One of the critical moments of trading on www.binomo.com is understanding the concept of the share price trend. Let’s dig up the main idea of it and have a look at some crucial details that you should know before you start trading.
Types of price trend
The price trend is the particular direction in which the price moves over time. Once you have determined the price trend, you can determine in which direction the price will move next.
Many traders prefer to trade in the same direction as the trend, but some try to spot reversals or trade against the trend. Uptrends and downtrends can be found in all markets, such as stocks, bonds, and futures.
Traders can distinguish trends using various forms of technical analysis, namely trendlines, price action, and technical indicators. The direction of the trend is conveniently traced along the trend lines. The Relative Strength Index (RSI) is used to display the strength of a trend at any given time.
Mainly, there are three price trends: uptrend, sideways, and downtrend. Binomo has a Chart scanner that helps you track and determine the direction of the price trend.
Uptrend
The upward trend is formed when the previous peaks and troughs are lower than the new ones. The troughs can be seen as reversal points when the price moves in the opposite direction of the trend. These are crucial to reach a higher peak in the trend than the former one.
Sideways
The sideway trend occurs when the share price within a given time period forms peaks and troughs that are equal or nearly equal. Prices may witness weak and strong fluctuations, but they will eventually go sideways.
Downtrend
You can see a downtrend as the opposite of an uptrend. In the downtrend, the previous peaks and troughs are higher than the new ones. The reversal points would be the peaks in preparation for making new troughs.
How to recognize changes in share prices?
The changes in share prices can be recognized by understanding the price trends. The peaks in the price trends indicate that the share prices have increased, whereas a trough would indicate a decrease in the share price.
For example, if you see the price of a particular company’s share rise by $15, then fall by $5 and again increase by $8, then we can say it has an upward trend as the share price is on the rise.
Similarly, you can recognize these price trends according to the highs and lows of the share prices. It will help to make a more informed decision when trading on the Binomo platform.
How to trade live on Binomo?
You should begin by identifying the primary trend (downward or upward) and then wait for signals to confirm the continuation of the price trend.
Regarding an Uptrend
While the trend is up, traders focus on buying, trying to get additional income from the continued price rise. At that moment, open UP trades and use bullish reversal candlestick patterns (Bullish Pinbar, Morning Star, Bullish Harami, etc.).
Regarding a Downtrend
When a trend turns down, traders focus more on selling or shorting to minimize losses. At that moment, open DOWN trades and use bearish reversal candlestick patterns (Bearish Pinbar; Evening Star; Bearish Harami, etc.).
Note! A trick you can use here is to open up trades when there is an upward trend and open a down trade when there is a downward trend. It is also suggested to use open trades of 15 minutes or more using a 5-minute candlestick chart.
Conclusion
To learn more about trends and their impact on trading and investments, watch tutorials and read articles on the Binomo official website. These materials can help you improve your skills and make more informed decisions. Meanwhile, always remember that trading is risky. Learn and practice on the demo account to avoid loss of funds.
