Forex uptrend

In the Forex training video above you will see two trading charts. The chart on the left shows an uptrend and the chart on the right shows forex uptrend downtrend.

Uptrend When we see the market trending in the upwards direction, we call this a BULLISH market. So, when we see an uptrend we know that the bulls are in control. Once we join the highs of the previous trend with a line, you will see that the new uptrend gained momentum at the point at which this previous line was broken. Downtrend When we see the market moving downwards, we call this a BEARISH market. It is at this stage that the bears have seized control. If we join the lows of the previous trend with a line, you will see that the new downtrend started to gain momentum at the point at which this line was broken. Sideways movement When the Forex market has no sense of direction it tends to consolidate.

It is at this point that bulls or bears have no real power so trading can be minimal. There are Forex trading strategies that can take advantages of this but the majority of traders stay away until a new trend is born. An uptrend describes the price movement of a financial asset when the overall direction is upward. In an uptrend, each successive peak and trough is higher than the ones found earlier in the trend. For example, the high at point 4 is above the high at point 2 and the low at point 5 is above the low at point 3.

The uptrend is broken if the next low on the chart falls below point 5. The opposite of an uptrend in a downtrend. An uptrend provides investors with an opportunity to profit from a security until it reverses. Moving averages are another popular tool used to determine if a security is in an uptrend. Traders look for price to be trading above the moving average and for it to be rising.

The best time to enter an uptrend is when price retraces back to a support level. Support can come from a trendline, a moving average or previous price action. For example, a security might retrace back to its 50-day moving average, or a previous swing high. For instance, a trader may buy a stock if its price returns to an uptrend line and the RSI is below 30. In the example below, the retracement to a key support level proves to be an excellent entry point. A downtrend occurs when the price of an asset moves lower over a period of time.

The dynamic momentum index is used in technical analysis to determine if a security is overbought or oversold. Swing low is a term used in technical analysis that refers to the troughs reached by a security’s price or an indicator. Swing high is a term used in technical analysis that refers to the peak reached by an indicator or a security‚Äôs price. What are the best indicators to identify overbought and oversold stocks? Investopedia is part of the Dotdash publishing family. Notify me of new posts by email.

In the Forex training video above you will see two trading charts. The chart on the left shows an uptrend and the chart on the right shows a downtrend. Uptrend When we see the market trending in the upwards direction, we call this a BULLISH market. So, when we see an uptrend we know that the bulls are in control. Once we join the highs of the previous trend with a line, you will see that the new uptrend gained momentum at the point at which this previous line was broken. Downtrend When we see the market moving downwards, we call this a BEARISH market.