💭 How do you determine the overall trend of the currency before opening any position?
📌 The successful trader only enters the market when they know the overall trend. Here is a simplified way to determine it:
1. Start with the larger frame (4H or Daily):$XRP
Look at the bigger picture. Is the price making higher highs and lows? This means up.$BNB
Is it making lower highs and lows? This is down.
SOL
146.87
-1.13%
2. Use moving averages (like MA 50 and MA 200):
If the price is above both averages = the trend is up.
If it is below them = the trend is down.
3. Use the trend line:
Draw a line connecting the lows or highs. Breaking it or respecting it confirms the trend.
4. Don't forget trading volume:
Strong trend = high volume supporting it.
Why is this important?
Because when you trade with the trend, you increase profit opportunities and reduce loss possibilities.
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🎁 Next lesson:
How do you choose the right currency for day trading?
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