Higher Highs and Higher Lows
Student’s Question:I’m confused. What does making “higher highs and higher lows” mean?Instructor’s Response:Yes…it can be a bit confusing at the outset.Take a look at the chart below and look at the uptrends shown in green. As a pair trades to the upside, as price action moves up and retraces, moves up and retraces or pulls back, each high will be higher than the one before it and each low will be higher than the one that occurred just prior. There may some minor exceptions as the move/trend continues, but, overall, that is how it builds.On the other hand, lower lows and lower highs would be what a trader would see as a downtrend continues. Those are shown on the chart below in red.Also you will see on the chart that there are two examples of the pair trading in a range.
To learn more about identifying trends and ranges, there are a total of eight lessons on both subjects in the Daily FX Trading Course that is available to live account holders.
All FXCM live account holders have access to the course at the following link…
Once there, click on Trading Course and proceed to the subjects of Trend Trading and Range Trading.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.