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With this as confirmation, a sell trade was placed as soon as the candle closed under the 25 EMA 3at 1. Connors advises not using hard stop losses, but that should be OK. Each question has a detailed explanation after you have answered, so you can truly understand the secrets of how to trade forex and how the pros make their decisions regarding the currency forecasts.
Figure 5. ADX shows the strength of that movement, with a reading above 25 or 20 showing a strong trend, and readings below 25 or 20 showing a lack of a clear trend, a weak trend or sideways movement.
In essence, if both the trend-following tool and the trend-confirmation tool are bullishthen a trader can more confidently consider taking a long trade in the currency pair in question. If you opt to use indicators, only pick one from each of the following four groups if required, remember indicators aren't needed to trade profitably.