It is widely known in the currency trading world that the trend is your pal and any currency trading method based around following a trend is probably going to be both easy and effective. When trend lines are forming, you may use them as a signal to buy or sell the currency pair. The first step in using trend lines for a foreign exchange trading plan is to ascertain whether the market is rising, falling or is stable inside certain parameters. Naturally there’ll always be fluctuations, but at particular times you will see clear patterns. If the price is rising

If the price is going up, first draw a straight line through the highest highs on the chart. This line will be sloping upward. If this line is also going upward and is approximately parallel to the 1st, you’ve got an upward trend.

You can then use these two lines as support and resistance lines. any time the price hits the top line you could sell, on the assumption that it’ll fall back. In a way this strategy means going against the trend, but you would only hold that position for a short while. or, any time the price hits the final analysis you could buy, on the assumption that it’ll soon rise again. In this situation you follow the trend which is commonly a better strategy. However, you must keep in mind that there will at some specific point be a real reversal and you could be caught out by this.

2. If the price is falling

If the price is going down, you can follow an analogous method to the previous system.