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Where does price go after it breaks a trendline on forex?

The forex market is one of the most volatile markets in the world, and traders use trendlines as a tool to identify the direction of the market. Trendlines are a graphical representation of the trend of the market, and they are used to identify support and resistance levels. When price breaks a trendline, it can signal a change in the market direction, and traders need to know where price is likely to go after it breaks a trendline.

Price can go in two directions after it breaks a trendline: it can either continue in the same direction as before the trendline break or reverse its direction. The direction that price moves in after breaking a trendline depends on several factors, including the strength of the trendline, the volume of trading, and the news and events that are affecting the market.

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When price breaks a weak trendline, it is more likely to continue in the same direction as before the trendline break. This is because the trendline was not strong enough to hold the price back, and the market sentiment is still bullish or bearish. Traders can use this information to place trades in the direction of the trendline break.

On the other hand, when price breaks a strong trendline, it is more likely to reverse its direction. This is because the trendline was a significant barrier to price movement, and the market sentiment has changed. Traders need to be cautious when trading after a strong trendline break because there is a higher risk of losing money.

The volume of trading is another factor that affects the direction of price movement after a trendline break. If there is high trading volume after a trendline break, it is more likely that price will continue in the same direction as before the trendline break. This is because there is a lot of market activity in that direction, and traders are more confident about the trend.

On the other hand, if there is low trading volume after a trendline break, it is more likely that price will reverse its direction. This is because there is less market activity in that direction, and traders are less confident about the trend.

News and events that affect the market can also influence the direction of price movement after a trendline break. If there is positive news or events that support the previous trend, it is more likely that price will continue in the same direction as before the trendline break. On the other hand, if there is negative news or events that contradict the previous trend, it is more likely that price will reverse its direction.

In conclusion, where price goes after it breaks a trendline on forex depends on several factors, including the strength of the trendline, the volume of trading, and the news and events that are affecting the market. Traders need to be cautious when trading after a strong trendline break and should take into account all the factors that can influence the direction of price movement. By doing this, traders can make informed decisions and increase their chances of making a profit in the forex market.

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