Don’t waste your time – keep track of how NFP affects the US dollar!

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Follow us on Facebook

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

FBS Mobile Personal Area

FREE - In Google Play

View

Market conditions and phases

Information is not investment advice

The market isn’t always the same. In order to choose the best trading strategy, you need to understand the market’s condition. There are two types of market conditions: a trend (a sustainable movement to the upside or to the downside) and a range (price fluctuations in a horizontal channel). 

It’s necessary to apply a strategy that fits the current condition of the market. If you use a trend trading strategy in a ranging market, you will likely lose money and, vice versa, if you use a range trading strategy, then you’ll lose money in trending markets. Always start your technical analysis with identifying the market’s condition, so that you could then pick an appropriate strategy.

cond.png

It’s important to understand the underlying logic of trends and ranges.  

First of all, keep in mind that the price moves as a result of supply and demand for the currencies which form a currency pair. If there are more buyers of the euro than those of the US dollar, EUR/USD will tend to rise. 

A price stays within a horizontal range when the powers of buyers and sellers are mostly equal. As usual, the market is in the situation of uncertainty: the majority of traders lack the information to join one of the camps. 

At some point, new information appears and either bulls or bears manage to break the range and start the directional movement of the price. If this movement is sustained, we get a trend. During a trend, there will definitely be periods of the so-called consolidations (i.e. ranges) and corrections (i.e. short counter-trend moves) as market participants take profit and re-adjust their positions. These shorter moves may provide opportunities for range trading on lower timeframes.   

Popular

Main market news on September 23

The US dollar has broken through the key resistance, it failed to cross since March so far. Riskier assets are dipping. Let’s discuss it in detail.

Will the pound keep standing?

Services and Manufacturing PMIs are out on Wednesday at 11:30 MT time.

Main market movements on September 22

The market sentiment remains risk-off amid rising virus cases around the world and fears over new restrictions and lockdowns.

Choose your payment system

Learn more