My Infima Forex

The Trend Is Your Buddy

If the price isn’t going anywhere, then the lines that you draw through the highest highs and the lowest lows will either be horizontal and parallel to one another, or they’re going to be converging (drawing closer together) or diverging (drawing apart). If they’re horizontal, you might use them as support and resistance lines in the same way. If they are diverging, it’s not a good time to trade. Wait for a trend to form.

If the lines are converging, they might point to a breakout. In this example you shouldn’t treat the lines as support and resistance lines but wait for the price to go beyond either of them and continue in that direction. So if the price breaks above the upper line you would buy, expecting it to resume in that direction for a bit. Equally, if the price breaks above the lower line, you would sell.

Like all currency exchange systems, these are not guaranteed. There’s always a likelihood of trades going against you, so you should check your signals against other indicators and always use stop losses. Always test your system in a demo account before going live. These steps will help you to develop a successful currency trading strategy.