How to Identify a Trend in Forex Trading: A Beginner’s Guide

In this article we will learn how to correctly identify the trend direction on the chart and how to trade according to the market trend. Finding the right direction of the market trend is the most important and basic thing that every trader should learn, because we do our analysis according to the market trend.

How to identify the trend correctly?

One of the reasons for losing your positions is that you have not correctly identified the direction of the trend from the beginning, and this leads to opening wrong positions and not being able to make continuous profit in the Forex market. In order to correctly identify the trend in the market, we will introduce you to 2 techniques that will allow you to easily identify the direction of the market

Zoom out on the chart

When you zoom in on the chart, you see only a small part of the trend at that moment, and this makes you unable to recognize the market trend correctly, For this reason, you should zoom out on your chart to see the entire trend.

Photo by TradingView

In the image above, we have zoomed in on the chart to show you that when you zoom in on the chart, you cannot recognize the market trend correctly. Now let’s zoom out of the chart

Photo by TradingView

In the example above, you saw that after we zooming out on the chart, we were able to easily and clearly see the main trend of the market and its direction.

Go to a higher time frame

On very small time frames we can usually only see a small part of the main market trend, the trend we see may only be a corrective movement of the main market trend. Therefore, we go to higher time frames to identify the main trend of the chart.

You can use 4-hour, 1-hour and daily time frames to find the market trend, and then after finding the main market trend, you can go to lower time frames to do your analysis and start trading according to your strategy.

We hope you enjoyed this article.