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  • Beginner
  • Intermediate
  • Advanced
  • Completion
  1. Beginner
    Early Stages for Beginners
    8 Topics
  2. Forex Terminology
    11 Topics
  3. Margin & Leverage
    2 Topics
  4. Personal Psychology Questions
    2 Topics
  5. Psychology for Beginners
    7 Topics
  6. Intermediate
    Identifying Scams
    2 Topics
  7. Brokers for Beginners
    5 Topics
  8. Technical Analysis
    13 Topics
  9. Market Structure
    5 Topics
  10. Completion
    Risk Management for Beginners
    8 Topics
  11. Fundamental Analysis
    9 Topics
  12. Advanced
    Using Indicators
    6 Topics
  13. Technical Analysis (Part 2)
    8 Topics

3 Ways a Market Can Go (Up, Down, Sideways)

We are going to look at charts and understand what it’s saying to us in a few more sections, but until then, let’s understand how the market moves. When looking at a chart, there’s only 3 ways the market can move!

  1. Up
  2. Down
  3. Sideways

An UPTREND is exactly that, an overall move towards a higher price. This is where you’ll notice price making higher highs and higher lows. What higher highs and higher lows mean is the market will head UP, and once it gets to a high point, it’ll retrace and make a low. Once price is done retracing, it’ll shoot up HIGHER than the previous high before retracing again. While it’s retracing, it’ll form a new low, but that low is higher than the last low. When you see the market creating higher highs & higher lows, you know it’s an uptrend. Look at the example below!

Simple Uptrend

A DOWNTREND is the complete opposite of an uptrend. This is where you’ll see the overall direction moving towards a lower price, which is created by lower highs and lower lows. Just like an uptrend represents higher highs & higher lows, a downtrend is the complete opposite. Price will go very low, retrace to a high point, head back down and form a new low that is lower than the previous low, then retrace back to a high point that is LOWER than the previous high. When you see lower highs and lower lows, you know the market is heading down, as a downtrend is present.

Simple Downtrend

SIDEWAYS, also known as consolidation and congestion, usually means there’s a lot of indecision within the market. Price hasn’t made its mind up on which direction it really wants to go, which usually happens after a major trend or after the news has calmed down. You will begin to notice CONSOLIDATION coming to an end once price breaks out of the support or resistance area that you drew on your charts!

Consolidation Breakout

Now that you have a basic understanding of how the market moves and of the terms within the Forex Market, we now can talk a little deeper about margin and leverage before discussing one of the most important things in your trading career: YOUR BROKER!

Understanding the actual charts (technical analysis) will come in a few more sections. Stay patient. All of this information is extremely vital! Let’s get it!