The way to earn money from the forex while not risking too much depends basically on your ability to interpret forex movements. Is there a trend developing? Identifying forex trends which is mostly the result of fundamental factors and what traders are doing provides great opportunities for huge payday.

What exactly is a forex trend? Well, it’s a certain period of time when a particular currency or currencies is expected to move in a specific direction. Being the first the detect a forex trend gives any trader the advantage over other as he/she can make a trade without the possibility of results getting affected by what the other traders are doing.

The best way to detect trends is to relate price movements to fundamental factors that induce long term and sharp movements in the forex market.  Economic policies of the US, for example, can exert pressure on the market since the US dollar is the most traded currency. The effects maybe long-term or not but any self-respecting trader must be able to assess where the dollar will go in relation to the other currencies. When you are into a long term trading mode its safe to focus on what the fundamental indicators say. There might be glitches like some losses along the way but if your analysis is correct you’ll earn some decent money in the end.

How to you detect a trend. There are various indicators for this. There is the moving average which is excellent for detecting forex trends. A 100 day moving average can help you detect a trend without getting you side-tracked by the numerous fluctuations along the way. The fluctuations are mere ripples or stops that do not effect the over-all direction of the currencies being traded. Another trend indicator is the trend lines. But it requires manual adjustment once in a while which new traders may find a bit too much for them.

Nowadays numerous softwares are peddled as having the ability to detect trends. They are useful of course as you would be left to your own devices if you do not have one. Mind, however, that you do not get one without assessing it for its effectiveness.