subject: Forex Trading Market: The Trend Filter [print this page] Forex Trading Market: The Trend Filter Forex Trading Market: The Trend Filter
Traders can increase their edge and take it to the next level. More so, traders can also gain a further edge by checking the direction of the currency pair preceding the information of the triangle pattern, when trading ascending or descending triangles.
This is for the reason that it is not abnormal for a currency pair to trend in one direction, then consolidates and then resume trending in the same direction. The pair trending in the same direction prior to the formation of the triangle pattern can only cause the trade to become all the more compelling.
Natalia Osorio Editor of the "Best Forex Trading" website -- http://www.BestForexTradingUsa.com -- pointed out;
"In trading, when you notice that the pair has been trending steadily heavier, it is important to use the power of this trend to your own advantage. You must do this in order to reduce false breakouts from happening and enhance your chances of success. Through filtering the breakout trades, you are again integrating the trend into your techniques. Remember that the general rule for the trade is always to trade with the trend and never fight it. Traders who fight against the trends often get disappointed with their actions"
The Time-Of-Day Filter
The time of day is anther edge that traders can utilize when trading intraday breakouts. In trading, there is a saying stating that a breakout is believed to be significant if it happens on high volume, and is considered less dependable if it happens on low volume.
Within a high-volume environment, the move is deemed real since the players are placing significant amounts of capital work. On the other hand, order that normally would not have a significant impact on the exchange rates but have the ability to move markets are included within a low-volume environment.
"If the trader applies buying or selling pressure at the right moment, the institutional traders can cause pools of orders to be implemented, thus generating commissions. However, this is easier to accomplish when the volume is light and the move tends to be succinct.
While traders do not have the capacity to easily access precise volume figures, the trading is not equally liquid at all time of the day. Additionally, there are certainly times of the day when large volumes are generated" N. Osorio added.
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