💭 How do you determine the overall direction of a currency before opening any trade?
📌 A successful trader does not enter the market without knowing the overall direction. Here is a simplified way to determine it:
1. Start with the larger timeframe (4H or Daily):
Look at the bigger picture. Is the price making higher highs and higher lows? This means upward.
Is it making lower highs and lower lows? This means downward.
SOL
150.09
-1.44%
2. Use moving averages (like MA 50 and MA 200):
If the price is above both averages = the trend is upward.
If it is below them = the trend is downward.
3. Use a trendline:
Draw a line connecting the lows or highs. Breaking 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 your chances of profit and reduce the likelihood of loss.
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