The UptrendSunday, 20 August 2017 22:25
The uptrend (bullish) is the rapid movement of the price upwards. The trend got its second name because of the comparison with the bull, which throws its victim up. It is quite simple to determine it by looking at the graph.
How to identify an uptrend before it starts?
More often the market is in a non-trending state and only 20% of the time it is observed with the movement in a particular direction. That’s why the bullish trend dominates in the market only 10% of the time.
Before determining the time of the beginning of the uptrend, it is important to know in what other states the market can be. The opposite to the ascending (bullish) trend is the downward (bearish) trend, in which the price falls rapidly. In addition to the trend, the market can also be in flat, when the price fluctuates in a small period. It is important to note that fluctuations occur during any trend, but the general movement up or down persists.
The beginning of the uptrend can be determined in several ways:
- Through the technical analysis, when the direction of the price is observed in different time periods;
- Through the fundamental analysis, when world news, which affects the growth of the price of a financial instrument is taken into account;
- The use of indicators and trend advisors, which give real signals for the beginning of a new direction of the price and turning points.
Using each of these methods will help you to determine the bullish trend accurately before it starts.
The stronger the trend, the more secure is the trading on it. We can distinguish the following types of ascending trends according to its size:
- The Long-term is the trend, which persists from a few months to a couple of years;
- The Medium-term is a trend, which continues from a few weeks to a couple of months;
- The Short-term is a trend, which persists from a couple of hours to a couple of weeks.
The long-term movement is infrequent in the world market. The longer the price moves up, the safer is to open orders.
Trading strategy on the trend
One of the most popular strategies in the Forex market is the trend trading, which is popular among the traders with the different experience. It is possible to predict the further behavior of the price and enter the market with minimal risks receiving a stable profit having determined the direction, its strength, and the probability of a turn.
All in all, having learned to identify the uptrend, you will understand the specifics of the changes in the prices of a financial instrument and learn how to trade smart.