TECHNICAL ANALYSIS by Matt Simpson


FX


MASTERING TRENDS


Prices do not move in straight lines – instead they oscillate to form peaks and troughs along the way. To trade a directional view, we need to be able to identify a probable trend whilst managing to ride out these oscillations. If either of these two conditions are not met, we either miss the move or get stopped out.


To aid with this, we strongly recommend a multi-timeframe


approach where all analysis is started on the highest


working your way down to the timeframes you trade.


Before we delve into the details, we’ll start with some basic tips to aid your process:


• Zoom out: Trends are easier to identify the more data you have on screen, particularly if prices are


timeframes before


squashed as to remove unnecessary noise. • Focus on the obvious trends: If you spend too long agonizing over whether it is a trend, chances are it isn’t one. A trend should jump straight out at you. • Combine techniques: By combining several simple techniques for trend analysis, we aim to squeeze more out of a trend, or avoid jumping into a lower probability one.


FX TRADER MAGAZINE July - September 2017 37


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