One of the hardest yet seemingly easiest things to do is find the direction of the trend. If you correctly identify the trend, even if you have bad timing on a trade, you will likely still profit. Just like if you kick a ball up a hill, it will eventually roll back down the hill. So, how do you find the trend? There have many technical ways to find the trend in forex like is price making lower highs or high highs, or is price above or below the 200 moving average. But those methods sometimes give more confusion than actual answers. For example, sometimes 2 different time frames (like daily and weekly) can be moving in opposite directions and then it leaves you basically guessing which way the trends going.
Luckily, there is a much simpler way. It's what I like to call it the "Line Method". All you do is draw a line where price action has been heading. Here's an example of the eur/usd (click to enlarge)
When traders try to find the trend in forex, they often fail to look at the big picture and where price is likely to head.
It's also important to look at fundamental factors affecting the long term outlook. For example, right now it appears the eur has been performing poorly and the fundamental outlook (news) hasn't led me to believe that this will change at least in the near term.
Now, probably more important is monitoring the trend. Set physical lines on your chats that would be points that make you reevaluate the direction of the trend. In the example above, you might choose 1.155, the nearest major resistance, or maybe a
Fibonacci retracement from the previous major high.
Trading with the trend in forex will greatly increase your profits -- just don't overthink which way the trend is.
