The EURUSD is the most popular currency pair in the world the trader trades. The USDJYP is the second and the GBPUDS is the third most popular currency pair traded in the world. Trading in the Forex market is simple. Buy when the currency rate is low and sell when it is high.

30 percent of the trading times are the currency rates moving in a trend direction. The rest of the time they are moving whiteout a direction. The traders’ interest is to find when the currency rates are moving in a trend direction. In this article is my interest in trend lines. My interest is also in Fibonacci trading.

Trend lines are defined as the direction the prices move in. They can be upward, downward or sideway. Upward is where the prices are moving in an upward direction. Downward is where the prices are moving in a downward direction. Sideways is when the prices are moving whiteout a direction.

When a line is draw it is important to remember that it only can be flatter and never steeper. It is also important that the line is close to the price bars lowest low when it is upward and close to the price bars highest high when it is downward. If not. There will be a possibility that the trader oversee a change in the currency price trend.

The line shows what direction the currency rate is in. The trend channels tell the trader when to enter the trade at the right price level and when to exit the trade at the right price level. The channel line is drawn after the trend line as a parallel line on the reverse side of the price bars.

Fibonacci trading is a strategy that is built on human nature behavior. The strategy can be used for both an upward and downward trend line. The Fibonacci rule says if the currency rate rises from A to B the rise represents 100 percent. As a part of human nature behavior the currency price will fall to C. The price will fall 38, 8 percent of the rise from A to B. The level C represents 61, 2 percent. The price will again as a part of human nature behavior rise 100 percent from point C to D. The 100 percent is the same as from A to B. The price will again as a part of human nature behavior fall to E and then rise to F with the same percent as from A to B, from B to C and from C to D.

The described Fibonacci levels are an upward trend. A downward is reverse. The Fibonacci rule says if the currency rate falls from A to B the fall represents 100 percent. As a part of human nature behavior the currency price will rise to C. The price will rise 38, 8 percent of the fall from A to B. The level C represents 61, 2 percent. The price will again as a part of human nature behavior fall 100 percent from point C to D. The 100 percent is the same as from A to B. The price will again as a part of human nature behavior rise to E and then fall to F with the same percent as from A to B, from B to C and from C to D.

Conclusion. Trend lines are defined as the direction the prices move in. They can be upward, downward or sideways. It is important to remember that the line only can be flatter never steeper. A trend could be the Fibonacci levels.