Sideways Forex Trading Trend Strategy - Waiting for a Turn
As mentioned in our Forex trading trend guide, sideways trend lines are seen as horizontal lines, that occur in between drops and rises in currency price.
Forex trading sideways trends are a good entry point for investors, because they are stable places where the currency price behaves steadily, on a relative perspective of course.
Sideways trend lines cannot continue for a long time, and it is a good advice to try and estimate where exactly the currency is going to go next. Following this Forex trading courses can help you pin point when a sideways trend is going on and invest more wisely.
A Forex trading sideways trend can nevertheless last for days and weeks. This period of time is considered congestion, and after this period of congestion there usually occurs a rapid rise or drop in the currency price. Another thing you should know is that the direction that a currency price continues after a Forex trading sideway trend is usually the original direction that presided before the sideways trend took place.
Using the right sideways trend strategy means figuring out the following direction of the trend by seeing the previous market direction history.
Sideways trends can be found inside support and resistance levels that are near each other. Inside the Forex trading trend line the currency price still fluctuates, but with rather small ups and downs. A sideways trend is said to be broken when the currency price goes outside the previous limitations of the trend line. You might like to make sure that the price goes outside the barrier of the trend line twice before being sure the sideways trend is broken.
Tracy Jones, Forex Senior Editor