So, What’s A Trend?

Typically, a trend represents the price movement of a currency pair in an anticipated direction over a time period. Overall, you must understand the direction of the price movement to improve your trading performance. Visit this site, if you are looking for more details regarding forex trading. Browse the following site, if you are seeking for more information on ameritrade ira review.

Why Are Trends So Important?

Trends are very much vital to prevent any wrong buy. They help you to choose the right direction. When you decide to trade in the trend direction, you increase your chances of success.

Identifying The Trading Trends

Traders make use of several techniques to identify these trends. The most common of them all is technical analysis, which comprises indicators and trend lines.

                                                                                     Video Source: forex trading for beginners

• Line Graph

Many traders opt for candles for reading a forex chart. But a simpler alternative to them is line graphs. Unlike candles, line graphs provide traders with much more in-depth information about the charts, helping them to identify the trend direction perfectly.

• Highs And Lows

Another valuable way of identifying trading trends is by sighting highs and lows on charts. It’s a relatively much easier method for determining a trend. The chart with high ups and high lows indicates an upward trend. On the contrary, there will be a downtrend if the chart shows lower highs and lows. The method is pretty simple, as there are no indicators involved. However, compared to other methods, it cannot be considered the best one. Look at this site to the following website, if you are looking for more information on good spreads.

• Trendlines

It’s yet another crucial method to identify trends that help you understand market movements efficiently. For those looking for an established trend, trendlines are the best option. It’s basically a straight line connecting the lows of the upward trend or the highs of the downward trend. The rule of thumb to follow here is: if there is an uptrend, buy the order, and when there’s a downtrend, sell the order. 

Identifying Trends With Indicators

• ADX:

ADX is useful in indicating average movement direction; not only it helps to identify a trend, but also lets traders find the best time for making a trade. Basically, it comprises three lines:

1. Positive DI
2. Negative DI
3. ADX itself

When the negative DI moves below the positive DI, it is an uptrend. On the contrary, when the positive DI moves below the negative DI, it indicates a downtrend. While an uptrend recommends you buy, a downtrend suggests selling.

• Moving Averages

It’s one of the simplest and most widely used indicators, which represents the average price over a period of time. Moving averages can be of numerous types, such as simple, weighted and exponential. Here’s the common approach to follow when trading with moving averages:

1. It’s an uptrend in case the price reaches the average from above while moving towards the trend. It suggests buying the trade.
2. It’s a downtrend in case the price reaches the average from below while it moves towards the trend. It suggests selling the trade.

Conclusion

Never ignore trends, as they can help you a lot when it comes to minimizing the risks while trading forex. One can make the most out of their trading journey by just following the trends precisely. Therefore, it is vital to use the best tools and indicators to help you identify trading trends in the most accurate manner.

and the trading platform they offer for trading through smartphone, desktop or tablet devices. Consequently, one can find several international regulators to ensure forex brokers adhere to industry standards and protocols to offer a legitimate and transparent place for traders to invest in the forex market. So, if you want to make sure you end up choosing a legal broker, you need to avail yourself of the top regulatory bodies below, which many brokers prefer to be associated with.

Active Forex Regulatory Organizations

The Financial Conduct Authority (FCA): 

The FCA is a British independent regulatory body with statutory powers given under Financial Services And Market Act (2000). This regulatory organization supervises the overall forex industry within the UK. Its main mission is to remove unauthorized forex brokerages to prevent scams in the forex market. The FCA has an updated register of all authorized UK firms that are capable of serving clients in forex trading or providing trading platforms for traders to buy or sell forex, CFDs and other commodities.

The Commodity Futures Trading Commission (CFTC):

The CFTC is an independent American regulatory body that regulates the commodity futures and options markets for traders. This regulatory body was started in 1974 for a competitive and efficient futures market to protect traders against illegal manipulation and fraudulent activities. The CFTC plays a major role in the emergence of new financial markets like Bitcoin futures contracts by maintaining the integrity of the trading industry.

The National Futures Association (NFA):

All forex brokers who want to operate their business in the United States are required to become members of the NFA to serve the USA’s retail traders. The NFA is a self-regulatory body that strives to safeguard the integrity of the foreign exchange market and implements the latest forex regulations whenever necessary.

Common Laws And Regulations:

Here are some standard rules and regulations that govern the functioning of the Forex Markets:

• Every forex broker or trading platform needs to have a legitimate license to operate their business in the country you live in. In case they don’t have it, there might be chances that you are trading illegally.
• Every licensed and regulated forex broker should accept periodic audits and reviews regarding their operations to make sure they comply with all national and industry standards.
• A common law of the forex market is that forex brokers should honor their agreement with their clients. Failure to do so can lead to their license getting canceled or revoked. 
• A significant feature of forex regulations is that forex brokers must have sufficient funds to cover up their customers’ investments.
• Lastly, all forex brokers and trading platforms must comply with transparent representation legislation. It means they should clearly understand all the potential risks associated with forex trading. Any forex broker who guarantees you huge profits and fake promises should always be left alone.

How Can You Spot A Forex Scam?

Since the scale of the forex market is quite large, forex scams are very much common. Although in recent years, the previous kind of scams has stopped, there are still numerous scams that continue to exist, and new ones are popping up every day. To prevent falling for a scam that can wipe out your trading account, it is vital to look for the following warning signs:

• No live track record: Before you choose a forex broker, ensure they have a record of verified statistics. If they don’t, it is a reason to be wary.

• Not regulated by a recognized regulator: Before you consider any forex broker, you must check their reputation and status with the regulatory organization. Various regulators have warning lists. If you find your prospective broker on such a list, it is best to avoid them.

• Pressure to deposit funds: An authorized and regulated forex broker ensures you feel comfortable with them before you transfer any capital to them. If you find your broker is forcing you to deposit funds during early meetings with them, they are likely trying to scam you. If you have already been scammed by a broker, you must report the scam to the appropriate regulatory body.

Conclusion:

Forex trading is a hugely profitable and enjoyable hobby. However, if you are looking to put away some of your personal wealth, it is essential that you choose a well-regulated and licensed forex broker who can work with complete honesty.