"forex Trading Trends In Australia: Identifying Profitable Opportunities"

 "forex Trading Trends In Australia: Identifying Profitable Opportunities" - A trend is the tendency of prices to move in a particular direction over a period of time. Trends can be long-term, short-term, up, down and even sideways. Success with investing in the forex market depends on the investor's ability to spot trends and identify profitable entry and exit points. This article explores the stages of a forex trend and how they affect investors.

Often a strong economy will also have a strong currency. Economic power attracts investment and investment creates demand for foreign exchange. The demand for gold as a currency alternative has led to currency demand in gold-producing countries such as Australia, South Africa and Canada.

"forex Trading Trends In Australia: Identifying Profitable Opportunities"

Note that economic factors, in this case demand for gold, and higher interest rates in Australia from 2009 to 2012 created demand for Australian currency. This demand will continue until the exchange rate becomes too high and adversely affects Australian exports.

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In addition, factors in other economies must also be taken into account, as no currency can move independently of the rest of the world's economies.

The weekly AUD/USD chart below shows the appreciation of the Australian dollar against the US dollar at that time. Although the price (currency appreciation) has oscillated back and forth in the regression channel, providing some short-term trading in the opposite direction, the prevailing trend has not changed.

The chart below shows the strength of the Canadian dollar against the US dollar from 2009 to 2011. Canada is also a commodity-producing country with abundant natural resources. There is a bullish trend on the Australian dollar chart - a bullish trend with increasing demand for the Australian dollar. As the Australian currency is the base currency and the US dollar is the benchmark currency, the chart shows strong bullishness and strengthening of the Australian dollar.

On the other hand, in the case of the Canadian dollar against the US dollar, the US dollar is the base currency and the Canadian dollar is the rate currency. So, the chart shows that the US dollar is falling as it weakens against the Canadian dollar.

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The conventional wisdom among traders is that "the trend is your friend". While this is good advice, we add a word of warning: "The trend is your friend...until it ends."

Of course, the difficult questions to answer are whether there is a trend at all or just a sideways trading range, or where and when the trend will start and where and when it will end.

Wefirst addresses the question of where a trend begins and where to participate once it begins. To answer these questions, we need technical analysis. To keep our analysis as simple as possible, let's create a chart that uses weekly time frames and uses only two indicators.

The first indicator is a simple 20-period moving average calculated on closing prices. However, we add an additional 20-period simple moving average to add cushion, but this time it is calculated with the price high. We then add another 20-period simple moving average calculated below the price. The result is an average channel that roughly represents the balance of dynamic values.

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We use this channel to determine when prices are rising and when prices are falling. If the price breaks below the channel, we assume that it is likely to be bearish and if it breaks above the channel, it is likely to be bullish.

Also, note that when the market is trending in both directions, prices tend to move away from the channel and back into the channel with upswings and downswings. With volatility, prices return to the mean over a period of time. On average, this reversal provides opportunities to buy or sell depending on the direction of the trend.

In addition to the addition of moving averages, we add the two-period anRSI to the usual 14-period, and the plot guides are set to 90 and 10 instead of the usual 70 and 30.

The diagram shows some interesting possibilities. Every time the RSI peaks at the 90 chart guide, the trend is down, allowing prices to trade below the channel. Each time the RSI reached the 90 chart guide, prices returned to the channel, creating a new opportunity to sell in the direction of the trend.

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Conversely, when the trend is up, prices return to the channel when the RSI reaches the 10 plot guide, giving a new buying opportunity.

Trading in the above order means trading only in the direction of the trend each time it corrects, thus creating a new opportunity to participate.

Most traders will reverse the trade. A reversal point is always where a trend begins or ends. To find these reversal points, we look for price patterns (like doubles or triples or lowers), Fibonacci levels or trend lines. A reversal is often found at the 127.2 or 161.8 Fibonacci extension. For this reason, it is useful to plot Fibonacci lines on weekly charts and view the daily chart as prices approach one of the Fib levels.

Some areas are stronger than others. In fact, some trends are so strong that prices form a j-shaped or parabolic curve.

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In the next chart we see an example of a parabolic shaped price curve for the World Silver Index. This is absurd as traders drive up the price of silver as the entire commodity pool benefits from strong fund flows into futures and ETFs without equal and natural demand for the underlying commodity. This is an example of "musical chairs". When the music stops, the exit door narrows and latecomers suffer.

A "spin-top" candle on the weekly silver line should be a strong warning to traders that the trend may be ending.

In the case of the Canadian and Australian dollars (first two charts above), the shape of the curve comes from a more typical upward slope than the price of silver. Traders should always be aware of the "bubble" mentality of the rising parabolic curves in the market.

The reader familiar with Elliott Waves will see that trend markets move in a five-stage impulse wave followed by a three-stage ABC correction. Most investors prefer to count pivots and look for a pivot point that moves from 7 to 11, especially when the price reaches a strong resistance level.

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It is impossible to predict the future, but we can calculate the potential success of a trade by combining various factors with the aim of turning the odds in our favor. Since all predictions are based on odds rather than precision, we must be mindful of risk and use methods to manage risk.

When placing a trade, it is important to always place stops so that the losses in the tape trade do not go as expected. Major market makers know where the stops are, and in some cases (especially periods of low liquidity) they can go into the stops. Thus, there should be sufficient margin to ensure that investors' stops are not prematurely withdrawn.

Use "trailing stops" to better manage your stop strategy in trending markets. The popular Parabolic SAR indicator can also be used to track the market and take profits after hitting a stop. In the chart below, three 50-period ATR reversals hold path values ​​and provide exit points if the trend suddenly reverses.

It is best to trade with the trend, but be aware of when a trend has ended and a correction or reversal is imminent. By monitoring and listening to market sentiment, following news releases, and using technical analysis to help time entries and exits, you can develop your own profitable and simple-to-follow rule-based system.

Aud/usd Technical Analysis: Weekly Chart Insights And Trends

The recommendations in this table are from a compensatory partnership. This offset may affect how and where listings appear. does not include all offers on the market. Australia's FX market continues to grow in corporate and institutional markets, driven by rising commodity prices and more activity from the country's super funds. The use of algorithmic trading has also increased. Nicholas Pratt looks at how e-FX adoption can be further encouraged through the post-Covid recovery and the evolving regulatory landscape, offering proposals from major FX providers.

According to financial research group Peter Lee Associates, FX reporting in Australia rose 7% to $323 billion in 2021, the highest level in 13 years. "The increased volume was driven primarily by a sharp increase in resource costs," said Cameron Peters, managing director of Peter Lee Associates. the highest reported,” he said.

Australia and New Zealand have imposed strict lockdowns to limit the spread of Covid-19, which has helped reduce infection rates. But the pandemic has also affected the region's FX market. In particular, it caused a sharp rise

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