Forex markets are huge unlike the stock market which can be manipulated by a few big players in the market. What this means is that a strong trend cannot be sustained in the forex market without the pouring of tremendous amount of capital in the market by the big players. This is unlike the stock market where few big players placing orders can drive the stock price up. Watch this Freedom Forex Formula videos that show how to build a $34 million forex account from scratch using nothing but simple forex methods. Download this special manuscript the explains the forex method in step by step detail FREE. You should not miss these forex training videos. They are full of premium content. Learn this Fibonacci Retracement method FREE that pulls 500+ pips per trade! Get this 1 Minute Forex Trading System FREE!
So how do you filter a strong trend from a weak trend? Now, we have said that the 10 day EMA is going to be our focus when trading strong trends. Wha we need to do is to add a filter based on this exponential moving average (EMA) in order to be sure that this is no ordinary trend.
In case of an uptrend we want the 10 day EMA above the 20 day exponential moving average that should be above the 50 day EMA which should be above the 100 day EMA. Plus the price action should be above the 10 day EMA for a period of at least 10 candles to confirm that this is a real strong uptrend .
In case of downtrend, reverse the order of the EMAs. The 100 day EMA should be above the 50 day EMA. The 50 day EMA should be above the 20 day EMA and the 20 day EMA should be above the 10 day EMA. In addition to that the price action should be below the 10 day EMA for at least the last 10 candles in order to confirm that that uptrend is strong .