This is a very pragmatic problem, because even if the foreign exchange market is dominated by economic trends, such as the monetary policy cycle, it presents a long-term trend, but this directional trend still accounts for only one-third of the market price behavior, that is to say, the market price changes are directionless for about two-thirds of the time. To make matters worse, many traders usually only rely on one or two technical indicators to determine the direction of the market and use it as the basis for trading opportunities. This "omnipotent" orientation makes them often trapped in the trend and interval market, because when the market presents interval trend, the technical indicators suitable for identifying the market direction and trend may seriously mislead traders. Therefore, traders may make a profit too early, miss a larger direction band, or mistakenly think that the trend is still there and make short-term transactions for too long. In order to avoid falling into the mystery of whether there is a trend, the purpose of this paper is to suggest that traders use several technical indicators to identify whether there is a directional trend in the market at the same time, and use different indicators to determine the entry point and exit point. However, this paper will mainly propose a flexible technical analysis method to help traders solve their doubts about the existence of market trends, rather than listing a series of trading rules. Tools suitable for trend trading First, we need to define what a trend is. From the perspective of technical analysis, the trend means that the change of price behavior in the so-called resistance level and support level is predictable. For example, in the upward trend, the price will rebound when it is close to the support level, and finally it will hit a new high; On the contrary, in the downward trend, the price recovery will be blocked by the resistance level, and finally a new low will appear. In fact, this definition shows that trend line analysis is the first tool we use to identify the existence of trends, and this analysis can also be used to imply the so-called support level and resistance level. Some market participants think that trend line analysis is too subjective, but they ignore one point. This kind of analysis actually helps us to see the hidden price pattern in the basic market. In view of this, trend line analysis should be the first tool to judge whether the trend exists. If the analysis fails to show an identifiable trend, it is likely that there is no trend in the market at present. In addition, trend line analysis can also be used to identify price patterns, which itself has predictive value. The best starting point for trend line analysis is to use long-term price charts, such as daily charts or weekly charts, and then gradually reduce them to 4-hour charts and 1 hour charts, so that shorter-term support and resistance levels can also be explored. This method can show the importance of various support levels and resistance levels in turn, and prevent traders from ignoring a major trend line that may not be far away because they follow a short-term trend line breakthrough. Another objective tool to judge the trend is the Dirc international Movmnt index (DMI), which can effectively eliminate the doubts about the existence of the trend and further confirm the conclusion of the trend line analysis. DMI system consists of ADX (AAG Dirc MOV MNT INDX) and DI+ and DI- lines. ADX is used to judge whether the current market is in a trend. If the index is higher than 25, there is a trend; if it is lower than 20, there is no trend at present. ADX can also be used to measure the strength of trends. The higher the index, the stronger the trend. Using ADX indicators can not only judge whether the market is in a trend, but more importantly, traders can decide whether to use the trend tracking trading system. Two lines of DMI system can generate trading signals. When DI+ crosses DI- from bottom to top, it is a buy signal, and when DI- crosses DI+ from bottom to top, it is a sell signal. However, if we want to confirm the validity of this signal, we must surpass the highest or lowest price of this signal in the current cycle in the next cycle. Therefore, ADX can be used as a leading indicator of whether the trend is about to stop. When ADX starts to decline from a high level, the original trend will either stop or end. At this point, traders will be able to close their existing positions and then wait for the next cross-trading signal of DI+/DI-. Interval trend tools, such as RSI, stochastic or MACD, are shock indicators to determine price momentum, and are the most commonly used market tools for many traders, with no specific trend or horizontal trend. The main function of the indicator is to show whether the goods are overbought or oversold, and to show the possible price reversal signal in advance. However, once the market is in a strong trend, this momentum indicator can remain in the overbought or oversold range for a long time, and the price will continue to rise or fall, so that traders who rely solely on momentum indicators will either close their positions prematurely or trade in the opposite direction, but the original trend will not change because the shock indicator reaches an extreme position. The second use of momentum indicator is to observe the deviation between price and momentum. The basis of this theory is that only when the hidden momentum exists can the change of market price be regarded as effective. For example, when the price continues to hit a new high, only the driving force behind it can also hit a new high, and this new high price can be stabilized, otherwise the so-called deviation phenomenon will occur. The foreign exchange market often deviates, and the price usually reverses with the reversal of momentum. However, in reality, even if deviation often occurs in the trend market, the price has not obviously reversed, which makes the original trend still valid, and the price finally accelerates to change with the trend direction, and even the momentum reversal follows the trend again, making it unprofitable to trade in reverse according to the deviation signal. In other words, deviation will produce many wrong signals, which will lead traders who have not noticed the trend indicators to make many wrong transactions. Upload: Liao Siping