The movement in the price of a currency or stock on which a trader can make money is called a trend. Your success on the stock exchange depends on how quickly and accurately you determine its beginning.
Instructions
Step 1
Use fractals to identify the beginning of a trend. When the price exceeds the value of the extreme UP-fractal, it definitely means the beginning of a trend. If we talk about a downtrend, which is the opposite of a positive, upward trend, then its beginning will mean a fall in price below the Down-fractal. The UP fractal can be calculated on the chart as a maximum among several candles.
Step 2
Watch the combination of ADX and MACD indicators. The first indicator is the index of the average direction, the second indicates the convergence or divergence of the averages. Please note that only together these data can indicate the beginning of a trend, because the ADX can be used to judge the presence of a trend, and by the MACD - about its direction. Plot both indices on one graph. If they grow together, you can form a hypothesis about the presence of an uptrend.
Step 3
Refer to statistics, in particular linear regression. In this case, you need a special program to build the channel. Further, the Zig Zag indicator will clarify the situation. By cutting off the unnecessary, it helps to objectively assess the market situation.
Step 4
Install the Xprofuter indicator in the trading terminal. Its advantages are simplicity and high accuracy, and among the disadvantages is the impossibility of constructing a long-term forecast. So use Xprofuter in conjunction with another index.
Step 5
Analyze currency pairs. This is how you can identify the trend too. This is a laborious job, because you need to study pairs as much as possible.
Step 6
Do not give up on the old, proven way of determining the trend - SMA analysis. At the same time, the average closing price for a certain period is found, insignificant fluctuations are eliminated and the slope of the moving average is analyzed. The disadvantage of this method may be that the trend calculation is somewhat delayed.
