Tendencies
Tendency lines
The basic tendency line is one of the simplest tools used by operators and also one of the most valuated in any kind of technical operation.
The tendency is just the general direction to where the prices are moving, it can be: upward, down and neutral.
In the forex market is possible to obtain profits with all these tendencies; it is possible because people buy and sell money in different currencies.
Example: To buy United Stated dollar and to sell Japanese yen
Upward tendency
When the tendency is upward the United States dollar has a similar value to the Japanese yen. If the tendency continues you can see how in the graphic the prices get higher and higher
Down tendency
When the tendency is down the dollar reduces its value and you can see in the graphic how the prices are getting lower and lower in the time.
Horizontal or neutral tendency
The prices are moving around a narrow margin (the currencies don’t reduce or increase their value)
In an upward tendency we can find a down tendency and the same in the opposite case, we need to identify in which tendency period we are working and take advantage of the longer tendencies.
Our inversions are mostly made in the stronger tendencies but we can also make profit buying or selling in short periods, it is as simple as buy or sell in the fluctuations that happen into a tendency.
In the graphic we can see and identify the canals of the tendencies that contain the evolution of the prices. In an upward tendency we can find options to buy when the price raises the internal canal’s price and to sell when it touch the upper line.
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- scalping tools (1)
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- Tendencies (1)
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