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Understanding the Different Stages of the Trend

Developing your career in the Forex trading industry is a very challenging task

Developing your career in the Forex trading industry is a very challenging task. Unless you educate yourself properly, chances are very high that you will lose your entire investment. But mastering the art of trading is not so hard. You need to follow the basic rules of investment business and trade with proper discipline. Many people in the United Kingdom have changed their lives just trading the Forex market. So, if a person can become a successful trader, you can also change your life with trading.

There is saying in the Forex market, the trend is your friend. But do know the different stages of a market trend? Let’s learn about the key phase of the market movement. These are:

  • Uptrend
  • Downtrend
  • Retracement phase
  • Range bound market

forex market, market trend
File: Forex Market Time Chart. Wikimedia Commons

Uptrend

When the market exhibit extended bullish movement, it is said to be in an uptrend. Being a new trader in the Forex market you need to look for buying opportunity in such market conditions how do spot the uptrend in a trading chart? This is a very simple process. Just switch to the daily or weekly time frame and see the overall movement of the market. A bullish trend or uptrend will always exhibit extended movement in the north.

Downtrend

The downtrend is defined by the bearish movement of a certain asset. Just like spotting a bullish trend, you need to switch to the higher time frame to identify the overall trend of the market. Things might seem a little bit complex but over a period of time, you will get to know how things work. Just stick to your trading rules and never start to trade the market unless you know the details of this profession.

Retracement phase

This is one of the most important phases for retail traders. The experienced traders in the exchange traded funds industry uses the market retracement to ride the long term market trend. If you look closely at the trading chart, it won’t take much time to spot the small bearish movement in an uptrend. This is nothing but minor retracement of the correction phase of a trend. The experienced traders use the retracement point to find the exact entry point for a trade. Though this process requires extensive knowledge about support and resistance level, with proper devotion you can easily master the art of the trend trading strategy.

forex market, market trend, trend
Being a new trader in the Forex market you need to look for buying opportunity in such market conditions how do spot the uptrend in a trading chart? Wikimedia Commons

The range bound market

At times you will be surprised to see there is no extended bullish or bearish rally. Such price movement is called ranging movement. During the ranging market, traders are advised to execute a trade in favor of the last prevailing trend of the market. Things might seem really easy at the initial stage but trading the range bound market is one of the most complicated tasks.

By now you know a lot about the market trend. So how do the pro-UK traders execute trades using this information? They simply wait for a minor retracement in the trend so that they can place trade along with the trend. You don’t have to be a worry about this section since you have the opportunity to open a demo account with brokers like Saxo and learn the art of trading without risking any real money.

ALSO READ: Stop Competing With the Dynamic Forex Market

Demo accounts are often considered as blessings for retail traders. If you can devote yourself properly it won’t take much time to develop your trading skills. It’s true, you will lose many trades and fail to identify the trend correctly but over the period of time, you will know how this market works. Always remember, knowledge is power when it comes to the investment business. So keep practicing hard in the demo account and you will be able to create a balanced trading strategy. If you even get confused try to seek attention from the trained professionals and they will give you an easy solution. 

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