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How To Trade Momentum In The Forex Market

Trading trend in the forex market works in 3 cycles. There is the trend, retracement, and consolidation cycle.

2 currency pairs right now that are showing evidence of how the market cycles work are XAUUSD and GBPUSD.

Before I send you to the video of how it works, let me first explain the market cycles in more detail. When the market is trending it is pushing in an uptrend or downtrend. Basically the market is either pushing up and the trader is looking for buys or the market is pushing down and the trader is looking for sells.

The next cycle is a retracement or pullback. Let's think of this cycle as a ladder. If I go up the ladder you can say I'm trending up. If I take a step down before continuing up, that is the retracement. I'm going against the natural direction I'm am trying to go in which is up. The opposite is true if I am going down the ladder, but I decide to take a step back up before continuing down.

The last market cycle is consolidation. This is when price is no longer trending nor retracing.

Watch the video below as I dig into Gold and GBPUSD analysis. Also for more step by step guidance in the market course, you can purchase the Basics Course(click here) or stay tuned for future and upcoming trading workshops.

Comment below what do you think about these pairs and their future movements?


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