Amazing simple way to tell forex trend that is 100% price action only
Price action so easy to read, can be applied to any time frame
Price action is exciting but there is no mystery to its application. In fact it is very simple to apply on a good forex trading platform like MT4 and with simple rules, any one can read the trend of a currency pair without to much difficulty. Once a trader gets the trend right, that’s half the battle won.
3 simple steps to find trend: Illustration with CADCHF daily chart, MT4
Step 1. Start with a blank chart. I have chosen CADCHF to illustrate. Once we perform the steps, trend for CADCHF should be immediately clear.
Step 2. Press CTRL-Y. Vertical lines called ‘period separators’ will appear. In the daily chart, the period separators clearly segment price month by month.
Step 3. Use rectangle drawing tools to draw boxes enclosing each month. High and low of each box correspond with high and low price of each month.
- Boxes can be painted in any colours. I have chosen pink for these boxes.
- To the viewer, these boxes should make price trend stand out immediately. One has to look at the declining monthly highs to see that price CADCHF is falling in a persistent manner.
- This month CADCHF made a higher monthly high that bucks the trend established since the last 10 months. By drawing the ‘up’ month box with light blue instead, it looks like this below.
- It is immediately clear that CADCHF was moving down persistently since May 2013.
- For the first time in 10 months, price is printing a higher monthly level so shorts need to think twice.
- Bulls can look out for entry.
Developing a trading plan
The steps above show a simple innovation making use of existing functions in MT4. There is no need to rely on trading indicators that clutter the chart, has the tendency to lag or reprint. Trading information is available right away from raw price action.
For readers who are curious how one can formulate a trading plan using the steps here, we like to tell you that besides finding trend, Tflow® forex course covers additional techniques that determine market psychology and buy-sell signals using those boxes. Advanced fibonacci techniques incorporated into these steps provide precision and accuracy.
We encourage you to call us and arrange to attend our forex seminar where we can answer some of your questions.