How to Spot Forex Trends - Part 5 | Vantage FX
- 11 years ago
Vantage FX (www.vantagefx.co.uk) look at how to spot trends in Forex using different Chart Analysis techniques.
Trend-spotting
Today we are examining a daily S+P chart to see whether using simple 10-day moving averages with Parabolic SAR can make it any easier to spot trends and to spot when trends turn.
On an up-trend, you always draw the trend lines on the lows, and on a down-trend you draw them on the highs. We can see there is a record high on the S+P in late September, and now we are in a down-trend which lines up with our 10-day moving average.
The Parabolic SAR tells you where your point of re-thinking is. Here this point comes at around 1700, where the moving average had peaked and started dropping, which also happened in late July/early August. At the beginning of September we see the Parabolic SAR turning ahead of the moving average, which is common especially when the market moves very quickly in one direction.
It is not sufficient to just look at whether the moving average breaks above or below the trend line - we need to see whether the closing prices are consistently above or below the trend line.
Trend-spotting
Today we are examining a daily S+P chart to see whether using simple 10-day moving averages with Parabolic SAR can make it any easier to spot trends and to spot when trends turn.
On an up-trend, you always draw the trend lines on the lows, and on a down-trend you draw them on the highs. We can see there is a record high on the S+P in late September, and now we are in a down-trend which lines up with our 10-day moving average.
The Parabolic SAR tells you where your point of re-thinking is. Here this point comes at around 1700, where the moving average had peaked and started dropping, which also happened in late July/early August. At the beginning of September we see the Parabolic SAR turning ahead of the moving average, which is common especially when the market moves very quickly in one direction.
It is not sufficient to just look at whether the moving average breaks above or below the trend line - we need to see whether the closing prices are consistently above or below the trend line.