It is widely known in the currency trading world that the trend is your friend and any currency trading strategy based around following a trend, such as No Loss Robot, is probably going to be both easy and effective.
It is easy to create trend lines on any foreign exchange chart, but most folks prefer to use candlestick charts for this as the candlesticks are such a clear visible signal. 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 strategy is to ascertain whether the market is rising, falling or is stable within certain parameters. Of course there’ll always be fluctuations, but at certain times you’ll see clear patterns.
1. 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. Then draw another line through the lowest lows on the chart. If this line is also going upward and is roughly parallel to the first, you’ve got an upward trend.
You can then use these two lines as support and resistance lines. This means that you can assume that while the trend continues, the price will remain in the area between these 2 lines. any time the price hits the top line you might sell, on the presumption 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 that the price hits the final analysis you could buy, on the assumption that it’ll soon rise again. In this case you are following the trend which is commonly a better methodology. However, you should keep in mind that there will at some specific point be a true reversal and you could be caught out by this.
2. If the price is falling
If the price is going down, you can follow a similar method to the prior system. The lines you draw will be going downward but you would still buy when the price hits the lower line and sell when it hits the upper line.
