How to CORRECTLY interpret the direction of the Trend

By | September 14, 2017

FOREX trends

Without news and economic announcements, the FOREX market would be an apathetic place

In fact, any stock market would exist for nothing if there were no news, financial results or any other events meant to change the bearish or bullish trends of the balance of supply and demand.

As a trader, I do not care very much to understand this news in depth.

However, I am very attentive to how the market reacts to these ads.

The way the market “reacts” to a certain event can provide the necessary clues related to our next move.

Reading the Market Trends Based on FOREX News

Being able to determine the trends is very important if you want to become a profitable long-term trader.

In fact, all Price Action or geometric formations experts use in trading are a way of reading the stock market’s trend. Obviously, when you understand and interpret them correctly and not mechanically, things might start looking up for you.

Let’s suppose we have an upward trend for GBP/USD and obviously, we want to buy in order to benefit from this trend or we have a buying position already open and we want to pyramid correctly by adding to that position.

Following the reaction of a currency after the news is being released from the UK, you can see the market trends in the GBP/USD area (keep in mind that you are interested only in the news marked with red).

If a market is on an upward trend and this negative or neutral news appears on the market, and yet the market is still rising, it means that buyers ignore this news and continue to maintain their position.

Moreover, new buyers enter the market, a factor that leads to the increase of the price even more.

Conversely, if a market is on a downward trend and positive news fails to reverse this trend means that vendors took over control.

 

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