Forex Trading System

FOREX ; Ascending and Descending Trend

FOREX Ascending Anytime that the demand for currency exceeds the currency offered, the exchange rate on Forex grows. On the other hand, if the volume of currency for sell is less than the volume that participants are seeking to buy, the market rate falls. When the demand lasts for a long time, it causes a rate in growth and will lead to the market being saturated. From the time that offers exceed demand; the sales are decreased in rate.
Trend corrections are the movements that are directed against the direction in which the previous trend was headed. This movement doesn't surpass the previous trend. A trend is considered a phenomenon that will return prices to a correct channel and does not allow the movements in the market to deviate from the fundamental factors.
If participants will open long positions and when satisfied by the increase of an exchange rate sell with a purpose of profiting quickly, it is called an ascending trend. But, if the principal factors that have resulted in an increase in the demand for currency have not changed, it renews the buying of currency and increases the rate. Then that particular movement takes a direction.
There are two kinds of trend: ascending and descending trend.
Ascending trend - An ascending trend is any period in which exchange rates reach a higher value when compared to the previous rate. It's an upward gain in rates from the rate before it.
The bottom points of waves (local minima) join a direct line - trend line:

Example of an ascending trend




Forex Descending trend - Whenever the current rate of exchange depreciates, it is a descending trend. It is simply, when the rates value becomes lower.
Trend lines are drawn by connecting the highest peaks of local maximums for ascending rates and the local minimums for descending rates.

Example of a descending trend


When the trend lines form a straight, or more even line, it confirms that particular trend. One of the criteria for determining trend force is examination of breaks in the support or resistance levels. Any trend that receives a lot of resistance will be weaker. And, without support, the trend will eventually change in the future.
There are several general rules that are followed in defining trend force:
1) The longer a trend lasts, the stronger it becomes however there is still a limit.
2) When a trend begins abruptly and ascends or descends quickly, it's a strong trend.
3) If a trend line reflects a long, level line, it's very likely the trend will continue.
4) While an abrupt trend usually indicates a strong trend, they can also change abruptly.
5) No matter what the trend is, it will eventually slacken. High trends will eventually become lower and low trends will eventually rise.

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Forex Trading System 2009-08-01T07:09:00-07:00 Rating: 4.5 Diposkan Oleh: admin