readings above 70?

I will keep my Pre-trade checklist and forex trading journals together. I believe that they are my essential tools.

A forex trading checklist

Would you like to share some forex trading tips with me? You can give me a shout on my blogspot.

More reading: Trend Following Psychology

How to identify trend reversals in forex

Many successful traders will tell you the trend is your friend. But they will probably never tell you it is your friend until the end when it bends. Therefore, we will look into how to identify trend reversals.

Free currency trading tips for beginners

1. Please accept your imperfections. Sometimes you'll unable to identify trend reversals in forex.
2. Please control to limit your risk exposure. Because trading is a business and run it on principles. 
3. Don't try to predict and guess where the price is going.

Identifying trend reversals with my forex trading checklist

I will update my forex trading plan checklist every day. This is a boring job, but I will keep going.

1. If the price breakout the trend line, I will find a trend reversal.
2. Double Tops, double bottoms, head and shoulders are reversal chart patterns. 
3. Normally the RSI reading below 30 shows an oversold market and a reversal zone.
4. When price makes a higher high and ADX makes a lower high, there are trend reversals.

Forex trading reversal strategy

I think how to identify trend reversals is an important and difficult problem in forex trading reversal strategy.

First, I must be very careful not to make the dangerous mistakes.

Second, I use position sizing strategy frequently. For instance, anti martingale forex trading system, grid trading forex strategy or pyramid trading system.

Third, if I have identified the direction of a trend, I will decide to exit my forex trades at once.