How To Determing Whether The Trend Is Strong And Big Money is Behind It?
You can compare a trend to a river. It is always easier to paddle in the direction of the river! Your speed of paddling can be assisted by the speed of the current. For if the current is real strong, you can make a fortune. What this means is that trading a strong trend can be highly profitable. But how do you determine whether the trend is real strong or not? Now, if the trend is real strong and persistent, it is very likely that big money of institutional traders is at work. Watch this Freedom Forex Formula videos that show how to build a $34 million forex account from scratch using nothing but simple forex methods. Download this special manuscript the explains the forex method in step by step detail FREE. You should not miss these forex training videos. They are full of premium content. Learn this Fibonacci Retracement method FREE that pulls 500+ pips per trade! Get this 1 Minute Forex Trading System FREE!
Now past observations have shown that a strong trend in the forex market has a strong tendency to pullback to a key moving average before resuming the trend. There is strong evidence to suggest that in strong trends, the pullbacks to the 10 day exponential moving average makes a particularly effective entry points for forex traders. This is because the big players are using this moving average to determine their own entry points to the market.
So how do we know that this uptrend is a strong trend with big money driving the currency prices up and up? We will ue the 10 day EMA, the 20 day EMA, the 50 day EMA and the100 day EMA for determining the strength of the uptrend. The 10 day EMA should be above the 20 day EMA. The 20 day EMA should be above the 50 day EMA and the 50 day EMA should be above the 100 day EMA. In addition to that the price action should have been above the 10 day EMA for at least the lat 10 candles to confirm that this uptrend is indeed strong .
Similarly in case of a downtrend, the proper order of the EMAs should be 100 day exponential moving average above the 50 day exponential moving average that should be above the 20 day EMA which should be above the 10 day EMA. Plus the price action should be below the 10 day EMA for at least 10 candles to confirm that this a real strong downtrend .