Original article by Forex Turbo Drive

It is well known in the currency trading world that the trend is your friend and any forex trading method based around following a trend is likely to be both simple and effective. When trend lines are forming, you can use them as a signal to buy or sell the currency pair. Step one in using trend lines for a foreign exchange trading technique is to establish whether the market is rising, falling or is stable inside certain parameters. Naturally there will always be fluctuations, but at specific 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. Then draw another line thru the lowest lows on the chart. If this line is also going upward and is roughly parallel to the 1st, you’ve got an rising trend. This implies that you can presume that while the trend continues, the price will remain in the area between these 2 lines. Therefore , any time that the price hits the top line you could sell, on the presumption that it will fall back. In this situation you follow the trend which is frequently a better strategy. However, you must remember 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 corresponding strategy 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.